Data released this morning by Standard & Poor’s showed an annual decline of 3.7 percent in November for the 20-city composite reading of its S&P/Case-Shiller home price index. Analysts were expecting a year-over-year drop in the range of 3.2 to 3.4 percent. Eighteen cities were in negative territory. Detroit and Washington, D.C. were the only exceptions. At -11.8 percent, Atlanta continued to post the lowest annual return.

DQ News just released their December sales and they are also showing an overall drop in prices for the Bay Area.

What we need to remember is that this is a generalized report, and goes county-by-county.  In Alameda County and Contra Costa County there are micro-neighborhoods where sales are very skewed (such as Oakland in Alameda County and Richmond in Contra Costa County) and these figures throw these reports off.  This is why it is SO IMPORTANT to look at the zip codes, and some of those zips should even be dissected further.

Take a look at Berkeley zip code 94708, which has seen a 7.1% increase from this same time last year. One house, located in this zip code, is on the market and had over 50 requests for disclosure packets.  Albany, as a whole, has seen prices drop.  But if the house is centrally located and in good condition, multiple offers are happening left and right…one house I know currently has over 30 disclosure packets out.  Now this doesn’t necessarily mean that it will have that many offers, and these examples are not typical of all houses.  What it does say is that there are a lot of buyers out there, and with such low inventory, these buyers will end up driving up the prices in some of the communities.

Please take the headlines with a grain of salt and understand that 1) they are designed to draw readers and 2) that they usually report information on a national or regional level.  Prices in our area are expected to stabilize over the course of the year so if you really want to know what is happening in a particular city, zip code, or neighborhood, talk to a Realtor so that you can get the facts straight.  Chances are you will be talking house-to-house, not even neighborhood to neighborhood.

While I don’t think that we will see prices in Berkeley or the surrounding areas decrease significantly, I don’t think we will see much increase either.  With rates continuing to remain low there is no reason for buyers to make rash decisions.  Buyers are indeed picky.  And they are patient.  Because of this, they will wait.

There is talk of an influx of foreclosures hitting the market.  This doesn’t surprise me.  I think we will see more short sales, but the days on market for short sales will decrease.  Not because the banks have their systems in place, but because more sellers will lose their home to foreclosure during the process.  The one thing to watch is that banks are starting to promote short sales for their distressed clients, and are proactively calling owners to see if they would like to short sale their home.

I think the allure of investors seeking foreclosed properties will continue to rise.

2011 brought a ton of cash buyers.  As the economy attempts to recover, cash purchases in all price brackets will continue.

One demographic that is being hit is the younger market, the 30 – 34 year old market.  Loss of jobs, loss of appreciation, and student loans out of deferment, homeownership amongst this age bracket is falling faster than any other.  This is a market that I service, and I have definitely seen a shift in the mindset of the 30-somethings.

Sellers are discouraged.  They are fearful.  They are worried that prices will never go up.  Those who don’t need to sell, won’t.

This all sounds pretty grim, doesn’t it?  Well come on now, the economy is still in the pits.  Did you think real estate would be any different?  The good news is that if you are a seller, there are a TON of buyers who are well-qualified.  If you are a buyer, rates are still at an all time low.  And with rents projected to rise, now is the time to cash in on some real estate wealth.

Wherever your real estate path may take you in 2012, I wish you good health, happiness, and a hot cup of tea by a cozy fire.

Cheers!

Yes, cash!

I just had a listing in Berkeley that received 6 offers, 2 were all cash.
My 2-bed El Cerrito listing received 4 offers, 1 was all cash.
Another listing of mine in El Cerrito received 2 offers, 1 was all cash.
My clients just presented an offer on a cute house in Berkeley, they lost to all cash.

Where is everyone getting so much cash!!??!!

I asked some people and here is what they said:

1) “My parents gave us the cash, we are paying them back.”  (couple, 34 and 35 years old)
2) “We pulled all of our money from the stock market in 2010.” (couple, 41 and 44 years old)
3) “Stocks and 401K.” (39 year old single woman)
4) “We have saved for 6 years.” (38 year old and 44 year old couple)
5) “My company gave me a loan.” (46 year old single man)

Guess there is still some cash floating around in the Bay.

In addition to propping up the ceiling, which dropped to $625,500 on Oct. 1, the Senate amendment would also restore through 2013 the formula in use during much of the downturn for determining the upper loan limit in high-cost housing markets.

This is great news for the Bay Area!

The conforming loan limit determines the maximum size of a mortgage that Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hindering the ability of families in California to purchase homes by making them less affordable.

I am so thrilled to be with Berkeley Hills Realty.  With small-compay ethics and big-world views, Berkeley Hills Realty has an outstanding reputation in the real estate community which gives buyers and sellers a real advantage.  For the agents, everyone is treated equally and with respect.  From the moment I walked up the stairs of the Craftsman house that I have walked past for years, and into the office, I was greeted with nothing but kindness and consideration, a true testiment of the quality of agents at BHR.

You can now find me at:

Berkeley Hills Realty
1714 Solano Ave.
Berkeley, CA 94707
www.berkhills.com
office: 510-524-9888

http://newscenter.berkeley.edu/2011/09/13/in-law-units-east-bay/

1) 30 Year Mortgage. You can get a 30 year mortgage today with as little as 3% down.

2) Appreciation. According to the Macro Market Home Pricing Survey home prices are expected to appreciate starting in 2012, by 1.29%.

3) Interest Rates. Rates are on an increasing trend, and are expected to hit above 5% by the summer.  In November, 2010, rates were at 4.17%, today they are at 4.86%.  This small increase will cost you more money each month on a house that is priced the same.  Example: a $100,000 loan at 4.17% = $487.27/mo versus a $100,000 loan at 4.86% = $528.30/mo, a difference of $41.03/mo.  Yearly this difference adds up to $492.36 and over 30 years this adds up to $14,770.80.  If only you had bought in November instead of trying to chase down prices.

4) QRM. Quality Residential Mortgage- this is something you will start to hear more of in the future and it isn’t pretty.  The QRM will address 4 main issues: 1) they type of mortgage 2) The ratios between a purchaser’s income and their payment/overall debt 3) The amount of down payment which should be required (20% is being proposed) 4) The minimum FICO score for a borrower.  To give you an idea of the severity of these proposals, for the average mortgage written in 1997 (well before the housing mess), only 20.4% would have qualified for these current suggested QRM requirements. As mortgage underwriting has become much more stringent in the past three years, for mortgages written in 2009, only 30.5% (less than a 1/3) would qualify as QRM.  Here in the Bay Area this will be extremely problematic because of the high cost of housing.  Again, another reason that NOW is the time to buy.

5) Best Long Term Investment. Renters have only a fraction of the net worth that home owners do.  Real Estate has proven time and time again to be the best long term investment for your money.

Sounds like a good reason to me to buy now.

1) Just heard that rates are at their lowest for the year

2) Just heard that you can now obtain a conventional loan with as little as 3% down (will include mortgage insurance).

3) #2 applies to condos!

4) Just heard that transactions are closing in as little as 20 days!

5) Just heard that you can get a JUMBO loan with 30 year, 10/1 ARM and 10/1 Interest Only ARM!  80% ltv to $1million and then 75% ltv to $1.5 million.

Now that is some great mortgage news!

The app is really about organizing the buyer.  While looking at houses, users can take photos from the app and organize them, share them on Facebook, email them and rate their preferences.  They can also get information on schools, recent sales and demographics- all with a touch of the screen!

And guess what?  It’s F R E E !!!

Dowload the Better Homes and Gardens iPhone app here.

I had fully intended on writing a “I am going on maternity leave” entry but on the day before I was to go on maternity leave, I went into labor.  Well there went that bright idea.  And I was determined to take a maternity leave this time around so I closed up the computer and trading real estate for diapers.

Well, the time has come to return to this amazing world, and wow has it changed.  Lots of new regulations, disclosures, and foreclosures.  I have some catching up to do, and as I do, I will catch you up too.

Cheers!