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Real Estate Roundup: Apple’s New Campus Boosts Silicon Valley Home Prices

APPLE’S NEW “SPACESHIP” CAMPUS CAUSING BIG HOME PRICE GAINS IN CUPERTINO Although Apple’s massive, circular new campus — dubbed the “spaceship” — has yet to open its doors to employees, it has been affecting nearby home prices for the past several years. That’s according to an October report by Realtor.com, which found that median list prices for homes located within a one-mile radius of the company’s new Cupertino office increased by 20.5 percent from the second quarter of 2015 to the second quarter of 2016 — almost double the appreciation rate in Santa Clara County. Since the Cupertino City Council approved the 2.8 million-square-foot building in 2013, home prices within a mile of the structure have appreciated by 18.4 percent on an annual basis. Currently, there are only 14 homes listed within a two-mile radius of the new building. One reason that highly paid Apple employees will shell out big money for modest suburban homes within close proximity to the spaceship campus is because of the crushing traffic jams that currently plague the Bay Area and Silicon Valley. When Apple’s new building opens, the company will employ 24,000 workers based in Cupertino. THE PROS AND CONS OF THE BAY AREA’S ROARING ECONOMY While freeway congestion is one major downside of the Bay Area’s thriving job market, a slim supply of homes for sale and low affordability conditions are likely to be the region’s largest hurdles moving forward. Citing data from the California Association of Realtors, The Mercury News reports that home prices in Alameda, Marin, San Francisco, San Mateo, and Santa Clara counties surpassed their peaks earlier this year....

Housing Affordability Improves in 7 Bay Area Counties in the Third Quarter

A lack of affordable homes continues to present one of the largest challenges to buyers in California, so it comes as welcome news that more residents — if only slightly more — can make the mortgage payments on the average Bay Area property. Statewide, affordability failed to improve from the second quarter to the third, with 31 percent of Californians able to afford the median-priced single-family home. That’s according to the California Association of Realtors’ latest Traditional Housing Affordability Index released last week, which calculates the minimum income required to qualify for a 30-year, fixed-rate mortgage assuming a 20 percent down payment and an effective composite interest rate of 3.76 percent. For 14 straight quarters, California’s HAI has been below 40 percent, despite low mortgage rates and wage growth. The state’s housing-affordability condition is hovering near its all-time 2008 low, when 29 percent of residents could qualify for a mortgage. The average state household needs to earn just over $100,000 to afford the median-priced $515,940 single-family home. The nine-county Bay Area’s affordability rating rose 2 percentage points to 25 percent in the third quarter, but the region is still significantly less accessible to buyers than other major regions of the state, with a median home price of $785,980. Nationwide, nearly 60 percent of U.S. households could afford to purchase the median-priced $240,900 home. Affordability increased in seven of nine Bay Area counties in the most recently completed quarter, with conditions unchanged from the second quarter in Napa and Solano counties. That said, improvements were slight, ranging from 1 to 3 percentage points across the region. Solano and Contra Costa...

San Francisco Again Named Nation’s Hottest — and Quickest-Paced — Housing Market in October

U.S. homes sold slightly quicker this year in October than they did one year ago, particularly in San Francisco, which once again ranks as the country’s hottest real estate market. Realtor.com’s latest analysis of the 20 most in-demand places for home shoppers pegs San Francisco as the hottest U.S. market in October, based on the fastest pace of sales as well as the most listing views on its website. The City by the Bay ranked as the nation’s hottest market in September and for most of the past year and a half, although the Vallejo-Fairfield metropolitan area claimed the top spot for four consecutive months earlier this summer. Homes in the San Francisco metropolitan area — which includes Oakland, Hayward, and surrounding communities — found a buyer in an average of 34 days in October, the fewest days on market of the 20 cities included in the report. Realtor.com did not include this statistic for individual submarkets for the past few months, but its October 2015 analysis of the same kind found that homes in San Francisco sold in an average of 33 days. With a median list price of $830,000 last month, San Francisco properties are hitting the market 7.8 percent higher than they did one year earlier. Vallejo fell one spot from September to the No. 3 position. Homes in the Solano County suburbs are selling in an average of 45 days at nearly half the price as in San Francisco, listing for an average of $420,000. California real estate markets have dominated Realtor.com’s hot list since its inception, and October brought more of the same, with...

San Francisco: The No. 1 U.S. City for Building Wealth

Both in spite of and because of its pricey housing market, San Francisco ranks as the best city in America for accumulating wealth. That’s according to an analysis by Bankrate CFA Claes Bell, who ranked the top 21 U.S. cities for building wealth. Bell arrived at his list using a number of criteria, including after-tax income and expenditures, the job market, educational opportunities, debt burden, home price appreciation, and homeownership rates. By the study’s criteria, San Francisco stands as the nation’s No. 1 city for building wealth in 2016. San Franciscans save an average of $16,657 per year, in part because of very high wages. Earlier this year, a study by Glassdoor found that almost 70 percent of the nation’s best-paying companies are located in the Bay Area, nearly all of them in the tech sector. Along with New York City and San Diego, San Francisco counts among the lowest of the cities for homeownership rates, at 53 percent. The analysis notes that cities with homeownership rates of less than 60 percent often have land shortages and other issues that lead to slow housing growth and the resulting affordability problems, certainly a nod to the high real estate prices that Bay Area residents have grown accustomed to during the housing recovery. Still, since home equity is a prime component of building wealth, the half of San Franciscans who are lucky enough to own properties in the city are amassing money in that manner. The half who do not own homes earn such higher incomes compared with residents of other cities that they can amass money in other ways, such...

Silicon Valley Home Sales Activity Slows but Not in All Price Ranges

October 20, 2016 by Selma Hepp Executive Summary: Silicon Valley sales slowed but not consistently across all price ranges and generally due to different factors. A lack of inventory and buyer fatigue are holding back sales in the most affordable price range. Higher price ranges have suffered due to global and financial uncertainties. Buyer frenzy has diminished, and pressure on prices has slowed notably. Nevertheless, venture-capital (VC) activity has picked up again and job growth remains robust, which will translate into continued sales activity in the coming quarters. It has been an interesting year for the housing market, as well as global markets in general. Much anticipation has surrounded interest-rate increases, the upcoming presidential election, the slowing of VC investment, and ambiguity over continued job growth. As for the Bay Area’s housing market, overall conditions have slowed in 2016 when compared with the last few years. The slowdown is mostly in the number of units sold and buyers’ willingness to compete, while home prices have generally continued to appreciate. The total number of units sold year to date (January through September) in the Bay Area declined by 6 percent. The largest drop was for homes priced below $1 million, which is due to price appreciation and shifting of the price segment into points above $1 million. The number of units sold priced between $1 million and $2 million in fact increased by 7 percent during the same period, while sales of units priced above $2 million fell by about 4 percent regionally. In Silicon Valley, home sales trends generally followed the regional pattern, with a 6 percent decline in...

Most Bay Area Counties Have Surpassed All-Time-High Home Prices

October 19, 2016 Although California single-family home prices are still short of their record highs, the majority of Bay Area counties have eclipsed the peaks that they attained during the previous housing boom. That’s according to the latest monthly home sales report from the California Association of Realtors, which puts the median sales price for a single-family home in the state at $514,320 in September, up 6.1 percent on an annual basis and the sixth consecutive month above a half-million dollars. The Golden State’s median home price is still 14.5 percent lower than its all-time high of $594,530, set in May 2007 according to CAR’s historical data. Before the recession, California home prices were higher than $500,000 for 31 consecutive months. The median sales price for a single-family home across the nine-county Bay Area was $770,150 in September, a year-over year gain of 4.9 percent. The Bay Area’s median sales price reached a new peak of $848,580 in May but has declined every month since. Home prices increased in every local county year over year in September, ranging from 2.5 percent in San Francisco to 11.3 percent in Solano. San Mateo overtook San Francisco for the dubious honor as California’s most expensive county, with a September median sales price of $1,290,000. The Bay Area is home to the state’s three other current million-dollar real estate markets: San Francisco ($1,218,750), Marin ($1,165,000), and Santa Clara ($1,000,000) counties. All four of those counties, along with Alameda, have seen home prices reach new highs at some point during 2016. Prices in Contra Costa, Napa, Solano, and Sonoma counties have not yet returned...