Posts Tagged ‘home selling’

Investment Home Sales Surge in 2011.

Investment-home sales surged an extraordinary 64.5 percent to 1.23 million last year from 749,000 in 2010.

Investment sales jumped to 27 percent in 2011 from 17 percent in 2010.

“During the past year investors have been swooping into the market to take advantage of bargain home prices,” said NAR Chief Economist Lawrence Yun. “Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property.”

The median investment-home price was $100,000 in 2011, up 6.4 percent from $94,000 in 2010.

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More “Stratigic Defaults” Expected in 2012

 FICO survey of bank risk professionals found that 46 percent of them expect the volume of strategic defaults in 2012 to surpass 2011 levels, as more than 25 percent of U.S. homeowners owe more on their mortgages than their homes are worth.

Concerns about strategic defaults were also reflected in response to a question about the consumer payment hierarchy. When asked if the current generation of homeowners considers their mortgage to be their most important credit obligation, 49 percent of bankers said NO and 29 percent said YES.

Although concerns remain regarding strategic defaults, other signs point to growing stability in the housing market. More respondents (26 percent) expected delinquencies on mortgages to decline in the coming months than at any previous time in the two years FICO has been conducting this survey. Furthermore, 53 percent of respondents said the housing market would improve by the end of 2012, compared with 24 percent who said the market would deteriorate.

More than half of survey respondents expected the supply of credit for residential mortgages to fall short of demand over the next six months. A similar majority (53 percent) expected the supply of credit for mortgage refinancing to fall short of demand, indicating that lenders remain cautious about the risks in the real estate market.

Article was reprinted with permission from the Calif Assoc of Realtors. 

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Buy or Rent ??

Should I buy or rent?

The answer has never been clearer: Buy.

In 98 of the top 100 housing markets, buying a home is more affordable than renting, according to the online real estate company Trulia. Only Honolulu and San Francisco buck the trend.

There are several reasons. Home prices are falling. Mortgage interest rates are at historically low levels. And rents are on the rise.

Of course, many renters are not in a position to buy. For one, it’s hard to get a
mortgage these days, despite low rates. And paying rent can push them further away from being able to afford to buy, “Rising rents make it harder for people to save for a down payment, which is the biggest barrier to buying a home that aspiring homeowners face,” Jed Kolko, Trulia’s chief economist.

The nation’s cheapest buyer’s market is Detroit, where purchasing is only 3.7 times more expensive than renting.

Other top five metro areas where buying is much better than renting are Oklahoma City, Dayton, Ohio,Warren, Mich. and Toledo, Ohio.

In San Francisco, for example, studio and one-bedroom apartments sell for 13.1 times rent, while three bedrooms or larger sell for more than 18 times rent.

“People will pay more for a home if they expect prices to rise and give them a better return on their investment,” said Kolko.

According to Ken H. Johnson, a professor of real estate at Florida International who has studied the buy-vs-rent question extensively.
He believes home prices nationally have bottomed.”The ship has turned,” he said.
“Markets should slowly start to recover. Housing will return to its traditional
role of a safety investment.”

If so, that adds an incentive to buy. And investing in many of the most expensive markets may be even safer.

Kolko pointed out that places like Honolulu, San Francisco and Boston have strong long-term growth prospects. They also have little physical space to grow, a factor that tends to keep prices strong.

 The above information was obtained by the Calif. Assco. of  Realtors & CNN Money.

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Million Dollar Homes in Foreclosure

 

Five years after the housing bubble burst, America’s wealthiest families are now losing their homes to foreclosure at a faster rate than the rest of the country — and many of them are doing so voluntarily.

Last year over 36,000 homes valued at $1 million or more were foreclosed on, or at least in default, according to data compiled by RealtyTrac, which tracks foreclosures. While that’s still a low percentage of all foreclosures, it is growing.

Out of all foreclosure activity, the share of foreclosures on properties valued at $1 million or more has risen by 115% since 2007 while the share of multi-million dollar foreclosures — or homes valued at more than $2 million — jumped by 273%. Meanwhile, the share of foreclosures on mid-range properties valued between $500,000 and $1 million fell by 21%.

Lenders are typically more willing to work with homeowners that have other resources. But with a recovery in the housing market still years away, foreclosure has turned out to be a worthwhile option after all. Saddled with bloated mortgages after a long run up in property values, many high-end homeowners have chosen to pursue a “strategic default.” Even though they can afford the monthly mortgage payments, they still decide to walk away from their home because they owe more on the property than it is worth.

In million-dollar homes, you’re looking at people who can afford it, but they have to make a business decision: Does it make sense to make payments on a mortgage when the home is worth less than they owe. In many cases, it often makes more financial sense to walk away.

This information obtained by the Calif. Asso. of Realtors, courtesy of CNN Money, Feb 23, 2012.

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Fremont’s New Retrofit Plan

Microgeneration Certification Scheme

Image via Wikipedia

The Fremont Planning Commission held a work session on Thursday, Nov 17 to discuss the proposed Climate Action Plan (CAP).  Among the implementing measures is a Residential Energy Conservation Ordinance (RECO) that would require energy retrofits be completed when a home is sold. This could cost a home seller hundreds of dollars.

 Realtor members have testified at several meetings and met with Fremont officials in an attempt to remove these proposals from the CAP.  The Planning Commission appears to understand the negative impacts such requirements would have on the real estate market. However, City staff are still set on including the RECO, and it’s point-of-sale requirements, in the final CAP.

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Short Sales…are they worth the trouble?

Short sales – a real estate transaction in which the homeowner needs to sell the property, but owes more on the mortgage than the home currently is worth – continue to dominate the housing market, but these real estate transactions aren’t for everyone.

  • Typically with a short sale, the homeowner is underwater and has experienced a financial hardship such as a job loss. To limit the damage to his credit rating, a homeowner may attempt to work with his lender to negotiate a short sale. Not only must the bank approve of the short sale itself, it also must agree to the price, since the bank will accept the difference as a loss.
  • Unlike foreclosures, in which the owner has walked away and the bank is looking to unload a vacant – and sometimes vandalized – property, a short sale isn’t a distressed home that will sell at an extremely low price. According to data from RealtyTrac, short sales typically sold for nearly 10 percent less than the market price in the first quarter of 2011, whereas foreclosures sold at an average discount of 35 percent.
  • Home buyers wanting to purchase a short sale must have patience. In most cases, when a buyer makes an offer on a house, he receives a response from the seller within a few days, or even hours. With a short sale, the bank must approve of the sale and bank representatives are overloaded with cases. It may take 30 days or longer for a buyer to receive a response from the bank.
  • In a traditional real estate transaction, it is common for a home buyer who currently owns his home to make his offer contingent on selling his current home. In short sales, most banks will not approve an offer that is contingent on the buyer selling his current home, as too many things can go wrong.
  • Banks also typically won’t consider short-sale offers that have inspection contingencies in them, so buyers can either do an inspection prior to making an offer or get no inspections.
  • Even with the challenges associated with short sales, buyers don’t have too avoid these transactions. Being prepared ahead of the time and working with an experienced REALTOR® can help buyers avoid frustration and surprises down the line.

Home improvements that boost resale value

When deciding which home improvements to make, many homeowners consider the amount of resale value the improvement may or may not make and compare that against the cost of the renovation.   Homeowners concerned with making home improvements that will pay off when it’s time to sell the property, should consider the following tips.

 The first improvement/repair homeowners should consider are those that impact the home’s basic structures and systems.  Potential home buyers generally do not want to face expensive repairs, and if items such as the foundation, roof, air conditioning, water heater, or other basic structure need to be fixed, the property will be considered a fixer-upper and its market price will be discounted accordingly.

Some minor replacements will produce big results for minimal cost.  Replacing and coordinating bathroom and kitchen hardware and fixtures are generally inexpensive, but tend to make a big difference.  The same can be said for getting rid of any dated finishes, such as old wallpaper and brass light fixtures.

Homeowners who don’t know when or even if they will be able to sell their home are advised to choose home improvement projects carefully.  Unless the home is located in an upscale neighborhood and the property already is immaculate, owners can skip expensive upgrades – such as remodeled bathrooms – and focus on the fundamentals.

Information obtained by the Calif. Assco. of Realtors with permission. Photo by Barry Ripp.

Videos of Local Cities

Our Realty World cameras video taped almost every major city in Northern California.  This should help you learn more about the city that you may want to move to.    Just click the city you are interested in.   Please enjoy the show.

I look forward to helping you in anyway I can. 

Alameda, California – http://www.youtube.com/watch?v=umg9CUVhcm0

Albany, California – http://www.youtube.com/watch?v=UHtBnoRUEe8

Berkeley, California – http://www.youtube.com/watch?v=99hulMyHn50

Blossom Valley, California – http://www.youtube.com/watch?v=-NnhW9Aa8qo

Campbell, California – http://www.youtube.com/watch?v=0vW1XRohxnA

Carmel, California – http://www.youtube.com/watch?v=d_fv8raJvJs

Cupertino, California – http://www.youtube.com/watch?v=-t5-VBa-xDI

Dublin, California – http://www.youtube.com/watch?v=TrCa7J8vseY

Emeryville, California – http://www.youtube.com/watch?v=nIVFzcKDqJM

Fremont, California – http://www.youtube.com/watch?v=GxBg9z_aZX0

Gilroy, California – http://www.youtube.com/watch?v=zpIcevWc1T0

Hayward, San Lorenzo, California – http://www.youtube.com/watch?v=hj-9Q44DxoE

Livermore, California – http://www.youtube.com/watch?v=wIceLQhYBeo

Los Altos, California – http://www.youtube.com/watch?v=NGbdSewOpzs

Los Gatos, Monte Sereno, California – http://www.youtube.com/watch?v=xjz7pIcPVnI

Milpitas, California – http://www.youtube.com/watch?v=L70mGkUN-Ug

Monterey, California – http://www.youtube.com/watch?v=L5tAE6JFD9I

Morgan Hill, California – http://www.youtube.com/watch?v=zMtQmrp20-8

Mountain View, California – http://www.youtube.com/watch?v=UMRVDVYCNZE

Newark, California – http://www.youtube.com/watch?v=2G5FT6SGeio

Oakland, California – http://www.youtube.com/watch?v=3okcJIUIlwI

Palo Alto, California – http://www.youtube.com/watch?v=FkJBK3-R_Aw

Piedmont, California – http://www.youtube.com/watch?v=ErZ_obcGb54

Pleasanton, Sunol, California – http://www.youtube.com/watch?v=voAFmyM3NGw

Salinas, California – http://www.youtube.com/watch?v=R-EYkmN7WR8

San Jose, California – http://www.youtube.com/watch?v=dcK3X9J-awU

San Leandro, California – http://www.youtube.com/watch?v=OAu1Up1PNnw

Santa Clara, California – http://www.youtube.com/watch?v=AnmCscnxXKs

Santa Cruz, California – http://www.youtube.com/watch?v=o1_mh1uLlF8

Saratoga, California – http://www.youtube.com/watch?v=kESZB-7tyeg

Sunnyvale, California – http://www.youtube.com/watch?v=_LcGBiK7e1Y

Union City, California – http://www.youtube.com/watch?v=zFXiAOe1Yck

SHORT SALE PROBLEMS

The Calif. Assoc. of Realtors (C.A.R.) released the results of a statewide survey on short sales and the challenges REALTORS® face in working with lenders and servicers. 

The most frequent problems REALTORS® cited in working with lenders and servicers during the short sale process include unresponsiveness, onerous procedures, and long processing delays.  The survey also found that fewer than three of five short sales close in California, illustrating the complexity and difficulty of navigating lenders’ and servicers’ short sale procedures. 

“The lack of standardization, long approval process, and lack of lender approvals are hampering what should be a 45-day short sale process,” said C.A.R. President Beth L. Peerce.  “Instead we’re hearing the typical response time for lenders is at least 60 days, and in many instances, their response time exceeds 6 months.”

It’s important to work with experienced real estate agents. So call me with your real estate questions. I’ve been helping clients since 1985.

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Top 10 Tips for Identity Theft Protection (part 2)

Here are 5 more ways you can reduce the risk of having your identity stolen.

  • Click with Caution. When shopping online, check out the website before entering your credit card number or other personal information.
  • Check your bills and bank statements. Open your credit card bills & banks statements right away. Check them carefully for any unauthorized charges and report them immediately.  Call if your bills don’t arrive on time…it may mean that someone stole your mail or changed your contact info to hide fraudulent activity.
  • Stop pre-approved credit card offers.   Those make a tempting target for identity thieves who may steal your mail. Go to: www.optoutprescreen.com .
  • Ask Questions.  Ask questions whenever your asked for personal information that seems inappropriate for the transaction.  Ask how that info will be used or if it’s shared with others.
  • Check your Credit Report.  One of the best ways to protect yourself is to monitor or credit history.  You can get a free report every year for free from each of the three credit bureaus. One source is:  www.annualcreditreport.com .

I hope this information is helpful for you.

You can find more information about cyber security and safeguarding your personal information at the  California Office of Information Security: http://www.cio.ca.gov/OIS/

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