San Francisco Home Prices

Case Shiller and us
U.S. home prices dropped to a newlow in March. Case-Shiller home price index reports the lowest prices in five
years, confirming those fears of a double dip. National home prices declined 34% from the 2006 peak, down 5% in just the last year
Excesses of the Bubble Years
We are still working crippling debt, over priced homes and excess supply. Too many families owe too much money. Banks hold too much debt collateralized by too real estate and no doubt too little interest in adding to their property protfolio. All leading to too much market supply as banks dump homes at fire sale prices.
How did San Francisco Do
David Blitzer, Chair of the S&P index committe notes that numbers are down again, another 5%, but the pattern is not uniform. A few cities, Washington DC and San Francisco and San Diego, are above their recent lows.
The Case Shiller San Francisco designation includes Alameda, Contra Costa, Marin, San Mateo and San Francisco. So, for those of us interested in the San Francisco markets you should be aware that this is hardly clean data. Never the Less, we have fared better than many other cities. We have outperformed, along with San Diego and DC and are #3 of 20 in the month over month home price category.
Relative Strength
In bad markets, perspective is how well you did relative to your peers. Losing less in a bad market is an indicator of a strong(er) market. S&P also ranks cities by two other categories and here San Francisco also stands out as a more solid investment. San Francisco ranks 9 of 20 in both year over year and the since 2000 price category. Given that we are arguably the highest priced market in the country coming in just under the halfway mark is somewhat encouraging. In fact San Francisco, it seems to bucks the truism that the higher you go the harder you fall.
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Mortgage Bankers Weekly Survey: Mortgage Refinance Applications Increase

Mortgage Bankers Association for the week of 5/18/2010

Fixed rate mortgages continue to decline this week, with the 30-year loan averaging 4.61% its lowest average this year. The MBAA reports their  Market Composite Index: (loan application volume) increased 7.8 percent. 

heir Refinance Index:  increased 13.2 percent from the previous week and is at its highest level since the week ending December 10, 2010. Rates continue to decline and people are taking advantage of low rates.
However, this isnt helping sell homes.  Mortgage applications increased 7.8 percent from one week earlier, according to data from the Mortgage Bankers Associations Weekly Mortgage The MBAA reports their  Purchase Index:  increased 1.1 percent compared with the previous week and was 36.9 percent lower than the same week one year ago. However Refinance Index did increase by 3% to 66.7%

Although low rates are not translating into many home sales, I do think these refis are helping people fix their personal balance sheets and hopefully, this is keeping some people out of the foreclosure cycle

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Mortgage Bankers Association for the week of 5/04/2010

Market Composite Index: (loan application volume) decreased 5.6 percent from one week earlier

Refinance Index: increased 6.0 percent from the previous week

Purchase Index: increased 1.1 percent compared with the previous week and was 36.9 percent lower than the same week one year ago.

Refinance Share of Mortgage Activity:
increased to 62.7 percent of total applications from 61.6 percent the previous week.

MBA outlook:

The MBAA expects rate to rise this year, largely due to the Fed announcement that they will begin to back away from their mortgage buyback program, allowing the markets to begin to price the cost of loans. This is a hit to affordability and will likely impact sales a bit.

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Freddie Mac Weekly Update: 30-year Fixed-Rate Mortgage Matches Yearly Low of 4.71%

30-year fixed-rate mortgage:
averaged 4.78 percent with an averaged 4.71 percent with an average 0.7 point for the week ending May 5, 2011, down from last week when it averaged 4.78 percent. Last year at this time, the 30-year FRM averaged 5.00 percent. .

The 15-year fixed-rate mortgage: this week averaged 3.89 percent with an average 0.7 point, down from last week when it averaged 3.97 percent. A year ago at this time, the 15-year FRM averaged 4.36 percent.

Five-year indexed hybrid adjustable-rate mortgages ARMs: averaged 3.47 percent this week, with an average 0.6 point, down from last week when it averaged 3.51 percent. A year ago, the 5-year ARM averaged 3.97 percent .

One-year Treasury-indexed ARMs: averaged 3.14 percent this week with an average 0.5 point, down from last week when it averaged 3.15 percent. At this time last year, the 1-year ARM averaged 4.07 percent.

Freddie Sayz
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac

Weaker economic data reports reduced Treasury bond yields and allowed mortgage rates to drift lower for the third consecutive week. For instance, real economic growth in the first quarter fell short of the market consensus forecast and represented the slowest pace since the second quarter of 2010. In addition, both the manufacturing and service sectors exhibited growth at a slower rate in April.

Data reports on the housing market, on the other hand, were a little more uplifting. The National Association of Realtors reported pending home sales rose in March for the second month in a row to the highest index reading since November 2010. Also, the Federal Reserve reported credit standards among commercial banks for prime mortgages were unchanged on net in the second quarter of the year, following two quarters of tightening

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