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Napa & St Helena Real Estate Market Outlook May 2012


The Napa Wine Auction weekend starting on May 31, 2012 –June 3, 2012 is the kickoff season event in the Napa Valley. With the sights of spring bring out the beautiful vineyard landscapes in the Napa Valley.  The spring home buying season looks bright. If activity in St Helena, Napa & Calistoga is sustained near present levels, existing-home sales will see their best performance in five years. Now is the time to list your home as sales in St Helena, Calistoga and Napa are selling quickly. There is a limited inventory right now so finally it’s a seller’s market again. Home prices are coming back up in the valley. St Helena’s median home price is $745,000 and the land median being at $3,950,000. Like all statistics, those can be looked at in more than one way. We know that some numbers are more reliable than others. This particular index is based on an unusually large sample: about 20% of all transactions for existing home sales. It’s a forward-looking indicator: in the past, it has signaled coming trends before they materialize. This index seldom produces a straight line of activity because of seasonal and monthly ups and downs, but this time a trend is evident that is notably above the pattern from a year ago.

St Helena & Napa home sales patterns are not invariably tied to national trends — but they aren’t impervious to them, either.  So we are pleased when our own impression that the spring market is looking up is borne out by the experts who deal in the broader picture. Based on all of the factors in the current market expect to see sales rising 7 to 10 percent in 2012.

Real estate is a famously local phenomenon, and although we keep an eye on the national and state markets, our real attention is always centered right here in St Helena. If you have questions about your own real estate outlook, call me anytime for a consultation focused on your neighborhood.

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Napa Valley Investment & Vacation Home Markets Waking Up!

The investment- and vacation-home markets in Napa Valley, St.Helena & Calistoga have been among the first to show signs of real estate resurgence, according to the people who keep track of such things (as usual, the National Association of Realtors® is one). A second home can be a vehicle to generate investment income.Or it might be the fulfillment of a long-held dream.  St. Helena just passed a law to legalize short term rentals this past March 2012. Read more here.

It might seem unlikely, given the general view that the housing sector continues to post mixed signs of recovery. But when you think about it, there are reasons why it could make perfect sense. A few that come to mind:


* The price is right. If the overall real estate market is in fact in the process of rebounding, it’s still so early that no one can be certain it will be strong — or even that it will continue. You couldn’t describe a more appealing situation for small investors who have been biding their time, waiting for the right bargain to pounce upon. Investment home prices rose 6.4% last year (of course, because rents were rising), yet the median vacation-home price was down over 19%! Talk about vacation bargains! All of a sudden, the daydream of affordable vineyard homes in the Napa Valley for sale seem to have become a reality.


* The market is open. Right now, there are also strong inventories of vacation and Napa houses for sale – many of them located in attractive settings. Many of those settings also happen to be the very places were the real estate market is still digging out from under the foreclosure mess. This makes it easy for people to find vacation- or investment-home opportunities that previously would have been out of their price range.


* Interest rates are low. Low interest rates make a second mortgage even more affordable for those seeking a Napa Valley luxury vacation home.  Today’s interest rates signal savings throughout the term of the loan, which is even more appealing for those seeking a second home. Combined with the sheer volume of Napa homes for sale, this makes it the ideal time to purchase a Napa dream vacation or retirement home.


*Optimism on the rise. When the wolf is at the door, few of us are tempted to make luxury purchases. And for years, it seemed like the only news about the economy was bad. But declining unemployment numbers, soaring stock markets, and the resulting good news for retirement accounts can change attitudes…the same attitudes that underlie investment decisions of every kind.


Contact me if you need help finding that dream home

-Karen Magliocco


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Napa Real Estate Homeowners Should Track This One. Banks with a heart?

3 weeks ago, Bank of America initiated a pilot program allowing homeowners facing foreclosure to remain in their homes as renters. There are important reasons why Napa Valley homeowners should be interested in the success or failure of BoA’s approach.

First, a note about the term “bank owned homes”. It’s not technically correct to say that there has been some huge rise in the number of them, because “bank owned homes” actually describes every home with a mortgage. The mortgage holder always technically “owns” the property, even when the homeowner retains title. However, what is true is that over the last four years, many homeowners learned the hard way just what it means to face the reality of your home being owned by someone else.

Enter Bank of America. Their press release quotes Ron Sturzenegger, a Legacy Asset Servicing executive with the Bank: “Our priority is designing a solution that helps our customer.” Although we might be justifiably skeptical of this as BoA’s sole motive, allowing homeowners to remain as renters in bank owned homes is hardly just a PR move.

The program certainly makes bottom-line financial sense for a whole host of parties, including Napa Valley real estate homeowners who have no difficulty meeting their own mortgage payments.

Under the program, a former homeowner who qualified would be able to continue working and contributing to the economy without the costs, loss of time, and anxiety involved in moving. For all property owners, the ultimate effect is to keep the market from being flooded with distress sales. Every neighborhood would benefit if home values stabilize.

Under the pilot model, bank owned homes convert to investor ownership in a much smoother transition than the foreclosure/short sale model. Instead of the lender being left with an empty property generating zero revenue in the interim, former homeowners simply become renters, making it easier for them to get back on their feet financially.

In my opinion, any move or policy that helps more people stay in homes is a policy worth discussing. BoA’s program is only in a limited test stage, but here in Napa we can hope that it will prove to have multiple beneficiaries: banks, investors, agents, homeowners and neighbors. Everyone benefits when his or her neighborhood’s real estate market is healthy!

Have a question about real estate in Napa Valley? Feel free to contact me anytime with questions. I represent Napa buyers and sellers, and am always available to chat about your own plans.

-Karen Magliocco