My New Blog

Sausalito HOA Meeting & Special Seminar

Just got a reminder in from my favorite home warranty rep, Misty Hartung of First American Home Warranty. Thought it would be worth sharing, especially since I once was a "victim" of a 4th of July A/C disaster!

If the local weather people are to be believed (and I'll leave that up to you), HOT WEATHER is on the way. You know what that means. A/C problems!! Make sure YOU aren't left sweating, run your A/C THIS WEEK. See if it's working, change the filter. If you have a warranty (and if you don't, perhaps it's time to call me?), let's not wait until Friday July 3 to let me know it isn't working!!! 

This information is from the Virtual Advocate™ published by the CALIFORNIA ASSOCIATION OF REALTORS®,

GET YOUR $8,000 HUD TAX CREDIT NOW
Qualified, first-time home buyers using a Federal Housing Administration (FHA)-insured mortgage now can apply the $8,000 federal tax credit toward their down payments, the U.S. Dept. of Housing and Urban Development (HUD) recently announced.

Currently, borrowers applying for a FHA-insured mortgage are required to issue minimum down payments of 3.5 percent. Buyers still must come up with the mandatory 3.5 percent down payment, but the tax credit now can be used as an additional down payment, or for other closing costs, which can help lower principal balances and monthly payments. The home buyer may access their tax credit through participating FHA approved lenders (a small fee will likely be assessed) or a participating non-profit. This may be done through either the purchasing of the home buyer’s tax credit or through a bridge loan.

While HUD allows for state Housing Finance Agencies to offer the tax credit up front to the home buyer, CalHFA like other state programs is experiencing a shortage of capital and is unlikely to offer such a program.

More info: http://portal.hud.gov/pls/portal/docs/PAGE/FHA_HOME/LENDERS/MORTGAGEE_LETTERS/2009_MORTGAGEE_LETTERS/09-ML-15%20USING%20FIRST-TIME%20HOMEBUYER%20TAX%20CREDITS.PDF

It is not often that I see an article that is "spot on" in it's correct assessment of today's volatile real estate market. But I just came across this article in the LA times that really explains what we are seeing. Any properties that are $550,000 or less and are half way reasonably priced (so they are perceived to be a good value) are receiving multiple offers and selling for above list price. REO property & normal sale listings are rare in this price range, with the prices stabilizing in the lower end. However, we are still expecting some misery for the mid to high end, which is not done dropping in price.

Here is the article: From the Los Angeles Times

Southland median home price falls to $247,000 in April

By Peter Hong

10:31 AM PDT, May 19, 2009

Southern California's median home price in April was $247,000, down slightly from the previous month, a real estate research firm reported today.

The price drop -- a decline of 51% from the 2007 peak -- came after three months in which the median price had held steady at $250,000, according to the data from San Diego-based MDA DataQuick. The brief respite from price declines had raised hopes the housing market may have been close to its bottom.

Last month's price drop, however, drove home purchases up. The total of 20,514 homes sold in six Southland counties last month was up 5.2% from March and up 31.4% from a year ago, DataQuick reported.

The rise in home sales is an important step to housing market recovery, said UC Irvine economist Kerry Vandell, because the sales help to clear the surplus of homes -- many vacant -- still flooding the market.

"There seems to be some market clearance going on," Vandell said. Among lower-priced homes, "product is moving, which will in fact stabilize that [segment] of the market."

Previously foreclosed homes -- many of them deeply discounted -- accounted for 54% of the sales total. April was the seventh consecutive month in which the majority of homes sold in Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties had been foreclosed.

Sales were at record or near-record levels in foreclosure-heavy inland areas. Higher-priced coastal areas, including Malibu, Pacific Palisades, the Palos Verdes Peninsula and Manhattan Beach, as well as Beverly Hills, saw record or near-record lows in sales.

A tale of two markets is clear in Southern California, with low-priced areas appearing close to recovery, while wealthier areas face greater uncertainty as sales languish amid an economic downturn.

In lower-priced markets, "we've seen signs you'd expect to see not long before prices would normally stabilize: robust investor and first-time-buyer activity, 10-plus months of year-over-year sales gains, and less price erosion, if any," said John Walsh, MDA DataQuick president.

Wealthier areas may face new troubles because "we still face two big threats to price stability: layoffs, which can cause foreclosures across the home price spectrum, and possibly a new round of foreclosures triggered by defaults on 'option ARM' and 'stated income' loans used in mid- to high-end markets," Walsh said.

San Bernardino County showed the sharpest price decline in April, with its median price falling 48% from a year ago, to $138,500. Riverside County's median price of $180,000 was a 39% decline. Los Angeles County prices were down 31% to a median of $300,000. Orange County's median price was down 24% to $380,000. Ventura County's median of $340,000 was down 24% from April last year and San Diego's median of $290,000 was down 28% from a year ago.

The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $1,030 last month, down from $1,074 the previous month, and down from $1,831 a year ago. Adjusted for inflation, current payments are 52.9% below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 61.4% below the current cycle's peak in July 2007.

I just had an email pop up stating that the conforming loan limit has temporarily increased to $729,750 with Fannie Mae accepting the loans effective May 1st. Guidelines are being published and I will decode and post when it becomes available & understandable!

This could really help the upper end home sales, as anything over $600,000 is stagnant right now. The lower end, especially in the $300-$400K range, is pretty hot right now with many properties receiving multiple offers. I am hearing plenty of stories from agents as well as experiencing it myself firsthand. Is it the bottom? We certainly don't know. But we won't know until it starts to go up.

Contact me if you would like to discuss or receive more information.