Real Estate Roundup: Bay Area Homes Still Worth More Than Owners Think
January 18, 2016 • Posted in Weekly Real Estate News Roundups
Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious.
BAY AREA HOMEOWNERS CONTINUE TO UNDERESTIMATE PROPERTY VALUES
While the average U.S. homeowner has too rosy of an opinion of their property’s value, price appreciation here in the Bay Area has driven home values beyond expectation.
Quicken Loans’ latest Home Price Perception Index says that average appraisals were 1.8 percent lower than owners’ opinions in December. That was the 11th consecutive month that appraiser values have been lower that owner expectations, although the gap between the two sides has been shrinking in recent months.
In San Jose, however, the average appraisal came in at 4.99 percent above homeowner opinions in December, the highest of any U.S. metro area in the analysis. San Francisco was also near the top of the list in that regard, with appraisals beating owner expectations by 3.94 percent. But here, too, the gap is narrowing; one year ago, San Jose and San Francisco appraisals were above owner expectation by 6.45 percent and 4.45 percent, respectively.
U.S. FORECLOSURE RATE FALLS TO NINE-YEAR LOW
Foreclosure rates normalized in 2015, as banks mostly finished cleaning up the mess left in the wake of the last housing market crash.
According to RealtyTrac’s 2015 U.S. Foreclosure Market Report, there were 1,083,572 foreclosure filings last year, down 62 percent from peak levels recorded in 2010. Foreclosure activity in 2015 was the lowest since the previous housing boom, when there were 717,522 foreclosure filings in 2006.
Also at a nine-year low was the bank-owned property discount, which was 41 percent below the median-priced U.S. home. In a statement accompanying the report, RealtyTrac Vice President Daren Blomquist said that statistic indicated the health of the housing market; as foreclosures have returned to the exception rather than the norm, bank-owned properties are likely in such disrepair that most buyers won’t touch them.
ZUCKERBERG’S SECURITY FORCE DRAWS IRE OF SAN FRANCISCO NEIGHBORS
San Franciscans who regularly wrestle with street parking will likely relate somewhat to what Mark Zuckerberg’s neighbors are mad at him about now.
They claim that Zuckerberg’s security team’s SUVs permanently occupy desirable street-parking spaces near his Mission District home when they could be parked in his driveway. Previously, neighbors had griped about the “circus” surrounding the construction of the Facebook mogul’s $10 million home on Fair Oaks Street, including the associated noise and trash.
As SFGate reports, the parking fiasco has sparked the circulation of a letter that urges locals to notify the San Francisco Municipal Transportation Agency any time they spot the vehicles and pester Zuckerberg’s residential security manager. While the Facebook camp claims that their parking habits comply with local laws, neighbors say that the security guards, while nice enough, have admitted that what they are doing is in fact illegal.
HOUSING AFFORDABILITY TO WORSEN IN 2016
Although the average U.S. household will make more money this year than it did last, it probably won’t be enough to keep up with home price gains.
That’s the big takeaway from Fannie Mae’s January 2016 Housing and Economic Outlook. The U.S. economy is projected to grow by 2.2 percent this year and mortgage rates are expected to increase only gradually, but ultimately, that won’t make buying a home any more affordable for many.
“Despite our expectation of only a small rise in mortgage rates, home price and income dynamics should inhibit home purchase affordability,” Fannie Mae Chief Economist Doug Duncan said. “In addition, continued rent increases will hinder renters’ ability to save for down payments.”