November Existing-Home Sales Rise Again

RISMEDIA, December 28, 2006-Existing-home sales continued to recover last month following a rise in October, with the level of sales activity suggesting a turn in the market, according to the National Association of Realtors®.

Total existing-home sales - including single-family, townhomes, condominiums and co-ops - rose 0.6% to a seasonally adjusted annual rate of 6.28 million units in November from a level of 6.24 million in October, but were 10.7% below the 7.03 million-unit pace in November 2005.

David Lereah, NAR's chief economist, said modest gains are expected for home sales. "As the housing market recovers from its correction, existing-home sales should be rising gradually during 2007 - it looks like we may have reached the low point for the current cycle in September," he said. "We've entered a more sustainable period of home sales now, and we expect greater support for prices over time as inventory levels are eventually drawn down." continued...

New Tax Deduction Will Make Housing More Affordable

WASHINGTON, D.C. December 9, 2006 -- A new tax deduction will make homes more affordable next year by allowing many American home buyers to write-off premiums for private and government mortgage insurance.

The deduction, which will help families who can't afford the traditional 20 percent down payment for a home mortgage, will be effective for the 2007 tax year.

"Making the cost of mortgage insurance tax deductible helps those who need it most: low- and moderate-income Americans, primarily first-time home buyers, who are financially responsible but simply don't have the means to amass a 20 percent down payment," said Steve Smith, Chief Executive Officer of The PMI Group, Inc. and President of Mortgage Insurance Companies of America (MICA). "We congratulate Congress for taking this important step to address a key barrier to homeownership that so many Americans face."

Borrowers closing loans to purchase homes in 2007 who have annual household incomes of $100,000 or less will be able to get a low down payment mortgage and deduct the full cost of their mortgage insurance premiums on their federal tax return.

"We are pleased that policymakers have recognized mortgage insurance as a cost of finance just like mortgage interest," said MICA Executive Vice President Suzanne Hutchinson. "Mortgage insurance plays a crucial role in maintaining the stability and continued health of the mortgage finance system. In today's climate of steadily rising interest rates and slowing home price appreciation, an insured loan is often the most borrower-friendly alternative."

The legislation has been supported by a broad range of consumer, business, taxpayer, civil rights, civic and labor groups. Following are some comments on the new deduction from some of these groups:

"A tax deduction for mortgage insurance premiums will go a long way to help homeowners and potential homeowners who simply want to own a piece of the American dream," said Marc H. Morial, President and Chief Executive Officer of the National Urban League. "I congratulate both the U.S. House and the Senate for doing what's right to make the goal of affordable homeownership a reality for every American."

"This tax deduction will create important social benefits by offering relief to over-burdened taxpayers," said John Berthoud, President of the National Taxpayers Union. "Finally, homeowners will have the ability to make all the costs associated with the ongoing financing of their home truly tax deductible."

"Homeownership contributes substantially to social stability," said Bruce Hahn, President and CEO of the American Homeowners Grassroots Alliance. "Yet homeownership remains just beyond the grasp of millions of Americans. Making the cost of mortgage insurance tax deductible helps put homeownership within reach for many more families."

"Currently, many Latinos need loans with private mortgage insurance because they are unable to afford the 20 percent down payment traditionally needed to buy a home," said Guarione M. Diaz, President and CEO of the Cuban American National Council. "Policies such as this one help these families realize the aspiration of homeownership and fulfill an essential element of the American dream."

"With a U.S. Hispanic homeownership rate of 48 percent (20 points below the national average of 68 percent), this legislation would enable more hardworking Hispanic families and consumers to become homeowners," said Manny Mirabal, President and CEO of the National Puerto Rican Coalition. "An estimated 33 percent of the families benefiting from this tax deduction would be minority homeowners."

MICA is the trade association representing the private mortgage insurance industry. Its members help loan originators and investors make funds available to home buyers for low down payment mortgages by protecting these institutions from a major portion of the financial risk of default.

Single Women Take No. 2 Spot in Home Market

RISMEDIA, December 11, 2006—(MCT)—Laurie Minchew has been in her new home for only about a week. But the 35-year-old single woman said she made the right decision to buy the three-bedroom house in Red Oak, Texas. Continued »

Pending Home Sales Indicate Market Stabilization

RISMEDIA, December 6, 2006—Pending home sales are hovering in a narrow range, another indication that a stabilization is occurring in the housing sector, according to the National Association of Realtors®.

...David Lereah, NAR’s chief economist, said a fairly steady pace of home sales can be expected for the next two months. “It’s important to focus on where the housing market is now – it appears to be stabilizing, and comparisons with an unsustainable boom mask the fact that home sales remain historically high – they’ll stay that way through 2007,” he said. “In addition, a temporary correction in prices distracts from the fact that it is primarily the number of home sales that affects the economy, and the number for this year will be the third highest on record.”

Click here for the article

Commercial Real Estate Index Rises Again

RISMEDIA, December 1, 2006— The Commercial Leading Indicator for Brokerage Activity, a leading indicator for the commercial real estate market, has increased for six consecutive quarters showing that continued growth can be expected in commercial real estate sectors, according to the National Association of Realtors.

For more information, click here.

U.S. LEADING INDEX CONTINUES UPWARD TREND

The U.S. leading index, a key barometer of economic conditions, increased for the second consecutive month in October, The Conference Board recently reported. The index increased 0.2 percent last month and now stands at 138.3 (1996=100), 0.6 percent below the high of 139.1 reached in January.

According to the report, the leading index has declined in five of the last nine months and signals slow economic growth in the coming months. Throughout the year, declining housing permits have negatively impacted the leading index, offsetting positive contributors such as real money supply and consumer expectations. The coincident and lagging indexes, which measure current and past economic activity, respectively, also increased in October. The coincident index edged up 0.1 percent to 123.7, while the lagging index rose 0.2 percent to 124.1.

LUXURY HOME VALUES HIT RECORD HIGHS IN THREE CALIFORNIA MARKETS

The value of high-end homes in Los Angeles, San Francisco, and San Diego posted record highs in the third quarter of 2006, according to the First Republic Prestige Home Index™, which tracks homes valued at more than $1 million in key California markets. Despite the record highs, rising inventories and longer sales cycles kept luxury home price appreciation to single digits in all three markets. In Los Angeles, which previously experienced 14 consecutive quarters of double-digit, year-over-year price appreciation, luxury home values increased 4.4 percent to $2.37 million.

The values of luxury homes in San Diego and San Francisco also recorded modest gains last quarter, rising 5.4 percent and 4 percent, respectively. According to the index, the average luxury home in San Francisco is now valued at a record $2.96 million, while the average luxury home value in San Diego is $2.18 million.

Is the worst over for the housing bust?

Economists say 'yes' in new wsj.com survey but their views on home prices vary wildly.

While 20 economists predicted home prices would rise next year, 24 forecast a decline. Just eight of the economists forecast gains greater than 2.1%, which is their average forecast for consumer-price inflation through mid-2007. The Ofheo index, which is closely watched by economists, has never posted a year-to-year decline.

Click here for the article

Housing Market Expected to 'Coast' into 2007 with Modest Price Gains

RISMEDIA, November 13, 2006—Following a correction in home sales and prices in 2006, existing-home sales are expected to "coast" at roughly the same level next year, although there will be some additional decline in the new-home market, according to a forecast released Saturday at the National Association of Realtors(R) Conference & Expo in New Orleans.
_____

"We now have the most favorable market for home buyers in several years, and most sellers -- who've been in their home for a normal period of homeownership -- are still seeing very healthy returns on their investment. Conditions for buyers have improved because sellers are flexible now and mortgage interest rates are near historic lows. The market promises to be more balanced between buyers and sellers by early spring, supporting future price growth," Lereah said.

Click here for the article.

NAR Says: The time to buy is NOW...

NAR Bullish on Housing Market, Advises Consumers to Take Action Now while Conditions Still Favorable

National Association of Realtors launches national campaign to urge home buyers to buy now before market changes.

"The market is much better than you might hear or read. Consumers should take advantage of this perfect alignment of low rates and extraordinary inventory before market conditions change," Stevens said.

Click here or on the link above to read the article.

Local Market Report

For the first time in over a decade, we have seen a drop in median price (current 12 months versus previous 12 months) in Bodega Bay. We'll have to see if this is a trend or one-time occurance but is was significant (-2% for Bodega Bay, -7% for Bodega Harbour) and could indicate a levelling off of home prices here on the Coast.

I'm going to keep the full summaries on my website and you can visit that webpage directly here - feel free to bookmark. Or, look for the Market Summary link at www.bodegabayproperties.com in the lefthand frame.

PENDING HOME SALES INDICATE STEADY MARKET IN COMING MONTHS

From CAR, 11/01/06:

Home sales will remain stable in the months ahead, according to NAR's most recent Pending Home Sales Index (PHSI). In September, the PHSI stood at 109.1, down 1.1 percent from the previous month and down 13.6 percent from September 2005. The index gauges home sales activity for upcoming months based on the number of transactions that have signed contracts but are not yet closed. A PHSI of 100 or more generally indicates a high level of homes sales activity.

"The present level of home sales is relatively high in historic terms, and we can
expect generally minor movements around this level. We don't expect to see any changes of note until early next year when we're likely to see a modest lift to home sales," said NAR Chief Economist David Lereah. "The market currently is a little lower than expected as buyers try to time their entry. In the meantime, there's some buildup in demand that will move when consumers realize that conditions are optimal for them."

The PHSI declined across the nation in September compared with the readings a year ago. On a regional basis, the PHSI was highest in the South, where it declined 9 percent to 125. In the West, the index fell 15.2 percent to 112.5. The PHSI also declined in the Midwest and Northeast regions, falling to 96.4 and 89.9, respectively.

Clear Skies Ahead?

As with most polarized headlines and reports, one should always read with caution. However, we are seeing the media trend changing course from mostly negative real estate news to more positive news. This is one of those positive reports...

Click here for the Dow Jones MarketWatch article

Real Estate Bust or Correction?

Here's another article suggesting a correction rather than bust in the real estate market. The media at large generally takes on the extreme opinion but appears to be taking a more realistic/moderate approach these days. In summary:

"Lower asking and selling prices on houses are integral parts of the self-correction and should help shorten the whole process. Lower interest rates should make those lower prices affordable to a broader number of potential buyers. That could become an even more important factor if mortgage rates dip below 6 percent in the coming months, as some Wall Street capital market analysts expect. "

Here's the article from the San Francisco Chronicle

Home Prices Correcting, Buyers Returning to the Market

Home sales appear to be bottoming out with lower prices attracting buyers in many areas of the country, says NAR.

RISMEDIA, October 13, 2006—David Lereah, NAR’s chief economist, said the housing market is showing signs of life and that sales may be leveling out. “Many potential home buyers who have been taking a wait-and-see attitude or taking their time and being methodical in the search process are being enticed by lower home prices,” Lereah said. “Given a positive economic backdrop of lower interest rates and job creation, we expect sales activity to pick up early next year.”

Read the complete article here

U.S. Economy Will Grow Slowly and Not Sink into Recession, Conference Board Reports

Reported downturn is modest, but economic cycle is mature, says chief economist

Click here for the article

PENDING HOME SALES INDICATE STEADY MARKET IN COMING MONTHS

The housing market will continue to stabilize in the months ahead, according to NAR's most recent Pending Homes Sales Index (PHSI). In August, the PHSI stood at 110.1, up 4.3 percent from the previous month and down 14.1 percent from August 2005. The index gauges home sales activity for upcoming months based on the number of transactions that have signed contracts but are not yet closed. A PHSI of 100 or more generally indicates a high level of homes sales activity.

"Our sense is that home sales may have reached a low in August -- the Pending Home Sales Index shows home sales should be fairly stable over the next two months, although a minor decline is possible," said NAR Chief Economist David Lereah. "With fewer new listings coming on the market, we should be able to draw down the inventory supply early next year to the point where home prices will rise, but at a slower pace than historic norms."

The PHSI declined across the nation in August compared with the readings a year ago. On a regional basis, the PHSI was highest in the South, where it declined 9.4 percent to 126.8. In the West, the index fell 16.9 percent to 112.7. The PHSI also declined in the Northeast and Midwest regions, falling to 95.4 and 93.8, respectively.

2006 home sales projected as third highest ever

Existing home sales fell last month but not as quickly as economists and analysts expected. True, home sales have declined in 10 of the last 12 months however they remain quite strong with this year projected to land somewhere near the third highest on record. For August, existing home sales fell 0.5% to an annualized pace of 6.30 million.

New home sales rebounded in August gaining 4.1% to an annual rate of 1.050 million, in line with estimates. The bounce was related to sharp downward revisions in the previous three months making August sales tallies seem stronger. New home sales peaked in July of last year and have been trending lower since. Over the past year new home sales have declined 17.4%.

Mortgage rates fell again this week as rate cut expectations increased on incoming economic data. 30-year fixed rate mortgages averaged 6.31% this week compared to 6.40% last week according to Freddie Mac’s mortgage market survey. Economists at Freddie Mac note that lower mortgage rates and moderate house price declines should lead to greater housing affordability.

Is Earthquake Insurance for You?

Buyers often ask if earthquake insurance is a necessity here on the Coast. And while we do live right near a major fault, the choice is not a simple one. While the insurance premium may be relatively inexpensive, the deductible could really cost you. Here's a link that estimates the cost to insure your home...

The California Earthquake Authority

Home Sales Forecast Lowered, Prices to Dip Temporarily - NAR

Home Sales Forecast Lowered, Prices to Dip Temporarily - NAR

Home sales during the rest of the year will be lower than earlier projections as the market works its way through an inventory and price imbalance, according to the National Association of Realtors (NAR).

PSYCHOLOGICAL FACTORS CONTRIBUTE TO DECLINING HOME SALES

The housing market should continue leveling out in the coming months, according to NAR's most recent Pending Homes Sales Index (PHSI). In July, the PHSI stood at 105.6, down 7 percent from the previous month and down 16 percent from July 2005. The index gauges home sales activity for upcoming months based on the number of transactions that have signed contracts but are not yet closed. A PHSI of 100 or more generally indicates a high level of homes sales activity.

"We've never seen a general decline in the housing market against a healthy economic backdrop where jobs are being created, the economy in growing and interest rates are favorable," said NAR Chief Economist David Lereah. "Psychological factors are causing some buyers to remain on the sidelines, waiting for prices to stabilize or for more favorable news about the market and the economy. Contributing to this hesitancy is a lot of negative news stories, but in the end we believe that underlying market fundamentals will prevail."

The PHSI declined across the nation in July compared with the readings a year ago. On a regional basis, the PHSI was highest in the South, where it declined 11.3 percent to 122.3. In the West, the index fell 20.3 percent to 103.1. The PHSI also declined in the Midwest and Northeast regions, falling to 93.3 and 92.1, respectively.

What Good is a Home Warranty Anyway?

RISMEDIA, September 5, 2006—Buying a home warranty policy during a real estate transaction provides many benefits to the buyer, seller, and to the real estate professional as well. What are these benefits and what good is a home warranty anyway?

What exactly is a home warranty? Home warranties are one-year or 13 Month policies that cover a home’s major mechanical systems and appliances. The mechanical systems often include the plumbing, heating/furnace, electrical, water heater, and cooling systems.
Major appliances may include the washer and dryer, refrigerator, and built-in microwave.

Oftentimes, there are optional items to purchase that are not covered under the base contracts. These items can include the pool and spa, septic tank, or roof leak repair. Real estate professionals should instruct their clients to read over the home warranty contract thoroughly to understand what is and what is not covered. See article, “Home Warranty Companies are Not all the Same! Research, Compare, and Ask the Right Questions.”

When a covered item breaks due to normal wear and tear, the policy holder makes a claim with the warranty company and a service vendor comes to the home to diagnose the problem. If the item is covered, it is either repaired or replaced. The policy holder is required to pay a service call fee to the vendor at the time of service.

Having a warranty on the buyer’s new home definitely helps their pocketbooks at a time when they probably need it the most – after the close on their new home. Repairing or replacing items in a home is the last thing a new buyer needs.

What good is a home warranty to the seller? Sellers are moving out of the house, so why would a warranty benefit them? Some home warranty companies, such as HWA, offer Free Seller’s Coverage. During the period that a home is listed, HWA ensures that covered appliances and mechanical systems are repaired or replaced for a low “per visit” service call fee. HWA covers the listing period up to 180 days and if more time is needed, it can be extended for another 180 days. The home will typically sell faster when there is a home warranty attached to it because it gives the buyer piece of mind when deciding to purchase the home. The warranty will also decrease the post-sale liability to the seller. The seller will not have to deal with the problems and expenses that may occur after the home has been closed.

Fed Takes Break from Hikes

From RISMedia

The Federal Reserve Board yesterday left short-term interest rates unchanged at 5.25 percent.

The Fed says the lull after 17 consecutive increases was because of the softening housing market, high energy prices, and previous rates increases.

Home buyers "who are looking at longer-term fixed-rate products are going to get a pretty good deal," says Doug Duncan, chief economist of the Mortgage Bankers Association. Duncan believes rates on fixed-rate mortgages aren't likely to move much higher unless the Fed decides to boost rates again to stem inflationary pressures.

Yesterday, rates stood at 6.66 percent, nearly one-third of a percentage point below their recent peak of nearly 7 percent, according to financial publisher HSH Associates.

The pause also will slow the pace at which rate increases are being passed on to borrowers with adjustable-rate mortgages, though some borrowers could see their rates continue to rise if their payments are tied to an index such as the 12-month Moving Treasury Average, which reflects rate moves on a lagging basis.

Source: The Wall Street Journal, Jeff D. Opdyke, Jennifer Saranow and Ruth Simon (08/09/2006)

PENDING HOME SALES INDICATE TRANSITIONING MARKET

From CAR Newsline - Wednesday, August 02, 2006

For the second consecutive month, pending home sales have risen on a month-to-month basis, a sign the housing market is beginning to level out, according to a recent report from NAR. In June, the Pending Home Sales Index (PHSI), which gauges home sales activity for upcoming months based on the number of transactions that have signed contracts but are not yet closed, increased 0.4 percent to 113.9 from the reading one month earlier and edged down 9.6 percent from June 2005. An index of 100 or more generally indicates a high level of home sales activity.

"Once again, we have various housing indicators moving in different directions, which itself is an indicator of a market in transition," said NAR Chief Economist David Lereah. "The housing market is striving for balance -- a process that will take several months. A quieting in the movement of indicators should restore confidence to home buyers who've been on the sidelines, waiting for the right time to get into the market, and now is the best time we've seen since the 1990s in terms of housing choices and flexible terms."

The PHSI declined across the nation in June compared with the readings a year ago. On a regional basis, the PHSI was highest in the South, where it edged down 4.8 percent to 130.7. In the West, the index fell 14.2 percent to 110.1. The PHSI also declined in the Midwest and Northeast regions, falling to 103.3 and 99.4, respectively.

And you thought the Sonoma Coast was expensive....

Here's a place for $135M - and it's not even close to the waterfront!

But I think the best part is that the quoted expert hyphenated her name - with the same name...

Click here to see Laurie Moore-Moore's comments on the luxury property.

The once-hyper market is experiencing a soft landing near historical norms

The media continues to buffer their harsh outlook on the housing market, as indicated by a few of the articles below and those to come.

Check out this article which states the NAR (National Association of Realtors) expects a slower years in terms of sales, minor fluctuations in prices, and stabilization near or below present levels.

Activity is certainly increasing here on the Coast and while we generally follow the trend, it appears that we may be recovering more quickly than those areas that continued to see sales growth well after we took a hit. Most of the sub-million dollar properties have already seen reductions and it seems to be a good opportunity for those who waited.

CALIFORNIA HOUSING STARTS REFLECT NORMALIZING MARKET

New home construction in California declined during May 2006, falling 21.2 percent when compared with the construction pace recorded one year earlier, the California Building Industry Association (CBIA) recently reported. Despite the decline, housing starts continue to edge up on a month-to-month basis, suggesting builders are on track to produce 170,000 to 180,000 new housing units in California during 2006, the fourth-highest number of starts in the past 17 years.

Based on the number of building permits issued, 15,263 new housing units were started throughout the state in May, with single-family units accounting for 75.8 percent of the starts. While single-family production is expected to remain strong in most of Southern California, starts are anticipated to trend downward in San Diego, the San Joaquin Valley, the Sacramento region, and the Bay Area, according to the report.

Click here for the complete story

10 years...

Over the past few months, I've been hearing more and more people mention Zillow.com when discussing current home prices and trends. I was on the website again today, and while most of the data for our area is incomplete or entirely inaccurate (DO NOT rely on Zillow.com for specific home values on the Coast), I did find some interesting historical data showing how well real estate has treated us here in California - and Bodega Bay in particular. I haven't confirmed the data but the general numbers add up.

Here's what was shown over the past 10 years (percent growth):
ZIP 94923: 306.0% (15.0% annualized)
Bodega Bay: 301.2% (14.9% annualized)
Sonoma County: 240.6% (13.0% annualized)
California: 269.8% (14.0% annualized)
United States: 108.5% (7.6% annualized)

What's going on here?!

You might notice that the articles listed below (and those to come) seem to be contradictory in many ways. While perhaps confusing, that is certainly the state of the market at this time. I suppose that this is common in transitional markets of any kind - we just don't know where it's headed most of the time. Comps are only somewhat relevant guides for listing a property so we're seeing some homes holding steady and while at least half are taking reductions in price. However, those reductions have averaged less than 10% and homes are still selling close to asking.

What I think all of this mess means is that we're headed into a more stable, predictable and realistic market here and throughout California. And that's good for everyone.

C.A.R. reports median price of a home in California at $564,430 in May, up 8 percent from year ago; sales decrease 21.1 percent

C.A.R. REPORTS HOME SALES DECREASED 21.1 PERCENT IN MAY (click for full article)

The median price of an existing single-family home in California increased 8 percent in May and sales decreased 21.1 percent compared with the same period a year ago, C.A.R. recently reported. "This is the first time since November 2001 that the median price did not increase by double digits, reflecting the return to the more balanced market that we have anticipated," said C.A.R. President Vince Malta. "Interest rates, while still historically low, continue to impact sales as did the inventory of homes for sale, which reached nearly a six-month supply in May."

According to the report, the median price of an existing, single-family detached home in California during May 2006 was $564,430, an 8 percent increase over the revised $522,530 median for May 2005. The May 2006 median price increased 0.5 percent compared with April's revised $561,750 median price. Also in May, closed escrow sales of existing, single-family detached homes in California totaled 488,260 at a seasonally adjusted annualized rate, down 21.1 percent compared with the sales pace recorded one year earlier and down 5.6 percent from home resale activity in April.

No Statewide or National Recession on the Horizon

According the UCLA Anderson (economic forecast experts), a US real estate slowdown is expected but most other factors that generally indicate recession are not present. Home prices are expected to hold steady while sales volume should decrease. The biggest impact of this will be seen by homebuilders, mortgage companies and real estate brokers.

Click here for the article and UCLA Anderson Forecast

Outlook Strong For Sonoma County

Tourism, construction, wine industries fuel recovery despite downturn in housing market.

Click here for the Press Democrat's article on Sonoma County's future...
Growing Stronger

Market Summary for Bodega Bay, May 2006

Based on data pulled from MLS for the past 12 months, we're seeing a dramatic decrease in sales volume (by about 1/3) but a significant increase in listing price (22 to 27%). My guess is that the slower sales are caused by the local increase in listing price while many other areas are seeing a decline.

Of course, there are plenty of exceptions in the widely diverse California markets - some are once again beginning to show quick sales over asking price. Because we're somewhat buffered here on the Coast, it seems that Bodega Bay generally follows these trends (usually in a less dramatic way) after a lag period of a few months.

Below is the summarized data for the Bodega Bay area as well as Bodega Harbour specifically.

SUMMARY
Month Ending: May 31,2006
	All Bodega Bay	Bodega Harbour
HOMES
Placed in Escrow	3	2
Sold - Month	2	2
Sold - 12 Months Per.	55	40
Sold - Previous 12 Months	84	57
Median Price - 12 Months	1,010,000	1,100,000
Median Previous 12 Months	829,500	865,000
Total Listing Inventory	34	19
Previous Year Listing Inventory	23	16
LOTS
Placed in Escrow	0	0
Sold - Month	2	2
Sold - 12 Months Per.	6	1
Sold - Previous 12 Months	16	3
Median Price - 12 Months	344,000	580,000
Median Previous 12 Months	310,000	N/A
Total Listing Inventory	10	3
Previous Year Listing Inventory	3	1

Outlook Positive for Sonoma County

The Economic Development Board and Moody's put together a quarterly report on the state of the couny and things are looking quite positive overall.

•Sonoma County’s economy has improved considerably in the past six months. Job growth is now approaching 2.5% over the year, its fastest rate since the 2001 recession.
•Sonoma County’s unemployment rate is falling to a point where the risk of a labor shortage is rising.
•Sonoma County’s housing market appears to be easing. Improved housing affordability, however, would generate improved long-term economic conditions.
•Sonoma County’s economy is proving itself to be resilient, as its industries, including technology, restructure and remain competititve.
•Brad Zigler reports on growth in local stocks. Brad Zigler is a Santa Rosa-based financial writer and editor, and is the creator of the North Bay Stock Index.

Click here for the full report in PDF format.

Second-Home Owner Survey Shows Solid Market, Appetite for More

With a majority of Sonoma Coast homeowners being multi-home owners, this article will certainly offer lots of support for your investment decisions. There's a LOT of data in the report, but all of it points to a steady growth in vacation and investment property purchases for years to come.

Second-Home Owner Survey Shows Solid Market, Appetite for More

1031 Exchange Myths

Doing a 1031 Exchange is not always straightforward, so you have to expect a lot of myths to exist. This article addresses a few of them and helps clarify the more important aspects of successfully deferring tax gains on investment properties.

1031 Exchange Myths

Prices Up, Sales Down...

The median price of an existing home in California increased 13 percent in March and sales decreased 15.1 percent compared with the same period a year ago, the California Association of REALTORS (C.A.R.) reported today. See article March 06 sales/price report.

Despite the continued media negativity and talk of a bursting real estate bubble, real people realize that investing in property is still one of the safest strategies available. As I mentioned weeks ago, we're expecting a solid year overall - the third best on record, in fact - and it appears that we're getting a increase in momentum.

For Bodega Bay in 2006, there have been 11 sales with a median of $990,000. While this is a relatively low number of homes - buyer activity is beginning to return and I'd expect a steady increase throughout the year.

Open House Weekend April 22-23

Open House Schedule

Come on out to the coast to see all of Coldwell Banker Coast Properties' listings this weekend. The link above shows a preview and all homes will be available from 1-4pm Saturday and Sunday...

I gotta bridge to sell ya...

Believe it or not, the Bodega Bay pedestrian trail appears to be making some progress! According to the Bodega Bay Navigator, two pieces of the puzzle are funded and underway - one piece on the north end and one on the south end.

If you live in Bodega Harbour, you'll soon (soon being a year or so) be able to ambulate to the US Post office without the fear of being run over by a truck. There will be a 100-foot bridge connecting Doran Beach and the Birdwalk Regional Park. From there you can access Smith Brother Road where you'll access your PO Box. A few more steps and you're in my office.

At the other end of the trail-to-be is a section which connects Salmon Creek to the infamous Community Center and Children's Bell Tower. As time goes on, we may be able to safely walk from Salmon Creek to Bodega Harbour to enjoy a martini at the all-new Bluewater Cafe.

Bodega Bay Fisherman's Festival

The 33rd Annual event takes place April 8 & 9 this year with the theme of "Whales & Fish Tales" so get on over to Westside Park - directly across the harbor from Gourmet au Bay. It's only $5 per adult and there's live music, wine tasting, food, crafts and children's events. As you may know, we're big fans of charity events and all proceeds from the festival benefit Bodega Bay area community services. Go to http://www.bbfishfest.com/ or call (707) 875-3286 for more info.

Bodega Bay Boardwalk

Frequently I've been asked about the progress of the proposed Bodega Bay Boardwalk and while I don't have any recent data, I have included a link to an article written in June 2004 which describes the potential 2007 project in general terms. I'd also suggest picking up or subscribing to the Bodega Bay Navigator for local updates (they provided the map on the left).

Here's the trails description (from the Press Democrat article below)...the town of Bodega Bay now plans a pedestrian walkway directly through town from the Bodega Bay Community Center at the north, through county- and state-owned parklands to Bay Flat Road. The trail would travel along Highway 1 or along side streets or both to Smith Brothers Road and Birdwalk Park at south end of town.

Santa Rosa Press Democrat // News for California's North Bay and Redwood Empire

Fireworks are back in Bodega Bay!

After a 3-year hiatus, fireworks are coming back to Bodega Bay in 2006 on July 2. While there's no charge for the event, these things aren't free and the fundraising efforts have begun. My wife, Tammi, is this year's Head Firecracker and is heading up the task to raise about $8000 - she needs your help.

Please donate at Gourmet au Bay (913 Highway One) or mail a cheque to the Bodega Bay Area Chamber of Commerce, PO Box 1175, Bodega Bay, CA 94923 (reference "Fireworks"). Any amount will be appreciated.

Several restaurants are gearing up with events to coincide with the display so it should be a great weekend to be on the Coast...

Click here for an event poster including info on the Bodega Bay Firefighters Annual Pancake Breakfast taking place in the morning...

One in 13 California Homes Sell for a Million Bucks

DQNews - DQNews - Million Dollar Home Sales Press Release

The number of $1M+ homes in California increased again in 2005 to 1 in 13. That's a significant rise from 2004 where one in 20 sold for a million dollars or more. Here in Bodega Bay, there were 36 million dollar homes sold out of a total of 80 (average = $994,754). If you'd like a complete market summary, email me and I'll send one out.

Lower sales volume in 2006

Realtors see 4.7% drop in 2006 home resales

While it's expected that California will see a 2% drop in sales volume this year, the National Association of Realtors is predicting a 4.7% drop nationwide. Once again, the Golden State should outperform national averages and is expected to have the third best year on record. Not too shabby for a market that the media has pounded for a couple of years now with talks of bursting bubbles and collapsing values.

And here on the Coast, our usual protections of relatively low availability/high demand still exist. We're beginning to see much more buyer activity as inventories reach two year highs (coming out of extreme lows). We're positioned to find some balance in a market that has gone from a strong sellers market in 2004/2005 to a buyers market in late 2005/early 2006.

Prices seem to be holding fairly steady after an adjustment period where listings were regularly reduced in order to attract nearly non-existent buyers. Price growth is slated for about a 5% increase overall in 2006.

Go to www.bodegabayproperties.com to see what's available.

2006 Housing and Economic Forecast

Seems that all of the talk of a real estate bubble may have popped itself. Expectations for 2006 look quite familiar - in fact, much like the results we had in 2005. The California Association of Realtors released their Housing and Economic Forecast and say that the economic factors look reasonably stable and while there may be a 2% decrease in the number of homes sold, prices should hold steady.

CAR suggests that "it takes a major economic disruption or a rapid increase in interest rates to cause a price decrease in the California housing market. The statewide median home price has increased by an average of 9 percent annually since 1970." The number of second/vacation homes has been on the rise for five years straight (and most of the last decade) and it looks to continue that through 2006.

Overall, it was a cautiously optimistic outlook for 2006 with expectations of steady economic conditions, low but rising interest rates and unchanged inventory levels. For the Coast, I'd expect slightly increased inventories and less-than-normal price growth.

Remodel Before You Sell? Maybe...

Realtor Magazine does an annual report on the cost versus value of remodeling your home and the 2005 results are interesting - especially if you're looking to sell your home soon. What's most interesting is the effect of location on the return you can expect from your investment. If you live in the West, you have a much better chance of turning the cost of the project into a profit than if you live in the South or Midwest - but each of the 58 cities studied had quite variable results so check out the details of the report in the link below.

The San Francisco market showed the best overall returns on nearly all of the remodel projects which include bathrooms, kitchens, siding, decks, etc. Of course, many factors affect the true value of the project and you also need to consider the cost of NOT doing the project. Keeping up with neighboring homes may necessitate a remodel in order to make your home saleable in the first place. By not remodeling an old kitchen or bathroom, you can turn the sales cycle into a long ride...

Here's the article:
Feature: 2005 Cost vs. Value Report

Shine On!

Solar power has been around for billions of years, but Californians are finally being financially encouraged to harness the stuff. And Governor Schwarzenegger may finally found something to hang his political sunhat on - he started the "Million Solar Rooftops" initiative and now has the backing of California's Public Utilities Commission with a 3 to 1 approval of the measure.

The bottom line is that builders and homeowners can receive up to one-third of the cost of installing a solar system on their homes - one that will cost about $27,000. The system should provide enough power for a 2500 square foot home to zero out it's annual electricity costs by running the meter backwards during the sunny days (California gets a lot of sunny days).

Initially, the incentives will be targeted on larger projects (like new office buildings or apartment complexes) and over the ten year period, existing residences will begin taking their share of the $2.9 billion program.

But the issue here is, will it be worth it? It takes a lot of $200 electricity bills to make up for the $27,000 investment in free power - about 11 years worth (or 7 years with the rebates). But as energy costs continue to rise as they have in the past, it may be well worth it if you plan to be where you're at for a while.

Plus, it's the right thing to do for the environment - and that's not always the right economic choice...