Friday, December 12, 2008

Daily Real Estate News December 9, 2008

Study Shows Housing Values Have Climbed
News reports have been packed with stories about declining home values, but a recent government report shows that the situation is not nearly so dire as some reports make it sound.Despite big loses in some areas of the country, the majority of markets continue to show growth in home value over the last five years.According to the third-quarter survey released by the Federal Housing Finance Agency, out of 292 metropolitan markets, 273 showed positive net home values in the last five years. Only 19 percent were negative. While home values declined 4 percent on average in the last year, values were up nearly 29 percent over the past five years.According to the Federal Housing Finance Agency, markets that gained the most over the last five years were:
Honolulu: up 78.7 percent
Virginia Beach: 72.6 percent
Flagstaff, Ariz.: 66.5 percent
Bellingham, Wash.: 65.6 percent
Wilmington, N.C.: 62.1 percent
Baltimore: 60.6 percent

Source: The Washington Post Writers Group, Kenneth R. Harney, (12/06/08)

Thursday, December 11, 2008

Bottom of the Market Secret

I've got a secret...or at least the national news seems to be hiding it....let me say it here folks....we're at the bottom of the market in Santa Cruz County. Why do I say this you ask....well, we are seeing multiple offers on well-priced homes and that is a major turning point (yes they are still lower priced than they were even a year ago, but that's what happens in a buyer's market). But, you should know the market goes in cycles. Ask anyone that's been around the industry in the last dozen years and they'll tell you, they've seen it with their very own eyes.

Despite the doom and gloom of national media (which IMHO, you can't generalize something like the Real Estate market nationally, especially along the coast of California, because markets are totally different even within one county, but I digress) our office is buzzing around with happy and excited clients- both on the mortgage end AND the sales end.

Let's break this down...the bottom of the market is usually in hindsight... those that happen to buy during that time are considered investor "stars," but I call them lucky with good guidance by a Realtor. This is my job- I follow trends in this industry and I am telling you...don't miss this golden opportunity to buy some California real estate at prices you won't ever likely see again.

The rates for loans have dropped again and are expected to stay that way for the remainder of this year. This alone, is a good idea to buy or refinance. In any case, say you do buy a home in today's'll need to sit on it (or in it) for 2 years because of tax reasons (or at least 12 months as an investor), by the end of 2009 we expect to see the market not only bottom out but slowly climb back on it's way to a sellers market..but by then you won't have the inventory selection you have now. So, even if today's market goes down 1-3% more in price, the difference is very small in your loan payments and you'll be in the market at a phenomenal deal AND you'll be ready for the turnaround when you sell.

SO, yes we're doing the Buyer's Dance right now...because we are at the bottom of the market folks!

Thursday, September 25, 2008

Short Sale Vs. Foreclosure on your Credit Report

Did you know?????
Generally speaking: a short sale on your property will ding your credit by about 100 points and a foreclosure will ding your credit by about 200 points. If you can make a short sale work, get a qualified real estate agent involved and work it to help save some points for your credit. Even an attempt at a short sale (selling the property at a lower price than is owed on the loan, with your lender's approval) may help show some efforts in your favor.
But don't soon as you think there might be a problem, call your lender and see if there can be a "workout" on your loan. They may be able to get you in to a better loan, reduce payments, refinance, tack missed payments on the end of the loan etc. you don't know until you ask, and it's more likely to happen if you talk to them BEFORE you miss a payment.

Monday, May 5, 2008

Shoulda, Coulda, Woulda- Don't Miss the Market

I hear time and time again that my buyers are "looking for a deal" well they are all over the place-- properties for sale may not be "listed" at their ideal price, but that's not to say they can't be negotiated at an incredible bargain...don't miss the market waiting for a perfect house. Buy a fixer or one of these bank-owned REO properties and turn it in to your dream, or at least a great investment that you can hold on to for instant equity in a couple of years.

I see folks getting caught up in short sales for months with no guarantee that they will even get their offer accepted or not get bumped by a better offer...and I fear that they will lose out on these incredible deals because they waited and waited for something else.

The Santa Clara County market is usually a step ahead of the Santa Cruz County market and they are seeing multiple offers in certain price ranges...just like we are, and buyers are missing out. Now that buyers have realized the market is phenomenal and the rates are good, they are coming out and putting out offers and getting outbid...don't miss the market by waiting too long. Now's your chance to get 2004 pricing and better rates, what are you waiting for REALLY?

Work with a Realtor that knows your market and which properties are a great deal, don't get caught up on "list price" because it's a different negotiation for bank-owned vs. short sale/foreclosure vs. none-of-the-above listings...we can help you sift through it, but don't wait if you have the means to make an offer now, because the selection and possibly pricing may not be there.

Tuesday, March 4, 2008

What is a Short Sale?

A short sale is an agreement by the bank or lender that they will take less for a property than what is owed on the mortgage.

What does that mean? When someone is forced to move or relocate due to a job
transfer, for instance, and it is during a “down market” this can help them get on their way to their new location. More often, it is a “pre-foreclosure” move to help save a seller’s credit (it is a bit better than a foreclosure or
bankruptcy on your record but it still has it’s consequences).

The can often get a great deal on a home or property because it is often listed at “realistic” or slightly below market value.

The downside...the property is usually in “as is” condition and inspections are often out of the buyer’s pocket. And even though it is listed at a low price, it doesn’t mean the bank will accept that price. Afterall, the bank is in the business of making money and doesn’t want to lose anymore on this property than it has to. Another concern is that if your offer DOES get
accepted (which takes about 2 weeks) you are not guaranteed you get the property until it closes (average is 90+ days to close, rather than 30-45 for a non-short sale). You could be pending in escrow and the bank could get a better offer the day before you close, then they can bump you from the first position and sell it to the other folks.

SO, in some cases you are better off negotiating a good price with your Realtor on the home of your dreams rather than the select homes in short sale, foreclosure or bankruptcy. Don’t miss this booming buyers’ market.

Wednesday, February 13, 2008

Conforming Loan limits Rise for 2008, Great News for....

President Bush Signed the Stimulus Plan

The bill will temporarily increase the size of loans that may be purchased by Fannie Mae and Freddie Mac, raising the current level of $417,000 to reportedly up to $729,750 in the highest cost regions of the housing markets. A change from a Jumbo Mortgage to a conforming mortgage will help you to possibly save hundreds of dollars a month on your mortgage payment. If you or someone you know has a loan that:
Has a loan balance currently between $417,000 and $730,000 at an interest rate higher than 6%.
Has a Second Loan with an interest rate higher than 6%.
Is a loan that is fixed for 3, 5, 7 or 10 years that will become an ARM anytime in the next 18 months.
Is an ARM that is scheduled to adjust anytime in the next 18 months.
Have been considering a purchase but you're not sure you could afford to or that you would qualify.

Contact us or your lender for more information

Friday, January 4, 2008

5 Investor Tips in a Slower Market

“When markets go soft, things get interesting. Even though an abundance of opportunity exists in a soft market, many people still won’t take action. Why is this? Because by nature, people follow a ‘herd’ mentality. Most people believe that for something to be the ‘right’ thing to do, many people need to be doing it. Actually, this is not true at all. … An experienced insider’s secret — that many folks don’t want you to know — is this … When the markets go soft the playing field is being ‘reset.’ Short-term opportunities are removed and an abundance of opportunity gets created for the seasoned investors who know how things really work.”

1. Timing is everything. Enter the market cycle early. “When it’s quiet, when the media isn’t saying ‘record levels of appreciation,’ that’s when you want to jump in,” the authors write. As billionaire oilman J. Paul Getty once said: “Buy when everyone else is selling and hold until everyone else is buying.”

2. Get financially ready. Before you buy, consider holding costs, tax implications, and cash flow potential. Many things can go wrong when buying investment properties — such as a vacant rental or a property that won’t sell. Have cash reserves (get a partner if you don’t have any) and you’ll be prepared to ride out any market cycle. Identify your risk level and what you want: For example, an investor who wants to turn a quick profit with low holding costs would want to sell their new-home property before construction is complete. On the other hand, an investor looking for a bigger return with less capital gains tax would want to hold the property until after construction is complete and keep it as a rental property for at least one year.

3. Buy and hold. In a distressed market, this can be a smart move. A buy-and-hold strategy can help give the property an opportunity to appreciate over time. Buy at the right price, though. Compare the home’s price to what homes are selling for over a reasonable time period in that
community and what you expect is the lowest price the market will reach. Get in at that price. Consider lease option investments so you can rent the property to cover payments, having the property practically pay for itself each month. Also, continue to pay down the mortgage and eventually you may even have the home paid off — an ideal position for an investor!

4. Find best deal. In a slow market, you can get great deals — and some extras. Builders overbuilt during the housing boom, resulting in high inventories of unsold properties. Now, many builders report slashing prices, offering free upgrades, absorbing all financing points for their buyers, and paying closing costs or fees. Extras aside, other good investment properties include homes five years old or less and properties in the $500,000-range, which can particularly be desirable to a large pool of buyers. Also, look for a property in an emerging market. Some indicators: sales of existing homes and new construction permits are starting to trend upward, supply is steadily dropping, mortgage loan defaults are high but starting to fall, days-on-market move below 90, and low interest rates.
5. Have an exit strategy. Have a selling strategy in place before you buy so you’re not just randomly banking on the property appreciating and then doing a quick sale. Come in with a solid selling plan. For new construction investing, your selling options might be to assign your purchase contract during the construction period, sell when construction is complete, lease and then sell, or a lease option. Reduce the taxable impact of selling your real estate investments by talking to your tax adviser about a 1031 exchange or self-directed IRA. “Know how you will get out before you get in!” we advise.
From the Book: 5 Investor Tips in a Slower MarketSlower markets can offer rich opportunities for investors: real estate sellers are more open to negotiate and lower home prices — and combined with low interest rates — can help you get properties at bargain levels. Yet, some buyers are reluctant. “The market may not look perfect,” the authors write. “This is why prices haven’t taken off yet” — and why you want to get in before they do!

Quick SkimThe slowdown in the real estate has sent some investors fleeing from the market. But those bailing out may be missing opportunities, say the authors of Making Hard Cash in a Soft Real Estate Market (Wiley, 2007). There are still big bucks to be made — even in a down cycle. In fact, authors Wendy Patton and Justin Ryan argue that “more money has always been made in a down market than in an up market.” They highlight how investors can snag the best buys, master market-timing and risk management, and prepare finances — all to better help you become a savvy investor in any type of market.

Top 10 Ways to Beat A Sluggish Housing Market's Top 10 Ways to Beat the Sluggish Housing Market
By Published: 12/21/2007

Don't let the slower market get you down. Whether you're a home seller looking for offers, or a homebuyer facing stricter loan requirements, rev up your real estate potential with these helpful pointers from

Give your house a makeover that adds value and keeps it up with the Joneses'. That doesn't mean you should run out and install Italian marble. But if hardwood floors are the norm in your neighborhood, replace the carpet. MORE...
Use the secrets of staging experts, or hire one. Staging can be as easy as a fresh coat of paint, new cabinet hardware and strategically-placed lighting. Think of it as a creative, inexpensive facelift for your home.MORE...
Find out what's wrong with the house and get it fixed. Don't wait until that serious buyer finds faulty wiring or a termite problem and then pulls the plug on the deal. Be proactive. Get an inspection before hitting the market.MORE...
Come up with a comprehensive home-selling strategy. Selling your home in a buyer's market requires a well thought-out plan with accurate pricing, targeted improvements and focused marketing and exposure.MORE...
Hire an aggressive, well-connected real estate agent. Find an experienced agent with a proven track record and knows how to pound the pavement. In this market, name recognition is important, so find the go-to person for buyers and their agents in your community.MORE...
Help a buyer buy it. Offer incentives that put money in the buyer's pocket, such as buying down the interest rate, absorbing more of the closing costs or offering seller financing. MORE...
Consider renting or offering a lease option. Minimize the impact of two mortgages by renting your house out until you find a buyer. Or offer a lease option to a motivated buyer who doesn't have enough cash to buy a home outright.MORE...
Make the house move-in ready. Throw in the furniture, flat-screen TV, washer/dryer, appliances, backyard jacuzzi AND the kitchen sink. The less money a buyer will have to shell out to furnish the house, the higher the perceived value.MORE...

Use calculators and tools to evaluate your potential purchase. Be careful not to get caught up in the hype of a buyer's market. Make calculated decisions with's "Return on Investment" tool, for instance, which helps you determine your potential IRR (internal rate of return) on a property. MORE...
Evaluate and boost your financial profile. If you're having trouble finding favorable terms or interest rates on a mortgage, make yourself more appealing to lenders by boosting your credit score. MORE...