We have recently updated our blog effective July 2008.
You can find it at this address.
Make it your homepage for Santa Cruz real estate news, events, stats, and much, much more. Thanks for making the switch and be sure to change your bookmarks and/or favorites.
Carol
Saturday, August 16, 2008
Wednesday, July 16, 2008
Foreclosure Relief Bill Becomes Law in California
This week, the State Legislature enacted foreclosure reform law to address the adverse effects of high foreclosure rates in California. The new law requires lenders to contact homeowners to explore options for avoiding foreclosure at least 30 days before filing a notice of default. It also requires owners acquiring property through foreclosure to maintain the exterior of vacant residential properties. The new law also extends from 30 to 60 days the time for residential tenants to move out of properties that have been foreclosed upon, unless other laws apply. These requirements will remain in effect until January 1, 2013. The full text of Senate Bill 1137 (Perata) is available at www.leginfo.ca.gov.
Highlights of the new law are as follows:
Contact Between Lender and Borrower: Effective on or about September 8, 2008, a lender, trustee, or authorized agent may not file a notice of default until 30 days after contacting a borrower to assess the borrower's financial situation and explore options for avoiding foreclosure. A lender must generally contact the borrower in person or by telephone, or satisfy due diligence requirements for contacting a borrower. During the initial contact, the lender must inform the borrower of the right to request a meeting with the lender within 14 days. The lender must also give the borrower the toll-free number for finding a HUD-certified housing counseling agency. A subsequent notice of default must include the lender's declaration that it has contacted the borrower, tried with due diligence to contact the borrower, or the borrower has surrendered the property. A lender who had already filed a notice of default before the enactment of this law must include a similar declaration in the notice of sale. This requirement to contact borrowers applies to loans secured by owner-occupied residences made from 2003 to 2007. Certain exemptions apply if the borrower has filed for bankruptcy, surrendered the property, or contracted with a person or entity whose primary business is advising people, who have decided to leave their homes, on how to extend the foreclosure process and avoid their contractual obligations.
Maintenance of Vacant Properties: Effective July 8, 2008, anyone who acquires property through foreclosure must maintain the exterior of vacant residential property. Violations of this law include permitting excessive foliage growth that diminishes the value of surrounding properties, failing to take action against trespassers or squatters, failing to take action to prevent mosquitoes from breeding in standing water, or other public nuisances. This law authorizes a governmental entity to impose a civil fine up to $1,000 per day for any violation, as long as the owner has been given notice and an opportunity to remedy the violation. A violator must be given at least 14 days to begin, and 30 days to complete, such remediation before a fine can be assessed.=
60-Day Notice to Terminate Tenants: Effective July 8, 2008, a tenant or subtenant in possession of a rental housing unit that has been sold through foreclosure is generally entitled to a 60-day written notice to quit, not just 30 days. However, a borrower who remains on the property after foreclosure may be served a three-day notice to terminate. This law does not affect, among other things, rent-controlled properties with just-cause evictions. Effective on or about September 8, 2008, the lender, trustee, or authorized agent posting a notice of sale must also post and mail a specified notice of a tenant's right to a 60-day eviction notice from the new owner, unless other laws apply. This requirement to notify tenants of their rights applies to loans secured by residential real property where the borrower has a different billing address than the property address.
Highlights of the new law are as follows:
Contact Between Lender and Borrower: Effective on or about September 8, 2008, a lender, trustee, or authorized agent may not file a notice of default until 30 days after contacting a borrower to assess the borrower's financial situation and explore options for avoiding foreclosure. A lender must generally contact the borrower in person or by telephone, or satisfy due diligence requirements for contacting a borrower. During the initial contact, the lender must inform the borrower of the right to request a meeting with the lender within 14 days. The lender must also give the borrower the toll-free number for finding a HUD-certified housing counseling agency. A subsequent notice of default must include the lender's declaration that it has contacted the borrower, tried with due diligence to contact the borrower, or the borrower has surrendered the property. A lender who had already filed a notice of default before the enactment of this law must include a similar declaration in the notice of sale. This requirement to contact borrowers applies to loans secured by owner-occupied residences made from 2003 to 2007. Certain exemptions apply if the borrower has filed for bankruptcy, surrendered the property, or contracted with a person or entity whose primary business is advising people, who have decided to leave their homes, on how to extend the foreclosure process and avoid their contractual obligations.
Maintenance of Vacant Properties: Effective July 8, 2008, anyone who acquires property through foreclosure must maintain the exterior of vacant residential property. Violations of this law include permitting excessive foliage growth that diminishes the value of surrounding properties, failing to take action against trespassers or squatters, failing to take action to prevent mosquitoes from breeding in standing water, or other public nuisances. This law authorizes a governmental entity to impose a civil fine up to $1,000 per day for any violation, as long as the owner has been given notice and an opportunity to remedy the violation. A violator must be given at least 14 days to begin, and 30 days to complete, such remediation before a fine can be assessed.=
60-Day Notice to Terminate Tenants: Effective July 8, 2008, a tenant or subtenant in possession of a rental housing unit that has been sold through foreclosure is generally entitled to a 60-day written notice to quit, not just 30 days. However, a borrower who remains on the property after foreclosure may be served a three-day notice to terminate. This law does not affect, among other things, rent-controlled properties with just-cause evictions. Effective on or about September 8, 2008, the lender, trustee, or authorized agent posting a notice of sale must also post and mail a specified notice of a tenant's right to a 60-day eviction notice from the new owner, unless other laws apply. This requirement to notify tenants of their rights applies to loans secured by residential real property where the borrower has a different billing address than the property address.
Sunday, July 6, 2008
Pending single family homes decline for past week
Just a quick update regarding our Santa Cruz market and what happened last week on sales of single family homes. There was a small decline in pendings and a decrease in the median price. Keep in mind, this is just a week over week comparison.
But doing a quick review of sales in June, although the month is not over, shows that there could be a significant decrease in the median price from May 2008 and could even be less than anything in over 5 years. Stay tuned……….I will report the actual findings by the first of next week.
But doing a quick review of sales in June, although the month is not over, shows that there could be a significant decrease in the median price from May 2008 and could even be less than anything in over 5 years. Stay tuned……….I will report the actual findings by the first of next week.
Tuesday, July 1, 2008
Santa Cruz pending condo sales increase but median price slips 31%
Oh what a difference a year makes! This is the day I usually run stats for the week, and after comparing them to last years numbers, some real interesting figures are apparent. Last June the median price was $558,500 in Santa Cruz County.
There were 36 sales in June of 2007 and currently there are almost that many. The month is not over and all the figures are not in so we may end up very close to the same number of sales, but the median price will be closer to $385,000. And why is that? You guessed it...over 35% of these transactions were short sales or bank owned sales.
I actually ran some numbers for a past client who was celebrating the fifth year in her condo in Capitola. She purchased it for $289K and in 2005 there were sales for the same size unit at $465K and now sales are around $345K. Being the eternal optimist since she still has equity and with no plans to sell, will eventually see added appreciation as the market returns.
Many great opportunites are available in our market. For those of you wanting to get a little piece of paradise here on the central coast of California, visit my website or view properties available and give me a call toll free at (800) 318-7052. There is no time like the present to cash in on a great value within walking distance to the beach in Santa Cruz, Capitola or Aptos.
There were 36 sales in June of 2007 and currently there are almost that many. The month is not over and all the figures are not in so we may end up very close to the same number of sales, but the median price will be closer to $385,000. And why is that? You guessed it...over 35% of these transactions were short sales or bank owned sales.
I actually ran some numbers for a past client who was celebrating the fifth year in her condo in Capitola. She purchased it for $289K and in 2005 there were sales for the same size unit at $465K and now sales are around $345K. Being the eternal optimist since she still has equity and with no plans to sell, will eventually see added appreciation as the market returns.
Many great opportunites are available in our market. For those of you wanting to get a little piece of paradise here on the central coast of California, visit my website or view properties available and give me a call toll free at (800) 318-7052. There is no time like the present to cash in on a great value within walking distance to the beach in Santa Cruz, Capitola or Aptos.
Friday, June 13, 2008
Bernanke says rate "well positioned" watching dollar
Federal Reserve Chairman Ben Bernanke Tuesday signaled he is finished cutting interest rates for now and has turned his attention to concerns about inflation in the world's foreign exchange markets in the wake of the U.S. dollar's 16 percent decline against the Euro over the past year.
Speaking to the International Monetary Conference, Bernanke stated that, "For now, policy seems well positioned to promote moderate growth and price stability over time. We will, of course, be watching the evolving situation closely and are prepared to act as needed to meet our dual mandate."
Observers called Bernanke’s statement a "strong defense of the dollar"
and a sign that the Fed believes a weaker U.S. dollar would be detrimental. Declines over the past year against the Euro and more recent oil price surges have increased fears of inflation. These fears are one reason the Fed is not expected to pare interest rates further at least through October.
Bernanke called financial market conditions "strained" and reiterated that U.S. consumers face challenges from declining home prices and stricter mortgage and other lending standards, a weaker job market and higher energy costs. He added that economic growth will remain limited until home prices and the housing market show clearer signs of stabilization.
Speaking to the International Monetary Conference, Bernanke stated that, "For now, policy seems well positioned to promote moderate growth and price stability over time. We will, of course, be watching the evolving situation closely and are prepared to act as needed to meet our dual mandate."
Observers called Bernanke’s statement a "strong defense of the dollar"
and a sign that the Fed believes a weaker U.S. dollar would be detrimental. Declines over the past year against the Euro and more recent oil price surges have increased fears of inflation. These fears are one reason the Fed is not expected to pare interest rates further at least through October.
Bernanke called financial market conditions "strained" and reiterated that U.S. consumers face challenges from declining home prices and stricter mortgage and other lending standards, a weaker job market and higher energy costs. He added that economic growth will remain limited until home prices and the housing market show clearer signs of stabilization.
Thursday, June 12, 2008
New cell phone laws effective July 1st
I know we all use cell phones to much in our cars, but maybe now this will help. As a real estate agent, it is always important to keep up with new regulations and this applies to everyone and anyone who uses a cell phone while driving.
So I just wanted to pass this along.
To new laws dealing with the use of wireless telephones while driving go into effect July 1, 2008. If you don't have a headset or hands free device installed, check out www.headsetking.com for great deals. You can get a wireless bluetooth headset for as low as $13.95. Please pass this information along to your colleagues, friends and family.
California Highway Patrol Wireless Telephone Laws FAQs
Q: When do the new wireless telephone laws take effect?
A: The new laws take effect July 1, 2008
Q: What is the difference between the two laws?
A: The first law prohibits all drivers from using a handheld wireless telephone while operating a motor vehicle. (Vehicle Code (VC) §23123). Motorists 18 and over may use a hands-free device. The second law prohibits drivers under the age of 18 from using a wireless telephone or a hands-free device while operating a motor vehicle (VC §23124).
Q: What if I need to use my telephone during an emergency, and I do not have a hands- free device?
A: The law allows a driver to use a wireless telephone to make emergency calls to a law enforcement agency, a medical provider, the fire department, or other emergency services agency.
Q: What are the fines if I’m convicted?
A: The base fine for the FIRST offense is $20 and $50 for subsequent convictions. According to the Uniform Bail and Penalty Schedule, with the addition of penalty assessments, a first offense is $76 and a second offense is $190.
Q: Will I receive a point on my drivers license if I’m convicted for a violation of the wireless telephone law?
A: NO. The violation is a reportable offense: however, DMV will not assign a violation point.
Q: Will the conviction appear on my driving record?
A: Yes, but the violation point will not be added.
Q: Will there be a grace period when motorists will only get a warning?
A: NO. The law becomes in effect on July 1, 2008. Whether a citation is issued is always at the discretion of the officer based upon his or her determination of the most appropriate remedy for the situation.
Q: Are passengers affected by this law?
A: No. This law only applies to the person driving a motor vehicle.
Q: Do these laws apply to out-of-state drivers whose home states do not have such laws?
A: Yes
Q: Can I be pulled over by a law enforcement officer for using my handheld wireless telephone?
A: YES. A law enforcement officer can pull you over just for this infraction.
Q: What if my phone has a push-to-talk feature, can I use that?
A: No. The law does provide an exception for those operating a commercial motor truck or truck tractor (excluding pickups), implements of husbandry, farm vehicle or tow truck, to use a two-way radio operated by a “push-to-talk” feature. However, a push-to-talk feature attached to a hands-free ear piece or other hands-free device is acceptable.
Q: What other exceptions are there?
A: Operators of an authorized emergency vehicle during the course of employment are exempt as are those motorists operating a vehicle on private property
DRIVERS 18 AND OVER
Drivers 18 and over will be allowed to use a hands-free device to talk on their wireless telephone while driving. The following FAQs apply to those motorists 18 and over.
Q: Does the new “hands-free” law prohibit you from dialing a wireless telephone while driving or just talking on it?
A: The new law does not prohibit dialing, but drivers are strongly urged not to dial while driving.
Q: Will it be legal to use a Blue Tooth or other earpiece?
A: Yes, however you cannot have BOTH ears covered.
Q: Does the new hands-free law allow you to use the speaker phone function of your wireless telephone while driving?
A: Yes.
Q: Does the new “hands-free” law allow drivers 18 and over to text page while driving?
A: The law does not specifically prohibit that, but an officer can pull over and issue a citation to a driver of any age if, in the officer’s opinion, the driver was distracted and not operating the vehicle safely. Text paging while driving is unsafe at any speed and is strongly discouraged.
DRIVERS UNDER 18
Q: Am I allowed to use my wireless telephone hands free?
A: NO. Drivers under the age of 18 may not use a wireless telephone, pager, laptop or any other electronic communication or mobile services device to speak or text while driving in any manner, even hands free. EXCEPTION: Permitted in emergency situations to call police, fire or medical authorities. (VC §23124).
Q: Why is the law stricter for provisional drivers?
A: Statistics show that teen drivers are more likely than older drivers to be involved in crashes because they lack driving experience and tend to take greater risks. Teen drivers are vulnerable to driving distractions such as talking with passengers, eating or drinking, and talking or texting on wireless phones, which increase the chance of getting involved in serious vehicle crashes.
Q: Can my parents give me permission to allow me to use my wireless telephone while driving?
A: NO. The only exception is an emergency situation that requires you to call a law enforcement agency, a health care provider, the fire department or other emergency agency entity.
Q: Does the law apply to me if I’m an emancipated minor?
A: Yes. The restriction applies to all licensed drivers who are under the age of 18.
Q: If I have my parent(s) or someone age 25 years or older in the car with me, may I use my wireless telephone while driving?
A: NO. You may only use your wireless telephone in an emergency situation.
Q: Will the restriction appear on my provisional license?
A: No
Q: May I use the hands-free feature while driving if my car has the feature built in?
A: NO. The law prohibits anyone under the age of 18 from using any type of wireless device while driving, except in an emergency situation.
Q: Can a law enforcement officer stop me for using my hands-free device while driving?
A: No. For drivers under the age of 18, this is considered a SECONDARY violation meaning that a law enforcement officer may cite you for using a hands-free wireless phone if you were pulled over for another violation. However, the prohibition against using a handheld wireless telephone while driving is a PRIMARY violation for which a law enforcement officer can pull you over.
So I just wanted to pass this along.
To new laws dealing with the use of wireless telephones while driving go into effect July 1, 2008. If you don't have a headset or hands free device installed, check out www.headsetking.com for great deals. You can get a wireless bluetooth headset for as low as $13.95. Please pass this information along to your colleagues, friends and family.
California Highway Patrol Wireless Telephone Laws FAQs
Q: When do the new wireless telephone laws take effect?
A: The new laws take effect July 1, 2008
Q: What is the difference between the two laws?
A: The first law prohibits all drivers from using a handheld wireless telephone while operating a motor vehicle. (Vehicle Code (VC) §23123). Motorists 18 and over may use a hands-free device. The second law prohibits drivers under the age of 18 from using a wireless telephone or a hands-free device while operating a motor vehicle (VC §23124).
Q: What if I need to use my telephone during an emergency, and I do not have a hands- free device?
A: The law allows a driver to use a wireless telephone to make emergency calls to a law enforcement agency, a medical provider, the fire department, or other emergency services agency.
Q: What are the fines if I’m convicted?
A: The base fine for the FIRST offense is $20 and $50 for subsequent convictions. According to the Uniform Bail and Penalty Schedule, with the addition of penalty assessments, a first offense is $76 and a second offense is $190.
Q: Will I receive a point on my drivers license if I’m convicted for a violation of the wireless telephone law?
A: NO. The violation is a reportable offense: however, DMV will not assign a violation point.
Q: Will the conviction appear on my driving record?
A: Yes, but the violation point will not be added.
Q: Will there be a grace period when motorists will only get a warning?
A: NO. The law becomes in effect on July 1, 2008. Whether a citation is issued is always at the discretion of the officer based upon his or her determination of the most appropriate remedy for the situation.
Q: Are passengers affected by this law?
A: No. This law only applies to the person driving a motor vehicle.
Q: Do these laws apply to out-of-state drivers whose home states do not have such laws?
A: Yes
Q: Can I be pulled over by a law enforcement officer for using my handheld wireless telephone?
A: YES. A law enforcement officer can pull you over just for this infraction.
Q: What if my phone has a push-to-talk feature, can I use that?
A: No. The law does provide an exception for those operating a commercial motor truck or truck tractor (excluding pickups), implements of husbandry, farm vehicle or tow truck, to use a two-way radio operated by a “push-to-talk” feature. However, a push-to-talk feature attached to a hands-free ear piece or other hands-free device is acceptable.
Q: What other exceptions are there?
A: Operators of an authorized emergency vehicle during the course of employment are exempt as are those motorists operating a vehicle on private property
DRIVERS 18 AND OVER
Drivers 18 and over will be allowed to use a hands-free device to talk on their wireless telephone while driving. The following FAQs apply to those motorists 18 and over.
Q: Does the new “hands-free” law prohibit you from dialing a wireless telephone while driving or just talking on it?
A: The new law does not prohibit dialing, but drivers are strongly urged not to dial while driving.
Q: Will it be legal to use a Blue Tooth or other earpiece?
A: Yes, however you cannot have BOTH ears covered.
Q: Does the new hands-free law allow you to use the speaker phone function of your wireless telephone while driving?
A: Yes.
Q: Does the new “hands-free” law allow drivers 18 and over to text page while driving?
A: The law does not specifically prohibit that, but an officer can pull over and issue a citation to a driver of any age if, in the officer’s opinion, the driver was distracted and not operating the vehicle safely. Text paging while driving is unsafe at any speed and is strongly discouraged.
DRIVERS UNDER 18
Q: Am I allowed to use my wireless telephone hands free?
A: NO. Drivers under the age of 18 may not use a wireless telephone, pager, laptop or any other electronic communication or mobile services device to speak or text while driving in any manner, even hands free. EXCEPTION: Permitted in emergency situations to call police, fire or medical authorities. (VC §23124).
Q: Why is the law stricter for provisional drivers?
A: Statistics show that teen drivers are more likely than older drivers to be involved in crashes because they lack driving experience and tend to take greater risks. Teen drivers are vulnerable to driving distractions such as talking with passengers, eating or drinking, and talking or texting on wireless phones, which increase the chance of getting involved in serious vehicle crashes.
Q: Can my parents give me permission to allow me to use my wireless telephone while driving?
A: NO. The only exception is an emergency situation that requires you to call a law enforcement agency, a health care provider, the fire department or other emergency agency entity.
Q: Does the law apply to me if I’m an emancipated minor?
A: Yes. The restriction applies to all licensed drivers who are under the age of 18.
Q: If I have my parent(s) or someone age 25 years or older in the car with me, may I use my wireless telephone while driving?
A: NO. You may only use your wireless telephone in an emergency situation.
Q: Will the restriction appear on my provisional license?
A: No
Q: May I use the hands-free feature while driving if my car has the feature built in?
A: NO. The law prohibits anyone under the age of 18 from using any type of wireless device while driving, except in an emergency situation.
Q: Can a law enforcement officer stop me for using my hands-free device while driving?
A: No. For drivers under the age of 18, this is considered a SECONDARY violation meaning that a law enforcement officer may cite you for using a hands-free wireless phone if you were pulled over for another violation. However, the prohibition against using a handheld wireless telephone while driving is a PRIMARY violation for which a law enforcement officer can pull you over.
Sunday, June 8, 2008
Santa Cruz County Real Estate Report for May 2008
Not much has changed since 60 Minutes first broadcast the story last January about the causes of the subprime mortgage mess and its effect on the economy. What’s behind the subprime mortgage mess? Banks loaned hundreds of millions of dollars to homebuyers who otherwise wouldn’t qualify on the assumption that home values would continue to increase. Wall Street packaged these loans as securities and sold them as investments. Those investments collapsed beginning in July 2007 under the weight of the housing market slowdown. Observers say many borrowers who ended up in default or foreclosure got there because they bought without a down payment and borrowed significantly more than the home was worth. Mortgage lenders, meanwhile, readily approved buyers based on their "stated income. According to CBS, "100 of the world’s biggest financial institutions now are on the hook for a reported total of $379 million in bad debt – and counting.
Making Sense of the Story for Consumers:
Homeowners who borrowed against the value of their second home, or who financed the purchase of their second home and subsequent homes by pledging their primary home or other properties as security, may be liable for taxes on the difference in value should they sell any of their properties for a price less than the value owed on the mortgage. Under the Mortgage Forgiveness Debt Relief Act, a homeowner doesn’t have to pay taxes on forgiven debt if the collateral behind the mortgage is owner-occupied. That provision doesn’t apply to a growing number of homeowners renting out their second home or investment property. Of some 7.5 million vacation homes, only about 10 percent are considered owner-occupied, according to the NATIONAL ASSOCIATION of REALTORS® (NAR). Many of these homeowners borrowed against the ever-increasing (or so it seemed) value of these properties to finance improvements or to buy other properties. There may be a way out for some, one bankruptcy lawyer counsels: Get a lender to agree that foreclosure “fully satisfies all obligations under the loan.” That might protect the seller from having to pay taxes on the forgiven debt – although one attorney said, "I sure don’t want to be the one litigating it" in court.
Some Interesting Info about Short Sales:
In a short sale, homesellers ask their lender to accept a buyer’ s offer that is less than the amount needed to pay off the balance of the mortgage. Lenders who agree to a short sale also typically agree to forgive the remaining debt. Many call short sales a win-win for lenders and homeowners. The homeowner avoids foreclosure and banks avoid the cost of carrying the property through the lengthy foreclosure process, not to mention the hassles of selling an empty property in a market saturated with other foreclosures.
On average, lenders lose approximately 19% of a mortgage’s value with a short sale but lose an average of 40% on mortgages that proceed to foreclosure, according to one source. The problem with short sales? Like other foreclosure mitigation efforts, the challenge is in determining which financial entity “owns” the loan and, thus, has the final say on a short sale offer. Banks also have been slow to ramp up internal processes needed to review and approve short sale packages. Delays and last-minute dickering often prolong or even derail transaction closings and creates frustration for potential homebuyers.
Local Monthly Stats for May show that the most activity in the Santa Cruz County market on single family homes was in the $500,000 price range with the listing ratio vs selling ratio at <9.3%>. Not surprising following in second were homes priced over $1M. This area of the market seems to be the one where second home buyers and investors are seeing the most opportunity in getting a great value.
----------------------------------------------------------------------
May Statistical Highlights for Single Family Homes:* Inventory increased 2.2% from April 2008, and up 6.6% compared to May 2007
* Sales increased 15.2% from April 2008, but still down 16.5% compared to May 2007
* Days on the market decreased to 91, month prior 106, prior year 89
* Median home price decreased from prior month to $645,000, and decreased 15.1% from May 2007
* Sales price vs.listing price ratio decreased to 95.51% from April 2008
* 9.8 months of inventory available at the end of May as compared to 7.7 in May 2007
-----------------------------------------------------------------------
(These statistics are believed to be accurate but not guaranteed)
For the second straight month The area of the market selling closer to listing price is the $800,000 price range followed closely by the $900,000 price range. Were these properties once priced over a million?
Making Sense of the Story for Consumers:
Homeowners who borrowed against the value of their second home, or who financed the purchase of their second home and subsequent homes by pledging their primary home or other properties as security, may be liable for taxes on the difference in value should they sell any of their properties for a price less than the value owed on the mortgage. Under the Mortgage Forgiveness Debt Relief Act, a homeowner doesn’t have to pay taxes on forgiven debt if the collateral behind the mortgage is owner-occupied. That provision doesn’t apply to a growing number of homeowners renting out their second home or investment property. Of some 7.5 million vacation homes, only about 10 percent are considered owner-occupied, according to the NATIONAL ASSOCIATION of REALTORS® (NAR). Many of these homeowners borrowed against the ever-increasing (or so it seemed) value of these properties to finance improvements or to buy other properties. There may be a way out for some, one bankruptcy lawyer counsels: Get a lender to agree that foreclosure “fully satisfies all obligations under the loan.” That might protect the seller from having to pay taxes on the forgiven debt – although one attorney said, "I sure don’t want to be the one litigating it" in court.
Some Interesting Info about Short Sales:
In a short sale, homesellers ask their lender to accept a buyer’ s offer that is less than the amount needed to pay off the balance of the mortgage. Lenders who agree to a short sale also typically agree to forgive the remaining debt. Many call short sales a win-win for lenders and homeowners. The homeowner avoids foreclosure and banks avoid the cost of carrying the property through the lengthy foreclosure process, not to mention the hassles of selling an empty property in a market saturated with other foreclosures.
On average, lenders lose approximately 19% of a mortgage’s value with a short sale but lose an average of 40% on mortgages that proceed to foreclosure, according to one source. The problem with short sales? Like other foreclosure mitigation efforts, the challenge is in determining which financial entity “owns” the loan and, thus, has the final say on a short sale offer. Banks also have been slow to ramp up internal processes needed to review and approve short sale packages. Delays and last-minute dickering often prolong or even derail transaction closings and creates frustration for potential homebuyers.
Local Monthly Stats for May show that the most activity in the Santa Cruz County market on single family homes was in the $500,000 price range with the listing ratio vs selling ratio at <9.3%>. Not surprising following in second were homes priced over $1M. This area of the market seems to be the one where second home buyers and investors are seeing the most opportunity in getting a great value.
----------------------------------------------------------------------
May Statistical Highlights for Single Family Homes:* Inventory increased 2.2% from April 2008, and up 6.6% compared to May 2007
* Sales increased 15.2% from April 2008, but still down 16.5% compared to May 2007
* Days on the market decreased to 91, month prior 106, prior year 89
* Median home price decreased from prior month to $645,000, and decreased 15.1% from May 2007
* Sales price vs.listing price ratio decreased to 95.51% from April 2008
* 9.8 months of inventory available at the end of May as compared to 7.7 in May 2007
-----------------------------------------------------------------------
(These statistics are believed to be accurate but not guaranteed)
For the second straight month The area of the market selling closer to listing price is the $800,000 price range followed closely by the $900,000 price range. Were these properties once priced over a million?
Sunday, May 11, 2008
Santa Cruz County Real Estate Report for May 2008
SOMETIMES ALL THE NEWS IS NOT BAD!
** Home values dropped 7.7% nationally in the first quarter and five California metropolitan areas were among the markets whose prices plunged by the highest percentage year over year and whose homeowners had high rates of negative equity, according to a report issued the first week in May by Zillow. Nationally, a little more than half of homeowners who purchased during the 2006 market peak today owe more on their home than its current value. Despite the year-over-year decline, the nation as a whole and the four California markets cited as having the greatest decline experienced gains when home prices are annualized over five years. Owing more than a home is worth may not be a problem for homeowners who can afford the monthly payment or who plan to stay in the home for an extended period.
** Fannie Mae’s regulators have taken steps to help free up additional sources of cash by reducing the mandatory reserves the company must maintain. The Office of Federal Housing Enterprise Oversight has said it will again reduce this surplus requirement by five points to 15 percent. That will be followed by another five-point cut in September if Fannie Mae’s position does not worsen. Seventy-five percent of mortgage-backed securities are issued by Fannie Mae and the smaller Freddie Mac. The federal government has positioned the two companies as key players in the effort to restore liquidity and stability to the nation’s real estate finance system.
** Worries that subprime mortgages originated during the peak real estate market would sideswipe borrowers with giant monthly payment increases have been reduced by Federal Reserve rate cuts and other steps to stimulate the nation’s credit markets. In fact, some borrowers with resets occurring today are finding their monthly payments staying much the same. Without the Fed’s rate cuts, more than $100 billion in subprime ARMs would have jumped at least two percentage points. Now, only about $60 billion in these mortgages will adjust up by more than two points.
LOCAL MONTHLY STATS for April show that the most activity in the Santa Cruz County market was in the over $1M price range with the listing ratio vs selling ratio at <9.73%>. Following in second were homes in the $400,000 price range followed by homes priced between $500-$700K. Of all those sold, the average days on market was only 55 as compared to the pending sales which are 112 days on market. This stat is particularly interesting when discovering that 36.4% of the pending are either REO or short sales.
----------------------------------------------------------------------
April Statistical Highlights for Single Family Homes:
* Inventory increased 8.8% from March 2008, and up 8.6% compared to April 2007
* Sales increased 43.8% from March 2008, but still down 19.2% compared to April 2007
* Days on the market decreased to 106, month prior 113, prior year 104
* Median home price increased from prior month to $759,750, and decreased only 2.1% from April 2007
* Sales price vs.listing price ratio increased to 96.91% from March 2008
* 10.9 months of inventory available at the end of April as compared to 10.3 in April 2007
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(These statistics are believed to be accurate but not guaranteed)
So what area of the market do you think is selling closer to listing price? Maybe you would be surprised to know it is the $800,000 price range. Were these sales once over a million? Could be as volume is down 23.7% annualized.
I hope you enjoy my monthly newsletter. Remember, this is truly a buyers market. It is an opportune time to buy with prices low and with reducing inventories. Too soon to indicate a change? Maybe........only time will tell.
** Home values dropped 7.7% nationally in the first quarter and five California metropolitan areas were among the markets whose prices plunged by the highest percentage year over year and whose homeowners had high rates of negative equity, according to a report issued the first week in May by Zillow. Nationally, a little more than half of homeowners who purchased during the 2006 market peak today owe more on their home than its current value. Despite the year-over-year decline, the nation as a whole and the four California markets cited as having the greatest decline experienced gains when home prices are annualized over five years. Owing more than a home is worth may not be a problem for homeowners who can afford the monthly payment or who plan to stay in the home for an extended period.
** Fannie Mae’s regulators have taken steps to help free up additional sources of cash by reducing the mandatory reserves the company must maintain. The Office of Federal Housing Enterprise Oversight has said it will again reduce this surplus requirement by five points to 15 percent. That will be followed by another five-point cut in September if Fannie Mae’s position does not worsen. Seventy-five percent of mortgage-backed securities are issued by Fannie Mae and the smaller Freddie Mac. The federal government has positioned the two companies as key players in the effort to restore liquidity and stability to the nation’s real estate finance system.
** Worries that subprime mortgages originated during the peak real estate market would sideswipe borrowers with giant monthly payment increases have been reduced by Federal Reserve rate cuts and other steps to stimulate the nation’s credit markets. In fact, some borrowers with resets occurring today are finding their monthly payments staying much the same. Without the Fed’s rate cuts, more than $100 billion in subprime ARMs would have jumped at least two percentage points. Now, only about $60 billion in these mortgages will adjust up by more than two points.
LOCAL MONTHLY STATS for April show that the most activity in the Santa Cruz County market was in the over $1M price range with the listing ratio vs selling ratio at <9.73%>. Following in second were homes in the $400,000 price range followed by homes priced between $500-$700K. Of all those sold, the average days on market was only 55 as compared to the pending sales which are 112 days on market. This stat is particularly interesting when discovering that 36.4% of the pending are either REO or short sales.
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April Statistical Highlights for Single Family Homes:
* Inventory increased 8.8% from March 2008, and up 8.6% compared to April 2007
* Sales increased 43.8% from March 2008, but still down 19.2% compared to April 2007
* Days on the market decreased to 106, month prior 113, prior year 104
* Median home price increased from prior month to $759,750, and decreased only 2.1% from April 2007
* Sales price vs.listing price ratio increased to 96.91% from March 2008
* 10.9 months of inventory available at the end of April as compared to 10.3 in April 2007
-----------------------------------------------------------------------
(These statistics are believed to be accurate but not guaranteed)
So what area of the market do you think is selling closer to listing price? Maybe you would be surprised to know it is the $800,000 price range. Were these sales once over a million? Could be as volume is down 23.7% annualized.
I hope you enjoy my monthly newsletter. Remember, this is truly a buyers market. It is an opportune time to buy with prices low and with reducing inventories. Too soon to indicate a change? Maybe........only time will tell.
U.S.home slump puts owners under water, as reported by Zillow
Home values dropped 7.7 percent nationally in the first quarter and five California metropolitan areas were among the markets whose prices plunged by the highest percentage year over year and whose homeowners had high rates of negative equity, according to a report issued Tuesday by Zillow. Nationally, a little more than half of homeowners who purchased during the 2006 market peak today owe more on their home than its current value.
130 of 160 metro markets included in the survey now are priced lower than a year ago. Among the California markets suffering the greatest decline: Stockton (-33.5 percent), Riverside/San Bernardino/Ontario (-26 percent), Greater Sacramento (-20.5 percent) and Los Angeles/Long Beach/Orange County (-16.4 percent).
Despite the year-over-year decline, the nation as a whole and the four California markets cited as having the greatest decline experienced gains when home prices are annualized over five years. Home prices experienced a net gain of 4.7 percent nationally over five years, 6.2 percent in Los Angeles/Long Beach/Orange County, 5.8 percent in Riverside/San Bernardino/Ontario, 1.5 percent in Greater Sacramento, and 0.3 percent in Stockton.
Zillow calculated that 95.8 percent of Stockton-area homeowners who purchased in 2006 now owe more than their home is worth: In Riverside/San Bernardino/Ontario the number stands at 88.5 percent; in Los Angeles/Long Beach/Orange County the number is 71.6 percent; and 69.4 percent in Sacramento.
Owing more than a home is worth may not be a problem for homeowners who can afford the monthly payment or who plan to stay in the home for an extended period. Those most affected are people who have lost a job or obtained a mortgage they couldn’t afford, those seeking to refinance into a lower or fixed interest rate, or those whose circumstances require them to sell now.
130 of 160 metro markets included in the survey now are priced lower than a year ago. Among the California markets suffering the greatest decline: Stockton (-33.5 percent), Riverside/San Bernardino/Ontario (-26 percent), Greater Sacramento (-20.5 percent) and Los Angeles/Long Beach/Orange County (-16.4 percent).
Despite the year-over-year decline, the nation as a whole and the four California markets cited as having the greatest decline experienced gains when home prices are annualized over five years. Home prices experienced a net gain of 4.7 percent nationally over five years, 6.2 percent in Los Angeles/Long Beach/Orange County, 5.8 percent in Riverside/San Bernardino/Ontario, 1.5 percent in Greater Sacramento, and 0.3 percent in Stockton.
Zillow calculated that 95.8 percent of Stockton-area homeowners who purchased in 2006 now owe more than their home is worth: In Riverside/San Bernardino/Ontario the number stands at 88.5 percent; in Los Angeles/Long Beach/Orange County the number is 71.6 percent; and 69.4 percent in Sacramento.
Owing more than a home is worth may not be a problem for homeowners who can afford the monthly payment or who plan to stay in the home for an extended period. Those most affected are people who have lost a job or obtained a mortgage they couldn’t afford, those seeking to refinance into a lower or fixed interest rate, or those whose circumstances require them to sell now.
Thursday, April 10, 2008
Santa Cruz County Real Estate Report for April 2008
MAKING SENSE OF THE STORY FOR CONSUMERS:
The riskiest markets are those with high foreclosure rates, slow or no job growth, and a glut of homes on the market. Markets like Detroit, Cleveland, and Miami display all three characteristics.
By contrast, transactions are rising in San Diego, and that’s a good sign (assuming the increase is sustained). Rising transaction numbers may mean credit is becoming easier to come by and buyers are looking somewhat more favorably on the market. In fact, Forbes suggests prices also may begin to rise over the next six months. That’s because there usually is a lag between increases in transaction numbers and price increases.
The Forbes report also projects better times ahead for San Diego and Sacramento thanks to a 125 percent increase in Fannie Mae/Freddie Mac conforming loan limits. In San Diego, the report notes, 18 percent of the market will see improved lending conditions.
BUYERS WAITING FOR THE RECESSION to pass before getting into the market might not want to wait too long: Clive Granger, winner of the 2003 Nobel Prize in Economics and professor emeritus at UC San Diego, says the U.S. economy has been in a recession for about four months. He expects the current recession to last an additional 2-6 months, depending on what occurs in the housing and financial markets.
SINGLE FAMILY HOME STARTS will drop to their lowest level in 50 years this year, Freddie Mac Chief Economist Frank Nothaft told a lunch audience last week. That’s good news for resale housing, which has a lot of unsold inventory to work through before prices can begin to move up. He expects that life should begin to return to the housing sector late this year or early next but says prices may not recover significantly until 2010.
LOCAL MONTHLY STATS for March show that the most activity in the Santa Cruz County market was in the $600,000 price range with the listing ratio vs the selling ratio at <6.3%>. Following in second were homes in the $500,000 price range followed by homes priced over $1M. In addition, only 14% of those sold were short sales or bank owned and they were all under $500,000 and mistily in the Watsonville area.
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March Statistical Highlights for Single Family Homes:
* Inventory up 15.0% compared to March 2007, and increased7.6% from February 2008
* Sales down 46.3% compared to March 2007, but UP 2.8% from February 2008
* Days on the market increased to 113, month prior 107, prior year 86
* Median home price increased from prior month to $675,000, and decreased 9.9% from March 2007
* Sales price vs.listing price ratio increased to 95.57% from February 2008
* 14.6 months of inventory available at the end of March as compared to 6.8 in March 2007
-----------------------------------------------------------------------
(These statistics are believed to be accurate but not guaranteed)
So what area of the market do you think is selling closer to listing price? Maybe you would be surprised to know it is the $900,000 price range, followed closely by $800,000 and the $700,000.
The riskiest markets are those with high foreclosure rates, slow or no job growth, and a glut of homes on the market. Markets like Detroit, Cleveland, and Miami display all three characteristics.
By contrast, transactions are rising in San Diego, and that’s a good sign (assuming the increase is sustained). Rising transaction numbers may mean credit is becoming easier to come by and buyers are looking somewhat more favorably on the market. In fact, Forbes suggests prices also may begin to rise over the next six months. That’s because there usually is a lag between increases in transaction numbers and price increases.
The Forbes report also projects better times ahead for San Diego and Sacramento thanks to a 125 percent increase in Fannie Mae/Freddie Mac conforming loan limits. In San Diego, the report notes, 18 percent of the market will see improved lending conditions.
BUYERS WAITING FOR THE RECESSION to pass before getting into the market might not want to wait too long: Clive Granger, winner of the 2003 Nobel Prize in Economics and professor emeritus at UC San Diego, says the U.S. economy has been in a recession for about four months. He expects the current recession to last an additional 2-6 months, depending on what occurs in the housing and financial markets.
SINGLE FAMILY HOME STARTS will drop to their lowest level in 50 years this year, Freddie Mac Chief Economist Frank Nothaft told a lunch audience last week. That’s good news for resale housing, which has a lot of unsold inventory to work through before prices can begin to move up. He expects that life should begin to return to the housing sector late this year or early next but says prices may not recover significantly until 2010.
LOCAL MONTHLY STATS for March show that the most activity in the Santa Cruz County market was in the $600,000 price range with the listing ratio vs the selling ratio at <6.3%>. Following in second were homes in the $500,000 price range followed by homes priced over $1M. In addition, only 14% of those sold were short sales or bank owned and they were all under $500,000 and mistily in the Watsonville area.
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March Statistical Highlights for Single Family Homes:
* Inventory up 15.0% compared to March 2007, and increased7.6% from February 2008
* Sales down 46.3% compared to March 2007, but UP 2.8% from February 2008
* Days on the market increased to 113, month prior 107, prior year 86
* Median home price increased from prior month to $675,000, and decreased 9.9% from March 2007
* Sales price vs.listing price ratio increased to 95.57% from February 2008
* 14.6 months of inventory available at the end of March as compared to 6.8 in March 2007
-----------------------------------------------------------------------
(These statistics are believed to be accurate but not guaranteed)
So what area of the market do you think is selling closer to listing price? Maybe you would be surprised to know it is the $900,000 price range, followed closely by $800,000 and the $700,000.
Thursday, April 3, 2008
America's Riskiest Real Estate Markets
There's roulette and there's skydiving. Then there's investing in Detroit and Cleveland real estate. That's especially risky because those markets are in freefall. Lenders have fled, foreclosures are on the rise, homes aren't selling and local economies have stalled.
Given the state of the country's housing market, it wasn't hard to find others like them. To do so, Forbes.com looked at the country's 40 largest metros and combined data on foreclosures, from RealtyTrac, a foreclosure listing service; job growth from the Bureau of Labor Statistics; transaction volume data from Radar Logic, a New York real estate research firm; and vacancy and current inventory rates from the U.S. Census Bureau and ZipRealty, an aggregator of multiple listing service data.
The riskiest were those that had the highest foreclosure rates, slow job growth (or job loss) and a rash of listed homes. By these measures, Orlando has everything working against it. Other spots, Denver, for example, exhibit negative characteristics like foreclosures, lending problems and vacancies, but are adding jobs, a sign that the local economy can better handle these difficulties.
Risky Business
Before "write-down" entered the national lexicon, the biggest risk facing real estate markets was the prevalence of subprime loans and adjustable rate mortgages. Last year, before the shoe-drop of the credit crunch and the dropping value of banks' loans and debt, we identified ARM-heavy Miami, Fla., Orlando, Fla., and Sacramento, Calif., as the markets most at risk of further fall.
Subprime still matters, as do the concentration of adjustable rate mortgages. Transaction volume, however, especially over the next 12 months is becoming an increasingly important gauge of a market's health. This month the National Association of Realtors reported that sales volume of existing homes was up 2.9%, the first such month-to-month rise since July.
In cities like San Diego, one of five major metros where transactions rose, that's good news, assuming it's sustained. What makes transaction volume a good indicator is that it shows how easy it is for people to get loans and how much confidence there is in the market. If mortgages are available and buyers have some faith in the value of the home, they're more likely to buy.
San Diego's present conditions suggest that over the next half-year, prices may start to rise. That's because "there's usually a three- to six-month lag between when transactions go up and prices go up," says Jonathan Miller, president of Miller Samuel, a Manhattan real estate appraisal firm.
Another good sign for the coming year? Increased credit availability. We took into account increased Fannie Mae and Freddie Mac (GSE) loan limits. The new legislation will open up credit in markets such as Sacramento and San Diego by boosting the GSE loan limit by 125% of the median price. That's a huge deal for San Diego, where 18% of the market will see improved lending conditions, based on projections by Radar Logic, a New York-based real estate research firm.
Not as fortunate are hard-hit foreclosure markets such as Denver, which saw 50,000 foreclosure filings last year, according to RealtyTrac, which comes out to a 2.6% foreclosure rate, ninth in the nation behind the likes of Las Vegas and Detroit. Here, GSE loan limits won't change to boost liquidity, though at the beginning of this year the local economy had added jobs at a rate of 2%, which is triple the national average, according to the Bureau of Labor Statistics.
The availability of jobs gets at the critical question of how much money is available within a market. A market with money on the sidelines has better recovery prospects because it means potential buyers are out there. A market without economic activity to generate buyers is simply sinking.
"People aren't pulling the trigger right now," says Steve Cesinger, vice-chairman at Dewberry Holdings, an Atlanta-based real estate investment group. "But it's a big difference if they're not pulling the trigger because the prices haven't declined enough or because they're waiting to catch the bottom."
Matt Woolsey, Forbes Magazine, 03.31.08, 10:30 AM ET
Given the state of the country's housing market, it wasn't hard to find others like them. To do so, Forbes.com looked at the country's 40 largest metros and combined data on foreclosures, from RealtyTrac, a foreclosure listing service; job growth from the Bureau of Labor Statistics; transaction volume data from Radar Logic, a New York real estate research firm; and vacancy and current inventory rates from the U.S. Census Bureau and ZipRealty, an aggregator of multiple listing service data.
The riskiest were those that had the highest foreclosure rates, slow job growth (or job loss) and a rash of listed homes. By these measures, Orlando has everything working against it. Other spots, Denver, for example, exhibit negative characteristics like foreclosures, lending problems and vacancies, but are adding jobs, a sign that the local economy can better handle these difficulties.
Risky Business
Before "write-down" entered the national lexicon, the biggest risk facing real estate markets was the prevalence of subprime loans and adjustable rate mortgages. Last year, before the shoe-drop of the credit crunch and the dropping value of banks' loans and debt, we identified ARM-heavy Miami, Fla., Orlando, Fla., and Sacramento, Calif., as the markets most at risk of further fall.
Subprime still matters, as do the concentration of adjustable rate mortgages. Transaction volume, however, especially over the next 12 months is becoming an increasingly important gauge of a market's health. This month the National Association of Realtors reported that sales volume of existing homes was up 2.9%, the first such month-to-month rise since July.
In cities like San Diego, one of five major metros where transactions rose, that's good news, assuming it's sustained. What makes transaction volume a good indicator is that it shows how easy it is for people to get loans and how much confidence there is in the market. If mortgages are available and buyers have some faith in the value of the home, they're more likely to buy.
San Diego's present conditions suggest that over the next half-year, prices may start to rise. That's because "there's usually a three- to six-month lag between when transactions go up and prices go up," says Jonathan Miller, president of Miller Samuel, a Manhattan real estate appraisal firm.
Another good sign for the coming year? Increased credit availability. We took into account increased Fannie Mae and Freddie Mac (GSE) loan limits. The new legislation will open up credit in markets such as Sacramento and San Diego by boosting the GSE loan limit by 125% of the median price. That's a huge deal for San Diego, where 18% of the market will see improved lending conditions, based on projections by Radar Logic, a New York-based real estate research firm.
Not as fortunate are hard-hit foreclosure markets such as Denver, which saw 50,000 foreclosure filings last year, according to RealtyTrac, which comes out to a 2.6% foreclosure rate, ninth in the nation behind the likes of Las Vegas and Detroit. Here, GSE loan limits won't change to boost liquidity, though at the beginning of this year the local economy had added jobs at a rate of 2%, which is triple the national average, according to the Bureau of Labor Statistics.
The availability of jobs gets at the critical question of how much money is available within a market. A market with money on the sidelines has better recovery prospects because it means potential buyers are out there. A market without economic activity to generate buyers is simply sinking.
"People aren't pulling the trigger right now," says Steve Cesinger, vice-chairman at Dewberry Holdings, an Atlanta-based real estate investment group. "But it's a big difference if they're not pulling the trigger because the prices haven't declined enough or because they're waiting to catch the bottom."
Matt Woolsey, Forbes Magazine, 03.31.08, 10:30 AM ET
Sunday, March 23, 2008
How home prices faired in 20 markets in 2007
National home prices fell 8.9% in the full-year 2007, according to figures released recently by the Standard & Poor's/Case-Shiller Home Price Index.
"Wherever you look things look bleak," says Robert J. Shiller, chief economist at MacroMarkets LLC, which recently sold its rights in the indices.
Of the top 20 markets tracked by the index, 17 of the metro areas reported annual price declines and the remaining three reporting flat or moderate growth rates. Also 14 of the metro areas are reported record lows and eight are in double-digit decline.
Here's a look at these markets:
"Wherever you look things look bleak," says Robert J. Shiller, chief economist at MacroMarkets LLC, which recently sold its rights in the indices.
Of the top 20 markets tracked by the index, 17 of the metro areas reported annual price declines and the remaining three reporting flat or moderate growth rates. Also 14 of the metro areas are reported record lows and eight are in double-digit decline.
Here's a look at these markets:
Thursday, March 6, 2008
Santa Cruz County Real Estate Report for March 2008
NEW HOME CONSTRUCTION DOWN 62%
New home construction starts in California fell 62% in January as homebuilders continued to cope with slow sales and the ongoing credit crisis, according to the latest data from the California Building Industry Association (CBIA). CBIA Chief Economist Alan Nevin said the drop in new residential projects breaking ground coupled with the ongoing push to move existing inventories, carry the potential to produce a 'severe shortage' of new housing once the real estate market rebounds.
INTEREST RATES ON LONG-TERM, fixed, and adjustable mortgages are at historically low levels. The Fed st arted cutting interest rates to bolster the economy in September, and recently has turned much more aggressive. In eight days in January, the Fed slashed rates by 1.25 percentage points — the biggest single-month reduction in a quarter-century. Since September, the Fed has cut its federal funds rate - what banks charge each other on overnight loans - by 2.25 percentage points to 3 percent. It also cut its discount rate on direct loans it makes to banks by 1.75 points to 3.5 percent. Rates are expected to move lower at the Fed's next meeting on March 18.
RATES MAY SHRINK ON JUMBO MORTGAGES. Homeowners and homebuyers who live in expensive housing markets may be pleased to learn that the federal government recently increased the size of mortgages that Fannie Mae and Freddie Mac can purchase and the Federal Housing Administration, or FHA, can insure. The higher loan limits are expected to help people in high-cost housing markets buy homes and refinance existing mortgages, though the extent of such aid won't be assured until the new programs are put into place.
The law instructed HUD to publish the new conforming and FHA loan limits for each county within 30 days after President Bush signed the legislation, which would set a March 14 deadline. Until then, it's nearly impossible to pinpoint the limits for each county because the law is very technical and HUD hasn't yet said which data source it will use to set the median home prices.
LOCAL MONTHLY STATS are out and show a continued decrease in the number of sales. The good news is that sales were up from January and most agents in the know agree there has been an upturn in the activity. Personally, I am seeing those who have been looking for some time getting more serious. In all honesty, it is a great time to buy. No matter where you choose to invest, the market is exce ptional and presents an opportunity long overdue.
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February Statistical Highlights for Single Family Homes:
* Inventory up 20.9% compared to February 200 7, and increased 6.2% from January 2008
* Sales down 44.5% compared to February 2007, but UP 16.4% from January 2008
* Days on the market decreased to 107, month prior 145, prior year 129
* Median home price decreased from prior month to $664,000, and decreased 7.5% from February 2007
* Sales price vs.listing price ratio decreased to 94.83% from January 2008
* 13.9 months of inventory available at the end of February as compared to 6.4 in February 2007, but down from January 2008
-----------------------------------------------------------------------
(These statistics are believed to be accurate but not guaranteed)
Here is an interesting stat: In February of 2007 only 7.3% of the sales were under $500,000 as compared to February 2008 at 17.5%. In addition, there were 79 active listings under $500,000 at the end of February 2007 and currently there are 295. The saga continues...........
New home construction starts in California fell 62% in January as homebuilders continued to cope with slow sales and the ongoing credit crisis, according to the latest data from the California Building Industry Association (CBIA). CBIA Chief Economist Alan Nevin said the drop in new residential projects breaking ground coupled with the ongoing push to move existing inventories, carry the potential to produce a 'severe shortage' of new housing once the real estate market rebounds.
INTEREST RATES ON LONG-TERM, fixed, and adjustable mortgages are at historically low levels. The Fed st arted cutting interest rates to bolster the economy in September, and recently has turned much more aggressive. In eight days in January, the Fed slashed rates by 1.25 percentage points — the biggest single-month reduction in a quarter-century. Since September, the Fed has cut its federal funds rate - what banks charge each other on overnight loans - by 2.25 percentage points to 3 percent. It also cut its discount rate on direct loans it makes to banks by 1.75 points to 3.5 percent. Rates are expected to move lower at the Fed's next meeting on March 18.
RATES MAY SHRINK ON JUMBO MORTGAGES. Homeowners and homebuyers who live in expensive housing markets may be pleased to learn that the federal government recently increased the size of mortgages that Fannie Mae and Freddie Mac can purchase and the Federal Housing Administration, or FHA, can insure. The higher loan limits are expected to help people in high-cost housing markets buy homes and refinance existing mortgages, though the extent of such aid won't be assured until the new programs are put into place.
The law instructed HUD to publish the new conforming and FHA loan limits for each county within 30 days after President Bush signed the legislation, which would set a March 14 deadline. Until then, it's nearly impossible to pinpoint the limits for each county because the law is very technical and HUD hasn't yet said which data source it will use to set the median home prices.
LOCAL MONTHLY STATS are out and show a continued decrease in the number of sales. The good news is that sales were up from January and most agents in the know agree there has been an upturn in the activity. Personally, I am seeing those who have been looking for some time getting more serious. In all honesty, it is a great time to buy. No matter where you choose to invest, the market is exce ptional and presents an opportunity long overdue.
----------------------------------------------------------------------
February Statistical Highlights for Single Family Homes:
* Inventory up 20.9% compared to February 200 7, and increased 6.2% from January 2008
* Sales down 44.5% compared to February 2007, but UP 16.4% from January 2008
* Days on the market decreased to 107, month prior 145, prior year 129
* Median home price decreased from prior month to $664,000, and decreased 7.5% from February 2007
* Sales price vs.listing price ratio decreased to 94.83% from January 2008
* 13.9 months of inventory available at the end of February as compared to 6.4 in February 2007, but down from January 2008
-----------------------------------------------------------------------
(These statistics are believed to be accurate but not guaranteed)
Here is an interesting stat: In February of 2007 only 7.3% of the sales were under $500,000 as compared to February 2008 at 17.5%. In addition, there were 79 active listings under $500,000 at the end of February 2007 and currently there are 295. The saga continues...........
FED CALLS FOR MORE AGGRESSIVE PLAN TO AID DISTRESSED HOMEOWNERS
Fed Chairman Ben S. Bernanke yesterday called for a more aggressive response to the nation's housing and foreclosure crisis, suggesting that lenders do more to help struggling homeowners avoid foreclosure and, in turn, help stave off further erosion of home prices in distressed areas and the broader economy.
"This situation calls for a vigorous response," Bernanke said. "Measures to reduce preventable foreclosures could help not only stressed borrowers but also their communities and, indeed, the broader economy. At the level of the individual community, increases in foreclosed-upon and vacant properties tend to reduce house prices in the local area, affecting other homeowners and municipal tax bases."
"This situation calls for a vigorous response," Bernanke said. "Measures to reduce preventable foreclosures could help not only stressed borrowers but also their communities and, indeed, the broader economy. At the level of the individual community, increases in foreclosed-upon and vacant properties tend to reduce house prices in the local area, affecting other homeowners and municipal tax bases."
Sunday, March 2, 2008
Practical information to help you navigate today's real estate market
* Interest rates on long-term, fixed, and adjustable mortgages are at historically low levels. The Fed started cutting interest rates to bolster the economy in September, and recently has turned much more aggressive. In eight days in January, the Fed slashed rates by 1.25 percentage points — the biggest single-month reduction in a quarter-century. Since September, the Fed has cut its federal funds rate - what banks charge each other on overnight loans - by 2.25 percentage points to 3 percent. It also cut its discount rate on direct loans it makes to banks by 1.75 points to 3.5 percent. Rates are expected to move lower at the Fed's next meeting on March 18. Despite all this, mortgage rates are starting to creep up. Consumers should lock in low rates now, before they go higher.
* With more homes on the market for longer periods of time, buyers have more choices when it comes to selecting a home today.
* The foreclosure crisis has motivated the government to create more consumer protections against predatory lenders than previously existed.
* A temporary increase in the conforming loan limit means consumers should soon be able to borrow at lower interest rates for higher-priced homes. Prior to the increase, the conforming loan limit was $417,000. The spread between jumbo, or non-conforming mortgage loans and conforming mortgages is about 1.2 percentage points.
* With more homes on the market for longer periods of time, buyers have more choices when it comes to selecting a home today.
* The foreclosure crisis has motivated the government to create more consumer protections against predatory lenders than previously existed.
* A temporary increase in the conforming loan limit means consumers should soon be able to borrow at lower interest rates for higher-priced homes. Prior to the increase, the conforming loan limit was $417,000. The spread between jumbo, or non-conforming mortgage loans and conforming mortgages is about 1.2 percentage points.
Sunday, February 24, 2008
Banks Freeze Homeowners Credit Lines
AS REAL ESTATE VALUES DROP, LIMITS PUT ON EQUITY LOANS
Bay Area residents accustomed to treating their homes like piggy banks could be in for unpleasant surprises as home prices decline in many areas. Not only are banks less willing to issue popular home-equity lines of credit, but some of the nation's biggest lenders are freezing existing loans.
Countrywide Home Loans, for example, has sent letters to at least 122,000 homeowners nationwide informing them they can no longer draw on their home-equity lines of credit. Many homeowners rely on these pay-as-you-use-them loans to finance things like remodeling or college tuition, or to use for emergency expenses.
Morgan Hill homeowner Kelly Urbina received a letter from Countrywide two weeks ago telling her she can no longer access the credit line that she says the lender encouraged her to get when she bought her three-bedroom home in 2006.
"I still have a substantial amount of equity in my property, so I was surprised to get a letter that just said, 'We're going to suspend your line,' " said Urbina, who works as an underwriter for Opes Advisors, a mortgage banking and wealth management firm in Palo Alto. She knows the value of her property has dropped somewhat, but not "significantly," as Countrywide claimed in the letter.
She and her husband used some of the equity line to remodel their kitchen two years ago, but otherwise have reserved it for emergency use. Urbina said she was surprised the lender didn't simply lower the amount of her line of credit, rather than suspend it. "I would have felt that was a very fair thing to do," she said.
Beginning of freeze
Chase and Washington Mutual also have frozen the home-equity lines of a much smaller number of customers in response to falling home values, said officials with the two banks. Wells Fargo said it "has not made large-scale decisions to restrict line-of-credit access for all customers in markets with declining real estate," but is reviewing its home-equity customers' accounts more frequently than in past years.
"Everybody's going to have to do it," said Guy Cecala, publisher of Inside Mortgage Finance. "We're just at the beginning of this trend of lenders freezing home-equity lines of credit."
Countrywide, which is being acquired by Bank of America after incurring huge losses because of its subprime lending, would not specify in which states or areas homeowners were most likely to have received the letters.
Because median home prices in Silicon Valley have held up better than in many parts of California, it's unlikely that a large chunk of the letters went to local homeowners. But mortgage experts say plenty of Bay Area homeowners potentially could get the same kind of news from their lenders if their equity lines of credit were generous and they did not have much equity in their homes to begin with - or if home values in the valley drop more steeply.
"It very much could hit people up here - whether it be Countrywide or another lender - where values have come down," said John Conover, president of Borel Private Bank in San Mateo. "This is a significant issue for people who expect to be able to borrow on their loans."
How equity works
Nationwide, homeowners borrowed $355 billion worth of home-equity loans and lines of credit in 2007, down from $430 billion in 2006, according to Inside Mortgage Finance. California borrowers make up 20 percent to 25 percent of the market.
Equity is a property's market value minus the owner's mortgage debt. So, for a home worth $700,000, if the owner has a $500,000 mortgage, he or she has equity of $200,000, or about 29 percent.
Until recently, some lenders were willing to make a combination of mortgages and equity lines of credit up to 100 percent of the home's value. So the homeowner in the example above could have gotten a home-equity line of $200,000 in addition to the $500,000 mortgage, bringing the debt obligation up to $700,000.
But with home values falling and credit markets still crunched, lenders have narrowed their lending criteria. Few will extend credit past 80 percent of a home's value now. That would cut that homeowner's equity line to $60,000, resulting in a total of $560,000 in mortgage debt.
Lower values
Lenders' changes amount to a sort of hedge against the possibility of further price declines. "Across the board, every lender has been tightening up their guideline with regard to home-equity lines," said Mike Gallagher, president of mortgage broker Avantis Capital in Morgan Hill.
Countrywide cited falling property values as the reason for shutting off so many customers' access to their equity, though lenders also can restrict borrowers' access to their credit lines for other reasons, such as deteriorating credit scores.
Experts called Countrywide's mass mailing to freeze home-equity lines unusual, but noted that in a declining market, lenders need to protect themselves from avoidable losses.
Susan McHan, president of Opes Advisors and homeowner Kelly Urbina's employer, said her company has at least two clients in the East Bay who have received the letters from Countrywide. In both cases, she said, the homeowners dispute that their home values have fallen sharply, and they are working with Countrywide to try to reopen their credit lines. "They had plans that they were going to be using the loans for," McHan said. Her company has notified other clients of the new climate in home-equity lending.
"Anybody who had an equity line of 90 percent or above, we definitely sent letters warning them" that their lenders might suspend their credit lines in the future.
As for Urbina, she was not counting on using her equity line soon, but she likes having one. "What if I did have an emergency and I needed the line?" she said.
________________________________________
Contact Sue McAllister at smcallister@mercurynews.com or (408) 920-5833.
Bay Area residents accustomed to treating their homes like piggy banks could be in for unpleasant surprises as home prices decline in many areas. Not only are banks less willing to issue popular home-equity lines of credit, but some of the nation's biggest lenders are freezing existing loans.
Countrywide Home Loans, for example, has sent letters to at least 122,000 homeowners nationwide informing them they can no longer draw on their home-equity lines of credit. Many homeowners rely on these pay-as-you-use-them loans to finance things like remodeling or college tuition, or to use for emergency expenses.
Morgan Hill homeowner Kelly Urbina received a letter from Countrywide two weeks ago telling her she can no longer access the credit line that she says the lender encouraged her to get when she bought her three-bedroom home in 2006.
"I still have a substantial amount of equity in my property, so I was surprised to get a letter that just said, 'We're going to suspend your line,' " said Urbina, who works as an underwriter for Opes Advisors, a mortgage banking and wealth management firm in Palo Alto. She knows the value of her property has dropped somewhat, but not "significantly," as Countrywide claimed in the letter.
She and her husband used some of the equity line to remodel their kitchen two years ago, but otherwise have reserved it for emergency use. Urbina said she was surprised the lender didn't simply lower the amount of her line of credit, rather than suspend it. "I would have felt that was a very fair thing to do," she said.
Beginning of freeze
Chase and Washington Mutual also have frozen the home-equity lines of a much smaller number of customers in response to falling home values, said officials with the two banks. Wells Fargo said it "has not made large-scale decisions to restrict line-of-credit access for all customers in markets with declining real estate," but is reviewing its home-equity customers' accounts more frequently than in past years.
"Everybody's going to have to do it," said Guy Cecala, publisher of Inside Mortgage Finance. "We're just at the beginning of this trend of lenders freezing home-equity lines of credit."
Countrywide, which is being acquired by Bank of America after incurring huge losses because of its subprime lending, would not specify in which states or areas homeowners were most likely to have received the letters.
Because median home prices in Silicon Valley have held up better than in many parts of California, it's unlikely that a large chunk of the letters went to local homeowners. But mortgage experts say plenty of Bay Area homeowners potentially could get the same kind of news from their lenders if their equity lines of credit were generous and they did not have much equity in their homes to begin with - or if home values in the valley drop more steeply.
"It very much could hit people up here - whether it be Countrywide or another lender - where values have come down," said John Conover, president of Borel Private Bank in San Mateo. "This is a significant issue for people who expect to be able to borrow on their loans."
How equity works
Nationwide, homeowners borrowed $355 billion worth of home-equity loans and lines of credit in 2007, down from $430 billion in 2006, according to Inside Mortgage Finance. California borrowers make up 20 percent to 25 percent of the market.
Equity is a property's market value minus the owner's mortgage debt. So, for a home worth $700,000, if the owner has a $500,000 mortgage, he or she has equity of $200,000, or about 29 percent.
Until recently, some lenders were willing to make a combination of mortgages and equity lines of credit up to 100 percent of the home's value. So the homeowner in the example above could have gotten a home-equity line of $200,000 in addition to the $500,000 mortgage, bringing the debt obligation up to $700,000.
But with home values falling and credit markets still crunched, lenders have narrowed their lending criteria. Few will extend credit past 80 percent of a home's value now. That would cut that homeowner's equity line to $60,000, resulting in a total of $560,000 in mortgage debt.
Lower values
Lenders' changes amount to a sort of hedge against the possibility of further price declines. "Across the board, every lender has been tightening up their guideline with regard to home-equity lines," said Mike Gallagher, president of mortgage broker Avantis Capital in Morgan Hill.
Countrywide cited falling property values as the reason for shutting off so many customers' access to their equity, though lenders also can restrict borrowers' access to their credit lines for other reasons, such as deteriorating credit scores.
Experts called Countrywide's mass mailing to freeze home-equity lines unusual, but noted that in a declining market, lenders need to protect themselves from avoidable losses.
Susan McHan, president of Opes Advisors and homeowner Kelly Urbina's employer, said her company has at least two clients in the East Bay who have received the letters from Countrywide. In both cases, she said, the homeowners dispute that their home values have fallen sharply, and they are working with Countrywide to try to reopen their credit lines. "They had plans that they were going to be using the loans for," McHan said. Her company has notified other clients of the new climate in home-equity lending.
"Anybody who had an equity line of 90 percent or above, we definitely sent letters warning them" that their lenders might suspend their credit lines in the future.
As for Urbina, she was not counting on using her equity line soon, but she likes having one. "What if I did have an emergency and I needed the line?" she said.
________________________________________
Contact Sue McAllister at smcallister@mercurynews.com or (408) 920-5833.
Thursday, February 21, 2008
C.A.R. Reports Entry-Level Housing Affordability at 33%
The percentage of households that could afford to buy an entry-level home in California stood at 33 percent in the fourth quarter of 2007, compared with 25 percent for the same period a year ago, according C.A.R.'s First-time buyer Housing Affordability Index (FTB-HAI) released Tuesday.
The FTB-HAI measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.
The minimum household income needed to purchase an entry-level home at $411,170 in California in the fourth quarter of 2007 was $82,200, based on an adjustable interest rate of 6.21 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $2,740 for the fourth quarter of 2007.
The FTB-HAI measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.
The minimum household income needed to purchase an entry-level home at $411,170 in California in the fourth quarter of 2007 was $82,200, based on an adjustable interest rate of 6.21 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $2,740 for the fourth quarter of 2007.
Friday, February 15, 2008
How the economic stimulus package addressess the mortgage crisis
President Bush Wednesday signed off on the $168 billion stimulus packaged approved by Congress last week, which, in addition to tax rebates for millions of working Americans and business owners, includes a vital, but temporary increase in the conforming loan limit. The economic stimulus package will allow the Federal Housing Administration, as well as Fannie Mae and Freddie Mac, to offer mortgages above the current conforming loan limit of $417,000 to as much as $729,750 in high-cost areas using a formula that considers an area’s median home price. The increase would only apply to loans originated between July 1, 2007 and Dec. 31, 2008. A host of details remain to be worked out, including how the median home price is established.
MAKING SENSE OF THE STORY FOR CONSUMERS
· It could be several months before the impact is felt in the mortgage markets. Wall Street is still working out whether investors will want to bundle securitized loans above $417,000 with loans below that level, or if they will invest in them separately.
· Rates for such loans might be higher because banks fear larger loans are riskier, but they’d still likely be lower than current jumbo rates.
· Even though the proposal does not apply to loans made before July 1, borrowers with older mortgages could refinance into new loans that would be sold to Fannie and Freddie, because those loans would be considered new loans.
MAKING SENSE OF THE STORY FOR CONSUMERS
· It could be several months before the impact is felt in the mortgage markets. Wall Street is still working out whether investors will want to bundle securitized loans above $417,000 with loans below that level, or if they will invest in them separately.
· Rates for such loans might be higher because banks fear larger loans are riskier, but they’d still likely be lower than current jumbo rates.
· Even though the proposal does not apply to loans made before July 1, borrowers with older mortgages could refinance into new loans that would be sold to Fannie and Freddie, because those loans would be considered new loans.
Sunday, February 10, 2008
Santa Cruz County Real Estate Report for February 2008
ECONOMY WEAK, BUT NO RECESSION: In a speech given late Thursday in Hawaii, Janet Yellen, the San Francisco Fed president, said an economic downturn - led by a decline in the housing market - will remain with us for at least the remainder of 2008. 'I consider it most probable that the U.S. economy will experience slow growth, and not outright recession, in coming quarters,' Yellen said. She warned that economic prospects are uncertain and downside economic risks remain. Read the rest of the story at http://money.cnn.com/2008/02/08/news/economy/yellen_speech/index.htm?postversion=2008020809 .
THE MORTGAGE INDUSTRY IS working hard to help more and more homeowners who are in difficulty, but obviously there is much more to be done. Among the subprime borrowers who have gotten help through permanent-loan modifications from a group of lenders, investors and nonprofits (dubbed Hope Now) are 150,000 buyers nationwide, while 395,000 negotiated repayment plans, which often involve a borrower getting back on track even though a few payments were missed.
LOCALLY AND NATIONALLY, mortgage application volume increased 3 percent during the week ending Feb. 1, according to the Mortgage Bankers Association's weekly application survey. Application volume was pushed higher by a 12 percent jump in purchase applications. Refinance volume fell 1 percent, but accounted for 69.2 percent of all mortgage applications.
OUR MARKET IS SEEING SIGNS OF REVIVAL: January stats are out and show a significant decrease in the number of sales (down 48.6% annualized), but the average sales price is still holding strong only down 8.6%. The biggest difference is that we are averaging 15 months worth of inventory County wide as compared to only 7 at this time last year. Individual areas of the County vary, such as Santa Cruz proper with 9 months and Watsonville at 24 months.
----------------------------------------------------------------------
January Statistical Highlights for Single Family Homes:
* Inventory up 21.9% compared to January 2006, and increased 2.4% from December 2007
* Sales down 44.0% compared to January 2006, and down 16.4% from December 2007
* Days on the market increased to 145, month prior 105, prior year 120
* Median home price decreased from prior month to $708,257, but increased slightly 0.46% from January 2006
* Sales price vs.listing price ratio increased slightly to 96.94% from December
* 15.3 months of inventory available at the end of January as compared to 7 in January 2006
-----------------------------------------------------------------------
(These statistics are believed to be accurate but not guaranteed)
Here is an interesting stat: Current single family home residential listings priced $1M and over have increased 10.9% in the past year as compared to listings priced $600K and under which have increased a whopping 64.4%. Does this give you any indication of what is happening in our local market! Give me a call to take advantage of this market before it goes away. I would appreciate the opportunity to help you.
I hope you enjoy my monthly newsletter. Let me know if there are other facets of the market you would like additional information about or would like a comparative market analysis on your property.
THE MORTGAGE INDUSTRY IS working hard to help more and more homeowners who are in difficulty, but obviously there is much more to be done. Among the subprime borrowers who have gotten help through permanent-loan modifications from a group of lenders, investors and nonprofits (dubbed Hope Now) are 150,000 buyers nationwide, while 395,000 negotiated repayment plans, which often involve a borrower getting back on track even though a few payments were missed.
LOCALLY AND NATIONALLY, mortgage application volume increased 3 percent during the week ending Feb. 1, according to the Mortgage Bankers Association's weekly application survey. Application volume was pushed higher by a 12 percent jump in purchase applications. Refinance volume fell 1 percent, but accounted for 69.2 percent of all mortgage applications.
OUR MARKET IS SEEING SIGNS OF REVIVAL: January stats are out and show a significant decrease in the number of sales (down 48.6% annualized), but the average sales price is still holding strong only down 8.6%. The biggest difference is that we are averaging 15 months worth of inventory County wide as compared to only 7 at this time last year. Individual areas of the County vary, such as Santa Cruz proper with 9 months and Watsonville at 24 months.
----------------------------------------------------------------------
January Statistical Highlights for Single Family Homes:
* Inventory up 21.9% compared to January 2006, and increased 2.4% from December 2007
* Sales down 44.0% compared to January 2006, and down 16.4% from December 2007
* Days on the market increased to 145, month prior 105, prior year 120
* Median home price decreased from prior month to $708,257, but increased slightly 0.46% from January 2006
* Sales price vs.listing price ratio increased slightly to 96.94% from December
* 15.3 months of inventory available at the end of January as compared to 7 in January 2006
-----------------------------------------------------------------------
(These statistics are believed to be accurate but not guaranteed)
Here is an interesting stat: Current single family home residential listings priced $1M and over have increased 10.9% in the past year as compared to listings priced $600K and under which have increased a whopping 64.4%. Does this give you any indication of what is happening in our local market! Give me a call to take advantage of this market before it goes away. I would appreciate the opportunity to help you.
I hope you enjoy my monthly newsletter. Let me know if there are other facets of the market you would like additional information about or would like a comparative market analysis on your property.
Saturday, January 12, 2008
Santa Cruz County Real Estate Report for January 2008
2008 IS DOMINATED BY THE VIBRANT AND POWERFUL NUMBER 1..
Although every year promises changes and new beginnings, 2008 will stand out in future history books according to numerology experts. And if you are a student of Chinese Astrology, 2008 is the year of the rat.
So what about 2007 you ask? Who cares, it is over (thank goodness) A rocky time for many, especially the mortgage industry, home owners and potential buyers, agents, and our economy. I am focused totally on what's ahead. Don't you agree!
CONSUMER CONFIDENCE UP SLIGHTLY in December, after consecutive declines since summer. The index now stands at 88.6, up from 87.8 in November. 'This month's slight gain in confidence was due solely to an increase in the Expectations Index,' said Lynn Franco, director of The Conference Board Consumer Research Center. 'Consumers' short-term outlook regarding business conditions, employment, inflation, and stock prices improved marginally. However, while consumers are less negative about the near-term future, they remain far from optimistic.'
MORTGAGE RATES DROP TO their lowest point in more than two years. Too bad more people won't -- or can't -- take advantage. The benchmark 30-year fixed-rate mortgage plunged 26 basis points, to 5.88 percent, according to the Bankrate.com national survey of large lenders. One year ago, the mortgage index was 6.24 percent; four weeks ago, it was 6.17 percent. The 30-year fixed hasn't been this low since Sept. 21, 2005, when it was 5.88 percent. You have to go all the way back to June of 2000 to find the last time the rate on the 30-year fixed tumbled more in one week.
FORECASTING 2008 CAN BE DIFFICULT according to FORTUNE magazine. History tells us that oil shocks, real estate crashes, and banking crises are harbingers of downturns. Confidence has already plunged as consumers have been pinched by rising energy prices and falling home values. October saw another bad omen: a decline in discretionary purchases such as books and electronics. Observes Merrill Lynch economist David Rosenberg: 'You have to go back to the 1990-91 recession to find a time that this trend has been so weak heading into the holiday shopping season.' Despite all that, the U.S. economy expanded 3.8% and 4.9% in the second and third quarters, respectively - up from 2.4% and 1.1% during the same periods in 2006. That's right: For all the bad headlines, the American economy appears to be getting stronger.
AND LET NOT US FORGET this is an election year. Did you know that voter turnout increases somewhere between 11 to 18% in a presidential election year? The highest turnout recorded was in 1960 at 63.1%, the year John F. Kennedy was elected, an icon of American hopes and aspirations.
Ok, you have waited long enough. Here is what happened in our local Santa Cruz County market in 2007:
----------------------------------------------------------------------
2007 Annual Statistical Highlights for Single Family Homes:
* Inventory up 25.0% overall from 2006
* Sales down 19.34% overall from 2006
* Days on the market increased to 96, year prior 78
* Median home price decreased to $755,172 from $762,083 in 2006
* Sales price vs.listing price ratio decreased 3.3% to 96.87%
* 12.5 months of inventory available at the end of the year as compared to 4.4 at the end of 2006
* Appreciation increased 1.6% as compared to 2006 which was <0.61%>
-----------------------------------------------------------------------
(These statistics are believed to be accurate but not guaranteed)
Although every year promises changes and new beginnings, 2008 will stand out in future history books according to numerology experts. And if you are a student of Chinese Astrology, 2008 is the year of the rat.
So what about 2007 you ask? Who cares, it is over (thank goodness) A rocky time for many, especially the mortgage industry, home owners and potential buyers, agents, and our economy. I am focused totally on what's ahead. Don't you agree!
CONSUMER CONFIDENCE UP SLIGHTLY in December, after consecutive declines since summer. The index now stands at 88.6, up from 87.8 in November. 'This month's slight gain in confidence was due solely to an increase in the Expectations Index,' said Lynn Franco, director of The Conference Board Consumer Research Center. 'Consumers' short-term outlook regarding business conditions, employment, inflation, and stock prices improved marginally. However, while consumers are less negative about the near-term future, they remain far from optimistic.'
MORTGAGE RATES DROP TO their lowest point in more than two years. Too bad more people won't -- or can't -- take advantage. The benchmark 30-year fixed-rate mortgage plunged 26 basis points, to 5.88 percent, according to the Bankrate.com national survey of large lenders. One year ago, the mortgage index was 6.24 percent; four weeks ago, it was 6.17 percent. The 30-year fixed hasn't been this low since Sept. 21, 2005, when it was 5.88 percent. You have to go all the way back to June of 2000 to find the last time the rate on the 30-year fixed tumbled more in one week.
FORECASTING 2008 CAN BE DIFFICULT according to FORTUNE magazine. History tells us that oil shocks, real estate crashes, and banking crises are harbingers of downturns. Confidence has already plunged as consumers have been pinched by rising energy prices and falling home values. October saw another bad omen: a decline in discretionary purchases such as books and electronics. Observes Merrill Lynch economist David Rosenberg: 'You have to go back to the 1990-91 recession to find a time that this trend has been so weak heading into the holiday shopping season.' Despite all that, the U.S. economy expanded 3.8% and 4.9% in the second and third quarters, respectively - up from 2.4% and 1.1% during the same periods in 2006. That's right: For all the bad headlines, the American economy appears to be getting stronger.
AND LET NOT US FORGET this is an election year. Did you know that voter turnout increases somewhere between 11 to 18% in a presidential election year? The highest turnout recorded was in 1960 at 63.1%, the year John F. Kennedy was elected, an icon of American hopes and aspirations.
Ok, you have waited long enough. Here is what happened in our local Santa Cruz County market in 2007:
----------------------------------------------------------------------
2007 Annual Statistical Highlights for Single Family Homes:
* Inventory up 25.0% overall from 2006
* Sales down 19.34% overall from 2006
* Days on the market increased to 96, year prior 78
* Median home price decreased to $755,172 from $762,083 in 2006
* Sales price vs.listing price ratio decreased 3.3% to 96.87%
* 12.5 months of inventory available at the end of the year as compared to 4.4 at the end of 2006
* Appreciation increased 1.6% as compared to 2006 which was <0.61%>
-----------------------------------------------------------------------
(These statistics are believed to be accurate but not guaranteed)
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