Real Estate Roundup: Silicon Valley Is the Nation’s Fastest-Growing Job Market
May 18, 2015 • Posted in Weekly Real Estate News Roundups
Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious.
EMPLOYMENT GROWTH PUSHES SAN JOSE MEDIAN HOME PRICE TO $900,000
The flourishing Silicon Valley economy pushed the median home price in the San Jose metro area to more than four times the national median in the first quarter, says a recent report from the National Association of Realtors.
The median single-family home price in the San Jose-Sunnyvale-Santa Clara metro area climbed to $900,000 in the first quarter, a year-over-year gain of 11.4 percent and the highest in the U.S. NAR says that employment in the region increased by 5.5 percent over the last year, the fastest pace in the country and more than double the national rate of 2.2 percent.
According to NAR’s full first-quarter 2015 report, home prices in the San Francisco-Oakland-Fremont metro area rose by 10.1 percent from the first quarter of 2014. At $748,300, the San Francisco metro area is the nation’s second most expensive housing market.
BAY AREA SEES MASSIVE LOAN-ORIGINATION SPIKE
The number of loan originations saw huge annual increases in both the San Francisco and San Jose metro areas in the first quarter, possibly due to owners taking advantage of low interest rates and choosing to refinance their homes.
In its Q1 2015 U.S. Residential Loan Origination Report, RealtyTrac says that loan-origination activity in San Jose rose by 72 percent from the first quarter of 2014, the largest such gain in the U.S. Loan originations in San Francisco increased by 49 percent in the same time period, No. 7 in the country.
If national trends are any indication, the uptick in local activity could have more to do with refinancing than home purchases. According to RealtyTrac, refinances accounted for nearly 68 percent of U.S. loan originations in the first quarter, compared with 32 percent for purchase-loan applications.
“A dip in interest rates early in the year, combined with lowered mortgage insurance premiums for FHA loans, breathed some life back into the refinancing market in the first quarter,” RealtyTrac Vice President Daren Blomquist said in a statement accompanying the report. For the week ended May 14, Freddie Mac said 30-year, fixed-rate mortgages averaged 3.85 percent, up for the third consecutive week.
SAN FRANCISCO TO HELP FUND WATER-SAVING HOME IMPROVEMENTS
San Francisco is once again trying to help homeowners pay for solar improvements, and this time around, the city has California’s drought woes in mind.
SFGate reports that the city’s GreenFinanceSF program will allow residential and business property owners to obtain money for energy-efficient upgrades and then repay the money as a line item on their taxes. Five years ago, San Francisco attempted a similar initiative before federal regulators shot it down citing foreclosure-related concerns.
According to the article, the program also funds water-saving improvements, such as gray-water collection systems. Homeowners interested in participating in the program can apply for a loan at the official GreenFinanceSF website.
SAN FRANCISCO NATION’S LEAST AFFORDABLE HOUSING MARKET 10 QUARTERS RUNNING
Housing affordability improved in San Francisco in the first quarter of 2015, but the region still ranks as the least affordable in the U.S.
In its most recent Housing Opportunity Index, the National Association of Home Builders says that 14.1 percent of homeowners in the San Francisco metro area could afford to purchase a home in the first quarter, up from 11.1 percent in the fourth quarter and 13.3 percent one year ago. According to NAHB, San Francisco has had the dubious distinction as the region’s least affordable large housing market since the fourth quarter of 2012.
Santa Cruz was the country’s least affordable small metro area in the first quarter, with 21.6 percent of residents able to purchase a home. Historic NAHB data shows that since the first quarter of 2013, either the Santa Cruz or Napa metro areas have ranked as the least affordable small U.S. real estate markets.