Wright Report Q3-4_2015

July - December, 2015

www.WrightRealEstate.us Page 1 (916) 726-8308

Wright Report

Perspective and Overview of the Residential Housing Market:

The United States, State of California, and Northern CA Region.

July to December, 2015

TTHHEE WWRRIIGGHHTT RREEPPOORRTT



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The Wright Report

Prepared by:

This work is licensed under the Creative Commons Attribution-ShareAlike 3.0 Unported

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Prepared By: Joel Wright

Document Version: Final

Last Updated On: April, 2016



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TABLE OF CONTENTS

TABLE OF CONTENTS ....................................................................................................................... 3

EXECUTIVE SUMMARY:.................................................................................................................... 4

THE EXPERTS WEIGH IN: .................................................................................................................. 5

Sacramento Appraiser: Ryan Lundquist ................................................................................. 5

Rental Housing Association: Jim Lofgren................................................................................ 7

Exchange Servicer: Bill Angove ............................................................................................... 8

Real Estate Attorney: Stephen Beede .................................................................................... 9

NATIONAL MARKET TRENDS: ........................................................................................................ 11

New Home Sales: .................................................................................................................. 13

Macro Economic Trends: ...................................................................................................... 15

Distressed Sales: ................................................................................................................... 17

Lending, Banking & Interest Rates: ...................................................................................... 18

CALIFORNIA STATISTICS: ................................................................................................................ 21

REGIONAL STAPSHOTS: Northern California 16 Counties ............................................................. 24

Northern Bay Area Counties – Marin, Sonoma, Napa.......................................................... 26

Southern Bay Area Counties – San Francisco, San Mateo & Santa Clara ............................. 29

Eastern Bay Area Counties – Contra Costa, Alameda & Solano ........................................... 32

Sacramento Valley Counties – Sacramento, Placer, El Dorado & Yolo ................................ 35

Central Valley Counties – San Joaquin, Stanislaus, & Merced ............................................. 38

RESOURCES: ................................................................................................................................... 42



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EXECUTIVE SUMMARY:

Residential markets appear pointed in the right direction for continued

growth during 2016. Following a year of relatively stable GDP and job

growth, low interest rates, increasing new and existing home sales,

lower inventory and price increases, the housing market in 2016

seems set to expand.

During the last half of 2015 many markets in Northern California and

the U.S. saw flat or declining sales prices, but when compared year

over year with 2014 they all showed strong increases. 2016 will likely

continue these same trends.

The Sacramento Metro Area median sales price remained stable

through the end of 2015 even as inventory shrank and the number of

sales remained about normal. As the new year took hold we are

seeing price increases due to inventory shortage, and increased

activity from Bay Area residents looking for less expensive property

not too far from home.

Another important shift is the infusion of foreign capital into our local

real estate markets. Across the U.S. huge amounts of cash from

foreign investors seeking stability are being pumped into residential

and commercial properties. The properties are bought as long term

holds. While this trend is likely to continue and it supports housing

demand, it also increases prices and lowers CAP rates for buyers

across the board.

Not everything is rosy as the FED doesn’t feel the economy is strong

enough to raise rates, the Stock Market experiences tremors, foreign

economies continue to be in economic trouble, Global Oil prices were

in freefall, and conflicts abroad remain unresolved. Nevertheless the

core economic situation in the U.S. seems to be in pretty good shape.



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THE EXPERTS WEIGH IN:

Sacramento Appraiser: Ryan Lundquist

Modest Value Increases, but Aggressive Demand

If I had to sum up the market last year I would say values were

modest, but demand was aggressive. In other words, the market felt

like it was increasing rapidly because of how much competition there

was to get into contract, but actual value increases were deemed fairly

minimal overall. The median price increased by roughly 7% as did

average sales price and average price per sq ft. Housing inventory was

low all year long, sales volume was up by 11%, cash investors didn’t

drive the market like they did in years past, FHA buyers gained a

greater share of the market, the Fall in 2015 was far less dull than the

previous year, and distressed sales were hardly a factor.

On paper it looks like buyers should be buying everything in sight

because of how low inventory has been, but overpriced listings and

properties with adverse location and/or condition issues are tending to

sit rather than sell. This reminds us the mood of the market has

shifted from say early 2013 where buyers were desperately trying to

get into contract on anything they could.

One last aspect worth mentioning is rents have been increasing in

many areas in Sacramento, which is a double-edged sword in that it is

good for investors, though it puts pressure on would-be buyers to

afford the market since more of their income is going to rent rather

than savings. Crucial trends to watch for in 2016 are the direction of

interest rates, the economy, and housing inventory.



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Ryan Lundquist is a Certified Real Estate Appraiser in the Greater Sacramento

Area. He also specializes in reducing property taxes. Check out his informative

Blog at www.SacramentoAppraisalBlog.com or contact him directly at (916)

595-3735.



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Rental Housing Association: Jim Lofgren

Northern California Rental Housing Update

Rent control proposals continue to spread in Bay Area cities where

rents have increased by double-digit figures for several years. Since

the Sacramento region has experienced similar increases, it probably

is a matter of time before tenant activists push for rent controls in this

area. The shortage of rental housing inventory is the primary culprit

for the Sacramento region ranking in the top 10 regions nationwide for

rent increases over the past several quarters. New development of

housing is needed, but the projects in the pipeline fall far short of the

need. So, the tenant activists may try to push for rent control even

though most elected officials are on record opposing it.

One new issue facing landlords is the U.S. Department of Housing and

Urban Development (HUD) recently issued new guidelines regarding

use of criminal backgrounds checks by rental property owners and

managers. Since a disproportionate percentage of adults with a

criminal history are African Americans and Hispanics, HUD warned that

denying rental housing based on criminal history background checks

may be discriminatory and violate the Fair Housing Act. Although HUD

did not prohibit the use, the burden of proof falls on the rental

property owner or manager to prove that the use of such reports and

the denial of certain applicants does not have a discriminatory effect.

Attorneys are working with their rental property clients to determine

whether they should continue the use of criminal history reports in

screening tenants and, if so, how to minimize the risk of a

discrimination lawsuit.

Jim Lofgren has been the Executive Director of the Rental Housing Association

(RHA) for 18+ years. RHA is a non-profit trade association representing owners

and managers of more than 80,000 units. For more information contact the RHA

at (916) 920-1120 or http://www.rha.org/.



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Exchange Servicer: Bill Angove

Changes in the Northern California 1031 Exchange Market

The number of 1031 exchanges increased some 20% from 2014 to

2015. With very low inventory in both residential and commercial

properties, exchangers are having to make offers earlier to lock up their replacement property(s) or face the risk of not meeting the 45

day identification period.

Most exchanges in the Sacramento area are being done on residential properties. We are seeing the average price on properties being sold,

and exchanged out of, increased significantly in Northern California, with the Bay Area accounting for a majority of the price increase. The

same is happening in the commercial property market. There are fewer commercial sales so far in 2015, but based up our phone activity

in early April, I expect the number of commercial 1031 exchanges to grow significantly in the next quarter.

Bill Angove is a Vice President with 18 years at Asset Preservation, Inc. a national

Qualified Intermediary assisting investors defer gains at sale using 1031

exchanges. For information see http://apiexchange.com/ or call him directly at

(916) 791-5991.



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Real Estate Attorney: Stephen Beede

Continued Worries for Upside Down Owners

Well we certainly are in a time of concern in the real estate market

with low inventory, short sale times, and more demanding loan

requirements. Lost in all this have been the fates of the thousands of

people who remain upside down on their properties. While they

received lots of attention when REO’s and Short Sales was 70% of the

market, today at 7% it’s a very different story:

Loan Modifications – In general lenders have no desire to modify

existing loans and cannot be compelled to do so. Even where debtors

appear fully qualified for a Mod, most requests are denied under the

Net Present Value test. Under NVP, if the lender/investor thinks they’d

be better off forcing the sale or foreclosure, then they deny the Mod. If

nothing else, this cleans a bad loan off the bank’s balance sheet which

is a focus for most banks today.

Foreclosures – Although not as noticeable as in years past,

foreclosures are still occurring at strong numbers as lenders again are

cleaning their books of bad loans. These typically indicate a failure to

achieve a short sale often as a result of junior lender’s refusal to

cooperate. Most lenders do not want a Deed in Lieu of Foreclosure and

those are generally non-existent in multi-loan situations.

Short Sales – These remain the path of choice for most but not all

upside down owners. Since enactment of Civil Code 580e in July

2011, lenders cannot require sellers to contribute any money nor is

there any recourse following short sale. But for lenders, the process

will be faster, less expensive, and yield more sale proceeds than a

foreclosure. The most impacted owners today appear to be people

that obtained an interest-only loan back in 2005-6. After 10 years,

many of these are now resetting to fully amortized and adjustable

interest. So now they may find themselves with equity in their home



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but no ability to refinance and insufficient income to pay the higher

debt costs. The result is Short Sale or sometimes foreclosure.

Equity Sales Act – In dealing with a Seller with equity but in default,

agents and buyers must be aware of the California Home Equity Sales

Contract Act. In any such real estate transaction, the Buyer must give

the Seller a 5 day Right of Cancellation. Transferring title before

expiration of the Cancellation period could expose the Buyer to

penalties of up to 3 times the equity plus attorney fees and costs. The

unaware Buyer might then go after their agent.

Stephen Beede is a prominent local attorney with very wide experience with

residential real estate that he brings to his law practice. He can be reached at

(916) 966-2260 and online at www.bpelaw.com. He also keeps an excellent blog

at www.stevebeede.com.

www.WrightRealEstate.us

Wright Report

NATIONAL MARKET TRENDS

National Real Estate Market

The U.S. median sold price in December 2015 hit $22

an increase of 7.2% from the $208,200 in December 2014

5.5% from the market high

The average sold price for a single family home in December 2015

reached $266,400, a decline from June’s $280,200, but an increase of

4.4% from December 2014

In 2015 the sale of single family homes (SFR

reached 5.25 million sales. That is up

2014; and also more than the

http://economistsoutlook.blogs.realtor.org/2016/02/02/raw

2015/

July - December

Page 11

TRENDS:

Real Estate Market

The U.S. median sold price in December 2015 hit $223,200. That is

from the $208,200 in December 2014, but down

% from the market high of $236,300 in June 2015.



4.4% from December 2014 which was at $255,300.

In 2015 the sale of single family homes (SFR – homes and condos)

million sales. That is up 6.4% from 4.94 million sold in

; and also more than the 5.07 million sold in 2013.

http://economistsoutlook.blogs.realtor.org/2016/02/02/raw-count-of-home-sales

December, 2015

(916) 726-8308

00. That is

, but down



homes and condos)

% from 4.94 million sold in

sales-december-


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Purchasers buying for investment purposes

sales, down from 17% in 2014

http://economistsoutlook.blogs.realtor.org/2016/02/01/sales

purposes-15-percent-of-resident

U.S. inventory in December 2015, a total of 1.7 Million homes,

declined to 4.4 months of units available for sale, down from 5 months

of inventory in December 2014.

February 2015, the rest of t

inventory each month.

The National Home Ownership Rate

While it is down from the high of 69.2 in Q4

with the long term historical trends

Homes are taking longer to sell, but it is mostly due to the new Federal

guidelines (TRID – TILA

requiring additional time at

approve the lending costs for their loan. While

to streamline the process

escrow time by an average of 10 days

July - December

Page 12

Purchasers buying for investment purposes accounted for 14

, down from 17% in 2014.

http://economistsoutlook.blogs.realtor.org/2016/02/01/sales-for-investment

residential-sales-in-december-2015/



of inventory in December 2014. With the exception of January and

February 2015, the rest of the year has been less than 5 months of

The National Home Ownership Rate in Q4-2015 ending at 63.

While it is down from the high of 69.2 in Q4-2006 it is more in line

with the long term historical trends prior to 2000.

king longer to sell, but it is mostly due to the new Federal

ILA RESPA Integrated Disclosures) that are

requiring additional time at the end of escrow for buyers to be able to

approve the lending costs for their loan. While one of the objectives is

to streamline the process, the result is that it actually extended the

escrow time by an average of 10 days at the end of 2015. In fact, as

December, 2015

(916) 726-8308

4% of

investment-



January and

he year has been less than 5 months of

15 ending at 63.8%.

in line

king longer to sell, but it is mostly due to the new Federal

) that are

of escrow for buyers to be able to

one of the objectives is

it actually extended the

In fact, as


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lenders and escrow companies applied the new rules the number of

sales that closed in Nove

into December.

All cash purchases accounted for 24% of all sales in December 2015;

down from 26% in 2014.

New Home Sales:

SFR New Home sales in 2015 reached

435,000 homes sold in 2

http://economistsoutlook.blogs.realtor.org/2016/02/02/raw

december-2015/

July - December

Page 13


sales that closed in November declined as many sales were bumped


down from 26% in 2014.

SFR New Home sales in 2015 reached 501,000 surpassing the total

in 2014.

http://economistsoutlook.blogs.realtor.org/2016/02/02/raw-count-of-home

December, 2015

(916) 726-8308


bumped


the total of

home-sales-


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Median sold price is down

in Q4-2015, however, the

3.8% from 2014 to 2015

also declined from $380,200 to $358,400 in Q4

annual sales price increased

$355,500.

http://economistsoutlook.blogs.realtor.org/2016/01/27/latest

december-2015/

The average size of new homes increased in 2015 from 2,660, in

2014, to 2,720 square feet. There is currently 5.1 months on

inventory in December 2015, up from 4.8 months in January.

Lack of skilled labor is still the primary concern of the industry,

followed by cost of buildable lots, and

regulations. Lending for construction projects is also a concern for

developers as construction loans are still marginalized by many banks

July - December

Page 14

Median sold price is down 3% from $302,300 in Q4-2014 to $2

, however, the average median price for the year increased

3.8% from 2014 to 2015. The average sold price for on new homes

from $380,200 to $358,400 in Q4-14 to Q4-15, but

increased slightly by 1.8% from 2014 to 2015

http://economistsoutlook.blogs.realtor.org/2016/01/27/latest-new-home

of new homes increased in 2015 from 2,660, in



is still the primary concern of the industry,

buildable lots, and federal environmental


as construction loans are still marginalized by many banks

December, 2015

(916) 726-8308

2014 to $293,200

average median price for the year increased

on new homes

15, but the

from 2014 to 2015 to

home-sales-

of new homes increased in 2015 from 2,660, in



is still the primary concern of the industry,

ederal environmental


as construction loans are still marginalized by many banks.



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Macro Economic Trends:

GDP growth in 2015 is estimated at 2.2% overall with Q3 and Q4

declining from Q2. It is not as strong as many would like to see, but it

is not negative.

http://money.cnn.com/2016/01/29/news/economy/us-economy-gdp-fourth-quarter/

Job growth has also been strong through the 2015 with job gains of

2.5 Million for the year.

As the job situation improves and Main Street becomes more confident

in their employment prospects for the foreseeable future, buyers are

beginning to purchase more. We have already seen this in the number

of homes sold in 2015, and while the number of resales are back over

5 million units sold, new home sales are still very depressed.

Millennials are beginning to find employment, form families and move

out of their parent’s home, and when they do they want to purchase a

place to live. However, due to the great recession, a struggling

National Economy and slow job recovery and growth, mixed with

increased migration and population growth and a large student debt

load they continue to remain behind the curve with household

formation and home purchases.



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The U.S. unemployment rate declined to 5% in December 2015, a

decrease from 5.6% in December 2014. In California the

unemployment rate declined to 5.9% in December from 7.1% a year

earlier.

Even though unemployment continues to decline, the labor force

participation rate (the % of the population actually working) has also

dropped slightly year over year. In December 2015 it was 63.8, up

slightly from 62.6% in June, and down slightly from 64% in December

2014.

Labor Force Participation Rate

http://data.bls.gov/timeseries/LNS11300000

The volatility of the Stock Market will likely benefit residential real

estate because some investors will be motivated to diversify into

assets like real estate which are seen as being more stable. The

perception, however, is that the real estate market is high, even

though many areas are still affordable locally and across the country.

International factors will also play into the performance of the national

economy and affect the housing markets. China’s fiscal considerations

will definitely affect the U.S. economic policy and housing, as well as

continued unrest in Syria and Ukraine.



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Oil prices remain low after a historical decline and with lower prices at

the pump comes money into the wallets of the consumer, but surveys

show they are paying down debt and saving, not buying new products.

Distressed Sales:

Distressed sales have drastically reduced since 2011. In 2015 they

only account for 6.1% of sales nationally.

While REOs have decreased substantially, they represent about 1.1%

of all homes with mortgages (433,000). Those that are seriously late,

90 days or more, represent another 3.2% of the mortgage pool, or 1.2

million units. There is another 450,000 mortgages that are between

60 and 90 days late.

At the end of 2015 the five states with the highest foreclosure rates

are Florida, Michigan, Texas, Ohio and Georgia.

Even as the markets are improving, bulk sales of properties continue

to occur, though now it is less the REO properties being sold in bulk

and more the nonperforming mortgages behind the homes. HUD over

the last 5 years has sold some 17 Billion in distressed mortgages to

Wall Street and Hedge Funds.

Some cities have complained that they are not being allowed to

purchase the nonperforming loan batches near them. I think it is

more likely that they do not have the infrastructure to properly

address the issues that arise with such a purchase. Not only will it be

difficult to raise the capital to purchase such a large number of

property loans, but also creating the structures to administer the loans

once purchased requires a great deal of specialized skill not typically

found in municipalities and non profits. But maybe will additional

public attention one or more of these financially hard hit cities could

put together the resources needed to purchase some loan packages.



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Lending, Banking & Interest Rates:

The Federal Reserve in December 2015 raised by .25% the FED funds

rate, the rate at which banks and other institutions borrow money

from the Federal Reserve. It is the first increase in rates in 9 years

and the results were striking… no movement in mortgage rates at all.

Perhaps the banks were already prepared for the hike in the loan

pricing, or maybe they did not want to scare their consumers and

absorbed the increase. Either way rates do not appear to have moved

at all for consumers getting a loan to buy a home.

With interest rates hovering around 4% for 30 year fixed conventional

financing, they are still near all time lows. The average rate in

December 2015 was 3.96% and that is not much higher than the 3.86

in December of 2014. In fact, only July averaged over 4% interest

rate through all of 2015.

The irony is that in June 2013 Ben Bernache, as head of the FED,

mentioned that at some point the purchase of bonds would have to

end and the mortgage rate jumped 1 point in a matter of days.



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At this point it remains to be seen if they will continue the intended

path of raising rates quarterly this year, or if they will hold off longer

due to economic considerations at the macro level. As mutterings are

heard that it may be a recession on the horizon, I am sure they will

think well about their decision.

An increase in mortgage interest rates will definitely affect the

residential markets… but its affect on the market could be positive or

negative. On the negative side it could contribute to buyer hesitancy

where there is a degree of expectation that interest rates will remain

low because they will wait for it to return to a lower rate so they can

purchase with a lower monthly payment. This would slow down the

number of buyers making offers and reduce the number of sales. On

the positive side, a higher rate might motivate buyers to get off the

fence and purchase before the rates move yet higher. Or it could have

both results and they could cancel each other out.

In early 2016 the stock market experienced some volatility. Some say

correction, others recession, and still others remain bullish. What is

likely to happen if the stock market continues to be volatile, is that it

will motivate some portion of its participants to transfer money to real

property which will support the volume and price of the residential and

commercial markets.

As we get farther from the end of the recession banks continue to

loosen slightly the restrictions on mortgages created to be sold to

Fannie & Freddie. There still remains a strong desire in the U.S.

Congress to be rid of the two lending giants, Freddie & Fannie. For

now they are generating positive revenues in the Billions of dollars

each year, and it is difficult to kill something that is paying back its

federally funded debt. Also, there does not seem to be a good solution

to replace them or any place to shift the burden of funding the vast

majority of loans in the country.

Yet even as income is up and foreclosures are down, not all banks are

out of the woods yet. Morgan Stanley just got hit with a 3.2 Billion

dollar bill for their part in the MBS situation that precipitated the



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recession. They are not the only bank that has participated in

reparations… Chase’s bill was 13 Billion, Bank of America’s 16.65

Billion, and Citi’s was 7 Billion; and Goldman Sachs and Deutsch bank

are up next.

Another lending issue coming due in 2016 is the reassessment of

HELOCs. Interest Only HELOCs, Equity second loans, are recasting

and a large number of them will be coming due this year, 10 years

after their origination in 2006. Some homeowners have kept their

property and have been paying their interest, but many will have to

begin paying their principle also which will jump many loans up a

significant amount. Unlike past issues with first loans it is likely that

the banks will take this in stride, having already been willing to do

workouts on first and knowing that the seconds on many homes will

likely be worth less than they would if they work out and probably not

worth the time and cost of going through a foreclosure. It is probably

that the banks will work out something with many of these unfortunate

seconds, though workouts on first loans with equity are becoming

increasingly uncommon.



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CALIFORNIA STATISTICS:

In California the median sold price hit $489,310 in December, up 8.1%

from Dec. 2014 ($452,570). That median price is up 99.5% from the

2009 bottom of $245,230. The current median price is also only

17.7% below the 2006 high of $594,530.

New construction is still floundering however, with limited construction

occurring and a distinct lack of supply coming forward. It is estimated

that there is a 165,000 shortfall currently, of what should be build.

This is not just a CA issue, but across the US as well. Some of it is

due to a general sentiment of existing home owners that do not want

new construction. It is also due to high fees and red tape that make

costs more expensive, and progress through development slow.



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The recovery in California is generally split throughout the state.

There are counties with strong job growth and where the median sold

price is well above the high point of the previous cycle. Others have

experienced moderate job growth and price gains, while some have

shown slow job growth and with sales prices that have not grown

substantially since the last market low point.

California has experienced strong job growth through the year, in fact

it grew at 2.9% in 2015 and was one of the national leaders in new

jobs creation.

Unemployment went down to 5.9% in CA and we are back to where it

was in November 2007, but not quite back to pre-recession

unemployment numbers of less than 5.5%.

The average Affordability, the percent of people in California who can

afford to purchase the median priced home with 20% down payment,

is 30% in Q4-2015. That is down 1 point from Q4-2014.



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Affordability in the Bay Area is well known to be low, and prices

continue to rise as rents have also spiked. There are many concerns

generally with the growing unaffordability of housing prices.

The least affordable County is San Francisco with 11% affordability,

followed by San Mateo with 14% and Marin at 17%. The most

affordable are King County at 61%, Merced at 55%, and Tulare at

54% affordability.

The ability of buyers to be able to pay for their mortgage is a major

indicator as to the health of the market and the transition through

market cycles. In fact, over 40% of renters polled cite lack of

affordability as the primary reason they don’t purchase a home.

Distressed sales continue to decline in 2015. In December 2014 the

number of equity sales in CA was at 90.1%. December 2015, it

reached 93.6% of all sales. Short sales saw the greatest reduction

from 4.9% in Dec. 2014 to 2.8% in Dec. 2015. REOs declined from

4.6% to 3.3% over the same period.

December 2015 distressed sales totaled only 6.4% of all sales; that is

a massive reduction from January 2009 where Short Sales and REO’s

accounted for 69.1% of the total.

First time home buyers make up about 30% of all buyers, and all cash

buyers are about 21% of the 2015 sales.

Another consideration in the CA real estate market is the large number

of foreign buyers purchase residential property. As much of the rest of

the world continues to experience difficult financial situation it appears

they are purchasing property in CA as a hedge against what may

happen in their own economies or to preserve cash in stable

investments. It seems this is particularly likely of Chinese buyers, as

the Chinese markets continue to experience shocks and changes.



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REGIONAL STAPSHOTS: Northern California 16 Counties

Through the 9 Bay Area Counties and the 7 Counties in the Valley we

see a consistent set of trends. Generally it is growth resonating along

the coast and Southern Bay Area which declines as it moves inland to

the Sacramento Region and down the Central Valley.

San Francisco and Santa Clara (San Jose) make up the 2 epicenters,

surrounded by 2 supporting Counties – Marin and San Mateo. Real

Estate prices in these 4 Counties begin on the low side in Santa Clara

at $922,000 (December 2015) and increase with the other 3 Counties

to top $1,000,000 median sales price. The percent of distressed sales

in these 4 Counties is 3% or less, unemployment is under 4%, and

affordability is below 20%.

As it expands outward to Alameda, Contra Costa, Napa and Sonoma

Counties the median sold prices drops to between $500,000 and

$750,000. The number of distressed sales rises to between 3-5% of

all sales, unemployment is between 4.2% and 5.2%, and affordability

increase to 21-26% except for 37% for Contra Costa County where the

income is relatively high compared to sales prices.

Extending into Solano County and the Sacramento Valley, prices begin

to decline to the $300,000s with Sacramento at the low end

($297,600) and El Dorado County at the high end ($409,800).

Distressed sales range between 3-8%, unemployment increases to

between 5.3-6.5% (except Placer County at 4.6%), and affordability is

from 44-46%.

The Central Valley trails the rest with prices in the $200,000s,

distressed sales between 8-9%, unemployment from 8.7-11.8%, and

affordability between 38-55%.

San Francisco, San Mateo, Santa Clara, Contra Costa & Alameda

Counties are also seeing selling prices higher than the listed price and

for the rest of the Counties, except Merced, the selling price is within

2% of asking price.



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All counties have seen growth in population between 2010 and 2015,

as well as Per Capita Income between 2010 and 2013. All saw an

increase in the median sales price, and most saw an increase in the

number of sales from Q4-14 to Q4-15.



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Northern Bay Area Counties – Marin, Sonoma, Napa

Market Trends:

The three Counties on the North end of the San Francisco Bay Area

have experienced solid growth over the last several years. Population

has increased 3.3% in Marin County from 2010 to 2015 and 3.6% and

4.1% in Sonoma and Napa respectively. Unemployment continues to

decline and is less than the state average of 5.9%. Per Capita Income

for each County (as of 2013) has been on the rise since 2009 in

Sonoma and 2010 in Marin and Napa Counties.

County Trends

Per Capita Income 2013

2015 Population Estimate

Unemployment Rate

Marin $97,124 261,221 3.2%

Sonoma $50,312 502,146 4.2%

Napa $56,634 142,456 5.1%

Real Estate Trends:

From 2014 to 2015 prices of Single Family Homes (SFR) have risen

substantially. All 3 Counties have a median sales price higher than the

state average, and Marin and Napa have increased more than 10%

over the last year, and Marin County topped the One Million Dollar

median sales price.

Median Sales Price

Median Sold Price Dec.

2015


2014

Yr/Yr % Change

Marin $1,120,690 $990,130 13.2%

Sonoma $563,320 $519,470 8.4%

Napa $628,120 $516,670 21.6%

The Number of Sales increased in Sonoma and Napa Q4-15 compared

to Q4-14, and decreased slightly in Marin.



Wright Report

# of Homes Sold

# Sold Q4-2015

# Sold Q4- 2014

Yr/Yr %

Change

Marin 521 529 -1.5%

Sonoma 1197 1130 5.9%

Napa 280 271 3.3%

In Q4-15, properties sold just below list price in Marin County at

99.1% of the price listed for sale on the MLS. In Sonoma County the

median sold price was the same as the median list price, and in Napa

County sold price was 98.2% of list price.

The number of Days on Market (DOM) declined in all 3 Counties

between Q4-14 and Q4-15. Marin declined 17% to 55 days in Q4-15

from 66 in Q4-14. Napa’s average DOM declined least with 4.5% to

85 from 89 days. Sonoma dropped 11% to 65 days from 73 days.

Distressed Sales, properties owned by the Bank (REOs) and Short

Sales, continue to remain low with each of the Counties placing well

under the state average of 6.4% of total sales.

Distressed Sales December 2015

Bank Owned (REO)

Short Sales Distressed - Total Sales

Marin 1% 1% 2%

Sonoma 3% 2% 5%

Napa 2% 2% 4%

Affordability, the percentage of families in the County that can afford

the median priced home, went up in Marin and down in Sonoma and

Napa Counties. In Q4-15 Marin reached 17% affordability, up from

15% in Q4-14. This is due to the increase in the median family

income for the County. Sonoma hit 26%, down from 29%, and Napa

21% down from 24%. In CA the affordability in Q4-15 was 30%.



Wright Report

Market Cycles:

Marin County reached the high point in the last cycle during June 2007

at $1,149,390. The low price point was hit in February 2011 at

$632,580. Since then the median sold price increased 73% to

December 2015 at $1,120,690. It is currently 2.5% below the

previous high. Over the last 6 months the price has fluctuated but

ended the year lower than the $1,163,460 in June 2015.

Sonoma County reached the high point of the last cycle in January

2006 at $650,326. The lowest point was in February 2009 at a price

of $312,338. Since then it has increased 80% to $563,320, where it is

currently 13% below the previous high. Since June ($573,640) the

price declined until November and then bounced back up in December.

Napa County reached the high point in the last cycle during August

2006 at $729,166. The lowest point was in April 2011 at a price of

$306,820. Since then it increased 105% to $628,120, where it is

currently 14% below the previous high. Over the last 6 months the

price has declined from June’s price at $641,670.



Wright Report

Southern Bay Area Counties – San Francisco, San Mateo &

Santa Clara

Market Trends:

The three Counties South of the Golden Gate Bridge have also seen a

dramatic increase over the last several years. Population, from 2010

to 2015, has grown 6.3% in San Mateo County and 7.3% in San

Francisco and Santa Clara. Unemployment ranges between 3.3% to

3.8%, more than 2 points below the state average of 5.9% and Per

Capita Income for all 3 Counties has increased between 18-21% from

2010 and 2013.

County Trends

Per Capita Income

2013


Unemployment Rate

San Francisco $70,190 864,816 3.3%

San Mateo $67,964 765,135 3.0%

Santa Clara $58,018 1,918,044 3.8%

Real Estate Trends:

From 2014 to 2015 prices of Single Family Homes have risen and all 3

Counties have a median sales price higher than the state average.

San Francisco and San Mateo both increased more than 20% year,

over the year with a median sales price reaching over One Million

Dollars.

Median Sales Price


2015


2014

Yr/Yr % Change

San Francisco $1,215,620 $935,480 29.9%

San Mateo $1,194,000 $980,000 21.8%

Santa Clara $920,000 $846,500 8.7%



Wright Report

The Number of Sales increased in San Mateo and Santa Clara from Q4-

14 to Q4-15, and decreased slightly in San Francisco.

# of Homes Sold

# Sold Q4-2015

# Sold Q4- 2014

Yr/Yr %

Change

San Francisco 636 675 -5.8%

San Mateo 950 882 7.7%

Santa Clara 2229 2159 3.2%

In Q4-15 properties in San Francisco County sold well above asking

price with the average sale being at 119% of list price. In San Mateo

County the median sold price was 106% of the median list price, and

in Santa Clara County the sold price was 104% of list.

The number of Days on Market (DOM) declined in San Francisco and

Santa Clara. San Francisco declined 12% to 29 days in Q4-15 from 33

in Q4-14. Santa Clara’s average DOM declined 5.7% to 33 from 35

days the year before, San Mateo stayed the same at 30 DOM.

Distressed Sales continue to remain low with each of the Counties with

the highest being San Francisco at 3%.


Bank Owned (REO)


San Francisco 2% 1% 3%

San Mateo 1% 1% 2%

Santa Clara 1% 1% 2%

Affordability stayed the same in San Francisco and went down in San

Mateo and Santa Clara Counties. From Q4-14 to Q4-15 San Francisco

remained at a very low 11% affordability. San Mateo hit 14% down

from 15%, and Santa Clara reached 20%, down from 22%; all much

lower than the CA average of 30%.



Wright Report

Market Cycles:

San Francisco County reached the high point of the last market cycle

in May 2007 at $932,352. The lowest point was January 2012 at

$561,270. Since the low the median sold price has increased 117% to

$1,215,620 in December 2015. It is currently 30% above the previous

high. Over the last 6 months the price has fluctuated and ended the

year lower than the $1,339,290 median sold price in June 2015.

San Mateo County reached the high point in October 2007 at

$1,020,000, then declined until January 2009 at $551,000. Since then

it has increased 137% to $1,194,000, where it is currently 17% higher

than the previous high. Since June ($1,300,000) the price has slowly

declined to December.

Santa Clara County reached the high point of the last cycle in April

2007 at $856,000. The lowest point was in February 2009 at a price

of $445,000. Since then it has increased 106% to $920,000, where it

is currently 6% above the previous high. Over the last 6 months the

price has bumped downward from June’s price of $990,000.



Wright Report

Eastern Bay Area Counties – Contra Costa, Alameda & Solano

Market Trends:

The three Counties on the East side of the Bay have grown also, but

not as much as their coastal neighbors. All 3 Counties have

experienced population growth from 2010 to 2015 with Contra Costa

increasing 7%, Alameda 8% and Solano trailing at 5%.

Unemployment is better than the California average at 5.6% for

Solano and 4.3% and 4.5% for Alameda and Contra Costa. Per Capita

Income also rose 12 - 15% in each of the Counties from 2010 to 2013.

County Trends

Per Capita Income

2013


Unemployment Rate

Contra Costa $55,465 1,126,745 4.5%

Alameda $48,087 1,638,215 4.3%

Solano $37,935 436,092 5.6%

Real Estate Trends:

From 2014 to 2015 prices of Single Family Homes have seen solid

increases. Contra Costa County shows a loss because of the ways

median price numbers are reported, but when comparing the median

price from Q4-14 to Q4-15 it experienced an 8% gain in median price.

Contra Costa and Alameda, the 2 Counties closest the Bay, have sales

prices higher than the state average and Solano County, even with a

10% gain in price, is lower than the state’s median sold price.

Median Sales Price


2015


2014

Yr/Yr % Change

Contra Costa $507,177 $704,440 -28.0%

Alameda $738,790 $693,180 6.6%

Solano $356,640 $324,070 10.1%

The Number of Sales increased in all 3 Counties from Q4-14 to Q4-15.



Wright Report

# of Homes Sold

# Sold Q4-2015

# Sold Q4- 2014

Yr/Yr % Change

Contra Costa 2655 2498 6.3%

Alameda 2605 2522 3.3%

Solano 1203 1057 13.8%

In Q4-15 properties sold in Contra Costa County at 102% of list price.

In Alameda County the median sold price was 104%, and Solano

County sold price was 100% of list price.

The number of Days on Market (DOM) declined in all 3 counties

between Q4-14 and Q4-15. Contra Costa declined 6% to 30 days from

32. Solano’s average DOM declined 5% to 56 from 59 days. Alameda

dropped 11% to 24 days from 27 DOM.

Distressed Sales are lower than CA average, led by Alameda County

with only 3% of sales being REOs or Short Sales.


Bank Owned (REO)


Contra Costa 3% 2% 5%

Alameda 2% 1% 3%

Solano 4% 2% 6%

Affordability went up in Alameda County, rising from 20% to 22% from

Q4-14 to Q4-15. In Q4-15 Contra Costa reached 37% affordability,

down from 40% in Q4-14, and Solano hit 45% down from 50%, both

higher than CA’s average affordability rate of 30%.

Market Cycles:

Contra Costa County reached the high point in the last cycle during

June 2006 at $923,155. The lowest point was in January 2012 at

$476,470. The median price reached $839,910 before the geographic

area being tracked was changed. This adjustment showed a median



Wright Report

price change of some $260,000 to $572,420 in July 2015. From that

point it fluctuated up and down ending the year lower at $507,177.

Alameda County reached the high point of the last cycle in May 2007

at $722,044. The low point was in January 2009 at a price of

$346,236. Since then it increased 113% to $738,790, where it is

currently 2.3% above the previous high. Since June ($814,480) the

median price dropped to October and then came up to December.

Solano County reached the high point in June 2006 at $492,799 and

the lowest point was in February 2012 at a median price of $179,020.

Since then it increased 99% to $356,640, where it is currently 28%

below the previous high. Over the last 6 months the price has stayed

pretty much the same from the June ($359,930).



Wright Report

Sacramento Valley Counties – Sacramento, Placer, El Dorado

& Yolo

Market Trends:

North East of the Bay Area is the Sacramento Valley, home to the

Sacramento Metro Area and the nexus of 4 Counties. The recovery

since 2009 has been solid and the population has increased in all 4

Counties. The slowest growth occurred in El Dorado County with 1.8%

increase since 2010, but the rest grew between 5.6% and 7.2% over

the 5 years. Unemployment is lower than the state average, except in

Yolo county which is higher, at 6.5%. Per Capita Income has grown in

each County from 2010 and 2013 between 15% and 19%.

County Trends



Unemployment Rate

Sacramento $37,700 1,501,335 5.5%

Placer $47,012 375,391 4.6%

El Dorado $48,222 184,452 5.3%

Yolo $36,505 213,016 6.5%

Real Estate Trends:

From 2014 to 2015 prices of Single Family Homes have risen but all 4

Counties have a median sales price lower than the state average of

$489,310. Sacramento saw the highest increase with 10% year over

year growth.

Median Sales Price


2015


2014

Yr/Yr % Change

Sacramento $297,600 $269,350 10.5%

Placer $391,960 $387,500 1.2%

El Dorado $409,800 $385,230 6.4%

Yolo $361,220 $344,590 4.8%



Wright Report

The Number of Sales declined in El Dorado County from Q4-14 to Q4-

15, but rose substantially in Sacramento and Yolo Counties.

# of Homes Sold

# Sold Q4-2015

# Sold Q4- 2014

Yr/Yr % Change

Sacramento 4300 3795 13.3%

Placer 1390 1327 4.7%

El Dorado 558 564 -1.1%

Yolo 404 349 15.8%

In Q4-15, properties sold in Sacramento County at 98.5% of list price.

In Placer and Yolo the median sold price was 98.8% of list price, and

in El Dorado County sold price was the same as list price.

The number of Days on Market (DOM) declined in all 4 counties

between Q4-14 and Q4-15. Sacramento declined 13% to 34 days

from 39. El Dorado’s average DOM declined least with 3.3% to 58

from 60 days. Placer dropped 10% to 43 days from 48 days, and Yolo

dropped to 37 days from 43 DOM.

Distressed Sales continue to be sold in both Sacramento and El Dorado

Counties at 8%; higher than the state average of 6.4% of total sales.


Bank Owned (REO)


Sacramento 4% 4% 8%

Placer 2% 1% 3%

El Dorado 5% 3% 8%

Yolo 3% 1% 4%

Affordability went down in Sacramento and Placer Counties. In Q4-15

Sacramento reached 46% affordability, down from 49% in Q4-14.

Placer hit 44% down from 45%. Both remain substantially higher than

the CA average.



Wright Report

Market Cycles:

Sacramento County reached the high point of the last cycle in August

2005 at $394,450. The lowest point was January 2012 at $161,080.

Since then the median sold price has increased 85% to December at

$297,600. It is currently 25% below the previous cycle high. Over

the last 6 months the price dipped to September then rallied to

December higher than the median price in June of $295,310.

Placer County reached the high point of the last cycle in August 2005

at $527,995. The lowest point was in February 2012 at a price of

$251,450. Since then it increased 56% to $391,960 where it is

currently 26% below the previous high. Since June ($402,870) the

price has declined only slightly.

El Dorado County’s median sales price is only tracked by CAR back to

2009, so we don’t have the previous cycle high point, however, the



Wright Report

low point was September 2011 at $238,750. Since then it has

increased 72% to $409,800. Over the last 6 months the price has

fluctuated, ending the year close to June’s sold price of $410,320.

Yolo County’s records at CAR also begin in 2009 with no previous cycle

high point either. The lowest point was in October 2011 at the price of

$107,500. Since then it has increased 111% to $226,560. Over the

last 6 months the price has gone up and down, but ending the year

very close to June’s sold price of $226,320.

Central Valley Counties – San Joaquin, Stanislaus, & Merced

Market Trends:

The Central Valley is located just South of the Sacramento Valley.

Population increased 5.6% in San Joaquin County from 2010 to 2015

and 3.6% and 4.5% in Stanislaus and Merced Counties.

Unemployment remains higher than the state average at close to 10%.

Per Capita Income, however, increased 13% in San Joaquin and

Stanislaus Counties and 17% in Merced from 2010 to 2013.

County Trends



Unemployment Rate

San Joaquin $30,732 726,106 8.7%

Stanislaus $31,197 538,388 9.1%

Merced $27,329 268,455 11.8%

Real Estate Trends:

From 2014 to 2015 prices for SFR rose moderately with Merced

gaining the most in value. All 3 Counties median sales price is lower

than the state average by almost half.



Wright Report

Median Sales Price


2015


2014

Yr/Yr % Change

San Joaquin $287,250 $267,070 7.6%

Stanislaus $249,440 $228,160 9.3%

Merced $208,930 $178,230 17.2%

The Number of Sales increased in San Joaquin and Stanislaus from

Q4-14 to Q4-15, but decreased slightly in Merced.

# of Homes Sold

# Sold Q4-2015

# Sold Q4- 2014

Yr/Yr % Change

San Joaquin 1695 1585 6.9%

Stanislaus 1356 1188 14.1%

Merced 318 333 -4.5%

In Q4-15 properties sold in San Joaquin County at 98.6% of list price.

In Stanislaus County it was 98.8% and Merced it was the same as the

median list price.

The number of DOM stayed the same in Stanislaus at 38 days, but San

Joaquin declined 12% to 37 days in Q4-15 from 42 in Q4-14. Merced’s

average DOM declined 13% to 46 from 53 days.

Distressed Sales continue to remain above the state average at 8% -

9% of total sales.


Bank Owned (REO)


San Joaquin 4% 5% 9%

Stanislaus 6% 3% 9%

Merced 4% 4% 8%

Affordability went up in Merced County from 53% in Q4-14 to 55% in

Q4-15. San Joaquin reached 38% affordability, down from 41% last



Wright Report

year. Stanislaus hit 40% down from 44%. All are substantially higher

than the average state affordability at 30%.

Market Cycles:

San Joaquin County reached the high point in the last cycle during

June 2006 at $426,829. The lowest point was in April 2009 at a price

of $147,053. Since then the median sold price has increased 95% to

$287,250 in December 2015. It is currently 33% below the previous

high. Over the last 6 months the sold price has fluctuated slightly to

end the year a bit lower than the $296,030 price in June.

Stanislaus County reached the high point of the last cycle in

September 2005 at $370,103. The lowest point was in February 2012

at a price of $129,863. Since then it increased 92% to $249,440

where it is currently 33% below the previous high. Over the last 6

months the price has increased slightly and then came down to its

value in June of $249,670.



Wright Report

Merced County reached the high point of the last cycle in October 2005

at $344,615. The lowest point was in January 2010 at a price of

$96,666. Since then it increased 116% to $208,930 where it is

currently 39% below the previous high. Over the last 6 months the

price has risen and fallen but remains close to the June sold price at

$206,080.



Wright Report

RESOURCES:

ABREVIATIONS

CAR = California Association of Realtors

HAFA = Home Affordable Foreclosure Alternative

HAMP = Home Affordable Mortgage Program

MLS = Multiple Listing Service

NAR = National Association of Realtors

NOD = Notice of Default

NOT = Notice of Trustee Sale

REO = Real Estate Owned by a bank, or foreclosure

SAR = Sacramento Association of Realtors

WRE = Wright Real Estate

ADDITIONAL RESOURCES

MetrolistMLS.com - to search for properties. www.metrolistmls.com

NorthState Building Industry Association (BIA) www.northstatebia.org

Rental Housing Association (RHA) www.rha.org

Sacramento Association of Realtors (SAR) www.sacrealtor.org

California Association of Realtors (CAR) www.car.org

National Association of Realtors (NAR) www.realtor.org

CA Employment Development Department (EDD)

www.labormarketinfo.eed.co.gov

United States Census www.factfinder.census.gov



Wright Report

Serving Sacramento since 2000.

Check out our BLOG and additional STATISTICS on the web at:

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Office: 916.726.8308 [email protected]