The housing market got another boost this morning, as July’s S&P Case/Shiller Home Price Index registered its biggest monthly increase in almost four years. The 20-city index rose 1.2% in July from the month before, the biggest jump since October 2005, according to Bloomberg.

Even though the monthly price figures have been increasing now for the last few months, year-over-year prices are still down. However, declines are becoming less severe.

And the debate continues as to whether this reflects a legitimate housing recovery or whether the Case/Shiller data — which is not seasonally adjusted — is simply reflecting the strong summer buying season, made stronger buy vast government support and banks’ reticence to list their inventory of REO properties.

As the months roll on, we’ll be keeping a careful on eye on the data to try and determine just how real this recovery is. And remember, Case/Shiller data lags, here we are almost to October and just now finding out what happened in July!

Market imbalances are resolved through two primary mechanisms: Time and price.

To be sure, the imbalance in new homes remains, despite a recent uptick in buying activity in real estate markets across the country. And as builders slash prices and time drags on, slowly but surely the backlog of newly constructed homes is being worked through.

New home sales ticked up 0.7% in August from the month before, registering the highest total in almost a year, according to Bloomberg. Although the increase was less than analysts expected, it continues the uptrend in place since this summer.

Meanwhile, prices keep falling. The median price of new homes tumbled 9.5% from July, the biggest drop since records began in 1963. This drop is primarily a result of homes less than $150,000 making up the lionshare of sales.

While the increase in sales is good news for market watchers eager to see inventory levels chewed through, fire sale prices push out any eventual recovery. Until it is economic for builders to build new homes, vacant land will remain exactly that, vacant, as landowners bleed cash on upkeep and maintenance. But in keeping new homes off the market, this correction will help speed up the broader housing recovery as inventories of all homes return to more manageable levels.

The resolve of the nascent US housing market recovery is about to be put to the test.

Existing home sales slipped in August, breaking a string of four straight months of rising sales. Purchases fell 2.7% in August from the month before, which was below analysis expectations, according to Bloomberg,

One kernel of good news was that the inventory of unsold homes gapped down 11% to 8.5 months of supply, the lowest level since April 2007. In addition to the brisk summer buying season, this figure also reflects banks’ reticence to list REO properties on the market, which is keeping inventories lean. Housing experts generally agree that 7 months of supply represents a stable market.

As autumn rolls on and gives way to winter, home buying typically dries up. During the next few months sales data will be very telling in determining whether this recovery is for real, or just a dead cat bounce on the way to new, painful lows.

For anyone in the market for a single family residence in Noe Valley under $1 million, pickings are slim, at best. Condos, sure, they’re a dime a dozen as the Noe Valley condo market follows rents off the proverbial cliff, but the attractive single family home for less than 7 figures is a rare find indeed. (click to enlarge images)

2324 Castro Street could be that find. Maybe.

At 1,380 square feet with a back yard and two
parking spots, the self-proclaimed cottage certainly
fits squarely into the “condo alternative” category.
The house does seem to try and crowd a lot into a
small space: Kitchen, dining room, reading alcove,
master bedroom with parlor, office/den, laundry,
storage and the aforementioned parking.

But the outdoor space could make up for what may be a cramped interior, and the premium for not having to share the yard with the condo owners upstairs should be significant.

The only question left is whether 2324 Castro is a DEAL OR NO DEAL?

Address: 2324 Castro St., San Francisco, CA 94131
(MLS Listing)
Status: ACTIVE
Bedrooms: 2; Bathrooms: 2
Living Space: 1,380 sq ft
Lot Size: N/A
List Date: 9/11/2009
Original List Price: $849,000
Current List Price: $849,000
MLS no.: 361149

Real Estate Agent Comment: The Quintessential Garden Cottage - Indoor/outdoor living at it’s best! Enchanting home-privacy through a tranquil garden + porch in the front + private manicured back yard w/ apple trees + charming patio on the rear. Home features living room w/garden outlook. Dining room that opens to kitchen w/reading alcove. Kit w/granite counters &skylight. Master bed has separate parlor
w/ensuite bath. Office/den w/french doors out to back yard.
Laundry + storage. Hardwood floors.

DEAL or NO DEAL?
Comment below and tell us what you think!

This post first appeared on Minyanville.

It seems that with each passing month, the data gods deliver more and more evidence that the woe begotten US housing market may finally be emerging from its years-long doldrums.

Existing home sales: Up.
New home sales: Up.
Pending home sales: Up.
Home prices: Down, but at a slower pace.

Even a relic from the booming housing markets of yesteryear has reappeared: Bidding wars.

To be sure, multiple-offer situations are concentrated in lower priced markets, but some sales are simply mind-boggling. Here’s a sampling of just how out-of-whack supply and demand truly are in some of this country’s real estate markets:

Costa Mesa, California: Home gets a whopping 68 offers and sells for nearly $100,000 over asking (list price of $399,000, sale price of $495,000).

Manatee County, Florida: Home gets 27 bids, list price $124,000.

Phoenix, Arizona: Home gets 11 offers, sells for 50% above list price (listed at $70,000, sold over $110,000).

Even Canada is getting into the act: A bidding war in Vancouver drove one home up to $1.1 million — almost $300,000 above its asking price.

Talk to most real estate professionals and it’s the same story: Cash-flush investors and first-time home buyers armed with a federal tax credit, low interest rates, and 3% down-payment loans courtesy of the Federal Housing Administration are bidding up properties with reckless abandon.

So it’s settled then — we’re at the bottom, right?

Unfortunately, probably not.

Before we get too excited about these bidding wars indicating a bottom for the broad housing market, it’s important to consider that these situations are heavily concentrated in areas where home prices are low. The trend is far from prevalent in mid-tier and high-end markets.

Lower priced homes are typically easier for investors to flip into juicy returns and require a smaller cash outlay, which opens the playing field to those without deep pockets. Further, cheap homes attract first-time buyers, who can be more easily swayed into bidding above list by commission-hungry Realtors.

In addition, big banks like Wells Fargo (WFC), Bank of America (BAC), JPMorgan Chase (JPM), and Citigroup (C) are still holding back the majority of their foreclosure inventory from the market. This is partly due to the “soft moratoria” ordered by the White House along with banks being reticent to take big losses on homes that have tumbled in value. This is keeping supply low, frustrating would-be buyers into bidding aggressively with so little inventory to choose from.

Meanwhile, as readers of this column should know all too well, higher-end markets continue to struggle, as jumbo mortgages remain a chore to qualify for and down-payment money is nigh impossible to scrounge together for all but the most qualified buyers.

This dichotomy in the marketplace means now more than ever, anyone considering buying a home should live by the over-used adage that real estate is always local. Markets adjacent to one another, separated by nothing more than a school district line, could be headed in opposite directions — and it may be that the “good” area is far riskier than the “bad” one.

Homes under contract to buy rose in July for the sixth straight month, reaffirming the widely held view that the worst of the housing market correction is behind us. The index of pending home sales rose 3.2% from the month before, according to Bloomberg.

Even Mark Zandi, the famously bearish chief economist at Moody’s Economy.com, said “The housing market is much improved.”

Indeed, buying activity is strong, and some markets could even be described as “hot,” with little inventory and many multiple bid situations. Ultimately, the question is the sustainability of this “rally” in the low end markets, and how things will shake out of the government starts to ratchet back it’s support of the housing market.

This post first appeared in the September edition of Cirios Trends: Getting to the Bottom of the Housing Market

If history has its way, housing inventory is set to rise.

And for all the potentially complex and controversial explanations for this coming bump in homes listed for sale, Occam’s razor will likely hold: The simplest explanation usually wins out.

Seasonality is the reason it snows in the winter, leaves change in the fall and bronzed Jersey Girls and beefy guidos head down the shore from Memorial Day to Labor Day. Seasonality explains what happens when the calendar changes, whether it’s weather patterns or consumer behavior.

The simplest explanation of seasonality in the financial world can be seen by looking at WalMart’s quarterly revenue figures. Q4, which includes the Christmas shopping season, is typically 50% better than any other quarter. So, when financial analysts tally up WalMart’s results, they have to back out this seasonality in order get good apples-to-apples comparisons. (For a more complex look at seasonality, please see Cirios statistics guru Austin Nelson’s piece entitled: The Magic of Seasonal Adjustments.)

So, back to housing.

Looking at the graph in the top right corner of this page, courtesy of Socketsite, a San Francisco housing blog, it’s fairly obvious that if the past 4 years are any predictor of the future, housing inventory (at least in San Francisco) is set to rise. This could blunt the recent exuberance of housing bulls around the country.

As anyone who has been paying attention to the financial media of late can attest, the view that the housing market has found a bottom is quickly becoming the opinion-de-jour. It’s clear, optimists argue, that buyers are stepping back into the market to take advantage of
screaming-hot deals.

Pessimists, on the other hand argue that the bottom will remain elusive, that recent strength can be attributed to government intervention into the market in the form of tax credits, artificially low interest rates and de-facto foreclosure moratoria preventing banks from unleashing their swelling portfolios of bank owned homes onto the market.

And here we are, Labor Day, when buyers typically refocus their energy on things like a new school season, the upcoming holidays and preparing for winter, rather than getting out and shopping for that new home.

The question then becomes, if pessimists and optimists can agree on the fact that positive sentiment, or social mood, is partly to blame/credit for this nascent housing “recovery,” what happens when data emerges in the coming months that maybe, just maybe, calls for a bottom in housing were premature?

Will buyers head for the hills, sending prices swooning once again? Or will they shrug, don their winter coats and leather gloves, saving the home search for the Spring … like they do every year?

This post first appeared in the September edition of Cirios Trends: Getting to the Bottom of the Housing Market

Improving your home’s energy efficiency doesn’t just help the environment — it allows you to unlock hidden value just waiting to be tapped.

Ask most homeowners, or anyone for that matter, what pops into their mind when they think of energy efficiency or a “Green Home,” and it’s likely “solar panels” and “expensive.”

Ciriosly Green Real Estate’s mission is to debunk the myth that energy efficiency at home is a luxury reserved only for the wealthy. It’s often the simplest, least expensive improvements that can have the biggest impact.

Case in point: Solar. Installing solar panel systems on homes is a notoriously bad business. Sure, there’s a ton of buzz around solar, even generous tax incentives for homeowners who install panels on their roofs. But for solar installation firms, the bigger the system, the bigger the profit.

The result: Solar installers are incentivized to sell homeowners the most expensive system possible. What they don’t tell you, because it hurts their bottom line, is that before you even think about solar, a series of non-sexy green improvements (fix your ducts, improve your insulation, seal your home’s shell), can reduce your energy usage so much that even a small, inexpensive solar system can power your entire home.

So, before you go solar, go energy efficient.

Energy efficiency in our homes has a material impact on the environment. In the US, energy consumption of our buildings accounts for at least 40% of our total energy use. About half of that is attributed to residential structures. According to the EPA, the average US household is responsible for emitting nearly 9,000 pounds of carbon dioxide into the air, per person each year.

To put that in perspective, NPR’s Car Talk guys say that burning one gallon of gas creates 20 pounds of carbon dioxide. If your car gets 20 miles per gallon, just living in your home each year has the same impact of driving from San Francisco to New York, then back to San Francisco, then back to New York.

So great, what can you do? Here are 5 tips to save energy around the house and reduce your carbon footprint. None of them will happen if you just sit idly by on your couch, but then again, not much typically happens when you just sit on your couch anyway.

1) Seal your home’s shell. As air leaks out cracks in your home, your heater and/or air conditioner works overtime, jacking up your electric bill. A simple Home Performance test can identify this leakage — most gaps are cheap and easy to fill.

2) Get between the walls. Insulation is the best bang-for-the buck green improvement you can make. New techniques are cheaper and a whole lot more effective than the messy pink fiberglass you’re probably used to.

3) Seal your ducts. The ducts that carry air around your house get worn out and crack, or can get pinched by a careless contractor shuffling around your crawl space. Not only does your heating and cooling system have to work harder to pump the same amount of air, but dirty air from your attic or under the house can get sucked up and distributed around your house. Have a child with Asthma? Check your ducts.

4) Unplug the Vampires. Standby loads, or “Vampire Loads,” are appliances and electronics draining power even when they are switched off. Did you know that 75% of a TV’s energy use comes while you’re not even watching? Plug these standby loads into a power strip with an off button and flip on the strip only when you’re using your TV or other appliances.

5) Light it up! Replace your traditional light bulbs with low energy, compact fluorescent lighting (CFLs). This can cut your lighting-related energy costs by up to 50-75%.

The best part about improving your home’s energy efficiency is that you get to not only save money, but enjoy a more comfortable and healthy home. Oh, and by the way Mother Nature won’t complain, either.