Calif. median home price - October 08: $311,060 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region
October 08: Santa Barbara So. Coast $860,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region
October 08: High Desert $154,660 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index -
Third Quarter 08: 53 percent (Source: C.A.R.)
Mortgage rates - week ending 12/11/08
30-yr. fixed: 5.47% Fees/points: 0.7%
15-yr. fixed: 5.20% Fees/points: 0.7%
1-yr. adjustable: 5.09% Fees/points: 0.4% (Source: Freddie Mac)
This is, by far, the best affordability index I've seen and interest rates are are the way down (well under 5% in many cases).
17 December 2008
13 December 2008
Scenic Bodega Bay named among nation's most exclusive small towns
Business Week put together their list of the 32 most exclusive small towns in America and Bodega Bay was included.
Here's the article.
Here's the article.
06 December 2008
Mortgage applications soar as interest rates fall
Could this be the sign we're all looking for?
The number of home buyers applying for mortgages surged by a record amount last week in response to aggressive federal efforts to lower mortgage rates. Financial lobbyists advocated more of the same to stimulate the housing market.
Mortgage applications more than doubled in the holiday week ended Nov. 28 from the week before, according to a report Wednesday by the Mortgage Bankers Association. The association's index, a measure of mortgage loan application volume, was up 112% on a seasonally adjusted basis from the week earlier. And the refinance index leapt 203%.
Click here for the article.
The number of home buyers applying for mortgages surged by a record amount last week in response to aggressive federal efforts to lower mortgage rates. Financial lobbyists advocated more of the same to stimulate the housing market.
Mortgage applications more than doubled in the holiday week ended Nov. 28 from the week before, according to a report Wednesday by the Mortgage Bankers Association. The association's index, a measure of mortgage loan application volume, was up 112% on a seasonally adjusted basis from the week earlier. And the refinance index leapt 203%.
Click here for the article.
04 December 2008
How Are Interest Rates Set?
Here's an article that addresses a question that pops up on a regular basis. When we see the Fed lower it's rate and mortgage rates jump, it causes a bit of confusion. Hopefully this will help explain why...
"...home-loan rates are influenced by longer-term economic indicators. The Federal Reserve Board’s benchmark rate, the federal funds rate, is the interest that banks charge one another for overnight loans. And that, in turn, is closely tied to the prime lending rate that the banks charge preferred customers."
For the entire article, click here.
"...home-loan rates are influenced by longer-term economic indicators. The Federal Reserve Board’s benchmark rate, the federal funds rate, is the interest that banks charge one another for overnight loans. And that, in turn, is closely tied to the prime lending rate that the banks charge preferred customers."
For the entire article, click here.
28 November 2008
Getting a Loan These Days...
While 28% of potential homebuyers say that getting a loan is their biggest hurdle, the money is out there. The trick is finding it...
From a Wall Street Journal Marketwatch article, here are some guidelines:
If you're shopping for a mortgage these days, here's what you need to know:
- For the best rates on a conforming loan, people need a 20% down payment and a FICO of 750 or higher, Cecala said. Not surprisingly, very few people meet those requirements, he added. Risk-based pricing by Fannie Mae and Freddie Mac will cause those who don't meet those basic parameters to pay more for their mortgage. So even if you're able to get a mortgage with a 640 credit score, the loan terms will be more expensive, he said -- and if you have a low credit score you'll probably have to put more money down than someone who has better credit.
- Borrowers who aren't able to put 20% down will likely have to purchase mortgage insurance, and to get that there's another set of requirements that must be met. Insurers are being "very cautious" with regard to what they will insure, Habetz said. Requirements differ at each mortgage-insurance firm, but if a home is in a market where prices are declining, borrowers may be asked to put down 10%.
- Borrowers who are eligible for a loan backed by the Federal Housing Administration may be able to put down as little as 3%. That has become a more popular option for those with weak credit scores.
- Most nonconforming jumbo loans today are being made by portfolio lenders, who keep the loans on their books, Cecala said. Consumers may do well by doing some legwork and comparing rates at local community banks, which have been "coming out of the woodwork" to offer competitive rates, he added.
From a Wall Street Journal Marketwatch article, here are some guidelines:
If you're shopping for a mortgage these days, here's what you need to know:
- For the best rates on a conforming loan, people need a 20% down payment and a FICO of 750 or higher, Cecala said. Not surprisingly, very few people meet those requirements, he added. Risk-based pricing by Fannie Mae and Freddie Mac will cause those who don't meet those basic parameters to pay more for their mortgage. So even if you're able to get a mortgage with a 640 credit score, the loan terms will be more expensive, he said -- and if you have a low credit score you'll probably have to put more money down than someone who has better credit.
- Borrowers who aren't able to put 20% down will likely have to purchase mortgage insurance, and to get that there's another set of requirements that must be met. Insurers are being "very cautious" with regard to what they will insure, Habetz said. Requirements differ at each mortgage-insurance firm, but if a home is in a market where prices are declining, borrowers may be asked to put down 10%.
- Borrowers who are eligible for a loan backed by the Federal Housing Administration may be able to put down as little as 3%. That has become a more popular option for those with weak credit scores.
- Most nonconforming jumbo loans today are being made by portfolio lenders, who keep the loans on their books, Cecala said. Consumers may do well by doing some legwork and comparing rates at local community banks, which have been "coming out of the woodwork" to offer competitive rates, he added.
31 October 2008
Fast Facts
Calif. median home price - September 08: $316,480(Source: C.A.R.)
Calif. highest median home price by C.A.R. region September 08: Santa Barbara So. Coast $935,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region September 08: High Desert $159,720 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Second Quarter 08: 48 percent (Source: C.A.R.)
Mortgage rates - week ending 10/23/08 30-yr. fixed: 6.04% Fees/points: 0.6% 15-yr. fixed: 5.72% Fees/points: 0.6% 1-yr. adjustable: 5.23% Fees/points: 0.5%(Source: Freddie Mac)
Calif. highest median home price by C.A.R. region September 08: Santa Barbara So. Coast $935,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region September 08: High Desert $159,720 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Second Quarter 08: 48 percent (Source: C.A.R.)
Mortgage rates - week ending 10/23/08 30-yr. fixed: 6.04% Fees/points: 0.6% 15-yr. fixed: 5.72% Fees/points: 0.6% 1-yr. adjustable: 5.23% Fees/points: 0.5%(Source: Freddie Mac)
NEW-HOME SALES RISE 2.7 PERCENT IN SEPTEMBER
Sales of newly built single-family homes posted a slight increase in September, rising 2.7 percent to a seasonally adjusted annual rate of 464,000 units, according to a U.S. Dept. of Commerce report released Monday. The report also indicated that builders are making substantial progress depleting the supply of unsold units on the market.
The number of new homes for sale fell to 394,000 units in September, compared with 425,000 units in August. At the current sales pace, there was a 10.4 months' supply of unsold new units on the market, compared with an 11.4 months' supply in August. Conversely, the median number of months that completed new homes have been on the market hit a new record of 9.1 months.
Regionally, sales activity gained 22.7 percent in the West and 0.7 percent in the South in September, but at the same time declined 21.4 percent in the Northeast and 5.8 percent in the Midwest.
The number of new homes for sale fell to 394,000 units in September, compared with 425,000 units in August. At the current sales pace, there was a 10.4 months' supply of unsold new units on the market, compared with an 11.4 months' supply in August. Conversely, the median number of months that completed new homes have been on the market hit a new record of 9.1 months.
Regionally, sales activity gained 22.7 percent in the West and 0.7 percent in the South in September, but at the same time declined 21.4 percent in the Northeast and 5.8 percent in the Midwest.
17 October 2008
C.A.R.'s California Housing Market Forecast for 2009
CAR is predicting a slowing of price drops and an increase in sales activity over the next few quarters with recovery by the end of 2009...
"Statewide median price decline to level out, sales will continue to rise."
LOS ANGELES (Oct. 15) – Home prices throughout most areas of California will post declines next year, while sales of existing homes will continue the rise in 2009, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.).
“The current uncertainty about the financial system and economy is likely to persist over the next several weeks, and could extend into next year,” said C.A.R. President William E. Brown. “Our forecast assumes that the financial system will begin to show signs of stabilization late in 2008 and into early 2009.
“We expect that the economy will be at its weakest period over the next three quarters through the second quarter of 2009, with recessionary economic conditions throughout that time period, before we begin to see a turnaround in the second half of next year,” he said. “Going forward, a great deal depends on the state of the financial system in general and the real estate finance situation in particular, as well as the flow of distressed sales through the market. We expect sales of distressed properties to peak in early 2009 – a critical factor in the housing market that directly impacts the timeframe for stabilization in the median price.
“Looking ahead, home prices and favorable interest rates in 2009 will contribute to gains in affordability,” Brown said. “However, we need to move through the current financial crisis and restore the flow of credit so that qualified buyers are able to take advantage of improved affordability and successfully purchase homes.”
The median home price in California will decline 6 percent to $358,000 in 2009 compared with a projected median of $381,000 this year, according to the forecast. Sales for 2009 are projected to increase 12.5 percent to 445,000 units, compared with 395,600 units (projected) in 2008.
“Sales in 2008 will be ahead of last year by 12 percent, with a further increase of 12.5 percent expected in 2009,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “However, the next couple of quarters in late 2008 and early 2009 will be marked by seasonal decreases in activity, with a pickup expected by the second quarter of next year. At 445,000 units sales projected in 2009, the sales environment will be well above the low point of 265,000 units in late 2007.
“The median price will be influenced through the balance of 2008 by the typical seasonal decrease in home prices as well as ongoing downward pressure from distressed sales,” she said. “For all of 2008, the median price is expected to fall by 31.7 percent from $558,100 to $381,000. Next year, we’re projecting that the median price will show a 6 percent decline to $358,000.”
Don’t miss “The Financial Crisis: What Lies Ahead?” at the Long Beach Convention Center in Long Beach, Calif. on Thursday, Oct. 16. Scheduled from 2 p.m. to 3:30 p.m., “The Financial Crisis: What Lies Ahead” panelists include Richard Green, director of the University of Southern California Lusk Center for Real Estate; Nancy Dayton Sidhu, vice president and senior economist, Kyser Center for Economic Research; and Stuart Gabriel, Arden Realty Chair and Professor of Finance; and Director of the Richard S. Ziman Center for Real Estate at UCLA. C.A.R. Vice President and Chief Economist Leslie Appleton-Young will serve as moderator.
Click here for the article and the 2009 FORECAST FACT SHEET
"Statewide median price decline to level out, sales will continue to rise."
LOS ANGELES (Oct. 15) – Home prices throughout most areas of California will post declines next year, while sales of existing homes will continue the rise in 2009, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.).
“The current uncertainty about the financial system and economy is likely to persist over the next several weeks, and could extend into next year,” said C.A.R. President William E. Brown. “Our forecast assumes that the financial system will begin to show signs of stabilization late in 2008 and into early 2009.
“We expect that the economy will be at its weakest period over the next three quarters through the second quarter of 2009, with recessionary economic conditions throughout that time period, before we begin to see a turnaround in the second half of next year,” he said. “Going forward, a great deal depends on the state of the financial system in general and the real estate finance situation in particular, as well as the flow of distressed sales through the market. We expect sales of distressed properties to peak in early 2009 – a critical factor in the housing market that directly impacts the timeframe for stabilization in the median price.
“Looking ahead, home prices and favorable interest rates in 2009 will contribute to gains in affordability,” Brown said. “However, we need to move through the current financial crisis and restore the flow of credit so that qualified buyers are able to take advantage of improved affordability and successfully purchase homes.”
The median home price in California will decline 6 percent to $358,000 in 2009 compared with a projected median of $381,000 this year, according to the forecast. Sales for 2009 are projected to increase 12.5 percent to 445,000 units, compared with 395,600 units (projected) in 2008.
“Sales in 2008 will be ahead of last year by 12 percent, with a further increase of 12.5 percent expected in 2009,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “However, the next couple of quarters in late 2008 and early 2009 will be marked by seasonal decreases in activity, with a pickup expected by the second quarter of next year. At 445,000 units sales projected in 2009, the sales environment will be well above the low point of 265,000 units in late 2007.
“The median price will be influenced through the balance of 2008 by the typical seasonal decrease in home prices as well as ongoing downward pressure from distressed sales,” she said. “For all of 2008, the median price is expected to fall by 31.7 percent from $558,100 to $381,000. Next year, we’re projecting that the median price will show a 6 percent decline to $358,000.”
Don’t miss “The Financial Crisis: What Lies Ahead?” at the Long Beach Convention Center in Long Beach, Calif. on Thursday, Oct. 16. Scheduled from 2 p.m. to 3:30 p.m., “The Financial Crisis: What Lies Ahead” panelists include Richard Green, director of the University of Southern California Lusk Center for Real Estate; Nancy Dayton Sidhu, vice president and senior economist, Kyser Center for Economic Research; and Stuart Gabriel, Arden Realty Chair and Professor of Finance; and Director of the Richard S. Ziman Center for Real Estate at UCLA. C.A.R. Vice President and Chief Economist Leslie Appleton-Young will serve as moderator.
Click here for the article and the 2009 FORECAST FACT SHEET
04 October 2008
Summary of recovery/bailout plan
Here's a quick summary of the plan and what the legislation means to us as presented by the California Association of Realtors:
Earlier today, the U.S. House of Representatives approved the Emergency Economic Stabilization Act by a 263 to 171 vote. The legislation was quickly signed into law by President Bush, capping what has been a very tumultuous two weeks for the credit and financial markets.
This was a difficult decision for our elected representatives to make, especially given the abbreviated time period for review and debate that the gravity of the situation warranted. While passage of the Act should enable the credit markets and the U.S. financial system to set the stage for their eventual recovery, this was only the first step in what will likely take weeks and even months to wend its way through the system before reaching Main Street.
But it was an important first step. The health of the nation’s housing market is critical to the financial well being of every household in the country, and is front and center here in California.
Here’s what the legislation does:
Helps American families keep their homes by requiring the Treasury Dept. and any federal agency that owns or controls troubled mortgages to modify those mortgages wherever possible; this may include reducing the principal or interest rate; and extends till the end of 2012 the exclusion from federal income tax of mortgage debt forgiveness.
Addresses the credit crisis by allowing financial institutions to immediately sell $250 billion in troubled assets to the U.S. Treasury Department under the newly created Troubled Assets Relief Program (TARP). Another $100 billion would be made available upon the President’s request. Should the President deem it necessary, and with Congressional review, the Treasury Dept. may utilize the remaining $350 billion;
Protects taxpayers by allowing the Treasury Dept. to take an ownership stake in participating companies. In addition, if after five years TARP has incurred a net loss, the President must propose legislation that would force participating companies to reimburse the government to make up the difference;
Sets up an insurance program, funded by the financial industry, to guarantee companies’ troubled assets, including mortgage-backed securities purchased prior to March 14 this year;
Curbs executive pay for companies utilizing TARP;
Sets up two oversight committees, a Financial Stability Board, and a congressional oversight panel, to which the Financial Stability Board would report;
Creates renewable energy tax breaks for individuals and businesses, including a deduction for the purchase of solar panels; as well as continuing other tax breaks that were set to expire; and extends relief from the Alternative Minimum Tax (AMT) by another year;
Allows the SEC to suspend the required mark-to-market accounting standards and orders a study to be done on the rule’s impact on financial institutions;
Shields bank deposits by temporarily raising the FDIC insurance cap to $250,000 from $100,000; and temporarily increases the federal insurance level for credit union savings to $250,000, both till the end of 2009.
We’re appreciative of the efforts of our congressional leaders in both houses as well as of our peers at NAR. Their efforts helped secure adequate protections for both consumers and taxpayers, as well as stricter oversight protocols than what were initially contained in the legislation. C.A.R. will continue to study and report to you additional information and analysis through our weekly “C.A.R. Newsline” and “Market Matters” e-mail newsletters.
Sincerely,
William E. Brown
2008 President
CALIFORNIA ASSOCIATION OF REALTORS®
Earlier today, the U.S. House of Representatives approved the Emergency Economic Stabilization Act by a 263 to 171 vote. The legislation was quickly signed into law by President Bush, capping what has been a very tumultuous two weeks for the credit and financial markets.
This was a difficult decision for our elected representatives to make, especially given the abbreviated time period for review and debate that the gravity of the situation warranted. While passage of the Act should enable the credit markets and the U.S. financial system to set the stage for their eventual recovery, this was only the first step in what will likely take weeks and even months to wend its way through the system before reaching Main Street.
But it was an important first step. The health of the nation’s housing market is critical to the financial well being of every household in the country, and is front and center here in California.
Here’s what the legislation does:
Helps American families keep their homes by requiring the Treasury Dept. and any federal agency that owns or controls troubled mortgages to modify those mortgages wherever possible; this may include reducing the principal or interest rate; and extends till the end of 2012 the exclusion from federal income tax of mortgage debt forgiveness.
Addresses the credit crisis by allowing financial institutions to immediately sell $250 billion in troubled assets to the U.S. Treasury Department under the newly created Troubled Assets Relief Program (TARP). Another $100 billion would be made available upon the President’s request. Should the President deem it necessary, and with Congressional review, the Treasury Dept. may utilize the remaining $350 billion;
Protects taxpayers by allowing the Treasury Dept. to take an ownership stake in participating companies. In addition, if after five years TARP has incurred a net loss, the President must propose legislation that would force participating companies to reimburse the government to make up the difference;
Sets up an insurance program, funded by the financial industry, to guarantee companies’ troubled assets, including mortgage-backed securities purchased prior to March 14 this year;
Curbs executive pay for companies utilizing TARP;
Sets up two oversight committees, a Financial Stability Board, and a congressional oversight panel, to which the Financial Stability Board would report;
Creates renewable energy tax breaks for individuals and businesses, including a deduction for the purchase of solar panels; as well as continuing other tax breaks that were set to expire; and extends relief from the Alternative Minimum Tax (AMT) by another year;
Allows the SEC to suspend the required mark-to-market accounting standards and orders a study to be done on the rule’s impact on financial institutions;
Shields bank deposits by temporarily raising the FDIC insurance cap to $250,000 from $100,000; and temporarily increases the federal insurance level for credit union savings to $250,000, both till the end of 2009.
We’re appreciative of the efforts of our congressional leaders in both houses as well as of our peers at NAR. Their efforts helped secure adequate protections for both consumers and taxpayers, as well as stricter oversight protocols than what were initially contained in the legislation. C.A.R. will continue to study and report to you additional information and analysis through our weekly “C.A.R. Newsline” and “Market Matters” e-mail newsletters.
Sincerely,
William E. Brown
2008 President
CALIFORNIA ASSOCIATION OF REALTORS®
20 September 2008
What a week!
From CAR:
To recap what’s happened -- so far -- this week:
U.S. Dept. of the Treasury Secretary Paulson today announced that Congress and the administration intend to take poorly performing assets, primarily mortgage-backed securities, off the books of financial institutions. These assets have been a prime impediment to the ability of financial institutions to lend money.
The government also prohibited the short sale of nearly 800 financial institutions for 10 days, and may extend this prohibition to 30 days.
The U.S. Dept. of the Treasury also plans to increase the amount of mortgage-backed securities bought from government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, in an effort to increase the GSEs’ role in the housing market.
The Federal Reserve and other major financial institutions worldwide also made hundreds of billions of dollars in loans available to commercial banks in an effort to improve liquidity.
Our expectation is that Congress and the administration will work together to craft legislation as early as next week addressing these critical issues. We expect to have a good sense of what the legislation will contain by this weekend, prior to financial markets opening Monday morning.
To recap what’s happened -- so far -- this week:
U.S. Dept. of the Treasury Secretary Paulson today announced that Congress and the administration intend to take poorly performing assets, primarily mortgage-backed securities, off the books of financial institutions. These assets have been a prime impediment to the ability of financial institutions to lend money.
The government also prohibited the short sale of nearly 800 financial institutions for 10 days, and may extend this prohibition to 30 days.
The U.S. Dept. of the Treasury also plans to increase the amount of mortgage-backed securities bought from government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, in an effort to increase the GSEs’ role in the housing market.
The Federal Reserve and other major financial institutions worldwide also made hundreds of billions of dollars in loans available to commercial banks in an effort to improve liquidity.
Our expectation is that Congress and the administration will work together to craft legislation as early as next week addressing these critical issues. We expect to have a good sense of what the legislation will contain by this weekend, prior to financial markets opening Monday morning.
09 September 2008
Who is Fannie & Freddie?
We've all been hearing about the US government (aka you and me) taking over the two of our largest financial institutions. But what we haven't been hearing is what the impact will be. It seems that there are some initial positive impacts, but what is to come seems to be in debate. For now, if you're not familiar with who Fannie Mae and Freddie Mac are, check out this short video explanation from Joel Singer of the California Association of Realtors.
31 August 2008
Bodega Bay Trail update
I just received an update on the Bodega Bay Trail from Norma Jellison who represents the Bodega Bay Bicycle and Pedestrian Advisory Committee and thought I'd post it here for you...
"What an incredible day we had Thursday for the dedication of the Cheney Creek Bridge and Trail, connecting Birdwalk on Rt 1 to Doran Park beaches thru the Doran Marsh, and thus the southern section of the Bodega Bay Path! It is also a section of the CA Coastal Trail.
If you have not yet seen the reconstructed path and the new bridge, do go check it out. Better yet, walk it!!
I accepted a Certificate of Appreciation - with photo of the bridge as background - on behalf of the Bodega Bay Bicycle and Pedestrian Advisory Committee. So we can all be proud to finally see something come of all our meetings and advocacy! I'm sure this gem will be much used and bring lots of appreciation for the beautiful southern end of our Bodega Bay - Sonoma County Coast.
BTW, sometime in January, Regional Parks will be looking for volunteers to help plant the new plants along the path. Hope to see some of you help with that effort to further enhance this section of the Bodega Bay Path!
Our Bodega Bay Path is now incorporated into the Countywide Bike/Ped Path Master Plan and a Programmatic EIR is underway for the BB Path. All of which will allow our Path to continue a forward march.
The next section to be constructed will be the northern section from Salmon Creek thru State Park lands to BB Community Center and then down thru the Dunes and old Rt 1 tree line to the Horse Trailer parking lot on Bayflat - there has been a bike lane around the Bay on Bayflat for many years - maybe we can get the path stripe repainted soon. This should be under construction in 2010. A boardwalk between the Tides and Lucas is also in the offing, hopefully not far behind the northern section construction."
"What an incredible day we had Thursday for the dedication of the Cheney Creek Bridge and Trail, connecting Birdwalk on Rt 1 to Doran Park beaches thru the Doran Marsh, and thus the southern section of the Bodega Bay Path! It is also a section of the CA Coastal Trail.
If you have not yet seen the reconstructed path and the new bridge, do go check it out. Better yet, walk it!!
I accepted a Certificate of Appreciation - with photo of the bridge as background - on behalf of the Bodega Bay Bicycle and Pedestrian Advisory Committee. So we can all be proud to finally see something come of all our meetings and advocacy! I'm sure this gem will be much used and bring lots of appreciation for the beautiful southern end of our Bodega Bay - Sonoma County Coast.
BTW, sometime in January, Regional Parks will be looking for volunteers to help plant the new plants along the path. Hope to see some of you help with that effort to further enhance this section of the Bodega Bay Path!
Our Bodega Bay Path is now incorporated into the Countywide Bike/Ped Path Master Plan and a Programmatic EIR is underway for the BB Path. All of which will allow our Path to continue a forward march.
The next section to be constructed will be the northern section from Salmon Creek thru State Park lands to BB Community Center and then down thru the Dunes and old Rt 1 tree line to the Horse Trailer parking lot on Bayflat - there has been a bike lane around the Bay on Bayflat for many years - maybe we can get the path stripe repainted soon. This should be under construction in 2010. A boardwalk between the Tides and Lucas is also in the offing, hopefully not far behind the northern section construction."
28 August 2008
Home Sales Increase Again
NEW HOME SALES ROSE 2.4 PERCENT IN JULY
Sales of new, single-family homes rose 2.4 percent in July to a seasonally adjusted annual rate of 515,000 units, according to new data from the U.S. Census Bureau and the Dept. of Housing and Urban Development released Tuesday.
The uptick represents a modest increase from June figures at 503,000, but sales still remain roughly 35.3 percent below July 2007 estimates of 796,000 units.
Sales of new, single-family homes rose 2.4 percent in July to a seasonally adjusted annual rate of 515,000 units, according to new data from the U.S. Census Bureau and the Dept. of Housing and Urban Development released Tuesday.
The uptick represents a modest increase from June figures at 503,000, but sales still remain roughly 35.3 percent below July 2007 estimates of 796,000 units.
14 August 2008
PENDING HOME SALES INDEX INCREASES 5.3 PERCENT IN JUNE
From National Association of Realtors (click for full article):
The Pending Home Sales Index, based on contracts signed in June, increased 5.3 percent in June to 89.0 from 84.5 in May, according to the latest report from NAR.
According to NAR, approximately 2.5 million first-time home buyers are expected to take advantage of the temporary tax credit, which economists predict will increase existing home sales by 7 percent to 5.51 million in 2009.
"The rise in pending home sales was broad-based with all four regions showing gains," Lawrence Yun, NAR chief economist said. "This is welcome news because a rise in contract activity is necessary for an overall housing recovery. With a tax credit now available to first-time home buyers, increases in home sales could be sustained with the momentum carrying into 2009."
The Pending Home Sales Index, based on contracts signed in June, increased 5.3 percent in June to 89.0 from 84.5 in May, according to the latest report from NAR.
According to NAR, approximately 2.5 million first-time home buyers are expected to take advantage of the temporary tax credit, which economists predict will increase existing home sales by 7 percent to 5.51 million in 2009.
"The rise in pending home sales was broad-based with all four regions showing gains," Lawrence Yun, NAR chief economist said. "This is welcome news because a rise in contract activity is necessary for an overall housing recovery. With a tax credit now available to first-time home buyers, increases in home sales could be sustained with the momentum carrying into 2009."
07 August 2008
Housing, Job Data Signal Recovery, Not Recession
An article by SmartMoney.com's Donald Luskin points out some important news items that seem to be neglected by nearly everyone in the media. Indicators are showing real sign of a real estate market recovery. Here's an excerpt or click here for the entire article.
"I haven't seen a single media story that reported the truth: that the median price of an existing home rose in June. It went up. It was higher."
"Let me be perfectly clear. The median existing home price was higher in June than it was in May, rising to $215,100 from $208,600. Oh, and while we're at it, the price was higher in May than it was in April. And guess what: It was higher in April than it was in March. And hey, while we're at it, it was higher in March than it was in February."
"I haven't seen a single media story that reported the truth: that the median price of an existing home rose in June. It went up. It was higher."
"Let me be perfectly clear. The median existing home price was higher in June than it was in May, rising to $215,100 from $208,600. Oh, and while we're at it, the price was higher in May than it was in April. And guess what: It was higher in April than it was in March. And hey, while we're at it, it was higher in March than it was in February."
30 July 2008
Reform Bill Summary
I received an email from our Coldwell Banker Mortgage advisor today and thought it was a much better summary than I could provide. Feel free to contact him directly - his info is at the end...
From Steve Guenza:
As most of you have already heard, President Bush signed the Mortgage reform bill this morning. I confess, I have not read the entire 700 pages, but below is my take on the import issues that will affect all of our business.
The most important aspect of the bill is that is gives the federal government the authority to step in and infuse money into Fannie Mae and Freddie Mac to keep them from going under. Over the last month, investors were selling off Fannie and Freddie stocks and not buying the mortgage backed securities for fear that they would lose money. Fannie and Freddie have bought over half of the mortgages in the US and their stocks have taken a huge hit due to the mortgage market mess.
In order for Fannie and Freddie to make their mortgage backed securities more attractive to investors. They started offering them at a higher yield to investors. They can’t offer a higher yield unless they get a higher yield themselves; hence, interest rates have gone up.
I believe this bill will calm investors down a little knowing that Fannie and Freddie won’t go under. That coupled with the new lending guidelines and rules set into place, should bring rates down as investors come back to the table. I have already seen rates drop twice already today.
The second most important thing is the new FHASecure loan. By now most of you know of Short Sales. Think of this as a ‘Short Sale’ refi. The current lender has to agree to take a 90% of the current value payoff and write off the rest, and FHA will come in and buy the reworked loan from the lender. Of course there are some conditions such as profit sharing of additional equity when the home is sold, and the lenders have additional fees to pay FHA. It is estimated that the lenders will save billions by accepting the ‘Short Sale’ refinance by not letting it go to foreclosure, but they will have to do a better job than they are doing now with all the problems we currently face with the Short Sale process.
What doe’s this mean for us?
It is estimate that this will help 400,000 U.S. homeowners currently facing foreclosure and that potentially means that we could have 400,000 less foreclosures and short sales on the market, and that’s a good thing.
A few other things included in the Bill:
- 10% or up to $7,500 tax credit for first time homebuyers (Although this needs to be paid back over 15 years with 0 interest)
- $7,000 tax credit for buyers that buy an REO
- Elimination of down payment assistance programs, such as Nehemiah, Ameridream and Genesis
- Tighter loan qualification guidelines
- Keeps the higher conforming and FHA loan limits, instead of just through this year.
- Increases FHA loan down payments from 3% to 3.5%.
- 4 billion dollars for states to buy and rehabilitate foreclosed properties
- Creates a national licensing system for Mortgage Brokers and lenders.
All in all, I really think that this is going to help. With all the good buzz in the media, I am even hearing more and more analyst piping up that this may well be the bottom……..Hang On!!!
Steve Guenza
Mortgage Advisor
Coldwell Banker Mortgage
707-765-4453 office
707-326-0814 cell
http://steveguenza.coldwellbankermortgage.com
From Steve Guenza:
As most of you have already heard, President Bush signed the Mortgage reform bill this morning. I confess, I have not read the entire 700 pages, but below is my take on the import issues that will affect all of our business.
The most important aspect of the bill is that is gives the federal government the authority to step in and infuse money into Fannie Mae and Freddie Mac to keep them from going under. Over the last month, investors were selling off Fannie and Freddie stocks and not buying the mortgage backed securities for fear that they would lose money. Fannie and Freddie have bought over half of the mortgages in the US and their stocks have taken a huge hit due to the mortgage market mess.
In order for Fannie and Freddie to make their mortgage backed securities more attractive to investors. They started offering them at a higher yield to investors. They can’t offer a higher yield unless they get a higher yield themselves; hence, interest rates have gone up.
I believe this bill will calm investors down a little knowing that Fannie and Freddie won’t go under. That coupled with the new lending guidelines and rules set into place, should bring rates down as investors come back to the table. I have already seen rates drop twice already today.
The second most important thing is the new FHASecure loan. By now most of you know of Short Sales. Think of this as a ‘Short Sale’ refi. The current lender has to agree to take a 90% of the current value payoff and write off the rest, and FHA will come in and buy the reworked loan from the lender. Of course there are some conditions such as profit sharing of additional equity when the home is sold, and the lenders have additional fees to pay FHA. It is estimated that the lenders will save billions by accepting the ‘Short Sale’ refinance by not letting it go to foreclosure, but they will have to do a better job than they are doing now with all the problems we currently face with the Short Sale process.
What doe’s this mean for us?
It is estimate that this will help 400,000 U.S. homeowners currently facing foreclosure and that potentially means that we could have 400,000 less foreclosures and short sales on the market, and that’s a good thing.
A few other things included in the Bill:
- 10% or up to $7,500 tax credit for first time homebuyers (Although this needs to be paid back over 15 years with 0 interest)
- $7,000 tax credit for buyers that buy an REO
- Elimination of down payment assistance programs, such as Nehemiah, Ameridream and Genesis
- Tighter loan qualification guidelines
- Keeps the higher conforming and FHA loan limits, instead of just through this year.
- Increases FHA loan down payments from 3% to 3.5%.
- 4 billion dollars for states to buy and rehabilitate foreclosed properties
- Creates a national licensing system for Mortgage Brokers and lenders.
All in all, I really think that this is going to help. With all the good buzz in the media, I am even hearing more and more analyst piping up that this may well be the bottom……..Hang On!!!
Steve Guenza
Mortgage Advisor
Coldwell Banker Mortgage
707-765-4453 office
707-326-0814 cell
http://steveguenza.coldwellbankermortgage.com
26 July 2008
Harbour View Update
It appears that the affordable housing units are about to rented and the developer is taking applications. There are some income restrictions but the rents are very attractive and the location is great. No word yet on when they'll begin building the single family units for sale but there hasn't been much activity for a while.
You can get more info on the rentals at www.theharborviewvillage.com
You can get more info on the rentals at www.theharborviewvillage.com
18 July 2008
Fast Facts
Calif. median home price - May 08: $384.840(Source: C.A.R.)
Calif. highest median home price by C.A.R. region May 08: Santa Barbara So. Coast $1,199.000(Source: C.A.R.)
Calif. lowest median home price by C.A.R. region May 08: High Desert $200,740(Source: C.A.R.)
Calif. First-time Buyer Affordability Index - First Quarter 08: 44 percent (Source: C.A.R.)
Mortgage rates - week ending 07/10/08 30-yr. fixed: 6.37 Fees/points: 0.6% 15-yr. fixed: 5.91 Fees/points: 0.6% 1-yr. adjustable: 5.17 % Fees/points: 0.5% (Source: Freddie Mac)
Finally, here's the current list of median prices in Bodega Bay over the last 8 years.
Calif. highest median home price by C.A.R. region May 08: Santa Barbara So. Coast $1,199.000(Source: C.A.R.)
Calif. lowest median home price by C.A.R. region May 08: High Desert $200,740(Source: C.A.R.)
Calif. First-time Buyer Affordability Index - First Quarter 08: 44 percent (Source: C.A.R.)
Mortgage rates - week ending 07/10/08 30-yr. fixed: 6.37 Fees/points: 0.6% 15-yr. fixed: 5.91 Fees/points: 0.6% 1-yr. adjustable: 5.17 % Fees/points: 0.5% (Source: Freddie Mac)
Finally, here's the current list of median prices in Bodega Bay over the last 8 years.
Bottom's Up
This article from Barron's give us a rare optimistic view of the current housing situation. The author points to several indicators that the bottom of the market is (or is about) here and that we're actually poised for recovery, albeit slowly.
"An ebbing tide of new delinquencies strongly hints that the worst may soon be over for the housing market, at least in terms of burdensome supply. The pig, in other words, is well along the python's alimentary canal.
In hindsight, the housing bust hasn't been nearly as calamitous as depicted in the media, or as Wall Street's woes might suggest. Yes, people have lost their homes, but more than a few were mendacious mortgage applicants and mere speculators, who eagerly sought out 100% margin loans, only to fold just as quickly when prices turned against them.
It is important to remember, as well, that even after a steep drop in the S&P/Case-Shiller Indices, long-term buyers in the top 20 U.S. metro markets have seen their properties appreciate by 70% since 2000. Home prices often take five to 10 years to recover fully from severe declines such as this. But at least the available data suggest the scary dive in home prices soon will be over."
For the entire article, click here.
"An ebbing tide of new delinquencies strongly hints that the worst may soon be over for the housing market, at least in terms of burdensome supply. The pig, in other words, is well along the python's alimentary canal.
In hindsight, the housing bust hasn't been nearly as calamitous as depicted in the media, or as Wall Street's woes might suggest. Yes, people have lost their homes, but more than a few were mendacious mortgage applicants and mere speculators, who eagerly sought out 100% margin loans, only to fold just as quickly when prices turned against them.
It is important to remember, as well, that even after a steep drop in the S&P/Case-Shiller Indices, long-term buyers in the top 20 U.S. metro markets have seen their properties appreciate by 70% since 2000. Home prices often take five to 10 years to recover fully from severe declines such as this. But at least the available data suggest the scary dive in home prices soon will be over."
For the entire article, click here.
24 May 2008
This American Mortgage...
Here's an excellent audio overview from Chicago Public Radio's "This American Life" of the recent mess that became the mortgage market. It's definitely worth an hour of your time whether you're in the business or just watching from the outside...
The Giant Pool of Money
A special program about the housing crisis produced in a special collaboration with NPR news. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money.
The Giant Pool of Money
A special program about the housing crisis produced in a special collaboration with NPR news. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money.
Affordability on the Rise
After dropping to the sub-20% range about a year ago, entry level home affordability has more than doubled recently. One more indicator that this is a great time to buy.
Here's the article from the California Association of Realtors...
The percentage of households that could afford to buy an entry-level home in California stood at 44 percent in the first quarter of 2008, compared with 26 percent for the same period a year ago, according to a report released Tuesday by C.A.R.
C.A.R.'s First-time Buyer Housing Affordability Index (FTB-HAI) measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.
The minimum household income needed to purchase an entry-level home at $356,350 in California in the first quarter of 2008 was $67,830, based on an adjustable interest rate of 5.65 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $2,260 for the first quarter of 2008.
Here's the article from the California Association of Realtors...
The percentage of households that could afford to buy an entry-level home in California stood at 44 percent in the first quarter of 2008, compared with 26 percent for the same period a year ago, according to a report released Tuesday by C.A.R.
C.A.R.'s First-time Buyer Housing Affordability Index (FTB-HAI) measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.
The minimum household income needed to purchase an entry-level home at $356,350 in California in the first quarter of 2008 was $67,830, based on an adjustable interest rate of 5.65 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $2,260 for the first quarter of 2008.
22 May 2008
The Tide is Turning - at least statistically...
The statistics are beginning to indicate a general turn-around in the base home market. While it's still difficult to assess the high-end direction, the low-end is beginning to turn around and that should help investors feel better about the mid- and high-end market very soon. In the meantime, housing is undoubtedly becoming more affordable for most of America (and California...).
From CAR's Market Matters:
The percentage of households that could afford to buy an entry-level home in California rose to 44 percent in the first quarter of 2008, up dramatically from only 26 percent in the same quarter a year ago and 33 percent in the final quarter of 2007, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ First-time Buyer Housing Affordability Index. Households needed an income of $67,830 to purchase a home costing $356,350, which is 85 percent of the statewide median home price. The income requirement was 30 percent lower than a year ago and is closer to the state’s median income of $50,700 – good news for first-time and other homebuyers considering a home purchase. Sacramento and the High Desert regions topped the list of most affordable regions at 64 percent, with Monterey and San Francisco the least affordable at 29 and 30 percent, respectively.
Everybody knows job growth helps drive demand for homes. One of the reasons the San Francisco Bay Area continues to experience a softer real estate market decline is the fact that San Francisco created an estimated 10,000 new technology and other professional jobs and continued to experience population growth, adding more than 12,000 new residents in 2007 alone, the “San Francisco Chronicle” reported. Parts of the Silicon Valley kept pace in job growth, and both areas had a significant increase in new home construction. San Francisco added 2,500 new homes, the most in almost two decades. That trend is expected to continue this year and next with 3,281 units approved for construction in areas like Rincon Hill, the Transbay Terminal Area, Hunter’s Point Shipyard and Candlestick Point.
The Chronicle also noticed that foreclosure figures published by various organizations sometimes contradict one another. So it was last week when RealtyTrac reported a 4 percent increase in foreclosures and the highest level of foreclosure activity since it began tracking those numbers in 2005, while Foreclosures.com reported that its figures showed a drop in preforeclosures of more than 5 percent. What gives? It all depends on how you count them and how you choose to interpret the results. RealtyTrac’s foreclosure numbers combine preforeclosure activity with actual foreclosures, while Foreclosures.com separates preforeclosures from foreclosures on the theory that not all preforeclosures ultimately end up as foreclosures. That’s why RealtyTrac trends point toward a continued foreclosure problem while Foreclosure.com’s figures tend to be more optimistic.
Housing starts were up 8.2 percent nationally in April, their largest increase in two years, and that good news spilled over into parts of California. In San Diego County, 224 multi-family building permits were issued in April, up from only 17 in March. Single-family permits, meanwhile, climbed from 193 in March to 484 in April, the largest one-month total since July 2007. Despite the increases, economists expect new construction growth to continue to be stunted while the significant backlog of foreclosed existing homes is reduced in the coming months.
From CAR's Market Matters:
The percentage of households that could afford to buy an entry-level home in California rose to 44 percent in the first quarter of 2008, up dramatically from only 26 percent in the same quarter a year ago and 33 percent in the final quarter of 2007, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ First-time Buyer Housing Affordability Index. Households needed an income of $67,830 to purchase a home costing $356,350, which is 85 percent of the statewide median home price. The income requirement was 30 percent lower than a year ago and is closer to the state’s median income of $50,700 – good news for first-time and other homebuyers considering a home purchase. Sacramento and the High Desert regions topped the list of most affordable regions at 64 percent, with Monterey and San Francisco the least affordable at 29 and 30 percent, respectively.
Everybody knows job growth helps drive demand for homes. One of the reasons the San Francisco Bay Area continues to experience a softer real estate market decline is the fact that San Francisco created an estimated 10,000 new technology and other professional jobs and continued to experience population growth, adding more than 12,000 new residents in 2007 alone, the “San Francisco Chronicle” reported. Parts of the Silicon Valley kept pace in job growth, and both areas had a significant increase in new home construction. San Francisco added 2,500 new homes, the most in almost two decades. That trend is expected to continue this year and next with 3,281 units approved for construction in areas like Rincon Hill, the Transbay Terminal Area, Hunter’s Point Shipyard and Candlestick Point.
The Chronicle also noticed that foreclosure figures published by various organizations sometimes contradict one another. So it was last week when RealtyTrac reported a 4 percent increase in foreclosures and the highest level of foreclosure activity since it began tracking those numbers in 2005, while Foreclosures.com reported that its figures showed a drop in preforeclosures of more than 5 percent. What gives? It all depends on how you count them and how you choose to interpret the results. RealtyTrac’s foreclosure numbers combine preforeclosure activity with actual foreclosures, while Foreclosures.com separates preforeclosures from foreclosures on the theory that not all preforeclosures ultimately end up as foreclosures. That’s why RealtyTrac trends point toward a continued foreclosure problem while Foreclosure.com’s figures tend to be more optimistic.
Housing starts were up 8.2 percent nationally in April, their largest increase in two years, and that good news spilled over into parts of California. In San Diego County, 224 multi-family building permits were issued in April, up from only 17 in March. Single-family permits, meanwhile, climbed from 193 in March to 484 in April, the largest one-month total since July 2007. Despite the increases, economists expect new construction growth to continue to be stunted while the significant backlog of foreclosed existing homes is reduced in the coming months.
17 May 2008
Home sales up -- first since '05
There's finally some good news hitting the headlines and while it's a start, I'm sure the media will continue their focus on the bad news. However, this is one more indication that potential buyers are getting more comfortable with the current conditions and are seeing this as a good time to pick up some of the excellent deals that exist. Activity on the Coast seems to have increased lately and I would expect that once we get a few homes in escrow, the momentum will continue...
Click here for the Press Democrat article.
Click here for the Press Democrat article.
03 May 2008
Is the median price the median price?
"Just like saying the average nationwide temperature today is 57 degrees doesn't tell you anything, the same is true for real estate prices," Yun said. "The only way to tell what your own home is really worth is to look at local-market conditions, do Internet research and utilize professionals (such as licensed appraisers) to help determine the value of your home." NAR Chief Economist Lawrence Yun
This article helps explain what I've been telling my clients for a while now - the median price fluctuations can be due to dramatic changes on one end of the market while little may be changing in another. You really need to focus on your piece of the market and evaluate accordingly.
Click here for the entire Wall Street Journal Marketwatch article.
This article helps explain what I've been telling my clients for a while now - the median price fluctuations can be due to dramatic changes on one end of the market while little may be changing in another. You really need to focus on your piece of the market and evaluate accordingly.
Click here for the entire Wall Street Journal Marketwatch article.
25 April 2008
Harbor View (formerly Romancia) update
It appears that the affordable housing (rental) units are near completion and awaiting sign off from the County. It could be a couple of months before they are ready for occupancy since the builder will have plenty of heavy equipment on site as they prepare the first five single family units (which will be held by Battaglia as vacation rentals). I would assume that once those are complete, the rest of the development will move forward.
If you have interest in a rental or single family residence, please contact me directly and I'll keep you updated on the progress.
If you have interest in a rental or single family residence, please contact me directly and I'll keep you updated on the progress.
14 March 2008
Clarification on Conforming Jumbo Loans
Actually, clarifying the current loan environment is a tough one and while this article may do some of that, there is still a lot to be learned about getting a loan these days. Find a good lender and spend some time talking to them before you do anything...
Here's the entire article from Bankrate.com's Holden Lewis. There is a list of guidelines that should help you understand if refinancing with the new limits will be of interest to you.
(Excerpts)
- You might be disappointed if you planned to refinance your mortgage under the new "jumbo-conforming" limits. The requirements are stringent, and they might leave some would-be borrowers out.
- Depending on the median cost of houses in each metro area, the jumbo-conforming limit can be as high as $729,750. You can look up your county's limit on this clickable map.
- There is no guarantee that the rates on jumbo-conforming loans will be low enough to attract a lot of borrowers. Rates will be set by the market. The most likely outcome is that the rates on the jumbo-conforming loans will end up somewhere between those for conforming loans and those for jumbo loans.
Here's the entire article from Bankrate.com's Holden Lewis. There is a list of guidelines that should help you understand if refinancing with the new limits will be of interest to you.
(Excerpts)
- You might be disappointed if you planned to refinance your mortgage under the new "jumbo-conforming" limits. The requirements are stringent, and they might leave some would-be borrowers out.
- Depending on the median cost of houses in each metro area, the jumbo-conforming limit can be as high as $729,750. You can look up your county's limit on this clickable map.
- There is no guarantee that the rates on jumbo-conforming loans will be low enough to attract a lot of borrowers. Rates will be set by the market. The most likely outcome is that the rates on the jumbo-conforming loans will end up somewhere between those for conforming loans and those for jumbo loans.
13 March 2008
Housing Affordability Improves as Prices and Rates Decline
California homes reach greatest affordability in three years...
Click here for entire article
From C.A.R.
Written by Robert A. Kleinhenz, Ph.D. Deputy Chief Economist
Decreases in the median price and declining mortgage rates during the fourth quarter of 2007 dramatically improved affordability in California for the first time in two years. At $483,730, the statewide median price fell by a record margin of 14.9 percent or $84,400 compared to the third quarter median of $568,130. The median price was nearly $80,000 lower than the median of $561,430 from the fourth quarter of 2006, corresponding to a record-setting 13.8 percent year-to-year decrease. Nearly all areas of the state experienced large price declines, as tighter underwriting standards and the liquidity crunch dramatically reduced the pool of qualified buyers who could obtain a loan.
Dramatically lower prices have contributed to large improvements in affordability in recent months. The C.A.R. Housing Affordability Index for First-Time Buyers (HAI-FTB) measures the share of all households that can afford the entry-level home. At 85 percent of the overall median, the price of an entry-level home in the fourth quarter was $411,170. Assuming a 10 percent down payment and a 1-year adjustable rate mortgage of 6.21 percent, the monthly payment (including taxes and insurance) was $2,740. With a 40 percent qualifying ratio the minimum income required for such a home was $82,200, considerably below the levels of recent quarters when the minimum income approached $100,000.
Click here for entire article
From C.A.R.
Written by Robert A. Kleinhenz, Ph.D. Deputy Chief Economist
Decreases in the median price and declining mortgage rates during the fourth quarter of 2007 dramatically improved affordability in California for the first time in two years. At $483,730, the statewide median price fell by a record margin of 14.9 percent or $84,400 compared to the third quarter median of $568,130. The median price was nearly $80,000 lower than the median of $561,430 from the fourth quarter of 2006, corresponding to a record-setting 13.8 percent year-to-year decrease. Nearly all areas of the state experienced large price declines, as tighter underwriting standards and the liquidity crunch dramatically reduced the pool of qualified buyers who could obtain a loan.
Dramatically lower prices have contributed to large improvements in affordability in recent months. The C.A.R. Housing Affordability Index for First-Time Buyers (HAI-FTB) measures the share of all households that can afford the entry-level home. At 85 percent of the overall median, the price of an entry-level home in the fourth quarter was $411,170. Assuming a 10 percent down payment and a 1-year adjustable rate mortgage of 6.21 percent, the monthly payment (including taxes and insurance) was $2,740. With a 40 percent qualifying ratio the minimum income required for such a home was $82,200, considerably below the levels of recent quarters when the minimum income approached $100,000.
06 March 2008
FHA Limit Raised to $662,500 in Sonoma County
Beginning tomorrow, Sonoma County’s limit on loans insured by the Federal Housing Administration will be temporarily raised to $662,500.
HUD will announce tomorrow the new conforming loan limit for Sonoma County and other markets, a spokesman said. Conforming loans are sold to government-sponsored buyers such as Fannie Mae and Freddie Mac and have a current limit of $417,000 in California and most states.
What this means is much more affordable loans for those buying property in Sonoma County, especially on the Coast where our median price is well over $800,000. This is great news for both buyers and sellers.
HUD will announce tomorrow the new conforming loan limit for Sonoma County and other markets, a spokesman said. Conforming loans are sold to government-sponsored buyers such as Fannie Mae and Freddie Mac and have a current limit of $417,000 in California and most states.
What this means is much more affordable loans for those buying property in Sonoma County, especially on the Coast where our median price is well over $800,000. This is great news for both buyers and sellers.
NEW Home Construction Slowdown Could Have Dual Impacts
As stated in the article from the California Building Industry Association below, new construction has slowed down significantly (62%) over the last year. While this may have been necessary, given consumer's hesitancy to buy, they warn that we may have gone to far. Once buyers start buying again, it could cause a frenzy over a shortage of inventory.
I still think this is a great time to buy as interest rates continue to remain low and prices have not yet started their rise. That is sure to change once the migration begins...
Here's the full article.
New home construction starts in California fell 62 percent in January as homebuilders continued to cope with slow sales and the ongoing credit crisis, according to the latest data from the California Building Industry Association (CBIA). Builders pulled just 2,608 permits for single-family homes statewide in January, a 28 percent decline from the previous month.
CBIA Chief Economist Alan Nevin said the drop in new residential projects breaking ground coupled with the ongoing push to move existing inventories, carry the potential to produce a "severe shortage" of new housing once the real estate market rebounds.
"We have rarely had a situation where interest rates are low and the California economy is stable and yet there appears to be hesitancy among potential homebuyers to make the critical purchase decision," Nevin said. "We do know, however, that within the near-term future, the market will decide, often en masse, to begin the home-buying process, but this time there will be a severe shortage of new product."
I still think this is a great time to buy as interest rates continue to remain low and prices have not yet started their rise. That is sure to change once the migration begins...
Here's the full article.
New home construction starts in California fell 62 percent in January as homebuilders continued to cope with slow sales and the ongoing credit crisis, according to the latest data from the California Building Industry Association (CBIA). Builders pulled just 2,608 permits for single-family homes statewide in January, a 28 percent decline from the previous month.
CBIA Chief Economist Alan Nevin said the drop in new residential projects breaking ground coupled with the ongoing push to move existing inventories, carry the potential to produce a "severe shortage" of new housing once the real estate market rebounds.
"We have rarely had a situation where interest rates are low and the California economy is stable and yet there appears to be hesitancy among potential homebuyers to make the critical purchase decision," Nevin said. "We do know, however, that within the near-term future, the market will decide, often en masse, to begin the home-buying process, but this time there will be a severe shortage of new product."
01 March 2008
Median Prices of Bodega Bay Homes (Rolling 12-months)
If you're interested in following the pricing trends in Bodega Bay and Bodega Harbour, bookmark this link and check back monthly. (This is a PDF document - click here to get the free Adobe Reader)
On the report, you'll see that Bodega Bay peaked in May of 2006 and dropped about 20% as of December 2007. Bodega Harbour's 27% trough came last Summer and appears to have stabilized.
Activity has certainly increased over the last month with seven properties in escrow after a significant quiet period.
On the report, you'll see that Bodega Bay peaked in May of 2006 and dropped about 20% as of December 2007. Bodega Harbour's 27% trough came last Summer and appears to have stabilized.
Activity has certainly increased over the last month with seven properties in escrow after a significant quiet period.
21 February 2008
HOMEOWNERSHIP LARGELY OUT OF REACH FOR MANY CALIFORNIANS
From the California Association of Realtors...
In every county across the sate, the income needed to buy a median-priced home in California has surpassed the median household income, according to the results of a study released earlier this month by the California Budget Project.
According to the report, more than 43 percent of all California households are renters, and nearly a quarter of them are projected to be spending more than half their incomes on rent, eliminating the opportunity to save for a down payment on a home.
"All indications suggest that the situation (for renters) has grown worse over the past three years," the report states. "The number of Californians in need of affordable housing far outstrips the supply of low cost units."
Click here for the full report.
In every county across the sate, the income needed to buy a median-priced home in California has surpassed the median household income, according to the results of a study released earlier this month by the California Budget Project.
According to the report, more than 43 percent of all California households are renters, and nearly a quarter of them are projected to be spending more than half their incomes on rent, eliminating the opportunity to save for a down payment on a home.
"All indications suggest that the situation (for renters) has grown worse over the past three years," the report states. "The number of Californians in need of affordable housing far outstrips the supply of low cost units."
Click here for the full report.
C.A.R. REPORTS ENTRY-LEVEL HOUSING AFFORDABILITY AT 33 PERCENT
From the California Association of Realtors...
The percentage of households that could afford to buy an entry-level home in California stood at 33 percent in the fourth quarter of 2007, compared with 25 percent for the same period a year ago, according C.A.R.'s First-time buyer Housing Affordability Index (FTB-HAI) released Tuesday.
The FTB-HAI measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.
The minimum household income needed to purchase an entry-level home at $411,170 in California in the fourth quarter of 2007 was $82,200, based on an adjustable interest rate of 6.21 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $2,740 for the fourth quarter of 2007.
Click here for more.
The percentage of households that could afford to buy an entry-level home in California stood at 33 percent in the fourth quarter of 2007, compared with 25 percent for the same period a year ago, according C.A.R.'s First-time buyer Housing Affordability Index (FTB-HAI) released Tuesday.
The FTB-HAI measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.
The minimum household income needed to purchase an entry-level home at $411,170 in California in the fourth quarter of 2007 was $82,200, based on an adjustable interest rate of 6.21 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $2,740 for the fourth quarter of 2007.
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Good Times Bad Times
I know we've had our share over the last few years, but it seems to be an interesting time right now - especially with the media. Lately, I've noticed a bit of confusion as to which way the media wants to spin the current real estate market. There have actually been some positive reports and mention of a "bottoming" market mixed in the with usual doom-and-gloom that they regularly treat us to.
Even California's highest real estate organization, the California Association of Realtors (CAR) can't figure out which way to go as indicated by a recent email I received from them. One headline touted a fourth-quarter affordability rate of 33% in California, which is 9% higher than a year ago and the highest rate I've seen in my 5 years as a Realtor.
CAR then spins around and says that home ownership is out of reach for many Californians. While this is true, the affordability has increased significantly while rents seem to have outpaced income growth - making an even stronger case for buying a home.
I believe we're certainly in a transition period right now with a market that does seem to be bottoming out and headed back toward some slow growth for while. As many experts said a while back, this downturn was a necessary correction for a market that was spinning out of control and making it much more difficult for the average Californian to join the ranks of homeowners.
The two articles I mentioned will be posted below (or above) this one...
Even California's highest real estate organization, the California Association of Realtors (CAR) can't figure out which way to go as indicated by a recent email I received from them. One headline touted a fourth-quarter affordability rate of 33% in California, which is 9% higher than a year ago and the highest rate I've seen in my 5 years as a Realtor.
CAR then spins around and says that home ownership is out of reach for many Californians. While this is true, the affordability has increased significantly while rents seem to have outpaced income growth - making an even stronger case for buying a home.
I believe we're certainly in a transition period right now with a market that does seem to be bottoming out and headed back toward some slow growth for while. As many experts said a while back, this downturn was a necessary correction for a market that was spinning out of control and making it much more difficult for the average Californian to join the ranks of homeowners.
The two articles I mentioned will be posted below (or above) this one...
04 February 2008
Pinpoint the right type of loan for you
By Charles Scutt Content That Works Features
Article Launched: 02/01/2008 10:02:51 AM PST
Mercurynews.com
Thinking about buying a new home but suffering from pre-borrowing anxiety? Despite the subprime mortgage meltdown, tighter lending restrictions and widening foreclosure fears, the American dream of home ownership still is attainable so long as you know what to expect in the current mortgage loan climate.
The good news, according to Michael LaCour-Little, a finance professor at California State University-Fullerton, is that most borrowers those with good credit and some down payment or significant housing equity should not have difficulty obtaining financing today. It s the no-money-down loans to borrowers with weak credit that will be very hard to come by.
Elisa Mullins, a broker and owner of Assist-2-Sell Premier Realty in St. Louis, Mo., says that the average borrower can weather the current financing storm, especially if she or he has good credit, which typically equates to a credit score of 680 or higher.
They have the opportunity to be in the driver s seat and take a proactive approach toward their future to include buying into the American dream, Mullins says. The credit-worthiness of the borrower will secure favorable financing in today's market. That will open the buyer to a lot of different mortgage products that are not available to credit-risky borrowers.
Nevertheless, today s borrowers will have to prove that they can repay a loan without any problems, says Gavin Susman, COO of Sky Development, Inc. in Florida. They will have to abide by Fannie Mae's guidelines for debt-to-income ratios utilizing documented income. Gone are the days where you could get away with providing a letter from your employer stating how much you make.
Instead, you'll need to provide pay stubs with W-2 forms or tax returns, Susman says. If your income is not documented and you have bad credit, you will not be able to secure any mortgage unless you are financing no more than 70 percent of the value of the property, he says. Even then, you may have a hard time getting the loan.
Additionally, you can anticipate having to pay higher interest rates nowadays if you seek a non-conforming loan one exceeding $417,000 says LaCour-Little.
What s more, says Mullins, you should expect to have around 5 to 10 percent of the purchase price saved. If you cannot get the seller to credit the pre-paids and closing costs, then you will need to have an adequate down payment, the amount of which is contingent on your creditworthiness.
With lenders adding more restrictions, be prepared to pay more in borrowing fees as well, says Mullins. With fewer lenders out there today than in years past, it makes it more competitive among lenders. The fees will go up naturally as a result.
On a side note, while there may be fewer lenders, greater loan availability may be on the horizon, says LaCour-Little, thanks to the recent Federal Reserve cut in interest rates. However, even though the rate cut is likely to produce greater liquidity in the mortgage market, the rate cut itself is not likely to reduce most mortgage rates, since they tend to be tied to longer-term rates rather than the federal funds rate that the Federal Reserve controls, he says.
When mulling over your mortgage-loan options, it s important to scrutinize several key criteria, says Scott Christiansen, a senior mortgage professional with WestCal Mortgage Corp. in Southern California.
Consider your income today vs. income in the future, he says. Look at potential tax breaks, and spread out your investments the amount of money you put into your home vs. other investment vehicles. Work with a mortgage professional who comes recommended and whom you trust. Lastly, do your homework and take action. Times change, and so do financing programs, so what is available this week may not be next week.
Doing your homework inevitably involves checking your credit score and analyzing your credit report carefully, says LaCour-Little. If you do identify any problems, try to resolve them before applying for a loan.
Though they ve gotten a lot of bad press lately, don't be too quick to dismiss adjustable-rate mortgage options, says Christiansen.
ARMs are still a great option for the informed borrower, he says. ARMs are designed to fit a borrower s time line and payment range. If you're going to live in a home for three to five years, look at a five- to seven-year ARM. If you plan on living in a home for 20 years, and you elect to go with a five- or seven-year ARM, then you run the risk of the rate being higher at the adjustment period. Many lenders and borrowers went about the last few years as if the housing market could do nothing but grow. There are always adjustments, corrections and changes, and all should be considered when selecting the best mortgage-financing solution.
If you get turned down by a lender, don't despair, says Mullins.
This is a sign of the times - a good sign, she says. Lenders are finally putting in some safeguards to help buyers recognize when they should not be buying. Get the tools you need to clean up your credit and other personal situations before you decide to take on any debt you can t afford.
LaCour-Little says that approximately 20 to 30 percent of mortgage-loan applications are declined each year. It s not the end of the world, he says. Different lenders have different underwriting guidelines, so you may simply need to apply to another lender.
Ultimately, remember that banks make money lending money, says Christiansen. The days of a real estate investor coming in without a job, with terrible credit and almost no money in the bank and buying homes and apartments may very well be over. But smart money is still available to smart borrowers.
Article Launched: 02/01/2008 10:02:51 AM PST
Mercurynews.com
Thinking about buying a new home but suffering from pre-borrowing anxiety? Despite the subprime mortgage meltdown, tighter lending restrictions and widening foreclosure fears, the American dream of home ownership still is attainable so long as you know what to expect in the current mortgage loan climate.
The good news, according to Michael LaCour-Little, a finance professor at California State University-Fullerton, is that most borrowers those with good credit and some down payment or significant housing equity should not have difficulty obtaining financing today. It s the no-money-down loans to borrowers with weak credit that will be very hard to come by.
Elisa Mullins, a broker and owner of Assist-2-Sell Premier Realty in St. Louis, Mo., says that the average borrower can weather the current financing storm, especially if she or he has good credit, which typically equates to a credit score of 680 or higher.
They have the opportunity to be in the driver s seat and take a proactive approach toward their future to include buying into the American dream, Mullins says. The credit-worthiness of the borrower will secure favorable financing in today's market. That will open the buyer to a lot of different mortgage products that are not available to credit-risky borrowers.
Nevertheless, today s borrowers will have to prove that they can repay a loan without any problems, says Gavin Susman, COO of Sky Development, Inc. in Florida. They will have to abide by Fannie Mae's guidelines for debt-to-income ratios utilizing documented income. Gone are the days where you could get away with providing a letter from your employer stating how much you make.
Instead, you'll need to provide pay stubs with W-2 forms or tax returns, Susman says. If your income is not documented and you have bad credit, you will not be able to secure any mortgage unless you are financing no more than 70 percent of the value of the property, he says. Even then, you may have a hard time getting the loan.
Additionally, you can anticipate having to pay higher interest rates nowadays if you seek a non-conforming loan one exceeding $417,000 says LaCour-Little.
What s more, says Mullins, you should expect to have around 5 to 10 percent of the purchase price saved. If you cannot get the seller to credit the pre-paids and closing costs, then you will need to have an adequate down payment, the amount of which is contingent on your creditworthiness.
With lenders adding more restrictions, be prepared to pay more in borrowing fees as well, says Mullins. With fewer lenders out there today than in years past, it makes it more competitive among lenders. The fees will go up naturally as a result.
On a side note, while there may be fewer lenders, greater loan availability may be on the horizon, says LaCour-Little, thanks to the recent Federal Reserve cut in interest rates. However, even though the rate cut is likely to produce greater liquidity in the mortgage market, the rate cut itself is not likely to reduce most mortgage rates, since they tend to be tied to longer-term rates rather than the federal funds rate that the Federal Reserve controls, he says.
When mulling over your mortgage-loan options, it s important to scrutinize several key criteria, says Scott Christiansen, a senior mortgage professional with WestCal Mortgage Corp. in Southern California.
Consider your income today vs. income in the future, he says. Look at potential tax breaks, and spread out your investments the amount of money you put into your home vs. other investment vehicles. Work with a mortgage professional who comes recommended and whom you trust. Lastly, do your homework and take action. Times change, and so do financing programs, so what is available this week may not be next week.
Doing your homework inevitably involves checking your credit score and analyzing your credit report carefully, says LaCour-Little. If you do identify any problems, try to resolve them before applying for a loan.
Though they ve gotten a lot of bad press lately, don't be too quick to dismiss adjustable-rate mortgage options, says Christiansen.
ARMs are still a great option for the informed borrower, he says. ARMs are designed to fit a borrower s time line and payment range. If you're going to live in a home for three to five years, look at a five- to seven-year ARM. If you plan on living in a home for 20 years, and you elect to go with a five- or seven-year ARM, then you run the risk of the rate being higher at the adjustment period. Many lenders and borrowers went about the last few years as if the housing market could do nothing but grow. There are always adjustments, corrections and changes, and all should be considered when selecting the best mortgage-financing solution.
If you get turned down by a lender, don't despair, says Mullins.
This is a sign of the times - a good sign, she says. Lenders are finally putting in some safeguards to help buyers recognize when they should not be buying. Get the tools you need to clean up your credit and other personal situations before you decide to take on any debt you can t afford.
LaCour-Little says that approximately 20 to 30 percent of mortgage-loan applications are declined each year. It s not the end of the world, he says. Different lenders have different underwriting guidelines, so you may simply need to apply to another lender.
Ultimately, remember that banks make money lending money, says Christiansen. The days of a real estate investor coming in without a job, with terrible credit and almost no money in the bank and buying homes and apartments may very well be over. But smart money is still available to smart borrowers.
10 January 2008
Rate on 30-year fixed's at lowest in over two years
CHICAGO (MarketWatch) -- Weak economic conditions, as borne out by recent indicators, caused mortgage rates to drop this week, with the 30-year fixed-rate mortgage falling to its lowest level since September 2005, Freddie Mac reported Thursday.
The recent movement in rates has inspired more homeowners to refinance in recent weeks, said Frank Nothaft, chief economist at McLean, Va.-based Freddie Mac.
The rate on a 30-year mortgage averaged 5.87%, down from 6.07% last week, according to Freddie Mac's weekly survey. The 30-year's average rate was 6.21% a year ago.
The 15-year fixed-rate mortgage averaged 5.43%, down from 5.68% last week and from 5.96% a year ago.
The recent movement in rates has inspired more homeowners to refinance in recent weeks, said Frank Nothaft, chief economist at McLean, Va.-based Freddie Mac.
The rate on a 30-year mortgage averaged 5.87%, down from 6.07% last week, according to Freddie Mac's weekly survey. The 30-year's average rate was 6.21% a year ago.
The 15-year fixed-rate mortgage averaged 5.43%, down from 5.68% last week and from 5.96% a year ago.
New Home Construction Market to Begin Slow Recovery in Mid-2008
SACRAMENTO – California’s beleaguered new-home market should begin a modest recovery this year, but won’t really rebound until public policy reforms to streamline the building process and promote construction of more-affordable new homes, the California Building Industry Association (CBIA) announced today.
In 2008, CBIA Chief Economist Alan Nevin predicts that the market will demonstrate a slow growth.
“By mid-2008 the housing industry will show signs of growth,” Nevin said during a media conference call today. “Continued population growth, a reduction of existing inventory and a return to normalcy in the credit markets are a recipe for a more positive 2008. As a result, we are projecting a slight increase in new home sales over last year.”
Specifically Nevin predicts that new-home sales will increase in the second half of 2008, leading to the construction of more than 80,000 new single-family homes this year, up from about 70,000 last year. He also expects production of condominiums, apartments and townhomes to increase to about 46,700, compared to about 44,000 in 2007.
In 2008, CBIA Chief Economist Alan Nevin predicts that the market will demonstrate a slow growth.
“By mid-2008 the housing industry will show signs of growth,” Nevin said during a media conference call today. “Continued population growth, a reduction of existing inventory and a return to normalcy in the credit markets are a recipe for a more positive 2008. As a result, we are projecting a slight increase in new home sales over last year.”
Specifically Nevin predicts that new-home sales will increase in the second half of 2008, leading to the construction of more than 80,000 new single-family homes this year, up from about 70,000 last year. He also expects production of condominiums, apartments and townhomes to increase to about 46,700, compared to about 44,000 in 2007.
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