Love it, Hate it, Leave it?…the SF Bay Area’s Real Estate Market

Love the San Francisco Bay Area? Hate the San Francisco Bay Area? Trying to make sense of the Bay Area Real Estate Markets? What do the experts have to say?

1) “A new study from human resources consulting firm Mercer has found that out of 230 metro areas studied, San Francisco has the highest quality of life for any American city.” (San Francisco ranks No. 1 in U.S. for quality of life, study says), By Riley McDermid, SF Business Times, March 1, 2016

2) “Californians are fleeing the state in unprecedented numbers, and their primary destination is Texas, according to an analysis issued Monday.” (Valerie Richardson of the Washington Times reports, August 31, 2015. Full Story (Texas emerges as top destination for Californians fleeing state).

It seems that on the surface, these statements from two of the articles above contradict themselves. However, it isn’t until you read the 3rd article entitled; California job surge could squeeze low- and middle-income workers, By George Avalos, of the Contra Costa Times that it starts to make some sense.

3) “California’s boom in high-wage jobs, such as those in the tech sector, has shoved housing prices skyward and threatens to squeeze low and middle-income wage earners out of the Golden State, a report released Wednesday warned.”

“It’s not a question of people having jobs, because there are a lot of jobs in California,” said F. Noel Perry, a business executive and founder of Next 10. “It’s a question of whether people can afford to live in California.”

“Housing prices are rising at a time when California has experienced an influx of low-wage workers, the Beacon study determined.”

“Over the five years that ended in 2014, the most recent year for which these statistics are available, the number of low-wage workers coming into California increased by 16.1 percent, according to the Beacon research. The number of middle-wage workers rose 11.2 percent, and the number of high-wage workers increased 6 percent.”

“Left unchecked, housing costs could severely hamper the low- and middle-income workers that power our economy.” Perry said.

“The pressure on housing for middle- and low-income workers is particularly acute in the Bay Area, the world capital of the technology industry.”

4) “Gridlock in the mid to low end of the housing market is one of the main reasons for the low inventory,” says Ralph McLaughlin, Trulia’s chief economist and the author of the study. Blame owners, not builders, for housing crunch By Paul Davidson, USA TODAY, March 21, 2016

“Gridlock in the housing market that’s slowing both first-time home purchases and trade-ups to better units is the chief reason for a persistent housing shortage, according to a new study.”

“The report by online real estate site Trulia casts doubt on the widespread belief that a scarcity of new construction is the main cause of a crunch that has driven up home prices and slowed sales.”

“Instead, the study says, a yawning price gap between mid-level and premium homes that’s shutting out many move-up buyers is the biggest obstacle to a more ample supply. Also, a large share of entry-level homes are off the market because they’re owned by either investors or so-called “underwater” homeowners who effectively can’t sell, the study says.”

5) Bay Area residents love what tech does, hate what it brings, new survey shows by Riley McDermid, San Francisco Business Times, March 30, 2016

Richard Zak, Charles Schwab regional branch executive based in San Mateo, told the San Francisco Business Times the recent study highlights that balancing act that Bay Area locals have to find between having a good quality of life while also getting ahead financially.”

“The results showed some yin and yang to them,” Zak said. “Bay Area residents feel good about the strength of the local economy, but the high cost of living is a real burden on their ability to reach their financial goals.”

What residents say are the Bay Area’s best assets

89% Technology industry

85% Weather, overall

85% Food and dining

78% Arts and culture

73% Quality of life

What residents say are the Bay Area’s worst assets

82% Cost of living

68% Housing market

66% Commute times

54% Tax rates

 

 

 

 

 

Glen’s SF East Bay Real Estate Market Update – March 31, 2016

 

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Glen’s SF East Bay Real Estate Market Update

March 31, 2016

 

Trying to make sense of the Real Estate markets? There seems to be several opinions, (key exerpts from recent news articles):

 

1) “First-time buyers were moving eastward, keeping sales robust there”, said Andrew LePage, a research analyst with CoreLogic.

“There’s more activity in some of the inland markets because of affordability,” he said. But overall, sales “are off to only a slightly stronger start than in 2015,” LePage said.

2) “Housing markets are poised for their best year in a decade,” Freddie Mac Chief Economist Sean Becketti said. “In our latest forecast, total home sales, housing starts, and house prices will reach their highest levels since 2006. Low mortgage rates, robust job growth and a gradual increase in housing supply will help drive housing markets forward. Low levels of inventory for-sale and for-rent and declining housing affordability will be major challenges, but on balance the nation’s housing markets should sustain their momentum from 2015 into 2016 and 2017.”

3) “These markets, I think, are substantially driven by psychology,” Shiller said during an interview on Cavuto: Coast to Coast. “And the psychology now is a little bit hard to interpret. Note that the cities with the biggest price increases are successful tech, entrepreneurial cities in many cases. So maybe people kind of believe in these markets as their salvation or their hope.”

4) “Gridlock in the mid to low end of the housing market is one of the main reasons for the low inventory,” says Ralph McLaughlin, Trulia’s chief economist and the author of the study.

In regards to the SF Bay Area Markets:

  • ·A new study from human resources consulting firm Mercer has found that out of 230 metro areas studied, San Francisco has the highest quality of life for any American city.
  • Californians are fleeing the state in unprecedented numbers, and their primary destination is Texas, according to an analysis issued Monday.
  • ·It seems that on the surface, these statements from two of the articles listed below contradict themselves. However, it isn’t until you read the 3rd article entitled; California job surge could squeeze low- and middle-income workers, By George Avalos, of the Contra Costa Times that it starts to make some sense.
  • California’s boom in high-wage jobs, such as those in the tech sector, has shoved housing prices skyward and threatens to squeeze low and middle-income wage earners out of the Golden State, a report released Wednesday warned.
  • “It’s not a question of people having jobs, because there are a lot of jobs in California,” said F. Noel Perry, a business executive and founder of Next 10. “It’s a question of whether people can afford to live in California.”

***************************************************************************

Here are some highlights for the 38 East Bay Cities that I track:

  • Inventory increased by 14.4% in the last 30 days and 65.6% since the beginning of the year. That increase is at a faster pace than we’ve seen during the previous three years. However, inventory is still lower than it was last year at this time. Our monthly supply is 27 days.
  • The number of pendings, (homes that are in contract), increased at about the same pace as inventory by 15.4%. That’s less than what we’ve experienced during the previous years. The pending active ratio remained about the same as last month at 1.54. This supply and demand ratio signals whether we’re in a sellers or buyers market. Typically, a number well above 1, (more inventory with less pending) favors sellers. A number below 1 favors buyers. This is similar to the levels we saw last year at this time.
  • The percentage of homes “sitting” decreased slightly since last month. 32% of the homes listed now remain active for 30 days or longer, while 14% stayed on the market for 60 days or longer.
  • The “distressed” market, (foreclosures and short sales) are no longer much of a factor representing only 4% of sales over the past 4 months.
  • Median Price recovery on a city by city is beginning to see a slight increase, typical as we approach Spring and Summer. 15 out of the 32 East Bay cities tracked are now at or above their median price “peak” levels with another 11 cities within 20%. That means that 7 cities are still well below their peaks, falling into the 20% to 40% range.
  • Some of you may have noticed that for many areas, the median price has come down. This is not by any means unusual for this time of year. The winter months are typically the lowest point for median price during most years and continues to rise throughout the spring months on into late summer where it reaches its seasonal high point.

Months_Supply

  • The month’s supply for the combined 38 city area increased to 27 days, roughly about the same level we saw last March, in 2015. Historically, a 2 to 3 months supply is considered normal in the San Francisco East Bay Area.

Active_&_Pendings

 

  • Our inventory for the East Bay (the 38 cities tracked) increased to 1,972 homes actively for sale. This is still well above the December 2012 low of 1,086 but below where we were last year at this time of 2,124. We’re used to seeing between 3,000 and 6,000 homes in a “normal” market in the San Francisco East Bay Area. Pending sales have increased to 3,034, lower than where we were last year at this time of 2,346.

Pending_Active_Ratio

  • Our Pending/Active Ratio has remained about the same at 1.54. This continues to favor sellers. We anticipate that it is primarily seasonal and will begin to move towards what is considered a more normal and balanced market after the first quarter of this year, (a ratio of 1 with an equal number of listings and pending sales).

Sales

  • Sales are beginning to rise based on a (4 month period) t0 6,561 for the 38 cities tracked. This is a 2.2% increase over the previous 4 months and 5.6% ahead of the pace for last year at this time. As you can see from the graph, this is a seasonal factor.
  • Sales over the last 4 months, on average, are 2.8% over asking for this area. This number is starting to level off and come down slightly.

Glen's Numbers Pg 1

Glen's Numbers Page 2

 

Historical Median Price City by City Recovery

How much has the real estate market in your city recovered from their previous Peaks. The graph shows our recovery from each cities peak. As you can see, the most sought after cities have led the way. However, this is a slow process and as buyers become priced out of some of these markets, their interest spills over to the surrounding cities. They too begin to follow the trend up towards recovering.

Historical Median Price by City

Recent News

Sales flat, prices mixed in February Bay Area housing market,

By Pete Carey, Contra Costa Times, March 18, 2016

A shortage of Bay Area homes for sale sparked bidding wars last month but kept sales low in what was the second-slowest February in eight years, according to a report released Thursday.

Sales of single-family homes were flat from a year ago across the region, the real estate research firm CoreLogic said, but it was a mixed market.

First-time buyers were moving eastward, keeping sales robust there, said Andrew LePage, a research analyst with CoreLogic.

“There’s more activity in some of the inland markets because of affordability,” he said. But overall, sales “are off to only a slightly stronger start than in 2015,” LePage said.

Real estate agents in parts of the East Bay and South Bay said there was plenty of demand — just not enough homes on the market. But in some areas, buyers were giving up.

“A lot of people are dropping out of market,” said Lynne French of Windermere Real Estate in Clayton in Contra Costa County. “For first-time buyers, $739,000 for a house is tough.”

High prices pushed millennial first-time buyers to the edges of eastern Contra Costa County. Sales were up 7.6 percent from a year earlier in that county and the median price of $460,000 was up 2.2 percent.

“Affordability is the issue,” said Jennifer Branchini, a real estate agent in Pleasanton. “First-time buyers are being pushed really far out.”

For Lisa and Brian Johnson, it’s been a war on multiple fronts, competing with downsizing baby boomers and investor-flippers for what they hope will be their first home.

Low inventory and overbidding drove prices up 15.7 percent to $640,000 from a year ago in Alameda County, while the number of sales dropped 1.6 percent.

Inventory levels “dropped off a cliff in December” and are just now coming back, said Glen Bell with Mason-McDuffie Real Estate in Berkeley.

But at this point there’s still a shortage in Berkeley and Oakland, said Barbara Reynolds with McGuire Real Estate.

Another factor depressing inventory is soaring rents, which make it tempting to rent out a home rather than sell it.

Is Housing Poised to Return to Pre-Crisis Glory?

Posted By Brian Honea, DSNews, March 31, 2016 

The recent predictions from analysts of a dark year for housing based on tight inventory combined with rapid home price appreciation and slow wage growth may be a little off base, according to Freddie Mac.

Freddie Mac is predicting that housing fundamentals such as home sales, housing starts, and prices will all reach levels not seen since 2006, right in the middle of the housing bubble and two years before the crash.

“Housing markets are poised for their best year in a decade,” Freddie Mac Chief Economist Sean Becketti said. “In our latest forecast, total home sales, housing starts, and house prices will reach their highest levels since 2006. Low mortgage rates, robust job growth and a gradual increase in housing supply will help drive housing markets forward. Low levels of inventory for-sale and for-rent and declining housing affordability will be major challenges, but on balance the nation’s housing markets should sustain their momentum from 2015 into 2016 and 2017.”

The year 2016 will be a robust one for housing for several reasons, according to Freddie Mac. For starters, the 30-year mortgage rate average is expected to attract homebuyers in the spring and subsequently remain below 4 percent for the second half of the year. Slowing home price appreciation is also expected to contribute to greater affordability—whereas home prices rose by 6 percent year-over-year in 2015, that pace is expected to slow down to 4.8 percent for 2016.

According to Freddie Mac, inventory, which has been cited by many industry analysts as a major hindrance to the housing market going forward is expected to pick up in 2016. Freddie Mac is predicting multi-family and single-family housing starts to increase this year by about 200,000, up to 1.3 million.

Robert Shiller: Housing Market Driven by Psychology

By Matthew Kazin, Fox Business, March 29, 2016 

 

Robert Shiller, one of the economists who developed the index, said the housing market is driven by the way people think.

“These markets, I think, are substantially driven by psychology,” Shiller said during an interview on Cavuto: Coast to Coast. “And the psychology now is a little bit hard to interpret. Note that the cities with the biggest price increases are successful tech, entrepreneurial cities in many cases. So maybe people kind of believe in these markets as their salvation or their hope.”

Shiller, who is also an economics professor at Yale University, said there is a decline in the interest of homes today.

“People aren’t as impressed by homes anymore after they saw how they collapsed in price with the financial crisis,” he said. “So it’s not such a clear case. I don’t think people are as impressed by big McMansions anymore as they used to be.”

He also explained why he believes a home is a good asset to have.

“The other thing about housing is that if you put yourself into a mortgage and you pay it off, you’re putting yourself into a saving program. A lot of people don’t save outside of some kind of a discipline device like that. So in that sense housing is a good investment.”

Bay Area Home Prices by Transit Stop

It’s no secret Bay Area home prices are among the highest in the country, but Estately wanted to show how those prices vary depending on which BART or Caltrain stop a home is near. To do this, Estately Real Estate Search analyzed the last six months of home sales for houses, townhouses, and condos that were within a one-mile radius of each BART and Caltrain transit stop. We then broke them down by price per square foot.

At an average of $1,630 per square foot, Caltrain’s California Avenue stop in Palo Alto is the Bay Area’s most expensive transit stop to buy a home near. Pittsburg/Bay Point BART stop, the furthest from downtown San Francisco, is the least expensive at $219 per square foot on average.

BART_Stops

 

Clock is ticking as Oakland officials try to control skyrocketing rents,

By Kurtis Alexander, SF Chronicle, April 7, 2016

The race is on for Oakland housing officials who this week won an unusual 90-day pause on rent increases in order to come up with a plan for making the city’s soaring real estate market a bit more affordable.

City leaders remained uncertain Wednesday about exactly what policies they will pursue, following the unanimous approval of the moratorium just hours earlier at Tuesday’s raucous City Council meeting that ran well past midnight.

But housing activists and city staffers have suggested that strategies to stem the tide of rising rents may include tighter long-term rent controls, cracking down on Airbnb rentals that they say are constricting the housing supply and boosting residential development.

“We’re at day one,” said Michele Byrd, city director of housing and community development. “This is an opportunity to do some analysis and determine what can be done.”

Oakland’s housing situation has indeed tightened: Rents over the past five years have nearly doubled as the Bay Area’s economy has boomed.

Rent control isn’t solving California’s housing problems,

By Joe Mathews, SF Chronicle, March 31, 2016

 

Rent control won’t solve California’s enormous housing problems. But that’s not stopping Californians from pursuing rent-control policies in their hometowns.

2016 threatens to become the Year of Rent Control, with the topic white-hot in the Bay Area, home to California’s most-expensive housing. Rent control refers to laws that put limits on how much landlords may raise rents.

Last summer, Richmond became the first city in California in 30 years to pass a new control law (though the law was later suspended, and the issue likely will be decided on the ballot). And in recent months, rent control has become a top issue in the state’s biggest cities.

In San Jose, multiple proposals to tighten rent controls, perhaps by tying them to inflation, are being debated in the City Council, and some could go to the ballot. A ballot initiative to cap rent increases was just filed in Oakland.

Such attention to rent control is understandable but unhelpful. Rent control is a policy that, as libraries full of research and California’s own experience demonstrate, doesn’t do much to accomplish its avowed purpose: to make more affordable housing available.

As the state’s nonpartisan Legislative Analyst’s Office made clear in a 2015 report, the heart of California’s housing problem is that we Californians have long failed to build anywhere close to enough housing to accommodate the number of people who live here. The office said we’d need an additional 100,000 units a year to mitigate the problem. The reasons for the lack of building are many and related: community resistance, environmental policies, a lack of fiscal incentives for local governments to approve housing, and the high costs of land and construction.

If rent control really lowers prices and produces stability for tenants, as its supporters claim, why are cities with rent control — among them Beverly Hills, Los Angeles, Palm Springs, San Francisco, Santa Monica, San Jose, Thousand Oaks and West Hollywood — so expensive? On the other side of the question, opponents of rent control sound ridiculous when they warn that it discourages construction, especially because state law exempts new construction from rent-control laws. The vast majority of California cities have no rent control — and they have housing shortages, too.

Bay Area building boom may not end housing shortage

By Kathleen Pender, SF Chronicle, April 2, 2016

Could the Bay Area’s housing shortage turn into a surplus? Given the number of high-density residential projects that seem to be popping up everywhere, the answer might seem to be yes.

In the nine-county Bay Area — which also includes Napa, Solano and Sonoma — just over 20,000 units were permitted last year.

Housing permits are considered a decent proxy for new housing supply because developers don’t usually pull them until they are ready to break ground. The permit doesn’t typically say whether the home will be for sale or rent.

But that’s only the supply side of the equation.

Demand is much harder to quantify, because it’s based on job, population and income growth and demographic factors. There is no question that since the recession, job and population growth has far outpaced housing creation, leading to stratospheric increases in home prices and rents.

As a result, experts say the Bay Area is not close to filling its housing hole, except at the high end of the market, where much of the new construction has taken place.

Blame owners, not builders, for housing crunch

By Paul Davidson, USA TODAY, March 21, 2016

Gridlock in the housing market that’s slowing both first-time home purchases and trade-ups to better units is the chief reason for a persistent housing shortage, according to a new study.

The report by online real estate site Trulia casts doubt on the widespread belief that a scarcity of new construction is the main cause of a crunch that has driven up home prices and slowed sales.

Instead, the study says, a yawning price gap between mid-level and premium homes that’s shutting out many move-up buyers is the biggest obstacle to a more ample supply. Also, a large share of entry-level homes are off the market because they’re owned by either investors or so-called “underwater” homeowners who effectively can’t sell, the study says.

“Gridlock in the mid to low end of the housing market is one of the main reasons for the low inventory,” says Ralph McLaughlin, Trulia’s chief economist and the author of the study.

In January, there was a four-month supply of existing homes for sale in the USA, well below a healthy six-month inventory, according to the National Association of Realtors. That drove up the median home price by 8.2% the past year, the biggest jump since last April.

The shortage is also helping constrain existing home sales, which totaled 5.25 million in 2015, below the 5.75 million considered normal in light of  population growth, saysLawrence Yun, the Realtor group’s chief economist.

Yun says the main reason for the skimpy supply is sluggish single-family housing starts, which hit an eight-year high of 715,000 last year but remained well below a normal 1.2 million.

McLaughlin disagrees, noting that new home sales represent less than 10% of all housing sales.

The study argues the answer instead can be found mostly in the makeup of the existing home market. For example, the median list price of a premium home across the USA is $542,805, compared to $267,845 for a mid-priced home. That gap is 17.3% higher than it was in 2012 and is keeping many mid-priced homeowners from trading up, curtailing the supply of mid-priced houses for owners of “starter” units, McLaughlin says.

The price chasm has widened even more sharply in some markets, increasing 70% in Dallas and 75% in Los Angeles.

McLaughlin at least partly blames a wealth gap that has seen the incomes of the top third of U.S. households climb more dramatically than those in the middle third and pushed up premium homes prices.

At the same time, the supply of starter homes is limited because many investors snatched up those units when prices hit bottom in 2011 and are renting them into a vibrant market that has seen rents soar. Nearly a third of starter homes were owned by investors in 2014, the latest data available, up from 27% in 2005, according to Trulia and government figures.

Meanwhile, about a quarter of starter homeowners are underwater, meaning they owe more on their mortgages than their homes are worth. That share has fallen in the housing recovery but is above the 13% average for all homeowners. That effectively prevents those owners from selling until prices recover.

America’s ZIP codes with the most expensive houses? We’ve got nine of the top 25,

by Jody Meacham, March 30, 2016

The list of the nation’s most expensive ZIP codes for housing can be taken as a guide to where the wealthy hang out or where — like the yacht market — if you have to ask the price, you can’t afford it.

Or you can take it as where Californians live, because in this year’s list, compiled by the real estate website PropertyShark.com, 17 of the 25 most expensive ZIP codes are in California and nine of those are in the Bay Area.

Bay Area’s population grows by more than 90,000 in a year,

By Kimberly Veklerov, SF Chronilce, March 26, 2016

The Bay Area’s population was boosted by 90,834 people — the size of Santa Barbara — between 2014 and 2015, according to estimates in a U.S. Census Bureau report, dramatically outpacing housing and transportation needs of the region, experts say.

The regional boom has cooled since a high in 2013, when the Bay Area greeted an additional 106,645 residents. But the relatively steady upswing in the past five years, policymakers say, underscores deficiencies in housing supply and public transportation.

“What should be a great story about job growth and very desirable communities is instead a story about housing displacement and gridlock,” said Gabriel Metcalf, president of SPUR.

Roadblocks to increasing the region’s housing stock, he pointed out, include zoning laws that prohibit high-density housing, prolonged project approval processes and the fact that many voters are homeowners not directly hurt by soaring home prices and who want to minimize congestion for themselves.

While each of the nine Bay Area counties grew between 2014 and 2015, the gains were far from equal. On the lowest end of the spectrum, Marin County added 671 people, just shy of a 0.3 percent increase. Alameda County, meanwhile, saw an almost 1.6 percent change in population, which is now at 1,638,215.

Alameda, Contra Costa counties among fastest growing in state,

By Peter Hegarty, Contra Costa Times, March 25, 2016

The most recent figures from the U.S. Census Bureau show the Bay Area’s population is increasing — and it’s increasing quickly, pushing home prices up and sending many renters scrambling for an affordable place to live.

The populations of San Francisco and the East Bay, especially around Oakland and Hayward, grew by more than 50,000 people between 2014 and last year, according to the bureau.

“It’s really not surprising at all,” said Rufus Jeffris of the Bay Area Council, a business-sponsored, public policy advocacy organization for the nine-county Bay Area. “The Bay Area is still a desirable place to live, despite the high cost of living. There’s great weather, good schools. There’s lots of reasons why people want to live here.”

Alameda County saw the second-highest population growth in the state between July 1, 2014, and the same period last year, rising by 1.6 percent, according to the bureau. Contra Costa County was the fifth-highest in the state, growing at 1.4 percent.

Digging Deeper Into the Declining Homeownership Rate,

By Brian Honea, DSNews, March 28, 2016

While many housing fundamentals have been nearing their pre-recession levels for months or even years in some cases, the nationwide homeownership rate sank to a 48-year low of 63.4 percent in the second quarter of 2015.

By the end of the year in 2015, the homeownership rate had clawed its way back up to 63.8 percent, but the full year of 2015 still represented the 11th consecutive year of decline since hitting an all-time peak of 69 percent in 2004.

Why does the homeownership remain low while other housing fundamentals continue to improve?

“Perhaps this period represented an unsustainable shift of many financially weaker families out of rental housing into homeownership, which subsequently reversed with the bursting of the housing bubble and the onset of the Great Recession,” said Bill Emmons, Assistant VP and Economist with the St. Louis Fed.

From 1968 until the late 1990s, the homeownership rate fluctuated between 63 and 66 percent over the three decades, which is likely the range to expect in the future, according to Emmons.

“Evidence supporting the return-to-normal hypothesis includes greater-than-average declines since 2004 in the homeownership rates of younger, less-educated and nonwhite families—precisely the financially weaker groups that moved into homeownership most rapidly during the housing boom,” Emmons said.

Still another explanation is that homeowership today is not as attractive as it has been in past decades because of fluctuations in home values, the tightened standards for obtaining a mortgage loan, and the fact that many millennials consider the prospect of being “tied down” to a house and the obligations that come with it less attractive than previous generations.

While it is possible the homeownership rate could decline further and even dip below 60 percent under the “retreat-from-homeownership interpretation of recent experience,” it is still too early to determine if the homeownership rate is on the path to “normalization” or if is in the midst of retreating, Emmons said, but one thing is certain—that the homeowership rate is not likely to approach its peak of 69 percent in the near future.

New HUD guidance on criminal records puts landlords in a bind,

By Kathleen Pender, SF Chronice, April 8, 2016

Landlords who have a blanket ban on renting to people with criminal records could be charged with violating the federal Fair Housing Act, under guidance issued last week by the U.S. Department of Housing and Urban Development.

However, a landlord who fails to screen prospective tenants for criminal records and rents to one who robs or hurts a neighbor could be sued by the victim.

That is the dilemma landlords now find themselves in as a result of HUD’s new guidance, which provides few specifics on how to comply.

“I understand the theory. From a practical standpoint, I’m not sure what a landlord is supposed to do,” said June Barlow, general counsel for the California Association of Realtors.

Scam steals closing money by hacking agent, escrow email

Deposits necessary to purchase a home are being diverted into hacker accounts, leaving buyers high and dry

by Marian McPherson, Inman News, March 19, 2016

Key Takeaways

  • Scammers are stealing homebuyers’ money by hacking agent and escrow email accounts, monitoring transactions and mimicking official email.
  • Closing costs are being illegally diverted to hacker accounts.
  • The best way to avoid this fraud is to never email money transfer instructions to clients — always call.

California job surge could squeeze low- and middle-income workers

By George Avalos, Contra Costa Times, March 3, 2016

California’s boom in high-wage jobs, such as those in the tech sector, has shoved housing prices skyward and threatens to squeeze low- and middle-income wage earners out of the Golden State, a report released Wednesday warned.

Those disturbing findings were contained in new research compiled by Beacon Economics and commissioned by Next 10, a San Francisco-based think tank.

“It’s not a question of people having jobs, because there are a lot of jobs in California,” said F. Noel Perry, a business executive and founder of Next 10. “It’s a question of whether people can afford to live in California.”

The state’s economic trends, while they offer prosperity to a wide array of residents, also are creating painful pressures on many who are unable to afford the cost of housing.

“The state has been growing its employment at nearly 3 percent a year,,” said Christopher Thornberg, principal economist and founding partner of Beacon Economics. “If we don’t build enough housing, where will the new workers live? If they don’t have a place to live, how will we fill these jobs?”

Housing prices are rising at a time when California has experienced an influx of low-wage workers, the Beacon study determined.

Over the five years that ended in 2014, the most recent year for which these statistics are available, the number of low-wage workers coming into California increased by 16.1 percent, according to the Beacon research. The number of middle-wage workers rose 11.2 percent, and the number of high-wage workers increased 6 percent.

“Left unchecked, housing costs could severely hamper the low- and middle-income workers that power our economy.” Perry said.

One of the big problems is that upward mobility is more difficult to come by in California despite its burst of high-paying tech jobs. That’s because many factory jobs have vanished, which has erased a slew of decent-paying jobs for the middle class.

The most robust high-paying jobs, typically in the technology sector, require skills right away. The employment and skills path is potentially difficult for people to work their way up from waiting tables to writing code at Google, Apple or Facebook.

“If you want to break into the technology field, you have to arrive with buy-in skills, ability to do coding, understanding of electronics, digital design skills, network architecture,” said Russell Hancock, president of San Jose-based Silicon Valley Leadership Group.

The pressure on housing for middle- and low-income workers is particularly acute in the Bay Area, the world capital of the technology industry.

Silicon Valley and the Bay Area increasingly are in danger of becoming more like a Manhattan of the West Coast that is dominated by high- and low-income workers, along with a shrinking middle class, Hancock said.

The study cited a report that showed that of the 10 metro areas with the worst home affordability in the United States, six were located in California. Santa Clara County was listed as the region with the worst home affordability. The San Francisco-San Mateo area was listed as second worst.

“While California innovation and entrepreneurship are driving business creation and job growth across the board, we don’t have enough housing,” Perry said. “That’s causing an affordability crisis.”

 

Glen Bell – (510) 333-4460   jazzlines@sbcglobal.net