If You’ve Got $3 Million to Spend…

… then the Bay Area is definitely the place to be as home sales of properties over $3 million doubled in February over February 2017. Analysts cited the usual reasons – continued job growth and low inventory in the region – but also suggested that the stock market’s recent volatility might have enticed some investors to sink their money in Bay Area real estate.

Conversely, sales of homes valued at under $1 million declined drastically: 8 percent in Contra Costa County; 16 percent in Alameda County; 34 percent in Santa Clara County and a whopping 47 percent in San Mateo County from February 2017 to February 2018.


Desperate to Buy? Tell Them How Much You Love the House

In the Bay Area’s red-hot real estate where receiving multiple offers is now standard, how is it possible to stand out from the hordes looking to purchase the same property? One strategy that realtors are encouraging more and more is to write “a love letter” to the sellers.

Understandably, sellers like to know that their home is appreciated and a short, passionate but thoughtful letter, outlining the specifics of why you want to buy the house are can often make the difference, even if your offer isn’t the highest.

Of course, being honest is key but if you’ve fallen in love with a house, why not let the seller know it?


Not Much Vacancy in California

To the surprise of absolutely no one, but now it’s official: California has the lowest vacancy rate in the nation. Apparently, the U.S. Census Bureau tracks empty residences and in 2017 8.3 of California’s residences – rental and owned – were vacant.

What is somewhat surprising is that this represents an improvement over 2016’s 7.8 rate.

Limited availability isn’t just a California problem: nationwide the rate was 12.7 – an 11 year low.


Many Are Looking, Few Are Buying

The home tours are up (14 percent) but the actual offers on Bay Area homes are down (bout 10 percent). This despite rising interest rates, continued increases in home prices, an up-and-down economy and few tax breaks, particularly at the high end of the market.

Nationwide there has been 32 straight months of decreasing home inventory.

What does it add up to? Lots of demand, not enough supply, and plenty of frustrated buyers.


Bay Area Home Values Continue to Rise

Throughout most of the country, starter homes show the greatest value for homebuyers. But not in the Bay Area where ALL homes are showing significant appreciation.

For examples, homeowners in the San Jose metro area who purchased in the lower third of the market saw a significant 18 percent return in 2017 while the high-end buyers saw a 18.9 precent increase.

Nationwide, starter homes appreciated 8.5 percent last year while those homes in the top tier saw a far more modest 3.6 percent return.


Single? Start Saving Now

A new study by Zillow reveals that it wold take the average single buyer almost 11 years to save the 20 percent down payment to buy a home. And that, of course, is conservative depending on where you want to love. Looking to live in San Jose? Then that might take you close to 30 years to save.

Of course, if couple are buying, the saving takes much less time – around five years, according to Zillow.

The majority of Americans consider buying a home to be an important part of the American Dream. But for single buyers that dream is increasingly getting harder and harder to realize.


Real Estate Trends in 2018

According to Realtor.com, the following are some real estate trends we can expect in 2018:

  • Supply begins to catch up with demand: Analysts see a rise in construction of new homes in 2018 with the eventual result of a decrease in price appreciation. However, expect the higher end to be affected first.
  • More millennials to enter the market: For a variety of reasons – most predominately the crushing weight of student loans – most millennials have been unable to become homebuyers. However, due to rising income, advanced career development, and a strong economy, 2018 may be the year.
  • An increase in short term rentals: Short-term rental homes, such as vacation homes, should continue to increase in 2018.

Even Some at Google and Apple Can’t Afford to Buy

In an interesting twist, the same high-tech workers – engineers at Apple and Google – who are often blamed for the sky-high home prices in the first place – are now finding it difficult to buy a home within a 20-minute commuting distance from work.

For example, the median price of a home in Cupertino – Apple’s base – is $2.2 million. Homes within a 20-minute commuting distance have a median price of $1.2 million while the average software engineer’s salary is $188,000, which makes for 33 percent of monthly income, significantly higher than the recommended 28 percent.

Some companies such as Facebook and Google are looking to partly remedy the situation by backing the development of homes in Menlo Park and Mountain View, respectively.


Home Seller Profits at a 10-Year High

The last quarter of 2107 saw home seller profits increase to $54,000, up from $47,133 a year before. This translates to a 29.7 percent return on a homeowner’s investment compared to the original purchase price, the highest return since 2007.

Not surprisingly, West Coast home sellers – and California in particular – saw the greatest return lead by San Jose (90.9% ROI) followed by San Francisco (73.3%), Merced, CA (64.6%), Seattle (64.4%), and Santa Cruz, CA (59.8%).

Finally, homeowners are holding on to their properties longer than ever. The average tenure of homes sold in the Q4 of 2017 was 8.18 years; the longest tenure since records were first tracked in 2000.


Concord Looks to Improve Affordable Housing

The City of Concord is planning to aggressively improve affordable housing by partnering on new projects and contributing subsidies to refurbish existing properties according to The East bay Times.

Over the next five years, Concord will increase its affordable housing fund from $9 million to $14 million in an effort to improve affordable housing from teachers, seniors and veterans. Developers have until March 1 to submit proposals to the city with a final decision due in April.

Moreover, the city will contribute between $75,000 to $100,000 per unit to refurbish between 140 to 160 units.