Real Estate News for Friday, February 10th, 2006

CALIFORNIA AND THE WEST. Fewer Seen Able to Afford a Home. A California real estate group says rising prices and mortgage rates will push the percentage to a record low this year. The percentage of California households able to afford a median-priced home will sink to a record low this year as home prices and mortgage interest rates edge up, a real estate group said Thursday. "We think affordability will reach a new low this year," said Robert Kleinhenz, an economist with the California Assn. of Realtors. "I suspect we will get in the 10% to 12% range and then hold steady." Kleinhenz said his group's measure of California households that could afford to buy a median-priced home in December with a 20% down payment and traditional financing was 14%, unchanged from November and down from 19% a year earlier. At 14%, the measure matched a record low notched in mid-1989, reflecting the effect of home prices in California advancing at double-digit rates in five of the last six years, Kleinhenz said. The median price of a home in California was $548,430 in December, compared with the national median of $209,300 in the same month, he said. To afford a median-priced home in California in December, a household would have needed total annual income of $134,200, compared with income of $51,200 to buy a home selling at the national median price that month, Kleinhenz said. The formula does not account for any equity from a previous home that a buyer may bring to a transaction. Click here to read more.

Plan targets home listings. Ballot initiative would overhaul MLS system. Local real estate industry participants expressed skepticism about the practicality and advisability of Barry's initiative proposal. There are checks and balances in the current MLS system that make it a solid system," said Dale Gray, chief executive officer for the Central Valley Association of Realtors. The CVAR operates the 2,000 plus-member Central Valley Multiple Listing Service, one of two MLSs serving the region. That MLS may join a half-dozen others to create a regional listing organization that would serve 11 counties in the Central Valley, Bay Area and the coast down to Monterey. Gray said that confidential selling information, including alarm codes and a lock-box secure access system, are managed by the MLS, and protecting that information within a public site would be inherently difficult. The public already is privy to nonconfidential property listing details on Web sites such as realtor.com, he said. Gray also said that the MLS mediates complaints that come out of the operation of its service, a benefit unlikely to be offered in a statewide system. Frank Orello, a sales manager for Coldwell Banker Grupe in Stockton who pays about $150 per quarter to subscribe for MLSs, sees no advantage for real estate agents should the initiative pass. "As a local Realtor, I don't know what advantage there would be to having access to listings in Los Angeles," he said. Click here to read more.

You Sell, Me Sell, We Sell. The huddle of houses for sale in the San Diego neighborhood is part of a growing phenomenon in San Diego County real estate. "Cluster selling," which Realtors said they haven't seen since the mid-1990s, is now becoming evident in several San Diego neighborhoods. "People are getting nervous. They're seeing their neighbors selling their home and they're thinking maybe now I should go ahead and put mine on the market before they take something really low and the prices go down," said Karen Whitfield, a Realtor with Re/Max Hometown Realtors in Santee. The prevalence of such cluster selling is undoubtedly adding to the high levels of real estate inventory in the San Diego County market. There were 16,464 homes on the market Wednesday, according to www.ziprealty.com, a Web site that keeps inventory and sales statistics. That's up from March 2004's all-time record low inventory of 2,301 homes. Alan Gin, professor of economics at the University of San Diego's Burnham-Moores Center for Real Estate, said he doesn't read too much into the trend towards cluster selling. Gin said homes sales generally lead to more home sales, whether the sales prices are high or low. When a home sells for more than expected, Gin said, the neighbors may try to cash in their equity. When a home sells for a disappointing price, however, the neighbors may think it's time to bail. Gin said it's too early to tell whether the selling trends being seen in the county could lead to a larger "chain reaction" in selling, as homeowners scramble to cash in on the equity gains they have seen in the past few years. Click here to read more.

Radon: how dangerous is it? Radon is still a risk in many homes, according to the American Lung Association, which recently distributed information on the South Coast offering free radon detection kits to local residents. Radon, a naturally occurring colorless, tasteless, and odorless radioactive gas, results from the decay of uranium, which is found in nearly all soils. The coastal region between Summerland and Monterey has some of the highest levels of radon in California, because the area it has large deposits of Rincon Shale, "marine rock approximately 17-20 million years old, laid down in the sea," said Professor Emeritus Robert Norris from UCSB's geology department. "The Rincon [Shale] is a fairly prolific producer of Radon in our California coast," he said. "It forms a band along the South Coast from roughly the brush line down toward the sea. "I think if you have a well-ventilated house and live in this area, you don't really need to worry much about it," said Norris. "The Rincon Formation is a producer of radon, and it's one of the rock units in the state that produces the most radon. Below Sycamore Hill, the Sycamore Canyon area has a lot of exposed Rincon, then the lower foothills out west toward Gaviota do too." Click here to read more.

~Tina Jan~
Coldwell Banker Kivett-Teeters
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