The Wall Street Journal reports stronger lure for prospective home buyers with the monthly cost of owning a home more affordable now than at any point in the past 15 years, homeownership is becoming less expensive than renting in a growing number of cities. The Wall Street Journal’s third-quarter survey of housing-market conditions in 28 of the nation’s largest metropolitan areas found that home values declined in all but five markets compared with the second quarter, according to data from Zillow Inc. Meanwhile, rent levels have risen briskly across the country and mortgage rates, hovering around 4 percent, are the lowest in six decades. As a result, monthly mortgage payments on the median priced home – including taxes and insurance – are lower than the average rent levels in 12 metro areas, according to data compiled by Marcus & Millichap. Homeownership also is looking more affordable because after several years of declines, apartment rents will rise approximately 4 percent this year, and rents are poised to pick up even more momentum across the country next year, according to Marcus & Millichap. Affordability could continue to improve as prices slide even lower in coming months. Price declines are likely because the share of “distressed” sales, including bank-owned foreclosures, tend to rise in the winter, when traditional sales activity cools. Tags: Market Information
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Q -So I just made an offer on a short sale where the seller received a NOD almost 60 days ago. The seller agreed to the terms, so my question is how long do I have to typically wait to see if the seller’s lender disapproves or approves the offer. Their lender is BofA and that is my lender as well does that help the process any. Answer: There is no way of predicting short sale timing. 1.) Is it HAFA pre-approved? With an agreed upon list price? Or was this the list price the agent/seller chose? 2.) Is it one lender or more? Are there other liens? (HOA, garbage, mechanics?) 3.) Is the loan(s) being short sold portfolio loans (owned by initiating bank) or by investors? Was it previously a CountryWide loan? 4.) Is there mortgage insurance attached to the loan? 5.) How does the offer price compare to other neighborhood sales? Will the bank believe the offer price is a fair price based on recent sales or will they counter at a higher price? 6.) How on top-of-it is the agent? Do they call weekly (sometimes more)? Is the file complete? Does the agent provide a weekly update to buyer’s agent? 7.) Did the seller provide all the appropriate paperwork? Are they working well with bank and agent to answer any request in a timely manner? I have had Bank of America short sales with two loans approved in less than 45 days – non HAFA. With HAFA 60-90 days. (Strange as HAFA was suppose to shorten timelines.). I would suggest you try to get some word on whether or not the NOD (Notice of Default) has been issued, whether or not the short sale negotiator has actually been assigned, and whether or not the foreclosure process is…
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Recent housing reporting has been all over the place. The price range between $300,000 – $600,000 is still very competitive with some listings going for 101% to 103% to list price. But there are strong indicators that the above $700,000 market is going to start feeling price pressure. Why? When the housing bust started, the government increased the high income area loan limit to $729,750. That meant that if you qualified you could place as little as 3.5% down on a home as long as your loan limit did not exceed $729,750. “The number of $500,000-plus homes sold dropped 25.4 percent month-to-month and 19.2 percent year-over-year, while sales below $500,000 fell 17.1 percent month-to-month and increased 3.5 percent from a year ago.” Data Quick But now, that has been reduced to $625,500. This means the buying pool for FHA loans will be reduced. In February 2010 nearly 20% of all loans were FHA in the San Jose/Silicon Valley area. Prior to 2009, the number of FHA loans were 0% because the conforming loan limit was $417,000. So, some are predicting a 3-5% reduction in buyers being able to afford over $700,000 for the remaining of 2011. There are movements in Congress to extend the higher limits but lenders have already stopped accepting applications. Active listings consist of Short sales, about 30% of the market while REO/bank owned homes are about 10%. Highest demand areas are currently good school areas which is driven by parents trying to find homes before the school year starts. As always, the best homes, in pristine move-in condition, in the best neighborhoods, i.e. schools, are selling first for the most money with multiple offers. But where are the deals? Talking with investors, even the court house steps are not providing many deals. An investor I spoke…
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Q. The buyer on my home asked to extend the removal of the loan contingency. What happens if we extend and they still don’t remove the contingency? A. In this lending market, it is not uncommon to have delays regarding loan approval. Sometimes, for no other reason than a back-up on the underwriting side or appraisal process that has nothing to do with the buyer’s ability to get a loan. As the seller, you have a couple of questions to ask before determining your next steps. 1.) Why is more time needed? What are the details? Are these resolvable issues or does it put the buyer at risk of not being able to obtain the loan? 2.) How much time is needed to get it all approved? Will this effect closing date or can close of escrow remain the same? Sit down with your agent and based on above questions decide if you would like to allow an extension or generate a “Notice to Buyer to Perform”. Which basically states,”release your contingencies or cancel the contract”. In my opinion and many years of real estate, I rarely have to have sellers issue a notice to perform. As agents it is our job to manage timelines and stay ahead of the dead lines not behind them. Find out the reasons for the delay, make decision on whether it is worth the wait, or have the buyer release the contract so that you may look for a new buyer. Tags: Talk to CJ
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The number of “notices of defaults” (NODs) are climbing and climbing. But the reality is the current home buyer is not the one being able to take advantage of these returned homes.
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The market barometer that indicates whether or not the Willow Glen area is in a buyer’s market or seller’s market. Currently, there is only about four months of inventory on hand which would lean toward a seller’s market.
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I have a friend who is a very intelligent person, highly organized, and very resourceful. He decided to purchase a short sale utilizing the listing agent of the home. He has been kind enough to detail out his experience and has allowed me to share step by step here. His experience is not unlike many short sales I have completed with clients. Whether I represent the buyer or the seller, I am always amazed at how each lender handles the short sale process. I have sat down with clients and went on and on about the process and how they should be prepared to wait for months for an outcome and low and behold, we receive approval in 10 days and close in 40 days. They are very unpredictable transactions. If you are considering buying a short sale, take a look at the step by step process this buyer went through to purchase his home. Knowing the pit falls may help you. 1. Made offer of $149K (2-26-2009) 2. Applied for FHA loan 3. Informed that property was going to auction. 4. Informed that property won’t go to auction; offer is being reviewed. 5. Wait for Aurora’s appraisal 6. Lender -Aurora counter offered $152,750.00 7. Counter offer accepted. 8. Rate lock on loan expires. Extension acquired. 9. Move out of apartment. Landlord illegally keeps deposit. 10. FHA loan denied based on insufficient HOA reserves. Tags: Buyers’ Tips, Short Sale, home purchase, mortgage insurance, short sale
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I am all for helping the consumer understand the complicated loan process connected to purchasing a home. In that light, I wanted to make sure everyone is aware of the changes to the Regulation Z requirements that went into affect on July 30th, 2009. These changes will definitely inform the consumer about changes in fees related to the loan they are receiving but also have the potential to delay closing on the purchase of their home. Loan officers, real estate agents, title companies, and consumers will need to be informed and prepared for how these regulations may impact the home purchase time line. If you want more details about this new change it is best to speak with a loan professional. Gabe Bodner with Bay Area Financing has written a great blog post with an over view of the changes. You can also check out the video below for an overview. HERA Is Not You’re HERO in RE – The most amazing videos are a click away Tags: Buyers’ Tips, APR, finance charges, home buying, reg z, truth and lending
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If you are considering a loan modification, please take the time to research how they are properly done. There are many scams out there. In fact, the first stop for any home owner considering a loan modification should be the California Department of Real Estate web site where there is a list of loan modification companies ( some very familiar names) that have been given desist and refrain orders by the Department of Real Estate. Two great resources to check out before you begin the loan modification process. The first is “Top 10 Questions about Loan Modifications” . The second is a video from Hope Now that tells what to look for when beginning the loan modification process and also provides contacts for counseling. Tags: Market Information, Sellers’ Tips, california department of real estate, foreclosure prevention, loan modification, scams
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Today’s housing market is like none other we have seen in awhile. I hear agents talk about how bad the ’80s were but this market is different in many respects. In order to purchase a home in this market, it is best if the home buyer prepares for potential hurdles that can be placed in between them and the door to their new home. The first hurdle is summoning the courage to buy a home in a downward trending market. Tell your friends you are house hunting and inevitably they will say, “Oh man, I would wait. It is surely going to drop some more.” That may be true but for most people buying a home is very different then buying a stock. Some people buy because they absolutely hate renting. They crave to paint the walls any color they want. They want to have a dog, or a water bed, or a private jacuzzi for skinny dipping. Whatever the reason, they want a home. The second hurdle is relentlessly trolling the multiple listing service (MLS) and the multitude of other home search sites. I do not know of a single site that has it all. Look at this site for school districts. Look at that site for street view. Look at this site for market trends. Some like Trulia, Zillow, and RealtyTrac have a lot of information but it may not always be as accurate as we would like. Part of the process is simply deciding how you like to search. By map? By criteria? By school district? I offer my clients a variety of ways to search and I also offer the option to receive homes directly to their email inbox based on their specific search criteria. There is no doubt internet house searches will continue to improve. …
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In the last couple of weeks, I have heard more and more real estate agents and loan officers tell me that they believe we might be near the bottom of the housing market in San Jose. Their biggest support for this theory is kind of interesting. It goes like this: ” How much lower can home prices possibly go?” Hmm. Well there you are. Scientific, (not), analytical (not), a hypothetical guess (barely), coming right from the professionals. I decided to look at the stats to see if I could see any indication that we are near the bottom of the housing market in San Jose. I looked at the average sales price for each neighborhood for single family homes, condominiums, and town homes from February 2008 to February 2009. Out of the 15 neighborhoods, 7 were continuing to trend down on average sales price. Saratoga had a huge down in January and then a huge up in February so I will call that a wash. Four areas, Milpitas, Central San Jose, Cambrian, and Willow Glen showed an average sales price slightly higher in February 2009. Certainly hard to call one month’s results a trend in this market. Especially, when over the last year we have seen some bump ups in almost all the neighborhoods at one time or another. The most interesting graph came from the Alum Rock neighborhood. Alum Rock has been hit hard as a result of sub-prime lending. Alum Rock was one of the last areas to “boom” in San Jose. It was also one of the first to show signs of trouble. Over and over again, I see the “entry” level markets hit hardest by the sub-prime debacle. There were not a lot of sub prime loans made in Atherton. You see the results of sub-prime…
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In 1978, the ballot initiative “People’s Initiative to Limit Property Taxation” was put in place by the voters of California. This initiative basically restricted the increase in property taxes per year to 1% of value. The result was a 57% cut in property taxes for California. This initiative also placed a high bar for change by requiring 2/3rds majority vote in local elections. The origination of this initiative came from the belief that older citizens should not be priced out of their homes via ever increasing property taxes. Valid argument. Some argue it has limited the housing market re-sale side (less inventory,high demand, pushing prices up), has increased rents, and has created a demand for new construction on smaller and smaller amounts of available land. It has been argued that not only do the long term residents benefit from a demand partially created by Proposition 13, but also benefit in services paid for by new home owner’s property tax rate. There is not doubt that Proposition 13 has contributed to the affordability issue for new home owners in the Bay Area. There are many opinions about Proposition 13 and the debate heats up again and again. Now, as home prices decline many home buyers that purchased homes after the year 2000 are asking why they are paying the same amount for property taxes. My property tax bill actually increased this period in spite of losing $95,000 in equity from December 2007 to December 2008. Therefore, I wanted to offer some resources to help those who have lost value on their property and have yet to see an adjustment on their tax bill. Tags: Market Information, Sellers’ Tips, Appeal Taxes, Property Taxes, San Jose Housing, Santa Clara County
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