Friday, August 28, 2015

San Francisco County Homeownwership Rate




Chart update 08/24/15
Q2 2015Q1 2015Q2 2014
San Francisco County homeownership57.7%52.5%54.1%

The homeownership rate in the Bay Area tends to vary more wildly than other parts of the state. However, the general trend since the Millennium Boom peak has been down. This decline may have recently reversed its trend, at 57.7% in Q2 2015, up by three-and-a-half percentage points from a year earlier, but time will tell. However, the homeownership rate in San Francisco has not suffered quite as much as the rest of the state during this protracted recovery due to the job support delivered by its successful tech industry. All the same, as the homeownership rate in the rest of the state catches up to pre-recession levels in the coming years, don’t expect San Francisco to follow. Due to the high cost of housing and the allure of city living, renting is often preferred in San Francisco.

If you’re looking for indications of where California’s housing market will be in a couple years, take a look at San Francisco County. Home sales volume is nearly level with the pre-Millennium Boom years and the renter turnover rate is fully recovered. Jobs are also fully recovered, due to the presence of the high-paying tech industry in San Francisco.

View charts  for current activity and forecasts for San Francisco’s housing market. fill out the form below and get this complete report emailed right to your email inbox.



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Thursday, August 27, 2015

Super Bowl 50: Bay Area residents hope to cash in by renting out their homes

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We're still months away from kickoff for Super Bowl 50 in Santa Clara, but the VACANCY signs are already popping up like mushrooms all over the Bay Area.
They are not, however, popping up at hotels, many of which are already sold out.

Joining what has become an annual tradition that gathers more steam each winter, scores of residents of the Bay Area hosting the big game are jumping into the hospitality business, using sites like Airbnb and VRBO.com to rent out their homes, apartments, cottages and spare bedrooms to the football faithful coming to town.

Judging by the prices they're asking, many expect a real gold rush.

"Superbowl 50th 2016 Event House in Santa Clara: $3,000 a nite!"

"Beautiful resort-like Eichler home: entire home/apt 1 guest pay $5830."
"San Jose home for Super Bowl 50: 1500 a nite."

"The surge has already begun," said Riccardo Ulivi with San Francisco-based Airbnb. "We've got more than 7,000 available listings already for Super Bowl weekend and we're seeing a bigger surge in demand here in the Bay Area than we did for the last one in Phoenix. We're currently seeing three-and-a-half times more searches than normal for that weekend" of Feb. 6-8.

Driving the home-hosting frenzy, which Airbnb says began with bookings as early as last January, is that many of the larger hotel properties in San Francisco, where many Super Bowl events will be held, and Santa Clara, home of Levi's Stadium, have already been booked solid. Many of those rooms are controlled early on by the NFL for its owners, guests and teams, with one hotelier complaining that the league uses "an onerous contract" that prevents a hotel from renting out even its unblocked rooms without the NFL's permission. (The league did not respond to a request for comment.)
A check of area hotels shows a dearth of available rooms. Close to the stadium, not only are all of the nearly 800 rooms at the Santa Clara Marriott already sold out for Super Bowl weekend, but a reservations clerk couldn't even quote a hypothetical rate: "They don't give me a room rate," she said, "unless I can sell a room -- and for those dates I can't."

And so into the void rushes an army of wannabe landlords like Reuven Shelef, the 45-year-old head of a management-consulting firm who's renting out his four-bedroom, two-bath home in Sunnyvale for the big event. He became an Airbnb host for the first time a few months back, even though he wasn't crazy about the idea.

"I didn't want to do all the prep work, but my wife was excited about the idea of becoming hosts," he said. "So to get her off my back, I said OK." In a flash, they had their first paying guests, who took the house for three weeks while Shelef and his family took off on vacation.

"For Super Bowl, my plan is to carefully research the market rates for those dates and then list it, start fielding candidates, and then take off Super Bowl weekend for some exotic place," said Shelef. "We'll have to take off, because it'll be too expensive to stay around here that weekend. Maybe Belize, or Costa Rica, or Hawaii to see that erupting volcano."
Isn't he worried about Super Bowl party animals trashing his pad while he's gazing at the very active Kilauea volcano?

"There is a risk, because we might get first-time renters who couldn't care less about how we might review them on Airbnb after their stay," he said. "So we might prepare the house a bit differently this time, leave no valuables or computers like we have in the past. But then again, who's going to pay $1,000 a night for our place and then destroy it?" Signs of the surge's momentum are everywhere. On HomeAway, which caters to owners of second homes and vacation properties, Santa Clara shows 58 listings this week, up from just 19 in April. San Jose jumped from 57 to 115, while Palo Alto's inventory climbed from 43 four months ago to 74 today. Spokesman Adam Annen said this Super Bowl uptick is not surprising.

"Super Bowls draw hundreds of thousands of people to events outside of the actual game," he said about an event that organizers predict will draw one million visitors to the Bay Area. "And all these people simply can't be accommodated by the existing hotel infrastructure. So you have people putting up their homes to take advantage of the demand."

Super Bowl 49 in Glendale, located nine miles outside Phoenix, saw a more than 300-percent price hike above usual rates, according to HomeAway, averaging $850 a night.
In the Glendale/Phoenix area, rates started as low as $617 for the weekend all the way up to the site's most expensive listing of $225,000 for seven nights in a $10 million-valued home. The average weekly rate was around $8,000, a Super Bowl-sized jump from the normal rate of $1,600.
Ian McHenry, co-founder and president of Beyond Pricing, which helps hosts figure out what to charge, said that greed is also part of this annual ritual. "We've seen this cycle over and over again, whether it's a Super Bowl or a Grateful Dead concert or the pope visiting, where all the hotels sell out and then the news stories lead everyone to list their home on these sites," he said. "Suddenly, you have a flood of supply with people asking outrageous amounts like $2,000 a night. People equate a listing with a booking, but it often doesn't turn out that way."

Still, the thought of easy income has proved hard to resist for Paul Arys, a 30-year-old account manager at Fiserv whose Santa Clara home sits across the street from the stadium.
"We started renting out a bedroom in February to pick up some extra income to pay our bills and save for a trip," said Arys. "It's pretty good since you can see a profile of the person who'll be staying in your house. We haven't gotten any ax murderers that we know of."
Asking $2,000 for his room, Arys has already fielded a handful of queries from "people saying, 'If our team makes the Super Bowl, we'd like to rent it for the week.'" And while they wait to rent out the bedroom, Arys and his wife are already thinking ahead: "We'll probably turn our garage into another bedroom we can rent out for Super Bowl," he said. "We're just waiting for permits."
 
HOMEAWAY super bowl 50 listings are up
Santa Clara: 58 listings (up from 19 listings in April)
San Jose: 115 listing (up from 57)
Palo Alto: 74 listings (up from 43)
Oakland: 246 listings (up from 64)
Berkeley: 201 listings (up from 172)
San Francisco: 1,185 listings (flat since April)
Half Moon Bay: 38 listings (flat since April)
Redwood City: 36 listings (up from 18)
Sunnyvale: 38 listings (up from 19)
Mountain View: 36 listings (up from 5)


* Airbnb currently has more than 7,000 available listings in the Bay Area for Super Bowl 50 weekend.
* Some current nightly rates for rentals in Santa Clara on HomeAway: $6,500; $2,500; $2,100; $1,840; $1,860; $1,800; $1,499; $688; and $579.

Source: Airbnb; HomeAway.com, which also owns vacation rental site VRBO
By Patrick May pmay
 

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Wednesday, August 19, 2015

Hayward Residents Says "Leave Our Chickens Alone!"

 
 
HAYWARD -- Stay out of our backyards and leave our chickens alone, a group of residents told city staff at an informal meeting Tuesday.
"Every Hayward neighborhood is full of chickens, and they're not a problem," said Didacus Ramos.

The city's rules for raising hens are so restrictive they effectively ban chickens in most residential neighborhoods. In response to increasing inquiries as the urban farm movement grows, Hayward is considering whether to loosen those regulations.

The city's regulations do not differentiate between larger animals, such as horses, and smaller ones, including chickens; all are classified as livestock.

A stable -- or chicken coop -- must be set back 20 feet from the property line and 40 feet from neighboring homes. But many Hayward backyards are only 20 feet deep.
Chickens are allowed on larger lots in the city's agricultural zones, mostly in the Hayward hills. But a city permit to raise hens is $500, which isn't chicken feed, noted those at the meeting.

"You can require permits, but people are not going to go get them, regardless if it's $500 or $5," Marcy Timberman said.

Ramos and others said the city should drop hen-raising permits altogether. "Having livestock in our backyards, that's our responsibility. I think it's a waste of our money and a waste of your time to issue permits," he said. "The chickens are not a problem; they're not creating a hazard."

Hayward assistant planner Michael Christensen acknowledged many people already are raising hens in the city. "We don't have a lot of properties that have permits, but we have a lot of properties that have chickens. They have had them for years, and we never hear about them," he said.

Most of those at the meeting agreed the ban on roosters should stay. If there are complaints about hens, the city should be able to respond. City planners will discuss revising the ordinance with the Planning Commission and City Council in September. A proposal could come as early as October, Christensen said.

A number of cities allow chickens, including San Leandro, Fremont, Oakland and Berkeley. San Leandro's approval in 2013 came after four years of debate. Some unincorporated areas of Alameda County also allow backyard chickens.

Moraga is considering an ordinance to not only allow chickens, but also let hen owners slaughter their livestock. It is patterned after a similar ordinance in Lafayette.

Some of the 20 or so people at the meeting also asked for the city to lift its ban on bees. Hives only are allowed on lots zoned for agriculture or in some open spaces along the shoreline. "Bees are critical to our survival," said Frank Goulart. Hayward could require beekeepers to register their bees, as Alameda County does, said Rick Hatcher, a beekeeper and member of the Ashland Cherryland Food Policy Council.

"It's the dogs I hear about at our neighborhood association meetings," Goulart said. "Dogs have to be snarling to get a response from the city. And the city is worried about chickens and bees?"

Story courtesy of Rebecca Parr.

 
 
 
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Tuesday, August 18, 2015

Overpriced Bayarea, The Effect on Black Churches.

Priced Out of Bay Area Hometowns, What Effect This Has on Black Churches



Oakland lost more than 50,000 black residents from 1990 to 2010, according to census figures. Richmond lost 8,000, while Antioch gained about 15,000, Oakley 5,000 and Brentwood 3,000.

With the exception of a few predominantly commuter churches such as Beebe Cathedral in Oakland, declining black populations in the inner East Bay have meant fewer people in the pews. Acts Full Gospel Church in East Oakland has seen its membership drop from a high of 7,000 to about 5,500, Bishop Bob Jackson said. "We lost them to Stockton, Sacramento, Antioch, Brentwood," he said. "They just kind of scattered."


Traveling long distances to church is fairly common across racial groups in the Bay Area, but Black-Americans may feel more invested in their home churches even after they leave their hometowns, said James A. Noel, the H. Eugene Farlough Jr. chairman of  Black-American Christianity at San Francisco Theological Seminary. "It's more than just convenience," he said. "It's their understanding of what the church should be involved in. They might not want to live anymore where the church is located, but they want the church to be doing ministry in that locale."

The black churches in the inner East Bay, East Contra Costa and the Central Valley are as intricately linked to each other as they are to the communities they serve. And they are every bit as vulnerable to the roller-coaster housing market as their parishioners. As the housing boom peaked a decade ago, Oakland churches lost members to upstart congregations in Antioch, Oakley and Stockton. When the bubble burst, families who lost their homes to foreclosure started moving back.

"I had little girls coming into the office with tears in their eyes because they had to leave," said the Rev. R. Mario Howell, pastor of Antioch Church Family. Howell's church, which he said consists almost entirely of transplants from San Francisco, Oakland and Richmond, swelled to 400 members on the eve of the 2008 foreclosure crisis. Now membership stands around 250. With the real estate market pushing people eastward once again, pastors in Oakland are bracing for another exodus.

"Every week I hear from people who tell me they're moving to Antioch or Pittsburg," said the Rev. George C.L. Cummings of Imani Community Church. "They say rent is going up and they can't afford Oakland anymore."

Rev. Gerald Agee, senior Pastor at Friendship Christian Center in West Oakland said membership at his church is holding steady for now, but he is promoting the construction of 7,100 new homes in Oakland to help safeguard the city's black community population and its churches. "If we don't do something about the housing shortage, it will affect the churches," he said. "We have to educate people that there is a tsunami en route."

If you would like this story emailed to you in it's entirety, send your request by clicking Here.
Story courtesy of Matthew Atrz.





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Friday, August 14, 2015

Was Irvine House- Flipping Business a Ponzi scheme?



A co-owner of a real estate firm based in Irvine and Long Beach set up a Ponzi scheme to pay off old investors while continuing to recruit new ones for a plan to flip distressed apartment buildings during the Great Recession’s housing collapse, a federal prosecutor told jurors.

However, Michael J. Stewart’s attorney told jurors his client was innocent and he thought his plan was a financially prudent one because homeowners who lost their property in foreclosure would have to turn to renting apartments Tuesday. Defense attorney Kenneth Miller also placed the blame for the company’s failure on co-defendant John Packard.

Packard, who pleaded guilty in November and “is hoping for a lesser sentence,” will testify against his former co-owner of Pacific Property Assets, according to Assistant U.S. Attorney Brett Sagel. Packard is awaiting sentencing.
Ultimately, Stewart and Packard declared bankruptcy in June 2009. The company’s 647 investors lost $91.6 million and the executives owed about $96 million in outstanding principal to banks, according to prosecutors.

In early 2009, during the downturn of the economy, “everybody’s extremely concerned… But defendant Michael Stewart is telling everybody, every potential investor … he has an opportunity for you to make money because his business is thriving,” Sagel said.
Stewart failed to tell his investors his company was failing, Sagel said.
The plan he sold to new investors was to snatch up apartment buildings at “rock bottom prices” and refurbish them to fill the void in housing when evicted homeowners look for a place to live, Sagel said.

“This investment was so great he called this the Opportunity Fund,” Sagel said.
Investors were told they could reap 15 to 30 percent interest a month, Sagel alleged.
“He was offering something too good to be true because it was,” Sagel said.
What he was telling investors was that the economic collapse “gravely affected PPA,” Sagel said.
Stewart’s and Packard’s business plan worked when they founded their company in 1999, Sagel said. They would borrow money from banks and individual investors while acquiring apartment buildings and renting out units and selling or refinancing the properties.

However, the rental income was never enough to even pay the bills, but as long as property values continued to thrive, the model worked as they sold off and refinanced the buildings, Sagel said.
Packard’s job was to acquire property, deal with the banks, get loans and manage the apartments. Stewart, an attorney and real estate broker, was in charge of recruiting investors.
When the housing industry began its collapse in 2006, the company found it tougher sledding to make a profit. By the end of 2007, the company had gotten its last refinancing deal, and the income from sales and loans had dried up, Sagel said.

That left one source of income left — new investors, Sagel said. The decision was made to “step on the gas with investors,” Sagel said.

At one point they put $2 million in the bank and then almost immediately pulled it back out so they could show investors a balance sheet with the money in the account, Sagel alleged.
Stewart also continued to draw a substantial salary while pulling his investments out of his struggling company even while he was giving investors a rosy account of its future, Sagel alleged.
The money from new investors to the Opportunity Fund was supposed to be spent on acquiring apartment buildings, but it instead went to pay off old debts, amounting to a Ponzi scheme, Sagel alleged.

Miller said his client could not have anticipated that the collapse of the housing industry would spread to apartments as well.

“What the government is doing is unfairly looking at this case with 20/20 hindsight,” Miller said. “Back when it was happening it wasn’t all that clear.”
By 2009, the housing industry slump appeared to be bottoming out, Miller said.
Stewart and Packard’s company had a solid track record and had earned praise for its business model before the economy cratered, Miller said.

Packard was the “hammer” who had “always come through” but had failed to win the financing to make the Opportunity Fund work, Miller said.
“Investors thought it was a good idea,” Miller said.
And they were warned in memos of the high risks, Miller said.
But up until April 2009, PPA had never failed to make a payment on a loan or to an investor, Miller said.

Stewart himself lost $1 million in his company’s collapse, Miller said.
Packard “was great at his job and Mike Stewart trusted him to do his job,” Miller said.
The two had $110 million in equity in 2006 and could have walked away with $40 million apiece after taxes if they had retired then, Miller said.

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Was California House- Flipping Business a Ponzi Scheme?

Yet another “scheme” has reared its ugly head in the real estate industry. A seemingly successful apartment-flipping business based out of Irvine looks like it turned into a Ponzi scheme when things got financially tough for the company and its two owners.

In November, John Packard, co-owner of a real estate firm based in Irvine and Long Beach, pleaded guilty to setting up a Ponzi scheme to pay off old investors while continuing to recruit new ones for a plan to flip distressed apartment buildings during the Great Recession’s housing collapse. Co-defendant and former co-owner of Pacific Property Assets, Michael J. Stewart stands behind an attorney who has told jurors that Stewart is innocent and his plan was a financially prudent one because homeowners who lost their property in foreclosure would have to turn to renting apartments.
According to prosecutors, just before Stewart and Packard declared bankruptcy in June 2009 and the company’s 647 investors lost $91.6 million and the executives owed about $96 million in outstanding principal to banks, Stewart was telling every potential investor that he had an opportunity for the investors to make money because the business was thriving. Assistant U.S. Attorney Brett Sagel pointed out that, in fact, the company was failing, but Stewart’s plan was to have investors snatch up apartment buildings at “rock bottom prices” and refurbish them to fill the void in housing when evicted homeowners look for a place to live. He told investors they would be able to reap 15 to 30 percent interest a month.

Sagel goes on to say that Stewart’s and Packard’s business plan worked when they founded their company in 1999. Packard’s job was to acquire property, deal with the banks, get loans and manage the apartments. Stewart, an attorney and real estate broker, was in charge of recruiting investors. They would borrow money from banks and individual investors while acquiring apartment buildings and renting out units and selling or refinancing the properties. However, the rental income was never enough to pay the bills, but as long as property values continued to thrive, the model worked as they sold off and refinanced the buildings.

Come 2006, when the housing industry began its collapse, Pacific Property Assets found it more difficult to make a profit. By the end of 2007, the company had gotten its last refinancing deal, and the income from sales and loans had diminished. This left new investors as the only source of income. The decision was made to “step on the gas with investors,” Sagel said. Sagel also alleged that Stewart was giving a “rosy” account of the company’s future despite its struggles and his actions of drawing a substantial salary while pulling his investments out of the company. The money from new investors was supposed to be spent on acquiring apartment buildings, but it instead went to pay off old debts, amounting to a Ponzi scheme.
Attorney Kenneth Miller defends that Stewart could not have anticipated that the collapse of the housing industry would spread to apartments as well. Stewart and Packard’s company had a solid track record and had earned praise for its business model before the economy cratered and up until April 2009, Pacific Property Assets had never failed to make a payment on a loan or to an investor.

What do you think? Was this a full-blown Ponzi scheme? Are Stewart and Packard guilty?

Read More Here


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