Calif. Median Home Price - June 09 $274,740
Calif. Highest Median Home Price by Region June 09: Santa Barbara So. Coast - $850,000
Calif. Lowest Median Home Price by Region June 09: High Desert - $108,600
Calif. First Time Buyer Affordability Index - First Quarter 2009: 69%
Mortgage rates for week ending 7/23/09:
30 yr. fixed: 5.2% fees/points: 0.7%
15 yr. fixed: 4.68% fees/points: 0.7%
1 yr. adjustable: 4.77% fees/points: 0.6%
Source: CAR and Freddie Mac
Thursday, July 30, 2009
New Listing! 484 Linfield pl. # H - Sold
$ 319,000
Inviting & Immaculate 2bd/1ba w/ spaciousness that provides sanity & room to roam located on a quaint cul-de-sac. New paint & carpet, nice appliances demonstrate pride of ownership. Dual glazed windows, RO unit, satellite dish, built-in dishwasher, refrigerator, range & stack washer & dryer included. Park is conveniently located nearby & the best of shopping and leisure is minutes away.
Give me a call or email me for an easy showing. Click HERE for more information and photos on the property.
Tuesday, July 28, 2009
Home Prices Post Monthly Increase
U.S. home prices continued their multiyear slide in May, according to the S&P Case-Shiller home-price indexes, although the indexes showed their fourth-straight month of slightly smaller declines and increased month-to-month for the first time in nearly three years.
Sixteen of 20 major metropolitan areas posted price declines of more than 10% from a year earlier, with the Sun Belt continuing to be hit the hardest. Nationally, home prices are at levels similar to the middle of 2003.
Separately, U.S. consumer confidence retreated once again in July, a report released Tuesday said.
David M. Blitzer, chairman of S&P's index committee, said the pace of descent appears to be slowing. "While many indicators are showing signs of life in the U.S. housing market, we should remember that on a year-over-year basis home prices are still down about 17% on average across all metro areas, so we likely do have a way to go before we see sustained home-price appreciation," he said.
As of May, the 10-city index is down one-third from its mid-2006 peak and the 20-city is down 32%. The two indexes posted their first monthly increases in 34 months.
The indexes showed prices in 10 major metropolitan areas fell 17% in May from a year earlier and edged up 0.4% from April. In 20 major metropolitan areas, home prices also dropped 17% from the prior year and rose 0.5% from April.Thirteen regions reported a slight price increase in May from a month earlier, and four of the 20 areas saw a smaller decline compared with April.
Month-to-month gainers were led by Cleveland, which posted a 4.1% gain, and Dallas, which grew 1.9%. Las Vegas again fared worst, dropping 2.6%.
For the 14th straight month, no region was able to avoid a year-over-year decline. Phoenix and Las Vegas were again the worst performers, with drops of 34% and 32%, respectively. San Francisco again followed with a 26% decline. Phoenix is down 55% from its peak in June 2006.
The data come a few days after data from the Commerce Department showed new-home sales soared in June, marking the third increase in a row, although prices fell 12% amid too much supply. The National Association of Realtors also said last week that existing-home sales rose again in June, though prices are down sharply compared to a year earlier.
Source: Wall Street Journal
Sixteen of 20 major metropolitan areas posted price declines of more than 10% from a year earlier, with the Sun Belt continuing to be hit the hardest. Nationally, home prices are at levels similar to the middle of 2003.
Separately, U.S. consumer confidence retreated once again in July, a report released Tuesday said.
David M. Blitzer, chairman of S&P's index committee, said the pace of descent appears to be slowing. "While many indicators are showing signs of life in the U.S. housing market, we should remember that on a year-over-year basis home prices are still down about 17% on average across all metro areas, so we likely do have a way to go before we see sustained home-price appreciation," he said.
As of May, the 10-city index is down one-third from its mid-2006 peak and the 20-city is down 32%. The two indexes posted their first monthly increases in 34 months.
The indexes showed prices in 10 major metropolitan areas fell 17% in May from a year earlier and edged up 0.4% from April. In 20 major metropolitan areas, home prices also dropped 17% from the prior year and rose 0.5% from April.Thirteen regions reported a slight price increase in May from a month earlier, and four of the 20 areas saw a smaller decline compared with April.
Month-to-month gainers were led by Cleveland, which posted a 4.1% gain, and Dallas, which grew 1.9%. Las Vegas again fared worst, dropping 2.6%.
For the 14th straight month, no region was able to avoid a year-over-year decline. Phoenix and Las Vegas were again the worst performers, with drops of 34% and 32%, respectively. San Francisco again followed with a 26% decline. Phoenix is down 55% from its peak in June 2006.
The data come a few days after data from the Commerce Department showed new-home sales soared in June, marking the third increase in a row, although prices fell 12% amid too much supply. The National Association of Realtors also said last week that existing-home sales rose again in June, though prices are down sharply compared to a year earlier.
Source: Wall Street Journal
Sunday, July 26, 2009
Home Sales, All Over the Map
Memo to those wondering when the housing slump will end: It depends on where you live.
The Wall Street Journal’s latest quarterly survey of housing-related data shows that the market for residential real estate is healing at varying speeds in different parts of the country. The Northern Virginia suburbs of Washington, D.C., and many areas in California that are near employment centers have shown signs of stabilizing, housing analysts say, while the outlook in other places—much of Florida, Detroit and Las Vegas—still appears bleak.
Thursday morning’s report from the National Association of Realtors on June home sales is sure to inflame the debate on whether the housing market is bottoming, but clear answers are likely to remain elusive—partly because of the variations in performance around the nation.
In June, home sales were up sharply from the depressed year-earlier levels in Orlando, Minneapolis, Southern California and the San Francisco Bay Area, according to reports from local Realtor groups and MDA DataQuick, a research firm. But sales dropped 50% in Manhattan, according to Miller Samuel Inc., a New York-based appraisal firm. Sales also declined in Long Island, N.Y., and Charlotte, N.C., among other areas.
A flood of foreclosed homes sold by banks over the past year has crushed prices of low- to mid-range houses down to levels that attract investors and first-time buyers in some areas, notably parts of California.
For Amy Musial, who manages a Starbucks in Sacramento buying a house became “a no-brainer” this spring once she and her husband realized that their monthly payments would be slightly lower than the rent they had been paying on a two-bedroom apartment. They paid about $229,000 for a three-bedroom house that had been through a foreclosure. Several years ago, the same house could have sold for more than $350,000, estimates Shelley Hescock, the real-estate agent who represented the Musials.
But prices of higher-end homes around the country have been slower to fall because there have been fewer foreclosure sand other forced sales of such properties. That is changing as more owners of fancy homes lose jobs, fall behind on mortgages or chop asking prices to realistic levels.
At both the high and low ends of the market, there are still plenty of reasons for caution. Rising unemployment is removing potential buyers and turning others into sellers. Credit remains tight. Appraisers have become more conservative and their estimates are causing many potential sales to fall through. Large numbers of foreclosed homes are likely to weigh on the market for at least another year or two. And a federal tax credit of as much as $8,000 for first-time homebuyers ends Nov. 30.
“People are being more conservative with what they’re buying,” says Matthew Montgomery, a real-estate agent at Hammond Residential who works in the Boston suburbs of Newton and Brookline, Mass. In general, he adds, “the bigger the house, the harder it is to sell.”
In the Washington, D.C., area, government-related employment has held up and helped revive housing demand, says Jody Kahn, an analyst at John Burns Real Estate Consulting, a research firm. “Good locations in Alexandria and Fairfax [Va.] are seeing some emerging price stability and even small increases,” Ms. Kahn says, and Maryland’s Montgomery County “is showing price stability.” More remote suburbs will take longer to recover, she says.
In California, San Diego and Sacramento both have become much more affordable, she says. Ms. Kahn also thinks prospects are relatively good in Denver; Raleigh, N.C.; San Jose, Calif.; and the Texas cities of Austin and San Antonio—areas that generally avoided the housing bubble and so don’t have as much need to adjust.
Thomas Lawler, an independent housing economist in Leesburg, Va., says areas that seem to be nearing stability include San Diego, Sacramento, Minneapolis, Boston and the Virginia suburbs of Washington.
Among metro areas that “still have a long road to recovery” are Detroit, Phoenix, Las Vegas, Miami-Fort Lauderdale and Chicago, says Ms. Kahn. Mr. Lawler includes New York, Seattle and Portland, among others, in this category. Problems in these areas include high unemployment and large numbers of vacant homes.
Of course, there are lots of variations within metro areas. The most appealing neighborhoods, offering short commutes and good schools, may vastly outperform marginal areas that thrived during the boom.
The job market outlook is a major wild card for those seeking to divine the direction of house prices. Looking ahead one year, Moody’s Economy.com sees the metro areas of Washington, Minneapolis, Houston and Dallas among those likely to have unemployment rates below the national average. Those expected to be above the national average include Detroit, Las Vegas, Los Angeles, Miami, Orlando, Sacramento and Portland, Ore.
Unemployment may be the most important factor in assessing a metro area’s housing-market prospects, says Mark Zandi, chief economist at Moody’s Economy.com. “If people don’t have jobs or fear losing their jobs ,then buying homes is out of the question,” he says.
Source: Wall Street Journal
The Wall Street Journal’s latest quarterly survey of housing-related data shows that the market for residential real estate is healing at varying speeds in different parts of the country. The Northern Virginia suburbs of Washington, D.C., and many areas in California that are near employment centers have shown signs of stabilizing, housing analysts say, while the outlook in other places—much of Florida, Detroit and Las Vegas—still appears bleak.
Thursday morning’s report from the National Association of Realtors on June home sales is sure to inflame the debate on whether the housing market is bottoming, but clear answers are likely to remain elusive—partly because of the variations in performance around the nation.
In June, home sales were up sharply from the depressed year-earlier levels in Orlando, Minneapolis, Southern California and the San Francisco Bay Area, according to reports from local Realtor groups and MDA DataQuick, a research firm. But sales dropped 50% in Manhattan, according to Miller Samuel Inc., a New York-based appraisal firm. Sales also declined in Long Island, N.Y., and Charlotte, N.C., among other areas.
A flood of foreclosed homes sold by banks over the past year has crushed prices of low- to mid-range houses down to levels that attract investors and first-time buyers in some areas, notably parts of California.
For Amy Musial, who manages a Starbucks in Sacramento buying a house became “a no-brainer” this spring once she and her husband realized that their monthly payments would be slightly lower than the rent they had been paying on a two-bedroom apartment. They paid about $229,000 for a three-bedroom house that had been through a foreclosure. Several years ago, the same house could have sold for more than $350,000, estimates Shelley Hescock, the real-estate agent who represented the Musials.
But prices of higher-end homes around the country have been slower to fall because there have been fewer foreclosure sand other forced sales of such properties. That is changing as more owners of fancy homes lose jobs, fall behind on mortgages or chop asking prices to realistic levels.
At both the high and low ends of the market, there are still plenty of reasons for caution. Rising unemployment is removing potential buyers and turning others into sellers. Credit remains tight. Appraisers have become more conservative and their estimates are causing many potential sales to fall through. Large numbers of foreclosed homes are likely to weigh on the market for at least another year or two. And a federal tax credit of as much as $8,000 for first-time homebuyers ends Nov. 30.
“People are being more conservative with what they’re buying,” says Matthew Montgomery, a real-estate agent at Hammond Residential who works in the Boston suburbs of Newton and Brookline, Mass. In general, he adds, “the bigger the house, the harder it is to sell.”
In the Washington, D.C., area, government-related employment has held up and helped revive housing demand, says Jody Kahn, an analyst at John Burns Real Estate Consulting, a research firm. “Good locations in Alexandria and Fairfax [Va.] are seeing some emerging price stability and even small increases,” Ms. Kahn says, and Maryland’s Montgomery County “is showing price stability.” More remote suburbs will take longer to recover, she says.
In California, San Diego and Sacramento both have become much more affordable, she says. Ms. Kahn also thinks prospects are relatively good in Denver; Raleigh, N.C.; San Jose, Calif.; and the Texas cities of Austin and San Antonio—areas that generally avoided the housing bubble and so don’t have as much need to adjust.
Thomas Lawler, an independent housing economist in Leesburg, Va., says areas that seem to be nearing stability include San Diego, Sacramento, Minneapolis, Boston and the Virginia suburbs of Washington.
Among metro areas that “still have a long road to recovery” are Detroit, Phoenix, Las Vegas, Miami-Fort Lauderdale and Chicago, says Ms. Kahn. Mr. Lawler includes New York, Seattle and Portland, among others, in this category. Problems in these areas include high unemployment and large numbers of vacant homes.
Of course, there are lots of variations within metro areas. The most appealing neighborhoods, offering short commutes and good schools, may vastly outperform marginal areas that thrived during the boom.
The job market outlook is a major wild card for those seeking to divine the direction of house prices. Looking ahead one year, Moody’s Economy.com sees the metro areas of Washington, Minneapolis, Houston and Dallas among those likely to have unemployment rates below the national average. Those expected to be above the national average include Detroit, Las Vegas, Los Angeles, Miami, Orlando, Sacramento and Portland, Ore.
Unemployment may be the most important factor in assessing a metro area’s housing-market prospects, says Mark Zandi, chief economist at Moody’s Economy.com. “If people don’t have jobs or fear losing their jobs ,then buying homes is out of the question,” he says.
Source: Wall Street Journal
Thursday, July 23, 2009
Fast Facts
California Median Home Price – May 09: $267,570
California Highest Median Home Price Region, May 09: Santa Barbara So. Coast $875,000
California Lowest Median Home Price Region May 09: High Desert $106,210
California First-Time Buyer Affordability Index – First-Quarter 2009: 69 percent
Mortgage Rates - week ending 7/16/09 30-yr fixed: 5.14% Fees/points: 0.7% 15-yr. fixed: 4.63% Fees/points: 0.7% 1-yr. adjustable: 4.76% Fees/points: 0.5% (Source: Freddie Mac)
Dept. of Real Estate Issues Fraud Warning About Loan Modification Programs
The DRE recently issued a fraud warning alerting consumers about loan modification scams and informing consumers of what they can do to protect themselves. The alert is available in both English and Spanish. Last July, the DRE had fewer than 10 complaints involving loan modification companies; today the department has 750 pending investigations. In addition, since last October, the DRE has filed more than 200 desist and refrain orders. A list of the companies and persons the DRE has filed an action against can be viewed at http://www.dre.ca.gov/cons_drs.asp.
It is worth noting that not all firms who collect advance fees for loan modification services do so legally, the DRE said. In general, only licensed real estate brokers and attorneys operating within the scope of their license may collect advance fees. Real estate brokers must have their advance fee agreement reviewed by the DRE prior to its use to ensure it is compliant with real estate law.
Source: C.A.R.
Monday, July 20, 2009
New Federal Reserve Regulations - Provide Disclosures
Reporting from Washington – If you’re applying for a loan to buy a primary or secondary home, or planning to refinance, you should be aware of a little-publicized set of federal consumer-protection rules that take effect July 20.
Among other key changes, the new Federal Reserve regulations require lenders to provide you with initial disclosures of your estimated mortgage costs within three business days of your loan application. If you don’t get them, you can pull the plug.
The rules also prohibit lenders from collecting any fees – except a reasonable charge for checking your credit – until you’ve been given the loan-cost disclosures.
This means no more out-of-pocket upfront application charges until you’ve received the truth-in-lending disclosures and an annual percentage rate (APR) calculation of those costs.
Because many mortgage brokers and lenders traditionally have collected fees covering appraisal, credit and various other charges at the time of application – sometimes amounting to hundreds of dollars – this will be significant change in procedure for the lending industry.
The rules also prohibit quickie closings on loans by requiring a seven-day waiting period after applicants are handed their early disclosures or the disclosures are mailed. You’ll have a week to think about the transaction and decide whether it’s right for you. Final truth-in-lending disclosures are due three business days before closing.
Here’s an even more sweeping change for applications on or after July 30: The new Fed rules require lenders to deliver a copy of the real estate appraisal to you three business days before the scheduled closing on the loan.
In the past, even though federal regulations guaranteed that consumers could request and obtain a copy of the appraisal, lenders and homebuyers frequently ignored that right. Many consumers had no knowledge of this right because no one in the home purchase, financing or settlement process told them about it.
Now the timing of the loan closing – which is the financial ballgame for loan officers, realty agents, title and escrow officials – will depend upon your receipt of the appraisal in advance. The three-day rule can be waived if you don’t think receiving the appraisal is necessary.
Another significant change under the new rules: If the APR on the early truth-in-lending disclosure increases by more than one-eighth of a percentage point (0.125), the lender will now be required to “redisclose” – that is, provide you with a corrected version and allow you an additional seven business days to consider the transaction before settlement.
What might cause the APR to increase after the initial disclosure? Lots of things: Say you left your initial rate on the loan to float with the market, but rates increase.
You’ll need to get an amended truth-in-lending disclosure. Or perhaps the lender got inaccurate estimates of costs from third-party participants in the transaction, such as the settlement or escrow company. Or say that unexpected eleventh-hour junk fees materialize.
All these events, which have been frequent sources of consumer complaints this decade, could force the lender to redisclose loan costs and set back timing for the settlement.
What are some of the likely repercussions of the Fed’s new mandates? First, the traditional approach of aiming in advance for a date-certain settlement target for home loan transactions almost certainly will be affected.
Closing dates will be more closely tied to lenders’ and settlement agents’ accurate estimates and their ability to deliver disclosures and appraisals by the required dates. If appraisers are backlogged and can’t produce valuation reports quickly, settlements will have to be delayed.
Second, the purposes of the rules are to afford consumers better access to, and more time to consider, key elements of what are major financial transactions for most people. There might be fewer instances of last-minute closing-date surprises fees, where buyers are slammed with hundreds of dollars of charges they’d never expected. But nobody can say that for sure.
Finally, the rules may well trigger waves of litigation if lenders and their business partners are not scrupulous in their compliance. There is an active and aggressive segment of the legal profession that specializes in going after banks and mortgage companies for truth-in-lending violations. Don’t be surprised if you hear of lawsuits seeking cancellation of mortgage deals because timing deadlines were not met or appraisals not received.
As David Berenbaum, executive vice president of the National Community Reinvestment Coalition, put in an email comment: “Consumer advocates will closely monitor” compliance with the new Fed regulations, and the lending industry can expect “civil litigation against bad actors.”
Source: Los Angeles Times
Friday, July 17, 2009
Lenders Urged to Move Quicker on Mortgage Modifications
The Obama administration recently sent a letter to the chief executives of the 25 lenders who have signed up for the Making Home Affordable program, urging them to move quicker to help troubled homeowners.
In the two-page letter, Treasury Secretary Timothy Geithner and Secretary for Housing and Urban Development (HUD) Shaun Donovan, asked the servicers to hire more staff, expand call centers and improve the training of employees handling calls from borrowers. The banks also were told to designate a senior liaison for the program and to prepare for a July 28 meeting with senior Treasury and HUD officials to discuss how to fully implement the effort.
“We are asking that all services expand servicing capacity and improve the execution quality of loan modifications in order to help the sizeable number of homeowners at risk of foreclosure and eligible for the program,” the letter said.
The administration will begin issuing monthly reports by Aug. 4 detailing lenders’ performance, including how many modifications they have implemented. They will be judged by new criteria, such as how long it takes borrowers to get help over the phone and the accuracy of the information they are provided. Freddie Mac, the government-controlled mortgage financing company, is developing a “second look” program to audit the applications of borrowers who have been denied under the program.
Fast Facts
California Median Home Price – May 09: $267,570
California Highest Median Home Price Region, May 09: Santa Barbara So. Coast $875,000
California Lowest Median Home Price Region May 09: High Desert $106,210
California First-Time Buyer Affordability Index – First-Quarter 2009: 69 percent
Mortgage Rates – week ending 7/9/09 30-yr. fixed: 5.20% Fees/points: 0.7% 15-yr. fixed: 4.69% Fees/points 0.7% 1-yr adjustable: 4.82% Fees/points: 0.6% (Source Freddie Mac)
California New-Home Market Slowly Improving
The monthly California Building Industry Association/Hanley Wood Market Intelligence (HWMI) New Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more declined 26 percent compared with May 2008, but sales improved from the 31 percent decline in the prior month and is the fourth consecutive month of that improvement trend.
During May, 3,019 new homes and condominiums were sold in the subdivisions tracked by HWMI, compared with 4,094 in May 2008. Sales of single-family homes were down by 30 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were down 24 percent and sales of condominiums were off by 16 percent.
Compared with the same period last year, the median base price of homes sold dropped by 5 percent.
“The incremental gains since March are counter to this typical seasonal trend, which suggests the market has found the bottom and is truly stabilizing, albeit slowly,” said Jonathan Dienhart, Director of Published Research for HWMI. “With the state tax credits for home purchases running out and continued troubles in the broader economy, it is not yet clear that an actual recovery is at hand.
Source: C.A.R.
Wednesday, July 15, 2009
3005 Paseo Tranquillo - Sold
$749,000
Welcome mat out for a winning combination: upscale neighborhood homes; inviting 2 bedroom, 1 bath San Roque charmer; permitted & detached Living Quarters with full bath; spacious and useable lot- 50x150; Peabody School; relaxing, secluded deck & central location close to shopping & restaurants. Nice peak of mountain view from living room picture window & a nicely updated kitchen w/lots of storage.
Give me a call or email me for an easy showing. Click HERE for more information and photos on the property.
Thursday, July 9, 2009
2009 Survey of California Home Buyers
Favorable home prices, record-low interest rates, and the belief that rates will rise in the near future were the primary motivators leading home buyers to purchase in 2009 compared with last year, according to C.A.R.’s “2009 Survey of California Home Buyers,” released this week. Sixty-eight percent of buyers said price decreases motivated them to buy a home, while 39 percent reported low interest rates helped them move to a better location. Twenty-three percent claimed the likelihood that rates will move up as the motivating factor.
“After back-to-back years of sharp declines, home sales in California rebounded in 2008 and early 2009,” said C.A.R. President James Liptak. “The increases reflected the combination of favorable prices, low mortgage rates, and home buyer tax credits, fueled primarily by sales of distressed properties that accounted for more than half of the state’s transactions. Housing affordability has improved dramatically in response to the decline in home prices along with historically low mortgage rates, creating a tremendous opportunity for home buyers in California.”
Forty-nine percent of all buyers purchased a home through a traditional market sale, while 38 percent purchased a REO/bank-owned property, according to the survey. Reflecting the difficulty in closing short sales – properties selling for less than the loan amount – only 13 percent of buyers purchased a shot-sale property. Home buyers who purchased a REO or bank-owned property experienced the highest level of difficulty in obtaining financing, compared with a more traditional transaction. They rated the level of difficulty as 8.9 (on a scale of 1 to 10, 10 being the most difficult) compared to 7.7 for home buyers with a traditional market sale and 7.6 for short-sale home buyers.
Source: C.A.R.
Home Affordability Refinance Eligibility Expanded to 125 Percent of Loan-To-Value
Fannie Mae las week announced the Home Affordability Refinance Program (HARP) will be expanded to permit refinancing of existing Fannie Mae and Freddie Mac loans with current loan-to-value ratios (LTVs) up to 125 percent, an increase from the current LTV limit of 105 percent. Fannie Mae characterized the expansion as a move to help lenders serve more borrowers with a demonstrated track record of paying their mortgages, but who have been unable to refinance due to significantly property value declines. Loans with LTVs above 105 percent will be eligible for a same service refinance under the Refi Plus manual underwriting option, and the new loan must be a fully amortizing fixed-rate mortgage with a term greater than 15 years, up to 30 years. Fannie Mae is evaluating potential updates to Desktop Underwriter to allow LTV ratios above 105 percent.
Source: C.A.R.
Tuesday, July 7, 2009
Complaints Erupt About Lowball Home Valuations
Reporting from Washington – It’s by far the hottest controversy in real estate this summer, and it could directly affect the value of your house – probably negatively – by tens of thousands of dollars.
The issue concern lowball valuations and the new rules guiding appraisers in both price-depressed and rebounding markets. Consider these snapshots of what’s going on:
· In San Diego, Steve Doyle, division president for Brookfield Homes, is trying to close out the final 20 houses of a 120-unit single-family subdivision. Prices range from $340,000 to $350,000. But recently there’s been a major hitch: Appraisers assigned by banks are coming in with valuations $60,000 or more below Doyle’s selling prices. The appraisers, who Doyle says are unfamiliar with local market trends, inexperienced or both, are using distressed sales – foreclosures and short sales for less than the amount owed on the mortgage – as their “comparables.” Some of the distressed properties are in poor condition, and all of them offer fewer amenities, Doyle said.
· In Wilmington, N.C., a loan applicant with a house in excellent condition and an unblemished payment record sought to refinance into a 4.74% mortgage. She had purchased the property four years ago for $160,000 and made about $20,000 worth of improvements in the interim. Her loan application, said Paul Skeens, president of Colonial Mortgage Group of Waldorf, Md., was “a slam dunk. Nothing to it.” The house was worth $180,000 to $200,000, according to a local realty estimate.
· In the suburbs near Cleveland, Enzo Perfetto, manager of Enzoco Homes, builds custom houses on clients’ lots. Recently, Perfetto said, banks have begun assigning appraisers from far outside the area to value lots as part of mortgage packages on new homes. Some of the comparables they use are foreclosure situations, and that depresses land valuations. A young couple who paid $75,000 for their lot recently had it valued at $30,000 by an out-of-area appraiser who only looked at online data, Perfetto said, discouraging the young couple from proceeding.
“I think the pendulum is swinging way too far in the wrong direction on appraisals,” Perfetto said. Bank-assigned appraisers often “don’t know the local market and they’re going for low numbers to be ‘safe.’”
Complaints about lowball appraisals – from builders, realty agents, consumers and mortgage companies – have erupted since May1, when government-sponsored mortgage investors Fannie Mae and Freddie Mac put their new appraisal rules into effect nationwide. Critics charge that the new system is foresting the use of appraisers willing to work for low fees – sometimes 50% below previous standards – and who are willing to conduct home appraisals far outside their typical areas of activity.
The Fannie-Freddie system – known as the Home Valuation Code of Conduct – is complicated by the fact that it is a byproduct of a legal settlement in 2008 between New York Atty. Gen. Andrew M. Cuomo and the two mortgage companies.
Under the code, appraisers are now routinely assigned by appraisal management companies rather than being selected by local mortgage companies or loan officers. The management companies pocket as much as 40% to 50% of the appraisal fee paid by the consumer.
Frustration with the new system boiled over and made its way to Capitol Hill late last month. The National Assn. of Home Builders called for an immediate change in the rules governing the use of foreclosures, short sales and other distress transactions as comparables for appraisals on non-distressed, typical homes.
Rep. Travis W. Childers (D-Miss.) and Rep. Gary G. Miller (R-Diamond Bar) have introduced legislation calling for an 18-month moratorium on the appraisal code. In identical letters to James B. Lockhart, the top regulator of Fannie Mae and Freddie Mac, and Cuomo, the National Assn. of Realtors also requested a moratorium and complained that the code was raising consumers’ costs, distorting property values and killing sales.
Asked for comment, Lockhart, director of the Federal Housing Finance Agency, said through a spokesman that his agency was “monitoring” the situation and considered “the views of market participants important.”
Bottom line: Be aware of the issue. It affects your equity, even if you’re not currently buying or selling. And watch whether Congress fixes the problem.
Source: L.A. Times
The issue concern lowball valuations and the new rules guiding appraisers in both price-depressed and rebounding markets. Consider these snapshots of what’s going on:
· In San Diego, Steve Doyle, division president for Brookfield Homes, is trying to close out the final 20 houses of a 120-unit single-family subdivision. Prices range from $340,000 to $350,000. But recently there’s been a major hitch: Appraisers assigned by banks are coming in with valuations $60,000 or more below Doyle’s selling prices. The appraisers, who Doyle says are unfamiliar with local market trends, inexperienced or both, are using distressed sales – foreclosures and short sales for less than the amount owed on the mortgage – as their “comparables.” Some of the distressed properties are in poor condition, and all of them offer fewer amenities, Doyle said.
· In Wilmington, N.C., a loan applicant with a house in excellent condition and an unblemished payment record sought to refinance into a 4.74% mortgage. She had purchased the property four years ago for $160,000 and made about $20,000 worth of improvements in the interim. Her loan application, said Paul Skeens, president of Colonial Mortgage Group of Waldorf, Md., was “a slam dunk. Nothing to it.” The house was worth $180,000 to $200,000, according to a local realty estimate.
But when an appraiser with little local knowledge was sent in by a bank to value the house, he chose two short-sale properties that had both closed in the mid-$140,000 range and one inheritance sale around $155,000. The last property was “in horrible condition, “Skeens said. The deal-paralyzing appraiser value that came in for the cream-puff refi: $149,000.
· In the suburbs near Cleveland, Enzo Perfetto, manager of Enzoco Homes, builds custom houses on clients’ lots. Recently, Perfetto said, banks have begun assigning appraisers from far outside the area to value lots as part of mortgage packages on new homes. Some of the comparables they use are foreclosure situations, and that depresses land valuations. A young couple who paid $75,000 for their lot recently had it valued at $30,000 by an out-of-area appraiser who only looked at online data, Perfetto said, discouraging the young couple from proceeding.
“I think the pendulum is swinging way too far in the wrong direction on appraisals,” Perfetto said. Bank-assigned appraisers often “don’t know the local market and they’re going for low numbers to be ‘safe.’”
Complaints about lowball appraisals – from builders, realty agents, consumers and mortgage companies – have erupted since May1, when government-sponsored mortgage investors Fannie Mae and Freddie Mac put their new appraisal rules into effect nationwide. Critics charge that the new system is foresting the use of appraisers willing to work for low fees – sometimes 50% below previous standards – and who are willing to conduct home appraisals far outside their typical areas of activity.
The Fannie-Freddie system – known as the Home Valuation Code of Conduct – is complicated by the fact that it is a byproduct of a legal settlement in 2008 between New York Atty. Gen. Andrew M. Cuomo and the two mortgage companies.
Under the code, appraisers are now routinely assigned by appraisal management companies rather than being selected by local mortgage companies or loan officers. The management companies pocket as much as 40% to 50% of the appraisal fee paid by the consumer.
Frustration with the new system boiled over and made its way to Capitol Hill late last month. The National Assn. of Home Builders called for an immediate change in the rules governing the use of foreclosures, short sales and other distress transactions as comparables for appraisals on non-distressed, typical homes.
Rep. Travis W. Childers (D-Miss.) and Rep. Gary G. Miller (R-Diamond Bar) have introduced legislation calling for an 18-month moratorium on the appraisal code. In identical letters to James B. Lockhart, the top regulator of Fannie Mae and Freddie Mac, and Cuomo, the National Assn. of Realtors also requested a moratorium and complained that the code was raising consumers’ costs, distorting property values and killing sales.
Asked for comment, Lockhart, director of the Federal Housing Finance Agency, said through a spokesman that his agency was “monitoring” the situation and considered “the views of market participants important.”
Bottom line: Be aware of the issue. It affects your equity, even if you’re not currently buying or selling. And watch whether Congress fixes the problem.
Source: L.A. Times
Monday, July 6, 2009
Best Buys
Here are some of the properties I think you readers would like:
3647 Sunset Dr.
Wonderfully and tastefully updated 3 bedroom, 2 bathroom home in San Roque in Monte Vista & La Colina School Districts. Nice area; Good value!
1240 Santa Terrisita Dr.
Very good ocean/island/city views from recent remodeled home. 3 bedroom 2 bathroom home almost 2,500 square feet on approximately 3/4 acre. Good upscale neighborhood.
507 San Onofre Rd.
3 bedroom, 2 bathroom home in Summerland for under $700,000. Fixer home on approximately 1/4 acre.
Click on the links to see more information and photos of the properties. The links will expire one week from the date of this post. Stay tuned for more Best Buy posts in the future!
3647 Sunset Dr.
Wonderfully and tastefully updated 3 bedroom, 2 bathroom home in San Roque in Monte Vista & La Colina School Districts. Nice area; Good value!
1240 Santa Terrisita Dr.
Very good ocean/island/city views from recent remodeled home. 3 bedroom 2 bathroom home almost 2,500 square feet on approximately 3/4 acre. Good upscale neighborhood.
507 San Onofre Rd.
3 bedroom, 2 bathroom home in Summerland for under $700,000. Fixer home on approximately 1/4 acre.
Click on the links to see more information and photos of the properties. The links will expire one week from the date of this post. Stay tuned for more Best Buy posts in the future!
Thursday, July 2, 2009
Fast Facts
Calif. Median Home Price - May 09: $267,570
Calif. Highest Median Home Price by C.A.R. Region April 09: Santa Barbara So. Coast $875,000
Calif. Lowest MEdian Home Price by C.A.R. Region April 09: High Desert $106,210
Calif. First-Time Buyer Affordability Index - First Quarter 2009: 69 percent
Mortgage Rates - Week Ending 6/25/09 30-yr. fixed: 5.42% Fees/points: 0.7% 15-yr. fixed: 4.87% Fees/points: 0.7% 1-yr. adjustable: 4.93% Fees/points: 0.7%
Source: C.A.R., Freddie Mac
Calif. Highest Median Home Price by C.A.R. Region April 09: Santa Barbara So. Coast $875,000
Calif. Lowest MEdian Home Price by C.A.R. Region April 09: High Desert $106,210
Calif. First-Time Buyer Affordability Index - First Quarter 2009: 69 percent
Mortgage Rates - Week Ending 6/25/09 30-yr. fixed: 5.42% Fees/points: 0.7% 15-yr. fixed: 4.87% Fees/points: 0.7% 1-yr. adjustable: 4.93% Fees/points: 0.7%
Source: C.A.R., Freddie Mac
House Passes American Clean Energy and Security Act Climate Bill
On June 26, the U.S. House of Representatives passed the American Clean Energy and Security Act by a vote of 219 to 212. While the bill addresses many issues, ranging from industry emissions, alternative energy sources, and ending U.S. dependence on foreign oil, C.A.R. and NAR focused its attention on the real-estate related provisions of the 1,300-page bill.
In a victory for REALTORS, the House of Representatives removed a costly energy-efficient labeling program for existing properties and will limit energy labeling to new construction only. The legislation also includes financial incentives for property owners who choose to retrofit and modify their properties to make them more energy efficient. These may include financial incentives such as loans and grants, to be handled by the states. The legislation also will prohibit the Environmental Protection Agency from regulating carbon emissions from residential and commercial buildings under Clean Air Act. Lastly, the bill would create energy targets for building codes. States would be able to set their codes above what is required by the legislation; California’s building codes appear to be in compliance with the bill’s targets.
In a victory for REALTORS, the House of Representatives removed a costly energy-efficient labeling program for existing properties and will limit energy labeling to new construction only. The legislation also includes financial incentives for property owners who choose to retrofit and modify their properties to make them more energy efficient. These may include financial incentives such as loans and grants, to be handled by the states. The legislation also will prohibit the Environmental Protection Agency from regulating carbon emissions from residential and commercial buildings under Clean Air Act. Lastly, the bill would create energy targets for building codes. States would be able to set their codes above what is required by the legislation; California’s building codes appear to be in compliance with the bill’s targets.
Consumer Confidence Declines
The Consumer Confidence Index fell to 49.3 (1985+100) in June compared with 54.8 in May, according to a report released yesterday by The Confidence Board. The Present Situation Index decreased to 24.8 compared with 29.7 in May and the Expectations Index declined to 65.5 in June compared with 71.5 in the previous month.
“After back-to-back months of strong gains, Consumer Confidence retreated in June,” said Lynn Franco, director of The Confidence Board Consumer Research Center. “The decline in the Present Situation Index, caused by a less favorable assessment of business conditions and employment, continues to imply that economic conditions, while not as weak as earlier this year, are nonetheless weak. Looking ahead, Expectations continue to suggest less negative conditions in the months ahead, as opposed to strong growth.”
Consumers’ appraisal of present-day conditions was less favorable in June, with those claiming business conditions are “good” decreasing to 8 percent in June compared with 8.8 percent a month earlier, while those saying conditions are “bad” increasing to 45.6 percent compared with 44.5 percent in May. Consumers anticipating an improvement in business conditions over the next six months decreased to 21.2 percent in June compared with 22.5 percent the previous month, while those expecting conditions will worsen increased to 20.2 percent from 18 percent in May, according to the report.
Source: C.A.R.
“After back-to-back months of strong gains, Consumer Confidence retreated in June,” said Lynn Franco, director of The Confidence Board Consumer Research Center. “The decline in the Present Situation Index, caused by a less favorable assessment of business conditions and employment, continues to imply that economic conditions, while not as weak as earlier this year, are nonetheless weak. Looking ahead, Expectations continue to suggest less negative conditions in the months ahead, as opposed to strong growth.”
Consumers’ appraisal of present-day conditions was less favorable in June, with those claiming business conditions are “good” decreasing to 8 percent in June compared with 8.8 percent a month earlier, while those saying conditions are “bad” increasing to 45.6 percent compared with 44.5 percent in May. Consumers anticipating an improvement in business conditions over the next six months decreased to 21.2 percent in June compared with 22.5 percent the previous month, while those expecting conditions will worsen increased to 20.2 percent from 18 percent in May, according to the report.
Source: C.A.R.
May Home Sales Increased 35.2%, Price Declined 30.4%
Home sales increased 35.2 percent in May in California compared with the same period a year ago, while the median price of an existing home declined 30.4 percent, C.A.R. reported last week. “With affordability for first-time buyers at a record high, sales of existing, single-family homes continued to remain above the 500,000 level for the ninth consecutive month,” said C.A.R. President James Liptak. “Buyers are beginning to realize that the combination of favorable home prices, historically low mortgage rates, and first-time home buyer tax credits, may not align again for many years.
“The sales gains over last year have diminished in recent months,” he added. “This trend is expected to continue through the end of the year, as limited inventory at the moderate and low end of the market constrains sales activity,” he said.
Closed escrow sales of existing, single-family detached homes in California totaled 556,590 in May at a seasonally adjusted annualized rate. Statewide home resale activity increased 35.2 percent from the revised 411,770 sales pace recorded in May 2009. Sales in May 2009 increased 2.9 percent compared with the previous month.
The median price of an existing, single-family detached home in California during May 2009 was $267,570, a 30.4 percent decrease from the revised $384,540 median for May 2008, C.A.R. reported. The May 2009 median price rose 4.2 percent compared with April’s $256,700 price.
Source: C.A.R.
“The sales gains over last year have diminished in recent months,” he added. “This trend is expected to continue through the end of the year, as limited inventory at the moderate and low end of the market constrains sales activity,” he said.
Closed escrow sales of existing, single-family detached homes in California totaled 556,590 in May at a seasonally adjusted annualized rate. Statewide home resale activity increased 35.2 percent from the revised 411,770 sales pace recorded in May 2009. Sales in May 2009 increased 2.9 percent compared with the previous month.
The median price of an existing, single-family detached home in California during May 2009 was $267,570, a 30.4 percent decrease from the revised $384,540 median for May 2008, C.A.R. reported. The May 2009 median price rose 4.2 percent compared with April’s $256,700 price.
Source: C.A.R.
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