Big Change at ZipRealty

From a recent press release (and recruiting flyer) fom ZipRealty:

The company is discontinuing the commission rebate program offered to buyers who close a transaction using a ZipRealty real estate agent.

They go on to say that surveys of their customers show that commission rebates are not the "primary driver" for choosing a brokerage and real estate agent.

This is a huge change for a company (and especially for its agents) that was founded 12 years ago and been through two major swings in the market under the basic premise that technology would allow them to provide faster, less expensive services (through commission rebates) to its clients.

Conforming Loan Limits Coming Down. Downpayments Going Up?

Here's a recent quote from the California Association of Realtors:

FHA and Conforming loan limits will drop dramatically on September 30. Bank of America has already lowered their loan limits for new loans, and others will follow suit. 

And from "HousingWire":

The conforming loan limit determines the maximum mortgage amount the Federal Housing Administration, Fannie Mae and Freddie Mac can buy or guarantee. Without congressional action, the limit will drop to $625,500 from $729,950 for the majority of counties nationwide on Oct. 1.

Almost 60% of single family homes and condos that sold in San Francisco during the first half of this year had a selling price below the current maximum.  Not all of those sales would have been affected by a lower limit but it provides a general idea of the scope of the impact a reduction may have. 

This is an issue for sellers as much as buyers and could have a significant impact on our slowly reviving housing market.  There are some efforts underway to get the congress to keep loans limits where they are but it's not at all clear that will happen. 

Marin Monthly Sales Statistics

We've just posted the monthly sales statistics for Marin County for June.  As with a similar report we publish each month for San Francisco, the Marin report compares sales by month and by year for six specific configurations of single family homes and four configurations of condos.  These configurations represent 70% of all single family homes sold for the month and 80% of all condos.

The report also shows the number of short sale and REO properties currently on the market. 

The number of sales is up significantly compared to May, especially for condos.  In a normal market we expect June to be a peak sales month.  Compared to June of last year the number of sales of single family homes is down slightly but remember that last year there had been a rush to complete sales before the end of the federal tax credit.

Average sales prices were essentially flat for single family homes compared to June of last year.  Condo sales prices were down significantly.

Finally, a little break for short sale sellers

From the California Association of Realtors comes the news that legislation has been signed by the Governor protecting sort sale sellers from any requirement to accept a deficiency from either the senior or junior lender in a short sale.

CAR says this is a victory for Realtors but it's actually a victory for sellers.  It will be interesting to see how this works in practice and it wouldn't surprise me to see the banks putting pressure on the real estate agents to contribute some (or more) of their commission. 

LAW AGAINST SHORT SALE DEFICIENCIES EXPANDED
In a major victory for REALTORS®, Governor Brown signed into law today a C.A.R.-sponsored bill, Senate Bill 458, prohibiting a deficiency after a short sale for one-to-four residential units, regardless of whether the lender is a senior or junior lienholder.  Effective immediately for transactions closing escrow from this day forward, both senior and junior lienholders cannot require a borrower to owe or pay for a deficiency in a short sale.  This law also prohibits any deficiency judgment to be requested or rendered for senior or junior liens after a short sale of one-to-four residential units.  Any purported waiver of this rule shall be void and against public policy.
Although a lender cannot require a borrower to pay any additional compensation in exchange for a short sale approval, the new law does not prohibit a borrower from voluntarily offering a monetary contribution to a lender in hopes of obtaining a short sale.  A lender is also permitted under the new law to negotiate for a contribution from someone other than the borrower, such as other lenders, agents, relatives, and the like.
Exceptions to the new law include a lender seeking damages for a borrower’s fraud or waste; a borrower that is a corporation, LLC, limited partnership, or political subdivision of the state; a lien secured by a bond as specified; a public utility lien; and additional rules apply if a note is cross-collateralized by more than one property.
This law is fully set forth as Senate Bill 458 (Corbett) at www.leginfo.ca.gov.

Sales by Price Range




  One of the reports we create on a regular basis is sales by price range.  This helps us understand which parts of the market are increasing or slowing down.  This survey includes all single family homes, condos and TICs as reported on the San Francisco MLS.

For the first six months this year, we are seeing a 5% increase in sales compared to last year.  (The federal tax credit incentive ended in June of last year).  The percentage of sales above and below $1million has remained the same at 20% and 80% respectively.

See the entire report here.

June sales statistics

We've just posted our monthly sales statistics report for June.  For the five benchmark property configurations we survey, inventory is down in four of the five categories compared to last month and compared to the same month last year.

Average sales prices for June were mixed.  Compared to last month, average sales prices in four of the five categories we survey were down.  Only 2bd/2ba condos averaged higher sales prices than last month.  Compared to the June of 2010 the average sales price for 3bd/2ba single family homes was higher as were 2bd/1ba and 2bd/2ba condos.  However, 2bd/1ba single family homes and 1bd/1ba condos averaged lower sales prices this June compared to a year ago.

Activity levels (number of properties sold) were also generally up in June compared to May and compared to June, 2011.  The exception was 2bd/2/ba condos which sold substantially fewer units compared to last month and June of last year. 

As a reminder, the deadline for qualifying for the federal tax credit last year was the end of June.  So, while average sales prices continue to ease, it appears that the number of transactions remains stead even without the tax credit incentive.

2nd Quarter San Francisco Sales

Each quarter we summarize sales for the previous three months and compare them to the previous four quarters.  We've just posted 2nd quarter data for San Francisco.  The residential real estate business is full of statistics -- so why is this one any different?  Basically, rather than lumping all homes together to calculate an overall average for the city, our report looks at five categories of single family homes and condos that share the same bedroom/bath configuration and tracks them on a monthly and quarterly basis.

For single family homes, we look at two configurations:  basic "starter" homes with 2 bedrooms and 1 bath, and larger 3-bedroom, 2-bath homes.  Together these two configurations make up approx. 45-50% of single family home sales (varies slightly from month-to-month). 

For condos, we look at three configurations:  1-bedroom/1-bath, 2-bedroom/1-bath and 2-bedroom/2-bath.  These represent approx. 58% of all sales.

Our report also includes 2-, 3- and 4-unit buildings.  100% of these properties are surveyed.

In addition to city-wide statistics, we break it down to each of the ten real estate districts. 

Here are some highlights from this quarter's report comparing 2nd quarter 2011 with 2nd quarter 2010:

• The average sales price of 2-bed/1-bath single family homes has dropped 8%.  The number of sales was up slightly.
• The average sales price of 3-bed/2-bath single family homes has increased 3% with the total number of sales down slightly.
• The average sales price for the three categories of condos we survey is down by 1 - 3%.  The number of sales of 1-bed/1-bath condos is down by almost 20% but up 5% for 2-bed/2-bath units.
• Average sales price for 2- and 3-unit buildings declined 14% and 6% respectively but is up 9% for 4-unit buildings.

Keep in mind that the 2nd quarter of last year saw a "frenzy" of sales as buyers rushed to take advantage of the federal and state tax incentives being offered.  It's encouraging to see that this year's 2nd quarter activity levels are largely back to 2010 without the stimulus effect of the tax incentives.

New Tools

The two major forms management systems used by agents in the San Francisco area (Instanet and CAR ZipForm) both offer iPad compliant versions of the software that let's you fill in standard forms, e-mail them, and sign them electronically.  In a sure sign that demand for and adoption of this kind of technology is moving even faster, a new company has jumped into the market.  Not affiliated with any of the traditional real estate software provides, Autriv Inc. has introduced an app for the iPad that lets you fill out any form in PDF format, sign it without using a third-party signing software such as DocuSign, and store and e-mail the form.  The product is called "Sign My Pad" and sells on the Apple app store for $3.99.  An Atlanta-based real estate agent has posted a very good demo of the product on YouTube.

This app won't replace Instanet or ZipForm but it's a great additional tool that will work well for those documents and forms that aren't included in their libraries.

Blog Launch

Here we are with the launch of our blog devoted primarily to the real estate market in the San Francisco Bay area. 

The timing seems perfectly fitting -- right after the Independence Day (and Canada Day) weekend celebrations.