Join the Bay Area Real Estate Newsletter mailing list

Email:

Bay Area Real Estate Sales.com Newsletter

October 2004

 

View the newsletter archives

In this Issue:

 

The Bay Area Housing Bubble

Marin House Sales Statistics - As of 10/5/04

Do I have a mold problem in my home?

NAR: Housing Market to Coast From Record Highs

 

 

The Bay Area Housing Bubble

By Liz McCarthy

 

Being a Realtor, I am asked all the time, "Is the bay area real estate bubble going to burst?"  Now of course, if I had a crystal ball, I'd be able to give you a definite answer, but all I can do is give you my opinion.  If we were to believe the newspaper headlines and other stories, the bubble has been about to burst for the last two years, but instead the market has continued to increase.

 

What actually does the bubble-bursting mean?  When most people think of the bubble bursting, they tend to think of the dot-com era where one-time millionaires now owned worthless pieces of stock.  If our housing bubble burst, would it mean that house prices are going to tumble 80% of their value?  This doesn't seem at all likely.  The most pessimistic economists have predicted the worst case scenarios with prices dropping off 15-20%; however, most industry experts believe prices will simply level off.

 

My main thought is this:  You shouldn't worry about whether the price is going to go up or down when you buy your own house, because, fundamentally, you need a place to live.  Unknown events may indeed soften prices (rising interest rates, politics, etc) in the short term, but if you can withstand that short term price fluctuation, I feel prices are inevitably going to go back up due to basic economics.

 

Standard supply and demand economics dictate that if there is a shortage of supply, prices will continue to rise over the long term even if there are stair-step fluctuations in the short-term. There is still a shortage of affordable houses in both Marin and San Francisco counties as there is very little room to build new homes and both places continue to be extremely desirable places to live. Population growth for the last decade has outgrown the current supply of housing, so even if the population growth were to come to a sudden halt (which seems unlikely), there is a huge amount of pent-up demand.

 

According to the California Association of REALTORS, the median sales prices of homes in California over the last 35 years have only decreased seven times (6 times under 3.5% and one time 4.5%).  On the other hand, since 1968 the median sales price has increase 1,200%!

 

Does this mean that if you buy a house today are you guaranteed that it will go up next year?  No, there is no guarantee, it's probably natural that the market will level off in the near future, but for the long-haul history has shown, real estate is still one of the best investments to be had.

 

So in closing, if you need to buy a home to live in, find a house that fits most of your criteria and plan to live in it for 2-5 years.  Even if you have to pay a bit more than you would have liked, remember that you are in it for the long-haul.

 

Back to top

 

Marin House Sales Statistics - As of 10/5/04

 

 

 

 

*Over 35% in contract is usually indicative of a sellers' market.

*Under 25% in contract is usually indicative of a buyers' market.

Between 25% and 35% is usually indicative of a balanced market.

 

 

Back to top

 

 

Do I have a mold problem in my home?

 

Liz McCarthy recently interviewed Tony Eldon, Mold Specialist and House Inspector from Bay Area Property Inspections.

Tony, there have been a lot of frightening headlines lately about mold in homes.  What are your thoughts on household mold?

There are over 100,000 species of mold on planet Earth, and dozens that are routinely found in every home regardless of how clean the home is. Mold is a completely normal part of the planet's ecosystem, it's always in the outdoor environment, and it's always present to some extent indoors as well. It's totally normal.

Who should worry about having their home tested for mold?

The most current medical research shows that there is no such thing as "toxic" mold that can cause death or permanent neurological problems, but some molds are very potent allergens. Therefore, anyone who has respiratory problems such as sinus allergies or asthma is likely to be more affected by mold than the rest of us and should consider having their home tested. Also, mold may cause symptoms or infections in individuals with a compromised immune system such as someone with HIV/AIDS, or an individual who is taking immunosuppressive medication, so those individuals also should consider having their homes tested for airborne mold.

Do all homes have mold?

Yes

How often should a home be tested?

If there have been leaks, or there is standing water under the home, or the home smells musty and the occupants are experiencing discomfort.

How can mold be removed?

Mold absolutely needs water to grow. Therefore, the first key is to remove the source of the water such as fixing all leaks, installing proper landscape drainage, installing fans in bathrooms, and so forth. Surface mold such as the typical black specks that we all have on our aluminum window frames can be wiped off with damp paper towels (or sprayed lightly with water and then wiped off). The typical gray mildew spots that we all get on our walls and bathroom tile can be easily cleaned off with light detergent and water. However, if there are large expanses of wet sheetrock, and the house has had leaks, and there are musty odors, then sections of walls or floors or ceilings may have to be removed and replaced. I'd caution people to have different companies perform the testing and the cleanup, however, to assure that they are obtaining accurate guidance.

If you would like to make an appointment to have Tony Eldon of Bay Area Property Inspections inspect your home,  please contact Tony at:  tony@bayprop.net or 415-479-7339

Back to top

 

 

NAR: Housing Market to Coast From Record Highs

(October 5, 2004) --   After setting unprecedented highs this year, home sales should ease but remain historically strong, according to the National Association of REALTORS®.

Existing-home sales are projected to easily set a record of about 6.49 million* in 2004, well above the previous record of 6.10 million last year. New-home sales also will hit a record with 1.15 million, compared with 1.09 million in 2003.

David Lereah, NAR's chief economist, said month-to-month existing-home sales should not experience significant shifts. "In the first quarter of 2005, the trend will be a gradual ease in the sales pace with the housing market coasting at historically high levels as mortgage interest rates rise," he said. "At this point - with strong market fundamentals - we project next year will be the second-best overall year for the housing market."

Housing starts are forecast at 1.94 million in 2004, compared with 1.85 million last year. Similar to the sales market, housing construction is seen to ease in 2005.

Lereah expects the 30-year fixed-rate mortgage to rise to 6.3 percent in the first quarter of 2005, after averaging 5.9 percent this year. "Even with a modest rise in mortgage interest rates, we still have to go back to the mid 1960s to see comparable rates," he said.

The national median existing-home price is projected to grow by 7.0 percent this year to $181,800, while the median new-home price should increase 9.0 percent to $212,500. Price appreciation is expected to slow in 2005, but remain above historic norms with appreciation greater than 5 percent.

NAR forecasts the U.S. gross domestic product to grow 4.5 percent this year, and the Consumer Price Index should rise by 2.6 percent. The unemployment rate is expected to drop to 5.0 percent during the first quarter of 2005.

Inflation-adjusted disposable personal income is forecast to rise 3.0 percent in 2004, while the consumer confidence index should improve to 104 in the first quarter of next year.

More detailed information about NAR's economic outlook, as well as other analysis of real estate industry statistics, can be found in the October issue of NAR's Real Estate Outlook: Market Trends and Insights. The publication may be purchased by calling 800/874-6500.

NAR

 

 

FREE...You can search for Marin listings directly on BayAreaRealEstateSales.com: Search for Homes

 

If you are thinking of selling your home, I would be more than happy to give you a free home evaluation report. I also create property specific websites for all of my listings: visit: www.417Greenfield.com for an example

 

Be sure to check out all the other great content & features of my website: www.BayAreaRealEstateSales.com

View the newsletter archives

 

The Bay Area Real Estate Newsletter is provided to you by:

Liz McCarthy

Real Estate Broker, e-PRO certified

Liz@BayAreaRealEstateSales.com

415-250-4929 (office)

415-250-4929 (cell)

60 Belvedere Drive

Mill Valley, CA 94941