August 31, 2017 – Real Estate Market Numbers
By Glen Bell (510) 333-4460
Here are some highlights for the 38 East Bay Cities that I track:
- Following a dramatic 60% drop at the end of last year, inventory began its usual seasonal trend upward. Typically, we see a steady increase on a month by month basis to occur before finally peaking in September. However, for the first time since 2012, we saw a very small decrease in our inventory during the late spring and summer months, April through August, with a decrease of 5.5%. Last year we had a 26.8% increase over the same time period. This probably is in part due to an increase in sales but without the normal replenishment of inventory through added listings. Pendings went down for the third month in a row, by 7.3% for June through August (unusual for this time of year) but obviously due to the tight inventory levels. Inventory levels are 30.6% less than what we experienced last year at this time. Our monthly supply is now 30 days. Last year, our months supply at this time was 45 days. As a reminder of what we mean by “months supply;” If no more homes come onto the market, and homes continue to sell at the same pace as they have been over the last 12 months, then the “months supply,” (in this case 30 days), tells us that’s how many days it would take to sell the remaining number of homes we currently have available for sale in any given market.
- The number of pendings, (homes that are in contract), has decreased 4.4% over the last 30 days and is less than what we experienced during this time last year by 12.5%. The pending active ratio decreased to 1.34. This compares to last year for the same time of 1.06.. 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 slightly higher than last year at this time, (1.34). This will change in the coming months as we continue to move towards a more “normal” or balanced market for 2017.
- The percentage of homes “sitting” has increased slightly with 42% of the homes listed now remaining active for 30 days or longer, while 21% stayed on the market for 60 days or longer. This is about what we saw last year at this time. Normally with such tight inventories, we would think that just the opposite would be true, that less homes would be sitting especially with an increase in sales. Perhaps, buyers are being more selective and homes are also still being snapped up at a quicker pace than last year. The same houses may be sitting but with such a tight inventory they became a greater percentage of what’s left.
- The “distressed” market, (foreclosures and short sales) are no longer a factor representing less than .05% of the market with only .02% of the active listings and .02% of sales over the past 4 months.
- Median Price recovery on a city by city is beginning to see a slight increase. 17 out of the 33 East Bay cities tracked are now at or above their median price “peak” levels with another 12 cities within 20%. That means that only 4 cities are still well below their peaks, falling into the 20% to 30% range. The Median Price for the East Bay remains at $700,000 over the last 4 months, up from last year at $645,000, an 8.5% increase.
- The month’s supply for the combined 38 city area is 30 days. Historically, a 2 to 3 months supply is considered normal in the San Francisco East Bay Area. As you can see from the graph above, this is normally a repetitive pattern that we’ve seen over the past four years. However, we are well below supplies levels compared to last year at this time, of 45 days.
- Our inventory for the East Bay (the 38 cities tracked) is now at 2,102 homes actively for sale. This is still above the December 2012 low of 1,086 and well less than last year at this time of 3,029 or (30.6% lower). 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 decreased slightly to 2,816, also lower than where we were last year at this time of 3,218 or (12.5% lower).
- Our Pending/Active Ratio is 1.34. Last year at this time it was 1.06. This will be moving towards a more balanced or “normal.” (a ratio of 1 with an equal number of listings and pending sales) as we continue into summer and fall.
- Sales have increased dramatically from the last (4 month period) now at 9,896 for the 38 cities tracked. This is slightly higher than what we saw last year at this time (9.541).
- The one factor that has changed this year is that we had a very late start to the spring season due to the heavy amount of rain received compared to very little in the preceding 3 years. The rains more than likely delayed many sellers from putting their homes up for sale early. They simply got a late start because they couldn’t work on the exterior of their homes during this time. Also, on average, homes are closing over in fewer days than before. It seems that inventory is still being gobbled up but at a slightly faster pace than being replenished.
- Sales over the last 4 months, on average, are 4.3% over the asking price for this area, slightly greater than what we saw last year’s at this time, 4.0%.
July sales mark lowest in years as prices jump
By Kathleen Pender, San Francisco Chronicle, August 30, 2017
The Bay Area housing shortage showed no signs of abating in July, as the number of homes sold fell by 17.3 percent from June and by 2.6 percent from July of last year, according to a CoreLogic report released Wednesday.
Sales typically fall from June to July as house hunters and real estate agents head off on vacation, but the average drop-off since 1988 has been only 6 percent. The number of homes sold last month was the lowest for a July since 2011. CoreLogic attributed the sharp slowdown to “a tight inventory and waning affordability.”
Meanwhile, the median price paid for a home in the nine-county region last month was $758,000, down 1.6 percent from a record $770,500 in June, but up 9.1 percent year over year. The report includes new and existing single-family dwellings and condos.
Vacations also cause prices to dip from June to July; the long-run average is a 0.2 percent decline. For buyers, the slightly larger-than-average price decline last month will provide little solace.
Only 21 percent of households in the Bay Area could afford a median-priced home in the second quarter, according to the California Association of Realtors’ affordability index. That’s down from 25 percent in the first quarter. The index estimates the percentage of households that have the minimum income needed to buy an existing, median-priced single-family home with a 20 percent down payment at prevailing mortgage rates. It does not include condos, which tend to be cheaper than single-family homes.
Vacations also cause prices to dip from June to July; the long-run average is a 0.2 percent decline. For buyers, the slightly larger-than-average price decline last month will provide little solace.
By the association’s reckoning, a Bay Area buyer would need $179,390 in annual income to buy the median-priced home.
Home prices are soaring because the region’s supply of new housing is not keeping up with demand, which is fueled largely by job growth, especially in high-paying technology jobs.
However, even at tech companies, most employees are not making enough to buy a median-priced home, Katie Ferrick, director of community affairs at LinkedIn, said at a housing conference in San Francisco last week sponsored by the Center for California Real Estate and Bay Area Council. At LinkedIn, the “vast majority” of workers are not making $179,000, she said.
The state’s least-affordable county is San Francisco, where only 12 percent of households could afford the median-priced home in the second quarter. But it has been worse. In 2005, when incomes were lower and mortgage rates higher, the index was 8 to 9 percent. Its recent high was 29 percent in early 2012.
Finding an entry-level home in the city is getting nearly impossible, according to a study out this week by the San Francisco Association of Realtors.
Last month, there were only 140 homes and condos in the city listed at less than $758,000, it said. In July 2014, there were 367 homes listed below $758,000. Over those three years, the average household income for a family of four in San Francisco rose 15.7 percent, but the median home and condo price rose 25 percent.
“The most competitive price point is the single-family home under $1.5 million,” said Drew Wilkerson, an agent with Vanguard Properties. Last week, he filmed an episode of the HGTV show “House Hunters” with a couple searching in that price range in San Francisco.
His clients had written three previous offers before buying a three-bedroom, 1.5-bath place in Merced Heights for $1,090,000. The couple, who have two young children, both work full-time, but not in tech. Like many first-time buyers, they got help with the down payment from parents, Wilkerson said.
One of the homes they visited was 415 Amazon Ave. in the Excelsior district. The home has two bedrooms, two baths and 1,155 square feet. It’s listed at $899,000. Traffic at two open houses last weekend “was absolutely constant,” said listing agent James Belisle, also with Vanguard. On Sunday, “there were 10 people waiting to get in at 2 o’clock.”
Most of the housing — both rental and for sale — being built in the Bay Area is either below-market rate or high end. People who earn too much to qualify for the former and too little to afford the latter are often forced into “mega commuting” or “driving till you qualify,” Carol Galante, faculty director at UC Berkeley’s Terner Center for Housing Innovation, said at last week’s conference.
A package of bills aimed at easing the state’s housing shortage could come up for a vote in Sacramento this week. But none is aimed at what Galante calls the “missing middle.”
One would create a new recording fee on certain real estate documents to fund low-income and affordable housing. One would ask voters to approve $4 billion in bonds, mainly for low-income rental housing but also for the state’s veteran home loan program, which could help middle-income vets, Galante said.
The third “basically requires that localities streamline their development-approvals process for communities that aren’t meeting their regional needs formula,” Galante said in an interview. This could open the door for some middle-income housing, but it applies to a very limited range of projects.
Galante said middle-income buyers and renters don’t have the same type of advocacy groups that champion low-income housing.
Of course, any new housing — high or low end, for sale or rent — eventually will relieve pressure on middle-income buyers.
Galante and other speakers at the conference said the state should do more to overcome the barriers to development erected at the local level, such as utility and impact fees.
Because Proposition 13 limits property tax increases, local governments put much of the cost of providing services on developers, which discourages new housing. The state also should consider creating incentives for housing by redistributing sales and property taxes and transportation dollars for communities that are meeting their goals, she said.
By Pamela Gwyn Kripke, New York Post, September 2, 2017
When an average $1 million home goes on the market in Santa Clara, Calif., it can reel in 20 offers. Quickly, and without batting an eye.
“As long as high-tech companies keep bringing people here from all over the world and paying them, high prices will continue,” says Brett Burns, a broker with San Jose-based Climb Real Estate. “If Google uprooted and set up shop in Texas, maybe that would make a big splash, but I don’t see a plateau as long as demand keeps getting fed.”
Median home prices across the nation have been increasing with gusto, though perhaps not at levels as staggering as San Jose’s median price tag of $1,183,400. In the second quarter of 2017, prices jumped by 6.2 percent compared with the same period in 2016 to an average cost of $258,300, according to the National Association of Realtors. While trends diverge profoundly from place to place — for all sorts of economic, geographical and lifestyle reasons — a good many of the nation’s metropolitan locales have experienced record appreciation. Coupled with inventory that is 9 percent lower than it was in 2016 and income that has not kept up with prices, the natural post-recession question arises.
One decade after the biggest housing collapse in America’s history led to a global recession, could we be facing another crisis?
“Not happening,” says Burns, adding that the 2007 housing crash “was based on lending practices which have since been cleaned up.”
Many industry experts agree. The subprime mortgages that targeted borrowers with less-than-perfect credit and led to financial turmoil 10 years ago do not play a role in today’s real estate market.
“When you talk about a bubble, you think of people being really exhilarated and excited and prices going way up. We don’t see that now,” says Annie Cion Gruenberger, who has been a New York City broker with Warburg Reality for 28 years. “We have a very positive market, but a targeted market of smart buyers.” So, what do high price tags and low supply mean, if not economic catastrophe?”
The 2007 collapse spooked home builders so much, they didn’t want to build anything but high-end properties. That drove up house prices and made it harder for people to buy starter homes.
Meanwhile, the market was split into two halves: Places such as Las Vegas, where development was overstretched and unsustainable, and which is still struggling to bounce back; and places such as Portland, Ore., and Silicon Valley, where NIMBY regulations limit how much construction can happen, meaning fewer homes available to buy. As a result, there’s a real lack of housing where the jobs are.
While cities such as Seattle, Denver, San Francisco and Austin show double-digit spikes in house prices, cities such as South Bend, Ind., Baton Rouge, La., and Atlantic City report dwindling numbers. On average, 87 percent of the 150 housing markets tracked by NAR experienced rising prices in 2016, up from an average of 75 percent in 2014.
In areas that were hard hit by the housing bubble, current market trends vary, and not all of the data is rosy. In Tampa, Fla., thousands of homes have been lost to foreclosure during the past decade. Today, the city appears to be recovering. It has the fourth-highest population growth in the country, adding 61,000 residents last year, according to the US Census. Tampa’s July unemployment rate was 4.1, reports the Bureau of Labor Statistics, and the median house price is $244,500, which is just about the national average.
In the extreme case, there is Vegas, which suffered the highest foreclosure rate in the country following the housing crash. Though sales and prices have been edging back, thousands of people are still reeling. Those who borrowed against their homes or bought at the height of the market may not see a return on their initial investment. Some still owe more than their homes are worth, 15 to 20 percent by some estimates. Add to the mix a 6.4 unemployment rate and low-selling homes owned by investors, and a full recovery seems a tall order.
In total, about 64 percent of Americans own their own homes, compared with 68 percent a decade ago. “I feel very fortunate to be able to afford our house,” says first-time buyer Greg Johnson, 30, of the property he and his wife, Molly Blank, 28, recently purchased in Seattle, where he works at a nonprofit bioscience research organization and she works at the University of Washington, Seattle. “We both really enjoy where we work and would rather not have to change our employers and work for a big company, or live in a different city, to be able to afford a house.”
One problem prospective buyers face is that there aren’t enough houses out there for everyone who wants one. (Among these home seekers are the so-called “Boomerang Buyers” who are getting back into the market after post-recession trepidation.) This low housing stock drives prices up. In some cities, prices, even at the low end of a market where inventory is most scarce, are unaffordable for first-time buyers. (In the higher end of the market, there are houses to sell.)
Thirty-two percent of home sales today are going to maiden purchasers, compared to 40 percent, historically, says the NAR. Typically, this buyer is 32, earns $72,000 and pays $182,500 for a home. A two-income couple pays $208,500, on average.
In certain areas, potential young homeowners, even with such salaries, have to forego equity and continue to rent. But in places such as San Jose, first-time buyers have enough money to buy even overvalued property in the lower swath.
“The job market is now good for millennials,” says Ken Fears, NAR’s Director of Regional Economics and Housing Finance. “Competing with investors for homes at a low price point is easier. Some millennials have access to credit and to inventory, and mortgage rates are low. It’s improved, but not great.”
Seattle, like San Jose and numerous other Northern California cities, draws this age group to its high-paying high-tech jobs. “They want to live close to downtown where their offices are, and first-time buyers can do that. They can afford $700,000 to $1 million on a starter home,” says Heather Dolin, broker with Seattle- based Windermere Real Estate. But competition for these homes is fierce, with just under a month’s supply of inventory available in the metro area. “Three to six months is considered a balanced market,” says Dolin.
It would seem that the way to stability, then, simply requires more homes for people to buy. But houses are not a typical commodity. New ones can’t be produced from scratch, quickly and inexpensively, on an assembly line. Old ones can’t be made available when the market wants them to be. There are many reasons why inventory is low, most of which can’t be changed.
NAR’s Fears points to a number of trends: First, homeowners are staying in place longer, limiting the number of existing homes for sale. Low unemployment rates are keeping them from leaving town in search of work. High home prices are inspiring them to remodel rather than relocate within their communities, if they want a different kind of house. First-time buyers who can afford it might buy a home that can accommodate two kids instead of one, precluding a move a couple years after their purchase. Grandparents are staying put to live near their kids, rather than fly off to retirement far away.
Second, new construction is still springing back from the 2008 recession. Home builders have had a hard time keeping up with population growth since then, in most cities. “There was a high cost for dealing with regulation, a high lumber tax on Canadian framing lumber, a decline in the labor pool,” says Fears. But the construction industry has shown signs of life. In July, according to US Census Bureau and Department of Housing and Urban Development data, housing completions were 8.2 percent higher than they were one year ago, though 6.2 percent lower than they were in June.
Even when they do build, developers are restricted by urban planning and geography, in certain states more than others. In Portland, Ore., cities are required by state law to form an urban growth boundary around its perimeter, controlling expansion onto farm and forest lands.
“Since about 2009, a lot of areas inside the boundary have been dormant,” says Victor Bulbes, broker with Keller Williams. “Builders have been reluctant to get back in the game.”
The Portland metro area, like other Western cities, is popular, with a record low 4 percent unemployment rate and stable population growth. Since 2010, the city has grown 8.3 percent, according to US Census data.
Lifestyle preference also drives the market.
In Denver, where the number of available houses has plummeted in the last seven years from 12,000 to 2,000 and median prices grow by around 9 percent annually, most people want to live in the urban core, says David Schlichter, Denver-based broker with Keller Williams’ The Schlichter Team.
“There is definitely plenty of land here, at the base of the mountains, next to the foothills. There is some development in the outskirts, but where people want to be, in the city, there is only finite space.”
From 2012 to 2015, with the exception of 2014, Denver experienced double digit price appreciation.
“It will taper off,” says Schlichter. “You can’t have that in perpetuity because at some point, another city becomes more attractive. Now, there are way more people moving here than leaving. Each week, I get a call from someone from the Bay Area who is fed up. Here, houses are half the price. To them, this is paradise.”
Still, lingering fears from the past housing bubble and a present-day crisis in London, where astronomical prices mean young buyers are entirely locked out of the property ladder, are stoking concerns that market growth in the US could one day become unsustainable.
In March, William Poole, a senior fellow at the Cato Institute, wrote a column for cnn.com, pointing to concerns about the country’s two biggest mortgage lenders, Fannie Mae and Freddie Mac. “In Freddie’s 2016 Annual Report, the agency says 36 percent of its obligations are ‘credit enhanced,’ meaning they carry mortgage insurance of one sort or another, which is typically used for weaker mortgages,” Poole wrote. “If these weak subprime mortgages begin to fail in large numbers, so also will the insuring companies.”
Jonathan Miller, a real-estate analyst at Miller Samuel, is unmoved by such arguments. He says the average buyer today has an average credit score “well above 700. They are some of the highest average credit scores in history.” He added that any subprime failures would be offset by the quality of most American borrowers being “unusually high.”
For now, Schlichter in Seattle agrees. “Barring some calamitous event, I don’t feel that our local economy is threatened to the point that a bubble is about to burst,” he says, then added: “But we have a highly unpredictable president, and everything could change with a tweet.”
Half the state’s households struggle to afford the roof over their heads. Homeownership-once a staple of the California dream – is at its lowest rate since World War II. Nearly 70 percent of poor Californians see the majority of their paychecks go immediately to escalating rents.
This month, state lawmakers are debating a long-delayed housing package. Here’s what you need to know about the scope of one of California’s most vexing issues:
Just how hard is it to buy a home in California?
Hard. Really hard. Both compared to how hard it is in other states, and how hard it was for previous generations of Californians to buy homes.
While it’s always been more expensive to be a homeowner in California, the gap between us and the rest of the country has grown into a chasm. The median California home is now priced 2.5 times higher than the median national home. As of 2015, the typical California home costs $437,000, easily beating the likes of Massachusetts or New York (only Hawaii had more expensive houses).
Despite relatively low mortgage rates, exploding housing prices have caused California’s homeownership rate to dip significantly. Just over half of California households own their homes-the third lowest rate in the country, and the lowest rate within the state since World War II.
It’s not just housing prices that are affecting homeownership rates. Studies have found that student debt loads, rising income inequality and changing housing preferences among younger Californians are also at play.
Rents didn’t dip during the recession, and now are soaring
Rental costs across the state are some of the highest in the country. While listed housing prices dipped dramatically in the wake of the Great Recession, rents in California remained relatively stable before soaring in recent years in hot markets.
Across the state, the median rental price for a two-bedroom apartment is about $2,400, the third highest in the country. But statewide figures water down how absurd the situation is getting in urban coastal markets, where the vast majority of Californians live. The median rent for a two-bedroom apartment in San Francisco reached more than $4,000 this year.
“It may cost more to live here, but they pay you more”
That’s somewhat true – median earnings for Californians are higher than the national average, and are significantly higher in certain regions like the Bay Area with tremendously pricey costs of living.
But on average, income over the past two decades has not kept pace with escalating rents
The problem here is not just housing. Income inequality and wage stagnation in California also hinder low and moderate-income households’ ability to pay for a home.
But in certain markets, even extremely high incomes aren’t enough to blunt the cost of housing. In San Jose, where the current median income is nearly $100,000, renters can still expect to pay 40 percent of their monthly income on rent, according to an analysis by the real estate data firm Zillow.
Cities are being gentrified – as is the entire state
It’s difficult to measure things like “gentrification” and “displacement”-when the arrival of higher-income, higher-educated residents in a community results in the expulsion of longtime lower-income residents. But there’s little question change is happening rapidly across many California cities.
Researchers at UC Berkeley found that more than half of low-income households in the Bay Area are at risk of, or already experiencing, gentrification. It’s not just lower-income communities bleeding households-higher-income neighborhoods are losing their lower-income members as well. And in places like the Boyle Heights neighborhood of Los Angeles, gentrification protests have exposed escalating tensions between longtime Latino residents and new, predominantly white arrivals.
Where are these low-income people going? Increasingly, out of state.
From 2000 to 2015, the state lost nearly 800,000 residents with incomes near or below the poverty line. Nearly three-quarters of those who left California since 2007 made less than $50,000 annually. The leading destination for California’s poor? Texas.
Rising rents are causing more homelessness
Housing costs are just one factor in the complex tangle of reasons people become homeless. California actually has fewer people experiencing homeless now than it did a decade ago. But there’s little question rising rents are linked to more Californians living in cars, shelters, and on the streets-especially in the greater L.A. area.
While the vast majority of states saw a dip in their homeless population between 2015 and 2016, California saw an increase of about 2,400 people, according to statistics compiled by the U.S. Department of Housing and Urban Development. California accounts for about 12 percent of the nation’s population, but more than 20 percent of the nation’s homeless live here.
Recent numbers from Los Angeles County, where the number of people experiencing homelessness grew 30 percent over the past two years, have prompted cries for more eviction protections and rent control. Zillow recently estimated that a 5 percent increase in rent would result in an additional 2,000 homeless Los Angelinos. In 2016 rents grew an average of 4 percent there.
Millennials, mom and dad, and avocado toast
Nearly a decade removed from the depths of the Great Recession, and 38 percent of California’s 18 to 34-year-olds still live with their parents, according to U.S. Census data. That’s roughly 3.6 million people-more than the entire population of Chicago.
Again, housing costs are not the only thing keeping junior from moving out. Student debt loads, disappearing labor markets, and delaying marriage are also contributing to the trend. We’ve seen no thorough analysis yet on how California’s abundant avocado toast supply may be keeping millennials confined to their nests.
It’s a statewide problem
The extremes of the state’s housing crisis are concentrated in the Bay Area and greater Los Angeles, but the challenge is truly statewide. A widely-cited reportby the consulting firm McKinsey Global Institute found that in every metropolitan area in the state-from Fresno to Palmdale to Salinas-at least 30 percent of residents could not afford local rents.
The intense pressures of housing costs in coastal urban centers are spilling into inland cities. While San Diego, San Francisco and L.A. top the list of toughest rental markets in the country, cities like Sacramento and Riverside recently have experienced the largest year-over-year increases.
The housing crisis has major repercussions for the economy
Big business is also feeling the pinch of California’s housing crisis.
The McKinsey Global Institute found that housing shortages cost the economy between $143 billion and $233 billion annually, not taking into account second-order costs to health, education and the environment. Much of that is due to households spending too much of their incomes on the rent or mortgage and not enough on consumer goods.
Even the attractive salaries and lavish perks of Silicon Valley struggle to overcome the local housing market, as young tech talent flees to the relatively inexpensive climes of Austin or Portland. Nearly 60 percent of Los Angeles companies in a recent University of Southern California survey said the region’s high cost of living was affecting employee retention.
It won’t be getting better anytime soon
The state estimates that it needs to build 180,000 homes annually just to keep up with projected population growth and keep prices from escalating further out of control.
Unfortunately, for the past 10 years, the state has averaged less than half of that. In no year during that span did California crack the 100,000 barrier.
There’s fierce debate over how long it takes low-income residents to benefit from the construction of new market-rate housing – a renter on the wait list for housing vouchers won’t take much comfort in the luxury condos being built in downtown Oakland or Los Angeles. While California faces an affordable housing gap at nearly all but the highest income levels, the low-income housing shortage is most severe.
According to the nonpartisan Legislative Analyst’s Office, helping just the 1.7 million poorest Californians afford homes would cost $15 to $30 billion a year. The Los Angeles Times estimated that the three marquee bills considered by lawmakers this month would provide less than 25 percent of that total.
This is an excerpt of the project “Californians: Here’s why your housing costs are so high.” For the full report, go to calmatters.org. CALmatters is a nonprofit, nonpartisan media venture explaining California policies and politics.
By Jim Puzzanghera, Los Angeles Times, August 27, 2017
For decades, the home mortgage interest deduction has been one of the most sacred of cows in the U.S. tax code. Now, Republicans crafting legislation to overhaul the federal tax system and cut rates are considering placing new limits on the home mortgage interest deduction. And thousands of Californians could feel the pain.
Making sense of the story:
- Homeowners now are allowed to deduct interest paid on as much as $1 million of mortgage debt. Congressional Republicans and White House officials are looking at reducing the limit to $500,000, which would lead to billions of dollars more in federal revenue every year.
- Homeowners still would be able to deduct interest on the first $500,000 of a mortgage, but would lose the deduction for interest paid on any amount above that level.
- Most Americans would not be affected by such a change, either because they own their homes outright, their mortgages are less than $500,000, or they don’t have enough deductions to file an itemized tax return.
- But in states with high earners and pricey real estate, reducing the mortgage interest deduction would force hundreds of thousands of homeowners to pay more taxes.
- The California Association of REALTORS® estimates if Congress were to move forward with a cap on the mortgage interest deduction for loan amounts up to $500,000, a quarter of California’s home sales would be impacted, and those home buyers would end up paying more in taxes. And for those in Southern California, nearly one-third would be affected.
By Riley McDermid, SF Business News, August 21, 2017
A new study has found that 83 percent of Bay Area renters say they plan to leave the region, with two-thirds of those saying the high cost of living here will be the factor that pushes them out.
The study, conducted by housing site Apartment List, polled 24,000 renters in 50 metropolitan areas nationwide.
“Often, young, educated workers flock to these expensive metros to work for a few years after college or graduate school, but don’t plan to settle down permanently,” the survey found. “Additionally, the rising cost of living may be putting additional pressure on renters to move out of coastal metros.”
That cost of living remains a particularly intense factor in the Bay Area, where 63 percent of renters polled said it would be the main thing to spark their move elsewhere. After that, 13 percent cited the area’s jobs as a reason to leave, while only 10 percent said the commute time would be a reason to move out of the Bay Area.
The study underscores a number of similar findings, including a 2016 poll by the Bay Area Council that found that more than a third of Bay Area residents said they are planning to leave the region, as skyrocketing housing costs, terrible commutes and an increasingly high cost of living make the area very difficult to afford.
Overall, the poll painted a gloomy picture for the Bay Area, with 22 percent of those who answered saying high housing costs are their biggest concern, followed by traffic at 17 percent and cost of living at 9 percent.
Glen Bell – (510) 333-4460 firstname.lastname@example.org