National vacancy rates in the first quarter of 2012 were 8.8 percent for rental housing and 2.2 percent for homeowner housing, according to the Department of Commerce’s Census Bureau. The rental vacancy rate of 8.8 percent was 0.9 percentage points lower than the rate recorded in first quarter 2011 and 0.6 percentage points lower than the previous quarter. The homeowner vacancy rate of 2.2 percent was 0.4 percentage points lower than first quarter 2011 and 0.1 percentage point lower than the fourth quarter rate.

The homeownership rate of 65.4 percent was 1 percentage point lower than the first quarter 2011 rate (66.4 percent) and 0.6 percentage points lower than the rate fourth quarter 2011 (66 percent).

In the first quarter of 2012, the median asking rent for vacant rental units was $721, and the median asking sales price for vacant for-sale units was $133,700.

The homeowner vacancy rates in principal cities (2.5 percent) and outside MSAs (2.6 percent) were higher than in the suburbs (1.9 percent). The homeowner vacancy rates in principal cities and in the suburbs were lower than a year ago, while the rate outside MSAs was not statistically different from the corresponding first quarter 2011 rate.

For the first quarter of 2012, the homeowner vacancy rate was higher in the South than the Northeast, but not statistically different from the rates in the Midwest and West. The homeowner vacancy rates in the Midwest, South, and West were lower than a year ago, while the rate in the Northeast was not statistically different from first quarter 2011 rates.

Approximately 86.1 percent of the housing units in the United States in first quarter 2012 were occupied, and 13.9 percent were vacant. Owner-occupied housing units made up 56.3 percent of total housing units, while renter-occupied units made up 29.8 percent of the inventory in first quarter 2012.

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From www.PreviewSFHomes.com

Fewer foreclosures in the San Francisco real estate market produce price stabilization and inventory reduction, even as demand grows. These are signs of a housing recovery, albeit modest, perhaps as early as year’s end. However, the Fed’s near zero interest rate may be subject to change if Ben Bernanke is not reappointed chairman after the November election. It may be time to snap up your dream home at current values and interest rates.

PreviewSFhomes.com provides free and unlimited access to the MLS, foreclosures and short sales in the San Francisco real estate market. Enter location, price and number of bedrooms and baths, our software will filter the data and email you daily just those criteria.

Call Thea or Janis to view property, negotiate offers and navigate escrow, if you find a home. The services are free. The seller pays the commission.

Call Michael for a free credit report and loan preapproval, important first steps. Banks do not offer the same loans, but with over 40 financial affiliations, he will provide you the option that best suits you.

As always, we wish you prosperous San Francisco real estate hunting.

Thea Miller, Real Estate Representation (415) 229-1218
Theamiller@PreviewSFHomes.com

Janis Stone, Real Estate Representation (866) 224-8024
Janis@SFResidence.com
DRE# 00517072

Michael DiVita, Mortgage Finance Support (800) 239-1103
Michael@DiVitaHome.com

Yahoo Real Estate – Signaling that housing may be in recovery mode, median list prices for resale homes jumped about 5.6 percent to $189,900 from a year ago, according to the NATIONAL ASSOCIATION OF REALTORS®.

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Orange County Register – The median price for an existing, single-family home in California rose 1.6 percent in March compared with the year before, marking the first year-over-year increase in 16 months, the CALIFORNIA ASSOCIATION OF REALTORS® reported Monday.

Making sense of the story

• The statewide median price of an existing, single-family detached home jumped 9.2 percent to $291,080 in March from February’s $266,660 median price and was up 1.6 percent from a revised $286,550 recorded in March 2011.  The month-to-month increase was the largest since March 2004.

• Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 505,360 units in March, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide.  Sales in March were down 4.5 percent month-over-month and 2.3 percent year-to-year.

• The statewide sales figure represents what would be the total number of homes sold during 2012 if sales maintained the March pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

• “Housing inventory remains extremely tight throughout the state and at levels severely under normal market conditions,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  “In areas, such as Los Angeles and Riverside counties, where the Federal Housing Finance Agency (FHFA) wants to implement the REO bulk sale pilot program, inventory is running at levels well below the long-run average.  These low inventory levels demonstrate that the pilot program is not necessary in California.”

• The pilot program calls for the sale of more than 600 Fannie Mae-owned foreclosed homes in Los Angeles and Riverside counties to institutional investors.

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Existing home sales nationally were down in March but continue to outpace year-ago levels, while inventory tightened and home prices are showing further signs of stabilizing, according to the National Association of REALTORS®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, declined 2.6 percent to a seasonally adjusted annual rate of 4.48 million in March from an upwardly revised 4.60 million in February, but are 5.2 percent above the 4.26 million-unit pace in March 2011.

Lawrence Yun, NAR chief economist, said the recovery is in the process of settling into a higher level of home sales. “The recovery is happening though not at a breakout pace, but we have seen nine consecutive months of year-over-year sales increases,” he said. “Existing-home sales are moving up and down in a fairly narrow range that is well above the level of activity during the first half of last year. With job growth, low interest rates, bargain home prices and an improving economy, the pent-up demand is coming to market and we expect housing to be notably better this year.”

Total housing inventory at the end of March declined 1.3 percent to 2.37 million existing homes available for sale, which represents a 6.3-month supply at the current sales pace, the same as in February. Listed inventory is 21.8 percent below a year ago and well below the record of 4.04 million in July 2007.

“We were expecting a seasonal increase in home listings, but a lack of inventory has suddenly become an issue in several markets with not enough homes for sale in relation to buyer interest,” Yun said. “Home sales could be held back because of supply factors and not by demand—we’re already seeing this in the Western states and in South Florida.”

California pending home sales posted higher for the third consecutive month in March, rising from both the previous month and year, C.A.R. reported Tuesday.  Additionally, the share of distressed sales dropped for the second consecutive month, as equity sales typically increase with the start of the spring home buying season.

C.A.R.’s Pending Home Sales Index (PHSI)* rose from a revised 126.5 in February to 143.7 in March, based on signed contracts.  The March 2012 index was the highest since April 2009, when the PHSI was 146.9.  The index also was up from the 128.9 index recorded in March 2011, marking the eleventh consecutive month that pending sales were higher than the previous year.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

• The share of equity sales – or non-distressed property sales – compared with total sales increased in March to 55.4, up from 51.1 percent in February.  Equity sales made up 50.2 percent of all sales in March 2011.

• Meanwhile, the total share of all distressed property types sold statewide decreased in March to 44.6 percent, down from February’s 48.9 percent and from 49.8 percent in March 2011.

• The share of short sales was down again in March.  Of the distressed properties sold statewide in March, 21.1 percent were short sales, down from February’s share of 23 percent but up from last March’s share of 20.1 percent.

• The share of REO sales also declined in March to 23.1 percent, down from February’s 25.2 percent and down from the 29.4 percent recorded in March 2011.

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California home sales declined in March from February’s pace, while the median home price snapped a 16-month annual price decline and posted its first year-over-year gain, C.A.R. reported Monday.

The statewide median price of an existing, single-family detached home jumped 9.2 percent to $291,080 in March from February’s $266,660 median price and was up 1.6 percent from a revised $286,550 recorded in March 2011.  The month-to-month increase was the largest since March 2004.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 505,360 units in March, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide.  Sales in March were down 4.5 percent month-over-month and 2.3 percent year-to-year.

“Housing inventory remains extremely tight throughout the state and at levels severely under normal market conditions,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  “In areas, such as Los Angeles and Riverside counties, where the Federal Housing Finance Agency (FHFA) wants to implement the REO bulk sale pilot program, inventory is running at levels well below the long-run average.  These low inventory levels demonstrate that the pilot program is not necessary in California.”

The pilot program calls for the sale of more than 600 Fannie Mae-owned foreclosed homes in Los Angeles and Riverside counties to institutional investors.

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(Editor’s Note: Appearing below is the Association’s Market Focus report for April 2012. A report is issued each month by the Association. The reports are intended to provide the media and REALTOR® members of the Association with monthly analyses of the state of the housing and mortgage markets, as well as the local economy.

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

In recent months, the reports have been significantly enhanced to make them more readable and interesting. Each issue focuses on different sections of the city so that each major neighborhood of the city, over time, receives attention.

As always, comments are solicited concerning how the Market Focus reports can be made a more effective marketing tool for members.)

As Inventory Remains Low and Unchanged,
San Francisco Homes Sell Even Faster

Just as last month, many new home sellers continue to have confidence that the market is on an upswing and that housing prices will soon accelerate. As a result, the vast majority of them have decided to hold off on listing their properties for sale, keeping the city’s inventory low. Making matters worse, the flow of distressed properties from the banks has lessened, making it more difficult for buyers to find properties even though interest rates have remained low. The congruence of all these economic factors occurring at the same time is resulting in the current seller’s market, where sellers have more leveraging power over buyers who are competing against a limited pool of properties.

Single-Family Home Sales

While the city’s inventory of single-family homes for sale dropped by 29.4 percent compared to March 2011, it did not exceed February’s level this year. Still, despite the low inventory, the number of homes under contract continued to improve by as much as 19.9 percent compared to this time last year, while the number of homes sold fell by only a slight margin of 2.8 percent.

For homes that were priced below $700,000, the months of supply inventory fell by 65 percent to one month. For higher-priced homes between $700,000 and $1.2 million, the months of supply inventory fell by 56.1 percent to also one month. It comes as no surprise that a number of real estate web sites currently rank San Francisco high among the nation of cities where homes sell the fastest.

One region of the city which continues to experience healthy sales activity is the area in the mid-western part of town, known as Twin Peaks West. Since March 2011, the number of homes under contract here has risen by 14.7 percent. Twin Peaks West has a total of 16 neighborhoods, with Mt. Davidson, the highest natural point in San Francisco, at its center. With its elegantly landscaped streets and a variety of architectural styles, including Craftsman bungalows, Mediterranean, and Mid-century, homes here are very desirable. The median price for a home in Twin Peaks West is about $837,500.

Another section of town which experienced positive sales activity is the Central District. Since March of last year, the number of homes under contract here has jumped by 35.7 percent, while the number of homes sold has only dropped by 5.9 percent to a total of 32 properties. The Central District’s location in the midpoint of the city provides it with ample shelter from San Francisco’s world famous fog and is often one of the city’s sunnier regions. From the vibrant neighborhoods of Haight Asbury and the Castro, to the more contemporary and family-friendly Noe Valley, to the posh and upscale Clarendon Heights, the Central District will suit just about any home buyer’s requirements. The median price for a home here is around $1,457,500.

Condominium Sales

In the same fashion as single-family homes, the inventory of condominiums for sale in the city has dropped by 35.9 percent compared to March 2011. In spite of this, the number of condominiums under contract rose by 24.2 percent, while the number of condominiums sold fell just marginally by 4.5 percent.

For condominiums that were priced between $500,000 and $900,000, the months of supply inventory contracted by 66.5 percent to a reading of 1 month. For luxury condominiums priced above $900,000, the months of supply inventory also tightened, by 49.6 percent to 1.4 months.

One part of the city which experienced notable condominium sales activity is the central-north section of town, which includes such neighborhoods as the Western Addition and Hayes Valley. Compared to March 2011, the number of condominiums under contract increased by 28 percent, while the number of condominiums sold jumped by 50 percent to a total of 24 units. Full of charm, the Western Addition is home to the city’s historic Fillmore Jazz scene, while the recently revitalized Hayes Valley offers a number of fashionable boutiques, which go part and parcel with its burgeoning and stylish condominium market. The median price for a condominium in the central-north section is about $662,500.

Another area which saw a robust increase in condominium sales activity is the Marina and Pacific Heights neighborhoods in the northernmost part of the town. Since March of last year, the number of condominiums under contract has doubled, up 23 units to a total of 46. Successful professionals and young entrepreneurs who yearn to live in what many consider to be “old San Francisco,” will find solace in the picturesque streets of the Marina and Pacific Heights, where luxury condominiums sit adjacent to upscale shops and trendy restaurants and bars. The median price for a condominium here is around $967,500.

Outlook

A recently published USA Today article reports that, “Buyers from mainland China and Hong Kong are snapping up luxury homes, often paying cash, in major U.S. cities such as New York, Los Angeles and San Francisco.” The article goes on to explain how, “China has more money to invest than ever. Mainland China now has 960,000 millionaires — defined as individuals with residences, private businesses and investable assets of more than 10 million yuan or $1.5 million, according to the Hurun Report, a Shanghai publisher of magazines for China’s wealthy. Nearly half of those millionaires are considering moving or getting permission to reside overseas. Their top country of choice? The USA.”

According to a March 2012 national housing survey conducted by Fannie Mae, 48 percent of 1,000 respondents expect rental prices to increase and 33 percent of them expect home prices to go up over the next 12 months, suggesting that Americans are beginning to consider 2012 a good year to purchase a home. About 73 percent of those interviewed said buying a home today is a good idea, up from 70 percent in February. Also, the survey revealed that consumers are more confident about their own finances, with 44 percent believing their financial situations will get better in the near future.

Preliminary unemployment rates from the California Employment Development Department shows the San Francisco-San Mateo-Redwood City areas at 7.6 percent in February, remaining unchanged from January. This compares with an unadjusted unemployment rate of 11.4 percent for California and 8.7 percent for the nation during the same period. The unemployment rate was 6.6 percent in Marin County, 8.0 percent in San Francisco County, and 7.3 percent in San Mateo County.

Bloomberg News reports that, “Demand from technology and energy- industry tenants led the U.S. office market to its fifth straight quarterly gain in net occupancy, with San Francisco leading the country in rent growth.” And added, “Occupancy and rents are increasing as the U.S. economy slowly recovers from the recession and the office market rebounds after three years of net losses in leased space. San Francisco’s average office rent rose 6.8 percent during the past year.”

Asking prices rose 1.4 percent nationally in March compared with the previous quarter, according to Trulia’s Price Monitor.  On a month-over-month comparison, asking prices increased 0.9 percent in March and 0.6 percent in February.

Throughout 2011, asking prices rose slightly in several months of the year, but never more than 0.2 percent in a month. Asking prices in March were 0.7 percent below their level one year earlier.

Asking rents rose over the past year in almost all large metro areas included in the Trulia Rent Monitor. In the largest metros, rents rose 6.2 percent in New York and 6.1 percent in Chicago, but only 0.6 percent in Los Angeles. Rents rose strongly in Miami (12.1 percent) and Denver (9.9 percent), which also experienced large asking price increases. Meanwhile, rental affordability declined in places where rents rose while prices fell, most notably in San Francisco (rents up 11.1 percent), Seattle (9.7 percent), San Jose (9.4 percent), and Boston (9.2 percent).

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Aging baby boomers and their echo boomer children will significantly impact trends in the nation’s housing market over the next 20 years. In a new report released by the Bipartisan Policy Center, “Demographic Challenges and Opportunities for U.S. Housing Markets,” researchers at the National Association of REALTORS®, The Urban Institute, and the University of Southern California analyze key demographic trends and their likely influence on housing and homeownership in the U.S.

Over the next two decades, the aging baby boomer generation will swell the nation’s senior population by 30 million. That demographic shift will likely help increase the supply of housing, since people over the age of 65 typically release much more housing than they absorb.

“The Northeast and Midwest are most likely to see a large number of older homeowners selling their homes to younger homeowners as the baby boomers age,” said NAR Chief Economist Lawrence Yun. “This increased supply could mean additional buying opportunities for echo boomers. That generation will absorb 75-80 percent of the available inventory of owner-occupied housing by 2020.”

The echo boom generation includes nearly 65 million people born between 1981 and 1995. NAR’s analysis illustrates the potential impact of economic and housing policy on this generation’s demand for housing as they come of age.

“Housing, jobs and the economy are inextricably connected,” said Yun. “A strong recovery with favorable housing market conditions would encourage substantial growth in echo boomer households, which would help absorb the current vacant inventory and stabilize conditions for residential construction. Under a reasonable ‘middle’ recovery scenario, approximately 12 million new households will be formed over the next decade, requiring construction of up to 15 million new housing units.”