Real Estate Roundup: Competition for Homes Is Most Fierce in San Francisco
S.F. MOST COMPETITIVE MARKET IN U.S.
The San Francisco metropolitan area is the most competitive real estate market in the nation, with 87.9 percent of all offers on homes facing competition from other buyers, according to a new report from online real estate aggregator Redfin.
Nearly 97 percent of home sales were at prices above their asking prices — an average of 9.7 percent.
Those numbers are far above the average of 21 major metro markets, where 69.5 percent of offers face competition and 49 percent of sales topped their asking prices by an average of 1.4 percent.
But in a sign that the bidding frenzy may have finally peaked, San Francisco’s 87.9 percent of multiple bids is down from a high of 90.8 percent in April. (It eased off nationally too, down from 73.3 percent.)
HOMEBUYERS, SELLERS OPTIMISTIC
Americans are increasingly confident in their ability to buy and sell homes, according to Fannie Mae’s latest monthly housing survey.
The share of respondents who say now is a good time to sell a home reached a record high of 40 percent, up from 30 percent in April and 16 percent a year earlier. At the same time, the share of those who say it is a good time to buy a home rose 5 percentage points from April to a survey high of 76 percent.
Fannie Mae attributed the rising optimism to reports of strong home price gains.
“Sentiment toward selling a home appears to be catching up with the strengthening housing market,” Doug Duncan, Fannie Mae’s chief economist, said in a statement. “The share of consumers who think it’s a good time to sell a home spiked this month, the largest increase in the survey’s three-year history. This jump may foreshadow a gradual return to more normal levels of housing supply from their lows of recent months.”
HOUSING FORECAST: ‘LONG-TERM IMPROVEMENT’
In another report, economists at Fannie Mae said the housing market remains one of the brightest spots in the U.S. economy.
“Housing was largely positive entering the spring/summer season, with various indicators such as home prices, home sales, and homebuilding activity showing signs of long-term improvement toward normal levels,” the agency reported in a mid-year economic forecast. “Despite rising mortgage rates during the past month, which have affected refinance originations, affordability conditions remain high and should not present a significant obstacle to potential homebuyers.”
Overall, Fannie Mae said 2013 would see “sustainable but below-par growth as the economy begins its transition to more normal levels,” with “2.1 percent growth over the course of 2013, up from the anemic pace of 1.7 percent in 2012.”
UNDERWATER HOMES RECEDING
Rising home prices helped carry another 850,000 underwater homes back into positive equity in the first quarter of 2013. That brings the total of borrowers who have regained positive equity in the past year to 1.7 million.
Figures from the research firm CoreLogic show that 19.8 percent of all homes with a mortgage remained underwater at the end of the quarter, down from 21.7 percent at the end of 2012. In California, 21.3 percent percent of homes were underwater in the most recent quarter.
“The negative equity burden continues to recede across the country thanks largely to rising home prices,” said Anand Nallathambi, CoreLogic’s president and CEO. “The recovery is still far below peak home price levels, but tight supplies in many areas coupled with continued demand for single family homes should help close the gap.”
(Image courtesy of 401(K) 2013, via Flickr.)