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San Francisco Has the Nation’s Fewest Delinquent Mortgage Holders

  • The U.S. mortgage-delinquency rate dipped to 4.3 percent in March, the lowest since March 2007.
  • In the San Francisco metropolitan area, 1.5 percent of homeowners are delinquent on their mortgages, the fewest of any large U.S. housing market.
  • Mortgage delinquencies rose in the Santa Rosa and Napa metro areas from one year earlier, likely a result of October’s wildfires.

Contemporary homes in San FranciscoA thriving economy and rising home equity have helped pushed mortgage delinquencies to the lowest point since before the Great Recession, with San Francisco claiming the best late-payment rate of any large U.S. city.

That’s according to CoreLogic’s latest Loan Performance Insights report, which says that 4.3 percent of Americans with a mortgage were delinquent on their payments by more than 30 days as of March, the lowest number in 11 years. Mortgage delinquencies decreased in 47 states from one year earlier — including in California, where they dropped to 2.5 percent.

In a statement accompanying the report, CoreLogic Chief Economist Frank Nothaft pointed to the U.S. unemployment rate, which fell to an 18-year low of 3.8 percent in May, as helping most Americans avoid mortgage delinquency. He also said that rising home equity plays a factor in the trend, with the average mortgage holder gaining $16,300 in equity between March 2017 and March 2018.

Of the 10 largest core-based statistical areas in the country, San Francisco — which includes Marin, San Mateo, Alameda, and Contra Costa counties — boasts the nation’s lowest mortgage-delinquency rate, at 1.5 percent. Mortgage delinquencies are even more scarce in San Jose-Sunnyvale-Santa Clara, where just 1.1 percent of homeowners are more than 30 days late on their payments. The number of delinquent mortgages declined year over year in both areas.

By contrast, mortgage delinquencies rose from March 2017 in the Santa Rosa and Napa metro areas, to a respective 2.1 percent and 2.2 percent. This is likely due to the devastating October wildfires, with CoreLogic CEO and President Frank Martell referencing last year’s natural disasters as a factors affecting current mortgage-default rates.

California and the Bay Area serve as prime examples of the two trends that Nothaft referenced as helping fewer Americans to be tardy on their mortgage payments. The state’s unemployment rate fell to a record-low 4.2 percent in April, with jobless claims in San Francisco and San Mateo counties dropping to 2.1 percent. And according to a separate recently released CoreLogic report, Golden State homeowners gained an average of $51,000 in equity between the first quarter of 2017 and the first quarter of 2018, the most in the country.

(Photo: iStock/canbalci)

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Residents Are Overwhelmingly Happy With Their Homeowner Associations, Survey Finds

  • More than eight in 10 residents who pay homeowner association dues describe themselves as satisfied with their living situations.
  • Ninety percent of those who live in communities governed by an HOA believe that the guidelines protect or at least do not detract from their property’s value.
  • Residents say that living in a clean and attractive community is the top benefit of paying HOA dues.

Monthly homeowner association dues can be quite an expensive proposition at luxury buildings in cities like San Francisco, but most people who pay them are pleased with the services they receive.

That’s according to survey results from the Community Associations Institute, which found that 85 percent of Americans who live in buildings governed by HOAs say that they are satisfied in their communities. Sixty-three percent of residents rate their experience with their HOA as positive, while 22 percent are neutral on the subject.

Similarly, 81 percent of respondents said that they were on good terms with members of their HOA, and an identical number cited positive experiences when making personal contact with community managers. Eighty-four percent of residents believe that their HOAs absolutely or mostly have residents’ best interests in mind when making decisions.

An even larger number of those who live in HOA-governed buildings — 90 percent — believe that the rules enhance their property’s value, or at least do not negatively affect it. Just 4 percent of those surveyed believe that HOA guidelines harm their units’ value.

Because most residents who pay HOA dues perceive them as an investment in their long-term financial future, they are adamant that all residents chip in for the good of the community. Similar to past years’ surveys, nearly three-quarters say that they insist that their neighbors pay their dues with sufficient notice (including involving attorneys if necessary), compared with just 10 percent who would cut services or amenities for everyone.

So what do Americans like most about living in buildings governed by HOAs? Residing in a clean, attractive community is the top reason, cited by one-fifth of those surveyed, while 18 percent point to safety and not having to perform maintenance chores themselves.

If you are thinking about shopping for a condominium that charges HOA dues, check out Pacific Union’s primer on the subject, “Demystifying Homeowner Associations.”

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Bay Area Cities Rank as Best in the World for Future Momentum

  • Half of the world’s top 30 cities that are best prepared for the future are in North America.
  • San Francisco and Silicon Valley rank a respective No. 1 and No. 2 on the list of “future-proofed” metropolitan areas.
  • Los Angeles and San Diego also rank among the world’s top 10 future-proofed cities.

The Bay Area’s real estate market and high-performance economy are currently running at full steam and appear poised to carry that momentum over the long term.

Jones Lang LaSalle’s fifth annual City Momentum Index ranks 131 global cities based on potential for long-term socio-economic and commercial real estate market success, a term it calls “future-proofing.” Factors used to gauge a metropolitan area’s chance for future momentum include innovation capacity, quality of universities and colleges, number of startups, and public infrastructure and environment quality.

North America accounts for half of the world’s top 30 future-proofed metro areas. Six of the top 10 future-proofed cities are in the U.S., and four of those are in California.

San Francisco takes the top spot on the rankings, followed by Silicon Valley at No. 2, both due largely to the Bay Area’s global position as a technology powerhouse. Those two Bay Area regions have the planet’s largest number of startups and have also created the most tech unicorns — private startups valued at more than $1 billion — over the past 15 years.

In Southern California, Los Angeles and San Diego rank a respective No. 6 and No. 10 on the future-proofed cities list. Jones Lang LaSalle points to Southern California’s excellent higher-education institutions, which produce plenty of highly skilled technology workers. Both cities employ more computer and mathematics workers than any other job market on the West Coast, and both rank in the top five for the most international patent applications.

So why is future-proofing an important measure of a real estate market’s potential to thrive? Investors use the metric to determine whether technology innovations will result in a market’s ability to hold its value and appreciate over time. For developers, the concept of future-proofing allows for understanding a city’s capacity for economic growth, thereby allowing them to plan and build sustainable communities.

(Photo: iStock/Skyhobo)

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Oakland Ranks as One of America’s Top Five Booming Housing Markets

  • More than one-quarter of the country’s 25 fastest-rising real estate markets are in the Bay Area.
  • Oakland ranks No. 5 on the list, boosted by rising home values and incomes.
  • According to MLS data, the median sales price for a single-family home in Oakland reached $825,000 in April, the highest in two years.

The Oakland skyline and Lake MerrittDuring the current housing cycle, Oakland has become a hot spot for Bay Area homebuyers who are priced out of San Francisco, so it’s hardly surprising that a new study ranks the city as one America’s fastest-rising real estate markets.

An analysis from SmartAsset determines the country’s top 25 rising housing markets on a 100-point scale based on housing demand, change in home values, and change in incomes between 2012 and 2016. More than one-quarter of those booming housing markets are in the Bay Area, with East Bay cities making a strong showing.

Based on the criteria above, Oakland ties for No. 5 on the list of the country’s top rising real estate markets, with a score of 92.70. Since 2012, home values in Oakland have appreciated by 11.27 percent, while median incomes have risen by 11.79 percent. The number of new residents in Oakland has also outpaced the number of new housing units by more than 6 percent.

Oakland’s rising home prices and exceptionally low inventory reflect intense homebuyer demand in the city. According to MLS data, Oakland’s median single-family home sales price reached $825,000 in April, the highest in at least two years and up by 9.3 percent year over year. There was a 1.2-month supply of homes for sale in April, meaning that the market leans heavily in favor sellers. Bidding wars remain common, with Oakland homes selling for an average of 117 percent of original price last month.

Oakland’s Alameda County neighbors Hayward and Fremont also make the list, ranking a respective No. 13 and No. 14. With a 90.68, Hayward saw home values increase by more than 20 percent, while Fremont scores a 90.46 based on double-digit percent home value and income gains. Elsewhere in the East Bay, Contra Costa County‘s Concord comes in at No. 21, notching an 85.19.

San Francisco and San Mateo round out the Bay Area’s presence on the fastest-rising housing markets list, both tied with Portland, Oregon at 23rd and scoring an 84.85. Income growth was particularly strong in San Francisco at 18.83 percent, the second-highest gain of any city included on SmartAsset’s list.

(Photo: iStock/DianeBentleyRaymond)

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Labor Shortages, Materials Costs Increases to Drive Up Home-Remodeling Costs

  • A recent survey found that remodeling firms expect labor shortages to worsen this year, while worker and materials costs will increase.
  • More than nine in 10 remodeling businesses report a shortage of carpenters.
  • About 70 percent of home-improvement companies will pass increased labor and materials costs on to customers.

While most American homeowners and prospective buyers probably do not ponder the construction sector on a regular basis, current trends in that industry could affect their wallets in the coming months.

Houzz’s new State of the Industry 2018 report, which coincides with National Home Improvement Month, found that respondents from all seven construction and remodeling subsectors it tracks expect the availability of skilled workers to tighten this year. General contractors, designers, and builders are projected to be the most in-demand types of workers, with about half of those polled expecting the labor market to get tighter.

All seven subsectors also project that labor costs will increase, again led by general contractors (56 percent) and designers and builders (57 percent). About half of architects and specialty renovators and landscapers think that the aforementioned lack of skilled workers will cause job costs to rise in 2018.

That trend again persists when it comes to the cost of remodeling and building materials, which are expected to increase across the board. The number of remodeling professionals who believe that materials costs will be higher this year than last ranges from 60 percent of general contractors to 47 percent of landscaping firms.

Houzz’s survey dovetails with research published earlier this week by the National Association of Home Builders, in which more than 90 percent of home renovators reported a shortage of carpenters, with about half calling the situation serious. Other types of remodeling professionals that are in the highest demand include framers, bricklayers, drywall installers, and concrete workers.

About three-quarters of remodeling businesses told NAHB that a lack of skilled workers is leading them to pay higher wages. The impact on homeowners is nearly the same, with 71 percent of firms reporting that they pass their increased costs along to clients.

Bay Area homeowners who are considering a home-improvement project should check out Remodeling’s 2018 Cost Versus Value report, which estimates average costs for 21 popular jobs in 149 U.S. metropolitan areas, including San Francisco, San Jose, and Santa Rosa. The report also offers information on home-renovation returns, which are particularly sunny in Silicon Valley, with 18 of the 21 tracked jobs expected to turn a profit this year.

(Photo: iStock/Worawee Meeepian)

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