2013 Median Home Prices in Alameda & Contra Costa Counties

There has been a considerable price increase in 2013 through out Bay Area. Many first home buyers start to search homes without a detailed knowledge of home prices and get disappointed that they cannot afford to buy a home in the City of their choice.

To avoid disappointment and to save search time, we have compiled the table of median prices in all cities in both Alameda and Contra Costa counties. Data are based on sales reported in MLS for the homes sold in 2013 ( Jan 1, 2013 to Dec 31, 2013).

The table below summarizes the median home prices in all cities. Since the size and characteristics of a median home can vary between cities, we have also tabulated median price of a typical home with 3 Bedroom , 2 Bath  room , living area of 1000-1600 sq ft home. This provides a more uniform measure of  home prices across different counties. 

The median price of home varies between $200K to nearly $2M. The median days on market varies between 8 days to about 20 days.

	All Homes Sold in 2013			3 BR 2 Bath, 1000-1600 sq ft Home
City	#Sold	Median Price (K)	Median days on  market	#Sold	Median Price (K)	Median Days on Market
Alamo	221	1299	14	4	896	13
Albany	161	620	14	20	679	9
Antioch	1366	269	12	276	211	11
Baypoint	154	210	13	47	240	10
Berkely	612	730	15	43	730	14
Blackhawk	140	1,216	20	0	0	0
Brentwood	917	402	11	96	290	9
Castor Valley	601	556	12	106	505	11
Clayton	198	592	12	29	450	9
Clyde	6	260	10	2	297	32
Concord	1491	375	11	369	365	12
Crockett/Port Costa	37	290	19	8	318	19
Danville	848	865	10	106	585	9
Diablo	16	1,986	35	0	0	0
Discovery Bay	310	396	14	8	282	16
Dublin	743	583	10	134	520	11
El Cerrito	256	580	15	44	560	14
Emryville	158	354	14	3	450	12
Fremont	2021	635	12	495	590	12
Hayward	1401	375	13	394	384	12
Herculus	308	362	13	65	270	15
Kensington	70	843	15	9	723	15
Lafayette	330	1,122	12	26	855	9
Livermore	1214	520	10	320	465	10
Martinez	580	380	11	120	377	10
Moraga	210	949	11	26	535	12
Newark	425	452	12	139	450	11
Oakland	3620	410	14	324	417	14
Oakley	515	292	13	120	242	10
Orinda	266	1,100	12	24	814	12
Pacheco	34	261	9	13	308	12
Piedmont	113	1,500	13	4	1,182	11
Pinole	194	325	14	84	330	13
Pittsburg	609	260	12	135	228	12
Pleasanton	875	761	10	103	605	8
Pleasanton Hill	486	525	11	104	519	10
Richmond	979	255	14	177	260	14
Rodeo	71	274	14	13	270	13
Rossmoor	577	299	9	6	482	10
San lorenzo	271	385	13	82	404	11
San Peblo	277	215	14	98	250	14
San Ramon	986	759	9	90	622	9
Sanleandro	1048	390	13	149	410	12
Sunol	4	707	57	0	0	0
Union city	485	500	12	109	475	13
Walnut creek	968	660	11	103	609	9

2010 School API reports

There is a definite correlation between the median home prices and the API scores of schools in that area. Many first time buyers are not aware of school's API scores especially the young couples with no school attending children. They make the home purchase decision without inquiring about schools performance. Unfortunately, they realize the importance of schools a few years later and then get forced into sending the kids to private schools.

The following links provide the API scores for different Bay area counties.

Alameda

Contra Costa

Santa Clara

San Mateo

San Joaquin

San Francisco



To find the school where your child will attend the school, one should always call the school district and confirm the attendance area and check if the student attendance is guaranteed or if there is a wait and the child will be sent to a nearby school.

How much can I borrow?

How much can I borrow and what are housing expenses?

We get frequent question from listeners asking how much can I borrow? The exact amount one can borrow depends on a number of factors , for example – annual income, down payment amount,  credit score, loan term, loan program, interest rate, property type, HOA dues, and additional liabilities  like credit card debt , car payments, child support, alimony. A simple rule of thumb is one can borrow roughly around 5 times gross annual income. 

Consider a specific example of purchase price of $700K, loan amount $560K, 20% down payment of $140K, single family owner occupied home with no HOA fees, monthly credit card and car loan of $300. Under these conditions, borrower needs an annual income of $113K for 30 yr fixed term at 5% interest rate. Ratio of loan amount/annual income is 4.9. On other hand  if the rate drops to 3.25% for a 7/1 ARM product, required annual income is $97K and so ratio of loan amount to annual income is  changed to 5.7.

The graph below shows the effect of interest rate on  the maximum loan amount one can borrow and corresponding monthly payments.  loan amount and your monthly payments.

Other question asked frequently is – I want to buy a house but do not want to spend more than my current monthly rent, say $2000. A rule of thumb is that your effective monthly payment is only 50-60% of your monthly housing expense. If one is paying $2000/month rent one should consider buying a home with monthly housing expense of roughly twice that amount  of $4000/month.

Consider again the same example discussed above at  5% rate, one  has to pay interest of about $2330, principal of $670, property taxes  $670, property insurance $80. Both Interest and property taxes of $3000 are tax deductible and can save you about $1000/month if you are in 33% incremental tax bracket.  In addition, principal payment of $670 is also forced saving. So effective monthly payment is $3750-$1000-$670 = $2050. Pie chart below shows relative distribution of different items.

The above numbers provide a rough analysis. One should always consult a qualified tax adviser for tax benefits. For a detailed analysis of your particular mortgage situation, ,rate quote, and  pre-approval letter, please contact us by filling preliminary form at our website , http://RekhaChatwani.com and select loan application from menu bar on left side, or email   Rekha Chatwani 

Median Prices in Bay Area

The table below summarizes the median prices for single family home in many different towns in Bay Area. The prices are based on MLS data for each town for the period between Jan 2011 - May 2011 and gross living area of 1000-2000 sq ft.

For more details on current prices in any specific town in Bay area, please email me your request at
Rekha@RekhaChatwani.com

City Median Price City Median Price
(1000 $) (1000 $)
Merced 100 Alameda 550
Stockton-South 102 Antioch 165
Sacramento 110 Brentwood 230
Modesto 113 Castro Valley 370
Stockton-North 130 Concord 275
Lathrop 136 Cupertino 930
Antioch 165 Danville 640
Tracy 173 Discovery Bay 230
Brentwood 230 Dublin 410
Discovery Bay 230 Freemont 500
Oakland 235 Hayward 255
Hayward 255 Lathrop 136
Concord 275 Livermore 330
Livermore 330 Los Altos 1325
San Jose
- Alum Rock 330 Los Gatos 900
Castro Valley 370 Merced 100
Union City 370 Milpitas 440
Newark 390 Modesto 113
Dublin 410 Mountain View 900
San Jose-
Evergreen 430 Newark 390
Milpitas 440 Oakland 235
Freemont 500 Palo Alto 1250
San Ramon 537 Pleasanton 588
Alameda 550 Sacramento 110
Pleasanton 588 San Jose-
Alum Rock 330
Santa Clara 590 San Jose-
Evergreen 430
Danville 640 San Ramon 537
Sunnyvale 790 Santa Clara 590
Los Gatos 900 Stockton-North 130
Mountain View 900 Stockton-South 102
Cupertino 930 Sunnyvale 790
Palo Alto 1250 Tracy 173
Los Altos 1325 Union City 370

Rent vs Buy

A listener on Pravasvani Sham Ka Safar program, aired on KLOK 1170 am, asked whether one should buy or rent the house.

The answer is a very personal thing and the best course of action may be based on financial, emotional, and personal factors. So let us look at the personal or emotional aspects.

Owning a home provides a place which you and your family call  a home. It is a sign of stability which is cherished by the family throughout the life. Kids always remember the house they grew up in as their home throughout their life. Owning a home means you are not subject to landlords whims who may decide not to renew the lease and you are forced to move. If the move is local, kids may not have to change the school. Or the move may be slightly long distance, in which case kids have to change school, make new friends, get adjusted to new environment etc.

The financial aspect is  simpler to address. If you are planning to stay at one place over a long period of time, then owning a home definitely makes financial sense in any market. Historically, owning real estate has been on average the highest source of appreciation. Many wealthiest people in America own their fortunes to real estate investments. All the landlords provide rental units not because of the goodness of the heart but because it is the safest source of investments.

There  is a practical aspect to the home ownership. One should have sufficient income, stability, and reserves to  afford mortgage payments, property taxes, insurance, home improvements, utilities etc. Typical rule of thumb is that total housing related expenses should be about 1/3 of gross income. Buying home by stretching your expenses beyond your income has led to the current crisis. The days of using house prices as an ATM are gone. There is no doubt that if one can afford to purchase a home and keep it for a long term period, then ownership benefits will outweigh rental benefits.

The situation for a short term is not clear and varies from place to place and your time horizon. There are many financial calculators which allow one to compare the cost of renting a home vs the cost of owning a home. One such calculator link is given below-

http://realestate.yahoo.com/calculators/rent_vs_own.html

Considering todays low market values and low interest rates, buying a home will be financially better than renting it for many people and in many markets.

How To Refinance House Under Water?

A question frequently asked by listeners on Sham Ka Safar program Pravsavani at KLOK 1170 am and from me is My house is under water and my interest rate is high so I can refinance my home to benefit from todays low interest rates?

There are not too many options available in such a case. In most cases, banks need a 20% equity in the home to refinance it. So if your house is under water, meaning the current value of the home is less than the current mortgage balance, then one can refinance the 80% of the current home value and pay the difference between the refinanced amount and the current loan amount. To give a specific example, if the current loan amount is say $400K and the current market value is $300K, then you can refinance the loan amount of $240K ( 80% of $300K) and bring $160K cash to pay off the first mortgage. Obviosly, in today's economy, this option is not available to majority of the people.

The next option is to find out if you are eligible to benefit from HARP ( Home Affordable Refinance Program). This is a government program and has strict guidelines for its eligibility) . Some of the main requirements are described here.
(1) The loan should be owned by Fannie May or Freddie Mac.  The borrower can call the loan servicer and and ask if the loan is owned by Fannie May or Freddie Mac. One can also check it out online by visiting the following websites-     http://www.fanniemae.com/loanlookup/  and https://ww3.freddiemac.com/corporate/.
If your loan is not owned by Fannie or Freddie, then you are not eligible for HARP.
(2) You must be current on your mortgage payments ( current means should not be more than 30 days late for the last 1 year)
(3) Your current mortgage amount should not be more than 125% of your current home value.
(4) The loan amount should be less than $729K
(4) The property should be a owner occupied home
(5) You should be able to afford the new payments.

If you meet all these requirements, then you should contact your current servicer and apply for refinance under HARP program. You have to pay the cost of refinancing  which should typically be less than 1% and can be recovered easily because of the reduced interest rates.

Is Earthquake Retrofitting Required?

Is earthquake retrofitting required for sale of home?

 A listener wanted to know if earthquake retrofitting is required when selling or refinancing a single family home?

Sale of a home or refinancing of home does not require the seller to retrofit the home for earth quake safety. However, the sale of a home does require the seller to provide the new buyer with a Property Transfer Disclosure ( TDS) form. This form essentially details  items included in the sale, repairs done on the property, a history of know defects in the property, and any other factors which may affect the value of the property. California law also requires seller or their agents to provide a number of consumer safety guides. These include Residential Environmental Hazards , Protect Your Family From Lead , Homeowner's Guide to Earthquake Safety.  If   home was built before 1960, the seller or their agents are required to answers questions related to the home structure pertaining to Earth Quake Safety.  These disclosures provide necessary information to the buyer regarding the suitability of the purchase.  

In view of the recent Earth quake in Japan, it is natural to be concerned about the possibility of earth quake in Bay area and its potential damage to your home. Homeowners’s Guide to Ea rthquake  Safety shows the history of major California Earthquakes for the last 100 years. If your home lies in a major earth quake area and you are concerned about the damages, one should consider retrofitting the home and getting earth quake insurance. Retrofitting homes can be done through certified retrofitting contractors. Earth quake insurance can be obtained through your home insurance providers. Retrofitting of older homes can reduce the cost of the insurance premium. It then becomes a matter of personal choice of  weighing cost , insurance savings, and the peace of mind.

More Information can be obtained by the following links.

http://www.disclosuresource.com/downloads/environment.pdf

http://www.disclosuresource.com/downloads/lead.pdf

http://www.disclosuresource.com/downloads/earthquake.pdf

http://www.disclosuresource.com/downloads/consumer_forms.pdf

http://www.disclosuresource.com/downloads/HomeEnergyRating.pdf