Spotlight on River Islands, Lathrop, CA

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Real Estate

 

Hello there. This is Nagaraj Annaiah, your trusted realtor from the Bay Area. Here are the top headlines for this week. Home Seller Profits Averaged $94K in 2021. U.S. Housing Market has Doubled in Value since the Great Recession, Gaining $6.9 Trillion in 2021. Rising interest rates are making Bay Area homes, less affordable. High prices and higher interest rates ahead make monthly payments, a stretch. San Francisco has 40,000 empty homes. Would taxing them help solve the city’s housing crisis? Yahoo's new headquarters at Coleman Highline in San Jose is the most valuable real estate sale of 2021. Intuitive Surgical widens buying binge for Sunnyvale properties. Five-year shopping spree by medical tech titan tops $100 million. Belvedere housing plan calls for 42 homes on lagoon. Wildfire risk: Marin homeowners face increasing insurance woes. In this episode, I will answer three questions on people’s minds. Which are the top 5 emerging realty markets in California? Why are Tech execs driving high-end single-family home buying in several markets? And why are people moving to River Islands to live and work? Besides, I will also look at the latest realty trends in five happening counties of the Bay Area. If you have any property-related query, please leave your comments. If you are planning to buy or sell a home in the Bay Area, I am the expert you are looking for. 

 

Why people are moving to River Islands in Lathrop?

Lakes, schools, parks, and a river. That’s the benefit of staying in River Islands in San Joaquin County. This region in Northern California is even described by its developers as the “home of the 7-day weekend”. So what’s really working for this premier master-planned community facing the San Joaquin River Delta? Cool homes, fabulous schools, spacious parks, fascinating trails, and a restaurant and pub serving sumptuous food and drinks. Up next is a business park and downtown retail. It’s ‘location, location, location’ doing the trick for River Islands. The region is equidistant to San Francisco, the Silicon Valley and Sacramento, so you can live here and be everywhere. People are moving away from congested and highly pricey areas of San Francisco and San Jose in search of more open space, so they can work from home. The statistics say it all. In 2021, around 76% of the 641 homes for sale in River Islands were bought by Bay Area residents. Many people who hadn’t even heard of River Islands are now living here, and many more are planning to do the same. If we look at the MLS listings for Lathrop city that is closest to River Islands, you get a good idea of the realty developments in the area. The average days on market in Lathrop for single family homes has come down from 54 in February 2021 to 17 in Jan 2022. The months of inventory has come down from 4 months in March 2019 to less than a month in January 2022. The number of homes for sale stood at 14 while 34 were sold, clearly showing the demand-supply gap, thanks to the interest from Bay Area dwellers wanting to buy single family homes here. The sale prices have hovered around the $650,000 mark. So what do you get for $900,000? Much more than what you get in Santa Clara or Cupertino. Take that to mean, 3,500 sq. ft of space for a 5-bed house with 4 bathrooms at an average cost of $260/sq ft. You also get houses spread across 1,500 sq ft for $376-400/sq. ft here.


Top 5 emerging markets in California

Realtor.com has compiled a wonderful list by surveying 300 largest metropolitan areas in the United States to identify the top “emerging markets.” They have found areas that are not just great home buys but also providing added creature comforts, such as beach access, warm weather, restaurants, and shopping. So if you want to know the next best places in California where you can invest, here is the Hit List:

San Luis Obispo-Paso Robles-Arroyo Grande, California

San Jose-Sunnyvale-Santa Clara, California

Oxnard-Thousand Oaks-Ventura, California

Santa Cruz-Watsonville, California

Vallejo-Fairfield, California

 

Tech execs driving high-end single-family home buying in several markets

Techies, particularly in fields like life sciences, engineering, technology, and telecommunication are primarily influencing the luxury real estate market in the Bay Area. The pandemic made it even more beneficial to them as they are stepping out of San Francisco and San Jose to Seek more space in cities, such as Austin, Miami, Marin, and Texas. In San Francisco, 17% of the listed jobs are remote compared to 2-3% before the pandemic. The techies want to stay with friends and family, have room for in-laws and space for kids play area. They are adopting the hiking, biking, and sailing culture. About 6.4% of the immigrants in the top markets happen to be from outside, beating the 300-city average of 5.9%. One more new trend? Charging stations in high-end homes as the future of transport is electric.

MORTGAGE NEWS

The mortgage rates are the lowest in more than a week. While the 30yr fixed scenarios will hover between 3.625% and 3.75%, the effective rate during closing costs and credit will be less. After the Fed announcement, things are less volatile, and prices are consolidating, which is good news for home buyers. Home prices have gone up, but the pace is the same. Mortgage application submissions have dipped. While new home sales have gone up, pending home sales have come down. If we look at the annual trends, home prices gained 15% in 2021 compared to 6% in 2020. Single-Family Construction Spending Rose by One-Third Last Year by totalling $1.599 trillion in 2021, up 8.2% from 2020. Residential spending posted a double digit growth of 22.9%. The Rising Interest Rates have Propelled Surge in Refinancing that rose by 2% from last week. The Mortgage Bankers Association has said that the Market Composite Index, which is essentially a measure of mortgage loan application volume, went up by 12% on a seasonally adjusted basis from one week ago, and was up 15% on a non-adjusted basis. While the Refinance Index grew by 18% from last week, it was down 50% compared to the same week last year.

County News

The median price of a single-family home in the nine-county Bay Area hit $1.2 million in December, up 13 percent from the previous year. Here is where realtors like us have one advantage that the layperson does not. We have access to MLS listings that give a granular look at the realty scene in all the nine happening counties of the Bay Area. With forward-looking market metrics like ‘change’, ‘pending’ and ‘sold’, you get a ringside realty view that could help you before you attempt to buy or sell any property. The MLS data highlights the new, pending and sold listings from 2020 to 2022, so you get an idea of the realty market’s highs and lows. Let’s start with Santa Clara, the market leader in real estate in the Bay Area. With over 1293 active listings, 435 new and 347 pending, 150 of the properties on the market were sold last week. 

 

San Mateo is next with only half the active listings as Santa Clara, and yet it's still the second-best county in Bay Area with 688 active listings, 188 new, 139 pending, and 67 properties sold. Monterey figures next with 455 active listings, 85 new, 31 pending, and 58 sold. Santa Cruz takes the fourth spot among the five counties of the Bay Area that I am covering this week. Out of the 289 active listings, 49 were new, 29 were pending, and 45 were sold. San Benito County is last at 104 active listings, 22 were new, 13 were pending, and 16 properties were sold. 

 

If we look at the most happening county in the Bay Area for single family homes, you will get a closer look at what’s happening on ground. In Santa Clara, the average days on market came down by 32% from 22 days in February 2021 to 14 days in January 2022, with all the properties getting sold by then at 111% higher than the list price. The months of inventory or the average time for all the properties to get sold in the county came down from a high of 2.6 months in April 2020 to 0.4 in October 2021. This indicates a hot property market where the supply is less and buyers are far more. In January 2022, 466 houses were for sale, and 493 were sold. The sale prices, however, have remained largely stable, with prices hovering around $2m since May 2021. 

 

Conclusion

The Bay Area is becoming unaffordable by the day. However, thanks to the pandemic and the ‘work from home’ culture, you have a chance to move out of congested, unaffordable areas in San Francisco and San Jose to places, such as River Islands where you can buy homes at half the price. People are adopting the ‘hiking, biking, and sailing’ culture to live much more relaxed lives. To smoothen out the process of buying and selling homes in this part of California, get yourself a local realtor like me. See you soon in the next episode. Until then, stay safe, and mask up.