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Real Estate
Small Signs of Optimism
If you live in the Bay Area, you hardly need reminding that you pay more for your home than most people. The region has the dubious honor of ranking No. 1 nationally in median home value, median monthly mortgage costs and median gross rent.
PRICE The median price paid for a Bay Area home is $365,000, compared with $177,900 nationally. That regional median price peaked at $665,000 in June 2007.
The Urban Land Institute’s new Bay Area Burden report offers more of the figures behind the general sense of being overstretched: almost 20 percent of all Bay Area homeowners spend more than half of their income on housing far exceeding the national average of 12 percent.
On average, these households spend more than $28,000 annually on housing about 39 percent of the area median income, the report said. Three-fifths of local residents live in communities unaffordable to households earning less than $80,000 a year.
SALES New sales figures show an increase in the area’s two biggest urban concentrations, at a time of year when one would expect a dip. The number of existing single family homes sold in San Jose in the month ended Oct. 15 was 764, up 12 percent from that period in 2008, according to MDA DataQuick. In San Francisco, there was an 18.5 percent jump with 282 sales.
Even in Oakland, where one expects less buoyancy, existing home sales slipped just 3.5 percent, to 276 from 286, according to DataQuick’s analysis.
Low interest rates as well as lower prices help explain the strong numbers.
In more hard-hit communities, government assistance has helped increase home sales, particularly among first-time buyers. Lending on about half of all homes bought in Martinez (51.2 percent), Brentwood (50.6 percent) and Antioch (50.3 percent) is insured by the Federal Housing Administration. In Oakley, it is 65 percent.
FORECLOSURES The foreclosure statistics tell another story, and the most notable trend is a discernible increase in the number of distressed homes at the higher end of the market. In San Francisco, where the median home price is $650,000 (compared with $365,000 for the Bay Area as a whole), there has been a significant rise in the number of default notices: 180 in the month ended Oct. 15, compared with 34 in the same period last year. Mountain View, Palo Alto and Danville have also had sharp rises in defaults.
A major cause is the resetting of “exotic” mortgages, those with low upfront interest rates. Plunging home values, and reduced availability of the jumbo mortgages, which make refinancing possible, have left many high-end homeowners facing significant monthly payment increases.
The State of Real Estate
Whether you’re renting, buying or selling, here’s a look at real estate trends.
A lot of change is happening in the housing market. Here’s the outlook.
With a landmark legal settlement poised to upend a decades-old norm that has dictated who pays real estate agents and how much, economists, agents and lenders are beginning to worry that the burden could now be on first-time home buyers.
American homeowners could see a significant drop in the cost of selling their homes after a real estate trade group agreed to a landmark deal that would eliminate the standard 6% sales commission.
A pricey housing market and higher interest rates have made it harder to afford a house, but so-called closing costs — for items like loan origination fees, discount points, appraisal and credit report fees — are also adding to the challenge.
As the prices for office space in urban centers tumble, cities whose municipal budgets rely on taxes associated with commercial real estate are starting to bear the brunt.
Homeowners are adding hidden doors and rooms to foil burglars, eke out extra storage space and prepare for Armageddon.
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