Buyers continue to compete for homes in Los Gatos!!! Inventory is down 25% from the same time period as last year. With the Holidays here the seasonal slowdown in activity is likely to be in effect until the beginning of January, says our San Jose Main office manager. However there are many sellers who have signed listing agreements and are waiting for the first or second week of January to come on the market. He expects to see an increase in inventory in January but with the many buyers in the market the increase in inventory could result in an equal amount of increased sales and therefore inventory levels will remain low. As expected the local Willow Glen Market is in full holiday mode, according to our local manager. Listing inventory continues to decrease with the high 20’s for active listings. Sales activity has come to a crawl. This trend will probably continue as we move into the beginning of the New Year. One thing is certain: the market will be hungry for new inventory as we move into 2016. Are you looking to sell? Let me help you get top dollar for one of your biggest investments.

HOME SALES DECLINE Over the past week, economic events have had very little effect on mortgage rates. Year-end volatility due to light trading volume has been the more significant influence. Mortgage rates ended the past week just slightly higher. The last batch of data released this year on housing activity showed that we are ending 2015 at better levels than in 2014, but below the best levels of this year. A surprising 11% drop in existing home sales in November can be, at least partially, attributed to longer closing times resulting from new closing disclosure regulations. While existing home sales dropped sharply, NAR's Pending Home Sales Index for November was nearly unchanged. This index measures contracts to buy existing homes which were signed during the month. This measure would not have been affected by the new regulations. Fannie Mae projects the improvement in housing activity seen in 2015 will continue in 2016 with a 3.9% increase in total homes sales. The most recent inflation reading, the core PCE price index, showed that in November inflation remained well contained, at an annual rate of just 1.3%. Both low commodity prices and a stronger dollar have helped keep inflation low in 2015. However, the effect these have on inflation is transitory. Unless commodity prices continue to fall or the value of the dollar continues to rise, future readings will not reflect these benefits. The Fed's effectiveness at keeping expectations for future inflation low will influence mortgage rates in 2016.

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Real estate update time!!!

DecemberArticle

Real Estate Recovery in the BAY AREA

Rate of Recovery for Bay Area Real Estate Speeds Up January 16, 2013 La Jolla, CA.--The pace at which the Bay Area housing market is making up for lost ground quickened at the end of 2012 as sales increased year-over-year for the 18th month in a row and the median price rose at its fastest rate in more than 25 years. The market remained constrained by a tight supply of homes for sale and a fussy home loan environment, a real estate information service reported. The median price paid for a home in the nine-county Bay Area was $442,750 in December. That was up 1.1 percent from $438,000 in November and up 32.0 percent from $335,500 in December a year ago. Last month’s median was the highest since August 2008 when it was $447,000, according to San Diego-based DataQuick. The 32.0 percent year-over-year increase in the median is the highest in DataQuick’s statistics, which go back to 1988. At least half that increase is due to a change in market mix, with sales shifting away from low-cost distress homes toward more mid-market and move-up homes. The median reached a high of $665,000 in June/July 2007 and then fell to a low of $290,000 in March 2009. On a year-over-year basis it dropped more than 30 percent each month from August 2008 through May 2009. At the median's current rate of increase, sometime this spring it will have recovered about half of its loss since its summer 2007 peak. “Prices are in the midst of bouncing off bottom right now, and nobody really knows what the trajectory of this bounce will be beyond this point. So far, supply has been a bottleneck, but as prices go up, more homes will be put up for sale,” said John Walsh, DataQuick president. “Another bottleneck these days is that mortgage lenders are swamped. Not only by home buyers, but by homeowners who want to refinance. Rising home prices also mean higher appraisals, and tens of thousands of homeowners who couldn’t refinance half a year ago, now can,” Walsh said. The number of new and resale houses and condos sold last month in the Bay Area was 7,832. That was up 7.3 percent from 7,296 in November, and up 4.5 percent from 7,494 for December 2011. While last month’s sales count was the highest for any December since 8,372 were sold in 2006, it was still 9.0 percent below the 8,611 average for all Decembers since 1988. December sales have ranged from 5,065 in 2007 to 12,349 in 2003. The number of homes sold for less than $500,000 decreased 12.6 percent year-over-year, while the number that sold for more than $500,000 shot up 61.2 percent, DataQuick reported. Last month distressed property sales – the combination of foreclosure resales and “short sales” – made up 34.2 percent of the resale market. That was down from 35.5 percent in November and down from 52.4 percent a year ago. Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 11.8 percent of resales in December, down from a revised 12.5 percent in November, and down from 27.8 percent a year ago. Last month was the lowest since 10.1 percent in November 2007. Foreclosure resales peaked at 52.0 percent in February 2009. The monthly average for foreclosure resales over the past 17 years is about 10 percent. Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 22.4 percent of Bay Area resales last month. That was down from an estimated 23.0 percent in November and down from 24.6 percent a year earlier. Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 40.2 percent of last month’s purchase lending, down from a revised 40.3 percent in November, and up from 26.5 percent a year ago. Jumbo usage dropped to 17.1 percent in January 2009. Before the credit crunch struck in August 2007, jumbos accounted for nearly 60 percent of the Bay Area purchase loan market. Adjustable-rate mortgages (ARMs), an important indicator of mortgage availability, accounted for 11.1 percent of the Bay Area’s home purchase loans. That was down from a revised 12.0 percent in November, and down from 11.6 percent in December last year. Since 2000, ARMs have accounted for 48.7 percent of all purchase loans. ARMs hit a low of 3.0 percent of loans in January 2009. Government-insured FHA home purchase loans, a popular choice among first-time buyers, accounted for 18.9 percent of all Bay Area home purchase mortgages in December, up from 17.0 percent in November and down from 22.9 percent a year earlier. In recent months the FHA level has the been the lowest since summer 2008, reflecting both tougher qualifying standards and the difficulties first-time buyers have competing with investors and other cash buyers. The most active lenders to Bay Area home buyers last month were Wells Fargo with 15.5 percent of the market, RPM Mortgage with 4.2 percent and Stearns Lending with 3.4 percent. Last month absentee buyers – mostly investors – purchased 25.8 percent of all Bay Area homes, an all-time high (absentee statistics go back to January 1999). Last month's absentee level was up from 24.9 percent in November, and up from 23.8 percent a year ago. Absentee buyers paid a median $315,000 in December, up 34.0 percent from $235,000 a year earlier. Buyers who appear to have paid all cash – meaning no corresponding purchase loan was found in the public record – accounted for 29.3 percent of sales in December. That was unchanged from November, and up from 27.3 percent a year ago. The monthly average going back to 1988 is 12.5 percent. Cash buyers paid a median $312,500 in December, up 36.2 percent from $229,500 a year earlier. San Diego-based DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Because of late data availability, sales were estimated in Alameda, San Mateo and San Francisco counties. The typical monthly mortgage payment that Bay Area buyers committed themselves to paying last month was $1,561. That was up from $1,544 in November, and up from $1,336 a year ago. Adjusted for inflation, last month’s payment was 44.9 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 59.3 percent below the current cycle's peak in July 2007. Indicators of market distress continue to decline. Foreclosure activity remains high by historical standards but well below peak levels reached three years ago. Financing with multiple mortgages is low, down payment sizes are stable, DataQuick reported. SalesVolume MedianPrice All homes Dec-11 Dec-12 % Chng Dec-11 Dec-12 % Chng Alameda 1,584 1,623 2.5% $328,000 $410,000 25.0% Contra Costa 1,534 1,530 -0.3% $259,000 $333,500 28.8% Marin 280 291 3.9% $517,818 $660,750 27.6% Napa 132 129 -2.3% $317,500 $350,000 10.2% Santa Clara 1,611 1,822 13.1% $440,000 $544,500 23.8% San Francisco 499 646 29.5% $594,500 $720,000 21.1% San Mateo 602 626 4.0% $500,000 $600,000 20.0% Solano 714 610 -14.6% $182,250 $218,000 19.6% Sonoma 538 555 3.2% $279,500 $345,000 23.4% Bay Area 7,494 7,832 4.5% $335,500 $442,750 32.0% Source: DataQuick, www.DQNews.com Media calls: Andrew LePage (916) 456-7157 Copyright 2012 DataQuick. All rights reserved.

A Great 2013 for Real Estate

Promising Signs for More Improvement in Housing Market in 2013 Happy New Year!The housing market, both in the Bay Area and across the country, certainly showed impressive gains in 2012 with sales and median sale prices up in most markets and distressed sales and foreclosures down. In fact, the biggest challenge many of our local markets faced last year was not having enough homes to sell in order to satisfy the growing demand from buyers. How far we've come in just a few short years! As we kick off 2013, there are a number of positive signs out there that the momentum we saw last year will only accelerate in the new year. Many widely followed industry analysts believe we will see gains in sales, prices and new home construction this year from coast to coast. National Association of Realtors Chief Economist Lawrence Yun believes the steady housing market recovery will continue over the next several years, barring further tightening of mortgage credit availability.Yun reports that, "Existing-home sales, new-home sales and housing starts are all recording notable gains this year in contrast with suppressed activity in the previous four years, and all of the major home price measures are showing sustained increases." While mortgage rates have been at historic lows, Yun expects these rates to rise to an average of about 4.0 percent this year and 4.6 percent in 2014. With rising demand and shrinking inventory, NAR foresees "meaningfully" higher home prices. The organization estimates that the national median existing-home price rose 6 percent to $176,100 last year, and predicts it will increase another 5.1 percent in 2013 to $185,200 with a similar increase in 2014. NAR isn't alone in its bullish forecast. According to the UCLA Anderson quarterly forecast released last month, the U.S. housing market should be a major driver for the nation's economy over the next two years – a change from past years when housing trailed other sectors. UCLA Anderson economists say that the U.S. housing market may have been late to the economic recovery, but it is now taking the lead. "With the recovery more than three years old...housing is gaining strength," said UCLA Senior Economist David Shulman in his report, Beyond the Cliff. "In fact, the late arrival of the traditionally early pickup in the housing market has become the leading source of strength." So where does all this leave us? While no one can say for certain what the future holds, most signs point to the fact that the housing market will continue to see steady improvement. Interest rates remain near historic lows, and home prices are rising again. The economy is gaining strength, albeit not as predictable and solid as we’d like to see. And the job market continues its gradual acceleration. Locally, this gives us a very optimistic outlook for 2013's Bay Area housing market. It should be even more robust than 2012's. The market has turned in a big way since the recession and there just aren't enough listings to go around. Sellers are getting good prices for their homes once again – in some cases, multiple offers over their asking price. In San Francisco and the Peninsula, most of 2012 was challenged with 40% to 50% of the previous year’s inventory, even less in some communities; coupled with rising sales activity. Similar situation occurred in Silicon Valley, and Marin. East Bay, Sonoma, Monterey and Santa Cruz counties had drastically low levels of entry level homes for sale all year long. Some areas in these counties had been hit hardest with distressed sales, and the recovery was most notably swift here, as it became very competitive to purchase a short sale or bank-owned property. South County; Morgan Hill, Gilroy, and Hollister, it was all about the lack of inventory all year. The two most widely known axioms associated with real estate; Location, Location, Location – and Supply/Demand, have never been more important. Here in the Greater San Francisco Bay Area, we are extremely fortunate to have both in our favor. If a homeowner is considering selling this year, the best advice may be, to not wait for other homeowners in the area to do the same. Now may be the perfect time list your home while the numbers are in your favor. The overall consensus is that the winter selling season will start well before the traditional “Super Bowl” weekend Call me today and let's talk about putting your home on the market.