The M & M Team

Home Buyer Tax Credit Extended and Expanded

2009-11-06T10:22:00.000-08:00

More good news for buyers and the housing market recovery. Following the Senate’s favorable vote recently, the U.S. House of Representatives also voted 403 to 12 to extend the home buyer tax credit, expanding the parameters to include existing homeowners and not just first-time buyers. As you may know, C.A.R. and NAR have worked for months urging Congress and the Senate to extend and expand this crucial piece of legislation. We expect President Obama to sign the legislation very soon.

As it now stands, the federal tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. Which means purchase agreements need to be signed by April 30th and close by June 30th. First-time home buyers will continue to be eligible for a tax credit of up to $8,000, while existing homeowners will be eligible for a reduced credit of up to $6,500. To qualify for the $6,500 credit, existing homeowners must have lived in their current residences for at least five years. The bill also increases the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000 in both instances.

Under additional provisions included in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The legislation maintains the provision that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

Nationwide, more than 1.4 million first-time home buyers were given the opportunity to become homeowners as a result of the Federal Tax Credit for First-time Home Buyers. We expect that number to increase dramatically in the months ahead with this new legislation in place.

Loan Limit Extension Signed into Law

2009-11-05T10:00:00.000-08:00

President Obama recently signed a congressional resolution to extend through 2010 the current conforming loan limits of $417,000 for most areas in the U.S. and $729,750 for high-cost areas, including many in California. The resolution was part of a broader piece of budgetary legislation that will prevent a government shutdown.

Both C.A.R. and NAR have long advocated making permanent higher conforming loan limits. As a result of C.A.R.’s and NAR’s efforts, a provision of the Housing and Economic Recovery Act of 2008 included temporarily raising the conforming loan limits. The signing of the congressional resolution effectively extends the higher conforming loan limits for Fannie, Freddie, and FHA loans through 2010.

The conforming loan limit determines the maximum size of a mortgage that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac, and the Federal Housing Administration (FHA) can buy or “guarantee.” Non-conforming or “jumbo loans” typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable.

Experts Say Housing Bottom is Behind Us

2009-10-30T10:04:00.000-07:00

The median price of an existing, single-family home in California rose for the seventh consecutive month in September to $296,090, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ most-recent sales and price report. Home sales also increased in September, rising 2.1 percent compared with August. If home sales maintain their current pace, 530,520 units will be sold in California in 2009.

Here are some interesting facts...

· The market’s momentum continued in September, as many home buyers took advantage of the federal tax credit for first-time home buyers. The success of the federal tax credit is clear. Nearly 70 percent of first-time home buyers report that the tax credit was ‘the most important’ or a ‘very important’ factor in their decision to buy a home.

· C.A.R. is calling for the U.S. Senate to swiftly adopt the Dodd-Lieberman-Isakson amendment, which would extend the federal tax credit through June 30, 2010, remove the first-time buyer requirement and extend the credit to all home buyers, and increase the qualifying income limits so more families are eligible for the credit.

· A new milestone was reached in September, when five C.A.R. regions reported positive year-to-year increases in the median price, the first such increase since January 2008. September also marked the first single-digit decline in the year-to-year median price since October 2007, after 22 consecutive months of double-digit decreases, leading many to believe the state’s median prices are leveling out.

· C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in September 2009 was 4.2 months, compared with 6.5 months for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

· Thirty-year fixed-mortgage interest rates averaged 5.06 percent during September 2009, compared with 6.04 percent in September 2008, according to Freddie Mac. Adjustable-mortgage interest rates averaged 4.59 percent in September 2009, compared with 5.14 percent in September 2008.

C.A.R. September Sales and Price Report

2009-10-29T17:08:00.000-07:00

Home sales increased 2.1 percent in September in California compared with the same period a year ago, while the median price of an existing home declined 7.3 percent, C.A.R. reported yesterday.

The median price of an existing, single-family detached home in California during September 2009 was $296,090, a 7.3 percent decrease from the revised $319,310 median for September 2008, C.A.R. reported. The September 2009 median price rose 1.1 percent compared with August’s $292,960 median price.

“A new milestone was reached in September, when five C.A.R. regions reported positive year-to-year increases in the median price, the first such increase since January 2008,” said C.A.R. Vice President and Chief Economist Leslie-Appleton-Young. “September also marked the seventh consecutive month of month-to-month increases in the statewide median price and the first single-digit decline in the year-to-year median price since October 2007, after 22 consecutive months of double-digit decreases.”

California Real Estate Market Snapshot - October '09

2009-10-26T17:02:00.000-07:00

Market Analysis:
White House spokesman Robert Gibbs just announced that President Obama supports an extension of the $8,000 first-time homebuyer’s tax credit along with prolonging job loss benefits and healthcare subsidies for unemployed workers. Recently there has been evidence that the Senate has bipartisan support for the extension as well. This is especially good news considering that the California Association of Realtors® Homebuyer Survey indicated that 40% of first-time homebuyers who purchased a home in 2009 would not have purchased had the credit not been available. The California Association of Realtors® released their 2010 Housing Forecast on October 7th. Some of the predictions are as follows:
* The median home price will rise by 3.3%
* Sales are projected to decrease by 2.3% from 540,000 in 2009 to 527,000 in 2010.
* A tale of two markets is projected – a hot market in the more affordable price ranges, and a slow market in the upper-end market.
* Interest rates will average 5.6% in 2010 compared to 5.2% in 2009.
* While there is guarded optimism, there are still numerous unknowns such as how high will the volume grow of foreclosures, loan modifications and the unemployed? And will the state’s budget problems get resolved?

Market Report

October, 2009	Current Period	Last Period	Last Year	Month-to-Month Change	Year-to-Year Change
Existing Home Sales	526,970	555,440	483,400	-5.1%	9.0%
Median Home Price	$292,96o	$285,480	$352,730	2.6%	-16.9%
Unsold Inventory Index	4.3 months	3.9 months	7.0 months	10.3%	-38.6%
Median Days On Market	35.2	39.9	47.6	-11.8%	-26.1%
30-Year Fixed Mortgage	5.19%	5.22%	6.48%	-0.03%	-1.29%

Source: California Association of REALTORS®

620 Credit Score is the New Magic Number for Mortgages

2009-10-23T11:01:00.000-07:00

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.

Start Repairing Bad Credit Rating Now

2009-10-19T16:22:00.000-07:00

Homeowners who have lost their homes to foreclosures or through short sales may be able to buy another home in as little as two years by taking immediate steps to rebuild their credit.

Here's what you need to know...

· Consumers who have had their homes foreclosed upon or sold via a short sale, where the lender agrees that the owner can sell the home for less than is owed on the mortgage, are advised to review their credit report as soon as possible for accuracy. Web sites such as annualcreditreport.com offer free reports, but not free credit scores.

· The first step in reviewing a credit report is to make certain that the information in the file is about the correct individual, and not someone with a similar name or similar Social Security number. Credit reports also should be reviewed for incorrect items, such as credit cards that were never opened or payments made that were never reported.

· Homeowners who have sold their home via a short sale should review their credit report to ensure the account reflects a zero balance rather than the difference between the outstanding balance and the sales price. Consumers should not assume that a short sale carries no further obligations. Some lenders are filing deficiency judgments, while others are selling the debts to investors who then contact borrowers for repayment.

· Staying current on credit card payments, applying for secured credit cards, and taking out and paying on small loans also can help to reestablish credit.

Fannie and Freddie are Offering Financing Incentives

2009-10-16T10:12:00.000-07:00

Fannie Mae and Freddie Mac are offering financing incentives for buyers of foreclosed homes owned by Fannie and Freddie. Home buyers have until Oct. 30 to apply for Freddie Mac’s SmartBuy program, which started in July, and offers up to 3.5 percent of a home’s sale price to help cover closing costs.

To qualify, the home must be a principal residence and must be selected from Freddie Mac’s HomeSteps Web site (www.homesteps.com/homeshoppers.htm) for its foreclosed properties. Loans must close by year’s end. The HomeSteps properties also include two-year warranties on major appliances and electrical, plumbing, and air-conditioning and heating systems.

Fannie Mae’s HomePath program (www.homepath.com) is an ongoing program and offers more incentives than Freddie Mac’s. Through participating lenders, Fannie will offer mortgages to buyers who make a down payment of 3 percent. The buyers do not have to secure private mortgage insurance, a common practice with nearly all lenders. Home buyers also can negotiate for Fannie Mae to offer closing-cost assistance. Unlike Freddie Mac’s program, Fannie’s assistance level is not capped. Under the HomePath program, the average participating homeowner has received payments equivalent to 3.75 percent of the loan’s value.

Gap Between List Price and Sale Price Diminishes

2009-10-15T11:28:00.000-07:00

Home buyers still are paying less than a home's asking price, but had slightly less negotiating power in August than they did in July, according to the August Zillow Real Estate Market Reports. Buyers paid a median $6,525, or 3 percent, less than the last listing price on homes bought in August, down from $7,018, or 3.3 percent, less for homes bought in July, according to the report. Negotiating power peaked in January 2009, when buyers were paying 4.5 percent less than last listing price, a median of $10,096.

Sellers also continued to cut prices on unsold homes. One quarter (24.7 percent) of all homes listed for sale on Zillow had at least one listing price reduction as of Oct. 1, 2009. For the U.S. as a whole, the median U.S. price reduction was 6.6 percent off the original listing price.

Several Metropolitan Statistical Areas (MSAs) in Florida made the top 25 list of markets nationwide with the greatest gap in list price to sale price; no MSA in California made the list. In two California markets, buyers paid more than asking price during August, according to the report: In the El Centro MSA, buyers paid 2.2 percent, or a median $2,479, more than asking price; in the Stockton MSA, buyers paid 1.3 percent, or $2,515, more.

"Negotiating power is a clear reflection of inventory levels, which dropped nationally in August. Tighter supply in some markets is translating into less of a discount off listing price," said Zillow Chief Economist Dr. Stan Humphries. "Unfortunately, the brisk spring and summer home shopping season is drawing to a close now, and with foreclosures on the rise again, inventory levels will likely head back up in the coming months, leading buyers' negotiating power to regain the ground it lost in August."

Finding The Right Neighborhood

2009-10-12T13:51:00.000-07:00

One of the most common questions any real estate professional has to answer is, “What is the best neighborhood for me and my family?” Here are 3 things to keep in mind:

Little things are big things
When selecting a neighborhood, you may be tempted to discount a few small annoyances and focus on the big things you really like. However, when you live in a neighborhood for several years, small annoyances can really add up and soon dominate your experience in that neighborhood. Seek out a neighborhood that has a myriad of small pleasures.

Look for neighbors, not a neighborhood
When you buy a new home, you are joining a new community. Joining the right community can furnish you with trusted babysitters, reliable carpools, authentic friendships, and a support group for whatever comes your way. Find a group of neighbors you enjoy spending time with, and you can be certain that you’ll enjoy the neighborhood on many different levels.

Don’t obsess over numbers
Numbers are important, but selecting a neighborhood is, on some level, an emotional decision, and it should be treated accordingly. Crime statistics, school test scores, and home appreciation projections can only take you so far. Ultimately, no computer readout can make the decision for you. Trust your instincts and seek out that “a-ha moment”—the point when you know you‘ve found a place that feels like home.

How to Create a "Green" Laundry Room

2009-10-08T09:58:00.000-07:00

Your laundry room is another place that can consume a great deal of energy. Here are a few ways to reduce that:

Energy-efficient washer: Typical washing machines can use as much as 40 gallons of water a load—energy-efficient washers, such as ENERGY STAR models, can use half of that.

Only wash and dry full loads: Similar to dishwashers, washers and dryers use a great deal of energy, regardless of their contents—so be energy efficient and use full loads (or adjust settings accordingly).

Clean out lint filter: Cleaning out the lint filter in the dryer after each use is an easy way to make sure your dryer is running as efficiently as possible.

Choose eco-conscious products: Look for non-chlorine-based bleach—chlorine can react with environmental organic matter which creates harmful toxins in the environment. Detergents also can contain a plethora of chemicals, so try to choose the simplest product that fits your needs—fragrances, dyes, and brighteners don’t impact how clean your clothes are, so if you can avoid them, do. Organizations that promote or sell eco-conscious products include: Green Seal and TerraPass.

Information provided by: http://green.car.org

Real Estate Bargains Happening in the High End

2009-10-02T09:41:00.000-07:00

Buyers hoping to purchase deeply discounted homes may want to consider purchasing homes in the high end—especially those priced $2 million or more. In some cases, buyers may be able to command even lower prices on these homes, as financing continues to be a challenge for buyers of luxury homes.

Here are some great tips for buyers...

· While data from the Federal Housing Finance Agency (FHFA) showed that average home prices rose 0.3 percent nationwide between June and July, including a 1.6 percent increase on the west coast, the data only relate to homes purchased with conforming loans guaranteed by the FHFA. These loans are mortgages of up to $417,000 or up to $713,000 in the country’s most expensive regions. The outlook for homes priced above that amount remains bleak.

· In many areas across the country there is a new level of value being established. According to one broker, homes that used to sell for $8 million now are selling for $6 million, while homes previously priced in the $10 millions are selling for $8 million. The price adjustment in the high end appears to be about 20- to 30 percent lower.

· A recent survey by Trulia.com showed that sellers listing homes for more than $2 million have reduced their asking prices by a total of $7 billion, with an average price reduction of 14 percent.

· Chip Case, economics professor at Wellesley College and coauthor of the Case-Shiller index, says that some of the markets finally may be catching up to the wider housing market downturn. “That level was more in the hold-out category,” he says. “Up until recently, the foreclosures weren’t hitting that level. But they are now. There’s no question about that. You’re seeing some contagion from the prime level to the luxury end.”

· Sooner or later, even high-end homeowners need to sell. And, when they get tired of waiting, they reduce their asking prices. Factoring in taxes, upkeep and the opportunity cost of keeping money in a non-performing asset, an empty luxury home may be costing owners a lot just by sitting there, giving them a powerful incentive to make a deal.

California Real Estate Market Snapshot - September '09

2009-09-29T09:11:00.000-07:00

Market Report

September, 2009	Current Period	Last Period	Last Year	Month-to-Month Change	Year-to-Year Change
Existing Home Sales	553,910	512,530	494,390	8.1	12.0%
Median Home Price	$285,480	$274,740	$355,000	3.9%	-19.6%
Unsold Inventory Index	3.9 months	4.1 months	6.9 months	-4.9%	-43.5%
Median Days On Market	39.9	44.3	47.8	-9.9%	-16.5%
30-Year Fixed Mortgage	5.22%	5.42%	6.43%	-0.20%	-1.21%

Source: California Association of REALTORS®

Market Analysis:
The California housing statistics are showing signs of improvement. The California median price has increased for five consecutive months, indicating the growing buying power of homebuyers. While the market under $500,000 has been active for several months, the mid-range market is also showing improvement. It has increased from 12% in January to 20% in July. The high-end market, which has really been struggling, has also improved from 3% in January to 6% in July. The main reason the market below $500,000 is showing signs of slowing is that inventory is down from earlier in the year. This lack of inventory will most likely ease in the coming months, as the current backlog of foreclosures hits the market. The First-Time Buyer Housing Affordability Index (FTB-HAI) is currently at 67%, which is up from 49% a year ago. The FTB-HAI is the most fundamental measure of housing well-being for first-time home buyers in the state. A final reminder: the $8,000 First-Time Home-Buyer Tax Credit is set to expire on December 1st. To qualify for this tax credit the home must be the taxpayer’s principal residence for 36 months after purchase; otherwise, the credit, must be repaid. In addition, the buyer (and buyer’s spouse, if applicable) must not have owned a principal residence during the three-year period before the date of purchase. The tax credit begins to phase out if modified, adjusted gross income is over $75,000 or $150,000 for joint filers.

Short Sales - What You Need to Know

2009-09-25T09:39:00.000-07:00

As more homeowners find themselves underwater -- owing more on their mortgage than their home is currently worth -- and unable to make the monthly mortgage payments, many are turning to short sales, which allow a homeowner to sell their home for less than owed on the mortgage. Short sales can be a win-win situation for all parties, because they enable home buyers to purchase properties in desirable neighborhoods and at favorable prices.

Here's what you need to know...

· Theoretically, short sales should be a win-win for the bank and the homeowner. Although the bank does not receive the full amount owed on the mortgage, it also does not incur the costs of foreclosure (which can run them about $40,000) and/or eviction, if necessary. Many homeowners also prefer short sales because it is less damaging to their credit scores than a foreclosure. Take a look at How Short Sale and Foreclosures Affect Your Credit Score. However, many real estate experts say that the majority of banks are reluctant to approve short sales, and often let properties go into foreclosure, even when there are reasonable offers on the property. In addition to considering the price, most lenders also take into consideration whether the homeowner can demonstrate financial hardship. If the homeowner is capable of making payments, many lenders will try to work out a loan modification, rather than a short sale.

· Unlike foreclosed properties, which may be run-down and vacant for many months, short-sale properties are likely to be better maintained, as most owners may still live in the home. Buyers have to weigh their options. On one hand, short sale purchases might have a better maintained home and because the owner is still involved with the transaction, they have to disclose all pertinent information. BUT, a buyer might have to wait six months for the lender's acceptance (OR counter-offer, OR rejection). On the other hand, foreclosure purchases will have much faster response times. BUT, since the bank/lender has never lived on the property, they do not know what to disclose. If there is a leaky roof, they don't have to tell you that! If you are a buyer, make sure you discuss these options with an experienced REALTOR®.

· Short sales often are more time intensive than traditional transactions and often require additional paperwork. As we mentioned before, short sales take as long as six months to receive approval due to the large number of offers the banks/lenders receive. If information or required forms are missing or incomplete, the bank may set the offer aside, which could delay the process and cause the property to go into foreclosure. To expedite the process, sellers should work closely with their REALTOR® to provide all of the necessary paperwork.

· It is important to remember that in a short sale, although the seller may be anxious about selling the property and willing to accept any offer, it is ultimately up to the lender to determine if, and at what price, the property can be sold. Home buyers should work closely with their REALTOR® to submit realistic offers.

One of Our Clients, Mark Dacascos, is on Dancing With the Stars!!!

2009-09-21T14:12:00.000-07:00

One of the homes we have listed for sale is owned by our good friend and neighbor, Mark Dacascos. We are hoping you can help support him on Dancing with the Stars tonight! You might have seen Mark in various other movies and shows. He is currently THE CHAIRMAN on "Iron Chef America." He was the title character in the television series "The Crow." His movies include "Cradle to Grave," "Brotherhood of the Wolf," "Only the Strong," "Double Dragon," and many more. He is a martial artist and has been working very hard to prepare for the competition. The season starts tonight at 8:00p.m. on ABC. Please watch and vote for him. Share this email with anyone you think might be interested in helping a Local Boy win!!

* Don't forget to VOTE for Mark & Lacey!! Call 1-800-VOTE4-03!! 1-800-868-3403 Up to 10 times per phone line!
* You can also text VOTE to 3403 if you are an AT&T customer.
* You can vote online at abc.com until tomorrow morning. 10 times per email address!

Online polls will open at the top of each performance show so that viewers can vote for their favorites. Phone and text lines will stay open for 30 minutes after the end of the show. Online voting will remain open until noon (Eastern Time) the next day.

Thanks everyone! Go Mark!!

How Short Sales and Foreclosures Affect Your Credit Score

2009-09-18T09:52:00.000-07:00

Homeowners who find themselves struggling with mortgage payments and unsure how to handle the situation—short sale, foreclosure, or walk away—are advised to consider the impact of each on their credit scores.

Loan modifications that roll late payments and penalties into principal debt owed on the house can actually increase borrowers’ scores modestly, while refinancing underwater mortgages may have little or no negative effect on credit scores, according to Vantage Solutions, a scoring company created by the three national credit bureaus.

Short sales on the other hand can trigger large declines in credit scores, according to researchers. A homeowner with an excellent credit score might see a 120 to 130 point decline after a short sale.

Homeowners who choose to walk away from the home and stop payments altogether should expect their credit scores to fall 140 to 150 points, plus negative marks on their credit bureau files for up to seven years.

People filing for bankruptcy protection covering all their debts will get hit with an average 355- to 365-point drop in their scores. Bankruptcies remain on borrowers’ credit bureau files for 10 years.

But there is good news. Homeowners facing financial stress can experience minimal declines to their scores if they contact their loan servicer or lender when they first discover that they may have trouble making their monthly payments.

Understanding Reverse Mortgages

2009-09-14T14:48:00.000-07:00

Reverse mortgages have become increasingly popular over the last several years. Still, many eligible homeowners are confused by reverse mortgages, while many more are unclear on the details. Here are some basic facts to help you understand reverse mortgages.

What is a reverse mortgage?
Instead of making payments to the bank in exchange for equity in your home, the bank makes payments to you in exchange for equity in your home.

Why would I want one?
If having cash on hand (or monthly payments of cash) is more important than maintaining long-term equity in your home, a reverse mortgage may make sense. For instance, if you are 80 years old with no heirs, you may consider a reverse mortgage as a way to supplement Social Security for the remaining years of your life.

Am I eligible?
The main eligibility requirement is that you be at least 62 years old. For obvious reasons, it would not make sense for a bank (or a borrower) to engage in a reverse mortgage prior to the age of 62.

How do I get started? The reverse mortgage process is different than that of a standard mortgage, though it is not particularly complicated. As with any transaction, the best way to get started is to call your real estate professional.

A Closer Look at Home Prices

2009-09-08T09:00:00.000-07:00

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.

Strengthening Prices Due Largely to Mix of Homes Sold
The recent increase in the median price is attributed in part to the change in the mix of sales since the beginning of this year. Since reaching a peak of 85 percent in January 2009, the market share of homes sold under $500,000 (the low-end market) has been declining and stood at 74 percent in July. Meanwhile, the market share of homes sold between $500,000 and $1 million (the middle tier) surged from 12 percent in January 2009 to 20 percent in July, and homes above $1 million (the high-end market) improved from 3 percent to 6 percent for the same period.

The gain in sales has softened at the low-end market because of low inventories. Statewide, inventory has shown a steady decline since the start of the year, with the unsold inventory index dropping from 6.6 months in January 2009 to 3.9 months in July 2009.

Supply Constraints Impacting Lower Priced Home Sales
Inventory levels, however, differ across price tiers and are tighter at the low-end market. The unsold inventory index for the low-end market has been around 3 to 4 months since the beginning of the year. There were 3.2 months of inventory in July 2009, as compared to 6.9 months for the same month last year. The middle tier had an inventory level of about 9 months early this year, but had dropped to 4.3 months in July, and was lower than 6.6 months a year ago. The inventory level of the high-end segment has declined since the start of this year, but was high in comparison to the rest of the market. The unsold inventory index for high-end homes was at 9.6 months in July 2009, slightly below 9.8 months for the same month last year.

With inventory levels well below the long-run average, a supply shortage at the low to middle-tiers has constrained sales in lower-priced homes and has contributed to an increase in the median price. The supply of homes is expected to increase later this year as the number of foreclosures continues to rise. However, the government and lenders’ efforts in modifying loans, combined with delays in processing the backlog of delinquencies may ease the number of defaulted loans, thus making a prediction on the number and timing of the flow of distressed properties less certain.

It should be noted that much of the current market activity is being financed by the government sponsored enterprises Fannie Mae and Freddie Mac (GSEs) and the Federal Housing Administration (FHA). In the absence of government sources of real estate financing, the market’s capacity to absorb distressed properties would be significantly reduced. Making permanent the current loan limits for high cost areas in California will be essential to the absorption of these impending foreclosures and to a recovering housing market.

3713 Corte Cancion, Thousand Oaks, CA 91360

2009-09-06T12:38:00.000-07:00

Home Prices on the Rise

2009-08-31T09:42:00.000-07:00

Home sales increased 12 percent in July in California compared with the same period a year ago, while the median price of an existing home declined 19.6 percent, according to the latest sales and price report released by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

Doesn't the title say, "Home Prices on the Rise?" Here are some facts...

· The median price of an existing, single-family detached home in California declined 19.6 percent in July compared with July 2008, but rose 3.9 percent compared with June. The median price statewide during July 2009 was $285,480. July marked the fifth consecutive month of month-to-month increases in the median price and the smallest yearly decline in 19 months.

· In Ventura County the stats get even better! The median price of an existing, single-family detached home in Ventura declined only 5% percent in July compared with July 2008, AND again, rose when compared with June. Making it the fifth consecutive month of month-to-month increases in the median price for Ventura County. Click on the graph above to enlarge.

· Closed escrow sales of existing, single-family detached homes in California totaled 553,910 in July at a seasonally adjusted annualized rate. The statewide sales figure represents what the total number of homes sold during 2009 would be if sales maintained the July pace throughout the year.

· Many housing analysts believe the first-time home buyers tax credit has helped fuel home sales in recent months. According to a survey of first-time home buyers, nearly 40 percent reported they would not have purchased a home if the tax credit was not offered. Because the tax credit has helped so many first-time buyers become homeowners, it is critical that Congress extends the credit beyond the Dec. 1 deadline, and includes all buyers, not just first-timers.

· C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in July 2009 was 3.9 months, compared with 6.9 months for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

· Thirty-year fixed-mortgage interest rates averaged 5.22 percent during July 2009, compared with 6.43 percent in July 2008, according to Freddie Mac. Adjustable-mortgage interest rates averaged 4.82 percent in July 2009, compared with 5.24 percent in July 2008.

What to do if Your Mortgage is Sold to Another Lender

2009-08-28T09:35:00.000-07:00

Approximately half of all mortgage loans are sold from one lender to another, often because the original lender is not equipped to collect payments, manage escrow accounts, pay taxes and insurance, respond to questions, and prepare payoff statements when the home is sold or refinanced. Some borrowers may receive letters in the mail alerting them of the sale of their loan a few days after closing, while others may not receive a notice for years.

In the mortgage-industry, this is called a “transfer of servicing,” and is a common practice. Borrowers should not be concerned about these changes, as the majority of lenders transfer their servicing rights to loans. Generally, the selling of a mortgage loan from one lender to another is a smooth transition and does not impact the borrower. Every so often though, there is a misstep by either the loan buyer or the loan seller.

Under the National Affordable Housing Act, when a mortgage loan is sold, the borrower is required to receive a “goodbye” letter from their current servicers at least 15 days before their next payment is due. The letter must state the name, address, and telephone number of the new servicer; the date the old company will stop collecting payments; and the date the new company will start accepting them. Under the Helping Families Save Their Homes Act, signed by President Obama on May 20, the new owner of the loan—which may or may not be the servicer—also must notify the borrower of the transfer within 30 days, known as the “hello” letter.

The “hello” letter should outline the same information as the “goodbye” letter sent from the former loan servicing company. Borrowers should be cautious if they receive a “hello” letter without receiving a “goodbye” letter, as they may be the intended victim of a scam by someone who is hoping to unlawfully receive the monthly mortgage payments. Concerned borrowers should contact their current loan servicer to verify if their loan has been transferred. If it hasn’t, authorities should be notified immediately.

In most cases, a mortgage payment sent to the old servicer automatically will be forwarded to the new servicer for a brief amount of time, typically 60 days. However, if payments are not sent to the correct servicer, they could become lost, and the homeowner may incur late fees.

2121 El Monte Drive, Thousand Oaks, CA 91362

2009-08-27T11:03:00.000-07:00

California Real Estate Market Snapshot - August '09

2009-08-25T09:27:00.000-07:00

Market Report

August, 2009	Current Period	Last Period	Last Year	Month-to-Month Change	Year-to-Year Change
Existing Home Sales	514,110	546,750	427,910	-6.0	20.1%
Median Home Price	$274,740	$263,600	$373,100	4.2%	-26.4%
Unsold Inventory Index	4.1 months	4.6 months	7.6 months	-10.9%	-46.1%
Median Days On Market	44.3	52.4	49.0	-15.5%	-9.6%
30-Year Fixed Mortgage	5.42%	4.86%	6.32%	0.56%	-0.90%

Source: California Association of REALTORS®

Market Analysis:
The four primary economic indicators that affect real estate are interest rates, job market, affordability, and consumer confidence. By analyzing these, we understand why the market is improving, and we can predict where the market is trending. Interest rates -Your monthly mortgage payment is directly affected by the interest rate you pay. For example, if you have a $300,000 mortgage at 5% amortized over 30 years, your monthly payment is $1,610. If your interest rate is 8% on the same amount, your monthly payment is $2,201. A $591 monthly payment difference makes it clear that interest rates are important. Federal Reserve Chairman Bernanke has indicated that he intends to keep interest rates low...at least for the next few months. Job Market - Obviously, people need income in order to buy a home. With unemployment over 10% in California, many potential homeowners are unemployed or in fear of losing their job. There is definitely a need for the job market to grow stronger. Affordability - Over the past four years, home prices have depreciated from 30 to 40% in most areas of California. We may never see prices this affordable again. In fact, in the lower price ranges, we are already experiencing some appreciation. Consumer Confidence - This is, perhaps, the most important factor of all. When consumers believe the market is good, they are more inclined to make purchases. With interest rates very low, prices down, and consumer confidence on the rise, it is easy to predict a bright future for California real estate.

First-Time Home Buyers Should Start House-Hunting Now to Qualify for Tax Credit

2009-08-21T10:04:00.000-07:00

First-time homebuyers—those who have not owned a home for at least three years—may be eligible for the $8,000 federal tax credit, but the window of opportunity is closing rapidly. To qualify for the credit, the buyer must close escrow by midnight on Nov. 30, when the tax credit expires. Buyers hoping to take advantage of this benefit are advised to start house-hunting early, as the buying and lending processes takes time.

Here's what first-time buyers need to know...

· Finding the right house can take some time, so REALTORS® recommend home buyers start looking for a home as soon as they are able and ready to purchase. Buyers also should build in extra time to accommodate the lending process, which is taking approximately two weeks longer to process this year compared with last year.

· The tax credit is equal to 10 percent of the purchase price, up to $8,000, subject to income limits. Single taxpayers are eligible if their modified adjusted gross income is $75,000 or less, while married taxpayers filing jointly must have a modified adjusted gross income of $150,000 or less.

· Only primary residences are eligible for the federal tax credit, including new or existing single-family homes, townhouses, condominiums, manufactured homes, custom homes, and houseboats. Vacation homes and investment properties do not qualify.

· Purchases must be arm’s-length transactions, meaning the seller cannot be the buyer’s parent, grandparent, child, grandchild or spouse.

· Married people filing as such cannot claim the credit if either spouse has owned a primary residence within the last three years. However, unmarried joint purchasers may allocate the credit in any way they see fit, as long as it does not exceed the $8,000 maximum.

· *IMPORTANT* The government WILL allow those who finance their purchases with a federally insured loan to apply their anticipated credit immediately toward closing costs or as additional down payment, rather than waiting until they file their 2009 taxes to receive the refund.

Buy Foreclosures Now–Before It’s Too Late

2009-08-14T09:11:00.000-07:00

Buyers in many areas are finding that real-estate owned (REO) properties—homes that have been repossessed by lenders and put back on the market—often are selling in one day, sometimes faster. According to the founder of Foreclosure.com, offers on REOs are coming in immediately after the listing comes on the market, and some homes have been put into contract in less than 90 minutes.

Here's what buyers need to know...

· On average, inventories of California homes priced less than $300,000—the most-popular price point for foreclosure buyers—have shrunk from a nearly 10-month supply a year ago, to less than a three and a half-month supply in July, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

· Because inventory levels of homes priced in the lower end of the market are low, some buyers are finding that sellers are not willing to negotiate on the price. In many instances, sellers expect the first offer to be the best and highest possible for the buyer.

· Instead of holding onto REOs for the best prices—and paying the property taxes and maintenance and heating costs—many banks are selling the homes as quickly as possible, according to Foreclosure.com. “In this market, if they can liquidate them fast, it makes more sense to get them off the books,” said the company’s founder.

· Despite efforts by lenders and the government to prevent foreclosures, many economists and housing analysts predict there will be another wave of foreclosures by year’s end, and many of those properties will be offered for sale. According to the U.S. Comptroller of the Currency, 53 percent of loans that were modified in the first half of 2008 fell back into arrears.