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Homebuyers Are Willing to Make Big Sacrifices for Top Schools

  • About 75 percent of homebuyers said that access to excellent schools was important in their search.
  • Nearly 80 percent of buyers gave up some home features to land in their preferred school district, with about one in five sacrificing a garage.
  • Palo Alto is home to the top-ranked school district and high school in California this year and also claims America’s best college.

Four elementary school childrenPurchasing a home in a good school district has always been a high priority for buyers who have or want children, and recent survey results show just how much a neighborhood’s educational pedigree matters.

Nearly three-quarters of successful homebuyers said that the quality of the school district was either important or very important in their purchasing decision, according to a realtor.com poll and an accompanying analysis by company Chief Economist Danielle Hale. About the same amount — 78 percent — sacrificed some features to score a home in their desired school district.

Although a separate survey conducted by realtor.com earlier this year found that a garage was the No. 1 home amenity, 19 percent of buyers gave up that essential to gain access to an excellent school district. Eighteen percent sacrificed a large backyard, 17 percent gave up an updated kitchen and additional bedrooms, and 16 percent were willing to forgo an outdoor living space.

So what criteria defines a good school in the eyes of homebuyers? For 59 percent, test scores are the most important thing to look for. Next on the list are accelerated curriculums (53 percent) and music programs (49 percent).

The analysis also examined the most popular schools in every state based on 2018 search data from realtor.com. In California, the most searched elementary school is Cordelia Hills Elementary Hills in the Solano County city of Fairfield. For high schools, buyers are performing the most searches for Clovis North High School, located on the outskirts of Fresno.

Excellent educational opportunities are one of the reasons that Silicon Valley remains such a sought-after — and expensive — destination for California homebuyers. Earlier this year, Niche.com ranked school districts in Palo Alto, Los Gatos, Saratoga, and Mountain View as the best in California. Palo Alto’s Henry M. Gunn High School ranks No. 1 in the Golden State, while Stanford University is at the head of the class on Niche.com’s 2018 list of America’s best colleges.

But buyers who are intent on providing their children with a top-tier Palo Alto education will need to dig deep to pull it off. According to MLS data, the median price for a single-family home in the Santa Clara County city in the second quarter was $3.2 million, a year-over-year gain of 21 percent.

(Photo: iStock/miljko)

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Bay Area Housing Inventory Further Tightens in November

  • The median sales price for a single-family home in the nine-county Bay Area increased by 12.5 percent year over year in November to $910,350.
  • Home prices rose from November of last year in all nine Bay Area counties, with six seeing double-digit percentage point appreciation.
  • Seven Bay Area counties have the state’s most severe inventory shortages, with less than two months of supply.

Stubbornly low supply conditions did not improve in California or the Bay Area on an annual basis in November, pushing prices up by double-digit percentage points in six local counties.

The latest home sales report from the California Association of Realtors says that the state median sales price for a single-family home was $546,820, up 8.8 percent from November 2016 for the largest annual gain in nearly two years. Home prices increased in 45 of 51 counties for which CAR tracks data, with double-digit percent gains recorded in 23 counties.

The nine-county Bay Area led the state’s major regions for annual appreciation, with the median sales price climbing by 12.5 percent from November 2016 to reach $910,350. Home prices appreciated year over year in every local county, with six recording double-digit percent gains: Santa Clara (27.0 percent), San Mateo (22.1 percent), Marin (17.1 percent), Sonoma (13.3 percent), San Francisco (10.3 percent), and Alameda (10.0 percent).

Like last November, four of those counties were California’s only seven-digit housing markets. San Francisco was the state’s most expensive county, with a median sales price of $1,500,000, followed by San Mateo ($1,486,000), Santa Clara ($1,282,500), and Marin ($1,230,000) counties.

In what has become an all-too-familiar refrain, a pronounced lack of homes on the market fueled the price growth statewide and locally. California’s months’ supply of inventory dropped to 2.9 in November, down on both a monthly and yearly basis. The nine county Bay Area’s MSI ended the month at 1.5, also down from October and November 2016.

Supply declined year over year in eight of nine counties, with conditions in Solano County unchanged. San Francisco has the state’s most severe inventory shortage, with a 1.1-month supply, while Santa Clara, San Mateo, Alameda, Marin, Contra Costa, and Sonoma counties all have less than two months of supply. Overall, there were 17 percent fewer Bay Area listings than at the same time last year, with Santa Clara County seeing a substantial 36 percent drop.

CAR President Steve White expressed concern about the state’s deteriorating affordability conditions, pointing to particularly slim supply levels at lower price points. Senior Vice President and Chief Economist Leslie Appleton-Young echoed his sentiments, referencing the Federal Reserve’s decision to raise interest rates last week and more expected hikes in 2018.

“As rates rise, the cost of homeownership will go up, and housing affordability will further deteriorate if the trend continues,” she said.

(Photo: iStock/ChuckSchugPhotography)

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Home Prices Rise in More Than 90 Percent of California Counties in October

  • The median sales price rose year over year in October in 47 of 51 California counties for which data is available.
  • For the second straight month, home prices rose by double-digit percentage points on an annual basis in the nine-county Bay Area — up 11.1 percent to $892,790.
  • San Francisco again overtook San Mateo County as the state’s most expensive housing market, with a median sales price of nearly $1.6 million.

Home Prices Rise in More Than 90 Percent of California Counties in OctoberAn insufficient supply of homes to meet buyer demand pushed up home prices in most California real estate markets in October, with the nine-county Bay Area posting its second straight month of double-digit percent annual gains.

That’s according to the California Association of Realtors most recent home sales and price report, which puts the median price for a single-family home in the state at $546,430 in October, up 6.1 percent on an annual basis. Home prices rose year over year in 47 of the 51 counties for which CAR tracks data.

“While October’s year-to-year price gain was the lowest in five months, we’re still seeing solid price increases, especially in the San Francisco Bay Area. In fact, 20 of the tracked counties recorded strong double-digit, annual price gains,” CAR Senior Vice President and Chief Economist Leslie-Appleton-Young said in a statement accompanying the report.

As in September, the Bay Area’s price appreciation outpaced the state rate, rising by 11.1 percent from October 2016 to $892,790. Five Bay Area counties were among the 20 in California to post double-digit percent price gains: Santa Clara (18.3 percent), Contra Costa (14.8 percent), San Francisco (13.3 percent), San Mateo (12.8 percent), and Alameda (11.3 percent).

Like last October, San Francisco was the state’s most expensive county, with a median sales price of $1,594,000. California’s three other million-dollar-plus counties are located in the Bay Area: San Mateo ($1,522,500), Marin ($1,252,500), and Santa Clara ($1,242,500).

In what has become an all-too-familiar pattern, a lack of inventory is behind the statewide and regional price gains. California’s monthly supply of inventory dipped to 3.0 in October, down on both a monthly and regional basis. As they have every month so far in 2017, active listings declined by double-digit percentage points on an annual basis, falling by 11.5 percent.

The Bay Area continues to suffer from the state’s most pronounced housing shortage, with the months’ supply of inventory falling to 1.9. Santa Clara, Alameda, San Francisco, and San Mateo counties had California’s tightest supply conditions, all with less than a two-month supply of inventory.

The lack of properties on the market also caused the pace of sales to quicken substantially from a year ago, with the average California home finding a buyer in 21 days. Buyers in the Bay Area’s largest job centers needed to act even faster than that to close a sale, with homes in Santa Clara, San Mateo, Alameda, and San Francisco counties selling in an average of two weeks or less.

(Image: iStock/gguy44)

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Home Prices Rise in More Than 90 Percent of California Counties in October

  • The median sales price rose year over year in October in 47 of 51 California counties for which data is available.
  • For the second straight month, home prices rose by double-digit percentage points on an annual basis in the nine-county Bay Area — up 11.1 percent to $892,790.
  • San Francisco again overtook San Mateo County as the state’s most expensive housing market, with a median sales price of nearly $1.6 million.

An insufficient supply of homes to meet buyer demand pushed up annual home prices in most California real estate markets in October, with the nine-county Bay Area posting its second straight month of double-digit percent annual gains.

That’s according to the California Association of Realtors most recent home sales and price report, which puts the median price for a single-family home in the state at $546,430 in October, up 6.1 percent on an annual basis. Home prices rose year over year in 47 of the 51 counties for which CAR tracks data.

“While October’s year-to-year price gain was the lowest in five months, we’re still seeing solid price increases, especially in the San Francisco Bay Area. In fact, 20 of the tracked counties recorded strong double-digit, annual price gains,” CAR Senior Vice President and Chief Economist Leslie-Appleton-Young said in a statement accompanying the report.

As in September, the Bay Area’s price appreciation outpaced the state rate, rising by 11.1 percent from October 2016 to $892,790. Five Bay Area counties were among the 20 in California to post double-digit percent price gains: Santa Clara (18.3 percent), Contra Costa (14.8 percent), San Francisco (13.3 percent), San Mateo (12.8 percent), and Alameda (11.3 percent).

Like last October, San Francisco was the state’s most expensive county, with a median sales price of $1,594,000. California’s three other million-dollar-plus counties are located in the Bay Area: San Mateo ($1,522,500), Marin ($1,252,500), and Santa Clara ($1,242,500).

In what has become an all-too-familiar pattern, a lack of inventory is behind the statewide and regional price gains. California’s monthly supply of inventory dipped to 3.0 in October, down on both a monthly and regional basis. As they have every month so far in 2017, active listings declined by double-digit percentage points on an annual basis, falling by 11.5 percent.

The Bay Area continues to suffer from the state’s most pronounced housing shortage, with the months’ supply of inventory falling to 1.9. Santa Clara, Alameda, San Francisco, and San Mateo counties had California’s tightest supply conditions, all with less than a two-month supply of inventory.

The lack of properties on the market also caused the pace of sales to quicken substantially from a year ago, with the average California home finding a buyer in 21 days. Buyers in the Bay Area’s largest job centers needed to act even faster than that to close a sale, with homes in Santa Clara, San Mateo, Alameda, and San Francisco counties selling in an average of two weeks or less.

(Image: iStock/gguy44)

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California Housing Affordability Falls to Decade Low in Third Quarter

  • Twenty-eight percent of California households earned the minimum annual income needed to purchase the median-priced $555,860 single-family home in the third quarter.
  • Affordability improved by 1 percent to 2 percent from the second quarter in six Bay Area counties.
  • San Francisco remains the state’s least-affordable county, with 13 percent of households able to afford the median-priced home.

California Housing Affordability Falls to Decade Low in Third QuarterInventory shortages continue to drive up Golden State home prices, further reducing the number of households that can afford to purchase a home. Here in the Bay Area, affordability improved slightly from the second quarter, though four local counties have the most difficult conditions in the state.

The California Association of Realtors’ latest Housing Affordability Index says that 28 percent of households could afford to purchase the median-priced $555,860 single-family home in the third quarter, down on both a quarterly and annual basis and the lowest in 10 years. Affordability has now dropped to half of its peak level of 56 percent, set in the first quarter of 2012.

The average California household needs to earn $112,100 per year to afford the median-priced home, more than double the U.S. minimum qualifying income of $51,240. That translates to a monthly payment of $2,800, assuming a 20 percent down payment and a 30-year, fixed-rate mortgage with an effective composite interest rate of 4.16 percent.

In the nine-county Bay Area, 23 percent of households could afford to buy the median-priced $860,000 home, up from 21 percent in the second quarter but down from 27 percent in the third quarter of 2016. Bay Area homebuyers require annual incomes of $173,500, which means a monthly mortgage payment of $4,340.

Six Bay Area counties were among the 15 in the state to see affordability improve from the second quarter — albeit slightly. Affordability increased by 1 percentage point in Alameda, Marin, Napa, San Francisco, and San Mateo counties and was up by 2 percent in Contra Costa County. The number of households who could afford to purchase a home declined by 1 percent in Solano County and was flat in Santa Clara and Sonoma counties.

CAR notes that the slight affordability improvements in San Francisco and Marin counties were due to home prices that cooled by about $80,000. Still, San Francisco remains California’s least-affordable county for buyers, with just 13 percent of households able to purchase the median-priced $1,370,000 home. Buying a home in San Francisco requires a minimum yearly income of $276,380 to make the monthly mortgage payment of more than $6,900.

The 15 percent of San Mateo County households that can afford to purchase the median-priced $1,441,250 home face the largest monthly mortgage payments in California: $7,270. Santa Clara and Marin were also among the state’s five least-affordable counties, with a respective 17 percent and 18 percent of households able to quality for a mortgage.

On a national level, the San Francisco metropolitan area ended its nearly five-year run as the nation’s least-affordable housing market in the third quarter, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index. Los Angeles now owns the dubious title of the least-affordable U.S. housing market, with 9.1 percent of households able to qualify for a mortgage on the median income.

(Photo: iStock/Yuri_Arcurs)

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California Housing Affordability Falls to Decade Low in Third Quarter

  • Twenty-eight percent of California households earned the minimum annual income needed to purchase the median-priced $555,860 single-family home in the third quarter.
  • Affordability improved by 1 percent to 2 percent from the second quarter in six Bay Area counties.
  • San Francisco remains the state’s least-affordable county, with 13 percent of households able to afford the median-priced home.

Inventory shortages continue to drive up Golden State home prices, further reducing the number of households that can afford to purchase a home. Here in the Bay Area, affordability improved slightly from the second quarter, though four local counties have the most difficult conditions in the state.

The California Association of Realtors’ latest Housing Affordability Index says that 28 percent of households could afford to purchase the median-priced $555,860 single-family home in the third quarter, down on both a quarterly and annual basis and the lowest in 10 years. Affordability has now dropped to half of its peak level of 56 percent, set in the first quarter of 2012.

The average California household needs to earn $112,100 per year to afford the median-priced home, more than double the U.S. minimum qualifying income of $51,240. That translates to a monthly payment of $2,800, assuming a 20 percent down payment and a 30-year, fixed-rate mortgage with an effective composite interest rate of 4.16 percent.

In the nine-county Bay Area, 23 percent of households could afford to buy the median-priced $860,000 home, up from 21 percent in the second quarter but down from 27 percent in the third quarter of 2016. Bay Area homebuyers require annual incomes of $173,500, which means a monthly mortgage payment of $4,340.

Six Bay Area counties were among the 15 in the state to see affordability improve from the second quarter — albeit slightly. Affordability increased by 1 percentage point in Alameda, Marin, Napa, San Francisco, and San Mateo counties and was up by 2 percent in Contra Costa County. The number of households who could afford to purchase a home declined by 1 percent in Solano County and was flat in Santa Clara and Sonoma counties.

CAR notes that the slight affordability improvements in San Francisco and Marin counties were due to home prices that cooled by about $80,000. Still, San Francisco remains California’s least-affordable county for buyers, with just 13 percent of households able to purchase the median-priced $1,370,000 home. Buying a home in San Francisco requires a minimum yearly income of $276,380 to make the monthly mortgage payment of more than $6,900.

The 15 percent of San Mateo County households that can afford to purchase the median-priced $1,441,250 home face the largest monthly mortgage payments in California: $7,270. Santa Clara and Marin were also among the state’s five least-affordable counties, with a respective 17 percent and 18 percent of households able to quality for a mortgage.

On a national level, the San Francisco metropolitan area ended its nearly five-year run as the nation’s least-affordable housing market in the third quarter, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index. Los Angeles now owns the dubious title of the least-affordable U.S. housing market, with 9.1 percent of households able to qualify for a mortgage on the median income.

(Photo: iStock/Yuri_Arcurs)

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Bay Area Housing Affordability Improves in the Third Quarter

  • Affordability increased nationwide and in all nine Bay Area counties from the second quarter.
  • San Francisco was the only Bay Area county where annual wage growth outstripped home price gains in the third quarter.
  • Marin County residents must spend more than 100 percent of the average annual wage in order to afford a home.

Some welcome news for Bay Area home shoppers: Affordability increased in every local county in the third quarter. Unfortunately, the region’s home price growth continues to outpace wage growth for the most part.

ATTOM Data Solutions’ latest Housing Affordability Index increased by 2 percent from the second quarter to the third quarter to 100, meaning that U.S. affordability conditions are exactly on par with their historic average. Despite the quarterly improvement recorded in 60 percent of markets analyzed, housing affordability is at its lowest level nine years.

Nationwide, the median sales price ended the third quarter at $249,373, up 6 percent year over year. Wage growth kept pace, also growing by 6 percent, but falling mortgage rates helped to slightly loosen affordability conditions. In a statement accompanying the report, ATTOM Data Solutions’ Senior Vice President Daren Blomquist stressed the need for higher wages in order to keep affordability in check on a long-term basis.

“More sustainable relief for the affordability crunch, however, will need to be some combination of slowing home price appreciation and accelerating wage growth,” he said. “Wage growth is outpacing home price growth in about half of all local markets so far this year, an indication that a more sustainable affordability pattern is taking shape in more local markets.”

Most Bay Area housing markets were not among the 48 percent where annual wage growth was higher than home price appreciation. Alameda, Contra Costa, San Mateo, Santa Clara, Solano, and Sonoma counties all saw home prices grow faster than wages, while price and income increases were even in Marin and Napa counties. Only San Francisco enjoyed an improvement, where prices grew by 6 percent and wages increased by 10 percent.

All nine Bay Area counties saw housing affordability increase from the second quarter, ranging from 19 percent in Marin County to 3 percent in Solano County. Five are still more affordable than their historic norms: Marin, Napa, San Francisco, Santa Clara, and Solano counties.

Even with the quarterly affordability improvement, Bay Area homebuyers must spend substantially more of their annual wages on mortgage payments than the national rate of 37.7 percent. Marin County residents would need to shell out 104.7 percent of their average wages in order to afford a home, the second most in the country. Elsewhere across the Bay Area, the percentage of wages necessary to afford a home ranges from 83 percent in San Francisco to 50.4 percent in Solano County.

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California, Bay Area Inventory Continues to Shrink in August

  • The median sales price for a single-family home in the nine-county Bay Area was $856,200 in August, an annual gain of 10.2 percent.
  • Eight of nine Bay Area counties posted home price gains from one year earlier.
  • Inventory dipped both statewide and in all nine Bay Area counties from August 2016.

The number of homes for sale declined statewide and in every Bay Area county from one year earlier — particularly entry-level properties — keeping prices at a 10-year high.

The latest monthly home sales report from the California Association of Realtors says that the median sales price for a single-family home in the state was $565,330 in August, up 7.2 percent from one year earlier. August marked the sixth straight month that home prices were higher than $500,000 and the third consecutive month that annual gains topped 7 percent. Year-over-year appreciation for the lowest-priced segment of homes was even higher, at 10.7 percent, further complicating matters for first-time buyers trying to get a foot in the door.

“These homes are selling faster than historically and for top dollar, adversely impacting entry-level buyers who are already struggling to afford to buy their very first home,” CAR President Geoff McIntosh said in a statement accompanying the report.

The median sales price in the nine-county Bay Area was $856,200, up by 10.2 percent from August of last year. Eight of nine counties posted annual price gains, ranging from 0.6 percent in Marin County to 17.9 percent in Santa Clara County. Year-over-year appreciation was flat in Solano County.

San Francisco overtook San Mateo County as the state’s most expensive housing market, with a median sales price of $1,380,000. San Francisco buyers also paid the highest premiums in California — 114.8 percent of original price. The state’s three other seven-digit real estate markets are also located in the Bay Area: San Mateo ($1,375,000), Marin ($1,207,120), and Santa Clara ($1,150,000) counties.

The driver behind the price growth will be all-too familiar to anyone who follows California and Bay Area real estate: more willing buyers than available homes. CAR says that active listings dropped by 11.9 percent from last August, while the months’ supply of inventory was 2.9, down on both a monthly and yearly basis. McIntosh noted that the state’s inventory of starter homes is particularly tight.

The months’ supply of inventory also dropped from the previous month and year in the Bay Area, falling to 1.9. The number of homes for sale declined from last August in all nine local counties, with Santa Clara, Alameda, San Francisco, San Mateo, and Contra Costa counties having the state’s most severe shortages.

Homes in the nine-county Bay Area left the market in an average of 15 days, five days fewer than they did in August 2016. Santa Clara County was California’s fastest-paced real estate market last month, with homes selling in an average of 9.5 days.

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