You are currently browsing the category archive for the ‘California Housing Market’ category.
It is expensive to live in the heart of Silicon Valley, but buyer demand for homes, including million-dollar homes, continues to be strong. Real estate information service DataQuick lists the following Silicon Valley communities among the highest ranked areas for million-dollar homes sales in California in the second quarter.
- Hillsborough topped the list with 134 sales in 2012 Q2, up from 118 in 2011 Q2, with the most expensive home purchased for $5.28 million.
- Saratoga ranked second with 126 million-dollar homes purchased in 2012 Q2, up from 93 in 2011 Q2, with the most expensive of purchased at $5.35 million.
- Cupertino ranked fifth (after Manhattan Beach and Newport Beach in Southern California) with 105 million-dollar homes sold in 2012 Q2, up from 88 in 2011 Q2, with the most expensive home purchased for $2.45 million.
- Los Altos ranked sixth after Cupertino with 102 million-dollar home sales in 2012 Q2. The most expensive home was purchased for $6 million. Los Altos had 81 million-dollar home sales in 2011 Q2.
- In Los Gatos, the most expensive home purchased cost $4.66 million. There were 67 million-dollar homes purchased in the zip code of 95032, up from 44 in 2011 Q2. In the Los Gatos zip code of 95030, 62 million-dollar homes were purchased last quarter, up from 31 in the second-quarter last year.
Despite the hype over Facebook’s IPO, Menlo Park and Palo Alto made the list, but had fewer million-dollar home sales in second-quarter 2012 than the same time last year, according to DataQuick. Menlo Park had 100 million-dollar homes sold in second-quarter 2012, down from 124 last year, with the most expensive home purchased for $4.8 million. Palo Alto had 62 million-dollar homes sold, down from 69 in 2011 Q2, with the most expensive home purchased for $3.15 million.
Silicon Valley Association of REALTORS® (SILVAR) president Suzanne Yost, who is an associate broker with Alain Pinel Realtors in Los Gatos, is not surprised that many of the communities located within SILVAR’s five districts made the list. “Silicon Valley’s economy is healthy compared with other parts of the state because it is the heart of innovation, with many successful tech companies,” said Yost.
Yost added, “Our members have reported a surge of foreign buyers. They are attracted to the region’s weather, diversity, excellent schools, good mix and proximity to shopping, entertainment, the arts and services. We’re not that far from San Francisco, close to the freeways and airports. Buyers know they can’t go wrong and they are willing to pay the price for these amenities.”
SILVAR has five member districts, allowing members to work closely with their communities. They are the Menlo Park/Atherton District (including Portola Valley, Woodside and East Palo Alto), Palo Alto District, Los Altos/Mountain View District (including Los Altos Hills), Cupertino/Sunnyvale District and the Los Gatos/Saratoga District (including Monte Sereno).
The Federal Housing Finance Agency (FHFA) announced on Tuesday that it will align guidelines for Fannie Mae and Freddie Mac short sales and allow lenders and servicers to quickly and more easily qualify borrowers for a short sale.
The new guidelines issued by Fannie Mae and Freddie Mac to their mortgage servicers will offer a more streamlined approach to the short sale process by consolidating existing short sales programs into one standard short sale program. The program rules will expand eligibility criteria of borrowers, so homeowners who are current on their mortgage payments, yet suffer from specific hardships, will be able to qualify more quickly for a short sale.
Effective Nov. 1, homeowners with a Fannie Mae or Freddie Mac mortgage will be allowed to sell their home in a short sale even if they are currenton their mortgage, if they have an eligible hardship. Servicers will be able to expedite processing a short sale for borrowers with hardships such as death of a borrower or co-borrower, divorce, disability, increase in housing expenses, unemployment, disability, or relocation for a job, without any additional approval from Fannie Mae or Freddie Mac.
“We are pleased with the new guidelines. REALTORS® at the local, state and national level have long advocated for a more streamlined, standardized short sale process. Improving short sale eligibility will allow more families to avoid foreclosure and reduce the negative impact foreclosures have on families and communities,” said Suzanne Yost, president of the Silicon Valley Association of REALTORS®.
Some specific changes include:
- Eliminates current Fannie Mae and Freddie Mac short sale programs and creates a single standard short sale process for both entities (Fannie and Freddie HAFA programs will expire at the end of the year).
- Enables servicers to quickly and easily qualify certain borrowers who are current on their mortgages for short sales without waiting for an approval from Fannie Mae or Freddie Mac
- Offers special treatment for military personnel with Permanent Change of Station (PCS) orders.
- Standardizes and clarifies foreclosure suspensions on a property with an approved short sale.
- May pay borrowers up to $3,000 in relocation assistance.
- Fannie Mae and Freddie Mac will offer up to $6,000 to subordinate lien holders to expedite a short sale.
Additionally, FHFA clarified that a borrower experiencing a hardship must wait at least two years before becoming eligible for a Fannie Mae or Freddie Mac loan. These changes follow FHFA’s announcement in June that established strict timelines for servicers to respond to short sales within 30 days of receipt of a short sale offer, provide weekly status updates to the borrower, and communicate a final decision to the borrower within 60 days of receipt of the offer.
At this month’s Palo Alto District tour meeting, Palo Alto brokers said the market environment has greatly improved from a year ago. While inventory is still low, it has been slowly rising.
Keller Williams managing broker Bob Stelzer indicated demand is coming back strong, and there has been a significant rise in listings since April. His data showed Menlo Park with 52 current active listings compared with 26 in April; Palo Alto 51, compared with 29 in April; and Los Altos 45 compared with 24 in April. High-end property sales increased substantially in the first half of this year in comparison to the same time last year.
Sellers are becoming realistic, according to the brokers. Many sellers caught up in the hype of Facebook’s IPO and thinking they would strike gold by waiting for prices to skyrocket, now realize the phenomenon did not create the “super market” they thought it would. These sellers are now ready to sell.
Broker Tim Foy of Midtown Realty, however, believes inventory is low because people are still looking for stability. Despite the uptick, he expects low inventory for a while. “It won’t change overnight. It’s a market reality,” commented Foy.
According to Alain Pinel Realtors broker Bob Gerlach, it’s not the Facebook IPO phenomenon that is driving the market, but rather, it’s interest from Chinese and other foreign buyers. He said majority of transactions through his office are with Chinese cash buyers. Foreign interest in property in the area has created a “dramatic effect” in the market, said Gerlach.
Gerlach indicated an obstacle to the market rebound is a pocket of sellers who can’t sell because they don’t have better places to go. Buyers these days are more selective. “It is a discretionary market,” he noted.
The brokers said listing agents need to make their sellers aware that despite the high demand, not all houses are “entitled” to top market prices because today’s buyers are more informative. There is more discretion now regarding “housing with a blemish,” added Foy.
Left to right: SILVAR Past President Gene Lentz, Board Director Bill Rehbock, Affiliate Chair Richard Miller, Board Director David Tonna, President-elect Carolyn Miller, C.A.R. President LeFrancis Arnold, President Suzanne Yost, Los Gatos/Saratoga Chair Cassie Maas, and C.A.R. Past President Jim Hamilton
SILVAR members from the Menlo Park/Atherton and Los Gatos/Saratoga districts had the opportunity to meet and listen to California Association of REALTORS® President LeFrancis Arnold at their meetings this week. Meeting California REALTORS® across the country is part of his duty as president of the state REALTOR® association, said Arnold.
Arnold said SILVAR REALTORS® are very fortunate to be working and living in Silicon Valley because compared to other parts of the state, the region was not hit as hard by the housing downturn. He has observed the growing interest in residential real estate here and in the state from foreign buyers.
“The housing industry is one of the most important assets in California,” said Arnold. Proof of this is in the billions of dollars of residential real estate purchased by international investors. Arnold noted the top foreign buyers come from Canada, China, Mexico and Great Britain, and they are looking at properties in California.
“No immigrant comes to America with a desire to be a tenant. They dream of homeownership,” said Arnold.
Global real estate is growing in importance, said Arnold. Foreign investors and immigrants create opportunities and bring diversity not only in housing, but also in the election process. It is important that everyone, regardless of race, is given the opportunity for homeownership. Arnold said another part of his duty as C.A.R. president is to meet with legislators and deliver this message. It is what C.A.R., SILVAR and the National Association of REALTORS® do at the state, local and national levels.
Arnold underlined the importance of political advocacy. REALTORS® at the local, state and federal level fight legislation that will negatively affect homeownership and allow REALTORS® to be political activists. He stressed advocacy for homeownership needs to continue because the threats are very real, particularly proposals to impose transfer taxes and continuing discussions on eliminating or reducing the mortgage interest deduction (MID).
Left to right: SILVAR President Suzanne Yost, Menlo Park/Atherton Chair Chris Isaacson, C.A.R. President LeFrancis Arnold and SILVAR Past President Gene Lentz
Arnold said REALTORS® at the local, state and national level will continue to work as a team and fight legislation that hurts the American Dream of homeownership.
“Each of us has a role to play,” said Arnold. “We have to continue to fight for homeownership rights.”
Last week, the California State Legislature passed a Conference Report that was a key element of the California Attorney General’s package of bills making up a “Homeowners Bill of Rights.”
The legislation is intended to codify the national negotiated settlement between the state’s Attorney General and major banks. The California Association of REALTORS® (C.A.R.) had opposed the legislation because it felt, while well-meaning, the legislation would encourage the filing of frivolous lawsuits that would delay the foreclosure process and further discourage lending.
While C.A.R. is disappointed in the final outcome, the bill passed by lawmakers is a much improved version of the package of bills initially sponsored by the Attorney General. The original bill would have halted all foreclosures, drying up both REO inventory and even short sales.
“The good news is what has passed is an improved version of the package of bills initially sponsored by the Attorney General. During Legislative Day in May, REALTORS® from across the state traveled to Sacramento and spoke with their legislators against these complicated and harmful provisions. The Conference Committee ultimately did not include them in the final report,” said Suzanne Yost, president of the Silicon Valley Association of REALTORS®.
The Silicon Valley Association of REALTORS® (SILVAR) praises Congress for finally passing one of the real estate industry’s key legislative priorities, a 5-year reauthorization of the National Flood Insurance Program (NFIP), also known as the “Biggers-Waters Flood Insurance Reform and Modernization Act of 2012.” President Barack Obama is expected to sign it into law.
According to the National Association of REALTORS®, the 5-year reauthorization will bring certainty to real estate transactions in more than 21,000 communities nationwide where flood insurance is required for a mortgage. The bill ensures the program will continue long-term for more than 5.6 million business- and home owners who rely on it.
The passage of the flood insurance bill is the culmination of a successful multi-year REALTOR® campaign and a final push at the National Association of REALTORS® (NAR) Midyear Legislative Meetings & Trade Expo in May 2012. During their meetings SILVAR members joined thousands of REALTORS® nationwide and met with their members of Congress in Washington, D.C. and urged action on the National Flood Insurance Program (NFIP) and several other priority issues.
Since 2008, Congress had been extending the NFIP a few months at a time. Twice this led to shutdowns, including one that stalled more than 40,000 home sales in June 2010 alone. The NFIP will be in effect until Sept. 30, 2017.
The NFIP has averted $16 billion in losses by strengthening millions of properties against floods. Without NFIP, there would be more uninsured and unmitigated properties, taxpayers would still be “on the hook” for disaster assistance to these properties, and there would be no premiums to pay down any remaining loan balance or collect interest.
This week SILVAR members joined their fellow REALTORS® from across the nation and convened in our nation’s capital for the National Association of REALTORS® Midyear Business Meetings and visits with members of Congress, including U.S. Representatives Anna Eshoo and Mike Honda during the meetings.
The SILVAR delegation included SILVAR President Suzanne Yost, President-Elect Carolyn Miller, NAR Directors Jeff Barnett, Jim Hamilton, John Tripp, C.A.R. Directors Leannah Hunt, Susan Tilling, Federal Political Coordinator and SILVAR PAC Trustee Carole Feldstein and Joanne Fraser.
Below are the issues that were brought to the attention of our legislators.
REO Bulk Sale Initiative
FHFA (Federal Housing Finance Agency) has announced a pilot program to bulk sale 484 properties in Riverside/San Bernardino/Los Angeles counties, though no date has been set for these sales. Nineteen members of California’s Congressional Delegation have signed on to a letter to Acting Director Edward DeMarco stating their opposition to a proposed bulk sale pilot program for Fannie Mae REOs. Many members of Congress on both sides of the aisle have been frustrated with how Edward DeMarco has utilized the GSEs in addressing their distressed properties and as a tool to address the housing market.
REALTORS® informed members of Congress that bulk sales of Fannie Mae and Freddie Mac properties will cost the tax payers money because they will be sold for less than what they could receive if these properties were sold individually.
Preserve the Mission and Purpose of the FHA Program
The House Financial Services Committee has passed H.R. 4264, the “FHA Emergency Fiscal Solvency Act of 2012,” that will provide FHA (Federal Housing Administration) with additional tools to mitigate risk without overburdening consumers. Several members of Congress have written to the U.S. Department of Housing and Urban Development (HUD) to express concern over FHA’s condominium policies that make it very difficult to purchase a condo with FHA financing.
REALTORS® asked members of Congress to Support H.R. 4264, the “FHA Emergency Fiscal Solvency Act of 2012,” as it was passed out of committee. The bill seeks to balance the need to improve the fiscal solvency of the FHA fund with costs and availability to consumers. Members of Congress were also asked to submit comments to HUD opposing the condominium regulations, and expressed concern that qualified homebuyers are being shut out of often the most affordable homeownership option available.
Protect Homeownership Tax Benefits
H.R. 4202, which has been introduced in the House of Representatives, would extend the mortgage cancellation relief for two more years, through December 31, 2014. H.R. 4336, a similar bill, which would extend it for one year. The Senate as introduced S. 2250, which also extends the mortgage cancellation relief for two years. REALTORS® urged that more time is needed to restore equilibrium in the market. More than 20 percent of all homeowners currently owe more on their mortgages than the current fair market value of their homes. Members of Congress were asked to co-sponsor H.R. 4336 or H.R. 4202.
Reauthorize the National Flood Insurance Program (NFIP)
In July 2011, the House of Representatives voted 406-22 to approve a five-year reauthorization of NFIP, H.R. 1309. The Senate Banking Committee has since unanimously reported a similar bill, S. 1940, which continues to await full Senate consideration. Forty-one senators recently wrote their leadership urging them to bring up such a measure for debate. REALTORS® thanked members of Congress for voting for H.R. 1309, and urged the Senate to pass a five-year flood insurance reauthorization bill before the current temporary extension of the flood bill expires on May 31.
Secure the Future of Homeownership
During the first session of the 112th Congress, the House Financial Services and Senate Banking Committees held numerous hearings on the housing market, primarily focusing on foreclosure/loss mitigation and the state of the nation’s housing. Year-to-date, the House Financial Services Committee has not held any hearings on GSE reform, appraisals, short sales or QRM/QM. The Senate Banking, Housing and Urban Affairs Committee held only one two- part hearing on the state of the nation’s housing market. NAR expects that with a renewed focus by the Administration and Congress on housing concerns, additional hearings on all three issues will be initiated and that NAR will be a primary participant.
REALTORS® asked that reforms of the secondary mortgage market be comprehensive, and the federal government must have a continued key role in the secondary mortgage market in order to ensure that there is capital for mortgage lending in all mortgage markets under all market conditions. REALTORS® asked for a hearing on H.R. 1498 or S. 2120. This legislation requires services to decide whether to approve a short sale within a specified time frame of completion of the short sale request. REALTORS® also seek increased educational standards for appraisers, and support state regulation of all appraisers, regardless of their source.
Bolster Commercial Real Estate Lending
Representatives Ed Royce (R-CA) and Carolyn McCarthy (D-NY) introduced H.R. 1418, the Small Business Lending Enhancement Act of 2011, to increase the member business lending cap from 12.25 percent to 27.5 percent of total assets for well-capitalized credit unions. The Senate has introduced S. 2231 as a companion bill. In June 2011, the House Financial Services Committee voted to pass H.R. 940, the United States Covered Bond Act of 2011. This legislation facilitates the creation of a U.S. covered bond market, which would provide an additional source of commercial real estate lending. The Senate has introduced S. 1835 as a companion bill.
REALTORS® asked that Congress pass H.R. 1418 and S. 2231. Credit unions can fill in the commercial real estate lending gap and help get capital to the struggling small businesses that occupy commercial space. They also seek passage of H.R. 940 and S. 1835 to create a U.S. covered bond market, which would complement the fragile commercial mortgage-backed securities (CMBS) market by providing an additional new source of capital for the commercial real estate industry.
On April 17, the Federal Housing Finance Agency (FHFA) announced a new directive as part of FHFA’s continued servicing alignment initiative that directs Fannie Mae and Freddie Mac to align their guidelines for servicing delinquent mortgages they own or guarantee.
The new directive requires that servicers of Fannie and Freddie loans:
• Review and respond to borrower requests for short sales within 30 days after receipt of a short sale offer and a complete borrower request.
• If the review is still under way after 30 days, give the borrower weekly status updates. (This allows more time where necessary, such as where subordinate lenders and/or mortgage insurance is involved.)
• Advise the borrower of the final decision within 60 days after receipt of a short sale offer and a complete borrower request.
The new timelines apply both to HAFA loans and to other short sales approved by Fannie Mae and Freddie Mac. Additional enhancements are planned by the end of 2012 addressing borrower eligibility, simplifying documentation, valuing property, payments to subordinate lien holders, and mortgage insurance.
REALTOR® officials at the national, state and local level applaud the move by FHFA to streamline the short sale process. Faster response times will help thousands of distressed homeowners, according to Suzanne Yost, president of the Silicon Valley Association of REALTORS®.
“Short sale transactions are more complicated than regular transactions and they have taken so much time that many prospective buyers have walked away from short sales,” said Yost. “The FHFA’s move to streamline the short sale process is a critical step toward a full housing market recovery.”
In another move to protect struggling California homeowners, the California Association of REALTORS® (C.A.R.) is sponsoring a bill so homeowners who face losing their home and have negotiated a short sale in good faith with their lender or servicer are not forced to go through foreclosure.
Assembly Bill 1745 (Torres, D-Pomona) prevents lenders or servicers that have agreed to a “short sale” from foreclosing on a home. For any number of reasons (e.g., sickness, job loss, etc.), a homeowner may be unable to continue making his or her monthly mortgage payment. Rather than go through a lengthy and stressful foreclosure process, the homeowner will attempt to negotiate a “short” sale with the lender in which the lender agrees to accept less than the amount owed by the homeowner.
Foreclosures and short sales are usually handled by two different departments within banks. Unfortunately, these two departments often do not communicate with each other, which can frequently result in a homeowner being foreclosed upon, despite having previously negotiated a short sale with the same bank.
AB 1745 will likely result in banks implementing a dual tracking system to prevent foreclosing upon homeowners with whom they have already negotiated a short sale. The measure is scheduled for hearing on Monday, April 30 by the Assembly Banking and Finance Committee.
The Silicon Valley Association of REALTORS® joins the nation in observing Fair Housing Month in April. This year marks the 44th anniversary of the 1968 landmark Fair Housing Act, which prohibits discrimination based on race, color, national origin, religion, sex, familial status or handicap.
“REALTORS® play a vital role in ensuring fair housing for all and strive every day to make home ownership accessible to everyone,” said Suzanne Yost, president of the Silicon Valley Association of REALTORS®.
“REALTORS® are on the ‘front lines,’ working with buyers and sellers to see that they enjoy the benefits of a housing market free from discrimination.”
Members of the Silicon Valley Association of REALTORS® abide by a Code of Ethics that provides under Article 10 that REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin and shall not be a party to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status or national origin.
The home seller, the prospective home buyer, and the real estate professional all have rights and responsibilities under the law. Home sellers and landlords have a responsibility and a requirement under the law not to discriminate in the sale, rental and financing of property on the basis of race, color, religion, sex, handicap, familial status, or national origin. They cannot instruct the licensed broker or salesperson acting as their agent to convey any limitations in the sale or rental because the real estate professional is also bound by law not to discriminate.
Buyers and renters have the right to expect that housing will be available without discrimination. This includes the right to expect:
• housing in their price range made available without discrimination
• equal professional service
• the opportunity to consider a broad range of housing choices
• no discriminatory limitations on communities or locations of housing
• no discrimination in the financing, appraising, or insuring of housing
• reasonable accommodations in rules, practices and procedures for persons with disabilities
• non-discriminatory terms and conditions for the sale, rental, financing, or insuring of a dwelling
• freedom from harassment or intimidation for exercising their fair housing rights.
If you feel you have experienced discrimination in the rental, sale, financing or insuring of a property, you may file a complaint with the Department of Fair Employment and Housing (DFEH). Complaints must be filed within one year of the alleged discrimination. Visit http://www.dfeh.ca.gov for more information.
Silicon Valley Association of REALTORS® says ... 