Realtor.com came out with their 20 Hottest real estate markets in the nation. 11 of these are in California and we’ve added two NEW spots–Eureka and Fresno. Eureka is way up north on the coast of California. Isolated, older fishing community but it is very affordable as is Fresno which is in the “Valley”. “Valley” properties in the greatest state of California are fairly depressed and still have higher percentages of distressed homes. They have yet to get even close to their pre-bust highs. If you look at the top lists you’ll see 4 of these hottest market are in the California interior valleys—Sacramento, Stockton (at one time ground zero for the distressed market in California), Modesto and Fresno. What they all have in common is affordability. Median priced homes in these areas range from $270,000 to $317,000. Compare these prices with Santa Rosa (#13 on the list with a median price of $597,500).
Sonoma County selling and buying season here in the lovely “Wine Country” just an hour north of the “Gate” is flat with sales down 2% over last year but the bigger issue–Inventory! Usually March will signal the beginning of the “Selling” season by more homes coming onto the marketplace. March was a GOOD month but instead of being the beginning of an inventory surge–it was the end. March was our best month and inventory has been declining since. WHAT are the reasons? Below is a slide from the California Association of Realtors. I’ve added on the last three.
I think the “Off Market” or “pocket listings” is an issue but I’ve NOT seen any hard numbers on it. I’m waiting for CAR or perhaps Core-Logic, to come out with a study showing MLS sales vs. recorded sales. I know in our super tight inventory market, Realtors/Agents are always asking to see new listings not yet on the market. We hear of sales being made off MLS all the time. I keep waiting for the law suit which will define this isssue to apppear. Sellers and their Realtor/Agents who state, “They got their price.” really have no idea at how much that “price” could have been! The current disclosures by CAR, reflect this very issue which came out of the ’89 market scarcity.
Real Estate Hour favorite, Otto Kobler, of Summit Funding will be joining us this Sunday.
In this hot and heavy real estate market, cash buyers often beat out financed buyers in a multiple offer situation.
Learn Otto’s strategy that helps buyers with financing rise above the cash offers and present a winning offer.
Plus; There are big changes coming to the lending process, and looming interest rate hikes. Otto will fill us in on all of this and more.
Join Mike Kelly and Allison Norman for new and information about Real Estate in Sonoma County, Ca, and around the country, every Sunday on The Real Estate Hour 9-10AM, 1350AM, 103.5FM and streaming live at www.KSRO.com
We are pleased to have show favorite, “That Lender Guy”, Peter Phillippe of Princeton Capital. Pete will be discussing the latest and BEST Interest rates, VA/FHA, lending requirements plus YOUR CALLS! Join us for what will surely be a “don’t miss” hour. Pete can be reached at: 707-481-2737 Cell 1-888-305-2473 eFax or firstname.lastname@example.org
The link below will take you to a Fannie Mae history of 30 year fixed rate loans. The reason I’m bringing HISTORY into the argument of lower interest rates is to show Buyers and Sellers why NOT to “wait it out”. These folks mistakenly think they will see 3.5% again. It is wise to understand the dynamics OF interest rate fluctuations and to study past rate increases. For instance, In April of 1971 the interest rate was 7.31%–(42 YEARS AGO!) it would NOT fall under that rate again until July of 1993 when it hit 7.21%! Oh, and during that time frame it hit a high of 18.45% in October of 1981!
The first 11 years of my real estate career we had double digit interest rates with that big high I mentioned above. We STILL sold homes. Sure they were lower but so were wages and salaries. Fast forward to today and we see rates soaring from April to today by one full percentage point or what they say in banking as 100 “basis” points. And this is WITH the Fed taking a long term support measure for keeping interest rates “low”. What bothers me is the consumer balking at rates exceeding 5% as if THIS is a high rate! Continue reading Why WAITING for 3.5% is FOLLY and Financially Naive.
June 2 , 2013; Santa Rosa, Ca.
The change in the Sonoma County Real Estate Market was upwards of 60% in some areas of the county, from the height of the market in 2006, to the bottom in 2009. But, in some Sonoma County cities homes have managed to hold their value amazingly well. On today’s show we’ll tell you which areas, and why…..
And, We’ll talk about how much home you can afford now…
Tune in to The Real Estate Hour for this, and more local real estate news, every Sunday morning from 9-10am on 1350AM KSRO or streaming live at www.KSRO.com
The Federal Housing Administration, which is the largest insurer of low-down payment mortgages, announced last week that it will raise premiums by 10 basis points, or 0.1 percent, on most of the new mortgages it insures.
(FHA makes a lot of sense for many borrowers, in some cases it’s the only option, but it’s important to note that there may be other low down-payment options available that do not require mortgage insurance. It’s definitely a conversation worth having with your Realtor or your lender…give us a call/email for more info)
Making sense of the changes;
- A borrower opting for a 30-year, fixed-rate mortgage who puts down 5 percent or more will now pay an annual insurance premium of 1.3 percent of their outstanding balance. Someone who puts down less than 5 percent will pay a premium of 1.35 percent.
- The FHA said it also will raise premiums for borrowers with jumbo loans – loans of $625,000 or more – by 5 basis points, and increase the minimum down payment requirement on these loans to 5 percent from 3.5 percent.
- Additionally, the FHA said it will require most buyers to pay insurance premiums for the life of their loan. A policy that was put in place in 2001 allowed borrowers to cancel premium payments once their debt fell below 78 percent of the principal balance. One exception will be for borrowers who put more than 10 percent down at the time of purchase.
- Other new policies include a requirement that any mortgage for an applicant with less than a 620 credit score and debt-to-income ratio above 43 percent must be underwritten manually. Lenders who want to issue loans to these applicants must be able to adequately document why they decided to approve the loans.
- The FHA also decided to put new restrictions on reverse mortgages, no longer permitting retirees to take such large, upfront payments.
Read the full story at CNNMoney
Here in Sonoma County, California–Many Realtors are lamenting the LACK of inventory or homes for sale. I submit that it all depends on how MUCH money you wish to spend. One of the most IN DEMAND price points is the 0- $250,000 price point. This has been the land of the REO (real estate owned) or bank foreclosed home. I fear this price point has “left the station” or is quickly disappearing. This price point is a natural for bank foreclosed homes AND Short-Sales. However, we only have 60 “Active” Short-Sales currently on the market. Take a look at the slide below and note we are DOWN -47% over last year at this time. The question–is THIS the new reality of a surging market? We leave the lower price behind? Or is the market for this price point just stripping the shelves of all homes? What’s going to happen to make this a stronger price point? MORE Short-Sales and REO’s. I can’t see a big wave of REO’s coming but Short-Sales can fill the need. We shall see if the consumer REALIZES they can SELL their homes short and get out from under a tough financial mess.
Now look at the NEXT slide–What a difference huh? Almost a 180 swing. The $1,000,000 price point is flush with listings having 40% MORE listings over last year at this time. In between these two extremes we find a market still “starved” for inventory. The next “range” of $250-$500,000 is down about -5% over last year but the next price point or the “mid-range” ($500-$750,000) which is gaining momentum is down about 21%. The $750K to 1 Mil is +5%. Knowing HOW the market inventory is before making an offer can determine WHAT you’ll offer and HOW you present your terms to the seller. KNOW your NUMBERS. Feel free to call myself or Allison to give you analysis of YOUR price point. 707-799-3617.
Long time guest and friend of the Real Estate Hour, Pete Phillippe of Princeton Capital, will join us to discuss options which super low interest rates offer the consumer. With rates THIS low (3.25%) a homeowner refinancing may consider saving money while retaining a 30 year amortized loan or choosing to opt for a SHORTER Amortization schedule be it a 15 or even 10 year loan. One would argue that at 3.25% it’s just cheaper to KEEP the loan at that rate. Why rapidly pay-off a 3.25% loan when you could use the money for reducing say, credit card debt, college debt, etc. MUCH higher consumer credit rates and keep the home rate low and affordable. These questions PLUS MORE!!
Pete’s contact information: 707-829-7490 Direct or 707-481-2737 Cell. email@example.com