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Home Buying Gets Another Boost in Affordability

For home buyers or refinancers, borrowing costs for home ownership just got a little cheaper as mortgage rates took another dip to new all-time record lows this week, Freddie Mac reports in its weekly mortgage market survey. 

"Signs of slowing economic growth and inflation remaining subdued allowed yields on Treasury bonds to ease somewhat and brought most mortgage rates to new all-time record lows this week,” says Frank Nothaft, Freddie Mac’s chief economist.

Here’s a closer look at average rates for May 2012: 

• 30-year fixed-rate mortgages: averaged 3.84 percent, with an average 0.8 point, reaching a new historical low. The previous record for 30-year rates was 3.87 percent, which was set on Feb. 9 of this year. A year ago at this time, rates averaged 4.71 percent. 
• 15-year fixed-rate mortgages: averaged 3.07 percent, with an average 0.7 point, another historical low. The previous record for 15-year rates was 3.11 percent set on April 12 this year. A year ago at this time, 15-year rates had averaged 3.89 percent. 
• 5-year adjustable-rate mortgages: averaged 2.85 percent, with an average 0.7 point, holding the same as last week. Last year at this time, 5-year ARMs averaged 3.47 percent. 
• 1-year ARMs: averaged 2.70 percent this week, with an average 0.6 point, also registering at a new all-time low. Last year at this time, 1-year ARMs averaged 3.14 percent. 

Source: Freddie Mac

If you are looking to buy then go to http://www.wmsloans.com for financing and http://www.goldshieldrealty.com for real estate services.

More Buyers Eye Unlisted Homes as Options

As housing inventories shrink, more buyers are reportedly finding their perfect home in properties that haven’t even been listed on the market yet.

“Such back-pocket deals used to involve mostly luxury homes where buyers and sellers wanted to keep the sale hush-hush,” The Star Tribune reports. “But lower-priced houses are becoming a bigger part of the mix because even those are in short supply.” 

Real estate professionals are helping these buyers sniff out these unlisted homes by working their network to identify sellers who would like to sell but are unsure if the market will give them enough on a sale. Agents are finding these sellers through referrals and also by home owners who once listed their homes for sale but removed their homes from the MLS after they lingered on the market. Agents are also finding home owners who turned their homes into rentals as a good source for options too.

“There is a shadow market out there with a lot of people who want to sell,” Joe Grunnet, a broker in Minneapolis, told The Star Tribune. “[Home owners] just don’t know they can sell in this market. They still think the world is coming to an end.” 

Source: “Impatient Buyers Target Homes Before They go on Sale,” Star Tribune (Minneapolis) (April 28, 2012)

If you want to buy a home and want to find shadow inventory give me a call...I can help you find those properties...if you are selling I have the best marketing strategy in Southern California.  888-714-6873.

Bidding Wars Are Back, Agents Say

Some real estate markets are reporting that home buyers are having to pay more than asking price to get the home they desire, as the supply of for-sale homes has shrunk, Bloomberg News reports. 

Bidding wars were a common part of real estate in 2006. But when the market turned from a “seller’s market” to “buyer’s market,” more sellers started seeing lowball bids than high bids. Now times are slowly changing, and bidding wars are being reported in several markets, such as in Seattle, Boston, Silicon Valley, Miami, and Washington, D.C., Bloomberg reports. 

The inventory of homes for-sale is near a six-year low. Mixed with the low inventory, the job market has been improving and buyers are being lured to the record level of affordability in the housing market. Existing-home sales and pending home sales are up more than 8 percent compared to a year earlier, the National Association of REALTORS® recently reported. Trulia Inc. also reported that falling home values and low mortgage rates have made home buying a better deal than renting in 98 of the 100 largest metro areas.

“The housing crash is finally giving way to recovery in an increasing number of markets across the country,” Mark Zandi, chief economist for Moody’s Analytics, told Blommberg. “The decline in unsold listings and vacant homes and the increase in rents presage better times ahead for single-family housing.”

Source: “Bidding Wars Erupt as Supply of Available Homes Shrink,” Bloomberg News (March 31, 2012)

 

Is Housing as Cheap as It'll Ever Get?

Home buyers who want a bargain may want to act now because the housing market is in the midst of a turnaround, economists say.

Home prices have fallen and mortgage rates are hovering near record lows, pushing home affordability for the average family to record highs. Meanwhile, rents have been on the rise, making owning a home cheaper than renting in most areas of the country, according to recent surveys. 

But the housing deals aren’t expected to stick around much longer.

An improving job market, a decrease in the number of home owners falling behind on their mortgage, and an anticipated improvement in access to mortgages is expected to help home prices start bouncing back by next year, economists say. 

Investors eyeing profits in rentals also have been snapping up bank-owned properties, which Clear Capital’s Alex Villacorte attributes as helping to lead to an increase in prices on foreclosed properties. This “could have a significant impact on the market overall in terms of providing a rising floor to home values,” Villacorte told CNNMoney.

Some areas are already seeing prices rise. In Phoenix, housing prices have already increased 8.4 percent during the three months ending April 30, and Miami saw prices bump up 4.6 percent quarter over quarter, according to Clear Capital data.

"Stuff I was selling six months ago for $60,000 to $80,000 is now $90,000 to $110,000," Tanya Marchiol, founder of Team Investments in Phoenix, told CNNMoney.

Loan Rates, Demand Predictions

Buyers may want to act more quickly because mortgage rates are expected to tick up slightly by the end of the year. The increase is being sparked by greater demand, says Doug Lebda, CEO of LendingTree. He predicts 30-year fixed-rate mortgages will inch up to 4.5 percent by the end of the year, which is still low, however, by historical standards. 

The Mortgage Bankers Association is also predicting a big leap in mortgage loans next year. For this year, MBA estimates that buyers will take out loans totaling about $415 billion, but by 2013 that number is expected to nearly double to $706 billion.  

Source: “Buying a Home Won't get Much Cheaper,” CNNMoney (May 3, 2012) and “Time To Trade The Lease For A Mortgage?” NPR (May 1, 2012)

 

Bidding Wars Catch Buyers Off-Guard

Home buyers are unexpectedly finding more competition this spring in landing their dream home. Bidding wars are increasingly being reported in markets across the country, from California to Florida, The Wall Street Journal reports. 

"It's a little surprising because we thought bidding wars were done with," Andy Aley, a home shopper in Seattle, told The Wall Street Journal. Aley says he was outbid on a home earlier this year, even though he offered to pay $23,000 above the listing price and also waive inspections and other closing conditions.

Home buyers are frustrated and caught off-guard about the bidding wars re-emerging, real estate professionals report. 

"We're writing a record number of offers, but we're not seeing a record number of closings and that's because it's so competitive," Glenn Kelman, chief executive of Redfin Corp., told The Wall Street Journal.

Why are things getting so competitive? Many housing markets are seeing a drastic decrease in the number of homes listed for-sale, leaving home buyers with fewer options and more bidding on the same house. Housing analysts say the shortage in supply is from sellers unwilling to take much less for their home than what they originally paid for it and pulling their homes off the market. Also, a surge in investors has made the market more competitive, as investors snatch up homes in bulk in all-cash deals. 

“The bidding wars caused by tight inventory provide the latest evidence that housing demand is starting to pick up after a six-year-long slump,” The Wall Street Journal reports.

Indeed, the National Association of REALOTRS® reported late last week that pending home sales in March reached their highest level in nearly two years and are up 12.8 percent from a year ago.

Source: “Stunned Home Buyers Find the Bidding Wars Are Back,” The Wall Street Journal (April 27, 2012)

 

What's in Store for Housing in 2012?

The worst for the housing market may finally be over, according to housing experts in a recent article in Kiplinger. After median home price have dropped nearly 40 percent nationwide, a rebound is taking shape -- although, housing experts say, the market may stay flat for awhile before gradually ticking up. 

According to housing experts in a recent Kiplinger article, here are some predictions for the real estate market in the coming year:

Home prices stabilize: Mark Zandi, chief economist at Moody's Analytics, predicts that home prices nationwide may still drop another 3 to 5 percent in 2012, but the new year will most likely finally bring a leveling off of home prices before gains start to take shape in 2013. When markets do begin to stabilize in the new year, “price appreciation tends to spread unevenly, creating a lot of confusion about where the recovery is occurring and when,” David Stiff, chief economist at Fiserv Case-Shiller, told Kiplinger. “Even within a single city, more desirable neighborhoods will stabilize first, while prices in other neighborhoods may fall at a rapid pace.”

Housing affordability high: Housing affordability -- the ratio of median home prices to median family income -- will likely remain at record levels in 2012. Homes in many cities are “substantially undervalued,” the Kiplinger article notes. That may even lead to a mini bubble with double-digit spikes in prices, such as an increase of 10 to 15 percent in a given year in some markets, housing experts say.  

Low mortgage rates: Helping to keep affordability high, low mortgage rates are expected to continue on in 2012 -- at least the first part of the year, economists predict. The 30-year fixed-rate mortgage, the most popular among home buyers, has been hovering under a 4-percent average the past few weeks, staying in record low territory. Rates are expected to stay between 4 to 5 percent in 2012, predicts Guy Cecala, publisher of Inside Mortgage Finance, an industry publication. 

Sales increases: The National Association of REALTORS^® has already been showing a tick up in sales taking shape with increases in existing-home sales during the summer and early fall of 2011. High inventories of homes continue to flood the market but a drastic slowdown in new-home building the past three years is “gradually easing the surplus,” the Kiplinger article notes. 

Foreclosures: Foreclosures remain the problem and still plague many markets. After a slowdown with lenders processing the paperwork, foreclosures have began to pick up once again. About 1.84 million home loans are 90 days or more delinquent and 2.17 million have finished the foreclosure process but aren’t up for sale yet, according to RealtyTrac data. Alex Villacorta, director of research and analytics at Clear Capital, told Kiplinger that he predicts regardless of the downward price pressure caused from foreclosures, overall home prices won’t fall as long as lenders bring additional foreclosures to the housing market at a steady pace. 

Source: “What’s Ahead for Home Prices in 2012,” Kiplinger

 

Is That Rental in Foreclosure?

More “accidental” landlords are surfacing as home owners turn their underwater homes into rentals to try to come up with some extra cash. But some of these accidental landlords are still unable to keep up with their mortgage payments and may become delinquent on their mortgage. So what’s this mean for the person renting their property? 

Some renters may suddenly be served with an eviction notice when they discover the property they are renting is being foreclosed upon, and only having days to vacate. 

One new Web site, CheckYourLandlord.com, allows renters to check rental properties in the U.S. to see if there are any notices of default filed against the property.

Renters, or real estate professionals who represent them, can also stop at the county recorder’s office to check the status of a property. 

Source: “Renters Can Search Their Home for Foreclosure Notices for Free at CheckYourLandlord.com,” Marketwire

 

9 Reasons to Buy Investment Property Now

J. Paul Getty famously said, “Buy when everyone else is selling and hold when everyone else is buying.” Many commercial brokers believe that present market conditions provide an unprecedented buying opportunity to lock in significant real estate investment returns. Despite the opinion of some real estate professionals, however, many investors remain on the fence. While each investor must carefully consider their own financial objectives and risk tolerance before jumping back into the market, we’ve listed a few reasons investors should consider in assessing today’s real estate purchase opportunities: 1031 Exchange Opportunity - Investors with low basis properties may utilize Internal Revenue Code § 1031 to defer tax on the sale of one underperforming asset to acquire one or more discounted replacement properties that may enhance cash flow and provide higher long term investment returns. Attractive Purchase Prices – Many distressed sellers (and some banks) are selling investment properties at deep discounts and accepting offers that are below current replacement costs. Recent reports indicate that lenders are selling foreclosed properties (often referred to as ‘real estate owned’ or “REO” property) at an average discount of 28% below prices being paid for comparable non-distressed properties in the same market. Historically Low Financing Costs - The Fed’s stimulus efforts, such as QE2 (“Quantitative Easing 2”), have resulted in historically low interest rates, making the cost of debt service exceptionally attractive. Qualified real estate investors can take advantage of today’s low interest rates to bolster cash flow and lock in better long-term investment returns. Inflation Hedge – With many economists predicting that inflation will increase at some point in the future, hard assets, like investment real estate, can provide a hedge against the declining value of money in an inflationary environment. Additionally, ownership of leased real estate can provide an investor with increased income as rent rates also tend to rise in inflationary periods. Yield - Financial institutions are paying very low yields on money market accounts and other conservative investments. In contrast, many investment properties are generating returns in the 7-9% range, providing considerably better yields than many other competing investments. Less Competition – Foreign ownership of U.S. investment real estate is increasing. Foreign investors see U.S. real estate as a solid investment in a stable economy, and the lower value of the dollar has made U.S. real estate an even more attractive bargain. These two trends will increase demand, which will drive up prices on certain types of investment property. By buying now, investors can stay ahead of the competition. Desirable Product Classes – Some classes of investment property are experiencing considerably more demand than supply. For example, in the multi-family segment, demand for rentals has increased as foreclosures have mounted and there is little new multi-family construction in the pipeline to meet such increased demand. As a result, multi-family rents are increasing and many experts project this trend to accelerate. Worst Price Declines are Over – Property values nationally have declined by 30% or more since the market peak in 2006,. Many economists believe we are at an important pivot point where prices will stabilize and begin to increase (albeit at lower appreciation rates than in the past). If investors wait too long, they may find they are facing competing bids and higher prices to close. Buying before demand picks up in the nearly inevitable recovery locks in today’s bargain prices. Real Estate is Local – Despite national statistics about real estate prices, most investors are aware that real estate is local and supply/demand and investment returns are determined by local market conditions. Many investors are using 1031 exchanges to exchange out of areas that are not projected to perform well and into areas where the local economy is more robust and investment returns are more favorable. Financial professionals tell their customers it is almost impossible to ‘time the market’ and purchase investments at the very lowest point and later sell these same assets at near market peaks. The concept is fraught with many problems and, as a result, most financial advisors caution customers to not pursue this approach. Despite this advice, investors often wait until it’s too late to purchase and miss opportunities. Don’t be left out.

Investors Flock to Foreclosures, But Hit Snags

Investors continue to eye home foreclosure sales, but postponements or cancelled auctions and disagreements over a fair price are making it difficult to close deals, they say. Many investors buy foreclosures to fix them up and re-sell, but buying the property from the banks has become increasingly challenging in some parts of the country.

In California alone, about 12,279 auctions were cancelled in January, according to ForeclosureRadar.com.

Many auctions are being cancelled as banks look into modifying loans, opting for a short sale, or reviewing their foreclosure documentation for any mistakes. Bank of America Corp., the largest U.S. mortgage-servicing company, says it expects continued postponements as it sets out to do more loan modifications.

Home owners also are holding onto properties longer hoping that all the robo-signing allegations made at the banking industry will mean their lender may not have had the right to foreclose on them in the first place, says Bruce Norris, president of The Norris Group in Riverside, Calif.

Source: “Investors’ Foreclosure Appetite Grows, Headaches Arise,” Reuters News (Feb. 18, 2011)

California Mortgage Update February 2011

Real Estate:  For those of you who have been waiting for the market to hit bottom before you purchase, don’t wait any longer; now is the time to buy.  In Riverside County, property values have increased four consecutive months.  San Diego County posted the highest gains in the nation in 2009 for property values and the trend continued in 2010.  Orange, LA and surrounding counties are hot right now for Real Estate.  Most other counties in California are slowly rebounding.   We expect more inventory in 2011 than we had in 2010. Don’t miss the boat.

100% Financing:  There are still two 100% financing programs I can offer- VA and USDA. Rates are still very attractive.  You can use your VA more than once! USDA loans are limited to certain areas, but many suburban communities still qualify, such as Wildomar and Winchester and all of the mountain communities.  Rates are outstanding and neither one of these loans has monthly MI. Call or email me for more information.  USDA and VA refinance programs available as well.

FHA Loans:  FHA loans continue to be very popular.  If you currently have an FHA loan, you can do a no-appraisal, no paystub, no tax return, no-brainer FHA streamline refinance, even on high-balance FHA loans, with me paying ALL of your refinance fees.   FHA purchase rates allow gift funds for down payment and/or closing costs and allow for non-occupant co-borrower.  Many people do not realize that you can use FHA to purchase multi-unit property up to 4 units, as long as one of them is owner-occupied.  Cash out is available to 85% of the value for FHA refinances.  Manufactured homes ok too! 

Conventional Loans:   WOW!  With new programs, we can now refinance up to 105% of the current value with no monthly MI for many borrowers.    We have conventional programs as low as 5% down again.  I specialize in Jumbo loans, we can go up to 80% loan-to-value up to $2 million.  We also offer HOMEPATH loans with as little as 3% down, with no monthly MI.

CALHFA LOANS ARE BACK! As little as 1% down with below market rates.  I also have a ½% down loan program for purchasing a home you intend to occupy. Call me for more information!

Reverse mortgages are red-hot!  If you know anyone 62 years old or older that has some equity in their property, you would be doing them a favor by having them call me.  Reverse mortgages can greatly reduce stress and improve the financial situation for many seniors.  We can get creative too, working with a financial planner, to eliminate mortgage payments, pull a lump sum out for investing or giving to heirs now so they can enjoy what they pass on while they are still around, or even get a monthly payment TO them...if there is no equity in the home they live in, but they own other property free and clear we can move the money around SIGNIFICANTLY reducing the monthly impact WITHOUT eliminating all of the equity.  Most of the time this program is a no-brainer!

Renters:  If you are renting right now you are likely paying more than what you could be paying if you owned a home.  There are some amazing programs for first time home buyers (which is anyone who has never owned a home OR someone who hasn't owned a home in 3 years or more) that can get you in to a home with little to no money down...even in this market...and without doing a funky loan.

Call me today at 888-971-8326 x 2 to discuss your situation.  Save money through a refi or buy a home!  And if you are looking to buy...don't approach a Realtor until you talk to me!  I can save your thousands!