I am writing this out of frustration with the PayPal process. If you can avoid it, NEVER use PayPal as your payment processing. They require you to give way too much information to receive payments from customers. And that’s not all.

First of all they charge a processing fee which takes a certain percentage from every transaction. To issue a check they charge another $1.50. It doesn’t seem like a lot but imagine the hundreds of thousands of transactions that are being processed every day and you can see how they afford the phone bank they employ to answer questions from frustrated users like us! But that’s not all!

Even after you verify your bank account to automatically transfer the funds into (to avoid the extra check charge), it takes anywhere from 4-6 business days to move the money. Although they have already received the money from your customer, they make you wait almost a week before you receive your funds. Why would that be?

If you think about it the $450 sits in their account for a week earning interest. Doesn’t sound like much but when you multiply an average of $1000 per transaction times the tens to hundreds of thousands of transactions they must see in a day, it adds up. It’s almost like the govenment’s withholding scam!

Look, I am not against people earning a living, but wouldn’t it be just as easy for someone to pay by check? It would be  lot less expensive too!

- Mick Orton

FICO recently released research findings that explore the impact short sales and foreclosures have on FICO scores.

The study simulated various types of mortgage delinquencies on three representative credit bureau profiles of consumers scoring 680, 720, and 780, respectively.  The profiles focused on consumers whose credit characteristics – utilization, delinquency history, age of file – were typical of the three score points considered.  All consumers had an active currently-paid-as-agreed mortgage on file.

Key findings from the study include:

• The magnitude of FICO® Score impact is highly dependent on the starting score.
• There’s no significant difference in score impact between short sale/deed-in-lieu/settlement, and foreclosure.
• While a score may begin to improve sooner, it could take up to 7-10 years to fully recover, assuming all other obligations are paid as agreed.

In general, the higher starting score, the longer it takes for the score to fully recover.

According to statistics compiled by the Construction Industry Research Board (CIRB), California home builders pulled 2,088 housing permits in February, down 41 percent compared with a year ago and down 26 percent compared with January, according to the California Building Industry Association.

Permits for single-family homes totaled 1,204, down 34 percent from February 2010 and down 26 percent from the previous month, while multifamily permits totaled 884, down 48 percent from a year ago and down 24 percent from January.

The CIRB is now projecting 60,000 total permits will be pulled in 2011, up from 2010’s total of 44,955 permits, but down from 2008’s total of 64,962.

Note: When proposals like these are offered, they are essentially a tax increase, something we do not need anytime, particularly in a recession!) As part of its FY 2011 budget, the Obama administration has proposed limiting the value of the Mortgage Interest Deduction, which is being attacked as part of ongoing budget negotiations. 

On Monday, NAR issued a Call for Action urging REALTORS® to send letters asking Congressional representatives to co-sponsor H.Res25, a bipartisan House resolution that affirms the value and importance of the Mortgage Interest Deduction.

NAR also has posted a video of NAR President Ron Phipps explaining the importance of MID and why REALTORS® need to join in the fight to preserve this valuable homeownership benefit.

NAR and C.A.R. continue to fight these efforts to limit the MID. Please support the MID by responding to NAR’s Call-for-Action.

Silicon Valley’s increasing dominance in tech sector bodes well for housing

Most of us in the Bay Area realize how important Silicon Valley is to the region’s health and wellbeing. The Valley has spawned many successful startups over the years, attracting highly skilled, highly paid workers, venture capital, and strong demand for housing. But just how dominant Silicon Valley is in the tech sector is surprising even the experts. And it bodes well for the long-term future of our Bay Area housing market.

Entrepreneur and former MIT research director Branko Gerovac examined the S&P Technology 1500 – the largest public technology companies in America – that have been created over the past 20 years to find out where and when they were launched. What he discovered was that every year, the Bay Area and the west coast are becoming more and more successful in spawning meaningful startups that grow into large companies – and the east coast tech hubs of Boston, New Jersey, Raleigh-Durham, and New York City less so every year.

In the past 20 years, Boston has added one company to the S&P-1500 technology sector companies, while Silicon Valley has added 19 companies. Our local startup list reads like a who’s who of publicly traded tech – Google, eBay, Yahoo!, Juniper Networks, McAfee, Palm…the list goes on.

Of course this doesn’t even take into account those burgeoning private tech concerns like Facebook that will become public one day soon. And then there’s Twitter, the company that could stake a rightful claim into leading the social networking revolution. Twitter just announced plans to lease headquarters space on Market Street in San Francisco as the company works to expand its workforce from 400 to close to 3,000 employees, as this story discusses.

Success breeds success. The Valley’s dominance in launching and growing tech companies will attract even more of the world’s top engineering minds, more creative entrepreneurs, more venture capitalists, and the cycle will repeat itself.

In a recent article entitled, Where the World’s Brains Are, best-selling author and urban studies expert Richard Florida said part of our formula for success comes from proximity to top-flight research universities (in our case, Stanford and U.C. Berkeley). Florida writes that these universities “increasingly function as a key hub institution of the knowledge economy” for Silicon Valley and the financial and biotech sectors of San Francisco and the East Bay.

All other things equal, Florida writes, “it is both easier for and more likely that leading scientists and researchers will move within these clusters” of local universities and remain in the general area to live and work. “This kind of proximity creates considerable short- and long-run advantages both for the universities and research centers within the cluster” as well as the region itself, he argues. “Established mega-clusters are likely to enjoy significant advantages into the foreseeable future.”

All of this could explain that while the overall Bay Area housing market has been holding steady in most areas, the high-end Previews market has seen strong activity in recent weeks in Silicon Valley, the Peninsula, and San Francisco. Just a few recent examples:

• A $17.5 million Atherton home on market for just 30 days sold with two offers;
• Another Atherton home listed for $6.9 million, sold for over $7 million, also with two offers;
• A $18.9 million Palo Alto property recently sold;
• And a $5.9 million Palo Alto home just sold for over $6 million with six offers;
• Our Burlingame office is in escrow now with a $16 million Hillsborough sale;
• Six San Francisco properties over $5M have closed in MLS since Jan.1, and at least one other off-market.
• Eight of the Oakland/Piedmont office’s pending sales are in the upper end of the market.

My sources tell me a lot of the buyers in Silicon Valley and the Peninsula are coming from our fast-growing social media companies. Stay tuned for more on the impact of this hot new economic sector.

Below is a market-by-market report from our local offices:

• North Bay – Sales activity seems to be increasing, our Santa Rosa office says. New open escrows are holding strong. Open house attendance has been high, even in the rain. However, we are starting to feel the squeeze of not enough inventory. The Greenbrae office says local listing inventory has been steady and sales increasing with 17 recent ratified offers, including one multiple offer. Of the eight ratified offers in Northern Marin, four have been multiple offers. In Southern Marin, our local manager says that there are a number of quality listings in the area. But the market seemed to come to a halt after a flurry of activity last month.   Several sellers are reducing list prices, from prices that originally seemed to be a good value. The total number of units sold in Southern Marin is overall fairly consistent with last year.  Open houses are seeing good numbers but buyers are still hesitant to step up to the plate with solid offers.  The REOs are getting tremendous activity as buyers feel they are seeing good value at the price listed by the banks.
• San Francisco – The Lakeside office says sales are on the rise, but negotiations are the order of the day. Sellers are reluctantly pricing closer to sale price.  Buyers are frightened about paying too much but are stepping into the market to try to put an end to their home search. Pending sales are on the rise, our Sunset office reports.  Half of the ratified sales during this period were in multiple offer situations.  Open houses are very well attended, but the local market is still lacking inventory. Both inventory and sales are increasing, according to our Van Ness office. Five of the 41 recent sales were multiple offers.
• SF Peninsula — Our Burlingame offices report a steady to improving market. The Hillsborough market over $2 million is “robust” as long as the price is reasonable and the home is well staged. Hillsborough is often perceived as a bargain compared to other high-end markets on the Peninsula.Across the hill in Half Moon Bay, our local manager says there has been a noticeable drop in activity on the coast these past couple of weeks. Buyers continue looking but are not writing offers. Our Menlo Park offices say they are seeing strong sales in the over $2.5 mil market – a $3.85 million listing in Menlo Park is getting three offers today!  Buyers are exhibiting even more discretion as the ratio of houses sitting while others go multiple is rising.  Houses sit until the price is reduced and then the buyers jump. The “off-the-market” high-end properties continue to attract buyers. With all the technology we have, word of mouth networking continues to be a factor. One recent off-market sale went for $7.9 million in Atherton. The Redwood City office says inventory is still low.  Open houses, particularly first time opens, are extremely well attended.  The attitude of the buyers seems to be positive. Palo Alto remains a very strong market with more than half of the transactions getting multiple offers. Finally, the San Mateo and the Woodside markets are holding steady. The over $3 million market is doing well with three sales over this price in the last couple of weeks. Woodside is slowly waking up. Portola Valley has been much stronger the last couple of weeks – brisk sales of $1.3 million to $4 million.
• East Bay – Our Castro Valley office says if the market activity continues at its current pace, it will surpass its forecast for the month of March.  Closings for the month remain unpredictable due to the high number of REO’s and short sales taking longer than anticipated to close. In Danville, sales activity has been steady with four sales over $1 million in recent weeks. The Fremont office reports that inventory is still low.  The market is seeing more REO & short sales rather than traditional listings. Buyers seem to be waiting to see what interest rates are going to do as well as waiting on other economic news. In Livermore, both sales and inventory are on the rise. Total pending sales in the Tri-Valley area have increased dramatically in 2011.  Pending sales are up 38% in Livermore, 56 percent in Pleasanton, and 32 percent in Dublin since the first of the year. Additionally, there are lots of multiple offers. Our Orinda office reports inventory and sales are holding steady. Buyers are continuing to take their time and are in no hurry to make offers. Finally in Walnut Creek, our office says the market is picking up. More listings are coming on the market, and not necessarily distressed properties. But buyers are nervous regarding world news.
• Silicon Valley – Listings are on the rise and sales are steady, according to our Cupertino office. The Los Gatos manager says sales activity is increasing. The office just put a $5 million dollar home into contract and closed on $2.4 million dollar home from a walk-in client. The San Jose Almaden office reports sales activity is increasing, although it’s slow over $1.2 million. The San Jose Main manager says the local market is holding steady with excellent activity at open houses over the weekend. Low rates are keeping buyer interest in all price ranges. That story is echoed in Willow Glen, where the office reports they’re also seeing more multiple offers again. Both sales and listings are climbing, according to our Saratoga office. Not only has the office seen a spike in the number of new transactions, but agents are very actively working on additional deals.
• South County – In Gilroy, agents report buyers have a cautious mindset and seem to have no sense of urgency. Many feel prices are still falling. Two large builders, DR Horton and Hovnanian, just reduced their prices and increased upgrade packages due to slow sales after their launch two weeks ago. Properties in certain Morgan Hill neighborhoods are experiencing huge buyer interest and often are garnering offers almost immediately after they are placed on the MLS.  This phenomenon occurs despite the condition of the property, according to our Morgan Hill office.  Listings in other areas languish on the market.  Overall, however, the market is sputtering its way to a recovery.  Agents continue to report a steady stream of potential buyers at open houses and interest and demand remain high.
• Monterey Peninsula – The Monterey Peninsula market continues at a steady pace. Our local office says they seem to list and sell a similar number of properties each week, though down a bit from a month ago.  While properties at the lower-price ranges are selling quite readily, many with multiple offers, we’ve seen an increase in sales of higher-price properties, so that properties across the board are going into escrow.  In the past few weeks out of the 35 properties we closed, sales prices started at $195,000 and 10 were over $1 million, including one at $4 million and one at $6.5 million.

We continue to see a mixed market throughout the Bay.  The common thread seems to be low inventory at the entry level and generally more multiple offers in the entry level. The mid-price market is probably the most perplexing with a lack of move-up buyers.  The increased activity at the Luxury end is certainly a strong sign, but common thread here is that this sector remains very price sensitive; luxury buyers are pulling the trigger when they perceive value. 

That’s it for now. Have a good week!

Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage
tel 415.437.4505
rturley@cbnorcal.com

SFResidence is part of the TRI Coldwell Banker office at 1699 Van Ness in San Francisco which is one of the premier offices in the City and has the market share numbers to prove it. We have the most elite agents selling real estate in the San Francisco Bay Area. As a result, our office posts some impressive numbers.

There are not a lot of new listings… one to be exact, but the number of ratified deals shows why we are the number one office in the City. If we aren’t listing the properties, then one of our agents is probably representing the buyers. With Spring weather finally here, we should see an uptick in new listings in the next few weeks.

Here are the numbers for the week of 3/30/11:

• 1 new listings ($995,000)
• 20 ratified sales (pending) (average price $1,784,789, low $575,000, high $3,498,000, 1 confidential)
• 6 closed sales (average price $1,408,500, low $450,000, high $4,000,000)

- Janis Stone
DRE #00517072

SFResidence is part of the TRI Coldwell Banker office at 1699 Van Ness in San Francisco which is one of the premier offices in the City and has the market share numbers to prove it. We have the most elite agents selling real estate in the San Francisco Bay Area. As a result, our office posts some impressive numbers.

There is no chance we are going to have a drought this year. Does this mean that water rates won’t go up? Anyway, amid all the interesting weather we have been having (tornadoes in Santa Rosa, hail in the South Bay, thunder and lightening in Northern Marin, to name a few) the San Francisco real estate market is really doing well.

I just posted an article by the SFAR (San Francisco Association of Realtors) which predicts that the number of pending homes indicates a stronger than average Spring market.

Here are the numbers for the week of 3/23/11:

• 5 new listings (average price $1,965,400 low $599,000, high $4,500,000)
• 18 ratified sales (pending) (average price $1,472,056, low $499,000, high $3,900,000)
• 13 closed sales (average price $1,292,308, low $717,000, high $3,415,000)

- Janis Stone
DRE #00517072

SFAR – (Editor’s Note: Appearing below is the press release which accompanied the Association’s Market Focus report for February, released on March 15. The report can be viewed by clicking on the link below the press release. A report is issued each month jointly by Rosen Consulting Group and the Association and is intended to provide the media and REALTOR® members of the Association with a monthly analysis of the state of the local economy and the housing and mortgage markets.

The reports are issued ahead of reports from CAR and NAR and, hopefully, will go a long way to dispelling the notion that the San Francisco residential real estate market is little different than other markets in the country experiencing stagnation or significant price declines.

Rosen Consulting Group is an economic and real estate consulting firm providing clients with high-level strategic consulting services. Founded in 1990 by Dr. Kenneth T. Rosen. Rosen Consulting Group consists of 20 research professionals based in Berkeley, CA and New York.)

Healthy Rise in Pending Home Sales Points to More Robust Rebound in Home Sales
In San Francisco in Coming Months

Pending home sales activity in San Francisco increased 8.9 percent during the month of February which should result in stronger homes sales in coming months, according to the most recent Market Focus report issued jointly by the Rosen Consulting Group and the San Francisco Association of REALTORS®. The current pending sales rate equates to a 2.6 months of supply inventory. The single-family months of supply inventory declined across price segments, with the months of supply inventory for homes priced greater than $1.2 million showing the greatest improvement, declining to 2.2 months from 2.9 months in February 2010.

Though stringent mortgage lending standards continue to keep potential homebuyers out of the market, mortgage rates have reverted to the sub-5 percent range in recent weeks, supporting higher affordability levels.

Foreclosures and short sales make up a much smaller proportion of sales in San Francisco than other areas of the country. Despite this, in February 2011, the median sales price of a single-family home declined by 7.2 percent year-over-year to $645,000. Closed sales also contracted by 7.2 percent during this time.

Condominiums sales increased by 10.3 percent year-over-year in February 2011. The median price during this time declined 12.3 percent to $565,000.

The current rebound in employment growth is expected to gain momentum through the coming year, which, when combined with elevated affordability rates and limited new construction, should result in a more robust housing market recovery in the coming quarters, according to the Rosen Consulting Group. Driven largely by increased hiring across the tech industry, payroll levels in Bay Area metropolitan areas have rebounded in comparison to the same time last year. In January 2011, on a seasonally-adjusted basis, total employment levels in the San Jose and San Francisco metropolitan areas increased by 1.8 percent and 0.3 percent year-over-year, respectively. During this period, the contraction in East Bay employment levels flattened to a 0.4 percent year-over-year decline in jobs. Combined, job growth within these two Bay Area metropolitan areas during this period resulted in the addition of approximately 13,600 jobs. As the real estate market is driven largely by job creation, this trend bodes well for housing demand in the months to come.

San Francisco Chronicle - Fixed mortgage rates tumbled this week and the 15-year loan dipped below 4 percent for the first time in three months. Rates followed the yield on U.S. Treasury bonds, which fell on worries that the crisis in Japan could slow economic growth.