Walkable Neighborhoods Are Key to Millennial Homebuyers
July 30, 2015 by Pacific Union • Posted in Industry Surveys & Studies
San Francisco’s Union Square, ranked as one of the city’s most walkable neighborhoods.
Living in a highly walkable neighborhood is more important to millennials than it is to other generations, as nearly one-third of them use their feet as a regular form of transportation.
In a recent survey conducted in conjunction with Portland State University, the National Association of Realtors found that 50 percent of millennials – defined here as persons born in 1981 and later – said that living within an easy walk of amenities was very important when choosing a place to live. The importance of walkability decreases with age: 43 percent of Gen Xers ranked it as critical, compared with 38 percent of baby boomers.
One reason that a neighborhood’s walkability is so important to millennials is because a significant number of them – 32 percent – reported walking to work or school within the past month, compared with 19 percent of Gen Xers and 13 percent of baby boomers. Millennials were also the most likely to stroll in their free time, with 62 percent saying that they walked to restaurants and shops and when running personal errands. Additionally, the survey found that millennials walked an average of 13.3 days per month, more than older generations.
Members of Generation X were slightly more prone to travel by bicycle: 28 percent reported having ridden a bike for transportation or exercise in the past 30 days compared with 26 percent of millennials and 21 percent of baby boomers. Gen Xers favored neighborhoods with bike lanes more than other generations, with 28 percent calling them very important.
Millennials are flocking to the Bay Area to take advantage of a booming economy and high-paying jobs, and the fact that the region’s major cities are some of the most walkable in the U.S. is likely an additional attraction. In its 2015 rankings of America’s most walkable cities, Walk Score named San Francisco as the second most walkable city in the country, with a score of 83.9 out of a possible 100. Chinatown ranked as the city’s most walkable neighborhood, with a perfect score, while four other enclaves received a 99.
Oakland ranked No. 9 in the country for walkability, notching a 68.5. Downtown tied Koreatown-Northgate as the most walkable neighborhood in the city, both scoring a 97.
Walk Score also ranks neighborhoods for their bike-friendliness based on four factors, including number of bike lanes and hills. Even with its famously steep terrain, San Francisco ranks No. 2 in the country for bike-friendliness with a score of 75.1. Perhaps not surprisingly, San Francisco’s best neighborhoods for bicyclists are all in relatively flat parts of the city, including the Civic Center and the Mission District, both of which received a score of 98.
With a Bike Score of 60.9, Oakland ranks No. 14 in the U.S. for bicyclists, with the Bushrod neighborhood in the northern part of the city netting a high score of 98. Nearby Berkeley actually has a higher overall Bike Score – 88.8 – than either of its larger neighbors but didn’t make the top 20 due to its size.
(Photo: Flickr/Daniel Hoherd)
Real Estate Roundup: Bay Area Buyers Willing to Pay Large Premiums for the Right Neighborhood
July 6, 2015 by Pacific Union • Posted in Weekly Real Estate News Roundups
Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious.
BAY AREA HOMEBUYERS PAY NEARLY 25 PERCENT MORE FOR TOP LOCATIONS
Bay Area buyers aren’t shy about paying extra for homes located in top school districts and close to desirable urban amenities, says a new study of data from the Journal of Urban Economics.
CityLab reports that behind residents of the Hawaii community of East Oahu, homebuyers in the Bay Area are more likely than those in nearly any other part of the country to pay extra money to purchase a property in a top-rated neighborhood. Although the article doesn’t provide exact numbers, it says that homebuyers in San Francisco, Marin, and San Mateo counties are willing to pay nearly 25 percent more than the average American to live in the best neighborhoods. The article notes that buyers in San Jose, Oakland, and Santa Cruz are also willing to spend significant premiums to purchase a property in a top community.
CityLab includes a map of the Bay Area that shows that, unlike in New York, homebuyers in virtually all parts of San Francisco will spend more money for a great neighborhood.
“People are very willing to pay for most neighborhoods in the city itself, as well as the surrounding suburbs,” wrote Richard Florida. “Only a few sections of Oakland and Richmond, to the north of Berkeley, rank lower on the quality of life index, but these still do well relative to the rest of the country.”
MILLENNIALS DON’T EARN NEARLY ENOUGH TO BUY A BAY AREA HOME
The Bay Area may be a magnet for young tech workers thanks to plentiful jobs, but only those with six-figure salaries can afford to purchase a home in the region’s two largest cities.
Using data from the U.S. Census Bureau, Zillow, and Bankrate.com, Bloomberg found that San Jose was the least affordable city in the country for millennial homebuyers. The average millennial worker in San Jose pulls in an annual salary of about $53,000, more than $80,000 less than what’s needed to afford a median-priced $924,825 home. San Francisco is the nation’s second toughest city for millennials, with about $110,000 required to purchase a median-priced $764,925 home. Bloomberg says millennials in San Francisco earn $49,000 per year.
While the millennial earnings gap wasn’t quite as large in other California cities, all of the five least affordable markets for young people were located in the Golden State, rounded out by Los Angeles, San Diego, and Sacramento.
SANTA CLARA PROPERTY VALUES CLIMB TO RECORD HIGH
Silicon Valley’s high-growth economy has propelled Santa Clara County’s residential and business property values to an all-time high, according to an article in the San Jose Mercury News.
Last week, Santa Clara County Assessor Larry Stone announced that the county’s property-assessment roll reached a milestone $409 billion. Stone said the region’s job growth has generated demand for housing, pushing both home prices and rents up. The article says that the median price of a Santa Clara County home was $810,000 in 2014, while the median monthly rent for a two-bedroom apartment reached $2,300.
While Stone said that home price gains were promising signs for Santa Clara homeowners who lost equity during the recession, they can soon expect larger property-tax bills.
“The residential real estate market has been so strong that some property owners will experience double-digit increases in their assessments,” Stone told the publication.
A BROADBAND CONNECTION CAN HEAVILY INFLUENCE A HOMEBUYER
Like a swimming pool or an extra bathroom, a broadband Internet connection can be a deciding factor for today’s home shopper on whether to make an offer or whether to keep looking.
Citing data from a study by the University of Colorado and Carnegie Mellon University, The Wall Street Journal reports that a fiber-optic broadband connection can add nearly $5,500 to the price of a $175,000 home, the same amount as a fireplace. According to the article, real estate professionals across the country are seeing an increasing number of buyers who won’t purchase a home without fast, reliable Internet service.
One Santa Barbara County man who spoke to the publication formerly owned a home on a street where Internet access was spotty. When he decided to sell, more than half of the 40 potential buyers walked away once they learned about the issue.
(Photo: Flickr/American Advisors Group)
New-year resolutions are a dicey thing. It’s fine to swear to losing 20 pounds over the next few months, but unless you make a point to work out regularly or cut back on calories, it’s not going to happen.
The same is true in real estate. Homebuyers and sellers in the Bay Area can resolve to close a deal in 2015 — taking advantage of near-record-low mortgage rates, stabilizing home prices, and favorable economic conditions — but they need to be ready when the perfect opportunity comes along or they will lose out.
Follow these sensible steps to help make your 2015 real estate resolution a reality.
BUYERS: PREPARE YOUR FINANCES AND DO YOUR RESEARCH
Pay off credit cards and other debt so that you meet your mortgage lender’s qualifications. Anything you can do to improve your credit history and raise your credit score will help you get a better interest rate on your home loan.
This may seem contradictory, but at the same time as you pay off debt, do what you can to save money for a down payment. If a family member can help, go beyond a verbal commitment and get an agreement in writing (or cash).
With debt under control and a down payment in the works, take an honest look at your finances and determine how much you can afford to spend. No matter how wonderful your dream home may be, you’re not going to enjoy it if you can’t afford it.
Educate yourself on neighborhoods where you would like to live. What are homes in those areas selling for? What parks, shopping districts, and other amenities are nearby? If you have children, make sure to learn all you can about local public and private schools.
Talk with a real estate professional who is familiar with the areas in which you are searching. Get familiar with the ins and outs of buying a home, including paperwork, estimated timelines, making a bid, and closing a sale.
Start making your moving plans far in advance. Familiarize yourself with moving and storage options, and get rid of household clutter to save trouble later.
THREE WORDS FOR SELLERS: FIX, CLEAN, STAGE
Complete any unfinished home-improvement projects, and consider a few new ones that will add value to the property. Schedule an inspection to help get your house ready for sale and ensure there will be no surprises.
Clean your home, inside and out. Shampoo the carpet, wipe down the walls, and don’t forget to wash the windows. Sparkling windows are a sign of a well-cared-for home.
Talk with a real estate professional who is familiar with your community. Find out what your home is worth and what strategies will help it sell quickly. Learn the basics of home staging, and if necessary, hire a professional stager.
Lastly, remember to plan your exit strategy. Are you buying your next home at the same time you’re selling your current one? Familiarize yourself with moving and storage options.
(Image: Flickr/e3Learning)
Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:
HOW MUCH DO YOU NEED TO EARN TO AFFORD A BAY AREA HOME?
Prospective homebuyers in the San Francisco region need to earn nearly three times as much as those in the rest of the country in order to afford a property, reflecting the rapid price appreciation our local markets have enjoyed over the past few years.
In a study, HSH.com crunched third-quarter numbers for 27 major U.S. metro areas and found that buyers in the San Francisco region need to earn a minimum of $145,361 per year to afford the $744,400 median-price home, the highest of any city included in the report. Nationwide, the average homebuyer could afford the median-price home on an annual salary of about $51,000.
While local buyers will certainly need at least one healthy income — or better yet, two — to afford a home, the study says that the San Francisco area actually saw the largest quarter-over-quarter decline in required salary, partially due to a 3 percent home price decrease in that same time period.
PRICE GAP BETWEEN NEW AND EXISTING HOMES GROWING
Sluggish construction activity is likely causing the price differential between to new and existing homes to widen, says a blog post from the National Association of Realtors.
In November, the median price for a newly constructed U.S. home was $280,900, 36 percent more than an existing home. NAR says that, historically, new homes have commanded 15 to 20 percent more than their older counterparts.
Part of the reason for the growing divide is the fact that construction activity is still 35 percent below normal levels. Although single-family housing starts have risen in four of the past five years and are projected to increase to 820,000 in 2015, NAR warns that the uptick may not be enough to keep home prices from rising further.
TOP 5 HOUSING MARKET THREATS TO WATCH FOR IN 2015
Although the U.S. housing recovery is projected to continue in 2015, there are some potential hazards that could throw it off track, according to a CNN Money article.
A drop-off in investor activity, both institutional and foreign, is a chief concern, although Chinese buyers remain quite active. Rising mortgage rates, which some economists say are guaranteed this year, are also a cause for concern, as is strict access to credit.
Finally, for the housing recovery to stay on track, incomes will at least need to keep pace with home prices, CNN Money says.
(Image:
Flickr/401(K) 2012)
Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:
SAN FRANCISCO INVESTORS NET BIGGEST EQUITY RETURNS IN THE U.S.
Investors who have funneled money into the San Francisco housing market are netting huge equity returns, leading to speculation that rental property owners may soon sell, a recent report says.
Over the past three years, institutional investors who purchased a single-family home in San Francisco have realized equity returns of 63 percent, according to RealtyTrac, the largest gain of any major U.S. metro area. The company defines an institutional investor as one who buys at least 10 properties in a calendar year.
Across the country, institutional investors earned equity returns averaging 26 percent, RealtyTrac says. The company notes that while institutional investors don’t appear to be selling off assets at the moment, price appreciation gives them the motivation to do so.
Then again, with the most expensive rental prices in the nation, San Francisco investors also have solid incentive to hold.
RUNNING DOWN THE BAY AREA’S MUST-SEE HOLIDAY DISPLAYS
‘Tis the season for holiday decorating, and some local homeowners are sparing no expense to spread the yuletide cheer.
SFGate.com recently took a look at the Bay Area’s best holiday displays, starting with “Deacon Dave’s,” a Livermore home that has been attracting crowds for more than 30 years and contains 372,000 lights. Other locals take less conventional approaches to decking the halls, with two San Jose neighbors synchronizing their homes’ light displays with a variety of holiday tunes, a spectacle known as Glacier Lights.
The article also highlights several streets where all or most owners decorate their homes, including enclaves in Palo Alto, San Mateo, Oakland, and Alameda.
U.S. ECONOMIC GROWTH TO STRENGTHEN IN 2015
Although 2014 has been a volatile year for the U.S. economy and will end with less growth than measured in the previous year, Fannie Mae expects the pace to pick up in 2015.
In a news release, Fannie Mae projects that the U.S. economy will grow by 2.7 percent in 2015, compared with a forecasted 2.1 percent this year. As a result, the company said that it expects housing starts to increase by 22 percent and home sales to rise by 5 percent next year.
“We anticipate a fairly strong increase in housing starts in response to stronger employment and some improvement in related household incomes,” Fannie Mae Chief Economist Doug Duncan said in a statement.
WEALTHY AMERICANS BUYING MANSIONS AS FAMILY HEIRLOOMS
You can’t take your home with you when you die, but luxury buyers are increasingly purchasing high-end properties for the purpose of keeping them in the family for generations to come.
According to The Wall Street Journal, a survey found that 64 percent of affluent Americans said it was likely they would purchase a home in order to pass it on to family members. The article says that so-called legacy homes cost a minimum of $5 million to build, but because their buyers tend to prefer homes in traditionally affluent areas, they represent a solid long-term investment.
The Journal notes that legacy homebuyers are decking out their purchases with features that will appeal to multiple generations, including volleyball courts, equestrian facilities, home theaters, and rooms designed for playing video games.
(Photo:
Flickr/Liskbot)
