Buy Now or Suffer 8,000 Consequences?

Today I got this email from a friendly neighborhood Realtor:

Hello everyone,

I wanted to send out a friendly reminder about the deadline to take advantage of the first time home buyer tax credit.  The tax credit expires on Novemeber 30th, 2009.  However, assuming a 45 day escrow period from the time you buy to the time you close and get the keys, you would need to find a house, negotiate a purchase price, and have mutual acceptance by October 15th to take advantage. There are some income restrictions, it must be for your primary residence, and you must not have owned a home in the last 3 years.  If you or anyone you know would like more information about the tax credit, please email me and I will follow up.

Arg! Less than a month to find a house and close escrow?

On the other hand, I heard a rumor that this tax credit may be extended. Hard to imagine we have the money to do so in this country, but still, that’s the gossip from my broker. Nick Timiraos of the WSJ blog writes:

Not only are some legislators (and real-estate industry lobbyists) already pushing hard for an extension of the tax credit, which will expire Nov. 30, but they’re also arguing that it should be increased, to $15,000, and expanded to all buyers, and not just those who are first-timers. The current $8,000 tax credit emerged in the stimulus legislation that Congress passed in February, replacing an existing $7,500 credit that had to be repaid over 15 years.

The questions are not just whether the country has this money available, but whether other issues, such as health care, will push the homebuyer’s plight to the back burner.

In the meantime, we first-time buyers have about a week to buy our homes, people. No pressure.

Generous Uncle Sam, Via Coldwell Banker

“Unexpected Jump In Home Sales in February”

Unexpected Jump in Home Sales in February:

-Sales of existing homes rose from January to February in an unexpected lift for the slumping housing market as buyers took advantage of deep discounts on foreclosures.

The National Association of Realtors said Monday that sales of existing homes increased 5.1 percent to an annual rate of 4.72 million last month, from 4.49 million units in January. It was the largest sales jump since July 2003.

-That was great news for buyers, who are paying the most attractive prices in years. Plus, interest rates have sunk to historic lows.

You’ll have to click through to the article to read the fine print. ;-) Regardless, it’s good to see a positive spin in the national media instead of the oh so beaten dead horse that is the negative.

Daily Depression: “Bank Stocks Sink On Renewed Worries”

From the San Francisco Business Times:

Investors’ growing nervousness about the depths of the banking crisis hit shares of major banks that were seen as weathering the financial storm better than most.

San Francisco-based Wells Fargo (NYSE:WFC) saw its shares hit a new 52-week low, closing at $13.69, down $2.07 or 13 percent.

U.S. Bank (NYSE:USB), with a large Bay Area branch network, also hit a new 52-week low, closing at $10.73, down $1.67 or 13.5 percent.

J.P. Morgan Chase (NYSE:JPM) closed at $21.65, down $3.04 or 12 percent.

Bank of America (NYSE:BAC) closed at $4.90, down $0.67 or 12 percent.

Citigroup (NYSE:C) closed at $3.06, down $0.43 or 12 percent.

The declines reflect growing concern on Wall Street that the economic downturn may worsen even further than previously expected. The nation’s financial system could be swamped by cascading bad debts from credit cards and auto loans to commmercial real estate mortgages as the recession deepens and unemployment rises.

Adding to the day’s worries was General Motors (NYSE: GM) and Chrysler going back with hat in hand to Washington, D.C., seeking billions more from the government. Also not helping matters was the worst showing for the Japanese economy in 35 years in the fourth quarter and concern that the U.S. federal stimulus package might not be enough to spur growth here at home.

Word from Moody’s Investors Service (NYSE: MCO) that some Central and Eastern European countries “have now entered a deep and long economic downturn” sparked concerns about the outlook for European banks with heavy exposure to countries such as Poland, Hungary and the Czech Republic.

At least the sun is supposed to come out tomorrow…

-Bank stock sink on renewed worries -SF Business Times

Can California Keep Her Bling?

 

I used to look at houses in Portland, OR like this 2/2 SFH in one of the most gorgeous neighborhoods, Sellwood, listed at $440K.

And then I would look for somthing similar in SF. And then I would need a very large martini. We all know, even after the martini, that a comparable home is SF (in a comparable lovely neighborhood) would go for twice or three times that price.

Experts in the field offer myriad explanations: SF has limited homes, limited land, high demand, good jobs, California property is worth more… etc., etc.

I am curious though how many of those factors still exist, or can continue to exist as the economic climate changes.

The Chron estimates that Bay Area homes lost $202 billion in value in 2008. Agreed, the Bay Area includes areas much harder hit by the slump than SF, but SF is not impervious to these problems. Maybe they aren’t horrible yet, but conditions aren’t as crazy-good as they used to be (right? We can agree on that at least?); could they get worse?

It seems that California itself is losing value. The S & P has already lowered her credit rating , tying her with Louisiana,  and may lower this rating again if the budget crisis can’t be solved– a phenomenon we have no real optimism to witness, unless we relish our tax refunds being issued as IOUs as part of the solution. From the LA Times:

“Should the state not enact timely midyear budget gap closing measures by February 2009, or should the state’s cash position weaken significantly compared with recently revised state cash flow projections,” the rating firm warns, the ratings on California’s long-term debt could be lowered, S&P said.

That could drive more investors away from California bonds, forcing the state to pay higher interest rates to borrow. Municipal bond yields in California and elsewhere have been surging in recent weeks as state budget troubles have deepened.

As for the prospect of borrowing to plug budget gaps, S&P warned that without “meaningful budget adjustments on the revenue or expenditure side,” California may face “constrained investor appetite” for its short-term notes.

In the meantime, Prop 13, once meant to protect the housing consumer, is now a very big part of the problem.

So my question is, can Californians expect to see deals like those in Portland, OR anytime in the near future in San Francisco? (And I pick Portland for its many similarities, physically and politically, to SF.) Ironically, though this would be a nightmare to some people, it would be a dream come true to the vast majority of renters who are currently priced out.  And if this untapped pool of buyers could actually buy, well…  we’d see that scary-good rush to buy again, like before the dot.com and current economy bust when people offered children and unneeded organs along with 50% over asking— but with distinctly post-bust differences.

U.S. Pending Home Sales Up 6.3%

Some good news in an otherwise gloomy picture:

The number of new sales contracts on existing homes jumped a seasonally adjusted 6.3% in December as buyers took advantage of lower mortgage rates and falling prices, a real estate trade group said Tuesday.The pending home sales index rose 6.3% in December and is now up 2.1% compared with a year earlier, the National Association of Realtors said. The increase points to a healthy gain in existing-home sales in January and February. The index is based on signed sales contracts, which usually occur a month or two before the sale is closed, when sales are reported in the NAR’s existing-home sales report.

-U.S. Pending Home Sales Up 6.3%: Realtors Say [MarketWatch]

Obama Says: Go Buy A House (In So Many Words)

We’re going to take the liberty of pulling a few quotes from this recent New York Times article about President-elect Obama’s call to action and urge our fellow San Franciscans to go out and buy a house.

-’I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible,’ Mr. Obama plans to say, according to advance excerpts of the text released by his office. ‘If nothing is done, this recession could linger for years. The unemployment rate could reach double digits.’

-Mr. Obama’s message is stark, warning not just of short-term pain from a recession that is already the longest in a quarter-century, but also of deep and systemic longer-term costs that could threaten American economic leadership if too little is done.

‘We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future,’ Mr. Obama plans to say. ‘And our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world.’

‘In short, a bad situation could become dramatically worse.’

-’For every day we wait or point fingers or drag our feet, more Americans will lose their jobs,’ Mr. Obama plans to warn in his speech. ‘More families will lose their savings. More dreams will be deferred and denied.’

…and as one of our frequent commenters will surely say, “More 40 year old renters will become 41 year old renters, and rents keep going up!”

Take a stand. Buy a house!

[Editor's Note: There is sarcasm in our post. We understand it may not be a good time for you to buy, but it is a good time to be a buyer (assuming financial stability in your household).]

Predictions for ’09 Reveal There Are No Experts

zoltar-1
So, one hell of an ugly year is coming to a close. As usual, this event cues panels of “leaders” in various fields to opine about the coming 365 days. What will become of Tom and Katie? Will Cher remove another rib? Will the Celtics top the NBA again?

These days the doings of celebrities and (forgive me, Celtics) national sports are no longer as relevant as the economy, however. Luckily America has myriad experts on this last issue, and we need only to look at current conditions, both in California and the country as a whole, to judge these specialists’ true qualifications– or rather, lack thereof.

No one should be surprised then that as newspapers and blogs roll out the obligatory predictions  for ’09 articles, no consensus can be found. For instance, USA Today (that rag!) predicts a ray of sunshine:

“It may come as a surprise, given all the bad news of late, but the U.S. economy is expected to emerge from the recession sometime around mid-2009.” We’ll have some bad times, yes. “However, once the massive amount of fiscal stimulus currently being crafted by lawmakers and aggressive action by the Federal Reserve kicks in, the economy is expected to improve, according to several economists and business owners.”

Meanwhile, John Cassidy of Conde Nast’s “Portfolio” writes “Most economists predict a recovery late next year. Don’t bet on it.”  He’s not the only one who predicts bad times ahead for housing, jobs, retail, and even the entire world economy. Every media outlet– from the San Francisco Chronicle to the BBC online to the cheapest weekly you find on the street corner– has predictions; some are rosier and some are darker. In short, no one knows.

Still, an interesting point that Cassidy makes deserves attention. He writes:

Among noneconomists, there is much more concern about what lies ahead. In October, a CNN poll found that 59 percent of Americans believe another 1930s-style depression is very or somewhat likely. Dismissing feel-good suggestions that the turmoil on Wall Street won’t have much impact on the rest of the economy, 55 percent of the respondents said the financial crisis would affect them personally within the next year. A separate poll for Condé Nast Portfolio shows that people working in the finance business are even gloomier: 77 percent of them say their industry is in a state of crisis, and 50 percent say the economy is the worst it has been in their careers.

So who are we to believe: the experts who failed to predict the current crisis or the great American public?

Indeed, what do you predict, public? Time to go on record now. Clearly, we need some actual experts.

Zoltar photo via TheGreenHead (also a source of 2009 predictions!)

Road to Real Estate Recovery

When I was working at C__________, my boss was a big coke-head. As a result, the atmosphere was, to understate, lax. Everyone drank and ate copiously (never paying for it), sat down and/or danced randomly in the middle of the restaurant, swore, and slept with one another. All of the aforementioned took place during open-for-business hours. None of us were very surprised when an accountant appeared to “audit the situation” since the owners were confounded, and not at all pleased, that such a busy place could simply not turn a profit. The list of solutions thus generated included: uniforms, Michael Bolton CDs, crafting our famed sangria with boxed (as opposed to bottled) wine, and a NO DRINKING ON THE JOB POLICY.” Nowhere was it suggested that coke-head boss might… cut back, abstain, cease, or desist. And so ended my tenure at C_______.

The relevant thread here is that ailing businesses oft must look within to cure what ails. In the case of real estate, a national convalescent, such introspection cannot come too soon. Perhaps this is why Inman is sponsoring a “Roadmap to Recovery” program, part of which includes an essay contest, with prizes such as $500 and a free pass to the upcoming Real Estate Connect conference.

One recent essay asks how Realtors can redefine “full service.” The author, Jack Harper, has a thesis that what’s missing in real estate is transparency: a term he defines as the client having full understanding of what the agent does for his/her commission. He laments not only a lack of clear communication regarding those services, but also a lack of agreement by the industry as a whole as to what those services entail.

Commenters have opinions aplenty on this essay. Most turn out to be thinly veiled ads for the agents commenting, masturbatory “I am so good at this and that as well as that and this; and by the way, here is my contact information and website!” type stuff. But most of the ideas echo Harper’s.

As a potential client to any realtor, I would like to add that “transparency” also implies a level of honesty and freeness with information your industry is not famed for. We need to trust you again. Bringing that trust back to real estate could be one very important step on the road to recovery.

Photo credit: Active Rain.com

East Bay: Berkeley Named Top Spot For Selling Your Home

By Home Girl, aka real-estate blogger Tracey Taylor

If you are selling your home, Berkeley is the place to be doing it, according to a piece in Forbes which ranks the ten best suburbs to sell a home. (Suburb? Ouch that hurts.) This is how they put it:

Berkeley known sometimes as a hippie haven, is becoming a hotbed for home sales. Prices in the Bay Area suburb are up 9% this year, with homes selling for a median price of $790,986. Properties are sitting on the market for 73 days on average, the lowest of any area with positive price trends within the confines of the country’s 75 largest Census-defined metro areas. Only 37% of sellers have been forced to reduce their prices, one of the lowest rates in the country.

“Only 37%” of sellers reducing their prices? Shows just how bad it is. Other California spots to make it into the Top 10 include Encinitas and Venice.

The report draws on stats from Altos Research and the really interesting angle — and one Forbes fails to mention — is provided by Altos CEO Mike Simonsen on his blog. He says this was a difficult one to call:

Their editors called and asked, “Where are the best selling suburbs for sellers right now?” It’s a tough question because the answer, really, is nowhere… By our Market Action Index, there are essentially no markets with demand levels high enough to call them “Sellers’ Markets”. We settled on identifying ten suburbs whose demand trends … simply weren’t horrible.

Of course, a Forbes ranking of “10 suburbs to sell that simply aren’t horrible” doesn’t have quite the same ring to it.

[Photo credit: http://www.cityofberkeley.info

Reduction, Ad Nauseum

I’m not a Realtor, so I’ll tell something I’m more qualified to comment on: buyers’ perspectives. For instance, I can tell you how buyers looks at a property that’s been reduced more than twice. We feel sorry for them. They’re like awkward teenage boys at their first dance, pretending to be terribly busy with their shoe laces to avoid eye contact. We all know these boys can’t really be too picky; they have to take what they can get.

This analogy might not totally work for reduced priced properties. I’m just saying that as a buyer, we tend to feel a lot more powerful when we notice a home’s asking has come down not once, but twice– a feeling that multiplies with each subsequent reduction. That’s why, as a seller, I’d really hope my agent were savvy enough to price my home right. Of course, we can’t, unless we are Dione Warwick, know what the future holds, and some of the current meltdown has caught us by surprise. Still, the writing’s been on the wall awhile. Most literate people, I’d think, would have read it.

Case in point the next three properties, whose reduction history goes from bad to worse.

1. Studio TIC at 1059 Leavenworth St #5 San Francisco, CA 94109. Current price: $325,000. In over 120 days on the market, the list price has come down thrice:

Jul 02, 2008 $399,000
Jul 03, 2008 $329,000
Sep 09, 2008 $325,000 

2. 532 Clipper St #B San Francisco, CA 94114, currently at $539,000 is a 2 bed/1 bath TIC flat. In over 170 days on the market, it’s suffered 5 reductions, each one not very big, but the conglomeration of so many price cuts is pretty damning:

May 14, 2008 $679,000
Jun 11, 2008 $659,000
Aug 13, 2008 $639,000
Aug 28, 2008 $599,000
Sep 25, 2008 $570,000
Oct 28, 2008 $539,000

3. 3630 22nd St., San Francisco, CA.  A 2bed/1bath detached cottage TIC, this one I’ve saved for “worst” because though it has not been cut as often as the above property, the overall slash down is quite dramatic. In over 100 days on the market:

Jul 18, 2008 $749,000
Sep 05, 2008 $649,000
Oct 06, 2008 $589,000
Oct 29, 2008 $499,000

In this last case, the current price seems a lot more fair. I went to the open house yesterday and the listing agent informed me the place needed about $250K in repair and pest control. I have to wonder who would have ever, ever, ever paid the original list price.

I also wonder what other SF real estate agents or buyers or sellers think of these reductions overall, so I’m serving this blog up on the Front Steps for commentary. Take it easy on those awkward teen age boys though. Everyone, and everything, is fragile right now.

Coming Soon! And, Coming Later!

Realtor Kevin Gueco writes a very sunny review for the coming soon Mosiaica 601 condo project (pictured above) in his SFNewDevelopments blog. There’s definitely some room for pleasant surprise in the announced price  (pleasant to me, anyway, since I selfishly find all condos I cannot afford to be unpleasant):

“Mosaica 601 announced last week that it plans to start pricing of its 3 bedroom / 2 bath condos in the low $600s!  This is an incredible value considering each home is around 1400 square feet.”

Of course, putting aside Gueco’s near-by  restaurant list, the area (where Mission meets Potrero) is a little rough, but the price still seems all right to me. Perhaps the developers see the price cuts so many other condo developers have had to make recently, and are starting lower to begin with?  

Also coming soon (but not as soon) are a more mysterious set of housing units. Just off West Portal and 16th Ave., in front of Arden Wood, you can see the pushed-up dirt, huge bulldozers, and thin wood skeletons that signal housing to come, and their sectioning looks multi-unit. Thus I suspect these are the long awaited condos that were subject of news and speculation in 2006. In fact, that’s still the only information I can find on this construction: 2 years old, via SFHomeBlog and J.K. Dineen. Someone has to have a more updated scoop here. Anyone?
 
Meanwhile, still a pipe-dream (ha ha! Really, Haight Street, how many pipe stores can one street support?), but with the supervisorial green light is the Whole Foods/condo complex, slated to replace long-dead Cala Foods at the corner of Stanyan and Haight. The Chronicle outlines the plan here:

 “The large, four-story project, which also includes some 60 high-end, market-rate housing units, was expected to be controversial, but the commission voted 6-0 to approve the conditional use permit – a result supporters think had a lot to do with their organized turnout.”

Right, agreed: Haight could use a face-lift and perhaps a gentle reminder that THE 60′S ARE OVER. Also, I like Whole Foods, but I’m saving for one of those condos, so I’ll stick to Trader Joe’s (with a new one also coming soon!). I’m curious what “market rate” will be when those units go up, since so many new developments are struggling to sell out units already. The Frontstep’s own banker/blogger, aptly known as “The Banker,” says: “We are overbuilt. . .and it is next to near impossible to get financing!”

What do you say?

—-

Construction photo via SFNewDevelopments

Taking Over Fannie Mae and Freddie Mac, Some Clarification

If you’ve been wondering what all of this Government takeover of Fannie and Freddie means, you’re hardly alone, so we just went ahead and copied what we just read to give you some different perspectives of what is being said in the real estate world. We take zero credit for this, it all came from the San Francisco Association of Realtors Advantage Online:

[Update: And we just discovered more info on Trulia].

“NAR: What the Government Takeover of Fannie Mae and Freddie Mac Means to Housing Industry

In short-term, home sales should improve as mortgage rates fall Continue reading

Labor Day is over…now what?

Labor Day is behind us, which typically marks the beginning of Real Estate season. Many buyers are waiting for that special place to hit the market, and many sellers are getting their homes ready to place in the increasingly critical public eye, and hoping they sell prior to the looming Holiday Doldrums. More and more real estate blogs and “watch dogs” are among us, countless real estate listing sites have sprung up, and the mortgage market continues to spiral downward. Considerable amounts of money (new and old) are still pouring into the San Francisco economy, and those with means still have no problem qualifying for, and attaining, top-notch loans at insanely low rates.

By all accounts things are going to be interesting. Specifically, I’m busier than I’ve ever been. Generally, I think I’m lucky.

So now what?

Our (extended) backyard is getting more affordable, Lake Tahoe luxury real estate takes a dip

It’s not very often that we get excited about a dip in median or average sales price, but when we’re talking our favorite playground and extended backyard, we have to admit we’re a bit giddy.

From a recent article in the Reno Gazette Journal:

“We had an absolute record-breaking year for the high-end market in 2007,” said Susan Lowe, corporate vice-president of Chase International. “Lake Tahoe usually averages two sales over $10 million around the entire lake each year. Last year, there were 11.”

Since January, however, Tahoe has seen a softening in its high-end market, Lowe said.

The decline is reflected in Dickson Realty’s latest quarterly report, which saw the number of houses sold drop by 72 percent in South Lake Tahoe, 71 percent in Incline Village and 46 percent in Zephyr Cove compared with the same period last year.

The same report also found that median prices in the first half of 2008 dropped by 1 percent in South Lake Tahoe to $1.3 million and 40 percent in Zephyr Cove to $1.7 million compared to the same period in 2007.

Incline Village was the exception, reporting a 24 percent increase in median sales price to $3.2 million.

Nancy Fennell, president and chief executive officer of Dickson Realty, attributed the softening to pressure in the lower end of the luxury market.

For the first time, Dickson Realty’s real estate-owned and short-sale division is seeing foreclosures and short sales in the $1 million to $1.5 million market from Tahoe to the Reno-Sparks area.

Truckee was the only area that remained flat for both number of properties sold and median price.

“We’re starting to see the general kind of distress in the economy creep up into the $1 million to $1.5 million range of the luxury market,” Fennell said. “I don’t think it’s going to look quite so dismal by the end of the summer. But I think there are definitely going to be fewer sales in the luxury market in 2008 compared to 2007.”

Skills we possess to earn our keep in your new Tahoe pad:

1) Back-of-hand knowledge of all ski areas in and around Tahoe

2) Ski tech

3) Sun lotion applied in smooth even strokes

4) Valet Parking and bar-tending skillz (in that order)

5) Friends in real estate in and around Lake Tahoe ;-)

-Tahoe homes on tour define luxury [Reno Gazette Journal]

Comment du Jour: “Check out the VC funding [the Bay Area] received…”

From Aubear1 in Bay Area attracts top talent and money (theFrontSteps):

Check out the percentage of VC funding that this region received during Q1 ’08 versus other parts of the country:

PWC MoneyTree.com

I can’t think of a more compelling piece of information that paints the picture of how this region continues to create both real jobs & wealth during the current economic downturn. You can go back to the previous quarters as well to see that the “Silicon Valley” region has consistently won a significant piece of the funding awarded. In my opinion, this is one of the key elements that continues to drive the local real estate market (and the US economy). This region is at the “tip of the spear” in terms of “creative destruction” and stands unique among most top tier global cities. The SF Magazine gives great recent examples of this as does the recent book, “Who’s Your City” (creativeclass.com/whos_your_city).

Thanks for letting us all in on this information bit of information….

-PWC MoneyTree.com

-creativeclass.com/whos_your_city

California Foreclosure Crisis: I ask, Senator Barbara Boxer replies

Okay, so maybe it wasn’t a personal message to me, but I contacted Senator Boxer not too long ago to find out more about her ideas behind helping Californians who are upside down on their homes (actually I was mostly interested in getting the code to post her video directly on the site.) After sifting through all kinds of Political crap and coming to grips with the fact they did not, in fact, “listen” to what I had to say, I found this quite interesting:

California is being hit particularly hard by the foreclosure crisis, reporting 481,392 foreclosure filings on 249,513 properties in 2007, the highest total of any state and more than triple the number in 2006. These foreclosures will cost Californians an estimated $67 billion in lost property values, and local governments are likely to see a decline of $4 billion in collected property, sales, and transfer taxes.

For the full reply, read on… Continue reading

San Francisco Real Estate watch: SF Chronicle’s recipe for fear

The main ingredient: “The Associated Press-AOL Money & Finance telephone poll of 1,002 adults, including 769 homeowners, portrayed a public afflicted with anxiety about what will happen to their pocketbooks in the near future. Those anxieties also show how the slumping real estate market has led to a weakened economy. [No shit?]“

Add the graph:

Shake and stir in: “The people most affected are those who bought recently with little or no money down. When home values decline, many such homeowners end up “underwater” – owing more than their house is worth. [Really?]“

Yet another excellent Chronicle treat that is sure to help boost both the economy and general well-being of our nation and specifically housing market. Well done!

But did you notice San Francisco? I call for a petition to officially change the name of our region’s largest publication from “San Francisco Chronicle” to “Bay Area Chronicle, and Everything Bad about it“.

-Homeowners get that drowning feeling [sfgate]

Mercury rising? San Francisco foreclosures on the increase?

Browsing TechCrunch today, we came across a site we had visited before, HotPads.com, that provides a fair bit of mashing goodness, and were reminded that we had never posted on the matter. Given all the continued hoopla in the media over the perpetual demise of real estate and the end of the world as we know it, we thought we would point out a few things about this little bubble we call San Francisco. Actually, we’ll leave that to the maps:

Hotpads.com

Notice that around 1 in 2500 homes in San Francisco are in foreclosure (according to the map). Some areas are more, some less, but you’d have to agree, the sky has not fallen. Also important to note, and TechCrunch missed this, the little home/building icons you see do not represent the actual homes in foreclosure, rather homes for sale or rent. Slightly misleading? Yes. Food for the bubblistas? Definitely. Cause for panic? No.

All in all, the mercury on that map doesn’t appear to be rising to the to the extent you might be reading.

For another data point on foreclosures, check out the list of San Francisco foreclosures provided to sfnewsletter via PropertyShark.com. Yes, the list has grown, but it’s hardly cause for headline reporting.

[Update: "Tyler" points us to what should have been obvious: "If you click the 'foreclosure' tab at the top, the houses change to foreclosures."]

Is San Francisco real estate still “Holding On”?

A reader forwards us this link to a recent article in this special section of the New York Times, which leaves us wondering, “Is San Francisco real estate still ‘Holding On’?”

Some quotes:

-”Once real estate in the most expensive cities no longer seemed to be a can’t-miss investment, you might have thought more people would flee, bringing prices down sharply. That would further shrink the gap between a place like San Francisco and one like Sacramento. Instead, the gap is growing again.”

-”What, then, can explain the contours of this housing bust? The best answer is that the sheer scale of the bubble obscured another — in all likelihood, more lasting — trend: despite all the ways that technology has made distance matter less, geography matters more. It may be easier to transport an individual job from [San Francisco to Sacramento], but the value of being in [San Francisco] is actually greater than it used to be.”

-”In recent years, New York, Boston, Washington and San Francisco have widened their lead in household income and educational attainment over much of the rest of the country. So it makes perfect sense that they have widened their lead in housing prices, too.”

-”Mark Zandi, who runs Moody’s Economy.com, has built a statistical model designed to predict the proper level for housing prices in every major metro area. The model is based on population, housing supply, income and various other factors. As of the end of last year, Zandi estimated, prices were still 30 percent too high in much of Florida and roughly 25 percent too high in Las Vegas and Phoenix. But prices looked somewhat more sensible in New York (16 percent overvalued), Los Angeles (10 percent), Washington (9 percent), Boston (7 percent) and San Francisco (6 percent).”

And from an entirely different article in the New York Times, we direct you to yet another reason San Francisco will always attract top level talent, and top level earnings potential.

-Cafe Capitalism, San Francisco Style [New York Times]

-Holding On [New York Times]

Still confused about Conforming Loan Limits?

3 Oceans Real Estate provides some answers:

Raising the conforming loan limit has the following benefits:

1. It does in fact greatly stimulate the economy

2. Many consumers who got in over their head will now be able to afford their mortgage

3. Greater affordability for housing is created

4. It will influence a portion of the jumbo market that has been lost and create some investor confidence, and finally

5. California has been long overdue to have a raise to the conforming limit given that over 50% of the nation’s jumbo mortgages were originated in California.

Okay, let’s say that raising the conforming loan limit is good for a moment. What’s next and what are the details? There’s still some speculation, but here goes:

1. The conforming loan amount will be determined based on 125% of the median price of a given county…

2. This allowance will NOT go into effect for purchase or refinance transactions until July 1, 2008 (that’s the earliest date that the loan application may be signed) since the market needs from now to June 30, 2008 to liquidate current qualifying mortgages available for sale from institutions

3. The types of programs allowed will be fixed-rate programs on a full-doc basis, which means that the hybrid, interest-only programs using “stated” income will not be allowed

4. The property must be single-family and owner occupied, which means that 2nd homes, investment properties and multi-unit properties are ineligible

5. Credit scores must be “reasonable” with a combined loan-to-value not to exceed 90%

6. No cash-out, which means that a refinance may not allow the borrower to receive any greater than $2,000 at closing

7. Loans must be funded and closed prior to December 31, 2008

Please visit their site for more on the matter, or feel free to ask our very own Kelly McCray.

-How stimulating will raising the conforming loan limit be? [3 Oceans Real Estate]

Chop go the rates…again! (Feds cutting rates makes us queezy)

“Fed Cuts Rate by Half-Point; 2nd Reduction in 8 Days” [New York Times]

In lowering its benchmark Federal funds rate by half a point, to 3 percent, the central bank acknowledged that it is now far more worried about an economic slowdown than rising inflation, and it left open the possibility of additional rate reductions.

“Financial markets remain under considerable stress, and credit has tightened further for some businesses and households,” the central bank said in a statement accompanying its decision. In addition, it said, recent data indicated that the housing market is still getting worse and the job market appears to be “softening.”

What’s going on here? This roller coaster is making us queezy!

Marc Herrenbruck had this to say:

As expected the Fed lowered “rates” by .50% so how will this effect you? Banks will be reporting that Prime has now fallen to 6%! Four months ago it was at 8.25%. People with HELOC loans rejoice you have experienced a 2.25% reduction in your interest in the last 4 months or if you had a $250,000 line of credit your payments went from $1718.00 to $1250.00 a month, a savings of almost $500.00 a month! I also want to say that rates for 30 year, 15 year and 3,5,7,10/1 arms are not benefiting from this in fact rates have been going up since the Fed lowered rates by .75% last Tuesday. That is because money is moving from the bond market to the stock market which supports what the Fed is doing to fight recession, lower Fed Fund and Discount Rates to stimulate the economy.

N.A.R. Housing Forecast

NAR Issues Housing Forecast: “Stable Existing-Home Sales Expected in Early 2008, then Gradual Rise”

Over the next few months, existing-home sales are expected to hold fairly steady as indicated by pending sales activity, then rise later in the year and continue to improve in 2009, according to the latest forecast by the National Association of REALTORS®.

Lawrence Yun, NAR chief economist, said there is a pull and tug exerting itself on the market. “On the one hand, we have a pent-up demand from the four million jobs added to our economy over the past two years of sales decline,” he said. “On the other, consumers continue to wait for additional signs of market stabilization. There are more people with financial capacity now than in 2005, but many are trying to market-time their purchase. As a result, the exact timing and the strength of a home sales recovery is a bit uncertain. A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008.” Continue reading