I just received a CAR (California Association of Realtors) newsletter that posts weekly and this one caught my attention for the number of positive articles it contained. We've been seeing a trend toward the right direction lately but all four of these articles this week are strongly positive. I'll include the headlines and a link to the articles below in case you're looking to brighten your day...
Fed leaves key rate unchanged - The Federal Reserve today announced it will maintain its target for the federal funds rate in the 0 percent to 0.25 percent range...
Survey finds most agents see home prices stabilizing - A fourth-quarter survey conducted by HomeGain showed that 72 percent of HomeGain members believe that home prices will remain the same in the next six months, an increase from 69 percent in the third-quarter survey...
California new-home sales rise 25 percent - Sales in new-home communities of 10 units or more in California rose 25 percent in October compared with a year ago...
Foreclosure activity declines 8 percent nationwide - A report by RealtyTrac shows that foreclosure filings, including notices of default, scheduled foreclosure auctions, and bank repossessions, decreased nearly 8 percent in November compared with the previous month...
16 December 2009
02 December 2009
Market Summary for November 2009
Here's the summary for Bodega Bay for November and the twelve months prior. You'll find that we're still relatively flat and activity continues to fluctuate from month-to-month. Don't hesitate to call me with any questions or just to talk about the market in general.
Click to enlarge.
Click to enlarge.
26 November 2009
California Housing Market Turns Corner
From Bloomburg:
By Daniel Taub
Nov. 25 (Bloomberg) -- California, one-time hub of subprime mortgage lending and the nation’s leader in home foreclosures, has turned the corner toward a housing recovery, according to the state Association of Realtors.
Single-family home prices in California rose for the eighth consecutive month in October. The median cost of an existing, detached house gained 0.3 percent from the previous month to $297,500. Prices dropped about 3.2 percent from a year earlier, compared with annual declines of 7.3 percent in September and 17 percent in August.
“California has hit and passed the bottom of this real estate cycle,” Leslie Appleton-Young, vice president and chief economist of the Los Angeles-based Realtors group, said in a statement today.
Click here for the article
By Daniel Taub
Nov. 25 (Bloomberg) -- California, one-time hub of subprime mortgage lending and the nation’s leader in home foreclosures, has turned the corner toward a housing recovery, according to the state Association of Realtors.
Single-family home prices in California rose for the eighth consecutive month in October. The median cost of an existing, detached house gained 0.3 percent from the previous month to $297,500. Prices dropped about 3.2 percent from a year earlier, compared with annual declines of 7.3 percent in September and 17 percent in August.
“California has hit and passed the bottom of this real estate cycle,” Leslie Appleton-Young, vice president and chief economist of the Los Angeles-based Realtors group, said in a statement today.
Click here for the article
25 November 2009
Valley Ford Crab Feed Dec. 6
Apparently this won't be a huge season for eating crab this year and while the little crustaceans might be happy, that certainly won't stop about 400 people from meeting at the Valley Ford Town Hall for their annual crab feed on Sunday, December 6 from 11am to 4pm. The donation is $40 per person and you can eat as much crab, salad and bread as you can handle. People even bring homemade deserts to sell. You can bring your own beverages or buy them there. Proceeds go to support the Valley Ford Volunteer Fire Department. Get your tickets while they're still available as this event sells out every year.
Click on the image for the flier.
Click on the image for the flier.
05 November 2009
Homebuyer Credit Extended
From Steve Guenza - CB Mortgage (707) 765-4453
Here’s an update on the Homebuyers tax credit.
The Senate has voted last night (11/4) to extend and expand a popular tax credit for homebuyers that was scheduled to expire Nov. 30. The House is expected to schedule a quick vote on the bill as early as today 11/5 as part of a package that also extends unemployment benefits for people out of work more than a year. The White House indicated that the President will sign the legislation.
How the homebuyer tax credit would work:
· Tax credit: Ten percent of the purchase price of a primary residence, up to a maximum of $8,000 for first-time homebuyers and $6,500 for repeat buyers who purchase between December 1, 2009 and May 1, 2010. First-time homebuyers are defined as people who have not owned a home in the previous three years. Repeat buyers must have owned their current home at least five years. The credit cannot be used for houses costing more than $800,000.
· Deadline for qualifying: Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30.
· Military deadline: The deadline is extended by a year for members of the military who have served outside the U.S. for at least 90 days from Jan. 1, 2009, to May 1, 2010.
· Income limits: Individuals with annual incomes up to $125,000 and joint filers with incomes up to $225,000 qualify for the full credit. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.
· How to apply: Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a payment. Taxpayers who want immediate refunds can amend their tax returns for 2008 to claim the credit.
· New anti-fraud limitations imposed.
· Cost: $10.8 billion.
Source: Bloomberg Press and Associated Press and confirmed information with the content of the Senate bill
Here’s an update on the Homebuyers tax credit.
The Senate has voted last night (11/4) to extend and expand a popular tax credit for homebuyers that was scheduled to expire Nov. 30. The House is expected to schedule a quick vote on the bill as early as today 11/5 as part of a package that also extends unemployment benefits for people out of work more than a year. The White House indicated that the President will sign the legislation.
How the homebuyer tax credit would work:
· Tax credit: Ten percent of the purchase price of a primary residence, up to a maximum of $8,000 for first-time homebuyers and $6,500 for repeat buyers who purchase between December 1, 2009 and May 1, 2010. First-time homebuyers are defined as people who have not owned a home in the previous three years. Repeat buyers must have owned their current home at least five years. The credit cannot be used for houses costing more than $800,000.
· Deadline for qualifying: Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30.
· Military deadline: The deadline is extended by a year for members of the military who have served outside the U.S. for at least 90 days from Jan. 1, 2009, to May 1, 2010.
· Income limits: Individuals with annual incomes up to $125,000 and joint filers with incomes up to $225,000 qualify for the full credit. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.
· How to apply: Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a payment. Taxpayers who want immediate refunds can amend their tax returns for 2008 to claim the credit.
· New anti-fraud limitations imposed.
· Cost: $10.8 billion.
Source: Bloomberg Press and Associated Press and confirmed information with the content of the Senate bill
01 November 2009
Market Summary for October 2009
As expected, we're seeing minimal change this month - median prices are holding steady after continued (but light) pressure downward and the volume remains consistent.
22 October 2009
For mortgages, 620 is the new magic number
Near historic low mortgage rates, favorable home prices, and the federal tax credit for first-time home buyers have contributed to home purchases in the past year. However, the onset of the credit crisis, new regulations for home appraisals, and more stringent guidelines for purchases and refinances have resulted in confusion for some potential home buyers.
While using a mortgage broker to find the best loan may work for some buyers, it may not always be the best route. In the past, mortgage brokers could “shop” a loan to multiple lenders to help find the best deal. However, new practices and procedures under the Home Valuation Code of Conduct (HVCC) have hampered mortgage brokers’ abilities, namely that lenders may no longer accept home appraisals commissioned by brokers. As a result, consumers may have to pay for new appraisals with each lender, which costs time and money. However, consumers who are very busy or need guidance may find that working with a mortgage broker is the easiest solution.
Qualifying for a mortgage under current lender standards is more difficult nowadays than in years past. Beginning Nov. 1 or Dec. 12, depending on the type of loan, Fannie Mae is tightening its lending standards to the 620 credit score benchmark—including loans backed by the Federal Housing Administration and Veterans Affairs. Borrowers with credit scores of less than 620 will find it very difficult to qualify for a mortgage. However, to qualify for the best rates, consumers generally need credit scores of 720 and must have verifiable, steady income.
As for loan type, most real estate professionals agree that a fixed-rate mortgage is the best choice for buyers and refinancers.
To read the full story, please click here.
While using a mortgage broker to find the best loan may work for some buyers, it may not always be the best route. In the past, mortgage brokers could “shop” a loan to multiple lenders to help find the best deal. However, new practices and procedures under the Home Valuation Code of Conduct (HVCC) have hampered mortgage brokers’ abilities, namely that lenders may no longer accept home appraisals commissioned by brokers. As a result, consumers may have to pay for new appraisals with each lender, which costs time and money. However, consumers who are very busy or need guidance may find that working with a mortgage broker is the easiest solution.
Qualifying for a mortgage under current lender standards is more difficult nowadays than in years past. Beginning Nov. 1 or Dec. 12, depending on the type of loan, Fannie Mae is tightening its lending standards to the 620 credit score benchmark—including loans backed by the Federal Housing Administration and Veterans Affairs. Borrowers with credit scores of less than 620 will find it very difficult to qualify for a mortgage. However, to qualify for the best rates, consumers generally need credit scores of 720 and must have verifiable, steady income.
As for loan type, most real estate professionals agree that a fixed-rate mortgage is the best choice for buyers and refinancers.
To read the full story, please click here.
21 October 2009
California's Median Prices Since 1970
This graph pretty much says it all. Everything was moving along fairly smoothly until we recovered from the last dip in the late 80's. From that point forward prices accelerated to unprecedented rates until the market just couldn't sustain it any longer. And you know what happened next.
What I get from this is that we're actually just below the expected median (around $300K) if you drew a line through the middle of the curve. That says we've probably over-adjusted and could begin seeing recovery and slow/moderate growth in the near future. Then again, I don't envy those who make their living by predicting this market...
CAR Releases Expectations for California's Housing Future
CAR's expectations are fairly positive for 2010 and beyond. It's been a rough three years for most of the market and although there are some predictions of a second dip, most analysts cautiously feel we're headed back toward positive territory.
From the California Association of Realtors:
“After experiencing its sharpest decline in history, we expect the median price to rise modestly next year,” Liptak added. “2010 will mark the beginning of the ‘new normal’ for California’s housing market. This ‘new normal’ likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.”
The median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year, according to the forecast. Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.
You can read the entire article here.
From the California Association of Realtors:
“After experiencing its sharpest decline in history, we expect the median price to rise modestly next year,” Liptak added. “2010 will mark the beginning of the ‘new normal’ for California’s housing market. This ‘new normal’ likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.”
The median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year, according to the forecast. Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.
You can read the entire article here.
20 October 2009
Sonoma County's Energy Independence Program (AB811)
I recently attended a lecture on Sonoma County's Energy Independence Program (AB811) and found an interesting opportunity for anyone looking to improve the efficiency of their home.
Sonoma County has about $100M earmarked to finance home energy and water efficiency projects that get repaid through homeowner's property tax bills. You can start with a $395 home energy audit to help determine which projects would be best for your home and pay for those projects over a twenty year period through your property tax bill. The financing is actually a voluntary assessment or lien on the property so that when you sell the home, the assessment stays with the home - not the owner.
Projects can be up to 10% of the assessed value of the home and include solar panels, insulation, heating and cooling systems, waterless urinals, cool roofing and energy efficient windows - among others.
For an energy audit go to Sustainable Spaces
For details on the program, go to http://www.sonomacountyenergy.org/
I'm putting some resources together on my webpage so check back occasionally.
Sonoma County has about $100M earmarked to finance home energy and water efficiency projects that get repaid through homeowner's property tax bills. You can start with a $395 home energy audit to help determine which projects would be best for your home and pay for those projects over a twenty year period through your property tax bill. The financing is actually a voluntary assessment or lien on the property so that when you sell the home, the assessment stays with the home - not the owner.
Projects can be up to 10% of the assessed value of the home and include solar panels, insulation, heating and cooling systems, waterless urinals, cool roofing and energy efficient windows - among others.
For an energy audit go to Sustainable Spaces
For details on the program, go to http://www.sonomacountyenergy.org/
I'm putting some resources together on my webpage so check back occasionally.
07 October 2009
Market Summary for September 2009
Here's the market summary for September and we're still seeing some minor downward pressure on pricing as the REO's and short sales are snapped up. Although there "reports" that another wave of foreclosures are on the way, it doesn't appear that there are many on the horizon here on the Coast. But, as we've seen, things can change quickly and drastically.
The good news is that sales activity is up more than 20% over last year at this time and that could help stabilize prices.
The good news is that sales activity is up more than 20% over last year at this time and that could help stabilize prices.
23 September 2009
A Closer Look at the Mix of Home Sales
An interesting look at the housing trends as the sales and prices begin their recovery. From the California Association of Realtors' Oscar Wei, Senior Research Analyst and Sara Sutachan, Senior Research Analyst...
California home sales continue to stay strong with seasonally adjusted annualized sales in July increasing 8.1 percent to 553,910 from 512,530 in June and 12.0 percent above the revised year-ago figure of 494,390. The year-to-year percentage gains in sales have moderated in recent months, and the 12 percent increase over the prior year was the smallest increase since April 2008. Year-to-date sales, nevertheless, remained well above the sales level of last year, with a 43.4 percent increase over the same period of 2008.
The statewide median price at $285,480 in July increased for the fifth consecutive month with a 3.9 percent increase over the prior month median price of $274,740. The yearly decline of 19.6 percent was also the smallest in the last 19 months.
For the entire article, click here.
California home sales continue to stay strong with seasonally adjusted annualized sales in July increasing 8.1 percent to 553,910 from 512,530 in June and 12.0 percent above the revised year-ago figure of 494,390. The year-to-year percentage gains in sales have moderated in recent months, and the 12 percent increase over the prior year was the smallest increase since April 2008. Year-to-date sales, nevertheless, remained well above the sales level of last year, with a 43.4 percent increase over the same period of 2008.
The statewide median price at $285,480 in July increased for the fifth consecutive month with a 3.9 percent increase over the prior month median price of $274,740. The yearly decline of 19.6 percent was also the smallest in the last 19 months.
For the entire article, click here.
04 September 2009
Market Summary for August 2009
We actually saw an increase in the Bodega Bay median price while Bodega Harbour continues to see minor decreases. We're currently at mid-2004 prices. Click on the image above to see the details for August...
29 August 2009
How Americans Spend Their Paycheck
Here's an interesting graphic on where our money is spent. Obviously, California's numbers are going to skew more toward housing with our higher prices, but interesting none the less.
click here for the graphic
click here for the graphic
19 August 2009
Bodega Bay Market Summary - Jul/Aug 2009
Here's the latest data on the real estate market in BB. You'll see that we continue to feel the downward pressure from the relatively low number (but very influential) distressed properties. Those properties are certainly getting the majority of the action right now but the number of new listings is slowing significantly, at least for now. You've probably heard the reports that thousands of distressed properties will enter the market in the 4th quarter and while I don't know how many will be in our area, those reports alone are impacting the psychology of the market.
Showings have picked up again over the last couple of weeks. However, we've been experiencing a great deal of cyclical activity all year - up for a few weeks and quiet for a few weeks. Buyers are still leery of the near future but appear to be more relaxed than they were several months ago and that alone has made me less reluctant to take on listings. Six months ago I suggested holding off, today I'm much more open to putting a client's home on the market - at the right price, of course. The number of sales has remained slow but steady throughout 2009 and somewhat ahead of 2008 - I expect that to continue through the rest of the year with a leveling of prices.
Pricing the homes has been a difficult conversation for those looking to list. With the continued downward pressure, you can't list for the future as many did a few years ago. The numbers are more important than ever, even though buyers are frequently attempting to low-ball their offers. And some of them work. However, we're still retaining a list price/sale price ratio of 94.4% so sellers are holding firm once they find the proper price point. Currently, prices are about 16% below this time last year in Bodega Bay and 33% lower in Bodega Harbour. Much of the discrepancy is due to s short spike in Bodega Harbour prices last year.
Showings have picked up again over the last couple of weeks. However, we've been experiencing a great deal of cyclical activity all year - up for a few weeks and quiet for a few weeks. Buyers are still leery of the near future but appear to be more relaxed than they were several months ago and that alone has made me less reluctant to take on listings. Six months ago I suggested holding off, today I'm much more open to putting a client's home on the market - at the right price, of course. The number of sales has remained slow but steady throughout 2009 and somewhat ahead of 2008 - I expect that to continue through the rest of the year with a leveling of prices.
Pricing the homes has been a difficult conversation for those looking to list. With the continued downward pressure, you can't list for the future as many did a few years ago. The numbers are more important than ever, even though buyers are frequently attempting to low-ball their offers. And some of them work. However, we're still retaining a list price/sale price ratio of 94.4% so sellers are holding firm once they find the proper price point. Currently, prices are about 16% below this time last year in Bodega Bay and 33% lower in Bodega Harbour. Much of the discrepancy is due to s short spike in Bodega Harbour prices last year.
05 August 2009
Sales of new home rose 11 percent in Jun
Sales of new homes rose 11 percent in June, compared with May, and were at a seasonally adjusted annual rate of 384,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. Sales were 21.3 percent lower in year-to-year comparisons.
The median sales price of new houses sold in June 2009 was $206,200; the average sales price was $276,900, according to the report. The seasonally adjusted estimate of new houses for sale at the end of June was 281,000, representing an 8.8-month supply at the current sales rate.
________
In Bodega Bay, prices continue to feel the downward pressure but are holding relatively flat. Bodega Harbour homes held steady with no change and all Bodega Bay homes saw less than a 1% reduction in July.
The median sales price of new houses sold in June 2009 was $206,200; the average sales price was $276,900, according to the report. The seasonally adjusted estimate of new houses for sale at the end of June was 281,000, representing an 8.8-month supply at the current sales rate.
________
In Bodega Bay, prices continue to feel the downward pressure but are holding relatively flat. Bodega Harbour homes held steady with no change and all Bodega Bay homes saw less than a 1% reduction in July.
09 July 2009
Finally time to re-fi?
The Obama administration finally made refinancing a possibility for most Americans with the recent changes in the loan-to-value now at 125% (up from 105%). Here's the latest article from Freddie Mac.
25 June 2009
Leading economic indicators up more than expected
From the Sacramento Bee (By TALI ARBEL - AP Business Writer)
NEW YORK -- A private research group's forecast of economic activity rose in May by the largest amount in more than five years, the latest sign that the recession is easing.
The Conference Board said Thursday that its index of leading economic indicators - designed to forecast activity in the next three to six months - rose 1.2 percent, the biggest gain since March 2004. Economists surveyed by Thomson Reuters expected a 0.9 percent increase in May. The April reading was revised to a 1.1 percent gain from 1 percent, the first back-to-back increases since 2006.
The New York-based group also said activity in the six-month period through May also rose 1.2 percent - the first time that measure has grown since April 2007.
"The recession is losing steam," said Conference Board economist Ken Goldstein. "If these trends continue, expect a slow recovery beginning before the end of the year."
Click here for the entire article
NEW YORK -- A private research group's forecast of economic activity rose in May by the largest amount in more than five years, the latest sign that the recession is easing.
The Conference Board said Thursday that its index of leading economic indicators - designed to forecast activity in the next three to six months - rose 1.2 percent, the biggest gain since March 2004. Economists surveyed by Thomson Reuters expected a 0.9 percent increase in May. The April reading was revised to a 1.1 percent gain from 1 percent, the first back-to-back increases since 2006.
The New York-based group also said activity in the six-month period through May also rose 1.2 percent - the first time that measure has grown since April 2007.
"The recession is losing steam," said Conference Board economist Ken Goldstein. "If these trends continue, expect a slow recovery beginning before the end of the year."
Click here for the entire article
California Housing Market Shows Pockets of Recovery
From the Wall Street Journal:
Prices Have Dropped Far Enough to Lure Buyers in a Trend Also Showing Up in Other Parts of the Country
SAN JOSE, Calif. -- A home-sales revival that began last year in some of California's cheaper inland areas has begun to spread to several more expensive coastal areas, another hint that devastated real-estate markets in the state -- and other parts of the country -- may see less grim days ahead.
Homes are selling briskly again in the lower end of the market in Santa Clara County, just south of San Francisco, with prospective buyers making multiple offers and bidding well above asking prices. The median sales price of a single-family home in May was $445,000 in the county, up 5.7% from February, when prices stopped dropping.
Click here for the entire article
Prices Have Dropped Far Enough to Lure Buyers in a Trend Also Showing Up in Other Parts of the Country
SAN JOSE, Calif. -- A home-sales revival that began last year in some of California's cheaper inland areas has begun to spread to several more expensive coastal areas, another hint that devastated real-estate markets in the state -- and other parts of the country -- may see less grim days ahead.
Homes are selling briskly again in the lower end of the market in Santa Clara County, just south of San Francisco, with prospective buyers making multiple offers and bidding well above asking prices. The median sales price of a single-family home in May was $445,000 in the county, up 5.7% from February, when prices stopped dropping.
Click here for the entire article
12 June 2009
If you like charts and graphs, you'll love this...
From USA Today, a collection of graphs comparing the trends of several key economic indicators. Click on the indicator to the right to see its trend.
Click here for the graphs and article
Click here for the graphs and article
10 June 2009
Fast Facts for June 2009
Calif. median home price - April 09: $256,700 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region April 09: Santa Barbara So. Coast $840,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region April 09: High Desert $106,530 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - First Quarter 2009: 69 percent (Source: C.A.R.)
Mortgage rates - week ending 6/4/09 30-yr. fixed: 5.29% Fees/points: 0.7% 15-yr. fixed: 4.79% Fees/points: 0.7% 1-yr. adjustable: 4.81% Fees/points: 0.6% (Source: Freddie Mac)
Calif. highest median home price by C.A.R. region April 09: Santa Barbara So. Coast $840,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region April 09: High Desert $106,530 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - First Quarter 2009: 69 percent (Source: C.A.R.)
Mortgage rates - week ending 6/4/09 30-yr. fixed: 5.29% Fees/points: 0.7% 15-yr. fixed: 4.79% Fees/points: 0.7% 1-yr. adjustable: 4.81% Fees/points: 0.6% (Source: Freddie Mac)
Own a small business?
SBA launches program to assist struggling small businesses
Small businesses, including real estate brokerages, suffering financial hardship as a result of the slow economy may be eligible to receive temporary relief to keep their doors open and get their cash flow back on track through to a new loan program from the federal government’s Small Business Administration (SBA).
Beginning June 15, the SBA will start guaranteeing America’s Recovery Capital (ARC) deferred-payment loans of up to $35,000. The loans will be available to established, viable, for-profit small businesses, as defined, that need short-term help to make their principal and interest payments on existing qualifying debt. ARC loans are interest free to the borrower, 100 percent guaranteed by the SBA, and have no SBA fees associated with them.
ARC loans will be disbursed within a period of up to six months and will provide funds to be used for payments of principal and interest for existing, qualifying small business debt, including mortgages; term and revolving lines of credit; capital leases; credit card obligations; and notes payable to vendors, suppliers and utilities. Repayment will not begin until 12 months after the final disbursement. Borrowers don’t have to pay interest on ARC loans. After the 12-month deferral period, borrowers will pay back the loan principal over a period of five years.
Small businesses, including real estate brokerages, suffering financial hardship as a result of the slow economy may be eligible to receive temporary relief to keep their doors open and get their cash flow back on track through to a new loan program from the federal government’s Small Business Administration (SBA).
Beginning June 15, the SBA will start guaranteeing America’s Recovery Capital (ARC) deferred-payment loans of up to $35,000. The loans will be available to established, viable, for-profit small businesses, as defined, that need short-term help to make their principal and interest payments on existing qualifying debt. ARC loans are interest free to the borrower, 100 percent guaranteed by the SBA, and have no SBA fees associated with them.
ARC loans will be disbursed within a period of up to six months and will provide funds to be used for payments of principal and interest for existing, qualifying small business debt, including mortgages; term and revolving lines of credit; capital leases; credit card obligations; and notes payable to vendors, suppliers and utilities. Repayment will not begin until 12 months after the final disbursement. Borrowers don’t have to pay interest on ARC loans. After the 12-month deferral period, borrowers will pay back the loan principal over a period of five years.
09 June 2009
Pending home sales increase for third consecutive month
Record low mortgage interest rates boosted pending home sales for the third consecutive month, with some benefit now from the first-time buyer tax credit, according to a recent report from NAR. Its Pending Home Sales Index, a forward-looking indicator based on contracts signed in April, rose 6.7 percent to 90.3 from a reading of 84.6 in March, and is 3.2 percent above April 2008 when it stood at 87.5.
“Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” said NAR Chief Economist Lawrence Yun. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”
“Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” said NAR Chief Economist Lawrence Yun. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”
New-home inventories continue to fall
The number of newly built single-family homes on the market declined to 297,000 units in April, their lowest level since May 2001, according to a recent report by the U.S. Dept. of Commerce. The pace of new-home sales, at a seasonally adjusted annual rate of 352,000 units, was nearly unchanged compared with the previous month.
“The fact that the new-homes inventory is now below the 300,000 mark shows that builders have made substantial progress in winnowing down their backlogs to a much more comfortable level,” said Joe Robson, chairman of the National Association of Home Builders (NAHB). April’s results mark two consecutive years of monthly declines in the number of unsold new homes.
Sales of newly built, single-family homes recorded a marginal 0.3 percent gain to 352,000 units in April compared with March, while the inventory of new homes for sale declined 4.2 percent to 297,000 units--a 10.1-month supply at the current sales pace.
“The fact that the new-homes inventory is now below the 300,000 mark shows that builders have made substantial progress in winnowing down their backlogs to a much more comfortable level,” said Joe Robson, chairman of the National Association of Home Builders (NAHB). April’s results mark two consecutive years of monthly declines in the number of unsold new homes.
Sales of newly built, single-family homes recorded a marginal 0.3 percent gain to 352,000 units in April compared with March, while the inventory of new homes for sale declined 4.2 percent to 297,000 units--a 10.1-month supply at the current sales pace.
Home buyer tax credit can be applied to purchase costs
U.S. Dept. of Housing and Urban Development (HUD) Secretary Shaun Donovan recently announced that the Federal Housing Administration (FHA) will allow home buyers to apply the administration's new $8,000 first-time home buyer tax credit toward the purchase costs of a FHA-insured home. The American Recovery and Reinvestment Act of 2009 offers home buyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate.
Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent down payment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of the announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate.
Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent down payment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of the announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate.
04 June 2009
California's Housing Picture Brightens
From the Wall Street Journal:
With the state’s median price rising for the second consecutive month in April, and sales of existing, single-family homes remaining above the 500,000 level for the eighth month in a row, California is being closely watched as a barometer of the economy. Some economists believe these two factors indicate the state’s median price could be at or near the bottom.
MAKING SENSE OF THE STORY FOR CONSUMERS
· Sales of existing, single-family homes increased 49.2 percent in April in California compared with the same period a year ago, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) April sales and price report.
· As the level of unsold inventory declines, the state’s median price will likely stabilize. Inventory levels for homes in the under $500,000 segment shrank to nearly three months in April, compared with almost 10 months a year ago, while unsold inventory in the more than $1 million segment rose to approximately 17 months, compared with roughly 10 months in April 2008.
· The median price of an existing, single-family detached home in California during April 2009 was $256,700, an increase of 1.4 percent compared with the prior month, but a 36.5 percent decrease from the revised $404,470 median of a year ago.
· Favorable home prices in many parts of the state have led to an increase in affordability for first-time buyers. In the first quarter of 2009, affordability rose to 69 percent, enabling many to take advantage of first-time buyer programs and near record-low interest rates.
click here for the story
With the state’s median price rising for the second consecutive month in April, and sales of existing, single-family homes remaining above the 500,000 level for the eighth month in a row, California is being closely watched as a barometer of the economy. Some economists believe these two factors indicate the state’s median price could be at or near the bottom.
MAKING SENSE OF THE STORY FOR CONSUMERS
· Sales of existing, single-family homes increased 49.2 percent in April in California compared with the same period a year ago, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) April sales and price report.
· As the level of unsold inventory declines, the state’s median price will likely stabilize. Inventory levels for homes in the under $500,000 segment shrank to nearly three months in April, compared with almost 10 months a year ago, while unsold inventory in the more than $1 million segment rose to approximately 17 months, compared with roughly 10 months in April 2008.
· The median price of an existing, single-family detached home in California during April 2009 was $256,700, an increase of 1.4 percent compared with the prior month, but a 36.5 percent decrease from the revised $404,470 median of a year ago.
· Favorable home prices in many parts of the state have led to an increase in affordability for first-time buyers. In the first quarter of 2009, affordability rose to 69 percent, enabling many to take advantage of first-time buyer programs and near record-low interest rates.
click here for the story
01 June 2009
Market Summary for May 2009
Even with increased activity over the past few weeks, we're seeing increased downward pressure on home prices on the Coast. This pressure appears to be due to the sale of the few distressed properties that are getting so much attention. It's rather surprising to see how much a few short sales and REO's can impact the local market, but it does give some clarity to their impact on the market nationally.
20 May 2009
Fast Facts for May 2009
Calif. median home price - March 09: $253,040 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region March 09: Santa Barbara So. Coast $825,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region March 09: High Desert $114,670 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Fourth Quarter 08: 59 percent (Source: C.A.R.)
Mortgage rates - week ending 5/14/09 30-yr. fixed: 4.86% Fees/points: 0.6% 15-yr. fixed: 4.52% Fees/points: 0.6% 1-yr. adjustable: 4.71% Fees/points: 0.6% (Source: Freddie Mac)
Calif. highest median home price by C.A.R. region March 09: Santa Barbara So. Coast $825,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region March 09: High Desert $114,670 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Fourth Quarter 08: 59 percent (Source: C.A.R.)
Mortgage rates - week ending 5/14/09 30-yr. fixed: 4.86% Fees/points: 0.6% 15-yr. fixed: 4.52% Fees/points: 0.6% 1-yr. adjustable: 4.71% Fees/points: 0.6% (Source: Freddie Mac)
Survey finds three of four homeowners think housing market bottom reached
Although 60 percent of homeowners believe their own home lost value during the past 12 months, in reality 80 percent of homes across the country lost value during the past 12 months, according to Zillow’s Q1 Homeowner Confidence Survey. However, 74 percent of homeowners surveyed believe their home will not decline in value in the coming six months, effectively calling a bottom to their own home's housing slide, the report said.
A significant number of potential sellers are holding back due to the current market, according to the report. When asked about future plans to sell, 31 percent of home owners said they would be at least "somewhat likely" to put their homes on the market in the next 12 months if they saw signs of a real estate market turnaround.
"While homeowners are now more realistic when looking backward, they are still pretty starry-eyed when looking forward with three out of four homeowners believing that their own homes' prices will increase or be flat over the next six months,” said Dr. Stan Humphries, Zillow's vice president of data and analytics. “Unfortunately, there are few markets we expect to perform this well."
A significant number of potential sellers are holding back due to the current market, according to the report. When asked about future plans to sell, 31 percent of home owners said they would be at least "somewhat likely" to put their homes on the market in the next 12 months if they saw signs of a real estate market turnaround.
"While homeowners are now more realistic when looking backward, they are still pretty starry-eyed when looking forward with three out of four homeowners believing that their own homes' prices will increase or be flat over the next six months,” said Dr. Stan Humphries, Zillow's vice president of data and analytics. “Unfortunately, there are few markets we expect to perform this well."
Entry-Level Housing Affordability Reaches 69%
The percentage of households that could afford to buy an entry-level home in California stood at 69 percent in the first quarter of 2009, compared with 46 percent (revised) for the same period a year ago, according to a C.A.R. report released last week. 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 $213,040 in California in the first quarter of 2009 was $38,090, based on an adjustable interest rate of 4.96 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 $1,270 for the first quarter of 2009.
At $38,090, the minimum qualifying income was 41 percent lower than a year earlier when households needed $65,030 to qualify for a loan on an entry-level home. Recent decreases in home prices and mortgage rates have brought affordability into better alignment with the income level of a typical California household, where the median household income is $61,030.
The First-time Buyer Housing Affordability Index also rose 7 percentage points in the first quarter of this year compared with the fourth quarter of 2008, due to a 14.1 percent decrease in the entry-level median home price.
At 83 percent, the High Desert region was the most affordable area in the state. The San Luis Obispo County region was the least affordable in the state at 49 percent, followed by the Orange County region at 56 percent.
The minimum household income needed to purchase an entry-level home at $213,040 in California in the first quarter of 2009 was $38,090, based on an adjustable interest rate of 4.96 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 $1,270 for the first quarter of 2009.
At $38,090, the minimum qualifying income was 41 percent lower than a year earlier when households needed $65,030 to qualify for a loan on an entry-level home. Recent decreases in home prices and mortgage rates have brought affordability into better alignment with the income level of a typical California household, where the median household income is $61,030.
The First-time Buyer Housing Affordability Index also rose 7 percentage points in the first quarter of this year compared with the fourth quarter of 2008, due to a 14.1 percent decrease in the entry-level median home price.
At 83 percent, the High Desert region was the most affordable area in the state. The San Luis Obispo County region was the least affordable in the state at 49 percent, followed by the Orange County region at 56 percent.
07 May 2009
Where home prices crashed early, signs of a rebound
Hard-hit areas, such as Sacramento, Las Vegas, parts of Florida and California’s Inland Empire, appear to be among the first cities in the nation to reach the early stages of recovery, as investors and first-time buyers compete for bargain-priced foreclosures.
From New York Times:
MAKING SENSE OF THE STORY FOR CONSUMERS
By some indications, the market could be close to a bottom. Pending home sales – homes that are under contract, but have not yet closed – and construction spending rose in March.
When a market reaches bottom, foreclosures usually stop piling up and banks become more willing to issue loans, confident that the collateral backing them will not continue to decrease in value.
The first-time home buyer tax credits from the federal and state governments, coupled with favorable home prices and near record-low interest rates, led to an increase in home sales in March. Sales of existing, single-family homes rose 63.8 percent in March compared with the prior year. Monterey County reported a sales increase of 248.7 percent and the High Desert region saw sales increase 172.7 percent compared with last year, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
The median price for the state also increased in March, rising 2.2 percent in month-to-month comparisons. March marked the first monthly increase since August 2007, while the statewide median price has remained in the $250,000 range for the past three months.
To read the full story, please click here
From New York Times:
MAKING SENSE OF THE STORY FOR CONSUMERS
By some indications, the market could be close to a bottom. Pending home sales – homes that are under contract, but have not yet closed – and construction spending rose in March.
When a market reaches bottom, foreclosures usually stop piling up and banks become more willing to issue loans, confident that the collateral backing them will not continue to decrease in value.
The first-time home buyer tax credits from the federal and state governments, coupled with favorable home prices and near record-low interest rates, led to an increase in home sales in March. Sales of existing, single-family homes rose 63.8 percent in March compared with the prior year. Monterey County reported a sales increase of 248.7 percent and the High Desert region saw sales increase 172.7 percent compared with last year, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
The median price for the state also increased in March, rising 2.2 percent in month-to-month comparisons. March marked the first monthly increase since August 2007, while the statewide median price has remained in the $250,000 range for the past three months.
To read the full story, please click here
06 May 2009
April Consumer Confidence Jumps
Consumer confidence rose more than 12 points in April to 39.2 (1985=100), compared with 26.9 in March, according to a recent Conference Board report. The Board’s Present Situation Index increased to 23.7 in April from 21.9 for the previous month, while its Expectations Index jumped more than 19 points to 49.5 in April compared with 30.2 in March.
"Consumer confidence rose in April to its highest reading in 2009, driven primarily by a significant improvement in the short-term outlook,” said Lynn Franco, director of The Conference Board Consumer Research Center. “The Present Situation Index posted a moderate gain, a sign that conditions have not deteriorated further, and may even moderately improve, in the second quarter. The sharp increase in the Expectations Index suggests that consumers believe the economy is nearing a bottom, however, this Index still remains well below levels associated with strong economic growth."
Consumers' short-term outlook improved significantly in April. Those anticipating business conditions will worsen over the next six months declined to 25.3 percent from 37.8 percent, according to the report, while those expecting conditions to improve increased to 15.6 percent from 9.6 percent in March.
"Consumer confidence rose in April to its highest reading in 2009, driven primarily by a significant improvement in the short-term outlook,” said Lynn Franco, director of The Conference Board Consumer Research Center. “The Present Situation Index posted a moderate gain, a sign that conditions have not deteriorated further, and may even moderately improve, in the second quarter. The sharp increase in the Expectations Index suggests that consumers believe the economy is nearing a bottom, however, this Index still remains well below levels associated with strong economic growth."
Consumers' short-term outlook improved significantly in April. Those anticipating business conditions will worsen over the next six months declined to 25.3 percent from 37.8 percent, according to the report, while those expecting conditions to improve increased to 15.6 percent from 9.6 percent in March.
05 May 2009
30 April 2009
Home prices edge upward?
From Business Week:
Although it’s too early to say the market has bottomed out, there are some indicators that prices may be stabilizing.
MAKING SENSE OF THE STORY FOR CONSUMERS
· The median price for existing, single-family homes rose 2.2 percent in March in California, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). March marked the first month since August 2007 that the state’s median sales price rose in month-to-month comparisons. According to the C.A.R. sales and price report, the median price of existing, single-family homes stood at $253,040 in March.
· Sales in California have soared in recent months, with existing, single-family home sales increasing 63.8 percent in March to a seasonally adjusted rate of 522,980 on an annualized basis.
To read the full story, please click here
Although it’s too early to say the market has bottomed out, there are some indicators that prices may be stabilizing.
MAKING SENSE OF THE STORY FOR CONSUMERS
· The median price for existing, single-family homes rose 2.2 percent in March in California, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). March marked the first month since August 2007 that the state’s median sales price rose in month-to-month comparisons. According to the C.A.R. sales and price report, the median price of existing, single-family homes stood at $253,040 in March.
· Sales in California have soared in recent months, with existing, single-family home sales increasing 63.8 percent in March to a seasonally adjusted rate of 522,980 on an annualized basis.
To read the full story, please click here
Bidding wars are emerging on foreclosures
From Wall Street Journal:
Real estate industry experts are reporting that favorable home prices in many parts of the country, including California, have ignited bidding wars as first-time buyers compete with investors for many of the same foreclosed properties.
MAKING SENSE OF THE STORY FOR CONSUMERS
· While the inventory of homes for sale still outpaces demand in many areas, inventory is shrinking and some middle class neighborhoods are running into shortages of moderately priced homes. C.A.R.’s Unsold Inventory Index (UII) stood at 5 months in March in California, compared with 12.2 months in March 2008.
· Although home prices in most areas of the country are still lower than a year ago, the Federal Housing Finance Agency (FHFA) reported last week that home prices nationwide rose a seasonally adjusted 0.7 percent in February from January, led by gains on the West Coast. While this is a positive sign for the market, it could mean that the window of opportunity for first-time home buyers is narrowing.
· Many economists and housing analysts predict that the most hard-hit areas of the country, such as Sacramento and San Diego, will be among the first to recover. According to an executive with Lyon Real Estate, if sales of foreclosed homes in Sacramento maintain its current pace, the supply will be exhausted in about one month. For non foreclosures, the executive at Lyon Real Estate speculates that the inventory will be exhausted in about eight months.
· It is important to note that many banks and sellers favor all-cash bids or offers from buyers who seem certain to qualify for financing. In some cases, sellers may choose the offer least likely to fall through rather than the highest bid.
· In some instances, buyers should make offers that are at or above the asking price of a home. If the home is extremely desirable or in a neighborhood that previously was out of many buyers’ price ranges, putting in an offer slightly higher than the asking price may help to seal the deal.
To read the full story, please click here
Real estate industry experts are reporting that favorable home prices in many parts of the country, including California, have ignited bidding wars as first-time buyers compete with investors for many of the same foreclosed properties.
MAKING SENSE OF THE STORY FOR CONSUMERS
· While the inventory of homes for sale still outpaces demand in many areas, inventory is shrinking and some middle class neighborhoods are running into shortages of moderately priced homes. C.A.R.’s Unsold Inventory Index (UII) stood at 5 months in March in California, compared with 12.2 months in March 2008.
· Although home prices in most areas of the country are still lower than a year ago, the Federal Housing Finance Agency (FHFA) reported last week that home prices nationwide rose a seasonally adjusted 0.7 percent in February from January, led by gains on the West Coast. While this is a positive sign for the market, it could mean that the window of opportunity for first-time home buyers is narrowing.
· Many economists and housing analysts predict that the most hard-hit areas of the country, such as Sacramento and San Diego, will be among the first to recover. According to an executive with Lyon Real Estate, if sales of foreclosed homes in Sacramento maintain its current pace, the supply will be exhausted in about one month. For non foreclosures, the executive at Lyon Real Estate speculates that the inventory will be exhausted in about eight months.
· It is important to note that many banks and sellers favor all-cash bids or offers from buyers who seem certain to qualify for financing. In some cases, sellers may choose the offer least likely to fall through rather than the highest bid.
· In some instances, buyers should make offers that are at or above the asking price of a home. If the home is extremely desirable or in a neighborhood that previously was out of many buyers’ price ranges, putting in an offer slightly higher than the asking price may help to seal the deal.
To read the full story, please click here
03 April 2009
Mortgage rates drop to record low
Rates on 30-year, fixed-rate mortgages averaged 4.85 percent for the week ending March 26, following an announcement by the Federal Reserve that it is launching a new effort to assist the U.S. housing market. The rate marked a record low in the history of the Freddie Mac survey. The previous low was 4.96 percent set during the week of Jan. 15.
02 April 2009
Fast Facts for April 2009
Calif. median home price - February 09: $247,590(Source: C.A.R.)
Calif. highest median home price by C.A.R. region February 09: Santa Barbara So. Coast $715,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region February 09: High Desert $121,970(Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Fourth Quarter 08: 59 percent (Source: C.A.R.)
Mortgage rates - week ending 3/26/09 30-yr. fixed: 4.85% Fees/points: 0.7% 15-yr. fixed: 4.58% Fees/points: 0.7% 1-yr. adjustable: 4.85% Fees/points: 0.6% (Source: Freddie Mac)
Calif. highest median home price by C.A.R. region February 09: Santa Barbara So. Coast $715,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region February 09: High Desert $121,970(Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Fourth Quarter 08: 59 percent (Source: C.A.R.)
Mortgage rates - week ending 3/26/09 30-yr. fixed: 4.85% Fees/points: 0.7% 15-yr. fixed: 4.58% Fees/points: 0.7% 1-yr. adjustable: 4.85% Fees/points: 0.6% (Source: Freddie Mac)
01 March 2009
Bodega Bay Market Summary - Feb 2009
Activity continues to improve as buyers snap up some of the few REO's and short sales in Bodega Bay. This is certainly impacting the median price but could begin to increase confidence as people realize that our local real estate is relatively safer than the stock market.
19 February 2009
The Crisis of Credit video
Here's a simple video explanation of the crisis. I found it on a great site called Planet Money and you can get their podcast every Mon/Wed/Fri. I highly recommend it.
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
Summary: Homeowner Affordability and Stability Plan
From the president of California Association of Realtors...
Feb. 18, 2009
Dear C.A.R. Member,
Earlier today, President Obama unveiled the Homeowner Affordability and Stability Plan, which will offer assistance to as many as 9 million homeowners, while attempting to prevent the destructive impact of foreclosures on families and communities.
The plan contains three main components, and only applies to primary residences. The loans referenced in the plan cannot exceed Freddie Mac/Fannie Mae conforming loan limits. I’ve outlined the plan in greater detail below.
The first component is directed toward homeowners suffering from falling housing prices who still have equity in their homes, but no longer have the 20 percent equity needed to refinance. Under the plan, homeowners who have conforming loans owned or guaranteed by Freddie Mac and Fannie Mae will be allowed to refinance their homes, even if they do not have 20 percent equity left in the house. The U.S. Treasury Dept. estimates that about 5 million homeowners will be helped by this portion of the program.
The second component, known as the Homeowner Stability Initiative, is designed to assist homeowners who are “underwater” on their mortgages. The $75 billion initiative will bring together lenders, servicers, and the government so that all stakeholders share in the cost of the modification. Primary mortgages would be reduced to monthly payments that do not exceed a 38 percent debt-to-income ratio, with the costs of doing so borne by the lender. The government and lender then would split the costs of further reducing the monthly payments until they were at a 31 percent debt-to income ratio. An important aspect of the initiative is that homeowners do not have to be delinquent to participate.
The Homeowner Stability Initiative also will create incentives for servicers, mortgage holders, and homeowners. Servicers would receive an up-front fee of $1,000 for every eligible modification meeting the initiative’s guidelines. Guidelines are scheduled to be released by March 4. Mortgage holders will receive an incentive payment of $1,500, and servicers $500, for modifications made on loans that are current but at risk of imminent default.
The final aspect of the Homeowner Stability Initiative is creating clear and consistent guidelines for loan modifications. The Obama Administration plans to work with federal agencies, banking and credit union regulators, and the private sector in order to develop loan modification guidelines that can be implemented across the entire mortgage market. While adoption of the guidelines will be voluntary for the private sector, all financial institutions receiving Financial Stability Plan assistance going forward will be required to implement the loan modification guidelines.
The government estimates that between 3 and 4 million homeowners will benefit from the Homeowner Stability Initiative component of the plan.
The third component of The Homeowner Affordability and Stability Plan is supporting low mortgage rates by strengthening Fannie Mae and Freddie Mac. The Treasury Dept. plans to increase their Preferred Stock Purchase Agreements with both Fannie Mae and Freddie Mac from its current $100 billion in both entities to $200 billion in each. The Treasury Dept. also will continue to purchase Fannie Mae and Freddie Mac mortgage-back securities in order to help promote stability and liquidity in the marketplace. Additionally, the Treasury Dept. will increase Fannie Mae and Freddie Mac’s portfolios by $50 billion, for a total of $900 billion. The Obama Administration will work with Fannie Mae and Freddie Mac to support state housing finance agencies in serving home buyers, such as CalHFA. Funding for this will not come from TARP money but from the Housing and Economic Recovery Act.
While some of the details still are being developed, such as the modification guidelines, the Obama Administration plans on using programs and funding already allocated for The Homeowner Affordability and Stability Plan and will need little legislative approval for programs under the plan.
We’ll keep you updated on the Homeowner Affordability and Stability Plan as more details and information become available to us.
Sincerely,
James Liptak
2009 President
CALIFORNIA ASSOCIATION OF REALTORS®
Feb. 18, 2009
Dear C.A.R. Member,
Earlier today, President Obama unveiled the Homeowner Affordability and Stability Plan, which will offer assistance to as many as 9 million homeowners, while attempting to prevent the destructive impact of foreclosures on families and communities.
The plan contains three main components, and only applies to primary residences. The loans referenced in the plan cannot exceed Freddie Mac/Fannie Mae conforming loan limits. I’ve outlined the plan in greater detail below.
The first component is directed toward homeowners suffering from falling housing prices who still have equity in their homes, but no longer have the 20 percent equity needed to refinance. Under the plan, homeowners who have conforming loans owned or guaranteed by Freddie Mac and Fannie Mae will be allowed to refinance their homes, even if they do not have 20 percent equity left in the house. The U.S. Treasury Dept. estimates that about 5 million homeowners will be helped by this portion of the program.
The second component, known as the Homeowner Stability Initiative, is designed to assist homeowners who are “underwater” on their mortgages. The $75 billion initiative will bring together lenders, servicers, and the government so that all stakeholders share in the cost of the modification. Primary mortgages would be reduced to monthly payments that do not exceed a 38 percent debt-to-income ratio, with the costs of doing so borne by the lender. The government and lender then would split the costs of further reducing the monthly payments until they were at a 31 percent debt-to income ratio. An important aspect of the initiative is that homeowners do not have to be delinquent to participate.
The Homeowner Stability Initiative also will create incentives for servicers, mortgage holders, and homeowners. Servicers would receive an up-front fee of $1,000 for every eligible modification meeting the initiative’s guidelines. Guidelines are scheduled to be released by March 4. Mortgage holders will receive an incentive payment of $1,500, and servicers $500, for modifications made on loans that are current but at risk of imminent default.
The final aspect of the Homeowner Stability Initiative is creating clear and consistent guidelines for loan modifications. The Obama Administration plans to work with federal agencies, banking and credit union regulators, and the private sector in order to develop loan modification guidelines that can be implemented across the entire mortgage market. While adoption of the guidelines will be voluntary for the private sector, all financial institutions receiving Financial Stability Plan assistance going forward will be required to implement the loan modification guidelines.
The government estimates that between 3 and 4 million homeowners will benefit from the Homeowner Stability Initiative component of the plan.
The third component of The Homeowner Affordability and Stability Plan is supporting low mortgage rates by strengthening Fannie Mae and Freddie Mac. The Treasury Dept. plans to increase their Preferred Stock Purchase Agreements with both Fannie Mae and Freddie Mac from its current $100 billion in both entities to $200 billion in each. The Treasury Dept. also will continue to purchase Fannie Mae and Freddie Mac mortgage-back securities in order to help promote stability and liquidity in the marketplace. Additionally, the Treasury Dept. will increase Fannie Mae and Freddie Mac’s portfolios by $50 billion, for a total of $900 billion. The Obama Administration will work with Fannie Mae and Freddie Mac to support state housing finance agencies in serving home buyers, such as CalHFA. Funding for this will not come from TARP money but from the Housing and Economic Recovery Act.
While some of the details still are being developed, such as the modification guidelines, the Obama Administration plans on using programs and funding already allocated for The Homeowner Affordability and Stability Plan and will need little legislative approval for programs under the plan.
We’ll keep you updated on the Homeowner Affordability and Stability Plan as more details and information become available to us.
Sincerely,
James Liptak
2009 President
CALIFORNIA ASSOCIATION OF REALTORS®
03 February 2009
Bodega Bay Market Summary
Here's the monthly market summary for Bodega Bay. You'll see that prices are down about 7% since January of last year but activity is down about 50% in Bodega Harbour.
30 January 2009
Housing market may have turned a pivotal corner
We're seeing a significant increase in activity in Bodega Bay and this article from Reuters seems to confirm that it's beginning to happen elsewhere...
From Reuters:
With home prices in many areas declining to the point where owning a home is a more affordable option than renting, especially in the West, many potential home buyers appear to be getting off the fence and starting to purchase. Add affordable prices to record-low interest rates and the demand for housing has reached a pivotal turning point.
MAKING SENSE OF THE STORY FOR CONSUMERS
· Home prices in some areas of California have dropped so much that monthly mortgage payments on single-family homes are comparable to apartment rents, according to recent data. Mollie Carmichael, a senior vice president with John Burns Real Estate Consulting, says that in the Inland Empire, the average monthly rent for an apartment is $1,157. Carmichael adds that the average after-tax monthly mortgage payment on a median-priced single-family detached home is $1,154 in the same area.
· The large number of distressed properties has led to a surge in home sales around the country. Existing home sales across the U.S. rose 6.5 percent to an annual rate of 4.74 million units in December, according to the NATIONAL ASSOCIATION OF REALTORS® (NAR). A senior director of housing economics at Moody’s Economy.com believes the latest NAR report means sales have reach bottom.
· Interest rates on 30-year, fixed-rate mortgages averaged 5.12 percent for the week ending Jan. 22, which is almost 1 percentage point lower than the average rate in late November 2008, according to Freddie Mac. The prior week, 30-year mortgage rates average 4.96 percent, the lowest since Freddie Mac began its weekly survey in 1971.
To read the full story, please click here.
From Reuters:
With home prices in many areas declining to the point where owning a home is a more affordable option than renting, especially in the West, many potential home buyers appear to be getting off the fence and starting to purchase. Add affordable prices to record-low interest rates and the demand for housing has reached a pivotal turning point.
MAKING SENSE OF THE STORY FOR CONSUMERS
· Home prices in some areas of California have dropped so much that monthly mortgage payments on single-family homes are comparable to apartment rents, according to recent data. Mollie Carmichael, a senior vice president with John Burns Real Estate Consulting, says that in the Inland Empire, the average monthly rent for an apartment is $1,157. Carmichael adds that the average after-tax monthly mortgage payment on a median-priced single-family detached home is $1,154 in the same area.
· The large number of distressed properties has led to a surge in home sales around the country. Existing home sales across the U.S. rose 6.5 percent to an annual rate of 4.74 million units in December, according to the NATIONAL ASSOCIATION OF REALTORS® (NAR). A senior director of housing economics at Moody’s Economy.com believes the latest NAR report means sales have reach bottom.
· Interest rates on 30-year, fixed-rate mortgages averaged 5.12 percent for the week ending Jan. 22, which is almost 1 percentage point lower than the average rate in late November 2008, according to Freddie Mac. The prior week, 30-year mortgage rates average 4.96 percent, the lowest since Freddie Mac began its weekly survey in 1971.
To read the full story, please click here.
22 January 2009
Consumer confidence in surprise rebound
I've considered this one of the most important factors when considering the potential for a recovery and it will be interesting to see if this trend can continue for a few months before we can consider that recovery a reality...
From Reuters:
While still low, the index of consumer sentiment unexpectedly rises to 61.9 in January from 60.1 in December.
Read the article
From Reuters:
While still low, the index of consumer sentiment unexpectedly rises to 61.9 in January from 60.1 in December.
Read the article
Fact Facts for January 2009
Calif. median home price - November 08: $285,680(Source: C.A.R.)
Calif. highest median home price by C.A.R. region November 08: Santa Barbara So. Coast $1,200,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region November 08: High Desert $148,580 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Third Quarter 08: 53 percent (Source: C.A.R.)
Mortgage rates - week ending 1/15/09 30-yr. fixed: 4.96% Fees/points: 0.7% 15-yr. fixed: 4.65% Fees/points: 0.7% 1-yr. adjustable: 4.89% Fees/points: 0.5% (Source: Freddie Mac)
Calif. highest median home price by C.A.R. region November 08: Santa Barbara So. Coast $1,200,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region November 08: High Desert $148,580 (Source: C.A.R.)
Calif. First-time Buyer Affordability Index - Third Quarter 08: 53 percent (Source: C.A.R.)
Mortgage rates - week ending 1/15/09 30-yr. fixed: 4.96% Fees/points: 0.7% 15-yr. fixed: 4.65% Fees/points: 0.7% 1-yr. adjustable: 4.89% Fees/points: 0.5% (Source: Freddie Mac)
02 January 2009
Prices are holding steady at the end of 2008 after an upward blip and downward correction midway through the year. For about 1.5 years now, the median price has been in the mid-800’s for Bodega Harbour and about $800K for all of Bodega Bay.
Expect to see a slight uptick in prices this year with interest rates continuing to remain historically low in combination with plenty of government programs in place designed to stimulate the real estate market. 2009 is poised to be a year of recovery - and opportunity.
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