California's Real-Estate Tailspin By SONJA STEPTOE/LOS ANGELES
will give us an insight into the future of real estate market in the US and the things which we should look out for before we sign on the dotted line for a loan for/on your property. Take smaller loans as far as possible within your limits.
Mid Peninsula real estate tours are on Tuesday and Friday. This home, listed by Coldwell Banker, was presented on Friday's tour in Palo Alto.
Not the highest price home on tour, but if you have time to see only one house, take a look at . The listing shows it as over 6,000 square feet on a lot of over 7,500 square feet, 3 years old (in my book, 3 years old is better than new; the bugs have been worked out) and priced at $5,000,000. Even if your budget doesn't take you that far, it is worth a look. It really represents an excellent combination of today's most popular features (large square footage, basement living area with excellent light wells, large family room kitchen, huge master bedroom suite, large rear gardens) with classic styling and elegance.
The following article is written by guest writer Jane Berger of .
The designer kitchen, the trendy new bathrooms, the bamboo flooring, fresh paint and carpeting have already boosted your home’s resale value. But the price could rise significantly higher if you simply look out your front and rear windows.
Most real estate experts agree that well designed, professionally installed landscaping can boost a home’s value by as much as 20 percent. According to the American Society of Landscape Architects, () an investment in landscaping of just five to 10 percent of your home’s value will return 100 to 200 percent when the property is sold.
• Money Magazine (May 2003) reported that landscaping offers a better return on investment than any other home improvement.
• The US Forest Service says trees alone can increase a home’s value three to seven percent
• The American Public Power Association says landscaping shades both windows and walls and can reduce air conditioning costs by 50 percent.
• Smart Money Magazine (March 2003) said a $25,000 spruce-up of a $500,000 home with a modest gain of just 7.5 percent would put $12,500 of straight profit into a homeowner’s pocket. How about that for a hot market tip?
High-value landscaping does not mean just a quick trip to the local nursery for a few new plants. It includes a number of outdoor features that more homeowners are insisting upon as they extend their living space from indoors to outside. Attractive lighting, well-defined pathways, decks and patios, garden “rooms,” outdoor kitchens, fireplaces, ponds and swimming pools can all greatly enhance the living experience.
An experienced designer will connect the interior of the house to the landscape outside to make the entire property a seamless whole. A seating area in front of a window can be enriched by a view through it to a beautiful spring-flowering tree, a perfectly-ordered herb garden, a serene lawn surrounded by lush borders. Double doors at the rear of a house can open on to a generous patio with an arbor overhead, doubling or tripling the useable living space. Destinations can be planned within your own back yard, taking you to a private corner where you can “get away” without ever leaving home.
And it’s not just “looks” that add to a property’s value. Not only is gardening good all around exercise, a serene outdoor experience reduces stress and tension and naturally improves anyone’s well-being.
So which backyard improvements will provide the most value?
According to Kiplinger.com (2006), outdoor living rooms have been growing in popularity over the past 10 years and are now the second most desirable home improvement project after remodeling kitchens. According to the US Census Bureau, consumers spent $3.7 billion on patios and terraces in 2004 – more than a 300 percent increase since 1994.
Kiplinger says that consumers should always consider irrigation systems to protect the investment they’ve made in plants. Other items that add solid value are covered patios, outdoor kitchens, complete with grill, refrigerator, and sink.
Some backyard projects, however, can scare away buyers. Both Kiplinger’s and Smart Money agree that swimming pools are not for everyone, mainly because of maintenance and safety issues. Other items that could put off prospective buyers include tennis and/or sport courts, built-in firepits, and rose or perennial gardens that can often require intensive care. But if your prospective buyer is into gardens, or if you’re not planning to move any time soon, there’s no reason why you can’t have it all.
From Straits Times - July 28, 2007:
"Private homes the biggest winners, but HDB resale prices also up 3 per cent
By Joyce Teo, Property Correspondent
THE property boom is now ringing across the country, with all segments, including the HDB market, recording rising prices.
The biggest winners were private homes, with prices up 8.3 per cent in the April to June quarter. This is on top of a 4.8 per cent increase in the first three months of the year.
The number of new homes sold hit a record 5,129 units in the second quarter, 7 per cent up on the first quarter.
Landed homes, which have not moved much over the past year, also sprang into life and registered price rises of 7.1 per cent, up from 2.9 per cent in the first quarter.
And resale prices in the HDB market rose 3 per cent, up from a 1.25 per cent rise in the first quarter.
'The benefits of the improving economy are now being seen more widely across the board, demonstrated by the mass market increases and a higher number of HDB upgraders,' said property firm Jones Lang LaSalle's regional managing director, Mr Chris Fossick.
Government figures also show that demand is pushing up private home prices in most parts of the country.
Prices in central Singapore, the city fringes and suburban areas rose between 7.2 per cent and 8.1 per cent in the second quarter.
'The even performance across all regions...is a positive as it implies that there is now greater uniformity in wealth creation across all segments,' said Ms Tay Huey Ying,of property consultancy Colliers International.
The wealth of data released yesterday by the Urban Redevelopment Authority (URA) - it included new information on housing rentals and office rents - also revealed some notable developments in the roaring market.
One was the bigger jump in prices of completed homes over uncompleted ones.
In the central core region - where the most expensive housing is found - prices of completed homes rose 8.5 per cent, compared with 7.1 per cent for uncompleted ones.
Usually, glamorous launches of prime homes attract higher prices than completed ones. But the huge number of displaced en bloc sellers looking for a roof over their heads has boosted demand for existing property.
Consultants said that because of strong leasing demand - in part contributed by owners and tenants displaced by en bloc sales - completed properties have become more attractive for investors, too.
Indeed, rents have been soaring, with some owners demanding a doubling of rent or more - and getting it.
The new figures have also cast more light on property speculation. In the second quarter, owners' sales of uncompleted homes amounted to less than 10 per cent of the total deals done.
But there was a hike in the prime central core region, where such sales accounted for 19.4 per cent of deals done. This is up from 12.4 per cent in the first quarter.
By contrast, in the second quarter of 1996 - when speculation was rife - subsales accounted for about 28 per cent of all deals.
On the supply side, 43,018 - mostly flats but with about 3,000 houses - will be built between now and 2010, the URA said. About 76 per cent of these will be completed in 2009 and 2010.
Overall, private home prices are now about 18.5 per cent below the 1996 peak and at a level similar to that in the second half of 1994.
Also yesterday, the HDB released more information on sales, including median resale prices, rental data and the amount of cash-over-valuation (COV) that buyers are paying.
It shows, for example, that the median COV for a five-room flat can reach $60,000 in Bukit Timah town, but is zero in Woodlands.
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From Straits Times - July 28, 2007:
"Big hike due to slew of collective sales, but still 21% lower than 1996 high
By Fiona Chan, Property Reporter
ALL private home owners have good reason to celebrate these days, but landlords should really pop the champagne - while their tenants should drown their sorrows.
Rents rose at an unprecedented rate in the April to June period, outpacing home prices which were far from sluggish.
Official figures showed yesterday that rents jumped 10.4 per cent in the quarter, trumping the 7.6 per cent rise in the first three months of the year. They are now 31.2 per cent higher than a year ago.
This is the highest quarterly and yearly growth since the Government made rental data public, said property firm Knight Frank. It is also the first time private home rents have shown double-digit growth in a quarter, it added.
Rents this year have gone up 18.7 per cent, compared to only 14.1 per cent in the whole of last year, added consultancy CB Richard Ellis.
More important, rents rose across the board, according to new Urban Redevelopment Authority (URA) figures yesterday.
Although the core central region still led the pack with a 12 per cent jump over the first quarter, the rest of Singapore was not far behind.
Rents in the city fringe areas went up 10 per cent while those in suburban districts were just behind with a 9.4 per cent rise.
Knight Frank's latest data shows that homes in the East Coast, Thomson and Bishan areas saw rents rise by 10 to 12 per cent, matching the pace in the prime districts.
But while landlords enjoy the bubbly, their tenants are far from happy with surging rents becoming a source of concern among foreign companies bringing in growing numbers of expats.
To help tenants get a better idea of the market, the Government yesterday released data on median home rentals, breaking it down for the first time by project.
This allows potential tenants to compare median rentals - that is, the level at which half the rentals are higher and the other half lower - of individual condominiums.
The figures showed that The Pier at Robertson, for instance, commands a median monthly rental of $6.30 per sq ft (psf), or $3,150 for a 500 sq ft unit. At the other end of the spectrum, Neptune Court has median monthly rentals of $1.56 psf, or $1,560 for a 1,000 sq ft apartment.
This new data is available on the URA website. The agency also took pains to point out that while median rents overall rose to $2.17 psf per month, there were 'a significant number of properties which were rented out at below $1.50 psf per month'.
Also, while rents are soaring, they are still some 21 per cent lower than the 1996 high, said Knight Frank.
The key reason for the rental rebound is the slew of collective sales, said experts. And as more and bigger estates are torn down, rents can be expected to surge further as displaced owners and tenants look for hew homes.
Similarly, private home prices are set for a good run.
They jumped 8.3 per cent in the second quarter to hit a level not seen since 1997. But what raised eyebrows was that prices of non-landed homes in the city-fringe areas outpaced those in red-hot prime districts.
Even in suburban areas, prices climbed 7.2 per cent - well above the 2 per cent rise in the previous quarter.
Perhaps most significantly, prices of completed homes rose more than those of uncompleted ones for the first time in at least two years.
This is a sign that the strong price rebound is due to genuine buying demand, said property consultants. Traditionally, prices of uncompleted homes tend to lead price increases because more people want to buy new homes.
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Gee, if I were a managing director or head of a company, I might be just as out-of-touch as the people interviewed in this article are.
From Straits Times - July 29, 2007
"Though rents are rising, expats say housing here is more affordable than in many major cities
By Melissa Sim
MR CHARLES TIDSWELL, 34, managing director for South-east Asia at IT company Facilitate Digital, pays about $3,000 for his 1,100 sq ft apartment at The Legend in Bukit Timah Road. When he was in Hong Kong, he paid $4,500 for a 900 sq ft apartment. He moved here in 1998. 'You could say that Singapore's prices are possibly 10 years behind those of Hong Kong's,' said Mr Tidswell. -- ST PHOTO: WANG HUI FEN
SINGAPORE and Hong Kong are keen competitors in most things but when it comes to rent, there is only one winner.
Ask Mr Jason Longley, the regional manager of an insurance company. A year ago, he was paying $8,500 a month to rent a 900 sq ft apartment in Hong Kong's prime Peak area.
Now he rents a 1,400 sq ft flat at Leonie Hill off Grange Road for just $5,500.
Mr Longley, 35, said Singapore's cheaper rent was a key factor in his decision to relocate: 'I definitely saw rent as a huge expense in Hong Kong.'
It also helps put into perspective the growing complaints about rising rents.
Urban Redevelopment Authority figures out last Friday showed that residential rents rose 10.4 per cent in the April to June quarter and are up 31.2 per cent over the past 12 months.
But expats and agents told The Sunday Times that Singapore rents are still cheaper than in cities such as Hong Kong, Tokyo, London and New York.
A new survey by ECA International, a human resource consultancy, showed that rents here were 45 per cent less than the average price in Tokyo and 40 per cent less than in Hong Kong.
Singapore was the eighth most expensive place to rent a three-bedroom flat in Asia and 15th most expensive in the world - below Hong Kong, Tokyo, New York and London.
Investment banker Timothy Rice, who moved here last August, can testify to that.
Mr Rice, 27, pays $1,400 for a 350 sq ft studio in Kelantan Lane, near Bugis Junction. He said such a flat in an equivalent London location would still cost about the same figure - but in pounds. That is about $4,300.
Mr Masamitsu Kawasumi, 44, chief bank representative of the Development Bank of Japan, arrived here last month and was struck by the rental gap between Tokyo and Singapore.
Tokyo's hip Roppongi area, with its many clubs and restaurants, has rents of about $13 per sq ft. Orchard Road's $6 psf seems like a bargain.
Mr Thomas Preben Hansen, 32, chief executive of a listed marine firm, has lived in Shanghai and London: 'Rents had become very cheap since 1997, and still have some catching up to do.'
He anticipated the rent squeeze and so bought a flat in Ewe Boon Road, off Bukit Timah Road, when he arrived in May.
A rental squeeze is exactly what Ms Isabelle Scali, 30, is bracing herself for. The public relations manager thinks Singapore is relatively more costly than London.
She pays $1,800 - nearly half of her salary - for a 1,200 sq ft flat at Sunshine Plaza off Prinsep Street.
In London, she said she spent just a third of her salary on a 700 sq ft studio flat in Balham, southwest London.
Ms Scali, who has signed a two-year lease, said rental costs will determine if she stays in Singapore.
Mr Rajesh Malkani, 43, who lived in Hong Kong for 13 years before moving here in 2005, said: 'I don't expect Singapore's prices to reach Hong Kong levels because there is still land here. But I do expect them to go up.'
Mr Malkani, the global head of sales and business development at Standard Chartered, rents a 4,000 sq ft bungalow in Sunset Place. He would not reveal his rent but said it would get only half the space in Discovery Bay, which he feels is a comparable site in Hong Kong.
Given the decade-long property slump here, Mr Simon Smith, a senior director at Savills Asia Pacific, thinks rents will keep rising for the next one to three years.
But Mr Rice is not complaining: 'Compared to Hong Kong, New York, London - Singapore is still cheap,' he said.
Additional reporting by Teh Shi Ning
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June's Existing Home Sales reported weaker than expected and dropped from prior levels, according to the .
Because our country (A) loves to discuss real estate, and (B) loves statistical headlines, expect tomorrow's newspapers to emblazon one (or both) of these data points on the front page:
Those are two of the negative points from .
There were positives in the report as well, but they'll likely get buried deep in the newspaper coverage.
For example, homes are more affordable today than they were a year ago. Mortgage rates for "A" paper home buyers (i.e. strong income, assets and/or credit rating) are slightly lower today in June 2006.
Additionally. the number of homes on the market dropped in June which led to, in part, an increase in the median home sale price.
We bring the up today because it's important to remember that real estate is not a national news story -- it's hyper-local. That's why newspaper headlines need to be taken with .
Your home is a part of your neighborhood and that has its own "real estate market". Just like on any street in America, your street has good buys and outright lemons listed for sale. What's happening on the national scene has absolutely nothing to do with what's happening in your backyard.
Unfortunately, this is a truth that remains largely untold.
Prospective pool of buyers can be frightened by negative headlines like the ones we'll likely see tomorrow morning. Fewer buyers means less demand for homes, placing additional downward pressure on the housing market.
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We've been holding off on this announcement as we've been focused on other priorities. However, we are now at the point of having sufficient locale specific content to launch a number of the associated beta websites for that content in English, Spanish, and Portuguese. Time to get this functionality live and in our users' hands.
These initial 15 or so real estate website launches will demonstrate the power of the for quickly developing microsites with contextually relevant information (something that we talked about LONG before it was popular). The content on these sites will include real estate video, property tours, articles, listings, and other information specific to the locale in question. These will also be another channel to quickly sydicate real estate videos to a set of visitors looking for specific types of information. We'll post the URLs here as the sites go live.
BTW, (english language real estate video site sorted by country), (roughly translated as "property video" in spanish), and ("for sale" in portuguese) are live now...Facebook seems to have made a change in their API since we launched the sites launch so we still have some work to do with the Facebook integration.
The real estate world is teaming with hundreds of independent and national chain discount brokerages and business models. The newest, in my experience, to flash on the scene is SnapAcommission.com. I found this company on google in a sponsored (paid) link which raised my level of skepticism. Here is what makes snapAcommission new and possibly a viable option for buyers.
The Model:SnapAcommission's business model is based on representing buyers who are set on purchasing property from a home builder. Home builders are an attractive solution to many buyers for their willingness to negotiate upgrades, floor plans, add-ons, and in some cases provide the buyer with options in financing. Consequently snapAcommission only works with customers who are going to purchase from a home builder. According to : "Many people are not aware that builders allow you to be represented by a Real Estate Agent for the purchase of a newly constructed home."
In my opinion, snapacommission does have a viable point. The majority of new home buyers really do not understand some of the advantages and disadvantages to buying from a home builder. The savy home buyer may be best served by investigating snapacommission first for their value proposition-to be outlined below. The idea would be to use snapacommission as a "bargaining" tool when interviewing an "open" Realtor. The Realtor may be worth the extra commission monies if he/she can demonstrate and justify their capabilities.
The Pitch: SnapAcommission says that (in general) most home builders factor in between 2 and 3% sales commissions into the sales price of a new home. They then offer this commission to the selling broker/agent for bringing them (builder) a buyer. Here is where things get interesting according to snapacommission "We enjoy sharing 40% of this commission with our clients as they inevitably are and active part in the search for new homes. . . and we reward them for this."
The following is the example savings provided by :
I. Purchase price: $1,500,000
Commissions offered by builder: 3%
You get $18,000! ($1,500,000*.03*.4 = $18,000)
II. Purchase price: $1,500,000
Commissions offered by builder: 2.5%
You get $15,000! ($1,500,000*.025*.4 = $15,000)
The example is interesting and confusing to me because of one statement made earlier on snapacommission's home page of their site: "Snapacommission.com will refund you up to 40% of this commission if you use one of our experienced agents to represent your transaction. "
Where did those two ugly little words, up to, come from in this pitch? The entire site gives examples of a 40% savings on a 2-3% agents fee. That means that savings are on a sliding scale with the best that the home buyer can do is 40%. What are the rules constituting a savings less than 40%? That would require the buyer to make a through investigation.
The Rest of the Story: Snapacommission has page of conditions that I will abbreviate here. If you are thinking of using this service remember to review the conditions page in it's entirety-please do not rely upon this summary to suffice your legal requirements. With that moment of "cya" let's get to it.
1. Condition #1 is that a snapacommission Real Estate agents must, first, meet you and register with you at the sales office for the property the buyer is interested in purchasing. This notifies the builder that the buyer is being represented by an outside Real Estate agent.
2. The home builder has to offer at least a 2% commission to the selling broker/agent who is representing the buyer.
3. The snapacommission "rebate" must be approved by the buyer's lending institution.
4. Buyer Agency Agreements with snapacommission must be in writing in accordance with California laws.
In my opinion, snapacommission is worth investigating. Always remember that a full service Realtor or Real Estate agent with experience in a specific market will be able to show you a much broader array of properties than a home builder with one site in one area. Also remember that the really solid professional Realtors, , earn their commissions through their expertise and knowledge of the "deal", the area of interest, school systems, climate, building plans for an area, and many of the nuances that are valuable intangibles in purchasing a home.
If you have further questions please contact Dean Guadagni ddguad@aol.com
While the rest of the country swelters, I'm wearing long pants, socks and two thermal tops. Welcome to summer in San Francisco. I live close to Lone Mountain near Geary Blvd. Most days, especially in the afternoon, the wind from the ocean races up the broad expanse of Geary avenue, when it hits the hill it whips all around the side streets making it seem even colder than it is. Night before last I went to a real estate seminar in downtown San Francisco (one takeaway from it: the subprime mess is going to add a year or two to the downturn) and when I got off the bus I was almost blown off my feet. You could see masses of fog gusting past. Brrrr.
It is days like this that make me think it might be OK to be forced to live in Florida because I can not sell the property I own there. I'm seriously considering it doing it in six months if the market is still soft. I would save on the rent I pay here and not live in a drafty crumbling building. This building is a total tear down and is only worth the land it is sitting on. There are gaping holes in the garage roof from the water damage. I'm subletting a rent controlled apartment and as per usual for such places, only one heater works and it costs over $300 a month to keep the place in the high 60s during the winter. Despite the masking tape I've used, you can see the cold breeze from the outside moving the curtains. Florida is warm and everything I own there is newer, has way better insulation .. air conditioning too ! People sacrafice a lot to live in San Francisco.
I was over in the Haight yesterday and ran into a large number of people who were milling about waiting to see "Martial Cage Fighting". There was a guy in a beige suit that had textured strips that looked exactly like my bed sheets (I have nice 500 thread count ones .. but still). San Francisco is such a microcosm of diversity and it's really interesting the look and vibe you get from a particular segment. This group looked similiar to the hard rock metal rock audience you see at shows. I'm a student of marketing and one concept I've been introduced is segmenting the audience not so much by their demographics (age, geo, gender .. etc) but by their interests, spending habits etc... I was wondering if I could leverage this new approach in marketing my houses (ie. the typical first time buyer who now can't get a loan might really want to buy my house on a wrap). Something to investigate more.