Holiday Decorations

For years we've decorated the blue trees (can't find the correct species name) in front of our house.  They started out at a height that didn't require even a step ladder to get lights to the very top.  Now they've grown so high that I can barely reach to top with our fully extended aluminum ladder and, even then, I have to "cheat" a bit by mounting the very highest lights on two foot bamboo stakes and hoisting them to the top where I can't reach. 

No matter.  Every year it's worth the effort, especially for the reaction of kids who come by with their parents.  Apparently, the display has achieved a certain reputation with a number of neighbors commenting on how they look forward to them and were concerned that they might not go up this year.

The video is a little retrospective and our holiday wish for all our friends and neighbors.

(And a greeting from Cleo).

A Concert Surprise

I have to admit I wasn't expecting much from my series concert Friday night.  Right in the middle of the holiday music season, this seemed like an odd program:

Sibelius

Pohjola’s Daughter

Esa-Pekka Salonen

Violin Concerto

Wagner

Excerpts from Götterdämmerung

 

The following nights feature Peter and the Wolf, Colors of Christmas, and of course Messiah.

 

So it was a pleasant surprise to hear two works that were new to me that are definitely worth repeat hearings -- the Sibelius and Salonen's concerto.  And the Wagner excerpts were beautifully done with Christine Brewer as an excellent Brunhilde. 

 

San Francisco Symphony concerts are broadcast locally on KDFC and on the web.  I don't see this concert on the list yet but, if and when they broadcast it, it's definitely worth a listen.

 

As a side note, it was also a surprise to see how many empty seats there were in the hall -- very unusual for a series concert.  Offsetting that were the presence of numerous, enthusiastic younger audience members -- something we need to encourage.

Sales Continue to Increase

The number of sales of single family homes and condos/TICs continues it's upward trend this month.  November sales were 10% higher than October, unusual for this time of year when traditionally the number of sales slows down.

Total sales for the first eleven months of the year are higher than they've been since 2007.  At the same time, prices remain steady.  More about that tomorrow when we post our detailed sales report for November.

Thanksgiving

Here we are at Thanksgiving eve.  Even more so than in previous years, so much of the emphasis seems to be focused almost entirely on shopping.  Target's ads provide some of the best worst examples.

Thanksgiving itself has become just the starter's gun to a huge shopping spree.  This year the stores can barely restrain themselves to the day after Thanksgiving with many chains planning to open Thursday at midnight,  Some Target employees are making an effort (likely to be futile) to fight back against such an early opening time.  Many of them will barely be able to finish their Thanksgiving dinner before they have to leave for work!

Every year at the holiday season many of us dish out, in addition to bountiful banquets of food, a full serving of platitudes about the true meaning of the season.  This year we have the Occupy movement pointing out the vast disparities between the 99% and 1% emphasizing some of the most glaring inequities in our society.  Many more in the country believe they have much less to be thankful for than they did a year or two or three ago and, no doubt, that's true -- especially if we're measuring wealth and income.

But I was reminded of how much we have to be thankful for (and the value of perspective) when listening to one of NPR's weekly Science Friday broadcast items last week.  The topic was "Building a Better Toilet".  Did you know that more than one-third of the earth's population does not have a toilet.  That's more than 2.3 billion people.  Think about that!  Think about what your life would be like if you didn't have a toilet.  And then think again about what we have to be thankful for.

Higher Loan Limits Approved

At the end of last week Congress passed and the President signed legislation to restore higher Fannie Mae, Freddie Mac, and FHA conforming loan limits of $729,750.  Those limits had been reduced  expired Oct. 1, when it was reduced to $625,500 on October 1st and, at that time, the restoration of the higher limits which particularly effect our market area seemed very much in doubt.  The higher limits are good through December 2013.

Where do they come from? Where did they go?

Forbes has published a fascinating interactive map that shows domestic migration trends by county for the past several years. 

Poking around the data, a few things struck me:

• More people left San Francisco each of the last five years than arrived.  Since the Census Bureau figures (upper left) show an overall increase in population, that growth is fueled by international immigration.
• The largest number of people leaving San Francisco head for the nearby counties (San Mateo, Alameda, Contra Costa, and Marin).
• Santa Clara, Los Angeles and San Diego counties are the largest source of arrivals.
• The largest source of incoming folks from outside California seem to be from Cook County (Chicago, IL), Middlesex County (Cambridge, MA), and Maricopa County (Phoenix, AR).
• The most popular destinations outside the state were Multnomah County (Portland, OR), Travis County (Austin, TX) and Harris County (Houston, TX).
• Marin County gets most of its incoming folks from San Francisco followed by Alameda, Contra Costa, Los Angeles and Vallejo.
• Most of Marin's departures seem to go one county north to Sonoma.

Take a few minutes to play with it.  Suggestion:  click on "hide lines".  They make for a pretty graphic but get in the way when you're trying to see detail.  Plus, they give something of a false impression.  Just looking at the San Francisco graphic above you could easily conclude that we import more folks than we export.

Also, try clicking through the years.  For San Francisco, you can see that from 2005-2007 more people were heading to the Seattle area than were coming into the City.  By 2009 and 2009 that trend had completely reversed.

Update (2) on Potrero Hill Listings

It's been a month since we took a look at the four high-end listings on Potrero Hill that all hit the market at approximately the same time.  This group includes two single family homes and two condos.  Here's the current status:

The two single family homes include:

746 Kansas which has been completely remodeled from a seriously deteriorated state was originally listed for $1,675,000 or $744/sq. ft.   Six weeks later it was reduced by 5% ($80,000) to $1,595,000.  Two weeks later it went into contract.  Current status is "Active/Contingent" which would suggest that at least one of the contingencies (finance, inspection) have yet to be cleared.

531 Kansas which went through a major remodel and 3rd floor addition about 10 years ago.  Listed in the middle of September, the list price has remained at $1,799,000 or $766/sq. ft.  There has been no price reduction and, as noted in our earlier post, is $100,000 higher than it was when the house was previously listed and then withdrawn in 2009.

The two condos are:

730 Vermont St., the lower unit in a two-unit in a 10-year old building.  It was  listed in mid-September at $1,195.000 or $665/sq. ft.  and then reduced in two steps by 8% ($95,000) to $1,100,000.  After two months on the market the listing has been withdrawn.  According to the listing agent, the owner plans to rent it although it has not been posted in Craigslist.

2101 18th St., the lower unit in another two-unit building that was built just three years ago, is listed for $1,299,000 or $764/sq. ft.  After 7 days on the market the property went into contract.  It closed escrow six weeks after listing with a final sales price of $1,266,525 -- 2.5% below the list price.  However, according to a notation in the MLS, the buyers paid their agent's share of the commission which amounts to 2.5% so, effectively, the buyers paid list price.  Structuring the deal this way will save the buyers a few hundred dollars in annual real estate taxes.



October Sales Statistics

We've just posted our monthly reports on sales San Francisco and Marin counties for October.  As a reminder, we survey several specific configurations of single family homes and condos that represent the majority (this month, 55% in San Francisco and 72% in Marin) of sales in the county.  Here are some highlights:

Marin

• inventory and number of sales has begun its normal, seasonal decline;
• average sales price is up compared to a year ago

San Francisco

• inventory is down slightly from last month and down approximately 30% from a year ago;
• the total number of sales of residential properties in October was the lowest of any October in more than seven years although we are still on track to sell more units for the full year than we did in 2010;
• of the configurations of single family homes and condos we survey, the number of properties sold in October is mixed with single family homes down slightly, condos down compared to last month but up compared to the same month last year, and 2-4 unit buildings up compared to both last month and last year

Twice a year -- like "clockwork"

Saturday, November 5

Don't forget to "fall back"

(Offically, at 2am Sunday morning)

Otherwise, you'll be early for your Sunday Open House!

(Refresh - F5 - your browser or click on graphic to restart the animation)

Today is National Cat Day (isn't every day?)

This was news to me and, although it has almost nothing to do with real estate, we have a cat and if we don't properly acknowledge the day she will almost certainly give us the "treatment".

Or not.

TICs in the Current Market

Periodically we look at the overall condo market in San Francisco (it makes up a little more than 50% of the total residential real estate market in the City) and also that peculiarly San Francisco subset of the market -- TICs.

At the end of September, sales of TICs made up 13% of sales in the combined condo/TIC market.  That's about the same as all of last year but down from 19% in 2009 and the high of 24% reached in 2007.  TICs made up 16% of the active listings.

Looking at the first nine months of the year, TICs have averaged about 85 days on market which is not much more than the 79 DOM of condos.

Our survey looks at three specific configurations of units:  1bd/1ba, 2bd/1ba, and 2bd/2ba.  These three configuration make up about 60% of the total market for condos and TICs in San Francisco.  The average difference in selling prices between condos and TICs for those three configurations range from $76,000 for the 1bd/1ba units, $127,000 for 2bd/1ba units, and $68,000 for 2bd/2ba units.  These numbers represent the premium buyers have been paying for a condo (or the discount you get when buying a TIC). 

Of course there are other considerations when considering the TIC/condo decision -- too many to get into here.  Nevertheless, the TIC market remains a significant, active part of overall real estate sales activity in San Francisco.  You can see the entire report on our web site here.

Update on Potrero Hill Listings

Three weeks ago I posted information on four higher-end listings in my immediate Potrero Hill neighborhood and posed the question "Example of Higher Priced Property Rebound?"  Here's a quick update:

The two single family homes include:

746 Kansas
Originally listed for $1,675,000 or $744/sq. ft., now reduced by 5% to $1,595,000 or $709/sq.ft. 

531 Kansas which had been on the market in 2009 for $1,799,000 and subsequently at $1,688,000 with no takers is now currently listed for $1,799,000 or $766/sq. ft.  There has been no price reduction in the 31 days it has been on the market.

The two condos are:

730 Vermont St. #1, originally listed at $1,195.000 or $665/sq. ft. and now reduced -- first to $1,149,000 after 20 days and again to $1,100,000  or $612/sq.ft. after 34 days. 

2101 18th St., was listed for $1,299,000 or $764/sq. ft.  and after only a week on the market went into contract.  18 days later it appears that all contingencies were  removed so this may well close in less than 30 days since the listing became active. 

Since I wrote the original post, a small 2bd/1ba, 1,150 sq. ft. single family home at 1919 Mariposa came on the market as a short sale priced at $749,000 or $651/sq.ft.  Six years ago the house sold for $1,030,000 with 10% down.  This went into contract in 5 days.  Now the seller and the listing agent have to convince the bank to accept a loan payoff somewhere in the neighborhood of $100,000 less than the current loan balance depending on how much the buyer has offered and other variables.



Great Fall Weekend

First off, the calendar may say fall but the weather this week has been what we normally expect this time of year -- sunny, warm, with little wind and virtually no fog. And this time of year is also when so many of the city's street and music festivals are scheduled (for good reason) -- Polk Street, Castro Street, Folsom Street, Noe Valley Harvest, Hardly Strictly Bluegrass, Treasure Island Music Festival, and many others.  The San Francisco Symphony has just begun its 100th season and San Francisco Opera has also started its season including a free simulcast of Turandot at AT&T Park.

Just this weekend (and it's only Saturday as I write this), I've seen a great San Francisco Symphony performance of Pictures at an Exhibition (and Shostakovich’s Symphony No. 14),

promenaded through our neighborhood street fair on Potrero Hill,

and checked out one of the local Open Studio

A couple of the artists particularly caught my attention:

Daniel Phill



Phillip Hua



Fleet Week

It's been a busy three weekends in San Francisco with various street fairs and other goings on.  Not surprising since this time of year is supposed to bring some of our best weather -- other parts of the country would call it "Indian summer" -- with glorious, warmth, sunshine and little or no wind.  Unfortunately this year, the weather has been touch and go all three of the last weekends although nobody got rained on.

One of my favorite annual events is Fleet Week which just wrapped up.

The best day to catch the air show is usually Friday afternoon when they do their practice.  This year Friday also turned out to be the best day for weather plus the usual benefits of many fewer people.

Here's some photos:



Click on the slideshow to see photo captions.

Number of Sales Improves in San Francisco

I am now predicting that the total number of residential real estate sales in San Francisco in 2011 will exceed the total number for 2010! This will be the second year in a row sales will have increased compared to the previous year and it will be the highest number of sales since 2007. I suppose, or hope, this is a continuing trend, and that the Bay Area/California, as usual, will lead the Nation is these trends, laws, and ideas!

As of September 30^th (end of the third quarter) my analysis from our Monthly Statistical Reports, which we prepare for both San Francisco and Marin Counties, makes it relatively easy to make my year end's prediction! For the nine months Total Number of Sales of residential properties in San Francisco including single families and condos/TIC is 3,695 . Of this total, 52% are condos/TICs (1,935) and 48% are single family homes (1,735). Nationally, there are 8 times as many single family homes selling as condos. So yes, another reason why we are unique in the Bay area and probably all of California. There are only a handful of communities in the entire country where the market share for condos is higher than for single family homes.

San Franciscans are faced with the challenges presented by Short Sales and REO's. 17.5% of our Total Number of Sales fall into this category. Breaking it down, 21.3% of condo sales are Short Sales or REO's but, surprisingly, only 13.3% of single family homes. On the other hand, 30% of sales in Marin county are Short Sales and REOs homes (48% of condos and 24% of single family homes). By way of comparison, REOs and Short Sales made up almost 70% of sales in Sacramento for the first three quarters!

So, all in all, I find that we are in pretty good shape, confidence is rising, as will total sales and prices! We welcome any questions or comments. For a complete list of our reports please go to boldsf.com and click on Statistics!

Example of Higher Priced Property Rebound?

There have been several reports recently that the higher end of the real estate market is enjoying a recovery even while the rest of the market remains flat and is expected to remain so for the next year.

There have been several high profile sales recently in the usual neighborhoods (Pacific Heights, Russian Hill, Nob Hill) but there is an unusual concentration of listings within a two block area on the north/west side of Potrero Hill -- two condos and two single family homes. 

The two single family homes include:

746 Kansas which has been completely remodeled from a seriously deteriorated state and listed for $1,675,000 or $744/sq. ft.

531 Kansas which went through a major remodel and 3rd floor addition about 10 years ago.  531 Kansas was on the market in 2009 originally listed at $1,799,000 and subsequently at $1,688,000 with no takers.  The current list price is back to $1,799,000 or $766/sq. ft.  (The photo is from the previous listing.  For some reason, the current listing agent has chosen not to include a picture of the front of the building).

The two condos are:

737 Vermont St., the lower unit in a two-unit in a 10-year old building.  This is the first resale.  It's listed at $1,195.000 or $665/sq. ft.  At today's writing, it's been on the market 13 days.

2101 18th St., the lower unit in another two-unit building that was built just three years ago, is listed for $1,299,000 or $764/sq. ft.  It's only been on the market officially for 7 days and is already in contract.  (Earlier this year for-sale signs appeared at the property for a couple of weeks but then disappeared without the listing appearing in the multiple listing service.  Whether that was just an over-eager agent jumping the gun or something else was going on I don't know.)



Here's a map showing current listings and recent sales over the past six months on Potrero hill over $1.1 million.

Number of Sales Improving

One of the best general measures of the health of our local real estate market is to look at the level of activity as shown by the actual number of resales each month.

In August, the number of sales was more than 11% better than August last year.


Data from the San Francisco MLS

For the first eight months of the year, the number of sales is up compared to the same period in both 2010 and 2009. 



Data from the San Francisco MLS


Crystal balls seem to be particularly foggy these days but this information would seem to indicate we've turned a corner with more people being willing to purchase a home in San Francisco despite the generally gloomy economic news.

Our next post will show what's been happening to listing and selling prices.

An end to exhorbitant HOA doc fees

... or at least it's a start.  Of the myriad bills the Governor must decide whether to sign or not at the end of the legislative session, he has already signed one of them that will close a loop hole that has allowed homeowners associations to jack up the cost of the mandatory disclosure documents must provide to the buyer.  These documents used to cost in the $100-$200 range.  Over the past year we've seen costs of $300-$500.

Here's a partial quote from a news release from the California Association of Realtors®:

     C.A.R. applauds Gov. Jerry Brown for signing AB 771, a bill that prevents home buyers in a common interest development (CID), such as a condominium or townhome, from being charged excess document fees. 
     Homeowner associations (HOAs) are required to provide specific documents to prospective purchasers of homes in a CID -- a form of real estate ownership in which each homeowner has an exclusive interest in a unit and a shared interest in the common area property.  In addition to the standard residential property disclosures, purchasers of a unit within a CID must receive basic information about the structure, operation and management of the HOA that operates the CID.
     Current law requires that this information come from the HOA and prohibits it from charging fees in excess of what is “reasonable,” not to exceed the actual cost of processing and producing these documents.  HOAs generally have provided the documents for approximately $75 to $250. Increasingly, HOAs have been delegating document preparations to third party vendors or contractors who, under a 2007 court decision, are exempt from this fee limitation. This delegation of responsibility by HOAs sometimes resulted in home purchasers being forced to pay additional fees, as much as $1,000, for other documents which were “bundled” with the required documents.
     Assembly Bill 771 (Betsy Butler, D-Torrance) addresses this situation by specifying that only fees for the required documents may be charged when such documents are provided, effectively prohibiting any “bundling” of fees for other documents with these fees. The bill also creates a new form detailing which documents are required, and requires the provider to disclose the fees that will be charged for the documents before they are provided. The seller of a CID must complete this form and transmit it to the prospective purchaser along with the required documents.  This will eliminate any uncertainty for the prospective purchaser as to exactly which documents are being provided and the precise fees being charged for those documents.

Foreclosure Activity

Foreclosure Radar publishes some interesting statistics about foreclosure activity on a county-by-county basis.  Their overall California report for June paints a somewhat encouraging canvas:
Their July statistics for San Francisco shows the number of Notices of Default (the first step in a bank foreclosure) declined almost 22% from the previous month and declined 22% compared to July of last year.

See the full report here.

NEW FEATURE: What's Wrong with This Listing?

First, the easy stuff.
Here's the description in the MLS:

Eligantly remodeled custom mediteranian tri-level home re-built from the ground up. Fantastic skyline and bay views, chef's kitchen w/viking appliances, oak flooring throughout, lg. master suite with walk in closets, den/office, multi terraces, surround sound and wet bar are just some of the many ammenities. A must see!

Come on, folks. There's a spell checker built right in to the form as you enter the information. All you have to do is CLICK IT!

Size Matters
The advertised size of the property:

Approx Square Feet:  2304                        Sq Ft Source:   Per Owner

The city's tax records show the property is 850 square feet. What accounts for the difference? Digging a little further into the city's permit records, numerous building permits have been issued for the property including moving bedrooms, adding an additional level with master suite and bath. The trouble is, none of the building permits have been finalized.

Location, Location, Location:
It may have "fantastic skyline and bay views" out the front. But the property backs up to the 101 freeway. It's a short lot -- only 58 feet deep so there's not much distance between the back of the house and freeway sound wall.



Type of Listing

So far, all of this is information than anyone can figure out from public records.  What you can't get from the public records is the type of listing -- "Exclusive Agency".  Most listings in our local MLSs are "Exclusive Right to Sell".  The main difference between the two is that "Exclusive Agency" lets the seller avoid paying a commission if he/she finds a seller on their own rather than through the listing agent. This creates a potential  disincentive on the part of the listing agent to do any marketing beyond the very basics of putting up a for sale sign and entering the listing in the MLS. 

Short Sale

The property is being sold as a short sale (asking price is less than the total of all liens/loans so the lender/s will have to agree to a less than total payoff).  To complicate matters, there are two lenders so each much agree to the short payoff.  The second lender, typically, gets a much smaller percentage of their outstanding balance than the first and can often be the major obstacle to approval of the short sale.

Surprise Deal?

On the same day the listing hit the MLS as "active", its status was changed to "active-contingent" meaning that it went into contract the same day the listing came on the market.  Interesting, when you take into account there is a tenant and showings have to be scheduled 24-hours in advance according to the listing.  Obviously the listing agent had a buyer already lined up to make an offer.  It's likely that the buyer and seller are being represented by the same agent/broker -- creating a dual agency situation.

The MLS listing is still encouraging other agents to "bring backups" but you have to wonder how aggressively the listing agent will be in presenting a backup offer when there is already an accepted offer where they will get both sides of the commission.  Short sales take a lot of work on the part of the listing agent (or the specialist they hire).

.  .  .

Lessons to be learned?

For a seller --

• work with an agent who is knowledgeable about your market and transaction type
• don't create disincentives for the listing agent, they will only work to your disadvantage
• review all marketing materials including the MLS listing information

For a buyer --

• work with an agent who is knowledgeable about your market and the type of transaction
• like any investment, balance the risks involved against your risk tolerance level

July Sales Reports

Earlier this week we posted our monthly sales reports for San Francisco and Marin counties.  You can see the full report for San Francisco here and for Marin here.

Generally for single family homes and condos in San Francisco, inventory, number of sales and average sales price was down compared to June.  For 2-4 unit buildings, inventory is also down but number of sales and average sales price are up.

Our report is based on several specific configurations of condos and single family homes (e.g. 2 bedrooms, 2 baths) rather than averaging all residential properties from the largest, most expensive to the smallest, least expensive.  Nevertheless, the total number of condos and single family homes we survey represents approximately 70% of all listings and sales.  For 2-4 unit buildings, we survey all listings and sales.

The last page of the report shows annual results back to 1996.

A Gift for San Francisco Listing Agents

The San Francisco MLS just implemented a new feature called "on market date".  This feature allows you to enter the listing into the MLS as soon as it's signed but set the "on market date" for sometime in the future.  Until that future date is reached, the listing can only be seen by the listing agent.  In the meantime, you can set brokers tour and open house dates and you can upload your photos.  Days-on-market (DOM) doesn't start counting until the "on market date" is reached.  If necessary, you can always extend the "on market date".

Quoting:

When entering a listing, users should put the true listing date in the MLS as the list date, and then indicate which date the property should be available as On-Market. The On-Market Date represents the date that the listing will be available on the MLS for listing searches. Prior to this date, the listing will only display to the listing owner(s). The On-Market Date can be updated at any time prior to the property going On-Market. 

This new feature will allow listing owners to upload photos and add open houses and tours in advance of the property being made available for other users to see.  Also, system reports have been updated to reflect both the List Date and the On-Market Date.  Days on Market (DOM) will be calculated using the new On-Market Date.  

Activity Level

This is a quick snapshot of total sales of single family homes, condos and TICs month by month.  There are seven years of data so the graph is getting a bit crowded.

The good news is that the number of sales in June was the highest for that month since 2007.  However, July sales were the second lowest in the last seven years, only slightly ahead of last year.  Some of the reduced July sales numbers can be attributed to the normal slow down this time of year.

For the first seven months, sales are at essentially the same level as last year. 

We should have the detailed sales reports for July for both San Francisco and Marin counties ready to publish by early next week.

Big Change at ZipRealty

From a recent press release (and recruiting flyer) fom ZipRealty:

The company is discontinuing the commission rebate program offered to buyers who close a transaction using a ZipRealty real estate agent.

They go on to say that surveys of their customers show that commission rebates are not the "primary driver" for choosing a brokerage and real estate agent.

This is a huge change for a company (and especially for its agents) that was founded 12 years ago and been through two major swings in the market under the basic premise that technology would allow them to provide faster, less expensive services (through commission rebates) to its clients.

Conforming Loan Limits Coming Down. Downpayments Going Up?

Here's a recent quote from the California Association of Realtors:

FHA and Conforming loan limits will drop dramatically on September 30. Bank of America has already lowered their loan limits for new loans, and others will follow suit. 

And from "HousingWire":

The conforming loan limit determines the maximum mortgage amount the Federal Housing Administration, Fannie Mae and Freddie Mac can buy or guarantee. Without congressional action, the limit will drop to $625,500 from $729,950 for the majority of counties nationwide on Oct. 1.

Almost 60% of single family homes and condos that sold in San Francisco during the first half of this year had a selling price below the current maximum.  Not all of those sales would have been affected by a lower limit but it provides a general idea of the scope of the impact a reduction may have. 

This is an issue for sellers as much as buyers and could have a significant impact on our slowly reviving housing market.  There are some efforts underway to get the congress to keep loans limits where they are but it's not at all clear that will happen. 

Marin Monthly Sales Statistics

We've just posted the monthly sales statistics for Marin County for June.  As with a similar report we publish each month for San Francisco, the Marin report compares sales by month and by year for six specific configurations of single family homes and four configurations of condos.  These configurations represent 70% of all single family homes sold for the month and 80% of all condos.

The report also shows the number of short sale and REO properties currently on the market. 

The number of sales is up significantly compared to May, especially for condos.  In a normal market we expect June to be a peak sales month.  Compared to June of last year the number of sales of single family homes is down slightly but remember that last year there had been a rush to complete sales before the end of the federal tax credit.

Average sales prices were essentially flat for single family homes compared to June of last year.  Condo sales prices were down significantly.

Finally, a little break for short sale sellers

From the California Association of Realtors comes the news that legislation has been signed by the Governor protecting sort sale sellers from any requirement to accept a deficiency from either the senior or junior lender in a short sale.

CAR says this is a victory for Realtors but it's actually a victory for sellers.  It will be interesting to see how this works in practice and it wouldn't surprise me to see the banks putting pressure on the real estate agents to contribute some (or more) of their commission. 

LAW AGAINST SHORT SALE DEFICIENCIES EXPANDED
In a major victory for REALTORS®, Governor Brown signed into law today a C.A.R.-sponsored bill, Senate Bill 458, prohibiting a deficiency after a short sale for one-to-four residential units, regardless of whether the lender is a senior or junior lienholder.  Effective immediately for transactions closing escrow from this day forward, both senior and junior lienholders cannot require a borrower to owe or pay for a deficiency in a short sale.  This law also prohibits any deficiency judgment to be requested or rendered for senior or junior liens after a short sale of one-to-four residential units.  Any purported waiver of this rule shall be void and against public policy.
Although a lender cannot require a borrower to pay any additional compensation in exchange for a short sale approval, the new law does not prohibit a borrower from voluntarily offering a monetary contribution to a lender in hopes of obtaining a short sale.  A lender is also permitted under the new law to negotiate for a contribution from someone other than the borrower, such as other lenders, agents, relatives, and the like.
Exceptions to the new law include a lender seeking damages for a borrower’s fraud or waste; a borrower that is a corporation, LLC, limited partnership, or political subdivision of the state; a lien secured by a bond as specified; a public utility lien; and additional rules apply if a note is cross-collateralized by more than one property.
This law is fully set forth as Senate Bill 458 (Corbett) at www.leginfo.ca.gov.

Sales by Price Range




  One of the reports we create on a regular basis is sales by price range.  This helps us understand which parts of the market are increasing or slowing down.  This survey includes all single family homes, condos and TICs as reported on the San Francisco MLS.

For the first six months this year, we are seeing a 5% increase in sales compared to last year.  (The federal tax credit incentive ended in June of last year).  The percentage of sales above and below $1million has remained the same at 20% and 80% respectively.

See the entire report here.

June sales statistics

We've just posted our monthly sales statistics report for June.  For the five benchmark property configurations we survey, inventory is down in four of the five categories compared to last month and compared to the same month last year.

Average sales prices for June were mixed.  Compared to last month, average sales prices in four of the five categories we survey were down.  Only 2bd/2ba condos averaged higher sales prices than last month.  Compared to the June of 2010 the average sales price for 3bd/2ba single family homes was higher as were 2bd/1ba and 2bd/2ba condos.  However, 2bd/1ba single family homes and 1bd/1ba condos averaged lower sales prices this June compared to a year ago.

Activity levels (number of properties sold) were also generally up in June compared to May and compared to June, 2011.  The exception was 2bd/2/ba condos which sold substantially fewer units compared to last month and June of last year. 

As a reminder, the deadline for qualifying for the federal tax credit last year was the end of June.  So, while average sales prices continue to ease, it appears that the number of transactions remains stead even without the tax credit incentive.

2nd Quarter San Francisco Sales

Each quarter we summarize sales for the previous three months and compare them to the previous four quarters.  We've just posted 2nd quarter data for San Francisco.  The residential real estate business is full of statistics -- so why is this one any different?  Basically, rather than lumping all homes together to calculate an overall average for the city, our report looks at five categories of single family homes and condos that share the same bedroom/bath configuration and tracks them on a monthly and quarterly basis.

For single family homes, we look at two configurations:  basic "starter" homes with 2 bedrooms and 1 bath, and larger 3-bedroom, 2-bath homes.  Together these two configurations make up approx. 45-50% of single family home sales (varies slightly from month-to-month). 

For condos, we look at three configurations:  1-bedroom/1-bath, 2-bedroom/1-bath and 2-bedroom/2-bath.  These represent approx. 58% of all sales.

Our report also includes 2-, 3- and 4-unit buildings.  100% of these properties are surveyed.

In addition to city-wide statistics, we break it down to each of the ten real estate districts. 

Here are some highlights from this quarter's report comparing 2nd quarter 2011 with 2nd quarter 2010:

• The average sales price of 2-bed/1-bath single family homes has dropped 8%.  The number of sales was up slightly.
• The average sales price of 3-bed/2-bath single family homes has increased 3% with the total number of sales down slightly.
• The average sales price for the three categories of condos we survey is down by 1 - 3%.  The number of sales of 1-bed/1-bath condos is down by almost 20% but up 5% for 2-bed/2-bath units.
• Average sales price for 2- and 3-unit buildings declined 14% and 6% respectively but is up 9% for 4-unit buildings.

Keep in mind that the 2nd quarter of last year saw a "frenzy" of sales as buyers rushed to take advantage of the federal and state tax incentives being offered.  It's encouraging to see that this year's 2nd quarter activity levels are largely back to 2010 without the stimulus effect of the tax incentives.

New Tools

The two major forms management systems used by agents in the San Francisco area (Instanet and CAR ZipForm) both offer iPad compliant versions of the software that let's you fill in standard forms, e-mail them, and sign them electronically.  In a sure sign that demand for and adoption of this kind of technology is moving even faster, a new company has jumped into the market.  Not affiliated with any of the traditional real estate software provides, Autriv Inc. has introduced an app for the iPad that lets you fill out any form in PDF format, sign it without using a third-party signing software such as DocuSign, and store and e-mail the form.  The product is called "Sign My Pad" and sells on the Apple app store for $3.99.  An Atlanta-based real estate agent has posted a very good demo of the product on YouTube.

This app won't replace Instanet or ZipForm but it's a great additional tool that will work well for those documents and forms that aren't included in their libraries.