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My old stomping grounds where I grew up in the bay area made the list as one of the most expensive housing markets in the country.  With increasing demand for housing especially up in silicon valley I predict it to further increase even more as demand continues to outpace supply.

The most expensive housing market is...

 

Newport Beach, Calif., is the most expensive housing market in the country.

A piece of the American Dream can cost anywhere from $75,000 to $2.3 million. It all depends on where you live.

Newport Beach, California, is the priciest place to live with the average list price for a four-bedroom, two-bathroom home at $2,291,764, according to a new report from Coldwell Banker Real Estate.

The average listing price for a four-bedroom, two-bathroom home nationwide is $302,632, but buyers can snag one for under $135,000 in all 100 of the most affordable markets. At the other end of the spectrum, the 28 most expensive markets have an average listing price of at least $1 million, the report found.

In Cleveland, Ohio, which is the most affordable market, the average sale price is $74,502 -- 30 times less expensive than a home in Newport Beach.

When it comes to affordability, Middle America dominates with 45% of the most affordable markets located in the Midwest.

"Many of these markets were the very first to go into a housing correction," said Budge Huskey, president and CEO of Coldwell Banker Real Estate. "These areas have had a long way to recovery, they are still doing so."

Though half of the 100 most expensive housing markets in the U.S. are located in California, it's still not the most expensive state to buy a home. That honor goes to Hawaii, followed by Massachusetts, according Huskey.

While the booming tech industry caused home prices to explode in many areas in California, especially in and around Silicon Valley, Huskey pointed out many markets are still affordable in the state. "You can drive 30 to 45 minutes outside these areas and be in a very different price point."

Here are the most and least expensive housing markets in the U.S., according to Coldwell Banker:
Most Expensive: 

Newport Beach, Calif. ($2,291,764)
Palo Alto, Calif. ($2,066,600)
Saratoga, Calif. ($1,979,218)
Cupertino, Calif. ($1,659,297)
Los Gatos, Calif. ($1,569,615)
Arcadia, Calif. ($1,541,406)
San Mateo, Calif. ($1,463,455)
Sunnyvale, Calif. ($1,447,411)
Orono, Minn. ($1,384,270)
Redwood City, Calif. ($1,367,350)

Least Expensive:
Cleveland, Ohio ($74,502)
Riverdale, Ga. ($79,223)
Wilkes-Barre, Pa. ($79,480)
Detroit, Mich. ($81,616)
Alma, Mich. ($90,523)
Gloversville, N.Y. ($91,406)
Euclid, Ohio ($92,550)
Hastings, Fla. ($95,267)
Flint, Mich. ($95,482)
Lithonia, Ga. ($95,750)

Source: http://money.cnn.com/2015/11/10/real_estate/most-and-least-expensive-housing-markets/index.html?iid=Lead


 

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New demand for living around areas surrounded by unspoiled nature. The conservation easement has exploded in popularity as it protects land from development. The deed to the land needs to be protected in perpetuity. These high end homes fuel the desire for homeowners to help with nature preservation along with gaining their own benefits of living in it as well. A price worth paying for many. It's a win win for all.

Luxury-Home Developers’ Latest Pitch: Unspoiled Nature

Forget golf: A growing number of high-end home communities are being built around large nature preserves 

Some developers are dedicating part of their land to nature preserves, hoping to draw in people with a passion for the environment and the outdoors. 

By Katy McLaughlin Nov. 5, 2015 9:38 a.m. ET

 

Sea Summit at Marblehead, a new luxury development in San Clemente, Calif., will feature Spanish-style, seaside homes with prices up to $3 million. Its developers are targeting coastal homeowners and “move-down buyers” from affluent parts of Southern California, but they’re also aiming to attract one resident in particular: the California gnatcatcher.

The developer, Taylor Morrison Home, acquired the rights to this 248-acre coastal plot last year, with the condition that 116 acres be set aside as a nature preserve. The company will spend $4 million to reinstall native vegetation that will attract species of birds like the gnatcatcher and to manage the habitat. The preserve is overseen by a nonprofit conservation group supported by an endowment established by the prior developer.

Sea Summit is one of a growing number of high-end real-estate developments that have a large nature preserve as the primary draw. In some of these communities, homeowners pay a premium to live near a piece of shared, unspoiled nature—even though their own lots may be relatively puny.

Marci and Shaun Skinner, 51 and 53 respectively, came to see the Sea Summit development site in July. Though there were no homes to tour—and they weren’t quite ready to sell their house in Rancho Cucamonga, Calif.—they signed a purchase agreement and put down a deposit on a $1.6 million house three days later. Their new home, which will be finished by year’s end, is just steps from the preserve, on a 6,250-square-foot lot.

“The fact that the land will be in preserve forever makes it feel much more open,” said Mr. Skinner, an executive for a commercial truck manufacturer who was turned off by how dense and urban most Southern California beach cities are.

When Rob Brinson, an Atlanta-based photographer, was looking for a vacation home, he wanted to avoid places anchored by a golf course. Instead, he was looking for a community interested in nature and conservation, he said.

His search led him to Serenbe, about 33 miles southwest of Atlanta, where he spent $1.3 million to build a 3,000-square-foot house. Mr. Brinson, 61, said the $400,000 he spent on his ½-acre lot within Serenbe might have purchased an entire farm outside of it. “But I have the best of both worlds,” with access to 700 acres of green space, Mr. Brinson said. “I love that I don’t have to do much yard maintenance.”

Randall Arendt is a conservation planner in Brunswick, Maine who has helped design 38 conservation communities in the U.S. and Canada over the past 20 years. Much of his work has been convincing local governments to allow homes to be built more compactly so that developers can devote chunks of land they could have built on to green space, he said. He has also worked on convincing developers that they can make “even more money when conservation land forms a significant part of their community design,” he said.

“It was harder in the past to sell developers on the idea that it could pay to not develop,” said Mr. Arendt. By contrast, today’s developers see nature preserves as relatively low-cost amenities that are highly valued by buyers, he said. 

 

Nature preserves are also replacing the amenity that used to serve as the hub for many luxury developments: the sprawling golf course. Golf courses’ popularity surged in the 1990s because “developers could charge 10% to 25% more over a non-golf development,” said Ed McMahon, a senior resident fellow at the Urban Land Institute. But with golf losing popularity, that trend has reversed: As of January, there were 15,372 golf courses in the U.S., down over 4% from 2005, according to the National Golf Foundation.

Research has shown many people who buy homes on or near golf courses don’t even play the game, Mr. McMahon said; they just want to live near green space.

Some nature preserves, such as the one at Sea Summit, are open to the public; many others, such as the one at Serenbe, are private land for the use of residents and their guests.

Home buyers can usually only be sure that land is protected forever if it is held in a legal designation known as a conservation easement, in which either a government body or private land trust is empowered to constrain development on it, even if the land is sold to a new owner.

If buyers want to be assured that the preserve will always be there, they should look up the deed and make sure that the deed protects the land in perpetuity, said Karin Gross, an IRS attorney specializing in charitable contribution deductions. “If you don’t have a conservation easement, that’s just set-aside land until the developer decides to build on it,” Mr. Arendt said.

Easements have exploded: There were over 16 million acres of land held in local and state land trusts in 2010, compared with 5.5 million in 2000, according to the Land Trust Alliance, a Washington-based trade group. One reason for their popularity: Conservation easements can—though don't always—confer state and federal tax advantages.

While conservation donations can reassure home buyers, they are not always problem-free. In Santa Fe, N.M., when developer Ralph Brutsche wanted to sell lots for 287 high-end homes in the northeast part of the city, he donated 300 acres of surrounding land to the Nature Conservancy.

His purpose, said Mr. Brutsche, was “for the property surrounding the development to be free and open space for the comfort of the owners.” He was also seeking tax advantages which, he said, he didn't end up receiving. By 2010, Mr. Brutsche said he had sold 159 lots.

Mr. Brutsche filed for chapter 11 bankruptcy in 2011. As part of bankruptcy proceedings, trustee Yvette J. Gonzales, a Santa Fe-based attorney, pursued a lawsuit against the Nature Conservancy, seeking to rescind part of the donation. The Canyon Neighborhood Association, representing about 650 neighbors, sprang into action.

The Association worried that “instead of having this wildlife area and view, we would have some homes,” said director Richard Ellenberg. His group joined the lawsuit, arguing that the donation should not be rescinded, Mr. Ellenberg said. Mr. Brutsche said that it was never his intention to use the land for anything but a wildlife preserve. In late September, the judge ruled against the trustee, which means the donation will remain as is.

Not all developers sacrifice land on which they could have built houses. In Darien, Conn., Kensett is a new community of townhouse condominiums on 15 acres, five of which are set aside as a nature preserve.

Those 5 acres weren’t buildable to begin with, said developer Bill McGuinness of Sun Homes, based in Pawling, N.Y., because they are on protected watershed. Rather than fencing off the area, the company spent about $100,000 to “make it into an amenity,” building trails, removing invasive species and stocking a pond with native fish and frogs. So far, 55 of the total 62 homes have sold for $1.3 million to $2.2 million, Mr. McGuiness said.

Some communities build activities and programming around their nature preserves. On Spring Island in South Carolina, Martha McMahon, 63, has taken the community’s 12-week “master naturalist” course, where she studied the flora and fauna in the preserve. She has also gone on kayaking trips and participated in the “Owl Prowl,” where neighbors listen for owls at night.

Ms. McMahon and her husband, Bill McMahon, a retired banker, built a 4,000-square-foot house for about $2 million on Spring Island in 2007, drawn in part by its 1,200 acre nature preserve. “It’s spiritual and peaceful, and it puts us in touch with what is really important,” Ms. McMahon said.

Source: http://www.wsj.com/articles/luxury-home-developers-latest-pitch-unspoiled-nature-1446734336



 

 

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 While California housing keeps getting less affordable it is only going to get worse. Construction is unable to keep up with demand. Even with some units set aside for affordable housing demand is not able to keep pace. Total employment growth continuing to rise is good news with a drop in unemployment rates predicted but also directly affects a greater housing demand for the area. This drives up home prices.

California housing will get even less affordable, UCLA forecast says

By City News Service

Posted: 09/28/15, 4:32 PM PDT

Housing in California — already considered unaffordable to many — will become even less affordable over the next two years, with construction unable to keep up with demand, according to a UCLA economic forecast released Monday.

UCLA Anderson Forecast Senior Economist Jerry Nickelsburg wrote in his forecast that government agencies need to reconsider their policies surrounding affordable housing if they hope to make a dent in the problem.

“The economics are clear,” he wrote. “When affordable housing is provided, say by requiring developers to have a fixed percentage of their new units ‘affordable,’ then the demand for that housing will be in excess of the supply.”

Nickelsburg added that “the policy itself recognizes that building constraints -- natural or regulatory -- will not permit a sufficient number of new homes to be built to satisfy the demand at affordable levels.

“This being the case, affordable housing policy needs to be explicit about who the housing is for,” he wrote. “For example, one might advocate affordable housing so that teachers in public schools can purchase housing that would otherwise be difficult for them to acquire.”

Nickelsburg said the typical response of “just build more housing” is unrealistic since such a move would require major changes in zoning codes, environmental requirements and building regulations.

“Certainly some of this is happening, particularly along mass transit corridors, but to make a significant impact the changes would have to be quite dramatic,” he wrote. “Realistically, this is not going to happen in the coming few years.”

On an economic front, Nickelsburg predicted total employment growth in California of 2.7 percent this year, 2.2 percent next year and 1.4 percent in 2017. The unemployment rate will drop below 6 percent for the balance of the year, then average 5.2 percent next year and 4.8 percent in 2017.

On the national front, UCLA Anderson director Edward Leamer predicted GDP growth of 2 to 3 percent over the next two years, with a generally healthy economy.

“This comes with an improving labor market, declining unemployment rate and a rising employment to population ratio,” Leamer wrote.

Source: http://www.dailynews.com/social-affairs/20150928/california-housing-will-get-even-less-affordable-ucla-forecast-says

 

 

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Improvements to the mortgage application process will allow borrowers more time to understand the entire process with more visibility of actual related costs but may slow the closing process.

What You Need to Know About the New Mortgage Rules 

 By Marilyn Lewis ; October 2, 2015 

Applying for a home loan soon should get easier and less confusing. That is the goal, at least, of changes to the mortgage application process required by the 2010 Dodd-Frank banking reform act, which finally kick in Saturday.

Clearing up confusion

If you have taken out a mortgage, you know how confusing the process can be. The law has required lenders to reveal in writing the fine points of the loan. But the documents that must be used are hard to understand for anyone who’s not a lawyer or a real estate professional.

Timing has also been a problem. The final details of a mortgage typically have been dumped in borrowers’ laps along with the final loan papers, meaning that, typically, a borrower has to take in the costs and terms of their new mortgage only minutes before signing the papers that commit them to hundreds of thousands of dollars of debt.

Stories of confused borrowers signing complex, risky mortgages they didn’t understand were commonplace at the end of the housing bubble. Congress’ effort to correct that led to a number of changes, including those going into effect now.

Two new disclosure forms

Starting now, lenders will use two new forms to explain the details of their mortgages — a loan estimate (shown here at the CFPB), which must be given to a borrower no later than the third business day after the borrower applies, and a final closing disclosure, which borrowers will receive three business days before a mortgage deal closes.
The two forms look similar, which should help borrowers line up the lender’s initial offer with the final deal, better revealing any bait-and-switch discrepancies in fees, rates or settlement costs.

More time to review the purchase

 

Lenders now will need to give borrowers the closing disclosure form breaking down the final costs and loan details at least three business days before the mortgage papers are signed.

This will give borrowers the time necessary to:

• Understand all of the loan’s terms and costs.
• Compare the final product with the offer they received initially.
• Ask questions about points of confusion.
• Enlist help from a lawyer, trusted friend or family member.
• Think about whether they can truly afford the mortgage they are considering and — if not — back out.

Brace for a rocky start

Lenders will need time to adapt to the changes, experts said. Expect that the process may be bumpy at first, said Tammy Felenstein, executive director of sales for Halstead Property in Stamford, Connecticut, talking to The New York Times. She advises borrowers to ask their real estate agents or an attorney for guidance. “Go with a lending institution that has prepared for these changes and knows what they’re doing,” she said.

The process is likely to create longer closing times. Borrowers can keep things moving by organizing their documents early, turning them into the lender quickly and scheduling inspections immediately, advises Diane Evans, the president of the American Land Title Association, in an interview with The Times:

Some real estate agents are planning to write contracts with 45-day closings, instead of 30, Ms. Evans said, adding, “if you’re prepared for a little more time and it takes less, everybody leaves a little happier.”

Source: http://www.msn.com/en-us/money/realestate/what-you-need-to-know-about-the-new-mortgage-rules/ar-AAf2o3n

 

 

 

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Home prices all time high up 5.5%. Los Angeles County's median home price is $492,000 with sales up 13.5% from a year ago. Most economists still predict continued appreciation but at a slower pace due to the increased cost of housing.

Southland home sales hit a nine-year high; prices up 5.5%

By Andrew Khouri - August 18, 2015

The Southern California housing market is enjoying a summer almost as hot as the weather.

Home sales reached a nine-year high in July, while the median price climbed 5.5% from a year earlier, according a report out Tuesday from CoreLogic.

The data represent a housing market that's picked up steam from a sluggish 2014, as an improved economy gives more families the confidence to buy a home. June sales also were at a nine-year high.

"Much of today's demand stems from job growth, low mortgage rates and a more confident consumer," CoreLogic analyst Andrew LePage said.

The 16.9% increase in sales from July 2014 comes as investors pull back from the marketplace, leaving more breathing room for families.

In July, absentee buyers, who are mostly investors, bought 21% of all homes sold, the smallest share since June 2010. All-cash transactions, often the sign of an investment deal, also fell to 21.7% of sales, the lowest since November 2008.

Real estate agents say some families have jumped into the market given all the talk about a coming rise in interest rates if the Federal Reserve raises its short-term benchmark rate later this year, as expected.

The robust demand pushed sales up in six Southland counties: Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura.

In Los Angeles County, sales jumped 13.5% from a year earlier. The median price, the point where half the homes sold for more and half for less, rose 4.7% to $492,000. In Orange County, sales were up 15.5% and prices increased 5.3% to $615,000.

The six-county region's median price ticked down 0.9% from June to $438,000. But LePage said such a month-to-month dip is not unusual and probably represents a shift in the mix of homes selling.

Most economists predict continued price appreciation ahead, though at a slower pace than in recent years as families struggle to afford the increased cost of housing. The California Assn. of Realtors expects that by the end of December the median price for a California single-family home will have risen 5.3% in 2015.

Source: http://www.latimes.com/business/realestate/la-fi-july-home-prices-20150819-story.html

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The jumbo loans market is getting bigger with some banks only requiring a 15% down payment for jumbo loans up to $1.5 million.  It's been a 58 percent increase in new loan originations from a year ago and an area of the mortgage market that has recovered more than any other sector since the housing crisis.

Banks Are Loosening Up on Jumbo Loans

Daily Real Estate News | Thursday, August 06, 2015 

 

As lenders try to capture more of the high-end housing market, J.P. Morgan Chase announced that it's loosening the underwriting standards for issuing jumbo mortgages, those that exceed $417,000 in most parts of the country or $625,500 in pricier areas. The bank is lowering its minimum credit score and down payment requirements for mortgages up to $3 million.

Chase's decision follows similar steps from Bank of America Corp., Wells Fargo, and other banks for jumbo mortgage requirements.

As such, the jumbo market is getting bigger. Jumbo originations in the second quarter climbed to an eight-year high of $93 billion – a 58 percent increase from a year ago, according to Inside Mortgage Finance estimates. Jumbo mortgages issued by lenders last year accounted for about 20 percent of all first-lien mortgages, up from 5.5 percent in 2009.

"There's no question that the jumbo market has probably recovered more than any sector of the mortgage market since the housing crisis," says Guy Cecala, publisher of Inside Mortgage Finance.
J.P. Morgan plans to lower its minimum FICO credit scores for jumbo mortgages from 740 to 680 for loans on primary single-family purchases, second homes, and some refinances. The bank is also allowing a 15 percent down payment for loans up to $3 million. That is less than other banks such as Bank of America and PNC Financial Services Group Inc. which allow a 15 percent down payment for jumbo loans up to $1 million and $1.5 million, respectively.

The housing recovery has been strong in the higher-priced tier. Existing single-family home sales priced between $750,000 and $1 million rose 21 percent in June from a year prior, according to the National Association of REALTORS®. Meanwhile, sales of homes priced between $100,000 and $250,000 rose 12.5 percent. Homes priced lower saw sales fall 3 percent.

Source: http://realtormag.realtor.org/daily-news/2015/08/06/banks-are-loosening-up-jumbo-loans

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That's good news as it's easier to qualify for a conforming loan than a jumbo loan. Also, jumbo loans due to higher loan amount comes with a higher price tag on the interest rate. If baseline jumbo thresholds rise more it should encourage more to buy and move into higher priced homes.

Mortgage Limits May Increase

With home prices still climbing, baseline jumbo-mortgage thresholds may be raised for the first time in a decade.

 

By Anya Martin -July 15, 2015 10:22 a.m. ET

 

Jumbo mortgages for single-family residences exceed $417,000 in most parts of the country and $625,500 in high-price markets. But with home prices climbing back to prerecession peaks in some markets, baseline jumbo thresholds may be raised for the first time in a decade.

 

The agency that sets these limits, the Federal Housing Finance Agency (FHFA), in May requested public input on its house price index. This index includes sale-price information on government-backed mortgages as well as real-estate sales compiled by research firm CoreLogic from hundreds of U.S. counties. Distressed sales are included but not appraisal values from refinances.

 

The deadline for input is July 27, and the FHFA will decide this fall whether to change the baseline limit starting Jan. 1.

In the early 1970s, the baseline limit for conventional loans was just $33,000. That was the maximum amount a homeowner could borrow to qualify for a “conforming” mortgage—one financed by Fannie Mae or Freddie Mac. The $33,000 limit rose steadily over the years to keep up with home prices. Hawaii, Alaska, Guam and the Virgin Islands got higher loan limits because of the high cost of living.

The Housing and Economic Recovery Act of 2008 established the current formula, which is based on median home-sale prices reported in a monthly FHFA survey. However, there is some wiggle room in high-cost areas, where conforming loans can exceed the baseline by up to 150%. 

To keep up with rapidly rising home prices, FHFA in January raised its conforming-loan cap in 46 counties nationwide—the largest number since 2012. Areas affected include metro Baltimore, Boston, Denver, Nashville and Seattle.

Loan-limit increases encourage more high-end home sales because many people, especially those upgrading for the first time to a pricier home, are more comfortable with a conforming loan, says Allen Decuyper, an agent with Nashville-based Neal Clayton Realtors. “For some it’s a psychological hurdle to get over—just the word ‘jumbo’—so [raising the limit] helps,” he adds.

Typically, it’s also easier to qualify for a conforming loan than a jumbo loan. Mortgages backed by Fannie Mae and Freddie Mac usually have lower interest rates, with the current difference about a quarter to a half a percentage point below jumbo rates, says Norman Koenigsberg, president and CEO of East Brunswick, N.J.-based First Choice Loan Service. Conforming mortgages also have less stringent underwriting qualifications than jumbo loans, says Mathew Carson, a mortgage broker with San Francisco-based First Capital Group.

For example, to qualify for the best rates, jumbo borrowers need a credit score of 740 or higher, while a Fannie Mae-backed mortgage borrower may only need 680, Mr. Koenigsberg says. Additionally Fannie Mae and Freddie Mac mortgages allow down payments as low as 3% and require zero to three months’ worth of cash reserves, as opposed to typically a 20% down payment and six months’ reserves to a year for a jumbo loan, Mr. Carson says.

More tips on qualifying for a conforming loan:

Put more down. If a borrower has sufficient assets, the easiest way to qualify for a conforming loan is to make a larger down payment or limit the amount of a refinance.

Double up. Many borrowers take out a home-equity loan or line of credit to fill the down payment gap. However, because second mortgages typically are adjustable-rate mortgages, consumers should not borrow more than they can pay off within the time period when low rates are locked in, Mr. Carson says.

Compare rates. During some weeks in 2014, average rates for both 30-year, fixed-rate loans and adjustable-rate jumbo mortgages dipped lower than conforming-loan rates. Even when average rates are higher, some lenders are competitive with their jumbo products when wooing borrowers with high credit scores, Mr. Koenigsberg.

CITY	Conforming loan limit	% of loans that were jumbos (2012)	% of loans that were jumbos (2015)	Change
Washington, D.C.	$625,500	7.0%	10.2%	46.3%
Tampa, Fla.	$417,000	2.0%	3.5%	77.7%
St. Louis	$417,000	1.8%	2.5%	39.6%
Seattle	$517,500	5.7%	11.3%	97.2%
San Francisco	$625,500	17.6%	38.2%	116.6%
San Diego	$562,350	11.4%	19.9%	74.9%
San Antonio	$417,000	1.8%	2.5%	37.3%
Sacramento, Calif.	$474,950	3.1%	7.6%	149.3%
Riverside, Calif.	$417,000	3.1%	7.8%	151.3%
Portland, Ore.	$417,000	4.2%	8.0%	89.0%

Pittsburgh	$417,000	1.1%	1.6%	46.4%
Phoenix	$417,000	4.0%	6.3%	58.5%
Philadelphia	$417,000	4.7%	6.0%	27.3%
New York	$625,500	7.1%	9.7%	36.6%
Minneapolis-St. Paul	$417,000	3.1%	5.3%	68.3%
Miami-Fort Lauderdale	$417,000	7.1%	10.9%	53.2%
Los Angeles	$625,500	11.9%	21.3%	78.5%
Houston	$417,000	3.0%	5.4%	82.0%
Detroit	$417,000	0.9%	1.9%	108.1%
Denver	$424,350	6.2%	11.2%	82.3%

Dallas-Fort Worth	$417,000	2.5%	4.0%	62.1%
Chicago	$417,000	4.5%	6.4%	42.2%
Boston	$517,500	11.8%	14.1%	19.9%
Baltimore	$517,500	3.8%	4.5%	16.5%
Atlanta	$417,000	2.8%	4.7%	68.5%

Source: http://www.wsj.com/articles/mortgage-limits-may-increase-1436970136