Coastal Real Estate and Lifestyles

We don’t like to go to the doctor.  Twenty- and thirty-somethings especially don’t.  Of course you’re healthy, fit, invincible, able to scale mountains, right?  We certainly hope so, but a check up now and then establishes that valuable baseline that you may appreciate more later in life…trust me on that one.  Getting a financial baseline before buying your first home is equally important.  For many first time home buyers here, it could take a long time to save the money necessary to purchase a home on your own.  It is just darn expensive to live here in San Mateo County.

This may hurt a little:  get a financial diagnosis from an experienced mortgage professional who can explain your loan options to you.  Forget the ads that tout “Find Your Dream Home”.  You are not in that market!  The most important consideration in a fixer is how it’s built - “bones”, lot size, and location. 

Next, get the treatment plan together with a local Realtor.  Realtors commonly have clients’ needs in mind when they tour new listings every Tuesday.  Sometimes great properties do not last long or are sold before they get onto the MLS.  He/she will ask you questions like…

• Commute considerations - distance, transportation, timing, etc.

• Lifestyle considerations - are you a surfer (ocean, that is), movie watcher, entertainer?  After all, you will need a break from working on the house from time to time!

• Finding the right fixer - how much of your free time can you spend improving your new home?  Every night - one day each weekend - once a month? 

Just as you hope to develop a partnership with your medical/health professional with the goal being your overall well-being, create a partnership with a Realtor with the long term goal being homeownership well-being.  Enjoy your journey toward homeownership health and happiness…and keep climbing mountains, or whatever you do to stay fit.

As new online consumer-oriented real estate sites emerge such as Zillow and Trulia, it is fascinating for me to watch how Realtors and consumers respond to this segment of our industry’s growth.  For years Realtor.com was the primary real estate site that consumers used outside of individual Brokerage sites such as Californiamoves.com.

I’m a fan of transparency, which you already know if you’ve been reading this blog, so I’m excited that consumers have more resources.  However, along with new choices comes some confusion and growing pains.  Here’s a bit of clarification regarding some of Zillow’s data for my corner of the world - the San Mateo County coast including Half Moon Bay and nearby towns.

Zillow just posted Q1 results for 30 Metropolitan Statistical Areas (MSA).  Look at the Quarterly Home Value Reports map to start.  Our San Mateo County Coastside area is included in San Francisco-Oakland-Fremont (called San Francisco Metro area).  For geographic reference, near us is San Jose-Sunnyvale-Santa Clara (called San Jose Metro area).  East Bay and North Bay communities are also included in the Bay Area’s general region.

Find San Francisco, CA on the list of cities on the left.  Zoom in a little and notice the colored icons near Moss Beach, Princeton By the Sea, and Half Moon Bay.  Note:  Montara is not on this map just a mile north of Moss Beach and Princeton By The Sea is also a neighborhood.  Princeton By the Sea is part of El Granada; Seal Cove is part of Moss Beach.

When you’re on the Zillow site, click on the green (the color refers to the amount of appreciation or depreciation) icon near Half Moon Bay to get this:

According to Zillow, the Half Moon Bay change is -5.2%.  The Zindex is $815,000.  Note:  this picture is of a recently sold - 3/11/08 - bank-owned house in the El Granada highlands - MLS # 768007 - for $615,000; not located in Half Moon Bay.  Zindex means median zestimate which is the current median price for a given Metropolitan Statistical Area, I think.

For a Big Picture tool, it’s not too far off…but as one would expect, not entirely accurate either.  They’re statistics - a tool… not the be-all-end-all of our homes’ value.  I’m looking for whether it’s in the ballpark.  Homeruns are only achieved with local expertise.

In my last post comparing Q1 2007 to Q1 2008 for Half Moon Bay see below.  Figures for El Granada, Moss Beach, and Montara are in the actual linked post.

Additional home value statistics are in my 2008 Coastside Report compiled in January 2008:  Coastside Market Report by Marian S. Bennett - January 2008

San Mateo County Coastside - Half Moon Bay, El Granada, Moss Beach, Montara:

ALL Coastside: population approx. 23,000 (based on 2000 census)
Q1 2007 had 183 new listings.
Q1 2008 had 189 new listings.

Q1 2007 completed transactions - 66
Q1 2008 completed transactions - 34

Q1 2007 Median Price Coastside - $778,000
Q1 2008 Median Price Coastside - $748,000
Approx. 4% depreciation overall in the last year.

Half Moon Bay only: population approx. 12,000
Q1 2007 had 50 new listings.
Q1 2008 had 59 new listings.

Q1 2007 completed transactions - 28
Q1 2008 completed transactions - 20

Q1 2007 Median Price in HMB - 928,950
Q1 2008 Median Price in HMB - 972,000
Approx. 4.4% appreciation overall in the last year.

El Granada only: population approx. 6,000
Q1 2007 had 24 new listings.
Q1 2008 had 17 new listings.

Q1 2007 completed transactions - 15
Q1 2008 completed transactions - 6

Q1 2007 Median Price in EG - $785,500
Q1 2008 Median Price in EG - $840,000
Approx. 7% appreciation overall in the last year.

Moss Beach only: population approx. 2,000
Q1 2007 had 10 new listings.
Q1 2008 had 15 new listings.

Q1 2007 completed transactions - 6
Q1 2008 completed transactions - 3

Q1 2007 Median Price in MB - $749,375
Q1 2008 Median Price in MB - $790,000
Approx. 5.4% appreciation overall in the last year.

Montara only: population approx. 3,000
Q1 2007 had 13 new listings.
Q1 2008 had 11 new listings.

Q1 2007 completed transactions - 17
Q1 2008 completed transactions -5

Q1 2007 Median Price in MONT - $830,000
Q1 2008 Median Price in MONT - $740,000
Approx. 11% depreciation overall in the last year.

Half Moon Bay has the largest population of the four towns and is the only incorporated city.  El Granada, Moss Beach, and Montara are unincorporated San Mateo County.  The difference in numbers of listings and completed transactions comparing HMB to the other towns in the same year is relative due the population size differences.  We all know that statistics can be manipulated, and broad based statistics are just that, very general.  I’m sharing the median prices here because that is what the headlines report.

NAR just announced on 5/13/08 ”mixed home price performance continues…”.   Inman News headline on 5/13/08 reports on NAR’s announcement that “median resale prices fall at record rate”.  Here’s the highlights:

• Median price among 149 U.S. metro areas tracked was down 7.7% in Q1 2008 compared to Q1 2007.
• One Hundred of the metro areas had price declines.  Sacramento, CA  topped this list, down 29.2%.
• Forty eight of the metro areas had price increases. Binghamton, NY topped this list, up 11.8%.
• The median price among the 149 areas tracked was $196,300.

When you are about to list your home or purchase a home, your Realtor can provide very specific data pertaining to YOUR neighborhood which will be most useful.

Just in from Susan O’Driscoll, our Half Moon Bay office in-house lender, Princeton Capital…

**Rates for our agency jumbos are down! Loan amounts > $417,000 – $729,750 today on a 30 year fixed are 6% - 0 points or 5.75% with 1 point.**

Shortly before Susan’s email, I got a call from HMB Branch of Bank of America’s Bob Zimmer with his update.  I hadn’t gotten to my newsfeed in the last few days to see for myself the Fannie Mae announcement.  Thanks guys for keeping the telephone tree alive and well so that we and our buyer clients can be the first to know about changes that may affect their rates! 

Their news to me coincides with Wednesday’s announcement by Fannie Mae, summarized here by an NAR press release that Fannie is…

“…working to reduce the cost to consumers of jumbo conforming loans (loans above $417,000, up to $729,750 in some areas) and make it easier for individuals and families to qualify for these loans. We expect this step will lower mortgage costs for many families living in high-cost areas. Additionally, Fannie Mae will allow many borrowers to refinance Fannie Mae-owned mortgages even where a home’s current value is significantly less than the existing mortgage.”

“Agency jumbo” is the another term for “jumbo conforming”, the recently approved loan limit increase for high cost areas.  I know, we really don’t need more industry lingo, do we?

Related reading:

Fannie Mae Quarter 1 News Release

…embellishing the facts further along the spectrum does.  To say that the real estate media landscape is biased is no revelation by any stretch of the imagination.  There are the respective agendas and it’s just the way it is.  It will always be up to us as consumers to decide how we want to react to it and consider its validity.  It’s up to us as real estate professionals to stay on top of public perception AND help our clients understand how such news affects their personal situation and goals.  We all have a job to do. 

I was amused by last Sunday 5/4 SF Chron Insight’s little back page column titled: The Bottom Line.  The headings Good Week and Bad Week drew me in to see how my own week compared to what made it into the column.  (check, check, more good than bad, doing ok!)  I scanned until I drilled into the words “Fair and balanced”.  I thought - wow, we could use some of that in our industry.  So I searched “Fair and balanced” and found it to be one of the news network’s terms.  A search for “fair and balanced real estate” led me to a post written 4/8/08 on News Hounds blog highlighting a rather unbalanced approach to the current state of affairs in real estate.  That is, one day it appears we may be finally rebounding, and the next a new report shows that we’re not.  I must admit part of me was expecting to find a fair and balanced real estate story, but instead I found the writer’s opinion that the news show they were writing about was not fair and balanced.  That’s fine, but I wanted to read something that I thought would be really unique.

It may always be up to us to bring the fair and balanced; however, unless there is trust, our writing probably won’t be viewed that way.  It will be viewed as another biased opinion about the real estate market.  Real estate agents who blog have an opportunity to get the real stories in their local market out there.  If we can discuss the good and the bad in a consistent manner, we have an opportunity to gain trust.  And our readers will continue to…react and consider its validity.   Thanks for reading.

Market activity and consumer feelings are consistent with my last morsel on 3/26/08.  Half Moon Bay March inventory was 7.6 months - pretty much on par with February.  While volume continues to be suppressed, HMB’s total sales volume was about double that of January 08.

In the last morsel, I mentioned that we were trending toward a balanced market with January’s 8.4 and February’s 7.2.  With 3 months of data to work with now, that ’s not the case to date.  April’s final numbers to come, are 7.5 months of inventory, incorporating 12 new HMB listings in April.  That said, not all listings are affected, the right combination of property/buyer/seller will put a home into contract within the first week.

For Half Moon Bay:
March - 22 new listings; 10 accepted contracts from total inventory - 2 within first week.
April - 12 new listings; 7 accepted contracts from total inventory - 2 within first week.

For El Granada:
March - 8 new listings; 2 accepted contracts from total inventory - 1 within first week.
April - 11 new listings; 3 accepted contracts from total inventory - 1 within first week.

A new trend is working to keep the property in contract.  While buyers and sellers both want to move forward, the new lending guidelines are catching some people off guard.  Some loan programs continue to be attractive - if the buyer comes to the table prepared; however, with the financial market’s pendulum now swinging heavily toward conservative investments, some loans take longer to go through than many buyers might expect.