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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• 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.

 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.

If the County Supervisors accept the the staff recommendation of including a Residential Energy Conservation Ordinance (RECO) in the CCAP, all homes being sold in Castro Valley, San Lorenzo, Fairview, Sunol and the rest of unincorporated Alameda County would be subject to energy retrofits at the time of sale.

The Alameda County Board of Supervisors will review the draft CCAP at a meeting on May 17.

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.

“With lower home prices and rates edging up from their historic lows of late last year, prospective home buyers should consider the opportunities in today’s market,” said C.A.R. President Beth L. Peerce.

California home sales rose 5.1 percent in January compared with December, to a revised pace of 520,080 units.  Sales also increased 2.5 percent in year-over-year comparisons, marking the first year-over-year sales increase since May 2010.  The statewide sales figure represents what would be the total number of homes sold during 2011 if sales maintained the January pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

The statewide median price of an existing, single-family detached home sold in California was $278,900, down 8.6 percent from a revised $305,020 in December and was down 2.0 percent from the $284,600 median price recorded for January 2010.  The January 2011 median price was the lowest since June 2009, when it was $274,640.

On Tuesday, Dec 21 the Alameda County Board of Supervisors will review and adopt a Climate Action Plan (CAP). The CAP is a comprehensive plan to reduce the emission of “green house” gases and will impact transportation, land use, economic development and residential and commercial real estate in the unincorporated communities of Cherryland, Ashland, Castro Valley, Sunol, Fairview and areas south and east of Livermore.

Local Realtors testified at several public hearings about the CAP during 2010 urging the County to encourage property owners to make their homes more energy efficient on a voluntary basis.  The final version of the CAP should not include a Residential Energy Conservation Ordinance or point-of-sale requirements. However, pressure from other interest groups could result in these measures being added by the Board of Supervisors at the last minute.

The final public hearing on the Alameda County Climate Action Plan will be held Tuesday, December 21 at 2:00 pm in the County Administration Building Supervisors’ Chamber at 1221 Oak Street in Oakland. Realtors will attend and testify at the meeting.

 Statewide, the seasonally adjusted home sales rate dropped 3.5 percent in October from the month before, the group reported. Year over year, though, sales were down 19.6 percent, although the market last fall was bolstered by federal tax credits for many homebuyers. The median price of a resale single-family house was up 2.3 percent from a year earlier to $304,220.

 ”We’re really seeing two different housing markets — one at the lower-end driven by first-time buyers and investors, which is keeping prices stable, and one with nostalgic sellers who set unrealistic asking prices,” Leslie Appleton-Young, the group’s vice president and chief economist, said in a news release today.

 ”Sellers need to consider current market conditions when pricing their home in order to facilitate a shorter time on the market,” she said.

 “The housing market is experiencing an uneven recovery, and a temporary foreclosure stoppage in some states is likely to have held back a number of completed sales,” Lawrence Yun, the group’s chief economist, said in a statement. “Still, sales activity is clearly off the bottom and is attempting to settle into normal sustainable levels.”

 ~ Barry Ripp  

information provided by Calif Assoc of Realtors with permission: www.car.org

The City of Hayward is hosting another community meeting about point-of-sale requirements on Monday, Oct. 25, at 7 p.m. at Hayward City Hall (777 B St.).

While California foreclosures are not conducted through the court system, lenders in California must still comply with other legally required procedures for non-judicial foreclosures.  C.A.R. is supportive of lenders taking action to ensure homeowners are not improperly foreclosed on and are following state law.  We hope they are able to conduct their review expeditiously so as to minimize the impact on California’s housing market.

An update was e-mailed to all C.A.R. members detailing the most recent information available on the foreclosure situation.  The update also is posted online at http://www.car.org/tools/smart/foreclosuremoratorium/. 

 ~ Barry          www.barryripp.com      

reprinted with permission from the Calif. Asso. of REALTORS