A Real Estate Hour favorite joins me this Sunday 2/24/2019;
Kimberlee Foster of Chucket! — Tune in for some great tips on downsizing, decluttering, move-management, getting ready for a move (where to start).
Decluttering #konmari style may be all rage, but Kimberlee has been organizing, downsizing and planning moves since the ‘80s. In addition to her paid move-management, organizing, and downsizing services, Kimberlee offers free downsizing seminars. Sign me up!! Browse her “testimonials” page for some great insight into just what an awesome resource she is. Join me as your host on Mike Kelly’s Real Estate Hour with Allison Norman on Sundays 9-10AM worldwide on The News and Talk of Sonoma County, KSRO.com and locally at 1350AM, 103.5FM, 94.5FM https://chucket.net/
Thanks to Mike Lamka of Freedom Mortgage for coming on the show this morning to discuss the current state of the lending world during our most recent government “shut-down”. The biggest issue was the announcement by FEMA stating no flood insurance would be issued during the shut-down. This didn’t last long as FEMA almost immediately retracted that statement and now will underwrite flood insurance while the shut-down continues.
The lender always check with the IRS with a form 4506 verification of IRS Tax Returns. This is NOT being issued for most lenders are working around this. Freedom Mortgage stated they are NOT requiring this and providing a waiver. VA loans seem to be o.k. but FHA may be a bit cloudy. I’d check with your lender if you are either within an escrow with FHA financing or considering going this route. USDA Loans are not being written but the application of this loan type is somewhat rare in our high priced area.
So caveat to all of my listeners and clients who are getting ready to write an offer–make sure your lender can process and FUND your loan! Thanks Mike for coming onto the show this morning to keep us informed during the current government “Shut-Down”. Mike can be reached at 707-494-4026
NMLS ID: 714616
Loan Officer Licensed in: CA
3333 Mendocino Avenue, Suite 110, Santa Rosa, CA 95403
Thanks to Rami Batarseh of Batarseh Real Estate for discussing his latest endeavor; “Fulton Crossing”. Below is a link to the story of the revival of the old Fulton chicken processing plant. As a kid growing up in Guerneville, I drove by the chicken plant many, many times and its current usage is vastly superior to the look and smell of its previously life! Now it is an exhilarating and art filled space. Check it out for the Holidays!
I’ll be discussing a recent article by Robert J. Shiller (of Case/Shiller Fame) where he discusses probable reasons FOR the surge but is really at a loss as to WHEN it will end and WHAT will cause it to stumble and fall. He writes of the three great booms and how this current one is #3 on his list. It’s startling when you realize he really doesn’t have a clue as to WHEN it will fail and by how much. We’ll be discussing this on the show as I read excerpts from his recent article. CLICK HERE for the full article as it appeared in the New York Times.
This week on “The Real Estate Hour”, Sundays, 9 to 10am PST, KSRO, 1350AM or 103.5 or 94.5FM or www.KSRO.com will be . Giuliana Brockway talking trusts and estate planning. We will touch upon various ways to hold title to real estate, do you really need a trust to own real property? Is it smart to make your oldest kid the trustee of your estate (careful–trick question!) This and more Sundays, 9 to 10am ALWAYS live! Got a question for us? Caller hotline 636-1350.
This Week’s Guest: Marc Durand–Residential Structural Inspections
(Mike next to Marc Durand with his “Speedy” work helmet! )
When should I hire a structural engineer?
Buying/Selling Of A Home:
In many instances, we are called to evaluate a potential problem un-covered after a home inspection. In this scenario, the homeowner is usually selling their home. After a general home inspection is complete, sometimes a structural engineering inspection is also
warranted. If this is the case, the home inspector will include this recommendation in his or her final home inspection report. Home inspectors are not qualified to assess and diagnose structural problems. Only a licensed, structural engineer can provide accurate assessments
and solutions for a home buyer or seller.
One of the main factors of a real estate “Bubble” is the appearance and increase of the mortgage “default” rate. This usually goes hand in hand with years of issuing shady lending. We saw it in the 2008 real estate crash when default rates soared first at the “sub-prime” level but then the “A+” paper. Those who saw the movie, “The Big Short”, recall the number which was being posted on a white board outside one of the main character’s office. It was the “default” rate and was quickly into the double digit numbers. It kept soaring upward until the moment of implosion and government bail-out intervention. Many today are calling this market a “bubble”. But the default rates are just NOT there. The graph below from Freddie Mac/Fannie Mae, show the gradual decline in default rates. We are at historic lows. NOTE the numbers during the “crash”.
I bring this up because shaky or very ez money was the basis of the great default of the 2008 real estate market crash. Speculation, another cause of the crash, was driven by the availability of this ez money in which to invest in real estate. But one of the first indicators was the alarming default rate of first “sub-prime” and then “prime” loans. We can eliminate default rates as the canary in the coal mine. NOT happening this time.
What WILL drive a bubble to burst or gradually deflate? In our area it is affordability. Currently in Sonoma County only 1 in 5 can afford our median home price of $670,000. It’s an old equation–buyers quit buying, Seller needs to sell, Seller drops price to bring buy to their property. The other Sellers follow suit and you’ve got a decreasing value market. Stay tuned!
The current slowdown of the real estate market is being blamed on higher interest rates and/or affordability. Interest rates have moved over the past five years from lows in the 3.40% range to the current 4.94% range. You’d think 1% would not make a huge difference in qualifying but when you add in the lack of affordability in our area you find consumers right at their limits. And not only are they hitting their max for loan qualifying, many are saying NO to a life where the mortgage payment dominates their household monthly outlays. What makes the market tick in the Sonoma County area is Affordability. Currently 1 in 5 can afford to purchase the median home price. We are among the top counties with affordability issues. As you can see below, our affordability number is at 20% who can afford the median home price. But look at San Francisco, San Mateo and Santa Clara! The most affordable county in the Bay Area is Solano but that dropped 6 points over the past year. How do we increase affordability? #1 lower interest rates, #2 building more affordable housing, #3 the economic boom we’re in needs to generate higher wages.
For the past few months the $1Mil+ price segment has been very robust. While the overall market languished in mediocrity, except for a record high median home price which quickly fell the following month, the $1Mil+ range was surging. June sales, off -20% in the overall market was UP +20% in the $1Mil+ market. Huge spread. The market, driven by fire victims replacing homes lost in the fires of October 017, are buying and rehabbing homes. If you look at the NE area and examine Lot sales you’ll find many NOT rebuilding. Currently we have approx 174 lots for sale with 33 in escrow and a whopping 247 that have sold.
The big question? Where have all of these homeowners gone? Have they moved away, moved down, moved within their price range relative to the value of the lost home? Here’s some charts on the latest activity:
Local Real Estate New and Information – Sundays, 9 to 10am PST, 1350AM,103.5 FM or www.KSRO.com