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April 30, 2018 – Real Estate Market Numbers

By Glen Bell   (510) 333-4460

Zillow_March_2018

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

  • As anticipated, we repeated the dramatic drop off in inventory at year end, following our normal pattern for December, typically our low point. As expected, January through April began the normal trend of adding on new inventory. We increased our available housing inventory by 132% in the first 4 months of the year. However, as early of a start as this has been and with such a large increase in supply, we’re still lagging slightly behind where we were last year at this time by 9.4%. We’re now sitting on a 30 day supply of homes. This makes for a very competitive market for many buyers that have been looking since the beginning of the year.
  • Our monthly supply is now 30 days. Last year, our months’ supply at this time was 30 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.
  • It’s hard to predict how much tax reform will play into this. That impact may not be felt until taxes are due. We are seeing interest rates starting to go up. Prices continue to rise, but at a slower pace. More and more, affordability, the high cost of living and our traffic woes are coming into play for those, especially in the “middle class,” who may now be considering leaving the Bay Area.
  • Typically, we see a steady increase on a month by month basis to occur before finally peaking in September.
  • The number of pendings, (homes that are in contract), increased as inventory levels began to rise. The pending active ratio increased to 1.39. This compares to last year at the same time of 1.28. 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.
  • The percentage of homes “sitting” has slightly decreased to 26% of the homes listed now remaining active for 30 days or longer, while only 13% have stayed on the market for 60 days or longer. This is similar to what what we saw last year at this time with 29% of the homes listed remained 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 a factor representing less than .05% of the market.

Months_Supply

  • The month’s supply for the combined 39 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 over the past four years. We are at about the same supply levels compared to last year at this time, of 30 days.

Actives_&_Pendings

  • Our inventory for the East Bay (the 39 cities tracked) is now at 2,013 homes actively for sale. This is below last year at this time of 2,222 or (9.4% 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 increased to 2,790, similar to what we saw last year at this time of 2,847.

Pending_Active_Ratio

  • Our Pending/Active Ratio is 1.639. Last year at this time it was 1.28.
  • Sales over the last 4 months, on average, are 6.2% over the asking price for this area, greater than what we saw last year at this time, 3.4% indicating a much stronger market for sellers.

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Recent News

 

5 Reasons California’s Housing Costs Are So High

By Matt Levin, Calmatters, May 4, 2018

Why are California housing costs so high? At its most basic level, it’s a story of supply and demand — lots of people want to live here, and there aren’t enough homes to go around.

But there are lots of uniquely California factors — from the shape of our coastline to Proposition 13 — that have attached a painfully expensive price tag to the California dream.

The median price of a home is now well over half a million dollars. That number is about $240,000 nationally. More than 20 percent of Californians pay more than half their income for housing.

Here are five reasons the state’s housing market got so out of whack.

1. We Haven’t Built Enough Housing

Experts who study California’s housing crisis argue about lots of things. Is rent control good or bad? Will that new shiny high-rise going up in your neighborhood help or hurt housing costs? How much should we blame “not in my backyard” NIMBYs for our problems?

But there is one principle the vast majority of housing experts agree on: Over the past few decades, California hasn’t built enough housing to keep up with the number of people who live here.

The state housing department estimates that we need to build 180,000 new housing units a year to keep prices stable. Over the past 10 years, we’ve averaged less than half of that.

Doesn't_Build_Like_it_Used_To

Even when new construction was booming in the early and mid-2000s, new homes and apartment buildings weren’t being built in coastal cities where the vast majority of Californians work. While places like the Inland Empire and Central Valley saw a building craze, places like San Francisco and Los Angeles basically flatlined.

We’re also not keeping up with other states.

Places like New York and Massachusetts have built a lot more housing per capita than we have in recent years. That hasn’t made those places cheap, but it has helped to alleviate some cost pressures.

California_Trails

2. Demand to Live and Work and Own in Urban California Has Reached a Breaking Point, and Part of That Demand Is Global

Over the last decade, Californians have increasingly tried to cram themselves into major urban centers that are already jammed with residents.

The Bay Area is the poster child here.

Between 2000 and 2007, Bay Area cities accounted for only 4 percent of the state’s total population growth. Between 2010 and 2017, nearly 20 percent of all new Californians were either being born in or moving to the Bay.

Calif_bands_together

While the tech industry certainly bears much of the responsibility for that trend, the increased demand to live in California’s urban cores extends beyond Silicon Valley. The urban parts of L.A. and San Diego have all seen a major increase in people wanting to live and work there, which means increased competition for rental housing.

And we’re not just talking about apartment rentals. Here’s a pretty amazing graph.

Rise_of_Rentals

The number of single-family homes occupied by renters grew by more than 400,000 over the last 10 years, while the number of owner-occupied units dropped during the Great Recession and has yet to recover.

So who owns these houses? The vast majority are “mom and pop” investors and wealthy individuals buying one or two additional properties. Foreign buyers, primarily from China, have also become increasingly enamored with California real estate. Last year, nearly one in four California single-family homes were sold in all-cash transactions, an indication of investor appetite for California real estate.

Overall, investors are a relatively small part of the housing market, especially when viewed from a statewide lens. But in certain local markets, investors compete directly with California families for homes.

3. Proposition 13 Dilutes a City’s Incentive to Build New Housing

Why hasn’t California built enough housing to keep up with its population?

Most housing researchers agree that part of the reason is Proposition 13, the landmark 1978 ballot initiative that capped how much local governments could collect from property taxes. While intended to protect California homeowners from unmanageable property tax bills, Proposition 13 has produced a host of unintended consequences.

Imagine you’re a city, sitting on a huge plot of vacant land. You could zone that land for housing or for commercial use, like a hotel or a Target. Your city obviously needs more housing — prices are sky high.

Easy decision, right? Nope.

Proposition 13 has made development decisions much more complicated. Because property taxes are capped, local governments have become increasingly reliant on other revenue sources. That vacant land is much more valuable to the city’s coffers if a big box retailer gets built on it, as opposed to a multifamily apartment building.

Housing nerds call this the “fiscalization of land use.”

There’s debate about just how much Proposition 13 is to blame for the state’s housing shortage. But talk to local elected officials, and you’ll see the issue isn’t just a hypothetical dilemma.

4. In Most Parts of California, the Process to Get New Housing Approved Is Difficult, Time-Consuming and Expensive

It can be hard to be sympathetic to developers.

From time immemorial, it feels like they’ve complained about rules and regulations they say make it harder to build their projects. The builder who designed Stonehenge probably thought there was too much bureaucracy involved.

While it may be tough to trust developers, that doesn’t necessarily mean that they’re wrong. The process by which a piece of land is approved for new construction can be incredibly cumbersome, time-consuming and risky. While good data on exactly how much this adds to housing costs is hard to come by, typical approval time for projects in San Francisco is over a year, while in L.A. it’s eight months. That doesn’t include when land needs to be “rezoned” for residential development, which can take even longer.

Why the lag? Here’s the laundry list.

  • Multiple Layers of Government Review: A housing project often must go through multiple government agencies, including the planning department, health department, fire department, building department and perhaps most importantly, a city council.
  • Lots of Avenues for “Not In My Backyard” Voices: The review process for new developments gives ample opportunity for local residents to express their opposition. Locals may fear that new housing projects will change the character of their neighborhoods, increase traffic and hurt their property values. If a city councilmember votes for new housing, he or she may have to face dissatisfied voters.
  • An Often Misused Environmental Law: The California Environmental Quality Act, or CEQA, requires that local agencies consider the environmental impact of a new housing development before approving it. That sounds like a worthy goal, but the law has often been abused to prevent new developments — even environmentally friendly ones with high-density housing and bike lanes. According to the nonpartisan Legislative Analyst’s Office, CEQA appeals delay a project by an average of two and a half years.
  • Local Growth Controls: Two-thirds of California coastal cities and counties have adopted policies that explicitly limit the number of new homes that can be built within their borders or policies that limit the density of new developments. Subtler growth controls include not zoning enough land for new development or requiring supermajorities to approve new housing.

5. Land, Labor and Raw Material Costs Are Higher in California Than the Rest of the Country. And Those Costs Are Rising

Unfortunately, California’s coastline topography makes it more expensive to build here than most other places. Also, there’s the ocean. You can’t expand into the ocean.

Limited land plus tons of demand means high land prices. In many markets in California, the bulk of a single-family home or apartment building’s value is in the land it is built on.

But while the land itself is what typically eats up most of a developer’s budget in California’s hottest markets, it’s not the only cost-driver. Construction labor and the cost of the raw materials have been rising over the last five years, and are higher in California than other parts of the country. According to the Legislative Analyst’s Office, construction labor is about 20 percent more expensive in major California cities than in the rest of the country.

On the labor side, a shortage of skilled construction workers bears much of the blame. When the housing market crashed in the late 2000s, construction workers left the industry in droves. And those same workers haven’t come back.

Constructions_Jobs

Construction today just doesn’t seem to have the same appeal to younger workers. Firms are struggling to recruit younger workers to supplement and eventually replace a graying workforce.

Building codes and environmentally friendly design requirements in many California cities require different types of raw building materials to be used, some of which can be pricier than elsewhere in the country. And nationwide, the cost of vital resources like lumber and concrete are on the upswing.

There are plenty of reasons beyond the five we’ve mentioned here that help explain why California housings costs have gotten so out of control. The task of making California affordable again — or at least relatively affordable again — defies a simple silver-bullet solution.

If people are fleeing the Bay Area for cheaper housing, why is it still so costly?

By Kathleen Pender, San Francisco Chronicle, May 4, 2018

So which is it: Are people fleeing California and the Bay Area for cheaper housing, or swarming here for high-paying jobs?

The answer is: both. A flurry of recent population reports have painted a confusing picture.

If you look just at domestic migration — people moving around the country — the Bay Area lost about 46,000 people more than it gained during the year that ended July 1, according to U.S. Census Bureau estimates released March 22. That net loss was nearly twice as big as the previous year and marked a turnaround from earlier years, when more people were coming to the Bay Area than leaving.

The national media pounced on this data — throw in some one-way U-Haul prices and dubious survey results — and declared that the Bay Area is losing its appeal, and fast. “They made it sound like the highways are jammed with people trying to get out of the Bay Area right now,” said Patrick Carlisle, chief market analyst with Paragon Real Estate Group. He summarized the coverage in a report, “Will the Last One Leaving Please Turn Out the Lights?”

So if people are leaving the Bay Area in droves, why are home prices still soaring and why aren’t there more houses for sale?

One thing these stories mostly failed to mention is that net immigration — people coming from and leaving for other countries — is still positive in the Bay Area. About 58,000 more people came here from abroad than left last year, surpassing the nearly 46,000 who decamped for other states. (The census estimates included the nine-county Bay Area and three neighboring counties.)

Another reason is that people moving here tend to have higher incomes than people moving out, and so are better able to absorb the ridiculous cost of housing.

Linda Crowe moved from the Bay Area to Boston for a job three years ago, but moved back in December because she missed her friends and community. “I worked my entire career in technology, and a lot of my professional network was here,” she said. And the weather “is so much nicer here.”

She landed a job with IBM, and bought a home in San Francisco’s Cole Valley. It helped that she sold her home in San Carlos a year and a half ago, after renting it out the first year and a half she was gone.

Crowe said housing is somewhat cheaper in Boston, but “I make more money here. Salaries are significantly higher in the Bay Area, particularly in the technology sector. They have to be.”

Coming_and_Going

California has had net domestic out-migration for a much longer period. Since at least 1991, it has lost more people to other states than it has attracted almost every year, according to the California Department of Finance.

Net immigration over that period has been consistently positive — in the hundreds of thousands per year — but it wasn’t always big enough to outweigh domestic out-migration. In 2005 through 2010, the state lost more people to other states and countries combined than it gained each year. But its total population has still grown each year since at least 1991, thanks to “natural” increase — births minus deaths.

It’s impossible to say definitively why people move out of the area, since there’s no exit poll. A report released last week tried to explain why California, by its calculation, lost nearly 1.1 million more people to other states than it gained from 2006 to 2016.

The report, prepared by Beacon Economics for San Francisco think tank Next 10, looked at housing, migration and employment trends.

It concluded that “the main driver for net out-migration appears to be high housing costs,” not high state income taxes. That’s because the “vast majority of people who moved out of California were concentrated in lower-skilled, lower-paying fields, namely sales, transportation and food preparation.” People moving out probably paid little or no state income tax because California’s tax structure is highly progressive.

People moving into the state are higher-income and better educated. They’re much more likely to pay state income tax and better able to afford a home in California, which had the nation’s highest median price in 2016.

“California has seen a net inflow of residents who earn more than $50,000 annually, have bachelor’s or advanced degrees, and work in high-skilled occupations. This is especially true for the Bay Area, where high salaries and abundant job opportunities outweigh the high cost of living,” the report said.

Most places want their working-age population to expand, because economic growth is the sum of growth in the labor force plus productivity growth, said economist Mike Englund of Action Economics.

California benefits from an inflow of younger people (thanks largely to immigration) because they have a future in the labor force. But if a region’s infrastructure does not match the population, problems ensue.

In the Bay Area, housing creation has lagged far behind population growth, which is why home prices and rents are skyrocketing and people are commuting longer distances to work.

But it can also go the other way. “If you build an infrastructure for 1 million and the population drops by half, you still have all the infrastructure to maintain but fewer people to pay for it,” Englund said.

Detroit, he said, “was a classic example of a city designed for one population and ending up with another.” During the recession you could pick up homes in Detroit for $1.

It’s enjoying something of a resurgence now. LinkedIn, based in Mountain View, said last week that it has leased a historic 74,500-square-foot building in Detroit and will expand its workforce there from about 40 to 120 over the next two years.

Although California and the Bay Area still have growing populations, the recent spike in domestic out-migration is raising concerns. The federal tax law passed in December could encourage people to move from California and other higher-tax states to lower-tax states, because the new law severely limits the federal deduction for state and local income and property tax.

In addition, “changes to (federal) immigration policy would likely reduce the growth we get from international migration,” said Jed Kolko, chief economist with job site Indeed. A big drop in immigration, however, “might be offset by less domestic out-migration” because fewer people would be competing for housing, and home prices and rents might drop.

The top five states for outbound Californians in 2016 were Texas, Arizona, Nevada, Oregon and Washington, according to Next 10. These states created an average of 231 new housing units for every 1,000 new residents from 2011 to 2016. California added just 209.

“California is permitting roughly the same number of housing units as Florida, despite having approximately 18 million more residents,” the report said. It added that “the housing shortage would be even worse” if there were no domestic out-migration.

After retiring from a career in technology, Jim DeStefano, 71, sold his San Jose home in December and moved to Fort Myers, Fla. He said he wanted a “better quality of life” and a “less liberal environment.”

Property taxes are higher in Florida, he said, but housing costs about one-third what it does in the Bay Area.

Moving was stressful, and expensive, but worth it, he said. “I haven’t seen one iota of graffiti, no litter on the streets. I haven’t seen a homeless person.”

 

Why the Bay Area is the epicenter of California’s housing crisis

By KATY MURPHY, Bay Area News Group, May 4, 2018 

The same story is playing out, over and over: People are flocking to the Bay Area for high-skilled, highly paid jobs, while cashiers, teachers and construction workers are, increasingly, saying goodbye to a place they no longer can afford.

A new study released Thursday points to why the California housing crisis is so acute, particularly in the Bay Area — where a home destroyed by fire sold for more than $900,000 and it would take four minimum wage jobs to afford an apartment: More people are moving in from other states than moving out. No other region in California has experienced such explosive growth of high-paying jobs. Statewide, between 2011 and 2016, California added just 171 homes for every 1,000 people.

Coming_and_Going_Bay_Area

“The boom is so ferocious that it exaggerates the driving up of the rents and the cost of living,” said Richard Walker, a geography professor emeritus at UC Berkeley and author of a new book, “Pictures of a Gone City: Tech and the Dark Side of Prosperity in the San Francisco Bay Area.”

The study, commissioned by the San Francisco public policy group Next 10, documented a growing economic divide. While pay for California’s low-wage earners grew by just 17 percent over the past decade, wages rose by 29 percent for middle-income workers and nearly 43 percent for high-wage earners.

The key question for California is, “How do you manage the effects of success?” said Michael Storper, an economic geographer at UCLA’s Luskin School of Public Affairs. “At the moment we are a winner economy. California is amazing in how much it attracts high-wage, high-skill industries. Who wouldn’t want to be like that?”

At the same time, he said, how do you preserve housing for the majority of residents who don’t command high salaries? Or find a way to pay them more?

Carmelita Reyes, principal of Oakland’s International High School, said that when she started teaching in the city in 2001, many of the young teachers rented apartments by Lake Merritt.

“No one was getting rich being a teacher, but you could afford to live in Oakland,” she said. The narrative back then, she said, was “teachers are never going to buy a house. And now it’s `teachers can’t afford an apartment.’ ”

One of her teachers commutes from Napa County, where she found a cheap place to rent. A fellow Oakland principal has decided to open her home to travelers, renting out a bedroom on Airbnb.

Fed up with housing costs, some Californians are leaving the state altogether. The study found that between 2006 and 2016, more than 1 million more people left California for other states than moved in from the rest of the U.S.

“These high home prices and high rents are forcing more low and middle-income Californians to leave the state for more affordable housing in states like Texas and Washington and Arizona,” said Noel Perry, Next 10’s Founder.

Researchers found similar patterns for international migration: Higher-skilled migrants from other countries are replacing lower-skilled migrants in California.

And though the Bay Area has grown in recent years, that pattern may be shifting. The new study, along with a recent report from the Joint Venture Silicon Valley think tank, found that nearly as many people are leaving Silicon Valley as are coming in. The think tank found the biggest drops were for residents between the ages of 18 and 24, and between 45 and 64.

The Bay Area always has been a high-wage economy, Walker notes, but the latest boom has attracted such an enormous level of investment in tech and other lucrative sectors that “the whole thing has gotten out of hand.”

“You can’t keep that economy going — you can’t feed people, you can’t get them the things they want, you can’t deal with the tourists, you can’t drive buses — without lower and middle-income workers to do those kinds of jobs,” he said.

The Next 10 report did not include recommendations. Perry, its founder, said the study was intended to help state and local policymakers try to solve some of these challenges.

“In order to support long-term, sustainable economic growth in California, our state needs to support a diverse economy — that means jobs and housing for people at all income levels,” he said.

The insatiable demand for housing that has uprooted so many Californians is forcing an 80-year-old Pleasanton resident to leave the house he has rented for 46 years, his daughter said. Tricia Davis said her father and stepmother got a letter in April saying that they could stay in the home — if they agreed to a $1,000 rent hike. They considered moving to Montana, where Davis lives, and then to Fresno, near another relative, before discovering an apartment for people over 62, in town, that they could afford.

“For them to have to try to just move, it’s been pretty traumatic,” Davis said.

Davis, an agent for Delta Air Lines, said she long ago gave up on living in the East Bay city where she grew up. “Pleasanton, as great of a town as it is, even with a college degree I couldn’t afford to live there.”

As Bay Area rents soar, many can’t keep up

By KATY MURPHY, Bay Area News Group, May 1, 2018 

A new report highlights the grim reality of renters struggling to keep a roof over their heads in the midst of a tech-fueled economic boom: Many are losing the battle with the housing crisis.

Sobering, county-level figures compiled by the nonprofit California Housing Partnership and released Tuesday show startling increases in homelessness and a widening chasm between wages and housing costs throughout the Bay Area and elsewhere in the state.

 

As lawmakers wrangle with one other and the governor over the best use for California’s $6 billion budget surplus, the group behind the report — a nonprofit the state created 30 years ago to advocate for affordable housing — recommends that $2 billion be used to build apartments for low-income Californians.

“This is a housing emergency,” said Matt Schwartz, the partnership’s president and CEO. “The state should declare this a housing emergency, and some of the budget surplus needs to be made immediately available to get the homeless off the streets and into affordable housing.”

The report found that workers in core Bay Area counties would need to earn four or more times the minimum wage to afford a Bay Area apartment — and that the lowest-income renters in Alameda, Santa Clara and Contra Costa counties spend well over half their income on rent, leaving little for other needs.

“We’re seeing rents and housing prices go up to a level where people who never thought they would have to worry about housing stability are having to worry,” said Gloria Bruce, executive director of East Bay Housing Organizations, a coalition of affordable housing advocates. “I think sometimes people think of homelessness and housing affordability as two separate issues, but they are really one and the same.”

Counties are doing more than ever to coordinate services for people who have lost their homes, Bruce said, but they are struggling to keep up with the need. When it comes to finding permanent housing, she said, “there is literally no place for them to go that they can afford. We see a market that is just not serving people at the bottom.”

The California Housing Partnership is recommending the state spend $2 billion of its surplus on affordable housing funding to cities and counties, similar to two pending legislative proposals. Senate Bill 912 from Sens. Jim Beall, D-San Jose, and Nancy Skinner, D-Oakland, would direct $2 billion in affordable housing funding to cities and counties. Assembly Bill 3171, a bipartisan bill from Assemblyman Phil Ting, D-San Francisco — who heads the Assembly budget committee — and backed by Republican Assemblyman Brian Maienschein of San Diego, calls for a one-time infusion of $1.5 billion in matching funds for cities.

 

The Legislature has until June 15 to approve the state budget. Gov. Jerry Brown, who has the authority to veto individual expenditures in the budget plan, has proposed saving most of the surplus to guard against the next economic downturn. He comes back with an updated proposal later this month.

The housing partnership also calls for changing the law to allow local affordable housing measures to pass with just 55 percent support, rather than 67 percent; bringing back redevelopment agencies for low-income housing; and an aggressive campaign for a $4 billion affordable housing and veterans’ housing bond that will appear on the November statewide ballot.

 

“Until the voters pass it, it’s not real,” Schwartz said of the bond measure. “And we can’t afford for that bond to not become a reality, because it will be a crushing blow for us to get veterans and homeless people off the streets of California.”

 

Are Bay Area residential towers too costly to build?

San Jose study session reveals troubling new trend in housing development

By GEORGE AVALOS, Bay Area News Group, April 27, 2018

Soaring construction costs could hobble efforts in San Jose and other Bay Area cities to speed development of high-density housing such as apartment towers, according to a foreboding assessment being circulated in the South Bay.

Even worse, while ordinary individuals already face dire financial obstacles when they buy or lease housing, residential rents likely would have to spiral even higher to render the vast majority of Bay Area apartment towers economically viable for developers, experts warned the San Jose City Council at a study session last week.

“This is a housing crisis and a housing catastrophe, but if I’m going to kick off a new project, rents have to go higher,” Drew Hudacek, chief investment officer for development firm Sares Regis, told the San Jose council’s study session last week.

Luxury apartment rents in San Jose now range from $3.25 to $3.75 a square foot, Hudacek estimated during his presentation to the council. However, he added, to justify new luxury apartment development based on current construction costs, rents would have to rise to $4.25 to $4.75 a square foot. That means renters would be forced to endure an eye-popping 25 percent increase in rents before most new residential towers could be built.

“We have more than 6,000 units that are fully entitled and ready to be built,” San Jose Mayor Sam Liccardo told this news organization following the study session. “But developers can’t get shovels in the ground because the development costs are scaring away the financing.”

The mayor indicated that he might seek City Council approval to slash the fees that San Jose charges developers for their projects.

“I don’t know that City Hall can do that much to change market forces, but at the very least,” Liccardo said, “we need to take a hard look at reducing our fees and reducing our red tape.”

Sharply rising costs for construction and labor have added a fresh complication in the market, developers and experts told the City Council study session.

“Construction costs have increased dramatically, especially in the last 18 months,” Don Peterson, senior managing director Northern California for Mill Creek Residential Trust, said during a presentation to the council.

Developers and industry experts say commercial construction costs are rising primarily due to more expensive materials such as lumber and rising labor costs.

According to Hudacek, construction costs are rising about 1 percent to 1.5 percent each month — which is far above the general rate of inflation, as measured by the consumer price index. Construction expenditures represent 60 percent to 75 percent of the total cost of developing a high-density residential project, Hudacek estimated.

These difficulties and obstacles in financing and project profitability have occurred at a time when the Bay Area economy overall — and Silicon Valley in particular — is booming. It’s unclear if, or when, the economy in the Bay Area might cool off.

“We never know when the perfect time is” to develop a project, Elizabeth Seifel, a principal executive with Seifel Consulting, told the study session.

San Jose officials should still support housing development as a priority, even in the face of uncertainty, Erik Schoennauer, a San Jose-based land-use and planning consultant, said Friday.

“The council should be bullish about housing,” he said. “Yes, the city has a jobs-first general plan. But you cannot achieve job growth without new housing. Employers want to be where there is an adequate supply of housing. And if you want expanded retail services, you need more customers going into that area.”

The Hottest Markets for U.S. Real Estate: Is California’s Reign Over?

By Cicely Wedgeworth, Realtor.com, Apr 26, 2018

How the mighty have fallen! For the first time in years, California markets aren’t fully dominating our monthly list of the hottest markets on realtor.com®.  In fact, the Golden State has even ceded its long-held No. 1 spot!

Each month at realtor.com®, we rank the top metro areas where homes sell the fastest, and where eager house hunters are clicking up a storm on our listings. And each month, California reliably hogs the greatest share of the top 20 spots of any state. But while 11 of the top 20 markets in March could be found in the Golden State, in April, that tally had fallen to only six.

That’s the lowest number since we started doing this ranking, in 2013.

Nine other states were represented on the top 20 list: Texas (2), Massachusetts (2), New York (2), Michigan (2), Colorado, Washington, Ohio, Idaho, and Wisconsin.

Longtime top dog San Francisco fell to No. 3 in April, ceding the throne to … Midland, TX, which had previously been at No. 5. Second place went to Boston, which just hosted its famous marathon.

(The definition of big-city markets often include neighboring towns. For example, the San Francisco market includes nearby Oakland and Hayward, and the Boston market includes Cambridge, Newton, and a tiny slice of New Hampshire.)

The top movers for the month are Racine, WI (up 28 spots from March); Rochester, NY (up 14); and Detroit (up 13). Columbus, OH, moved up five spots to reach No. 4, the highest it’s ever reached in our ranking.

Realtor.com’s hottest markets receive 1.6 to 2.7 times the number of views per listing compared to the national average. These markets are seeing homes move off the market 17 to 40 days more quickly than the rest of the United States.

The_Hot_List

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

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