California Association of Realtors Voices Objections to the End of Fannie and Freddie

There’s been a lot of talk across the real estate interwebs regarding the impending extinction of Fannie Mae and Freddie Mac. Experts have speculated that the loss of government support could mean the end of the 30-year-mortgage, make loans impossible to obtain, or put home-ownership out of reach for many lower and lower-middle income families.

So far, however, most of these objections have remained theoretical. It’s not known, of course, how dramatic an effect Fannie and Freddie’s absence may have – and even if the changes are pretty intense, they won’t go into affect for a few years at least.

The California Association of Realtors, however, is taking a stand right this minute. C.A.R. has come right out and said what a lot of people are thinking – that private lenders just don’t have the same incentives to promote home-ownership for the average Californian:

“A reduced government presence in the mortgage market will raise the cost of homeownership and make mortgages less available,” said C.A.R. President Beth L. Peerce.  “Moreover, Congress needs to understand that during economic downturns, the housing market needs government involvement to ensure capital stability.  History has shown the private market is incapable and unwilling to step in during the hardest of times and meet the demands of the nation’s home buyers.”

To see C.A.R.’s whole report, click here.

 

Home Prices in SoCal are the Lowest in Years

As we all know, the housing market in California has been struggling for a while – particularly in Southern California, where a large portion ofthe local economy is driven by construction and real estate related activity.

But it seems that, according to the real estate section of the LA Times, SoCal home prices are the lowest they’ve been since 2009. The median price of a Southern California home is now $270,000.  The raw number of sales is down, too, dropping 5.9% compared to January 2010.

Of course this isn’t the end of the world,  and unusually bad winter weather can realistically explain quite a bit of the drop. 

“It is very hard to tell a trend from January, but I think we are experiencing a market that has not yet found its forward momentum,” said Edward Leamer, director of the UCLA Anderson Forecast. “You can’t have a healthy housing market without a healthy job market.”

 This, of course, makes perfect sense. But it’s still disappointing news for those who predicted that 2011 will be the year that the housing market picks itself up and dusts itself off.

Who isn’t disappointed? Well, homebuyers, obviously. This is the cheapest homes in Southern California have been in years. This might very well be the “double-dip”/”rock-bottom” that everyone’s been talking about. And given the upcoming changes in the mortgage industry, this might be the homebuyer’s magic moment.

The changing tides of real estate – the A-Cup and San Francisco’s Waterfront

Last week, Curbed.com made a playful recommendation that San Franciscans, who will host the America’s Cup in 2012, “Consider an Investment in Port-a-Potty Leases Now“.  While that’s an unlikely proposition to all but the most rigorous entrepreneurial spirits, Curbed does have a good point – the Cup will definitely change the economic face of the Embarcadero, and locals (or non-locals, for that matter) might want to start looking for ways to cash in.

Recently the San Francisco Planning Department released the Notification of Preparation Report, or the NOP, which  basically details what’s going to change and what’s going to stay the same about the San Francisco waterfront..

Whether you’re actually interested the years-from-now progress of one of the most estoteric, elitist “sports” in the world, event-based real estate makes for some interesting food for thought. 

On some level, what happens when an “event” like the A-Cup or the Olympics visits a particular city is like a fast-forward of what is constantly happening in real estate over a much longer period of time.  As new advantages, needs, and opportunities arise, balances of power undergo dramatic shifts.  This “power” might be tangible profit potential from newfound foot traffic, or it could be an “intangible” like access to a once-in-a-lifetime view.

If you’re curious about San Francisco’s waterfront fate, you can check out the Curbed article above, or go straight to the NOP.

Your own private Red Rock Island in the San Francisco Bay

Our last post, also about the Bay Area, was a little bit bleak.  To make up for it, we’re sharing some of the most delightful real estate news we’ve heard in a while: there’s a private island for sale in the middle of the Bay, and it might harbor buried treasure (!!!!!!).

Real estate aficionados with ANY inner child left at all must be absolutely giddy about this listing.  It does cost $22 million, and nobody seems to know if you can actually build a house on it but – buried treasure!  Who cares!

And actually, $22 million for your own island?  That’s totally reasonable.  There are houses in Pacific Heights going for WAY more, right?

Foreclosures are up in San Francisco

It’s been sunny and breezy in San Francisco of late – but that description doesn’t apply to the real estate situation in the city by the Bay.

Over the past few years, as foreclosures have hit record levels throughout the state, homes in San Francisco have enjoyed some bragging rights – though foreclosures dotted the less-affluent areas surrounding the city, San Francisco proper remained relatively foreclosure-free.  Real estate analysts credited geographic limitations, rigid building codes, and already-astronomical costs of living for the fact that only renters and the very rich could live in San Francisco at all, thus lessening the likelihood of foreclosures.

But it looks like that’s no longer the case.  SFGate.com recently reported that the number of foreclosures within the city of San Francisco has definitely risen.  In fact, San Francisco foreclosures have increased while foreclosures in the rest of the Bay Area have actually dropped.

Foreclosures are even creeping into posh-and-pricey neighborhoods like Pacific Heights, though the majority are in neighborhoods like Twin Peaks and Glen Park, where prices are high but not jaw-droppingly so.

Though this trend sounds alarming, the explanation may be surprisingly straight-forward.   Lower-income families living hand-to-mouth under the shadow of unrealistic sub-prime mortgages were the first to succumb to foreclosure.  Those homeowners with better income-to-mortgage ratios, or savings put away, are only now starting to buckle under prolonged economic strain.

New Homes-Sweet-Homes

According to the Los Angeles Times, sales of new homes within California actually rose during the month of December- by a nice healthy margin of 17.5%.  Not bad, particularly considering that the end of the year is often a slow time for real estate sales.

What does this mean?  Well, it’s great news for builders and the construction industry, for sure.  For quite a while now new homes have had a tough time competing with the low prices on existing homes.  Foreclosures and short sales, despite their risks and red tape, have proved more attractive to buyers than shelling out for a brand-new place.

The trend may be related to the fact that foreclosures appear to be slowing down in the Golden State – although whether that’s a substantial fact or a result of shadow inventory remains to be seen.

William Holden’s Palm Springs Getaway for Sale

Here’s a little blast-from-the-past celebrity real estate to brighten your Wednesday: the L.A. Times reports that a home once owned by the legendary William Holden is up for grabs in Palm Springs.

Holden’s signature charm melted viewers of timeless Hollywood classics like Sunset Boulevard and The Bridge Over the River Kwai – as well as viewers of over-top-yet-still-forgettable stuff like Love is a Many-Splendored Thing.  He lived in his Palm Springs house, which features a poolside wet-bar, for eighteen years before he died in 1981.

Isn’t he handsome?  His house is, too.   It’s currently priced at $1,495,000.

Luxe Living in San Francisco

Generally we stick to news about California real-estate-at-large, but the Wall Street Journal recently featured a home in San Francisco that is a news story in itself.

Photo: Mark Darley via the WSJ

The home is absolutely elegant – white, neoclassical, with a rooftop terrace and perched on a hill with stunning bay views.  But its really eye-catching feature is its price-tag: $32 million.

Yes.  Even in a bay area housing market that’s been sluggish for months – $32 million. The article doesn’t say where the house is located, but we’re guessing Pacific Heights.  Take a look on our real estate map and see if you can find it!  We already tried, and had no luck.  But we did find this beauty – in Pacific Heights – for a whopping $45 million!!!  Take that!

 

 

‘Carnival’ comes to San Francisco

The San Francisco Embarcadero is expecting a new arrival – a really big one.

The gigantic Carnival Splendor, which made gruesome headlines when its engines caught fire in November, will dock at Pier 70 in order to undergo about a month of serious repairs.  The engine fire left the ship’s crew and 3,000 passengers without power, hot water, or fully-functioning sewage for four long days.

Though for many tourists this looming leviathan may serve as a dire reminder of what can happen when good vacations go bad, the repair work will supply SF port union employees with thousands of working hours over the course of the next month – a welcome source of economic stimulus to an area which has recently hit a snag in redevelopment revenue thanks to Governor Brown’s new California budget.

Office-space: commercial rents begin to recover in the Bay Area

Things – by which we mean rent – are looking up in the Bay Area.

According to the Wall Street Journal, office space south of the City is beginning to fill up as gradual economic recovery makes growth and therefore relocation more feasible for many start-ups.  According to Bay Area real estate experts, the recovery is following a familiar pattern:

“Palo Alto always rebounds first, always demands the best rent, and then it just slides down from there—Mountain View, Sunnyvale, Santa Clara,” says David Buchholz, a San Jose-based senior vice president at brokerage Colliers International.

In Palo Alto, the forerunner in the Bay Area office rental recovery, vacancy is down 2.8% from last year.  San Jose hasn’t recuperated nearly so well, and parts of the city continue to struggle with vacancy rates of around 25%.  That’s staggering for the city that was once a major home-base of the dot-com boom.

The reason many dot-coms are relocating to Palo Alto is three-fold.  First, the neighbors: everyone wants to be near Google and Facebook.  Second, many progressive new companies take employee residence zip-codes into account when deciding on a new move, and Palo Alto happens to be a good mid-point for many.  Third, just about every Caltrain makes a stop at Palo Alto.

Those who are smart, of course, will snatch up a home in Palo Alto to match their glamorous Bay-Area job.