Real estate prices in our area continue to remain steady. After the tax credits for home buyers expired last May, there was concern that the market could tank. Yet, existing home sales have stabilized over the past year. Lawrence Yun, Chief Economist for the National Association of Realtors, reports that the housing market continues to recover on its own power without the homebuyer tax credit. The NAR reported in September that existing-home sales rose by 7.6% in August following a big correction in July.
I think people are beginning to hedge their bets. Prices haven’t been this good for a long time. Sellers are serious. The rate for a 30-year conventional fixed-rate mortgage fell to a record low of 4.43 in August according to Freddie Mac. Note that the rate was 5.19 percent in August 2009.
So what is holding back more buyers? The main reason given is a lack of confidence in our national economy. Many believe that the November elections will create a new direction and confidence will grow. If that is so, then buying now will be seen as the smart move.
I am going to be talking about understanding the value of having a comparative market analysis below. Knowing the local market and seeing the trends in our area is what I do best for you. Let me know if you have specific questions and we can meet at your convenience.
JUST ASK
Q: What is a CMA?
A: A Comparative Market Analysis, or CMA, is an in-depth analysis of the home’s worth in today’s market. If you are thinking about selling your home, then we need to determine the fair market value first. There are online sites as well as newspaper listings that will give valuations. But each house is different and most sales are not posted publicly for months. It takes an expert who has walked through the recent homes for sale, knows the streets of the neighborhood, and knows the trends of real estate transactions to best assess which properties to compare to yours in order to create a realistic CMA.
To create a CMA, first I will walk through your home. At this point, I may recommend some improvements that would increase your home’s value. Then I will check all sales, pending sales, expired listings and active listings in our area that relate to your home. Once we have the analysis, together we will determine an asking price.
Depending on the strength of the market when we list your home, you can expect a range of offers. My goal then is to aggressively market your home so that you get the most exposure from qualified buyers. In the end, you and the buyer determine the final selling price.
MY TOWN
Any parent knows the value of good schools for their children. But the value of good schools doesn’t only affect children and their families, it also impacts neighborhoods and the property values of your home. Even if you don’t have school-age children, knowing the ratings of schools in your current home or prospective new homes will affect your pocketbook in the long run.
The Internet offers some free, comprehensive resources to find school ratings. While ratings don’t cover all of the facets of a school’s value, they give a quick data point to know how well children are learning at any given school. Academic Performance Index (API) score, state rank, parent education and more can be found on www.school-ratings.com. Check out www.greatschools.org for comprehensive school data nationwide. Peruse the website to find the top schools in small, medium, or large US cities (click Find a School tab, then Choose the Right School, then Moving with Kids). Or search for a specific city to review the API results.
As an agent, it is my job to know the local schools not just by test results, but through people and real stories. If you would like more information on your local schools, or the schools in a different neighborhood, just call or email me. Either I’ll help or I’ll connect you with someone who can.
FYI
With a large amount of bank-owned properties on the market, it's a great time for homebuyers looking for good deals. But bidding on bank-owned homes also means the homebuyer has to compete with investors bringing cash offers.
Fannie Mae's got a new program for their Real Estate Owned (REO) properties. For homeowners, this is a way to buy properties that have reduced prices BEFORE investors can buy them. After the property hits the market, you've got fifteen days to look at the property.
Qualified homebuyers must be owner-occupants and can receive up to 3.5% of the final sales price, which can be used toward closing cost assistance including a home warranty, if desired and available. Eligible offers must be submitted on or after Sept. 23, 2010, and must close by Dec. 31, 2010. The sale must close within 60 days of the offer being accepted.
Let me know if you are interested in this program. It is being offered through real estate professionals to give their clients the heads-up. Properties available under this program can be viewed on the REO Web site www.HomePath.com.
Showing posts with label residential real estate. Show all posts
Showing posts with label residential real estate. Show all posts
Monday, October 25, 2010
Friday, July 9, 2010
WHY IT MAKES SENSE TO BUY NOW
Many buyers are “sitting on the fence.” They don’t know whether there will be a “double dip” in the economy. They feel they missed out on the tax credit incentive etc. While these and other issues, like job uncertainty are keeping many away from making the commitment, there are also excellent and unprecedented reasons to buy now.
Sellers too, have been hesitating, concerned that they won’t receive a “reasonable price” for their homes. They seem to want to wait until prices have come back to pre-bubble bursting times. There is a belief (wish, desire) that things will recover and do so pretty soon. Not only that, many aren’t considering the fact that while their home will rise in price, sometime in the future, so too will the property they want to buy, as well as the cost of their mortgage (when rates rise as well.) Consequently, there are excellent reasons for some sellers to market their homes now as well.
As reported by the LA Times below, interest rates are the lowest they have been in the 39 years Fannie Mae has been tracking these rates.
Prices as most are aware, are back where they were 5-7 years ago and have either stabilized or begun to inch up. With the “affordability index” at its highest point in over 10 years, there are more potential buyers available.
It takes a simple math calculation to document to people how much they will save by buying now @ 4.5% then waiting a year or two when interest rates move up to and over 6%. It will make it even more expensive if property values increase a slight 3% over the next few years.
Below the link to the LA Times article is a link to the mortgage calculator I used in my example.
http://www.mortgagecalculator.org/
SAMPLE COMPARISON – BUY NOW @ CURRENT PRICES - BUY LATER (3% appreciation)
Sales Price today $600,000 $618,000
Loan Amount (20% DP) 480,000 494,400
Interest rate (4.5% current) 6.5% projected
Payment (30 year) $2,432.09 $3,124.74
Total interest paid $395,552.22 $630,579.95
Friday, June 25, 2010
Sunday, June 13, 2010
California Association of Realtors Market Update
http://videos.car.org/mediavault.html?menuID=1&flvID=7
Leslie Appleton Young, Chief Economist of the California Association of Realotrs discusses the residential real estate market
Leslie Appleton Young, Chief Economist of the California Association of Realotrs discusses the residential real estate market
Tuesday, December 1, 2009
The Three Million Dollar Floor Call
This is a holiday story; complete with good cheer.
It goes something like this..........
Several months ago, a hard working Realtor was in our office taking "floor time." A call came in on one of our current listings. Unfortunately, the eager agent was unable to match this buyer to that property. He wanted a "dead-on Golden Gate view." This property, though a very fine home, didin't have what the buyer was looking for.
Our undaunted agent offered to show the buyer other homes, more in conformance with his desires. He agreed and the showings began. They looked everywhere. But one house was too dark and another too shabby. They looked and they looked. Our intrepid agent would not disappoint our particular buyer.
And then one day a property came on the market. Was it perfect? What property is? Nonetheless, our perservering agent and her particular buyer went off to see it. While the price was "too high" said our buyer; the offer was "too low" said the seller. Storm clouds rose as the year was coming to an end.
With the motivation of a real seller and the desire of a real buyer, our agent would not give up. Closer and closer they came, until one day an agreement was reached; an agreement on a sale of close to three million dollars.
"Hooray!" shouted the buyer. I have the home I imagined. "Fantastic!" said the seller. Needless to say, selling a home like this in the worst market in over 70 years, during the holiday season, was nothing short of a miracle. And what made the miracle even sweeter, was that the home was purchased for cash and closed within a week.
Merry Christmas intrepid agent! You know the difference between hard work and wishing on a star and for that you will receive your reward.
Happy Holidays to all!
It goes something like this..........
Several months ago, a hard working Realtor was in our office taking "floor time." A call came in on one of our current listings. Unfortunately, the eager agent was unable to match this buyer to that property. He wanted a "dead-on Golden Gate view." This property, though a very fine home, didin't have what the buyer was looking for.
Our undaunted agent offered to show the buyer other homes, more in conformance with his desires. He agreed and the showings began. They looked everywhere. But one house was too dark and another too shabby. They looked and they looked. Our intrepid agent would not disappoint our particular buyer.
And then one day a property came on the market. Was it perfect? What property is? Nonetheless, our perservering agent and her particular buyer went off to see it. While the price was "too high" said our buyer; the offer was "too low" said the seller. Storm clouds rose as the year was coming to an end.
With the motivation of a real seller and the desire of a real buyer, our agent would not give up. Closer and closer they came, until one day an agreement was reached; an agreement on a sale of close to three million dollars.
"Hooray!" shouted the buyer. I have the home I imagined. "Fantastic!" said the seller. Needless to say, selling a home like this in the worst market in over 70 years, during the holiday season, was nothing short of a miracle. And what made the miracle even sweeter, was that the home was purchased for cash and closed within a week.
Merry Christmas intrepid agent! You know the difference between hard work and wishing on a star and for that you will receive your reward.
Happy Holidays to all!
Saturday, October 31, 2009
TEN WAYS TO SAVE THOUSANDS WHEN BUYING OR SELLING REAL ESTATE
It is always a good time to save money.
It is particularly so when real estate investments seem more uncertain. The following suggestions have something to do with the current market, but many are good ideas in any market.
NEGOTIATE
Until this recent market correction, most sellers thought that buyers couldn't pay enough for their cute little home. Tens of thousands of dollars over asking was only good if it beat out what the neighbor got for their house.
Similarly, buyers and their agents, were used to being turned upside down until the last dime dropped out of their 401k.
NO MORE.
Today, it makes sense to negotiate.
If you are not involved in the insanity of trying to buy an REO, you will have more of an opportunity to buy in the "real world" rather then the alternate universe that the following Youtube video comically and accurately describes.
Negotiation doesn't mean making an offer so low that no one will consider it. Nor does it mean, staying firm until the buyer meets your price. This is the opposite of negotiation.
SELLERS
#1 - Price it right
The best thing you can do in this market is to price your home realistically. There is lots of inventory. Pricing your home high just makes it easier for your competition to sell their homes, when there is more inventory then buyers. (One of the saddest experiences I've seen in this business has to do with a seller following the market down, when they could have sold their home for tens of thousands of dollars more, had they only been realistic in the first place.)
SELLERS
#1 - Price it right
The best thing you can do in this market is to price your home realistically. There is lots of inventory. Pricing your home high just makes it easier for your competition to sell their homes, when there is more inventory then buyers. (One of the saddest experiences I've seen in this business has to do with a seller following the market down, when they could have sold their home for tens of thousands of dollars more, had they only been realistic in the first place.)
When an offer comes in on your home, it might be much lower then you want. Don't make the common mistake of refusing to respond. A personal sense of outrage may be a good way to vent your displeasure but it's not going to get your home sold.
Take a good look at the offer. Is there a substantial down payment? Is the buyer pre-approved for his loan? Are the other terms, days until closing etc. acceptable to you? If the answers are yes, then it may be an offer you can work with. Don't you owe it to yourself to find out?
The way to find out is to ask questions of the buyers agent during the presentation. Why are they buying now? Why here? When do they have to do this by?
Information is power!
The more you know about the other party's circumstances the better position you are in. Once you know all you can, create a counter offer.
Is there anything in their offer that you can give in to? appliances? date of close of escrow? First come together on those points that are easy to resolve.
As for the price, if your home has been sitting for some time without an offer, come off your price. There is no need to go right to the bottom line. There is a need to keep the negotiations alive. The counter offer has to imply hope if you want to get a response from the buyer.
Many say negotiation is like fishing. You need to play the "fish" until you can reel him in. Of course, the buyer will, if they're any good, be trying to do the same.
(I'll continue with my list in my next several posts.)
Friday, October 30, 2009
HIGHER BALANCE LOAN LIMITS EXTENDED
Good news: President Obama is expected to sign a resolution passed late yesterday by Congress extending the current limits for Fannie Mae, Freddie Mac, and FHA loans through 2010. The limits were set to expire at the end of this year. This is especially critical for California, where more than 80 percent of all loans are financed by Fannie Mae, Freddie Mac, or FHA, and will help maintain the positive signs we are now seeing in California’s mortgage market. President Obama is expected to sign the resolution today or tomorrow as part of a broader piece of budgetary legislation that will prevent a government shutdown.
While home prices in California have declined, the demand for housing has not. The market has been dominated by first-time home buyers who have faced a shortage of financing opportunities. The loan limits are set at 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost areas, including many regions in California. Sales in move-up and high-end markets have been constrained this year; the loan limits extension will help qualified home buyers in these markets to move forward with their purchases.
This report just received from the California Association of Realtors
While home prices in California have declined, the demand for housing has not. The market has been dominated by first-time home buyers who have faced a shortage of financing opportunities. The loan limits are set at 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost areas, including many regions in California. Sales in move-up and high-end markets have been constrained this year; the loan limits extension will help qualified home buyers in these markets to move forward with their purchases.
This report just received from the California Association of Realtors
Monday, October 26, 2009
California Real Estate FORECAST: 2010 and where we are now
Last week I had the opportunity to meet Leslie Appleton-Young, chief economist of The California of Realtors. She was presenting her annual analysis of the real estate market to Alain Pinel Realtors. In her observations she also offered her projections for 2010.
The following represents my interpretation of her comments, along with some of the slides of her presentation, she was nice enough to provide.
While we all know that values plummeted during the past two years, a closer look at the data reveals some interesting details which could be overlooked, or mis-understood. For example, when talking about sales, you will notice in the slide below, almost 85% of all sales in January '09 were bwelow $500,000. What isn't obvious here is that the vast majority of these sales were REOs' or bank owned properties.
While we all know that values plummeted during the past two years, a closer look at the data reveals some interesting details which could be overlooked, or mis-understood. For example, when talking about sales, you will notice in the slide below, almost 85% of all sales in January '09 were bwelow $500,000. What isn't obvious here is that the vast majority of these sales were REOs' or bank owned properties.
What is also interesting here is that the luxury market (homes over one million dollars) represented 15% of all California residential sales at the peak of the market. In July '09 these luxury home sales represented only 6% of the market. As you see below, the greatest percentage of unsold inventory is in this same luxury market.
It is Leslie's opinion that going forward, this segment of the market will be one of continued pain for those needing to sell. However, even though this next slide shows some dramatic looking depreciation since the peak, this is really a tale of two markets; one that has taken a hit, but isn't suffering nearly as much as the other market, which has been "ground zero" for the bust, yielding a very high percentage of foreclosures.
The FUTURE : 2010
Going forward, Leslie made the following observations:
In spite of high unemployment, low prices and very low interest rates, California's Affordability Index is at its' highest level in over 10 years, that there is a larger potential buyer pool. When you combine this with almost no new construction activity and a growing number of FHA loans (that permit buyers to put as little as 3 1/2% down) there is growing belief, supported by some early data that the worst of the housing crisis is behind us.
However, there are some "Wild Cards" out there, which could effect this modicum of good news. The first time buyer tax credit, which has motivated many to buy, is scheduled to expire at the end of November. As of this writing there is no assurance it will be renewed.
While sales have recently increased in these "bust markets," most of these sales and price increases are the result of investors coming in at what they believe to be at or close to the bottom, and purchasing extremely inexpensive homes that in many cases permit cash flow from rent - a very rare occurrence in most of California. These same homes have in some cases lost over 70% of their value from the peak.
Yet, as you can see below, the counties shown here have faired relatively well, at least since '08.
Going forward, Leslie made the following observations:
In spite of high unemployment, low prices and very low interest rates, California's Affordability Index is at its' highest level in over 10 years, that there is a larger potential buyer pool. When you combine this with almost no new construction activity and a growing number of FHA loans (that permit buyers to put as little as 3 1/2% down) there is growing belief, supported by some early data that the worst of the housing crisis is behind us.
However, there are some "Wild Cards" out there, which could effect this modicum of good news. The first time buyer tax credit, which has motivated many to buy, is scheduled to expire at the end of November. As of this writing there is no assurance it will be renewed.
And finally, a 2010 projection that indicates a small decline in sales, as bank owned properties decline, and a 3% overall increase in home values, as stability begins to return.
If you are interested in receiving the entire Powerpoint presentation, you can email me at pweingrow@apr.com
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