Monthly Archives: April 2015

Bay Area Real Estate Prognosis ~ 2015

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Real Estate Prognosis: ‘Smooth Sailing’ for the Next Three Years

April 14, 2015 by Pacific Union • Posted in Industry Surveys & Studies

The real estate industry is poised for solid growth for the next three years and quite possibly beyond, with home prices rising 4 to 5 percent each year and a solid expansion of new-home construction, according to a recent survey of economists and real estate analysts.

The survey, by the Urban Land Institute, found broad agreement that the nation’s economic recovery will strengthen at least through 2017, laying the foundation for healthy real estate markets nationwide.

The three-year forecast doesn’t drill down into specific markets, but its conclusions bode well for Bay Area real estate. Our region has been at the forefront of the current economic recovery, and another three years of expansion will keep buyers plentiful and sellers motivated to trade up to higher-priced homes.

Earlier this month we reported that the Bay Area leads California in job growth. Last year economist Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy, told Pacific Union that the region’s tech-focusd economy will keep housing demand high.

Among the results of the Urban Land Institute survey:

  • Housing starts will rise from 647,000 in 2014 to 700,000 in 2015 to 815,000 in 2016 to 900,000 by the end of 2017.
  • The average price for existing homes is expected to rise by 5 percent in 2015, 4 percent in 2016, and 4 percent in 2017.
  • Net job growth is expected to be 2.9 million per year through 2017, compared with a long-term average of 1.2 million. Low unemployment rates should lead to healthy wage gains.
  • Real estate lending will remain competitive and favorable for borrowers.

“In summary, almost all U.S. real estate participants would be very pleased if the future unfolded as predicted by the ULI consensus forecast,” Urban Land Institute executive William Maher said in a statement accompanying the survey results.

Although growth could be slowed by economic downturns, foreign crises, interest-rate spikes, or oversupplies, Maher said, “real estate pros predict three more years of smooth sailing for U.S. real estate.”

One more reason ~ Pacific Union

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Pacific Union Now Ranks in the Top 10 U.S. Brokerages for Sales Volume

 

Pacific Union is proud to announce that our firm has moved up the ranks of RISMedia’s 2014 Power Broker list and the latest REAL Trends 500 list. We are now one of the 10 largest brokerages in the U.S. as measured by sales volume.

Pacific Union’s 2014 sales volume was $6.75 billion, ranking us No. 9 on both lists, which track the largest 500 brokerages in the nation. We ranked No. 14 on the 2013 Power Broker list, No. 18 in 2012, and No. 23 in 2011. On last year’s REAL Trends 500 list, we ranked No. 13.

Our firm continues to experience in excess of 20 percent annual growth for the fifth consecutive year since the acquisition from GMAC Homes Services in 2009. We have accomplished these results organically, without acquiring other companies.

Perhaps more importantly, Pacific Union has achieved this growth with substantially fewer real estate professionals than our competitors. We were the only brokerage on both top 10 lists with less than 1,000 real estate professionals – 637 as of 2014. By way of comparison, the No. 8 ranked brokerage had roughly six times the number of real estate professionals as Pacific Union.

According to Pacific Union CEO Mark A. McLaughlin, the company’s business model of attracting and retaining only the San Francisco Bay Area’s most talented and efficient real estate professionals is the primary reason for our firm’s consistent sales volume growth over the past few years.

“This is an outstanding accomplishment that Pacific Union achieved organically without acquiring a single competitor,” McLaughlin says. “I am honored and inspired daily to play on this special team of the finest real estate professionals — the people who make this kind of amazing yearly growth possible.”

Pacific Union’s relationship with the industry’s finest professionals is a direct result of our culture and commitment to their success. “Our culture is 100 percent our most significant asset,” Pacific Union President Patrick Barber says. “It’s in our DNA, and it’s what makes us tick, perform, and provide a level of elite service to our professionals and their clients.”

Staging ~ Almost a necessity!

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Staging ~ Increases a Home’s Appeal

With the coming of spring, potential Bay Area homebuyers will begin pounding the pavement, and homes that make a good first impression are the most likely to make the biggest impressions on eager buyers in what could be a crowd of open houses.

That’s where home staging can help.

A recent survey by National Association of Realtors’ 2015 Profile of Home Staging showed that 81 percent of homebuyers found professionally decorated properties easier to visualize as a future home. Staged homes typically sell within 30 days, according to research by The International Association of Home Staging Professionals and HomeStaging.com. Additionally, staging usually leads to a higher final sales price.

“Staging isn’t about decorating your home,” says Laney Nelson, Accredited Staging Professional stager for Walnut Creek-based East Bay Staging. “It’s about selling.”

THE BASICS AND BENEFITS OF STAGING

Stagers conduct a home assessment, examining items to be removed and refurbished, neutralizing decor to appeal to a majority of buyers, and maximizing both indoor and outdoor space to generate positive impressions of the home’s features. Replacing carpeting and flooring, painting, cleaning, landscaping, changing furniture, and even simple fixture replacements can help a property connect with buyers.

But mixing conflicting styles and accessories can put off homebuyers, according to Kelly Wood, a buyer’s specialist and a former stager. “The extremes don’t really work,” she says.

Additionally, staging and repairs offers the appearance of home upkeep, both in the real world and online, says Danielle Cirelli, owner of Walnut Creek-based staging company Designed to Sell. “Photos are an essential part of marketing because over 90 percent of the buyers will preview a property online,” she says.

Millennials, who currently make up the largest share of homebuyers, are even more likely to peruse online listings before visiting a home. Pacific Union CEO Mark A. McLaughlin stressed the importance of technology on the real estate industry in his recent Inman Select Live presentation, saying that digital strategies are geared toward users likely to “give you eight seconds.”

CONNECTING WITH A STAGING PRO

Sellers who decide that staging is the way to go will likely want to employ the services of a pro. Many expert real estate professionals offer their clients a list of recommended contacts – including architects, general contractors, and interior designers – who can help enhance a home’s appeal. Some real estate professionals provide staging services as a part of their service package. Sellers can also find a staging company through online resources such as Yelp and Angie’s List or referrals from friends and family.

Though some sellers might fret over staging expenses, it actually costs less — an average of $675, according to NAR’s study — than the first price reduction – typically at least 10 percent of asking price. And a lingering home on the market sans staging can incur additional price cuts, according to Nelson.

Every month a home is on the market, there is a price reduction of usually 5 percent.