How to Get Your Home “Sale Ready!”

How-To: Get Your Home Ready for Spring Buying Season in a Hot Market

The first day of spring was earlier this week—and you know what that means.  It’s the official start of the home-buying season! (Technically the season came early this year — California had 12 out of 20 of the hottest markets during the month of February, according to the Realtor.com Hotness Index).

If you’re thinking of putting your home on the market, now is the time. But before you do, you might want to start a mental checklist of pre-listing to-dos. De-clutter your office. Check. Clean out your garage. Check. Repaint your hot pink bedroom a tasteful neutral. Eh….check. Hire a listing agent. No question. (You better get on that, stat!)

To help you get your house in tip-top shape for open houses and showings, here are 12 simple and relatively inexpensive tips from stagers that will make your house stand out to buyers (and may ultimately help you sell it quicker and for more money in a hot, highly competitive market).

1. Pump Up Your Curb Appeal

The old saying is true: you only get once chance to make a good first impression. Make sure that the outside of your home looks as appealing as possible. Water and mow the lawn, trim the trees, cut back overgrowth and plant colorful flowers in the front and back. Even paint your front door an unexpected color—to give buyers a hint at what awaits them inside.

2. Clear the Clutter 

When it comes to staging, any stager will tell you: less is more. Having fewer things filling the rooms makes your home look both neater and roomier. It allows buyers to more easily visualize their own furnishings there. Be sure to store bicycles, gardening equipment, and children’s and pet’s toys. Also move any cars from the driveway and along the curb in front of your home.

3. Focus on the Living Areas First

A living room is an area in which potential buyers should be able to envision themselves entertaining friends or gathering with their family. With that in mind, consider making the area appear as large and functional as possible by removing any unnecessary furniture and decorations.

4. Go Light and Airy in the Bedrooms 

To make bedrooms appear bigger, try painting walls a light color and bringing in a neutral rug. Since beds will be the largest piece in the room, consider linens that don’t stand out too much.

5. Give Your Bath a Makeover 

Another area buyers will typically look is the bathroom. Some stagers suggest replacing standard bathroom tub or doing tile surface refinishing at a cost of about $1,900. You can add a new vanity, a medicine cabinet and hardware for an additional charge. New floor tiles can be laid on top of existing tile. A little goes a long way.

6. Make Your Home Anonymous

Of course you’re proud of your family, but now is not the time to show their pictures and mementos. Stow away family photos, trophies, collectibles and any other personal items. You want buyers to imagine their families in the house, and that’s hard to do with constant reminders of your family. This process can also help you declutter.

7. Make Necessary Repairs

Look at your house with a critical eye. The last thing you want potential buyers to see are chipped tiles in the bathroom, a faucet that doesn’t work, or burned out bulbs in light fixtures. All systems and appliances should be in good working condition.

8. Consider Cosmetic Improvements 

Simple, cosmetic touch-ups like painting, wallpapering, adding new light fixtures, and minor landscaping, can really help a home show better. If you paint, make sure it’s in a neutral color. You don’t need to spend a lot of money on these projects to help make your home look its best but remember that if there are any problems these must be disclosed to potential buyers whether or not the problems have been remediated.

9. Give Your Home a Good Spring Cleaning

This can be the most cost-effective thing you do in prepping your home for sale. Potential buyers will want to inspect every part of your home, from the kitchen to the bathrooms to the garage. After removing any clutter, clean the inside of the house from top to bottom. Clean carpets, spotless kitchens and bathrooms, and tidy bedrooms can help make a positive impression.

10. Go Green 

An easy way to breathe new life into your rooms is by adding plants, whether succulents, ferns or rosemary topiaries. Place a floral arrangement on tabletops for a lush touch.

11. Mix and Match Your Furniture 

Sure, you may be proud of your matching Pottery Barn sofas and loveseats in the living room. But you can give the space a quick refreshed look by separating those pieces. Replace a bulky piece of furniture with a chair that takes up less space and makes the room seem larger.

12. Add the Finishing Touches

When stagers are through decluttering a home they finish by adding a few carefully selected items for beauty—a painting in the living room, fresh flowers in the kitchen, an accent pillow for the sofa, or maybe an area rug for the bedroom.

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Bay Area Real Estate Market Update

California Real Estate Heats Up As Inventory Remains Low

California continues to deal with limited listing inventory, which is resulting in an increase in buyer interest, attendance to open houses and multiple buyer offers. The job growth and a strong stock market have made home buying a more achievable goal for many nationwide.

According to the National Association of Realtors® (NAR) Pending Home Sales Index, there was a 2.8 percent drop in contract activity for the West, causing the lowest pending home sales in the last 12 months.

“Despite a strong sales start for the year, the housing supply shortage in California continues to cast doubt on whether the sales momentum can be carried forward into the spring home buying season,” said Leslie Appleton-Young, senior vice president and chief economist for the CALIFORNIA ASSOCIATION OF REALTORS®. “The number of active listings has been on a downward trend for the past 20 months and has shown no signs of improvement. As we move into the spring home buying season, we should see a marginal increase in listings, which will be offset by a pickup in sales. The inventory level is not likely to get better in the upcoming months.”

What does this mean for sellers? Most homes that are reasonably priced tend to receive multiple offers and stay on the market for as short as one month, according to Lawrence Yun, NAR chief economist.

“Sales got off to a fantastic start in January, but last month’s retreat in contract signings indicates that activity will likely be choppy in coming months as buyers compete for the meager number of listings in their price range,” added Yun.

What does this mean for buyers? As limited listing inventory continues, homes will receive more buyer offers and stay on the market for shorter time periods. Buyers should come prepared with financing and ready to make a quick purchase decision.

Here’s what was happening in our local Northern California offices in early March:

 

East Bay – The East Bay region continues to display signs of a strong market with limited inventory. There have been a few more new listings coming on the market. Overall listings are still selling briskly and are receiving multiple offers.

Monterey County – The market continues to be a little on the soft side, but several agents are reporting that they are receiving calls for listing appointments that will be on the market very soon. Active properties in most cities are ranging from one- to three- months supply. Reasonably priced homes seem to sell more quickly due to the quantity of buyers and offers, and we expect to see even more buyers this month.

North Bay – Across the North Bay, we are experiencing an increase of activity in the last couple of weeks. Inventory is steady to slightly increasing and multiple offer situations seem to be on the rise again. Open houses have been very active and there are many buyers waiting for new inventory to come on the market. As of March 13th there were 74 single-family detached homes for sale in San Rafael, and of those, 32 are pending. The San Rafael market continues to be very strong and should remain strong well into late this year. Countywide, we are seeing a trend similar to the middle of summer 2016 with sold units above $1 million and the percentage of available listings above $1 million. Available listing inventory compared to the same period last year is up only 3.6 percent. Pending and sold units are up 42 percent and 28 percent, respectively for the same period. In Southern Marin, the luxury market is doing well. The manager of the Southern Marin office said the office closed a Tiburon property for $8,250,000 and put several multimillion dollars into escrow during the past two weeks. About 20 percent of the active market is listed over $3 million. However, only 5 percent of the sold properties are over $3 million. Only the most competitively priced and desirable luxury properties receive offers. The general market continues to have a limited supply to meet demand. However, the month supply of inventory has risen from 1.1 months in Dec. 2016 supply to 2.5 months as of March 16, 2017. This is definitely a seller’s market.

Placer County – Open houses continue to attract many buyers. Luxury sales for properties priced above $1 million are down slightly from 2016 luxury sales. For 2017, there have been 33 luxury properties sold as compared to 34 sold last year for the same period. The median sales price for luxury properties in 2017 thus far is $1,540,000, which is down 9 percent from the median sales price of $1,700,000 in 2016. The average sale price of luxury homes in year to date stands at $1,862,768 as compared to $2,609,244 in 2016 and is down almost 29 percent. Even with one of the largest snow level years in history, the 2017 real estate market in North Lake Tahoe and Truckee has begun the same as it did for the same period in 2016, which was a very solid year. There continues to be considerable activity in the market as many buyers and savvy investors are actively looking for homes.

Sacramento County – There is an abundance of inventory over $1 million, which makes this one of the few buyer’s markets in the state.

San Francisco – There is more inventory over $4 million showing a big increase in closings over the last few weeks. More than 75 percent of houses are selling over asking and surprisingly over 65 percent of condos are closing over asking, despite the condominium inventory being considerably higher year over year. Entry-level and fixer properties are still yielding the most traffic and offers. The luxury properties are seeing more price reductions, competition and lengthening days on market. As per usual, the number of homes available continues to increase as we enter the spring home selling season. We are still seeing multiple offers (as many as 13 during this period), and offers for well over the listing price. Open houses and broker tours continue to be well trafficked. However, we are also seeing buyer fatigue. Pricing is critical because even if a property is slightly over priced, the property will sit without offers.

SF Peninsula – In some areas, we are beginning to see multiple offers on properties that we have listed. Oceanfront homes are selling quickly if priced right. There are many cash purchases and quick closes. Despite the low inventory and high demand, there is extreme price sensitivity. Homes below $900,000 are selling quickly. Palo Alto and surrounding areas north and south tend to receive offers exceeding 20 percent of the listing price.

Santa Cruz County – Approximately half of the active inventory of single-family homes on the market have an asking price of over $1 million. There are 115 active single-family homes asking over $1 million and 17 are pending. The number of single-family homes active on the market in Santa Cruz County is currently 227, compared to 317 last year in March, which has created a competitive buying environment. There are a noteworthy number of all cash purchases, and we are seeing offers coming in on listings quickly as well as multiple offers on listings in the more affordable price range. In February we saw 97 sales, which is slightly up from February 2016, which had a total of 94 sales.

Silicon Valley – Activity is excellent but inventory levels are still low compared to buyer demand. Everything under $2.5 million sells quickly unless it is severely over-priced. Closing figures for the month of February reflected slow sales in January. Activity has, however, increased in March with more homes being listed to meet extraordinary buyer demand. With buyers facing the prospect of higher mortgage rates, the urgency to secure and close a property has increased significantly. South County agents are informing sellers that, if they are thinking about listing their homes, timing could not be better. The luxury market with homes priced over $4.5 million is steady but lacks offers. Typically we see an increase in inventory in the spring. However, we have already seen our inventory rebound faster than in years past, albeit slow. Many of the homes that had been lingering on the market have either gone off the market or have been sold. Currently, we have only a little more than one month’s worth of inventory in Los Altos. With such a limited number of homes available for sale, most homes are receiving multiple with a sales price over asking. The market in Mountain View is even hotter with barely two weeks’ worth of inventory. In short, the number of homes coming on the market for sale each week is on the rise in both the Los Altos and Mountain View markets. And although inventory is increasing, homes are still selling very fast. Reasonably priced homes coming on the market tend to sell in less than a week.

South County – There is still a shortage of inventory, especially in the under $500,000 market. We are seeing more interested buyers coming to the area, which means well-attended open houses. Most homes receive offers within a few days. Homes under $400,000 are seeing multiple offers. Over the last week we have seen an increase in listings, but finding homes for first-time buyers in the price point of $350,000 and below is a struggle. Most listings are seeing multiple offers and the majority of listings are going over asking price.

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Bay Area Housing Market Update

Housing Market Starts Off Year on the Upswing

As the housing market approaches the end of the first quarter, there have been some encouraging signs for home sellers and homeowners who may be weighing whether to sell. The year kicked off on a fairly strong note for the housing market both on a national and statewide level.

January sales of existing, single-family detached homes in California totaled 420,100, up 4.4 percent from a year earlier and 2.1 percent from the prior month, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

The median price for single-family homes sold in California in January was $489,580, which is a 4.8 percent increase from the median price recorded during the same month in 2016 but a 3.8 percent decline from December’s $508,870 median price.

Local housing experts attributed the boost in January sales to rising mortgage interest rates which encouraged buyers who had been waiting to make a move to make a purchase before interest rates rise further.

“California’s housing market continues to be defined by the higher-priced, coastal markets and the less expensive, inland areas that still offer access to major employment centers,” said C.A.R. President Geoff McIntosh. “For example, eroding affordability and tight housing inventory are pushing buyers away from the core Bay Area markets of San Francisco, San Mateo, and Santa Clara and into less expensive bedroom communities, such as Contra Costa, Napa, and Solano. In Southern California, an influx of buyers from coastal employment areas into the Inland Empire drove healthy year-over-year sales in Riverside and San Bernardino.”

Several metropolitan areas in California were among the regions nationwide where homes were selling fastest. Data from realtor.com® showed that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in January were San Jose-Sunnyvale-Santa Clara, Calif., 43 days; San Francisco-Oakland-Hayward, Calif., 47 days; San Diego-Carlsbad, Calif., 55 days; Seattle-Tacoma-Bellevue, Wash., 57 days; and Nashville-Davidson-Murfreesboro-Franklin, Tenn., Vallejo-Fairfield, Calif., and Greeley, Colo., all at 58 days.

Other parts of the country also experienced gains in sales and prices during the month of January. In fact, every region except the Midwest saw an increase in unit sales, according to the National Association of REALTORS® (NAR).

Nationally, sales of existing homes, including single-family homes, townhomes, condominiums and co-ops, were 3.8 percent higher in January than a year ago and were up 3.3 percent from December 2016, according to NAR®. The median existing-home price for all housing types increased 7.1 percent year-over-year to $228,900 compared to $213,700.

NAR Chief Economist Lawrence Yun noted that strong hiring and improved consumer confidence at the end of 2016 “appear to have sparked considerable interest in buying a home.”

“Market challenges remain, but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability conditions,” Yun said.

But in a separate report about pending home sales released in late February, Yun noted that homebuyers faced obstacles in January, including insufficient supply levels, which was a drag on contract activity in some parts of the country. In fact, the Pending Home Sales Index, which is a forward-looking indicator based on contract signings, slid to its lowest level in a year. Pending sales decreased 2.8 percent in January from December 2016 and although January’s index reading was 0.4 percent above the year-ago index reading, it is the lowest since then.

Take a look at what was happening in our Northern California offices during the last two weeks of February:

East Bay – The region is still dealing with a shortage of active inventory, which is leading to multiple offer situations and properties selling well over the asking price in Oakland and other areas. “Oakland is very much still on the receiving end of many buyers coming in from all over the Bay Area and out of state making it more and more difficult for first-time homebuyers to find a home,” explains the Oakland office manager. To provide a better idea of how tight the housing supply is, the Berkeley office manager outlined inventory levels noting that there were virtually no changes from the prior two weeks: In Berkeley there were 27 houses available for sale compared to 33 under contract, which is an inventory supply of .82 months. In Albany, there were six active listings versus seven under contract, a supply of .86 months. El Cerrito showed 16 active properties and 15 under contract, which is a supply of 1.07 months. In Oakland, there were 211 active listings and 249 under contract, a .85 months’ supply. Looking north to Richmond, there were 90 active listings and 93 under contract, a .97 months’ supply.  There is consistent strength in the East Bay market, which is reflected in the continued price increases, intense demand for homes in the region, and low supply.

Monterey County – Weather hampered home sales and listing inventory in the region, which experienced a decline in sales and new listings in February. Many sales associates reported that they couldn’t have properties photographed because of the flooding, explains the manager of the Monterey Peninsula offices. “We hope that February showers will bring March buyers to the market,” he said.

North Bay – As in other areas, one of the main challenges of the market in the North Bay, was lack of inventory. Multiple offers were happening with nearly all of the new listings coming on the market, as demand continued to outpace supply in the last two weeks of the month, notes the Greenbrae office manager. Listings priced under $1 million, in particular, sold quickly. In Marin County, there were 215 properties available for sale in the last two weeks of February, with only 55 priced under $1 million and 18 priced under $750,000. In a similar manner, the Novato office manager explains that homes in the $1 million to $1.5 million price range in “prime locations” were selling quickly. She said inventory is so tight that homes that had lingered on the market for more than three months were selling. Novato had 41 active listings, 25 percent of which were condominiums, and 50 contingent/pending sales in the last two weeks of February. The tight supply is affecting unit sales. Sales were down 9.7 percent year-over-year and inventory declined 20.8 percent, according to the Santa Rosa Bicentennial office manager. The median price for February was $550,000, which is 7.8 percent higher than the same month in 2016. The significant rainfall also affected market conditions, as the Santa Rosa Mission office manager shares that it kept “a lid on the market.” Meanwhile, in West County, listings doubled but inventory remained at an all-time low, said the Sebastopol office manager. Most properties in that region received multiple offers and went under contract within 10 days of hitting the market, she notes, and all cash offers were “usually the winning offer”.

Placer County – The area saw robust open house activity, even as inventory remained tight and homes priced under $500,000 were selling within a few days of being on the market and drawing multiple offers. The Auburn office manager points out that several homes priced under $400,000 went into escrow within a couple of days and for over the list price. Some offers turned into all cash offers, instead of offers with a mortgage contingency, so that buyers could be successful, according to the El Dorado Hills office manager. As for the higher-end market, more listings came on the market but pending sales and closed sales were about the same. Buyers of luxury properties continued to be being very selective.

Sacramento County – The supply of listings picked up in some areas and declined in others, but multiple offer situations were still occurring in some communities. Listing inventory doubled in the last two weeks of February but well-priced homes continued to sell at a quick pace, according to the Folsom office manager. However, the Sacramento Fair Oaks manager reports that inventory was still very light and that multiple offers on lower-priced homes was “leading to appraisal problems.”

San Francisco – Sales activity was on the rise in San Francisco in the last two weeks of February, with both the Lakeside and Pacific Heights office managers noting an increase in sales. Multiple offers were common, as the San Francisco Lakeside office manager points out that most properties that were “well priced, well prepared and well publicized” were getting more than 10 offers. Still, the manager cautioned that some sellers were unrealistic with price expectations.

SF Peninsula – The overall theme in the region continues to be a shortage of supply met with strong buyer demand, although some offices serving the area reported an uptick in listing inventory. Open houses in Menlo Park, San Carlos, and other communities in the region attracted large turnouts. The Woodside & Portola Valley office manager points out multiple offers were consistently seen for properties across most price ranges. Buyer demand has been healthy as the Menlo Park office manager notes that they’ve seen a return of homebuyers who were previously unsuccessful in their efforts to purchase properties.

Santa Cruz County – A key challenge in the county was the low number of listings. The number of active property listings on the market has decreased each month since June 2016, said the manager of the Santa Cruz offices. There were approximately 184 active listings, which is almost half the number of listings a year ago. There were almost an equal number of sales this year compared to last year, at 87 active single-family homes. The average sales price for single-family homes is $904,743, which is up approximately $10,000 from the total for 2016. The luxury market has been fairly consistent over the last five to six months, and demand has remained strong through the winter, leading to the lowest inventory level in more than three years, according to the manager of Santa Cruz offices. There were approximately 60 sales of properties priced more than $1 million. The number of active listings over $1 million declined from the prior month.

Silicon Valley – Increased sales activity, busy open houses, and multiple offers were the general theme for the region. The Cupertino office manager notes that open houses were getting “hundreds of visitors” and listings were typically drawing 10 or more offers. In the San Jose market, office managers said inventory was lower than a year ago. “We just can’t bring enough homes onto the market to satisfy demand,” said the San Jose Almaden office manager. The number of active listings dropped to 39 units in the last two weeks of the month. “Buyer demand is strong, open house traffic is jammed every weekend . . . with prospective buyers,” said the San Jose Willow Glen office manager. Average sales prices in February were up year-over-year in Almaden (+1.5 percent), Blossom Valley (+2 percent), Cambrian (+5.5 percent) and Santa Teresa (+5 percent). Meanwhile, the Los Gatos office manager notes that buyers were encouraged to see some more inventory coming to the market because inventory had been off 35 percent from the same time last year. He said the luxury market is showing signs of strength, with a recent $13 million sale occurring.

South County –  The South County region is experiencing a seller’s market. The listing shortage is having a significant impact on the market, as there is insufficient supply to meet demand. There were only 40 homes listed for sale in all of Morgan Hill as of March 1, while Gilroy had 76 active listings.  “Anxious buyers are looking to secure a property before rising interest rates prevent them from qualifying for loans,” explains the manager of the Gilroy & Morgan Hill offices. Many sales associates have started to walk through neighborhoods and make cold calls to secure listings.

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Bay Area Real Estate Market

 

Housing Affordability in California Steadies but Remains Low

There is no doubt that prices in California continue to be among the highest in the nation, buoyed by steady demand and a healthy economy. A recent report delivered a dose of good news, however, showing that rising wages and seasonal price declines have helped to stabilize California’s housing affordability.

According to the CALIFORNIA ASSOCIATION OF REALTORS® Traditional Housing Affordability Index, 31 percent of homebuyers could afford to purchase a median-priced, existing single-family home in California during the last three months of 2016, which is the same percentage as in the third quarter of 2016 and up slightly from 30 percent in the fourth quarter of 2015.

The fourth quarter of 2016 was the 15th consecutive quarter that California’s housing affordability index has been below 40 percent. The index peak of 56 percent was registered in the third quarter of 2012.

What does this translate to in terms of dollars? Homebuyers in California needed to earn a minimum annual income of $100,800 to qualify for the purchase of a $511,360 statewide median-priced, existing single-family home during the last three-month period in 2016. The homebuyer’s monthly mortgage payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $2,520, if a 20 percent down payment was made and with an effective composite interest rate of 3.91 percent.

Eight out of 29 counties tracked by the index experienced an improvement in housing affordability in the fourth quarter compared to third quarter 2016. Those counties that saw improved housing affordability are Contra Costa, Marin, Napa, Los Angeles, Ventura, Monterey, Santa Barbara and Madera.

The following 10 counties, however, experienced a decline in affordability quarter-over-quarter: San Francisco, Sonoma, Orange County, Riverside, San Bernardino, Santa Cruz, Kern, Kings, Merced, and San Joaquin. The remaining 11 counties – Alameda, San Mateo, Santa Clara, Solano, San Diego, San Luis Obispo, Fresno, Placer, Sacramento, Stanislaus, and Tulare – were unchanged.

The least affordable areas in the state in the fourth quarter included San Francisco County, where 13 percent of homebuyers could afford to purchase a median-priced existing single-family home, followed by San Mateo County at 15 percent and Santa Cruz County at 17 percent.

Affordability remains a concern not just in Northern California but in other parts of the country as well. In a recent survey by the National Association of Realtors®, Aspiring Home Buyers Profile, affordability was identified as the main hurdle for consumers who wanted to be a homeowner.

Here’s what was happening in our local Northern California offices in early February:

East Bay – Even though it is still early in the year, the East Bay region continues to display signs of a strong market with limited inventory. In Berkeley, there were only 27 homes available for sale in mid-February compared to 25 under contract, and there was about a month’s worth of inventory, shares the Berkeley office manager. In Albany, six homes were active listings while five were under contract and the community had 1.2 month’s supply, he said.  El Cerrito, Richmond and Oakland had less than a month’s worth of inventory. El Cerrito had 11 active listings and 14 properties under contact, while Richmond had 75 active listings and 97 homes under contract. Oakland had 201 active listings and 244 under contract.

Monterey County – The month of January saw a healthy level of sales activity. One sales associate had nine sale sides, and several other sales associates had two to four sales each, leading to a 43 percent increase in unit sales. Sales volume was up 39 percent year-over-year. February pending sales “look promising,” according to the manager of the Monterey Peninsula offices.

North Bay – The supply of available listings is still relatively low in most communities but there appeared to be some pick up in new listings in parts of the region in early February. The managers of the Greenbrae, San Rafael and Santa Rosa Bicentennial offices noted that inventory is on the rise.  In Marin County, there were 210 available properties up from 190, while listings priced under $1 million climbed to 55 from 45 and there were 16 properties priced under $750,000, up from eight, said the Greenbrae office manager. However, she also shared that multiple offer situations are occurring, with many offers eliminating inspection and financing contingencies. The Southern Marin office manager also reports that “multiple offers are becoming the norm again” for properties priced under $1 million and often for homes priced between $1 million and $2 million. Meanwhile, sales activity has been flat in northern Marin County, with sellers waiting for the weather to improve, according to the Novato office manager. With so few homes to sell in the local area, sales associates have been traveling to other counties to assist buyer clients in their searches for new homes. The San Rafael manager noted there were many new listings in the office over the last week. This is the first jump in office inventory since the first of the year, he said.  There were 72 active properties for sale in San Rafael, however only 38 of those are single-family homes, with the rest being condos or townhomes with some properties under contract. The San Rafael office had seven ratified offers. The median price for active single-family listings in San Rafael is $1,212,500 with an average price per square foot of $588.  With the anticipation of the arrival of spring, buyers are swarming open houses and sellers are getting their homes ready for sale, he added. However, the Santa Rosa Bicentennial office manager shared that there are a good number of homeowners who are holding off on putting their homes on the market until they find another home to move into, which means that some move-up buyers aren’t able to find a property to purchase. Meanwhile, the condominium market is very competitive, with sellers enjoying a big advantage in some parts of the region. The Santa Rosa Mission office manager, for example, said condo sales are up by 60 percent and pending sales are up 25 percent. The number of single-family home sales and listings is about the same as a year earlier, he added. As for the luxury market, the Santa Rosa Bicentennial office manager said the lower end of that sector is seeing “good buyer activity with multiple offers on correctly priced homes,” while the properties priced over $2 million are experiencing slower activity and more selectivity among buyers. The Previews market is gaining momentum, according to the Southern Marin office manager, with four new luxury sales in the price range of $3 million to $5 million in the office during the past two weeks. The Santa Rosa Mission office also reported gains in Previews, pointing to a 30 percent increase in pending sales activity but also about 30 percent more available listings in this market segment.

Placer County – Sales associates are busy but there is a need for additional inventory. Almost all properties attract at least two offers and as many as 12 offers, according to the Auburn sales office manager. If the home is priced under $500,000, even if it is not in the best condition, it will get multiple offers, she said.

Sacramento County – The market is displaying signs of health, with slight increases in inventory and sales holding steady. In the Sacramento Fair Oaks office, several listings priced over $750,000 have been taken, but the manager notes that they are experiencing a buyer’s market in that price range. Still, he described the lower end of the market as “hot.” The office’s sales in January were 29 percent higher than the same month last year. There were 21 properties under contract in that office, while the Sacramento Sierra Oaks office had 23 ratified offers.

San Francisco – Open houses and broker tours in the region are drawing large crowds, particularly for properties that are priced well and in good condition. Inventory, overall is restricted. Entry-level homes, fixer-uppers and well-priced homes are selling briskly, with multiple offers and properties selling for over the asking price, said the San Francisco Lombard office manager. An Outer Sunset home listed at $749,000 generated 16 offers with at least three offers over $1 million, he said. On the other hand, condos are seeing more price reductions with the majority selling at or below asking price, and the luxury market is seeing slow activity, he shared. “Multiple offers remain the order of the day even though we’ve seen a good number of properties need (price) reductions to generate interest — mainly in the higher price ranges,” said the San Francisco Market office manager.

SF Peninsula – There appeared to be some slight improvement in inventory but overall the region is still dealing with a very tight supply of available for-sale properties. Open house activity seems to be very brisk, drawing a lot of buyer traffic. Properties located in desirable areas and “priced right” are receiving multiple offers, shared the San Carlos office manager. Homes priced under $2 million are selling quickly, said the manager of the Menlo Park and Woodside/Portola Valley offices.

Santa Cruz County – Buyer demand in Santa Cruz County appears to be strong. There were 118 sales in January compared to 96 sales during the same month in 2016. Also, the active listing inventory grew, with 115 homes hitting the market last month, compared to 106 a year earlier. Additionally, the number of Previews homes coming on the market is starting to pick up. In January, 36 Previews listings hit the market and 32 were sold. It will likely take a few months to build the inventory with the demand being as high as it has been, explained the manager of the Santa Cruz offices. 

Silicon Valley – Some communities in Silicon Valley are seeing an uptick in listings and sales. Countywide, there was a jump in inventory compared to the previous two-week period, but overall there is not sufficient supply. Prices in some communities are also on the rise month-over-month and year-over-year. The San Jose Almaden office manager reported that Cambrian had the biggest price jump with the average sales price increasing 10.5 percent from January 2017 and 9 percent from February 2016.  The average sales price in that community thus far into February is $1,002,000. The average sales price for Santa Teresa is $757,000, which is up 1 percent from February 2016. Almaden and Blossom Valley average sales prices are on the rise compared to a year earlier. Almaden’s average sales price is $1,427,000 (5 percent gain) and Blossom Valley’s average sales price is $728,000 (6.5 percent increase). The San Jose Main office manager explained that there are more multiple offer situations and the sale price to list price ratio is starting to increase. Open house traffic is heavy, with most homes going under contract after just one weekend of open houses, and the area is experiencing “pre-emptive offer” listings or “coming soon” listings which are generating aggressive offers that are well over list price, according to the San Jose Willow Glen office manager.

South County – Listing inventory remains low, but more homes in all price ranges were being listed in South County during the last two weeks, providing more options for potential buyers. Sales associates were also reporting an increase in open house attendance. It has not been uncommon for 30 to 40 individuals to attend an open house, especially for listings priced correctly and located in desirable neighborhoods, according to the Gilroy and Morgan Hill office manager. There are still signs that the region is in a seller’s market.

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How to Write the Perfect Dear Seller Letter

In a seller’s market, buyers frequently find themselves competing for a limited number of available properties for sale. When competing for a home, one thing that can give buyers a distinctive edge is writing a dear seller letter to the homeowners.

A dear seller letter is one thing that can give the buyer a distinctive edge in a seller’s market. In the Bay Area, like many other parts of the country, listing inventory is low and buyers find themselves competing for a limited number of available properties for sale. When competing for a home, there are many ways to make your offer attractive to the seller. When a seller is reviewing multiple offers on their home that may be very close in price and terms, you want them to feel an emotional connection to you. A well-written dear seller letter can create that connection.

Here are some tips on how to write the perfect dear seller letter:

You want the seller to know who you are: Start out your letter by introducing yourself and let the seller know who will be living in the house. They might be thrilled to know that you are, for example, recently married, first-time buyers who work in a field like theirs. It’s all about making that personal connection.

Tell the seller why you are moving: Helping the seller understand your motivation for buying their house can make a difference too. Sellers might be more motivated to sell the house to a family who is weeks away from the birth of a third child and desperately needs the fourth bedroom their house offers.

Explain to the seller why you love the house: Chances are the seller originally purchased the property because, like you, they felt an emotional attachment to the home. Let them know the distinct characteristics that drew you to the house; whether it’s the beautifully remodeled kitchen or the hardwood oak floors they may have painstakingly just refinished. Sellers will appreciate knowing the details that make their home special to you.

Use social media to learn a little bit about the sellers: Checkout the seller’s Facebook and LinkedIn profiles to make some connections. If the seller has frequent posts about races they’ve run and you’re a runner too, include that in your letter. For example, you can’t wait to establish a new running route through the beautiful tree-lined streets of the neighborhood. Perhaps you discover on LinkedIn that you and the seller attended the same university; be sure to mention that you’re an alum.

You should also remember and mention things about the house that show your common interests like evidence of pets, kids, or hobbies. If you know the seller has a dog and you have one too, be sure to let them know how much you appreciate, for example, the fenced-in back yard that will be perfect for your beloved pet.

Compliment, Compliment, Compliment: Lastly, every good dear seller letter should include lots of compliments and seller love letters are no exception. Make sure your letter is full of sincere praise. Did the sellers custom-build the home? Let them know how much you appreciate their design aesthetic. Is the lower level recently finished? Let them know how much your family will enjoy the space. Did you notice a copy of a classic novel on their kid’s nightstand? Mention how, as an English teacher, that impressed you!

Everyone needs a little love and home sellers are no different. If you find yourself competing for your dream house, using these tips to write the perfect dear seller letter may give you a edge. It’s also always a good idea to get the help of an experienced real estate professional to help you navigate through the home buying process.

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Bay Area Housing Market Update

California Dominates Top-Performing Housing Markets List

San Francisco, San Jose, and Sacramento were among the nation’s top-performing housing markets in January, according to an analysis by realtor.com®.

The same analysis by realtor.com® revealed that homes were selling 4 percent faster nationwide than they did a year earlier, but housing supply hit new lows. Prices, meanwhile, remained at record highs. While nearly 360,000 new listings entered the market in January, inventory was down by 11 percent from a year ago, reports realtor.com®.

“We saw evidence of a stronger-than-normal off-season starting last September and October due to pent-up demand and surging interest from first-time buyers,” says Chief Economist Jonathan Smoke of realtor.com®. “The downside to this strong off-season is that we have started 2017 with a new low volume of available homes for sale and a new high for prices.”

Low inventory has been a challenging factor in parts of Northern California, particularly the San Francisco Bay Area. In fact, even though realtor.com® highlighted several markets in the region as top-performing in January, the California Association of REALTORS® cited the scarce housing supply as a key reason for the decline in the Bay Area’s pending home sales in December.

While pending home sales were on the rise throughout most of California in December, pending home sales in the San Francisco Bay Area as a whole fell 14.2 percent compared to December 2015 and 32.5 percent from November 2015.

San Mateo County posted the steepest decline in December at 35.3 percent, followed by San Francisco County at 23.3 percent. Meanwhile, Santa Clara County experienced an 18.6 percent decline in pending home sales.

Projections of mortgage rate increases in upcoming months are creating a sense of urgency among buyers, according to housing experts, which means that buyers will be scrambling to see new listings.

Despite the fact that fewer homes were available for sale, realtor.com® identified the following 20 top-performing markets in January, based on where buyers were checking out the most listings and homes were selling briskly:

1. San Francisco, Calif.
2. San Jose, Calif.
3. Vallejo, Calif.
4. Dallas, Texas
5. San Diego, Calif.
6. Sacramento, Calif.
7. Yuba City, Calif.
8. Denver, Colo.
9. Stockton, Calif.
10. Fresno, Calif.
11. Oxnard, Calif.
12. Columbus, Ohio
13. Colorado Springs, Colo.
14. Nashville, Tenn.
15. Detroit, Mich.
16. Modesto, Calif.
17. Los Angeles, Calif.
18. Tampa, Fla.
19. Santa Rosa, Calif.
20. Fort Wayne, Ind.

 

Here’s what was happening in our local Northern California offices during the last two weeks of January:

East Bay – There has not been a significant spike in listing inventory in the East Bay. The lack of inventory has led to multiple offer situations in some parts of the region.  A property in Oakland attracted 36 offers, while another listing received 26 offers, reports the Oakland office manager. Buyers are still flooding open houses, added the Oakland manager, and the Danville manager shared that it seems like buyers “are at the starting line waiting for the shot of inventory.” Meanwhile, there was strong and consistent growth in the area’s housing market in 2016 in comparison to 2015, according to the Berkeley manager. Median selling prices for properties increased year-over-year by double-digit percentages in several communities. Alameda’s single-family median home price jumped from $865,000 to $950,000, representing a nearly 10 percent increase, while the median condo price increased 11 percent from $600,000 to $667,500. Oakland’s single-family median home price jumped approximately 10 percent from $615,000 to $675,000, and the median condo price increased 15 percent from $482,000 to $555,000. Emeryville also saw a significant year-over-year increase in its median home price, going from $455,000 to $500,000, which represents an almost 10 percent increase. The median sales price for single-family homes in Berkeley grew approximately 8 percent from $1,025,000 to $1,105,000, while the median condo price leaped 14.5 percent from $585,000 to $670,000.  Albany’s single-family median home price increased from $875,000 to $925,000 and the condo median selling price inched up from $447,500 to $455,000. El Cerrito saw a smaller increase overall from $745,000 to $788,000. The condo sample size was only 23 sales in all of 2016, with a slight reduction in value from $518,000 to $500,000. Finally, Richmond’s single-family median home price rose from $400,000 to $440,000 and the median condo price increased from $355,000 to $397,000.

Monterey County – January started out a little slow in the region with the weather affecting listing activity. Rain delayed outdoor photo shoots for listings, and when the rain finally subsided the new listings started emerging. In January, the Monterey Peninsula offices saw several days with five to eight new listings coming online. Buyers are at a standstill if the property seems to be overpriced; they are not submitting any offers until there is a price adjustment, explained the manager of the Monterey Peninsula offices. The region is looking forward to the AT&T Pebble Beach Pro Am, which kicks off February 6, and the exposure that it brings to the Monterey Peninsula.

North Bay – Overall, the North Bay region is dealing with a lack of listing inventory, which is leading to multiple offer situations. Marin County had 40 properties under $1 million listed for sale and 140 listings priced above $1 million. The Greenbrae office manager reports that most of the new listings in the office in the last two weeks received multiple offers included one property listed at $699,000 that drew 16 offers, and a fixer-upper priced at $1,195,000 that received seven offers. Buyers are having to pay substantially over the list price in the low inventory market, the Greenbrae office manager shared. In a similar fashion, the Novato office manager said a property in Bel Marin Keys garnered 16 offers, and he said some listings are expected to hit the market this month and in March. The supply of inventory averaged about two months in 2016, according to the Santa Rosa Bicentennial office manager. “We anticipate more new homes coming on the market this year, but not enough to make a sizable change in inventory,” he said. The Sebastopol market currently has 25 properties for sale, and the heavy rainfall delayed work to get properties ready for sale, according to the Sebastopol manager.  The Santa Rosa Mission office manager said inventory was down about 16 percent for the time period October 2016 – December 2016 compared to 2015, and closed units are down 11 percent for the same period. The Southern Marin office has three listings priced over $5 million that have not been posted on the MLS, but all three properties are already getting qualified showings, and two of the three homes have attracted offers.

Placer County – As in other regions, Placer County is in need of listings as sales activity is on the rise. Homes priced in the low $400,00s or less are receiving multiple offers within a couple of days of being on the market, explained the Auburn office manager. Appraisals are taking time, and there are still properties that are being appraised for less than that contract price, she said. “We are still having a higher number than usual of cancellations,” noted the Auburn manager.

Sacramento County – The region is dealing with a low number of listings and is facing strong buyer demand for properties priced under $350,000. The Elk Grove/South County market had 1.2 months of inventory, down 27 percent for the same period a year ago, according to the Elk Grove/West Sacramento office manager. The average sales price in that area climbed to more than $400,000, due in part to two $2 million-plus property sales. The average listing price is growing, making it more challenging for buyers to find properties priced under $300,000 and thus creating strong competition for homes priced in the $275,000 to $350,000 price range. Many properties in that price range are generating multiple offers. Sales prices have increased more than 7 percent over the last 12 months. The region is also seeing new home developments. West Sacramento is experiencing similar market trends, with a decline in inventory and few homes available under the $300,000 price range. Prices have increased more than 8 percent year-over-year and price per square foot has increased to its highest level in a decade, the Elk Grove/West Sacramento office manager pointed out.

San Francisco – Demand for homes in the San Francisco market remained strong but inventory is not keeping up, leading to buyer competition and multiple offers. The San Francisco Lakeside office manager notes, “There is virtually nothing available to buy,” while the Lombard office manager said inventory is growing but not at the rate expected.  Entry-level and fixer uppers are drawing a lot of buyer traffic, multiple offers, and offers above asking price, according to the Lombard office manager, but the condo market is cooling as evidenced by the price reductions, the growing supply and days on market.

SF Peninsula – Some areas in the region are seeing an uptick in sales activity. The Burlingame, Burlingame North and Half Moon Bay offices reported an increase in sales activity during the last two weeks, with the Burlingame offices noting an increase in listing inventory as well. There were 10 properties under contract in the Burlingame office, seven in Burlingame North, and eight in Half Moon Bay. The Palo Alto Downtown office reported a drop in sales activity and inventory, and had three properties under contract.

Santa Cruz County – Sales activity is picking up in the Santa Cruz market. There have been approximately three new single-family homes listed per day, but brisk sales activity is absorbing the inventory. There are fewer than 200 active listings, according to the manager of the Santa Cruz offices. A number of high-end properties received offers over the last two weeks, and pending sales in the luxury market are on the rise.

Silicon Valley – More listings are emerging in the region, but Santa Clara County is still facing a shortage of available homes and strong buyer demand, which in some cases is leading to bidding wars. Open houses drew “hundreds of visitors” in the last two weeks, reports the Cupertino office manager. All offers ratified over the past two weeks have been multiple offers and all deals have contingencies in place, according to the San Jose Almaden office manager. Prices were up in several communities in January compared to the same month in 2016, he noted. Almaden’s average sales price was $1,329,000 in January, which was up 12 percent from January 2016 and down 3 percent from December.  Blossom Valley’s average sales price followed a similar trend. The average sales price in that community was $708,000 in January, which is up 10.5 percent from January 2016 and down 9 percent from the prior month.  In contrast, Cambrian’s average sales price declined 10.5 percent from a year ago to $916,000 and was down 6 percent from December.  Santa Teresa’s average sales price rose 11 percent year-over-year to $759,000 in January and was also 2 percent higher than the average sales price recorded in December. Most homes are going into contract after just one weekend on the market and in some areas homes are selling well over 10 percent of asking list price, says the San Jose Willow Glen office manager. Despite the strong demand and brisk activity, “Sellers still need to be careful not to overprice as we see homes that are priced above market sit idle as more competitively priced homes are seeing all the action,” explained the San Jose Main office manager.

South County — The real estate market in Santa Clara’s South County continues to be very slow, challenged by low inventory. Presently in the entire city of Morgan Hill, there are only 35 active listings.  The city of Gilroy has about 60 homes available. Both buyers and sales associates are finding this to be “frustrating and somewhat alarming,” shares the Gilroy and Morgan Hill office manager. Sellers are in an advantageous position to list their homes in coming weeks.  

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Home Sellers, Buyers: Start Planning Now

For homeowners who are considering selling their homes, it is not too early to start preparing for the spring selling season, which is traditionally the real estate industry’s busiest season.

Whether you’re thinking of putting your home on the market or planning to buy a home, right now may be the ideal time to meet with a real estate professional who understands the market to discuss your options.

For home sellers in particular, there is much to prepare for, and a real estate professional can help you prioritize and establish a plan of action. A strategic sales and marketing plan is essential to engage active buyers. That plan should include an effective pricing strategy, home presentation suggestions and a comprehensive approach to online marketing.

A competitive market analysis that includes a review of current inventory, recent comparable sales prices and other data is critical information that a real estate licensee can provide. In addition to providing valuable marketing data, a knowledgeable sales associate can also make recommendations on how to prepare your home for maximum appeal and to better position your property on leading real estate websites and portals in the industry. Below are a few practical tips:

As a seller, focus on curb appeal: The outside of a house is the first thing potential buyers see and it is important to make a good first impression. If the “curb appeal” is strong, people will want to see what is inside. To improve a home’s appearance, consider mowing the lawn, trimming the trees, cutting back overgrowth and possibly adding some pots or containers of colorful plants and flowers. Also, properly store away gardening equipment, bicycles and other toys.  The front door should have a “welcome home” feeling so consider adding a fresh coat of paint on the front door — it can work wonders on making that good first impression.

Remove the clutter: Homebuyers tend to show less interest in an untidy home. The two most important rooms in a buyer’s mind are the kitchen and bathrooms. Make certain these rooms are sparkling clean and show well.  If necessary, re-caulk tubs, showers and sinks. It is also helpful to clear out overflowing closets and avoid displaying too many family collectibles and photos.  Consider renting a storage unit to store some furniture to free up space in other living areas of the home. Buyers need to imagine themselves living in the home.  By neatly displaying and making all available space accessible, the seller affords the buyer a suitable opportunity to look towards the future.

Make repairs: Homebuyers generally expect all features in a home to operate safely and efficiently.   It may be beneficial to repair any faulty or outdated electrical outlets and wiring, furnaces and water heaters, along with leaking roofs and other plumbing concerns, prior to putting a house on the market.   Potential buyers may also react negatively to holes in window screens, broken windows and burned-out light bulbs.

Minimize odors: Make sure to take out the trash, change the cat’s litter box frequently, and open the windows to eliminate cooking odors. Another helpful tip is to clean drapes and bathe pets. It is important that the home smells nicely and you should consider adding fresh flowers, scented candles, or freshly baked cookies which can help create a pleasant environment.

Work with your Sales Associate:  Being objective about your environment is not always easy and you should utilize your real estate sales professional to gain an independent determination of what actions you should consider to make your home more appealing. Sales associates have the experience and knowledge to help identify potential problem areas and/or suggest some modifications that can help attract more potential buyers.

Preparation for Buyers Homebuyers have to do their homework as well and obtaining financing is generally a major priority. With limited inventory on the market in most areas, those buyers who come to the negotiating table pre-approved and ready to make an offer are likely to have stronger bargaining power.

A real estate professional can walk you through the home-buying process and help you identify homes for sale that are in your price range. Real estate licensees can help you research the markets you are interested in, prepare and present offers, negotiate price and other terms and then close the transaction.

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