Monday, December 26, 2011
$3.49M of 17 units apartment Homes in Walnut Creek
位于旧金山湾区Walnut Creek 的全新公寓。共24个单位，于竣工后卖出7个单位。2010年被
$3.75M, 22 Single Family Houses in West Sacramento
一个位于沙加缅度的现代化独立房屋群,于2007年建成,
16 Units, Castro Valley Apartments
位于加州湾区的Castro Valley16个单位的公寓,每个单位2房1.5卫浴. 公寓維護良好,周围环境安静. 总面积19,152sf,占地59,045sf. 总售价$3,
Study Finds 38% of Homes Purchased in 2011 Bought with Cash
In DSNews 12/23/2011, 38% of the homes were bought by cash investors, which is twice as much as the % in 2006.
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Despite record low mortgage rates, 2011 has seen a surprisingly high level of cash home purchases, according to the real estate research firm Hanley Wood Market Intelligence.
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Despite record low mortgage rates, 2011 has seen a surprisingly high level of cash home purchases, according to the real estate research firm Hanley Wood Market Intelligence.
Jonathan Dienhart and Ken Lee, two analysts with the company, say between tight lending standards and a desperate search for yield by investors, cash purchases of homes – particularly for distressed properties – became even more common in 2011 than last year.
Dienhart and Lee analyzed data collected through Hanley Wood’s Housing IntelligencePro, and shared their findings in a blog post.
The two discovered that 38 percent of homes purchased in 2011 were bought with all cash. That’s up from 34 percent in 2010, and double the 19 percent rate in 2006.
According to Dienhart and Lee, this trend is likely to continue in the near term. They note that cash-paying investors are responsible for an increasing share of home purchases nowadays as prior homeowners abandon the ownership market and head back to rentals.
Dienhart and Lee analyzed data collected through Hanley Wood’s Housing IntelligencePro, and shared their findings in a blog post.
The two discovered that 38 percent of homes purchased in 2011 were bought with all cash. That’s up from 34 percent in 2010, and double the 19 percent rate in 2006.
According to Dienhart and Lee, this trend is likely to continue in the near term. They note that cash-paying investors are responsible for an increasing share of home purchases nowadays as prior homeowners abandon the ownership market and head back to rentals.
Thursday, December 22, 2011
Housing starts showing some strength
If you watch bay area housing prices, you may notice that the pricing for many average houses had stabilized since 2009 Dec. You could buy a nice San Jose house (2000 sqft) for $500K in late 2009 but you may not be able to get lower prices or even the same bargain now. It is similar in other CA cities such as Sacramento or Stockton.
Below is an article to show the housing market starts to show a bit of strength. A smart investor should ask if the window of the great opportunities has started to close down.
----------------- From Washington Post on 12/20/2011
Read more on Is housing bouncing back?
Below is an article to show the housing market starts to show a bit of strength. A smart investor should ask if the window of the great opportunities has started to close down.
----------------- From Washington Post on 12/20/2011
The deeply depressed housing sector finally seems to have found its bottom — and may even be starting to bounce back.
A wide range of housing indicators — construction, home sales, prices — have stabilized in the past few months, although they remain at historically very low levels. And it looks as if construction activity in particular will pick up in 2012.
The latest evidence of the momentum — new-housing starts for November — was released Tuesday. The surprising 9.3 percent gain bumped the rate of new-housing construction to its highest level in 19 months, to a rate of 685,000 new units a year. The number of building permits issued for new houses and apartments also rose, to 5.7 percent in November.
“The good news is that housing has switched from being a drag on overall growth, to modest positive contributions,” said Brian Bethune, chief economist of Alpha Macroeconomic Foresights.
Behind this improvement was a combination of powerful demographic trends, differences in the job and housing markets in various local economies, and the half-decade in which very few homes were built or renovated.
In normal times, about 1.2 million new households are created in the United States each year, because of rising population. That number falls during bad economic times as more young adults live with their parents, retirees move in with their children and immigration declines. But it doesn’t fall as dramatically as has home construction amid the housing bust and recession.
Read more on Is housing bouncing back?
PS Business Parks pays $520 million for 18 South Bay and East Bay business parks
I had leased an office from PS Business Parks and impressed with their management. They have started to buy bay area office and industrial complexes. Should a regular investor take advantages of depressed pricing in bay area now as well?
------------ From Mercury News on 12/21/2011
Making a half-billion-dollar bet the Bay Area economy is rebounding, a realty firm Tuesday bought 18 business parks in the East Bay and South Bay in what's believed to be the biggest property purchase in the Bay Area this year.
PS Business Parks said Tuesday it paid $520 million for a portfolio of research, industrial and warehouse complexes in nine Bay Area cities. The seller in the deal was RREEF America REIT II.
"This portfolio acquisition significantly enhances PS Business Park's presence in Northern California, providing a strong concentration of parks in markets that are poised for continued recovery," said Joseph Russell, CEO of Glendale-based PS Business.
The properties total 5.3 million square feet -- roughly the combined size of Sunvalley Shopping Center in Concord, Valley Fair mall in San Jose, Broadway Plaza in Walnut Creek and Stanford Shopping Center in Palo Alto.
"This is the largest transaction we're aware of in the Bay Area this year," said John Yandle, a senior vice president in the Santa Clara office of Cornish & Carey Commercial Newmark Knight Frank, a commercial realty firm. "There is nothing that would beat a half a billion dollars."
The business parks that PS bought are located in San Jose, Oakland, Hayward, Fremont, Milpitas, Santa Clara, Sunnyvale, Concord and San Leandro. They typically consist of buildings with multiple tenants, with an office in the front and manufacturing, research and warehouse space in the rear of the buildings.
The properties have a combined occupancy level of 82 percent. The buyer believes it can profit from leasing the properties because of their location in key sections of the Bay Area. It expects rents to rise in the coming years.
"The economic strength and stability" of these markets, Russell said, "will provide opportunities to create value from this unique opportunity."
Local realty brokers predicted that PS won't have to combat a big surge in newly constructed projects that would compete against the newly acquired portfolio.
"It's a smart purchase," Yandle said. "There is not that much of this type of space left in the area."
So far this year, the Bay Area has added 47,500 jobs. That's four times as many as the 10,700 new jobs the region created during the first 11 months of 2010.
"We are having healthy growth in social networking, Internet companies, software companies, and that is contributing to job growth in the Bay Area," said Ed Hofer, a senior vice president with Colliers International, a realty firm.
And the South Bay is leading that growth. During the 12 months that ended in October, the South Bay job market expanded by 3.2 percent -- the fastest rate of growth among major urban centers in the United States.
"The Bay Area is not going away," Hofer said. "It is going to have a strong economy into the future."
Thursday, December 1, 2011
Pending Sales Increase May Point to Budding Market Recovery
DSNews 11/30/2011
The National Association of Realtors’ (NAR) pending home sales index reported strong positive movement over the month of October, rising 10.4 percent from September.
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Nonetheless, “I’m actually encouraged by these numbers,” Yun says. This could be the first sign of sustained recovery in the market, he says.
Pending home sales rose in three of four regions in October, falling only in the West, which experienced a 0.3 percent decline to 105.5. The rate, however, is 8.1 percent higher than last year
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We will see if this is the start of a new beginning.
The National Association of Realtors’ (NAR) pending home sales index reported strong positive movement over the month of October, rising 10.4 percent from September.
.................
Nonetheless, “I’m actually encouraged by these numbers,” Yun says. This could be the first sign of sustained recovery in the market, he says.
Pending home sales rose in three of four regions in October, falling only in the West, which experienced a 0.3 percent decline to 105.5. The rate, however, is 8.1 percent higher than last year
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We will see if this is the start of a new beginning.
Monday, November 28, 2011
Industry's Shadows Continue to Shrink （Shadow Inventory)
11/23/2011
Standard and Poor’s (S&P) has released its third-quarter shadow inventory update, which shows both the volume of distressed assets and the amount of time it’d take to liquidate these properties is contracting.
S&P says the volume of distressed residential mortgages included in its shadow inventory estimate remained “extremely high” at $384 billion in the third quarter, but it has declined in each quarter since mid-2010. S&P’s third-quarter evaluation is down from $405 billion at the end of the previous quarter.
S&P says the volume of distressed residential mortgages included in its shadow inventory estimate remained “extremely high” at $384 billion in the third quarter, but it has declined in each quarter since mid-2010. S&P’s third-quarter evaluation is down from $405 billion at the end of the previous quarter.
“We believe this points to a continued drop in the amount of time it will take to clear this ‘shadow inventory’ over the next year assuming national liquidation rates do not decline abruptly,” the analysts at S&P said in their report.
Regional default and liquidation rates varied widely in the third quarter of 2011, but overall improvements prompted S&P to lower its projection of the number of months to clear the supply of distressed homes on the market and coming down the pipeline.
The agency now estimates that it will take 45 months to work through the national shadow inventory. This assessment is seven months below S&P’s peak estimate of 52 months in March 2011, but is three months longer than the agency’s estimate a year ago.
S&P calculates shadow inventory as the number of properties for which borrowers are 90 days or more delinquent on their mortgage payments, properties in foreclosure, and properties that are REO. The agency also includes 70 percent of the loans that “cured” from being 90 days delinquent within the past 12 months because these loans carry a higher risk of redefault.
S&P’s analysis of the shadow inventory uses only non-agency (non-GSE) data, but the company’s analysts say they believe the months-to-clear is similarly high for the market as a whole.
Regional default and liquidation rates varied widely in the third quarter of 2011, but overall improvements prompted S&P to lower its projection of the number of months to clear the supply of distressed homes on the market and coming down the pipeline.
The agency now estimates that it will take 45 months to work through the national shadow inventory. This assessment is seven months below S&P’s peak estimate of 52 months in March 2011, but is three months longer than the agency’s estimate a year ago.
S&P calculates shadow inventory as the number of properties for which borrowers are 90 days or more delinquent on their mortgage payments, properties in foreclosure, and properties that are REO. The agency also includes 70 percent of the loans that “cured” from being 90 days delinquent within the past 12 months because these loans carry a higher risk of redefault.
S&P’s analysis of the shadow inventory uses only non-agency (non-GSE) data, but the company’s analysts say they believe the months-to-clear is similarly high for the market as a whole.
Tuesday, November 22, 2011
Housing Affordability Hovers Near Record Levels
Daily Real Estate News | Monday, November 21, 2011
Ultra-low interest rates mixed with stabilizing home prices continued to push housing affordability in the third quarter near its highest levels in more than two decades, according to the latest National Association of Home Builders/Wells Fargo Housing Opportunity Index.
For the third quarter, 72.9 percent of all homes sold were affordable to families earning the national median income of $64,200, according to the index. This marks the 11th consecutive quarter that the affordability measure was above 70 percent; prior to this it rarely was above 60 percent.
read more on ......
Ultra-low interest rates mixed with stabilizing home prices continued to push housing affordability in the third quarter near its highest levels in more than two decades, according to the latest National Association of Home Builders/Wells Fargo Housing Opportunity Index.
For the third quarter, 72.9 percent of all homes sold were affordable to families earning the national median income of $64,200, according to the index. This marks the 11th consecutive quarter that the affordability measure was above 70 percent; prior to this it rarely was above 60 percent.
read more on ......
Thursday, November 17, 2011
$2.9M of 31 Units apartment Homes in Sacramento
Just by driving 1.5 hours east of San Francisco, you can find income producing properties which provides 50% more than in the bay area. Here is one example. In Sacramento, a well maintained and newer style 31 units apartment building produces cash flow 50% higher than what you can get in bay area.
Sacramento is the capital city of California and the 6th largest city in CA. Government contributes 30% of the local economy. Education and Healthcare contributes 12% for the 2nd most important job providing industry.
Sacramento is the capital city of California and the 6th largest city in CA. Government contributes 30% of the local economy. Education and Healthcare contributes 12% for the 2nd most important job providing industry.
This $2.9M deal below will generate around $180,000 per year NET to you. (versus $120K a year in bay area.) It's only around $109 / square foot versus $200 to $400 /sqft in bay area. While you are waiting for the housing recovery in CA, by investing in Sacramento, you can get $40K more per year. In 5 years, it's a nice $200K extra.
Please contact me if you like to have more details.
Cheers,
Josh Chen
Freddie Mac will pay extra to get rid of its winter inventory
On 11/16/2011
Freddie Mac's Winter REO Sales Promo Pays Extra to Selling Agents
Freddie Mac has announced the launch of a nationwide winter sales promotion to move its inventory of foreclosed homes and put them back into the hands of responsible homeowners purchasing a primary residence.
HomeSteps, the GSE’s REO sales division, will pay selling agents a $1,000 bonus for offers received on Freddie Mac-owned homes in select locations.
Initial offers must be received between November 15, 2011 and January 31, 2012 with escrow closed on or before March 15, 2012. The offer is valid only on HomeSteps homes sold to owner-occupant buyers.
Initial offers must be received between November 15, 2011 and January 31, 2012 with escrow closed on or before March 15, 2012. The offer is valid only on HomeSteps homes sold to owner-occupant buyers.
Tuesday, November 15, 2011
Buy properties between November and February
11/14/2011, DSNews.com reported that
National home prices have been on the decline since June 2006 with a few bursts of increases, which Lender Processing Services (LPS) attributes to seasonal trends. Overall, prices have declined 28.3 percent since their peak in June 2006, according to LPS’ new home price index.
Some Highlights:
* From July 2007 to December 2009, prices declined an average of 13.8 percent annually.
* After December 2009, prices began to decline at a slower pace, posting an annual decline of 3.6 percent.
* ............. a series of increases during the spring of this year; a pattern that has occurred each year since 2009,” but declines starting July, August, ....
* Higher-priced homes – those above $321,000 – declined by 0.72 percent, while homes below $103,000 declined 1 percent in August.
* Among the MSAs with the greatest declines during the month of August, most were in California or Arizona.
Based on the data above, should a value investor pick up good properties after fall and before spring?
LPS: Prices Are 28.3% Below Peak in Mid-2006
National home prices have been on the decline since June 2006 with a few bursts of increases, which Lender Processing Services (LPS) attributes to seasonal trends. Overall, prices have declined 28.3 percent since their peak in June 2006, according to LPS’ new home price index.
Some Highlights:
* From July 2007 to December 2009, prices declined an average of 13.8 percent annually.
* After December 2009, prices began to decline at a slower pace, posting an annual decline of 3.6 percent.
* ............. a series of increases during the spring of this year; a pattern that has occurred each year since 2009,” but declines starting July, August, ....
* Higher-priced homes – those above $321,000 – declined by 0.72 percent, while homes below $103,000 declined 1 percent in August.
* Among the MSAs with the greatest declines during the month of August, most were in California or Arizona.
Based on the data above, should a value investor pick up good properties after fall and before spring?
Wednesday, November 2, 2011
1 yr old, 8 units condo in Marin County, San Francisco Bay Area
It's very rare to see this kind of the new builds in San Francisco bay area. See the summary below. The builder finished the project in Aug 2010 but couldn't sell the units before it was taken back by the bank.
The estimated value could be $2.5M to $2.8M but might be bought for $2M+. At the market peak around 2007, it could worth around $3.8M.
Now, you can get rental income with 100% occupancy while wait for market to come back.
The estimated value could be $2.5M to $2.8M but might be bought for $2M+. At the market peak around 2007, it could worth around $3.8M.
Now, you can get rental income with 100% occupancy while wait for market to come back.
Foreclosure Timeline Lengthened by 140 Days Over Past Year: LPS
from DSNews on 11/1/2011
Homes that were foreclosed on in September 2011 had been delinquent for an average of 624 days. That’s up from 484 days in September of last year, just before the processing issues surfaced.That 624-day foreclosure timeline is the national average. LPSsays timelines in judicial states continue to extend at a greater rate. The time from last payment made to foreclosure sale in judicial states is 761 days, which is six months longer than in non-judicial states.
Looking at the national foreclosure population, LPS says almost 40 percent of loans in foreclosure have not made a payment in two years, and 72 percent have not made a payment in a year or more.
In summary, it will be a while before foreclosure inventory issue can be reduced. 2 to 5 years??
Tuesday, November 1, 2011
Short Sales Offer Significant Discounts
From DSNews on Oct 31, 2011
Short sales are growing throughout the nation as distressed homeowners and servicers continue to seek alternatives to foreclosure and home buyers increasingly opt for the significant discounts that come with short sales.
With 9,145 completed short sales, the Los Angeles area had more short sale transactions than any other metropolitan statistical area (MSA) in the second quarter of this year, according to a recent blog post from RealtyTrac.
These short sales came with an average discount of 32 percent and at an average price of $350,237.
Phoenix ranked second in number of short sales for the second quarter with 8,434 short sales, which came with an average discount of 27 percent and an average price of $133,793.
According to the RealtyTrac blog post, the metros with the highest numbers of short sales in the second quarter were:
1. Los Angeles
2. Phoenix
3. Cape Coral – Fort Myers, Florida
4. Oxnard – Thousand Oaks – Ventura, California
5. Reno – Sparks, Nevada
6. San Francisco
7. San Jose
8. Portland
9. Atlanta
10. Milwaukee
2. Phoenix
3. Cape Coral – Fort Myers, Florida
4. Oxnard – Thousand Oaks – Ventura, California
5. Reno – Sparks, Nevada
6. San Francisco
7. San Jose
8. Portland
9. Atlanta
10. Milwaukee
Short sale savings averaged more than 30 percent in Cape Coral – Fort Myers, Florida; San Francisco; San Jose; and Milwaukee.
Reno – Sparks, Nevada, experienced a 50 percent rise in short sales from the first quarter to the second quarter of the year, while San Francisco saw a 47 percent rise in short sales.
Atlanta and Milwaukee also saw significant increases in short sales over the quarter – 21 percent and 20 percent respectively.
Thursday, October 27, 2011
Crisis will be postponed again!
Marc Faber, Gloom, Boom and Doom Report editor/publisher, said in the following CNBC interview below.
“The end crisis will be postponed until the sovereigns go bankrupt,” Faber said. “They can postpone the end-game endlessly…say another five to 10 years. Each money-printing exercise brings about unintended consequences. These unintended consequences are higher inflation rates than had no money been printed.”
“I think I’m very constructive and I’m a great optimist in life. Otherwise I would commit suicide in view of the kind of governments we have nowadays. For sure they will take wealth away from the well-to-do people one way or the other, and from the middle class they will take it away through inflating the economy and lowering the standard of living.”
“If the Chinese bubble bursts one day, which inevitably will happen — maybe not tomorrow, maybe in three months, maybe in three years — when it happens it will have devastating consequences for the global economy.”
Tuesday, October 25, 2011
Refinance Program for Underwater Borrowers
Administration Announces Refinance Program for Underwater Borrowers
It’s official. The Federal Housing Finance Agency (FHFA) unveiled a new, revamped government mortgage refinancing program Monday.
The initiative involves a series of rule changes to the Home Affordable Refinance Program (HARP) to allow more underwater homeowners to reduce their mortgage debt by taking advantage of today’s rock-bottom interest rates.
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Under the revised HARP guidelines, the 125 percent loan-to-value (LTV) ceiling has been eliminated. Previously, only borrowers who owed up to 25 percent more than their home was worth could participate in HARP. That limitation has now been removed. The program will continue to be available to borrowers with LTV ratios above 80 percent.
See the whole article here.
This is very positive for US housing market and should prevent 25% of the home owners who are underwater, giving up, walking away with strategic default and causing more foreclosure in the future.
Monday, October 24, 2011
Rental Shows Positive Movement
I have recently talked with property managers in San Francisco bay area. They all told me that rents are going up and demand is strong now just like in 1999. See the following article as well as one of the supporting news.
See the article of Multifamily Sector Shows Positive Movement on 10/18/2011 here.
While the homeownership rate falls, rental demand rises bringing rental rates up and apartment vacancies down – all of which has led Freddie Mac’s chief economist to label the multifamily sector “a positive signal for the U.S. housing industry.”
See the article of Multifamily Sector Shows Positive Movement on 10/18/2011 here.
While the homeownership rate falls, rental demand rises bringing rental rates up and apartment vacancies down – all of which has led Freddie Mac’s chief economist to label the multifamily sector “a positive signal for the U.S. housing industry.”
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