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Dire warnings of the approaching “fiscal cliff” in Washington obscure solid economic fundamentals in the Bay Area that point to continued economic recovery in 2013 and equally strong forecasts for our housing markets.

Like the Grinch at Christmas, dire warnings of an approaching “fiscal cliff” threaten to steal any goodwill remaining from the November elections and turn the holiday season into a political nail-biter. And while the possibility of steep tax increases and spending cuts looms large, many political observers expect that Republicans and Democrats will ultimately hammer out an accord before such results take effect — if only to avoid the bipartisan rage that would follow.
 
Lost in all this talk is concrete evidence that California’s economy is firing on all cylinders, putting the state in the enviable position of forecasting budget surpluses in the next few years.
Job growth in the state, and especially in the Bay Area, continues to expand much faster than the national average. With a clear link between strong employment and healthy housing markets, in the Bay Area we’re seeing solid growth forecasts for regional real estate in 2013.
 
Read the entire article here.

Originally published on pacunion.com

Here’s a look at news this week of interest to homebuyers, home sellers, and the home-curious:

BAY AREA NO. 1 FOR HOME PRICE GAINS
The Bay Area leads the nation in rising home prices over the past three-and-a-half years, according to statistics the Wall Street Journal compiled from the monthly S&P/Case-Shiller Home Price Index.

Home prices in the San Francisco metropolitan area were up 9.6 percent in July compared with January 2009. That’s far better than the national average over the same time period, during which home prices fell 3.7 percent among the nation’s 20 largest metro areas.

The Journal chose the odd time frame of three-and-a-half years in an effort to answer the politically charged question of whether the U.S. housing market is in better shape after nearly four years with Barack Obama as president.

The Journal noted that home prices are up from one year ago but remain narrowly below the recent peak set in May 2010, when tax credits fueled a brief burst of sales.

Trailing San Francisco in rising home prices were Washington, D.C. (8.4 percent) and Denver (4.6 percent). The biggest declines were in Las Vegas (24.7 percent), Atlanta (18.5 percent), and Tampa (12.1 percent).

The San Francisco metro area includes Alameda, Contra Costa, Marin, San Francisco, and San Mateo counties.

PRICES CLIMB 5.3% IN ONE YEAR
Speaking of the Case-Shiller Home Price Index, the Bay Area housing market continues to pick up momentum, with the latest proof coming from the aforementioned monthly index.

Home prices in the San Francisco metropolitan area rose 0.5 percent in August from the previous month and 5.3 percent from August 2011, Case-Shiller reported on Tuesday. Only five other metro areas topped San Francisco in year-over-year sales gains: Phoenix (18.8 percent), Detroit (7.6 percent), Minneapolis (7.4 percent), Miami (6.7 percent), and Denver (5.5 percent).

On average, August marked the fifth straight month of rising home prices across the nation.

The Case-Shiller index lags two months behind the current statistics, but it remains one of the most closely watched gauges of housing market health – one of several gauges that have turned upbeat in recent months. New and existing home sales have gained strength, inventory of homes for sales have fallen, and developers have stepped up building activity.

HOME OWNERSHIP RATE REMAINS LOW
Americans remain wary of home ownership as the nation slowly recovers from the housing market collapse, according to the U.S. Census Bureau.

The agency reported Tuesday that the nation’s home ownership rate was 65.5 percent in the third quarter, down from 66.3 percent a year earlier. But the rate was unchanged from the previous quarter, a sign that the drop in ownership may have hit bottom, as record-low mortgage rates lure consumers back into the housing market.

Today’s ownership rate is well below rates near 70 percent reported during the housing boom.

NEARLY $2 TRILLION IN EQUITY LOST
Foreclosures have drained nearly $2 trillion in home equity from surrounding neighborhoods across the country, according to a report from the Center for Responsible Lending.

The report determined that residents who live close to foreclosed properties have lost $1.95 trillion in property value. The cost does not include the total loss in home equity resulting from the foreclosure crisis, estimated at $7 trillion, and also does not take into account the equity lost by families who are actually foreclosed on.

African-American and Latino communities are seeing the greatest share of the $2 trillion loss, where the average spillover cost per family is estimated at $37,000 in household wealth.

 

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Contact Information

Photo of Ken J. Gendemann Real Estate
Ken J. Gendemann
Pacific Union International
1699 Van Ness Avenue
San Francisco CA 94109
Cell: (415) 828-4063

Ken J. Gendemann, CPA
Pacific Union & Christie's International Real Estate
1699 Van Ness Avenue, San Francisco, CA 94109

Cell: 415-828-4063, Office: 415-345-3083
 License #: 01884446