School Performance Can Increase Real Estate Values and Buyer Interest

While millions throughout the nation prepare for traditional back to school activities, some families are searching for affordable housing based on local schools or desirable school districts. In some cases, proximity to quality schools is so important buyers may choose to rent close to a preferred school until the right home becomes available, especially if they’re running out of time before the first day of school.

“I recently worked with clients that were moving to the Northwest Chicago suburbs from out of state,” said Nina Rocus, a Realtor(R) in Schaumburg, Illinois. “They originally looked for homes close to particular school districts, and wanted to move in before the school year started so their son would be enrolled on time for this school year. But because they felt they were running out of time they ended up renting. They still want to find a home in the spring so we will start looking again then.”

Because proximity to a quality school is such a high priority for some families as they search for their next home(1), buyers and sellers in cities with top ranked schools or school districts can often expect to see higher median list prices as compared to the statewide median list price, sometimes as much as 10 to 28 percent(2) higher.

“Without a doubt the ‘right’ school district increases value by 12 to 14 percent in my area even in today’s market,” said Maria Picardi-Kenyon, a long-time Realtor located in New Jersey. “I’ve spoken with many clients who are convinced that a preferred school district provides as much as 20 percent or more value to a home.”

To help families as they search for academic excellence and affordable housing during this year’s back to school season, Move, Inc., the leader in online real estate, today releases median list prices in ten communities ranked with high education quality scores, along with tips on how to expedite this season’s real estate search before the school bell rings.

Median List Prices For Cities Home to the High Scoring School Districts

In an April 2010 review of 17,377 cities and towns in 49 states(3), Ohio, Pennsylvania, Indiana and Kentucky led the review with the highest ranking school districts in terms of educational quality scores and median list prices(4) under $200,000. The review took into consideration K-12 public school enrollment data, student test scores, and population data that determined average education quality scores, among other data.

Single-Family Homes – Median List Price Under $200,000

    Town/City    School          Education   State Median   City Median List
                 District        Quality     List Price(5)  Price(5)
                                 Score(3)
    Mason, OH    Mason City      96.56       $135,900       $189,500
    Fishers, IN  Hamilton
                  Southeastern   95.89       $129,900       $184,900
    Fort Thomas,
     KY          Fort Thomas     94.22       $154,900       $174,900
    Allison Park,
     PA          Allison Park    94.07       $198,900       $169,900
    North Royalton,
     OH          North Royalton  92.54       $135,900       $179,000

Data from the same April 2010 review(6) also indicated the highest ranking school districts in terms of educational quality scores with median list prices between $200,000 and $345,270 today can be found in Vermont, Wisconsin, Indiana, and Minnesota.

Single-Family Homes – Median List Price Under $200,000 to $500,000

    Town/City   School/School     Education    State Median   City Median List
                District          Quality      List Price(8)  Price(8)
                                  Score(7)
    Edina, MN   Edina             94.74        $199,900       $345,000
    Zionsville, Zionsville
     IN          Community        94.03        $129,900       $325,000
    Brookfield,
     WI         Elmbrook          93.94        $184,000       $298,900
    South
     Burlington,
     VT         South Burlington  93.74        $269,500       $272,500
    Germantown, Germantown School
     WI          District         93.65        $184,000       $285,900

Factors Associated With Selecting Housing Near Quality Schools

While the National Education Association’s study on student achievement reports the proximity of affordable housing in stable neighborhoods remains a key component to a student’s success, buyers also often consider location to jobs, shopping, freeways, and property taxes among other things when searching areas with high ranked school districts.

“Clients focused on a particular school district are often inclined to favor neighborhoods that have great accessibility to community facilities like parks, pools, tennis courts, running/biking trails, as well as access to retail and restaurants,” said Tom Thornton, an EcoBroker with Realty Austin of Austin, Texas. “In Austin, popular neighborhoods with good schools can have an average negotiation range of two to three percent from list price, while the resale advantage can be as much as a five or 10 percent premium compared to neighborhoods without popular amenities.”

Is Bigger Better?

The ability to live, earn and learn often comes with a price in communities that serve larger student populations. According to The United States Department of Education, three states – California, Florida and Texas – account for 45 of the nation’s largest public school districts with an average of 169 school choices per district.

Median list prices for single-family homes listed for sale on the Move Network in California, Florida and Texas in July 2010 were $335,000, $215,000, and $179,900 respectively, while the national media price was $212,900 during the same time period.

Average active list prices for single-family homes listed for sale on the Move Network in the nation’s top three largest school districts in July 2010 were $816,545 in New York, $879,743 in Los Angeles, and $425,869 in Chicago.

Nation’s Largest School Districts / Market Median List Price

    City        School            Education    State Median      City Median
                District          Grade(9)     List Price        List Price
                                               (10)              (10)
    New York,
     NY         NYC Schools       B+           $299,900          $816,545
                Pop: 1,049,831
    Los Angeles,
     CA         LA Unified        B            $335,000          $879,743
                 student pop:
                  735,058
    Chicago, IL City of Chicago   B            $209,900          $425,869
                 School Dist-
                  299. pop:
                   409,279
    Miami, FL   Dade County       C            $215,000          $765,599
                 School
                  District. pop:
                   352,536
    Ft.         Broward County    B            $215,000          $585,901
     Lauderdale, School
      FL           District.
                    pop:
                     231,187

Community Information, School Data and More Available online 24/7

Regardless of the time of year, consumers searching for a property on the Move Network can easily find local community information at the bottom of each listing detail page(11) including school name, distance from the home of interest, type of school, grades taught, Great Schools Rating, parent rating; and the location of the home on a map that can be viewed in road, aerial or bird’s eyes views.

Additional information on these listing detail pages(12) includes: cost of living; climate; distinctive community characteristics such as the closest airport, colleges, closest major sports team, and general community information such as population statistics; household information including number, size and family make up of recorded households; general housing information such as pricing, dwelling age and annual residential turnover; available transportation types; income, net worth and employment by industry and occupation.

Homeowner Confidence in Real Estate Market Dips; 1 in 3 Think Worst Is Yet to Come, While 38% Think Local Home Values Have Reached Bottom

Homeowners are more pessimistic about the short-term future of home values in their local market than they have been in the past three quarters, according to the Zillow second quarter Homeowner Confidence Survey(ii). One-third (33 percent) believe home values in their local housing market have not yet reached a bottom, while 38 percent believe they have already reached a bottom.

More than one-quarter (28 percent) of U.S. homeowners said home values in their local real estate market will decrease in the next six months, up from 20 percent in the first quarter. Additionally, less than one-third (30 percent) believe home values in their local market will increase, down from 42 percent in the first quarter.

Despite the increasing pessimism, a large number of homeowners anxiously await the opportunity to sell. Five percent of U.S. homeowners say they are very likely to put their home on the market in the next six months if they see signs of a real estate market turnaround. This translates into 3.8 million homes with the potential to come into the market(iii). By comparison, 5.2 million existing homes were sold in all of 2009(iv).

Looking backward, homeowners also became slightly more pessimistic about the performance of their own homes’ values in the past year. Less than a quarter (24 percent) of homeowners said their home had increased in value in the past year, compared to 27 percent in the first quarter. In reality, 34 percent of homes increased in value in the second quarter, according to the Zillow Q2 Real Estate Market Reports.

“As homeowners have been so inundated recently with news of declining home sales post-tax credit, it’s no surprise that they would become more pessimistic about the future of home values,” said Dr. Stan Humphries, chief economist at Zillow.com®. “Homeowners have become much more responsive to current market conditions than they were just two years ago, when a more typical reaction was denial.

“Given this sentiment, we’re surprised so many homeowners believe their market has already bottomed. Although our Q2 reports indicated signs of stabilization in 30 percent of markets we cover, we’re concerned that this was at least partly due to the homebuyer tax credits. We’re already seeing payback for the credits in the form of declining home sales, and this trend will push up inventory levels and exert downward pressure on home values. Add in the inventory from the millions of sidelined sellers and we’ll take more steps back. Our forecast remains largely unchanged: We’re in for an L-shaped recovery that will likely keep annualized home value appreciation very low for the next three to five years.”

Zillow.com Partners with Apartments.com to Bring National Database of Managed Apartment Rental Listings to Zillow

Zillow.com® and Apartments.com™, two of the nation’s leading online destinations for real estate and multifamily housing, respectively, today announced a partnership to bring the Apartments.com national database of 90,000 managed apartment rental listings to Zillow®. Apartments.com rental listings include comprehensive home details, photos, floorplans, and property manager contact information – bringing the full search experience from Apartments.com to Zillow.

Listings from Apartments.com will receive exposure to Zillow’s 12 million monthly visitors(i), nearly two million of whom are currently renters. This syndication brings the total number of rental listings for single-family homes and apartments on Zillow.com to 150,000.

In addition to being displayed on Zillow, Apartments.com rental listings will also appear on the Zillow Mobile application, which has been downloaded more than two million times and is the most popular real estate application on the iPhone®, Android®, iPad™, and Windows® Mobile platforms.

“Zillow offers an unmatched user experience for home shoppers who are renting, deciding whether to rent or buy, or shopping for a home to buy. This partnership deepens Zillow’s footprint in the rental search industry, and gives Zillow users access to a new category of managed apartment rental listings,” said Chloe Harford, Zillow’s vice president of mortgages and new ventures.

Kevin Doyle, senior vice president and general manager from Apartments.com adds, “Our new partnership with Zillow is extending our reach to renters. By creating easy and convenient access to our listings, Apartments.com is able to drive highly qualified apartment shoppers to the leasing offices of our advertisers through unmatched exposure.”

In December 2009, Zillow added rental listings to its database of 100 million U.S. homes to complement its four million for-sale listings. Using the industry’s first monthly payment search filter, Zillow lets home shoppers search by a monthly payment they can afford, and simultaneously browse for-sale and for-rent homes. This is a helpful benefit as one in four (25 percent) home shoppers plan to search for both homes to buy and homes to rent, according to a recent Zillow survey(ii). Zillow home shoppers can also search for listings by neighborhood, ZIP code or city, and numerous home characteristics.

About Apartments.com

Apartments.com (http://www.apartments.com) is a leading national apartment Internet listing subscription service with more than 50,000 unique addresses representing more than three million rental units from managed properties, newspaper classifieds and for-rent-by-owner properties. With personalized searches, highly visual ads featuring “Walkthrough Video,” “Apartments.com Anywhere” mobile solutions, 360-degree virtual tours, professional photography and comprehensive community listings, Apartments.com makes it possible for renters to access apartment rental inventory from across town or across the country. Leads from highly qualified ready-to-rent prospects are delivered to Apartments.com customers, increasing closure rates and decreasing the average cost of leasing an apartment. The website’s foundation of solid partnerships with more than 1,000 newspaper affiliate and strategic partners across the country include Yahoo! Real Estate, AOL Real Estate, Univision, the Chicago Tribune, The Washington Post and the Los Angeles Times. Apartments.com is a division of Chicago-based Classified Ventures, LLC. The Apartments.com network of apartment rental websites includes Apartment Home Living (http://www.apartmenthomeliving.com), a leading social media apartment website distinguished by a “live for fun” community experience, proprietary lifestyle matching and local living guides to help renters find their perfect place to live.

About Zillow.com

Zillow.com is an online real estate marketplace where homeowners, buyers, sellers, renters, real estate agents and mortgage professionals find and share vital information about homes and mortgages. Launched in early 2006 with Zestimate® home values and data on millions of U.S. homes, Zillow has since added homes for sale and homes for rent, a directory of real estate and lending professionals, Zillow Advice and Zillow Mortgage Marketplace. One of the most-visited U.S. real estate websites, with 12 million unique visitors per month, Zillow’s goal is to help people become smarter about homes and real estate in every stage of their lives — home buying, selling, renting, remodeling and financing.  The company is headquartered in Seattle and has raised $87 million in funding.

Zillow.com, Zillow and Zestimate are registered trademarks of Zillow, Inc. Apple and iPhone are registered trademarks of Apple, Inc. iPad is a trademark of Apple, Inc.  Android is a registered trademark of Google Inc. Apartments.com is a trademark of Classified Ventures, LLC.  Windows is a registered trademark of Microsoft Corporation.

(i) In August 2010, more than 12 million unique visitors came to Zillow.com, according to internal tracking by Omniture. Zillow’s August 2010 site survey shows that 14 percent, nearly two million, of those visitors are currently renters.

(ii) This survey was conducted online by Harris Interactive within the United States on behalf of Zillow.com between June 24-28, among 2,452 adults ages 18+, of whom 1,724 are homeowners and 692 are renters. This online survey is not based on a probability sample and therefore no estimates of theoretical sampling error can be calculated; a full methodology is available. 

SOURCE Zillow.com

George’s July 2009 State of the Bay Area Real Estate Market

Interest rates have recently dropped back down ~1/4 Pt after moving up ~3/4 Pt in June. We are now at 5.25% for 30-Yr Fixed Conforming loans with 0 Pts and 5% for 30-Yr Fixed Agency Jumbo loans with 1.5 Pts
30-Yr Fixed Jumbo loans (loans higher than $729,750) are averaging 6.9% IY and they typically now require at least a 700 Credit Score, 6 months reserves, & 20-25% downpayment (30% downpayment for loans of 1M+). This tightening of jumbo loan money is a big reason for the recent downturn in values of high end (1M+) homes, by the far THE housing sector taking a value hit right now (while the 750K and under market surges). According to Princeton Economist Bernard Baumohl, the high end is unquestionably the worst performing sector of the residential real estate market right now. Sales of existing homes priced above $750,000 made up 2.3% of all sales in the first quarter of 2009. That’s down from 4.4% of homes sold in 2007, before high priced mortgages dried up. The recession and collateral damage in the stock markets have knocked many luxury buyers out of the market.
As to why the 750K and under market sector is doing so well these days, C.A.R.’s 2009 Survey of California Home Buyers shows that favorable home prices, record-low interest rates, and the belief that rates will rise in the near future has been the primary motivators leading home buyers to purchase this year. 68% of buyers said price decreases motivated them to buy a home, 39% reported low interest rates helped them move to a better location, & 23% claimed the likelihood that rates will go up as the motivating factor. Housing affordability has improved dramatically in response to the decline in home prices along with historically low mortgage rates, creating a tremendous opportunity for California home buyers. According to the survey, 49% of all buyers purchased a home though a traditional market sale, while 38% purchased an REO/bank-owned property, and only 13% of buyers purchased a short-sale property.
Meanwhile, recent news indicates that another wave of foreclosures is poised to strike, possibly as soon as this summer. Amid rising unemployment and falling home prices, mortgage defaults have surged to record levels this year. Until recently, many banks have put off launching foreclosure action on troubled properties, instead modifying loans to make it easier for troubled borrowers to make payments. It’s unclear how big this next foreclosure wave will be or how much of it will be concentrated on the Bay Area, but loan defaults are up sharply and many government and banks’ self-imposed foreclosure moratoriums are expiring with the biggest lenders indicating that they are likely to move more aggressively to clear up a back log of troubled mortgages. Mark Zandi of Moody’s Economy.com estimates that 15.4 million homeowners (or about 1 in 5 of those with first mortgages) owe more on their homes than they are worth. Many Real Estate experts (including myself) think that this next wave of foreclosures could be as big as the one we saw through 2008, but that the effect on prices won’t be as severe because values already have plunged and there’s a lot of demand for REO properties. Still, it could keep prices low and slow down the general recovery.
The LA Times recently reported that 467,000 jobs were lost in June, which is 117,000 more than analysts had expected, and this raised our unemployment rate to a 26-yr high of 9.5%. Not only was the size of the payroll loss unexpected, but it reversed a trend in which the monthly losses had been steadily shrinking from the January peak of 741,000 jobs eliminated. Those declines (since January) had raised hopes that an actual turnaround might be approaching. This is the only recession since the great depression to wipe out all the job growth from the previous business cycle.
Looking at the most recent Bay Area statistics, the low end of the market (750K and under) continues to surge despite the negative unemployment figures and the next wave of foreclosures looming.
San Mateo County Home prices rose for the 5th straight month in June, hitting an average Sale Price of $945,717, a 28% total rise from its low of $683,900 in January. (Class 1&2) Residential property inventory also dropped for the 2nd straight month (to 2,065 total active listings), but is still 9% above January’s inventory level of 1,884.
Santa Clara County Home prices rose for the 4th straight month in June, reaching a $688,484 Avg Sales Price, up a total of 18.5% from its low of $561,329 in February. SC County residential inventory also dropped for the 4th straight month, sinking to 5,584 total active listings compared to 6,806 in February.
The East Bay (Alameda/Contra Costa county) region has seen Sales outpace Listings over the past month (2,919 Sold to 2,435 New Listings), although so far in July New Listings are slightly outpacing Sales.
San Francisco residential inventory also dropped for the 3rd straight month in June. Monthly listings are still outpacing sales, but at a decreasing rate. San Francisco Residential inventory now sits at 2,076 Active listings, 964 Class 1 (Single Family Homes) and 1,112 Class 2 (Condos/TH’s), down 8% from a total of 2,261 in March.
I expect the next few months to be more of the same (as recent trends) with high end homes continuing to struggle and the low end homes and condo market (in many parts of the Bay Area) continuing to move quickly with plenty of demand in place. More foreclosures and short sales will hit the market, but there seems to be more than enough qualified buyers (including investors) to snatch them up and it shouldn’t cause values/prices to go back down, just probably slow the progress that we have seen over the past 5 months.

George Sudol is the Broker for Bay Area Realty Services (with offices in San Mateo and Palo Alto).
He writes these monthly state of the market newsletters to keep his clients constantly informed of the Bay Area Real Estate market conditions. Please call George at 650-242-4079 or Email him at george@ba-realtyservices.com if you have any Bay Area Real Estate questions or needs.
You can also visit him and his Brokerage on the web at www.ba-realtyservices.com

Holiday Home Prices Wilt In Euro Drought

Spain and Portugal have suffered one of their worst droughts on record this summer, with consequences from empty swimming pools for the tourist to economic disaster for farmers losing their
crops and livestock.

Roger Munns, Managing Director of Tribune Properties, predicts that property prices in the two European countries could drop as much as fifteen per cent in some areas as more owners decide to put their villas and apartments on the market.

‘For many owners of second homes the original motivation to buy was to have somewhere they could spend time in a relaxing environment. Coupled with the thought of a good investment for the future, the market for overseas homes from buyers in the UK, Germany and Scandanavia has really taken off in the last twenty five years.

But soaring temperatures and a strain on the water supply could have consequences for their rental returns next year, which many owners rely on to meet their overseas mortgage.

Many holidaymakers want to rent a villa with a pool – but the attraction soon goes if the pool is empty. Some golf courses are having to cut down on watering their greens too, and it won’t take a big fall in tourism to mean the difference between breaking even and not being able to meet the mortgage commitments for some overseas property owners.

This autumn could see more properties than usual being put on the market, with a consequential fall in prices’.

Early warning signs of a potential fall in property prices have already been seen on the Spanish Mediterranean island of Menorca, which has enjoyed better rainfall this year than the Spanish mainland and no water restrictions, but some villas being cut in price by over ten per cent.

Water restrictions on the mainland are having an impact on potential villa buyers, with many questioning the value of a swimming pool when they might not be able to use it.

Portugal has recently asked Spain for 6 million Euros in compensation, as water levels in the River Douro which runs through both countries fell below limits established in a bilateral agreement,with Portugal coming close to accusing her neighbour of stealing her water.

Good Time to Buy
‘For anyone considering buying a property in Portugal or Spain, this September and October could be the ideal time to buy’, say Tribune Properties. ‘Unusually many properties were being reduced in price in August, traditionally a good month for sales.

We normally see villa and apartment prices being dropped mid September onwards when the tourists and potential buyers are thinner on the ground as some owners are keen to sell and don’t want to wait until the following Easter before having a real chance of selling again.’

The drought isn’t the sole cause of property prices falling add Tribune Properties, saying it has accelerated price falls and come on top of an already poor year for many estate agents in Europe.

‘A good barometer for European property are the tax havens of Monaco and Andorra which don’t rely on ‘tourist’ buyers, but usually have a steady supply of buyers interested in taking advantage of the zero income tax rate. Andorra is in the Pyrenees and has no water supply problem – but estate agents were twiddling their thumbs this summer waiting for buyers to show – and they didn’t.

Monaco similarly has had no water supply problems, but has also seen a lack of buyers. The tourists are still visiting the Principality and hotels in Monaco and Monte Carlo have been as busy as ever, but again there is a lack of serious property buyers, and negative property inflation is quite possible in Monaco this year for the first time in a decade.

With more property available on the market we would suggest buyers draw up a list of three or four villas they have viewed and liked, and then suggesting to the owners that they would consider buying at fifteen per cent below the advertised asking price to see which ones are prepared to consider it.’

Sea Water
One possible answer to secure the long term tourist trade and consequential property market is to follow Malta’s example of building desaliniation plants, converting sea water to drinking water, sometimes known as ‘reverse osmosis’.

The Mediterranean island competes with Portugal and Spain for the attention of second home buyers, and has a healthy tourist industry – despite having no rivers and low rainfall, allowing the island to function normally even in drought conditions.

The water from this source can be used for agriculture and ensuring adequate reserves to fight forest fires for example – it might just be the answer too for the swimming pools and golf courses – and would allow a plentiful supply of high quality for domestic use.

About The Author: For details of hotels in Monaco, Monaco’s
weather, a map of Monaco, the Grand Prix and direct contact
details for the Hotel de Paris, Columbus Hotel and others visit
http://www.yourmonaco.com For property and real estate in Malta
http://www.maltaproperty.info and for property in Andorra
http://www.propertyandorra.com

Next Page »