Real Estate
Homeowners with ARMs are optimistic
Homeowners with adjustable-rate mortgages worry about rising interest rates, but most believe that they will be able to refinance their loans if necessary, according to a study released today. A survey of homeowners conducted for San Francisco-based Wells Fargo & Co. found that about 1 in 7 respondents had an adjustable-rate mortgage.
An ARM is a mortgage whose interest rate is typically tied to a short-term security such as one-year Treasury bills or the London interbank offered rate, or Libor. The borrower's payments change over time with the adjusting interest rate.As home prices rose during the recent housing boom, an increasing number of home buyers turned to ARMs to purchase homes.
The reason: ARM rates were lower than those for traditional 30-year fixed mortgages. Lenders also devised ARM variations that gave borrowers even lower monthly payments by allowing deferment of principal and/or interest.Over the last year, fixed and adjustable mortgage rates have crept higher. Mortgage company Freddie Mac reported last week that the interest rate on 30-year, fixed-rate mortgages averaged 6.40% in the most-recent survey period.
A year earlier, the rate was 6.15%. The Wells Fargo study found that nearly 80% of homeowners with ARMs said they were concerned about rate increases. But more than half said they believed that they could refinance their loans. And about 20% said they were prepared for rate adjustments and didn't plan any changes.
Last week, the Mortgage Bankers Assn. reported that the refinance share of mortgage applications increased to 45.6% from 45% the previous week. Wells Fargo's third annual study also found that homeowners expected their properties to appreciate, although they apparently were aware that price increases were slowing.
About 10% said they expected their home values to increase a lot, 53% said values would increase "a little," and 27% predicted they'd stay the same. The rest expected a decline or weren't sure. The survey of more than 1,300 homeowners was conducted by Media, Pa.-based ICR. The margin of error was about 3 percentage points.
From Times Staff and Wire Services
Friday, November 03, 2006
Wednesday, October 25, 2006
Real Estate
Home prices: 1st drop in 11 years
Sales slow, prices hit by second biggest year-over-year drop on record; surge of homes for sale seen keeping prices weak.
By Chris Isidore, CNNMoney.com senior writer
NEW YORK (CNNMoney.com) -- Home sales slowed and a key measure of prices fell for the first time in 11 years last month, spurred by the biggest glut of new homes on the market in more than a decade, an industry group said Monday.
The National Association of Realtors report on existing home sales showed that the median home price in August was $225,000, down 1.7 percent from a year earlier.
More on housing weakness
More home markets 'extremely' overvalued
Still rising prices and interest rates leave dozens of markets in dangerous territory, according to a new report. (more)
Foreclosures spiked in August
Rising payments on adjustable-rate mortgages contribute to 53% jump in foreclosures. (more)
Sharp home price pullback
Government index shows the largest quarter-to-quarter fall off in home price increases in three decades. (more)
Getting real about the housing bubble
Fortune's Shawn Tully dispels four myths about the future of home prices. (more)
Quick Vote
What are housing prices doing in your area?
Rising
Falling
Stable
or View results
It was the first year-over-year decline in median prices since April 1995, when that measure slipped only 0.1 percent. And it was the biggest year-over-year drop since the record 2.1 percent decline recorded in November 1990, when the nation was in recession.
While month-over-month declines in prices are not uncommon, year-over-year decreases in prices are a more serious sign of a slumping housing market. Even in other recessions, home prices generally have risen year-over-year on a national basis. The median price is the point at which half the homes sell for more and half sell for less.
The decline in home prices follows a period of record sales and very strong sales gains up through the end of 2005. The average price of a home in 2004 was up 9.3 percent from the previous year, and last year the full-year price average was up 12.4 percent.
The downward pressure on prices came from the record inventory of homes on the market in August. The group said there were 3.9 million homes on the market, up 38 percent from a year earlier. That gave the market a 7.5-month supply of homes, also up sharply from the 4.7-month supply available in August 2005, and the average 4.3-month supply throughout 2004.
The last time the group estimated a 7.5 month supply was April 1993. The report also showed the pace of sales essentially leveling off, slipping to an annual pace of 6.30 million in August from a revised July reading of a 6.33 million rate. While that's down just a bit from July, the pace of sales is down 12.6 percent from a year earlier.
Economists surveyed by Briefing.com had forecast that sales would slow to a 6.20 million pace in August. The group's report also showed the average price, which is typically higher than the median price, slipped 1.5 percent from a year ago to $271,000 in August.
David Lereah, the trade group's chief economist, said the relatively small drop in sales in August suggested that housing has cooled to a more sustainable pace, although he conceded the weakness in prices is likely to continue.
"We do expect an adjustment in home prices to last several months as we work through a buildup in the inventory of homes on the market," he said in the group's statement.
Mortgage rates have come down in recent weeks, with the average 30-year fixed rate mortgage now at 6.4 percent, according to mortgage financing firm Freddie Mac (Charts).
That's down from 6.79 percent in early July. The drop in rates, which reduces the cost of home ownership, won't necessarily show up in existing home sales figures for several months, though.
But some in the industry say lower mortgage rates won't be enough to revive the sales market, which hit its ninth record in 10 years in 2005. Sellers also will have to start reducing prices to get sales back on track.
"In some areas home sellers are not making sufficient adjustments in their listing price, so their homes are staying on the market and contributing to the buildup in inventory," said Thomas Stevens, a realtor in Vienna, Va., and the president of the trade group.
Existing home sales is not the only portion of the real estate market to show weakness.
New home sales and prices for new homes have fallen sharply as well, with many of the nation's leading builders, including KB Home (Charts), Lennar (Charts), Toll Brothers (Charts) and Hovnanian (Charts), lowering guidance on home sales in recent weeks, reporting lower prices and excess supply of homes on the markets.
The government report on new home sales in August is due Wednesday. While that's a fraction of the overall market, the new home sales report is closely watched as a leading indicator of the market since it's based on sales when contracts are signed, not on closings, which are often months later.
More home markets 'extremely' overvalued
Price drops seen for 10 top housing markets
Foreclosures spiked in August
More on the real estate market
Home prices: 1st drop in 11 years
Sales slow, prices hit by second biggest year-over-year drop on record; surge of homes for sale seen keeping prices weak.
By Chris Isidore, CNNMoney.com senior writer
NEW YORK (CNNMoney.com) -- Home sales slowed and a key measure of prices fell for the first time in 11 years last month, spurred by the biggest glut of new homes on the market in more than a decade, an industry group said Monday.
The National Association of Realtors report on existing home sales showed that the median home price in August was $225,000, down 1.7 percent from a year earlier.
More on housing weakness
More home markets 'extremely' overvalued
Still rising prices and interest rates leave dozens of markets in dangerous territory, according to a new report. (more)
Foreclosures spiked in August
Rising payments on adjustable-rate mortgages contribute to 53% jump in foreclosures. (more)
Sharp home price pullback
Government index shows the largest quarter-to-quarter fall off in home price increases in three decades. (more)
Getting real about the housing bubble
Fortune's Shawn Tully dispels four myths about the future of home prices. (more)
Quick Vote
What are housing prices doing in your area?
Rising
Falling
Stable
or View results
It was the first year-over-year decline in median prices since April 1995, when that measure slipped only 0.1 percent. And it was the biggest year-over-year drop since the record 2.1 percent decline recorded in November 1990, when the nation was in recession.
While month-over-month declines in prices are not uncommon, year-over-year decreases in prices are a more serious sign of a slumping housing market. Even in other recessions, home prices generally have risen year-over-year on a national basis. The median price is the point at which half the homes sell for more and half sell for less.
The decline in home prices follows a period of record sales and very strong sales gains up through the end of 2005. The average price of a home in 2004 was up 9.3 percent from the previous year, and last year the full-year price average was up 12.4 percent.
The downward pressure on prices came from the record inventory of homes on the market in August. The group said there were 3.9 million homes on the market, up 38 percent from a year earlier. That gave the market a 7.5-month supply of homes, also up sharply from the 4.7-month supply available in August 2005, and the average 4.3-month supply throughout 2004.
The last time the group estimated a 7.5 month supply was April 1993. The report also showed the pace of sales essentially leveling off, slipping to an annual pace of 6.30 million in August from a revised July reading of a 6.33 million rate. While that's down just a bit from July, the pace of sales is down 12.6 percent from a year earlier.
Economists surveyed by Briefing.com had forecast that sales would slow to a 6.20 million pace in August. The group's report also showed the average price, which is typically higher than the median price, slipped 1.5 percent from a year ago to $271,000 in August.
David Lereah, the trade group's chief economist, said the relatively small drop in sales in August suggested that housing has cooled to a more sustainable pace, although he conceded the weakness in prices is likely to continue.
"We do expect an adjustment in home prices to last several months as we work through a buildup in the inventory of homes on the market," he said in the group's statement.
Mortgage rates have come down in recent weeks, with the average 30-year fixed rate mortgage now at 6.4 percent, according to mortgage financing firm Freddie Mac (Charts).
That's down from 6.79 percent in early July. The drop in rates, which reduces the cost of home ownership, won't necessarily show up in existing home sales figures for several months, though.
But some in the industry say lower mortgage rates won't be enough to revive the sales market, which hit its ninth record in 10 years in 2005. Sellers also will have to start reducing prices to get sales back on track.
"In some areas home sellers are not making sufficient adjustments in their listing price, so their homes are staying on the market and contributing to the buildup in inventory," said Thomas Stevens, a realtor in Vienna, Va., and the president of the trade group.
Existing home sales is not the only portion of the real estate market to show weakness.
New home sales and prices for new homes have fallen sharply as well, with many of the nation's leading builders, including KB Home (Charts), Lennar (Charts), Toll Brothers (Charts) and Hovnanian (Charts), lowering guidance on home sales in recent weeks, reporting lower prices and excess supply of homes on the markets.
The government report on new home sales in August is due Wednesday. While that's a fraction of the overall market, the new home sales report is closely watched as a leading indicator of the market since it's based on sales when contracts are signed, not on closings, which are often months later.
More home markets 'extremely' overvalued
Price drops seen for 10 top housing markets
Foreclosures spiked in August
More on the real estate market
Tuesday, October 24, 2006
Real Estate
Builders to buyers: Take this house, please!
The once-hot housing market's about-face has created amazing incentives for buyers. What are you waiting for?
By Jean Chatzky, Money Magazine editor-at-large
How would you like a $10,000 gift certificate for Pottery Barn? A $30,000 in-ground swimming pool - installed? The chance to toss back a few drinks with rocker John Legend? These and many other fabulous prizes can be yours if...you buy a house!
That's right, Bob Barker. After years of soaring prices, in the past few months the real estate market has dropped faster than most people thought it would, even in markets where most people thought it wouldn't. Home builders, mortgage lenders and even some enterprising individual sellers have been racking their brains to come up with tantalizing incentives to get potential buyers to the closing table and to convince top brokers to work with them.
As buyer's markets go, this is shaping up to be a good one - as long as you know how to play it to your advantage.
But gimmicks like new pools and mingling with rock stars are a distraction, says Mark Zandi, chief economist of Moody's Economy.com. If you're truly savvy about selecting and bidding on a home, you may be able to do better, he says. Much better.
Home inventories have gone skyward in the past year. In August (the most recent month for which data are available) there were 4 million homes on the market in the United States, a million more than at the same point in 2005. Combine that with the boost in interest rates and you have a lot of nervous sellers.
"Until now sellers didn't want to cut their prices. They were much more willing to provide an incentive - refinish the deck, seal the driveway, help with the financing, anything but cut the price," says Zandi. That's because incentives are cheaper for the seller in most cases.
Knocking 5% off a $300,000 home, for example, costs $15,000, but giving away that Pottery Barn shopping spree costs less and sounds sexier.
Right now, however, there's enough inventory that sellers are starting to do both: lower prices and provide incentives. This sharp change is not happening at all times in all markets, Zandi says, and only by knowing what kinds of freebies are being doled out can you jump on the trend and score a better deal (and maybe a new pool too). Here's what to do.
Hit the Incentive Piñata
It makes sense that people selling on their own are often quick to offer incentives instead of dropping the price. Many have trouble coming to grips with the fact that their home is worth less than they thought it would be, so they resist cutting the price until absolutely necessary.
List: See forecasted declines for largest U.S. markets
Instead they offer to pay your closing costs or to leave the Sub-Zero behind. Let your eyes - and the inspector you hire to check the place out - guide your requests. If the house needs painting, new windows or a fresh buffer of trees, now's the time to ask. And ask for a price cut to boot. Builders and developers use incentives first for a different reason: Reducing the price on one house in a neighborhood could hurt the prices of the remaining homes (and it peeves buyers who already paid full price).
Anyone shopping for a newly constructed home has the most to gain. After drying up during the boom, explains David Seiders, chief economist for the National Association of Home Builders, incentives are back in force. A recent survey of NAHB members revealed that 55% of builders are offering more amenities, 42% are paying closing costs and 26% are absorbing points on mortgages.
In addition, the survey showed that 80% are encountering buyer resistance to the price of homes, the most since the early 1990s. As a result, nearly 45% of builders are trimming prices.
Improve Your Mortgage
Buyers are also getting incentives for taking out mortgages, says Anthony Hsieh, president of LendingTree.com. For example, 20% of home builders are using "buy-down" programs, in which they buy down your mortgage by two percentage points in year one and one point in year two.
That can, in fact, be a great deal. But tread carefully. Some other trendy mortgage offers are a little too much like credit cards with teaser rates attached. They're cheaper in the early years than what you might qualify for, but they escalate quickly.
"Buyers have to be very careful not to be swept off their feet to take the wrong product," says Hsieh. "You don't want to get blinded into the wrong mortgage." The key to knowing whether the loan being offered to you is a good deal or a bummer is to run the numbers on a few scenarios, says Keith Gumbinger of HSH.com, a publisher of mortgage information. You want to know what your actual payment will be not just in years one and two but for as many years as you're planning to live in the house.
Gumbinger recommends watching financing offers for early-termination fees and prepayment penalties. A lender's goal in offering subsidized financing is to keep you there until the payment escalates - and beyond - which often means making it expensive for you to get out.
Look for Alternative Cuts
The buyer's market has created a market for something that's not usually on the list of negotiable factors in the sale of a home: title insurance. (It's rarely on the list of comprehensible factors either, but that's another story.) That is changing thanks to Titleinsurance.com, a new Web site that operates kind of like a LendingTree.com for title insurance.
Consumers go to the site, fill in information about their transaction and get a handful of quotes from title insurers in the county. The site currently has some 325 title insurers signed up to bid and is limiting itself to five per county. The service is nonbinding and is free to consumers. Revenue comes from title insurers who pay, essentially, for leads.
How much money you will save depends on the competition in your area, but with title insurance averaging less than 0.5% of your loan but sometimes costing as much as 1.5%, the gap can be a couple thousand dollars or more
Builders to buyers: Take this house, please!
The once-hot housing market's about-face has created amazing incentives for buyers. What are you waiting for?
By Jean Chatzky, Money Magazine editor-at-large
How would you like a $10,000 gift certificate for Pottery Barn? A $30,000 in-ground swimming pool - installed? The chance to toss back a few drinks with rocker John Legend? These and many other fabulous prizes can be yours if...you buy a house!
That's right, Bob Barker. After years of soaring prices, in the past few months the real estate market has dropped faster than most people thought it would, even in markets where most people thought it wouldn't. Home builders, mortgage lenders and even some enterprising individual sellers have been racking their brains to come up with tantalizing incentives to get potential buyers to the closing table and to convince top brokers to work with them.
As buyer's markets go, this is shaping up to be a good one - as long as you know how to play it to your advantage.
But gimmicks like new pools and mingling with rock stars are a distraction, says Mark Zandi, chief economist of Moody's Economy.com. If you're truly savvy about selecting and bidding on a home, you may be able to do better, he says. Much better.
Home inventories have gone skyward in the past year. In August (the most recent month for which data are available) there were 4 million homes on the market in the United States, a million more than at the same point in 2005. Combine that with the boost in interest rates and you have a lot of nervous sellers.
"Until now sellers didn't want to cut their prices. They were much more willing to provide an incentive - refinish the deck, seal the driveway, help with the financing, anything but cut the price," says Zandi. That's because incentives are cheaper for the seller in most cases.
Knocking 5% off a $300,000 home, for example, costs $15,000, but giving away that Pottery Barn shopping spree costs less and sounds sexier.
Right now, however, there's enough inventory that sellers are starting to do both: lower prices and provide incentives. This sharp change is not happening at all times in all markets, Zandi says, and only by knowing what kinds of freebies are being doled out can you jump on the trend and score a better deal (and maybe a new pool too). Here's what to do.
Hit the Incentive Piñata
It makes sense that people selling on their own are often quick to offer incentives instead of dropping the price. Many have trouble coming to grips with the fact that their home is worth less than they thought it would be, so they resist cutting the price until absolutely necessary.
List: See forecasted declines for largest U.S. markets
Instead they offer to pay your closing costs or to leave the Sub-Zero behind. Let your eyes - and the inspector you hire to check the place out - guide your requests. If the house needs painting, new windows or a fresh buffer of trees, now's the time to ask. And ask for a price cut to boot. Builders and developers use incentives first for a different reason: Reducing the price on one house in a neighborhood could hurt the prices of the remaining homes (and it peeves buyers who already paid full price).
Anyone shopping for a newly constructed home has the most to gain. After drying up during the boom, explains David Seiders, chief economist for the National Association of Home Builders, incentives are back in force. A recent survey of NAHB members revealed that 55% of builders are offering more amenities, 42% are paying closing costs and 26% are absorbing points on mortgages.
In addition, the survey showed that 80% are encountering buyer resistance to the price of homes, the most since the early 1990s. As a result, nearly 45% of builders are trimming prices.
Improve Your Mortgage
Buyers are also getting incentives for taking out mortgages, says Anthony Hsieh, president of LendingTree.com. For example, 20% of home builders are using "buy-down" programs, in which they buy down your mortgage by two percentage points in year one and one point in year two.
That can, in fact, be a great deal. But tread carefully. Some other trendy mortgage offers are a little too much like credit cards with teaser rates attached. They're cheaper in the early years than what you might qualify for, but they escalate quickly.
"Buyers have to be very careful not to be swept off their feet to take the wrong product," says Hsieh. "You don't want to get blinded into the wrong mortgage." The key to knowing whether the loan being offered to you is a good deal or a bummer is to run the numbers on a few scenarios, says Keith Gumbinger of HSH.com, a publisher of mortgage information. You want to know what your actual payment will be not just in years one and two but for as many years as you're planning to live in the house.
Gumbinger recommends watching financing offers for early-termination fees and prepayment penalties. A lender's goal in offering subsidized financing is to keep you there until the payment escalates - and beyond - which often means making it expensive for you to get out.
Look for Alternative Cuts
The buyer's market has created a market for something that's not usually on the list of negotiable factors in the sale of a home: title insurance. (It's rarely on the list of comprehensible factors either, but that's another story.) That is changing thanks to Titleinsurance.com, a new Web site that operates kind of like a LendingTree.com for title insurance.
Consumers go to the site, fill in information about their transaction and get a handful of quotes from title insurers in the county. The site currently has some 325 title insurers signed up to bid and is limiting itself to five per county. The service is nonbinding and is free to consumers. Revenue comes from title insurers who pay, essentially, for leads.
How much money you will save depends on the competition in your area, but with title insurance averaging less than 0.5% of your loan but sometimes costing as much as 1.5%, the gap can be a couple thousand dollars or more
Monday, October 23, 2006
Real Estate
Buy my house, please!
As the market cools, it will take more work to get that 'For Sale' sign out of your front yard. –
To say that it's been a seller's housing market is the understatement of the year. Homeowners looking to sell in most parts of the country haven't had to wait around very long for a suitable offer, and those in the best markets have seen their homes swooped up in a matter of days, even hours.
In early 2003, in fact, 21 percent of all houses went into contract less than one week after going on the market, according to the National Association of Realtors (NAR). On average, houses sold in just five weeks – nearly half the time it took throughout the 1990s.
"I believe this may be our best year ever," said David Hemenway, a realtor in Cottage Grove, Ore., who's been in the business since 1968. On the other side of the country in Sebring, Fla., realtor Chip Boring is enjoying a record year.
Yet, both are aware that great times can't last forever. "Up until the last 2 1/2 years the average time on the market was anywhere from 180 days to 210 days," Boring said. And Hemenway recalls the early 1980s when his listings lingered on the market, sometimes for years.
As interest rates creep up, buyers' budgets creep down and markets return to more normal levels, sellers will discover that it takes a little more work (and patience) to unload their homes. Many already have. While there is little you can do to change the laws of supply and demand, you have some control over whether your house sits or sells.
Here are the most common reasons houses don't sell, in order of importance.
The price is not right
Even in the best of markets, setting your price too high is a mistake -- unless you really don't want to sell your house.
"Starting too high is the worst thing you can do," said Hemenway.
Why? Because your greatest opportunity for selling your house is immediately after it goes on the market. That's when the majority of serious buyers will see the house.
"Even if you lower the price to reflect the market, you'll have fewer people coming through than if you'd just priced it right to begin with," said Hemenway.
In fact, it's not until after you bring the price down below the market – something few sellers want to do – that interest will pick up again.
To make matters worse, say real estate agents, the longer a house sits the harder it is to sell. "Everyone thinks there must be something wrong with the house if it hasn't sold," said Boring, adding that for this reason he won't take on a listing if the seller insists on asking more than the house is worth.
To drum up new interest among buyers, sellers sometimes pay for extra advertising or offer to, for example, pay for closing costs as a way to get buyers' attention. "In markets where people don't have a lot of cash, paying for closing costs or buying down interest rates with points up front can put you at a huge advantage," said Ron Phipps, a realtor in Warwick, R.I.
The house is in the wrong place
When markets are good, buyers are more willing to buy on the outskirts of an area or turn a blind eye to busy streets, bad views and other problems. But when markets cool down, it's these spots that suffer the most, said Hemenway.
Short of moving the house, there is not much you can do if it is in the wrong location. But while in the house you can take care to make sure you don't over-improve your property relative to the ones around it.
"If you have a $300,000 house in a neighborhood of $100,000, be prepared to lower the price or let it sit," said Boring.
Buyers can't get past the front door
Realtors say that getting buyers to take a look inside a house is the biggest challenge of selling a house. Once they've stepped through the door buyers are more likely to consider a place.
"I recently sold a house that from the front was not very inspired," said Phipps. "The buyers came to the open house only because they needed to kill time, but once inside they were interested."
For this reason, a little time and money spent on curb appeal will go a long way. Trimming the grass, washing the windows and planting a few flowers may be all it takes.
In the case of houses whose best features are inside or out back, Phipps recommends taking good interior pictures and putting 360-degree tours online.
Sellers sometimes get buyers to look past their homes' imperfections with creative extras. "I've seen sellers offer decorating allowances, and pay for cleaning service and landscaping," said Phipps. "Several years ago a seller in the bakery business offered to bring the buyer a different cake every month."
Too much chintz and tchotchkes
Less is more when it comes to attracting buyers.
"Put all of those pictures of your family and other personal treasures away," said Sheryl Gregory, a broker in Wynthrop, Maine. "It distracts buyers and makes it harder for them to picture themselves in the house."
She also recommends taking down distracting curtains and putting on a fresh coat of paint. "Buyers sometimes get scared if they wander through a house and think they're going to have to do a lot of painting," she added.
According to Sarah Max cnn/money
Buy my house, please!
As the market cools, it will take more work to get that 'For Sale' sign out of your front yard. –
To say that it's been a seller's housing market is the understatement of the year. Homeowners looking to sell in most parts of the country haven't had to wait around very long for a suitable offer, and those in the best markets have seen their homes swooped up in a matter of days, even hours.
In early 2003, in fact, 21 percent of all houses went into contract less than one week after going on the market, according to the National Association of Realtors (NAR). On average, houses sold in just five weeks – nearly half the time it took throughout the 1990s.
"I believe this may be our best year ever," said David Hemenway, a realtor in Cottage Grove, Ore., who's been in the business since 1968. On the other side of the country in Sebring, Fla., realtor Chip Boring is enjoying a record year.
Yet, both are aware that great times can't last forever. "Up until the last 2 1/2 years the average time on the market was anywhere from 180 days to 210 days," Boring said. And Hemenway recalls the early 1980s when his listings lingered on the market, sometimes for years.
As interest rates creep up, buyers' budgets creep down and markets return to more normal levels, sellers will discover that it takes a little more work (and patience) to unload their homes. Many already have. While there is little you can do to change the laws of supply and demand, you have some control over whether your house sits or sells.
Here are the most common reasons houses don't sell, in order of importance.
The price is not right
Even in the best of markets, setting your price too high is a mistake -- unless you really don't want to sell your house.
"Starting too high is the worst thing you can do," said Hemenway.
Why? Because your greatest opportunity for selling your house is immediately after it goes on the market. That's when the majority of serious buyers will see the house.
"Even if you lower the price to reflect the market, you'll have fewer people coming through than if you'd just priced it right to begin with," said Hemenway.
In fact, it's not until after you bring the price down below the market – something few sellers want to do – that interest will pick up again.
To make matters worse, say real estate agents, the longer a house sits the harder it is to sell. "Everyone thinks there must be something wrong with the house if it hasn't sold," said Boring, adding that for this reason he won't take on a listing if the seller insists on asking more than the house is worth.
To drum up new interest among buyers, sellers sometimes pay for extra advertising or offer to, for example, pay for closing costs as a way to get buyers' attention. "In markets where people don't have a lot of cash, paying for closing costs or buying down interest rates with points up front can put you at a huge advantage," said Ron Phipps, a realtor in Warwick, R.I.
The house is in the wrong place
When markets are good, buyers are more willing to buy on the outskirts of an area or turn a blind eye to busy streets, bad views and other problems. But when markets cool down, it's these spots that suffer the most, said Hemenway.
Short of moving the house, there is not much you can do if it is in the wrong location. But while in the house you can take care to make sure you don't over-improve your property relative to the ones around it.
"If you have a $300,000 house in a neighborhood of $100,000, be prepared to lower the price or let it sit," said Boring.
Buyers can't get past the front door
Realtors say that getting buyers to take a look inside a house is the biggest challenge of selling a house. Once they've stepped through the door buyers are more likely to consider a place.
"I recently sold a house that from the front was not very inspired," said Phipps. "The buyers came to the open house only because they needed to kill time, but once inside they were interested."
For this reason, a little time and money spent on curb appeal will go a long way. Trimming the grass, washing the windows and planting a few flowers may be all it takes.
In the case of houses whose best features are inside or out back, Phipps recommends taking good interior pictures and putting 360-degree tours online.
Sellers sometimes get buyers to look past their homes' imperfections with creative extras. "I've seen sellers offer decorating allowances, and pay for cleaning service and landscaping," said Phipps. "Several years ago a seller in the bakery business offered to bring the buyer a different cake every month."
Too much chintz and tchotchkes
Less is more when it comes to attracting buyers.
"Put all of those pictures of your family and other personal treasures away," said Sheryl Gregory, a broker in Wynthrop, Maine. "It distracts buyers and makes it harder for them to picture themselves in the house."
She also recommends taking down distracting curtains and putting on a fresh coat of paint. "Buyers sometimes get scared if they wander through a house and think they're going to have to do a lot of painting," she added.
According to Sarah Max cnn/money
Real Estate
Buy my house, please!
It's been a seller's housing market is the understatement of the year. Homeowners looking to sell in most parts of the country haven't had to wait around very long for a suitable offer, and those in the best markets have seen their homes swooped up in a matter of days, even hours.
In early 2003, in fact, 21 percent of all houses went into contract less than one week after going on the market, according to the National Association of Realtors (NAR). On average, houses sold in just five weeks – nearly half the time it took throughout the 1990s.
"I believe this may be our best year ever," said David Hemenway, a realtor in Cottage Grove, Ore., who's been in the business since 1968. On the other side of the country in Sebring, Fla., realtor Chip Boring is enjoying a record year.
Yet, both are aware that great times can't last forever. "Up until the last 2 1/2 years the average time on the market was anywhere from 180 days to 210 days," Boring said. And Hemenway recalls the early 1980s when his listings lingered on the market, sometimes for years.
As interest rates creep up, buyers' budgets creep down and markets return to more normal levels, sellers will discover that it takes a little more work (and patience) to unload their homes. Many already have. While there is little you can do to change the laws of supply and demand, you have some control over whether your house sits or sells.
Here are the most common reasons houses don't sell, in order of importance.
The price is not right
Even in the best of markets, setting your price too high is a mistake -- unless you really don't want to sell your house.
"Starting too high is the worst thing you can do," said Hemenway.
Why? Because your greatest opportunity for selling your house is immediately after it goes on the market. That's when the majority of serious buyers will see the house.
"Even if you lower the price to reflect the market, you'll have fewer people coming through than if you'd just priced it right to begin with," said Hemenway.
In fact, it's not until after you bring the price down below the market – something few sellers want to do – that interest will pick up again.
To make matters worse, say real estate agents, the longer a house sits the harder it is to sell. "Everyone thinks there must be something wrong with the house if it hasn't sold," said Boring, adding that for this reason he won't take on a listing if the seller insists on asking more than the house is worth.
To drum up new interest among buyers, sellers sometimes pay for extra advertising or offer to, for example, pay for closing costs as a way to get buyers' attention. "In markets where people don't have a lot of cash, paying for closing costs or buying down interest rates with points up front can put you at a huge advantage," said Ron Phipps, a realtor in Warwick, R.I.
The house is in the wrong place
When markets are good, buyers are more willing to buy on the outskirts of an area or turn a blind eye to busy streets, bad views and other problems. But when markets cool down, it's these spots that suffer the most, said Hemenway.
Short of moving the house, there is not much you can do if it is in the wrong location. But while in the house you can take care to make sure you don't over-improve your property relative to the ones around it. "If you have a $300,000 house in a neighborhood of $100,000, be prepared to lower the price or let it sit," said Boring.
Buyers can't get past the front door
Realtors say that getting buyers to take a look inside a house is the biggest challenge of selling a house. Once they've stepped through the door buyers are more likely to consider a place.
"I recently sold a house that from the front was not very inspired," said Phipps. "The buyers came to the open house only because they needed to kill time, but once inside they were interested."
For this reason, a little time and money spent on curb appeal will go a long way. Trimming the grass, washing the windows and planting a few flowers may be all it takes.
In the case of houses whose best features are inside or out back, Phipps recommends taking good interior pictures and putting 360-degree tours online.
Sellers sometimes get buyers to look past their homes' imperfections with creative extras. "I've seen sellers offer decorating allowances, and pay for cleaning service and landscaping," said Phipps. "Several years ago a seller in the bakery business offered to bring the buyer a different cake every month."
Too much chintz and tchotchkes
Less is more when it comes to attracting buyers.
"Put all of those pictures of your family and other personal treasures away," said Sheryl Gregory, a broker in Wynthrop, Maine. "It distracts buyers and makes it harder for them to picture themselves in the house."
She also recommends taking down distracting curtains and putting on a fresh coat of paint. "Buyers sometimes get scared if they wander through a house and think they're going to have to do a lot of painting," she added.
According to Sara Max CNN/MONEY
Buy my house, please!
It's been a seller's housing market is the understatement of the year. Homeowners looking to sell in most parts of the country haven't had to wait around very long for a suitable offer, and those in the best markets have seen their homes swooped up in a matter of days, even hours.
In early 2003, in fact, 21 percent of all houses went into contract less than one week after going on the market, according to the National Association of Realtors (NAR). On average, houses sold in just five weeks – nearly half the time it took throughout the 1990s.
"I believe this may be our best year ever," said David Hemenway, a realtor in Cottage Grove, Ore., who's been in the business since 1968. On the other side of the country in Sebring, Fla., realtor Chip Boring is enjoying a record year.
Yet, both are aware that great times can't last forever. "Up until the last 2 1/2 years the average time on the market was anywhere from 180 days to 210 days," Boring said. And Hemenway recalls the early 1980s when his listings lingered on the market, sometimes for years.
As interest rates creep up, buyers' budgets creep down and markets return to more normal levels, sellers will discover that it takes a little more work (and patience) to unload their homes. Many already have. While there is little you can do to change the laws of supply and demand, you have some control over whether your house sits or sells.
Here are the most common reasons houses don't sell, in order of importance.
The price is not right
Even in the best of markets, setting your price too high is a mistake -- unless you really don't want to sell your house.
"Starting too high is the worst thing you can do," said Hemenway.
Why? Because your greatest opportunity for selling your house is immediately after it goes on the market. That's when the majority of serious buyers will see the house.
"Even if you lower the price to reflect the market, you'll have fewer people coming through than if you'd just priced it right to begin with," said Hemenway.
In fact, it's not until after you bring the price down below the market – something few sellers want to do – that interest will pick up again.
To make matters worse, say real estate agents, the longer a house sits the harder it is to sell. "Everyone thinks there must be something wrong with the house if it hasn't sold," said Boring, adding that for this reason he won't take on a listing if the seller insists on asking more than the house is worth.
To drum up new interest among buyers, sellers sometimes pay for extra advertising or offer to, for example, pay for closing costs as a way to get buyers' attention. "In markets where people don't have a lot of cash, paying for closing costs or buying down interest rates with points up front can put you at a huge advantage," said Ron Phipps, a realtor in Warwick, R.I.
The house is in the wrong place
When markets are good, buyers are more willing to buy on the outskirts of an area or turn a blind eye to busy streets, bad views and other problems. But when markets cool down, it's these spots that suffer the most, said Hemenway.
Short of moving the house, there is not much you can do if it is in the wrong location. But while in the house you can take care to make sure you don't over-improve your property relative to the ones around it. "If you have a $300,000 house in a neighborhood of $100,000, be prepared to lower the price or let it sit," said Boring.
Buyers can't get past the front door
Realtors say that getting buyers to take a look inside a house is the biggest challenge of selling a house. Once they've stepped through the door buyers are more likely to consider a place.
"I recently sold a house that from the front was not very inspired," said Phipps. "The buyers came to the open house only because they needed to kill time, but once inside they were interested."
For this reason, a little time and money spent on curb appeal will go a long way. Trimming the grass, washing the windows and planting a few flowers may be all it takes.
In the case of houses whose best features are inside or out back, Phipps recommends taking good interior pictures and putting 360-degree tours online.
Sellers sometimes get buyers to look past their homes' imperfections with creative extras. "I've seen sellers offer decorating allowances, and pay for cleaning service and landscaping," said Phipps. "Several years ago a seller in the bakery business offered to bring the buyer a different cake every month."
Too much chintz and tchotchkes
Less is more when it comes to attracting buyers.
"Put all of those pictures of your family and other personal treasures away," said Sheryl Gregory, a broker in Wynthrop, Maine. "It distracts buyers and makes it harder for them to picture themselves in the house."
She also recommends taking down distracting curtains and putting on a fresh coat of paint. "Buyers sometimes get scared if they wander through a house and think they're going to have to do a lot of painting," she added.
According to Sara Max CNN/MONEY
Thursday, October 19, 2006
Real Estate
More Homeowners Going Into Default
A housing market slowdown combined with rising payments on adjustable-rate loans is leading to a sharp hike in notices from lenders.
By David Streitfeld and Martin Zimmerman, Times Staff WritersOctober 19, 2006
The number of Californians who are significantly behind on their mortgage payments and at risk of losing their homes to foreclosure more than doubled in the three months ended Sept. 30, providing the latest evidence of trouble in the housing market, figures released Wednesday show.Lenders sent out 26,705 default notices — the first step toward a foreclosure — during the July-to-September period, up from 12,606 during the same quarter in 2005, according to DataQuick Information Systems.
Defaults are still well below their peak level of 59,897, which came in the first three months of 1996, as the state's last housing slowdown was ending. But the report shows that the slumping housing market is taking a toll on more homeowners especially those with mortgages that offer low initial payments at the cost of higher bills down the road."We were putting buyers in homes with loans they could not afford to sustain over the long haul," said Bob Casagrand, a San Diego real estate agent. "If you're a marginal buyer with an adjustable mortgage, you're rolling the dice on the future."Foreclosures are rare when the housing market is strong and prices are rising. In those conditions, borrowers can usually sell their homes quickly, or they have enough equity to allow them to refinance their loans. But in another disquieting sign, DataQuick reported that 19% of the owners who went into default earlier in the year actually lost their homes to foreclosure in the third quarter, more than triple the 6% in 2005.Mortgage payments are such a big part of the household budget for many Californians that it takes only a little trouble to fall behind.
For Stacey and Mike Broussard, all it took was an exceptionally rainy spring. That meant Mike Broussard was laid off from his job as a heavy equipment operator."I tried to juggle things around — we were eating a lot of peanut butter and a lot of beans — but it got out of control," said Stacey Broussard, 39.She was in charge of the bills and each month would pay what she could of the $1,300 the lender expected for the mortgage on their home northeast of San Francisco in Antioch. At the end of August, she said, she tried to make another partial payment, but the lender said anything less than a full payment would lead to a default.
One day her husband said she had a notice from the post office to pick up a special letter. She knew what it was, but he didn't. "I was trying to fix it before I told him," she said. "That was the worst moment."Mike Broussard is now employed again, and the couple — who are lucky enough to have equity in their home — are working with TerraCotta Group, a Manhattan Beach real estate and mortgage company that specializes in helping delinquent homeowners get out of default.
When she started TerraCotta 2 1/2 years ago, company President Tingting Zhang said two or three people would come through her door on the typical day looking for help. Now, it's 30 to 40. "And we haven't reached the peak yet," said Zhang, who believes that the combination of rising interest rates and high-risk mortgages could spell defeat for a rising number of borrowers.Just Wednesday morning, Zhang dealt with a Lancaster resident who had taken out a $310,000 adjustable-rate mortgage with a starter interest rate of 5.4% and a monthly payment of $1,050. In July, the interest rate climbed to 8.5% and the monthly payment jumped to $2,306. A year-end adjustment will send the monthly payment to $2,744."The borrower is totally unprepared for this rate adjustment," Zhang said.The fallout is starting to show up in the workload at credit counseling outfits.
Gary Aguilar, counseling manager for Springboard, a nonprofit credit counseling agency in Riverside, said the amount of mortgage-related work he and his staff were doing had "pretty much tripled this year."The softening of the housing market was the trigger, as new homeowners with little or no equity in their properties found themselves unable to sell at a high enough price to pay off the balance of the loan and still cover all of the sale expenses."Whereas a year ago, people could have put their house on the market and sold their way out of the problem, now they're stuck with the house," said Richard Pittman, housing services coordinator for credit counselor ByDesign Financial Solutions in Los Angeles
Provided by Los Angeles Times
More Homeowners Going Into Default
A housing market slowdown combined with rising payments on adjustable-rate loans is leading to a sharp hike in notices from lenders.
By David Streitfeld and Martin Zimmerman, Times Staff WritersOctober 19, 2006
The number of Californians who are significantly behind on their mortgage payments and at risk of losing their homes to foreclosure more than doubled in the three months ended Sept. 30, providing the latest evidence of trouble in the housing market, figures released Wednesday show.Lenders sent out 26,705 default notices — the first step toward a foreclosure — during the July-to-September period, up from 12,606 during the same quarter in 2005, according to DataQuick Information Systems.
Defaults are still well below their peak level of 59,897, which came in the first three months of 1996, as the state's last housing slowdown was ending. But the report shows that the slumping housing market is taking a toll on more homeowners especially those with mortgages that offer low initial payments at the cost of higher bills down the road."We were putting buyers in homes with loans they could not afford to sustain over the long haul," said Bob Casagrand, a San Diego real estate agent. "If you're a marginal buyer with an adjustable mortgage, you're rolling the dice on the future."Foreclosures are rare when the housing market is strong and prices are rising. In those conditions, borrowers can usually sell their homes quickly, or they have enough equity to allow them to refinance their loans. But in another disquieting sign, DataQuick reported that 19% of the owners who went into default earlier in the year actually lost their homes to foreclosure in the third quarter, more than triple the 6% in 2005.Mortgage payments are such a big part of the household budget for many Californians that it takes only a little trouble to fall behind.
For Stacey and Mike Broussard, all it took was an exceptionally rainy spring. That meant Mike Broussard was laid off from his job as a heavy equipment operator."I tried to juggle things around — we were eating a lot of peanut butter and a lot of beans — but it got out of control," said Stacey Broussard, 39.She was in charge of the bills and each month would pay what she could of the $1,300 the lender expected for the mortgage on their home northeast of San Francisco in Antioch. At the end of August, she said, she tried to make another partial payment, but the lender said anything less than a full payment would lead to a default.
One day her husband said she had a notice from the post office to pick up a special letter. She knew what it was, but he didn't. "I was trying to fix it before I told him," she said. "That was the worst moment."Mike Broussard is now employed again, and the couple — who are lucky enough to have equity in their home — are working with TerraCotta Group, a Manhattan Beach real estate and mortgage company that specializes in helping delinquent homeowners get out of default.
When she started TerraCotta 2 1/2 years ago, company President Tingting Zhang said two or three people would come through her door on the typical day looking for help. Now, it's 30 to 40. "And we haven't reached the peak yet," said Zhang, who believes that the combination of rising interest rates and high-risk mortgages could spell defeat for a rising number of borrowers.Just Wednesday morning, Zhang dealt with a Lancaster resident who had taken out a $310,000 adjustable-rate mortgage with a starter interest rate of 5.4% and a monthly payment of $1,050. In July, the interest rate climbed to 8.5% and the monthly payment jumped to $2,306. A year-end adjustment will send the monthly payment to $2,744."The borrower is totally unprepared for this rate adjustment," Zhang said.The fallout is starting to show up in the workload at credit counseling outfits.
Gary Aguilar, counseling manager for Springboard, a nonprofit credit counseling agency in Riverside, said the amount of mortgage-related work he and his staff were doing had "pretty much tripled this year."The softening of the housing market was the trigger, as new homeowners with little or no equity in their properties found themselves unable to sell at a high enough price to pay off the balance of the loan and still cover all of the sale expenses."Whereas a year ago, people could have put their house on the market and sold their way out of the problem, now they're stuck with the house," said Richard Pittman, housing services coordinator for credit counselor ByDesign Financial Solutions in Los Angeles
Provided by Los Angeles Times
Wednesday, October 11, 2006
Real Estate
HOME VALUESHousing's hottest markets
REAL ESTATEHome prices dip Existing-home prices fell in August for the first time in 11 years.•
Bakersfield once hot, now cold
Census survey looks at the biggest winning cities in home values from 2000 to 2005.• Ready for 'me' time at home• Fishy rehab-at-closing scheme• The condo-investment hangover
TRENDSLiving it up by living smallDefying trends, some homeowners have decided to do more with less.• Using design to ease downsizing• The weeHouse way
INSURANCEOverpaying on the house Homeowners' claims behavior may be costing them hundreds of dollars on policies.
RealEstateJournal coverage
House TalkWall Street Journal writer June Fletcher answers your questions.My investmentLearn firsthand from those who buy and sell income property.Search houses for sale or rent
MORTGAGESShouldering a big burden
Facing payments that could double, holders of option ARMs now find their choices limited.• Legal cash back at closing•
Senate hears of loan confusion
Dip in gas prices should ease winter heating bills WASHINGTON (MarketWatch) -- The recent drop seen in natural gas prices is likely to help soften U.S. consumer heating bills this winter, the
American Gas Association said at a briefing on Monday.
Realty Q&A: More tricky ways mortgage fraudsters seek to prosper WASHINGTON (MarketWatch) -- Question: I have read your articles and enjoy them and learn from them. Now I have a question. A "friend" has $300,000 in equity in his house. A broker asks him to flip to another mortgage, guaranteeing him a $6,000 dollar profit every three months if every three months he agrees to do this. Also, the broker agrees to take care of all the cost; "friend" pays nothing, zip, zero, nada. How is it possible? Sean.
U.S. mortgages hold at 7-month lows CHICAGO (MarketWatch) -- Mortgage rates held at seven-month lows this week, propelling a round of refinancing, according to Freddie Mac's weekly survey released Thursday.
Who's exposed to the housing chill? Look around your home SAN FRANCISCO (MarketWatch) -- It's not just homeowners and homebuilders that have a lot to lose if tremors roiling the real estate market turn into a full-scale quake.Contractors see their prices rising faster than inflation Pending-home sales rise 4.3% in August Can U.S. curb the mortgage frenzy that puts homeowners at risk?
Real Estate Library
•
Home Buying & Selling
•
Home Improvements
•
Mortgages & Home Loans
•
Renting
More...
See More Stories in the Library
HOME VALUESHousing's hottest markets
REAL ESTATEHome prices dip Existing-home prices fell in August for the first time in 11 years.•
Bakersfield once hot, now cold
Census survey looks at the biggest winning cities in home values from 2000 to 2005.• Ready for 'me' time at home• Fishy rehab-at-closing scheme• The condo-investment hangover
TRENDSLiving it up by living smallDefying trends, some homeowners have decided to do more with less.• Using design to ease downsizing• The weeHouse way
INSURANCEOverpaying on the house Homeowners' claims behavior may be costing them hundreds of dollars on policies.
RealEstateJournal coverage
House TalkWall Street Journal writer June Fletcher answers your questions.My investmentLearn firsthand from those who buy and sell income property.Search houses for sale or rent
MORTGAGESShouldering a big burden
Facing payments that could double, holders of option ARMs now find their choices limited.• Legal cash back at closing•
Senate hears of loan confusion
Dip in gas prices should ease winter heating bills WASHINGTON (MarketWatch) -- The recent drop seen in natural gas prices is likely to help soften U.S. consumer heating bills this winter, the
American Gas Association said at a briefing on Monday.
Realty Q&A: More tricky ways mortgage fraudsters seek to prosper WASHINGTON (MarketWatch) -- Question: I have read your articles and enjoy them and learn from them. Now I have a question. A "friend" has $300,000 in equity in his house. A broker asks him to flip to another mortgage, guaranteeing him a $6,000 dollar profit every three months if every three months he agrees to do this. Also, the broker agrees to take care of all the cost; "friend" pays nothing, zip, zero, nada. How is it possible? Sean.
U.S. mortgages hold at 7-month lows CHICAGO (MarketWatch) -- Mortgage rates held at seven-month lows this week, propelling a round of refinancing, according to Freddie Mac's weekly survey released Thursday.
Who's exposed to the housing chill? Look around your home SAN FRANCISCO (MarketWatch) -- It's not just homeowners and homebuilders that have a lot to lose if tremors roiling the real estate market turn into a full-scale quake.Contractors see their prices rising faster than inflation Pending-home sales rise 4.3% in August Can U.S. curb the mortgage frenzy that puts homeowners at risk?
Real Estate Library
•
Home Buying & Selling
•
Home Improvements
•
Mortgages & Home Loans
•
Renting
More...
See More Stories in the Library
Real Estate
Mortgage defaults up 67% in California
Notices filed on late loans highest in more than three years
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By Nick Godt, MarketWatch
Aug 3, 2006
NEW YORK (MarketWatch) -- The number of defaults on mortgage payments rose to a three-year high in the second quarter in California, a 67% increase from the year earlier period, according to DataQuick, a real estate data-compiling firm.
Lenders sent 20,752 default notices to homeowners across the Golden State, up 10.5% from 18,778 the previous quarter and up 67.2% from 12,408 in the second quarter of 2005. Notices of default are formal documents filed with the county recorder's office which mark the first step of the foreclosure process.
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Coverage of home buying and selling, housing prices, mortgage information and home improvement.• Decade's hottest housing markets• 'Me' houses for boomers• Reining in exotic mortgages• Homeowners living smallGet our free Real Estate newsletter
The 20,752 defaults were the highest since 25,511 were filed in the first quarter of 2003.
"This is an important trend to watch but doesn't strike us as ominous," said Marshall Prentice, DataQuick's president. "We would have to see defaults roughly double from today's level before they would begin to impact home values much."
Because the number of defaults had fallen to extreme lows in recent years, it was widely expected that they would start spiking up as home-price appreciation slowed, he said.
"We hear a lot of talk about rising payments on adjustable-rate loans triggering borrower distress," Prentice said. "While there's no doubt some of that is going on, as far as we can tell the spike in defaults is mainly the result of slowing price appreciation."
Slowing prices make it harder for homeowners who fall behind on mortgage payments to sell their homes and pay off the lender. Price increases level off
Some parts of California, along with others in Florida and the northeast region, had seen some of the sharpest increases in home prices in the nation over the past few years, fueling what many observers described as a speculative bubble.
Historically low interest rates helped fuel the surge in home sales and prices, also encouraging homeowners to borrow on their home equity to finance their consumption.
But with the Federal Reserve gradually lifting short-term rates over the past two years, the housing market began to slow late last year.
California defaults had hit a low of 12,145 in the third quarter of 2004, a year during which home prices were on average rising by more than 20% annually. But so far this year, annual price gains have slipped into single digits in many of the state's key housing markets, DataQuick said.
In July, median home prices in San Diego and Sacramento counties dipped about 1% from the year earlier. As a result, second-quarter defaults rose by 99% in San Diego County and 109% in Sacramento County. Still, that represented just 1,778 default notices in San Diego and 1,352 in Sacramento. DataQuick said overall defaults remain about one-third their peak level reached in 1996 in the last housing recession in California.
Among the banks that have issued the largest amounts of mortgages in California, such as Wells Fargo & Co (WFC :
Wells Fargo & Company
Sponsored by:
WFC36.22, -0.06, -0.2%) , most said credit quality remained solid when they reported second-quarter earnings.
But a slowing housing market has still caused some trouble. Earnings at Golden West Financial (GDW :
Golden West Financial Corporation
GDW77.25, 0.00, 0.0%) , which is in the process of being acquired by Wachovia (WB :
Wachovia Corp
WB56.02, +0.19, +0.3%) , came in below expectations as mortgage demand slowed.
Golden West specializes in adjustable-rate mortgages, which have fallen out of favor as interest rates increased.
Countrywide Financial (CFC :
Countrywide Financial Corp. The largest mortgage lender in the U.S., saw a 26% improvement in earnings but lowered its outlook for new loan production, while its chief executive warned that expectations of a "soft landing" in housing is overly optimistic.
Many banks have been ditching lower-quality loans while some have gone further, selling entire slices of the business.
Washington Mutual (WM : Reported a 9% drop in second-quarter earnings on charges stemming from the sale of mortgage-servicing rights to Wells Fargo.
KeyCorp (KEY : It is exploring the sale of its subprime mortgage lending unit. Three weeks ago National City Corp
(NCC :
National City Corporation said it has similar intentions. Nick Godt is a MarketWatch reporter based in New York.
Mortgage defaults up 67% in California
Notices filed on late loans highest in more than three years
Del.icio.us
By Nick Godt, MarketWatch
Aug 3, 2006
NEW YORK (MarketWatch) -- The number of defaults on mortgage payments rose to a three-year high in the second quarter in California, a 67% increase from the year earlier period, according to DataQuick, a real estate data-compiling firm.
Lenders sent 20,752 default notices to homeowners across the Golden State, up 10.5% from 18,778 the previous quarter and up 67.2% from 12,408 in the second quarter of 2005. Notices of default are formal documents filed with the county recorder's office which mark the first step of the foreclosure process.
Lots morereal estate
Coverage of home buying and selling, housing prices, mortgage information and home improvement.• Decade's hottest housing markets• 'Me' houses for boomers• Reining in exotic mortgages• Homeowners living smallGet our free Real Estate newsletter
The 20,752 defaults were the highest since 25,511 were filed in the first quarter of 2003.
"This is an important trend to watch but doesn't strike us as ominous," said Marshall Prentice, DataQuick's president. "We would have to see defaults roughly double from today's level before they would begin to impact home values much."
Because the number of defaults had fallen to extreme lows in recent years, it was widely expected that they would start spiking up as home-price appreciation slowed, he said.
"We hear a lot of talk about rising payments on adjustable-rate loans triggering borrower distress," Prentice said. "While there's no doubt some of that is going on, as far as we can tell the spike in defaults is mainly the result of slowing price appreciation."
Slowing prices make it harder for homeowners who fall behind on mortgage payments to sell their homes and pay off the lender. Price increases level off
Some parts of California, along with others in Florida and the northeast region, had seen some of the sharpest increases in home prices in the nation over the past few years, fueling what many observers described as a speculative bubble.
Historically low interest rates helped fuel the surge in home sales and prices, also encouraging homeowners to borrow on their home equity to finance their consumption.
But with the Federal Reserve gradually lifting short-term rates over the past two years, the housing market began to slow late last year.
California defaults had hit a low of 12,145 in the third quarter of 2004, a year during which home prices were on average rising by more than 20% annually. But so far this year, annual price gains have slipped into single digits in many of the state's key housing markets, DataQuick said.
In July, median home prices in San Diego and Sacramento counties dipped about 1% from the year earlier. As a result, second-quarter defaults rose by 99% in San Diego County and 109% in Sacramento County. Still, that represented just 1,778 default notices in San Diego and 1,352 in Sacramento. DataQuick said overall defaults remain about one-third their peak level reached in 1996 in the last housing recession in California.
Among the banks that have issued the largest amounts of mortgages in California, such as Wells Fargo & Co (WFC :
Wells Fargo & Company
Sponsored by:
WFC36.22, -0.06, -0.2%) , most said credit quality remained solid when they reported second-quarter earnings.
But a slowing housing market has still caused some trouble. Earnings at Golden West Financial (GDW :
Golden West Financial Corporation
GDW77.25, 0.00, 0.0%) , which is in the process of being acquired by Wachovia (WB :
Wachovia Corp
WB56.02, +0.19, +0.3%) , came in below expectations as mortgage demand slowed.
Golden West specializes in adjustable-rate mortgages, which have fallen out of favor as interest rates increased.
Countrywide Financial (CFC :
Countrywide Financial Corp. The largest mortgage lender in the U.S., saw a 26% improvement in earnings but lowered its outlook for new loan production, while its chief executive warned that expectations of a "soft landing" in housing is overly optimistic.
Many banks have been ditching lower-quality loans while some have gone further, selling entire slices of the business.
Washington Mutual (WM : Reported a 9% drop in second-quarter earnings on charges stemming from the sale of mortgage-servicing rights to Wells Fargo.
KeyCorp (KEY : It is exploring the sale of its subprime mortgage lending unit. Three weeks ago National City Corp
(NCC :
National City Corporation said it has similar intentions. Nick Godt is a MarketWatch reporter based in New York.
Monday, October 09, 2006
Real Estate
California August Home Sales
By Real Estate Analyst John Karevoll-->September 20, 2006
A total of 49,800 new and resale houses and condos were sold statewide last month. That's up 12.5 percent from 44,250 for July and down 25.1 percent from a revised 66,500 for August 2005.
The median price paid for a home last month was $472,000. That was down 0.6 percent from July's $475,000, and up 3.5 percent from $456,000 for August a year ago.
The typical mortgage payment that home buyers committed themselves to paying last month was $2,258. That was down from $2,353 in July, and up from $2,034 for August a year ago.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. The numbers cover all sales, new and resale, houses and condos.
Market stress indicators are still low: Down payments are stable, speculation buying is moderate, there are no significant shifts in market mix and default rates are rising, but still low. Earlier increases in non owner-occupied purchase activity and flipping activity have leveled off. The use of adjustable-rate mortgages has dropped the last half year.
California August Home Sales
By Real Estate Analyst John Karevoll-->September 20, 2006
A total of 49,800 new and resale houses and condos were sold statewide last month. That's up 12.5 percent from 44,250 for July and down 25.1 percent from a revised 66,500 for August 2005.
The median price paid for a home last month was $472,000. That was down 0.6 percent from July's $475,000, and up 3.5 percent from $456,000 for August a year ago.
The typical mortgage payment that home buyers committed themselves to paying last month was $2,258. That was down from $2,353 in July, and up from $2,034 for August a year ago.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. The numbers cover all sales, new and resale, houses and condos.
Market stress indicators are still low: Down payments are stable, speculation buying is moderate, there are no significant shifts in market mix and default rates are rising, but still low. Earlier increases in non owner-occupied purchase activity and flipping activity have leveled off. The use of adjustable-rate mortgages has dropped the last half year.
Wednesday, September 13, 2006
Real Estate
FORECLOSUES SPIKED IN AUGUST
Rising payments on adjustable-rate mortgages contribute to 53% jump in foreclosures.
With real estate markets slowing and mortgage rates well above levels of recent years, times are getting tougher for homeowners - the number of homes entering into some stage of foreclosure is surging, according to a survey released Wednesday.
In August, 115,292 properties entered into foreclosure, according to RealtyTrac, an online marketplace for foreclosure sales. That was 24 percent above the level in July and 53 percent higher than a year earlier.
Where foreclosures are jumping Year over year gain in homes in foreclosure. Click for more stats on each state.
Nevada: Up 255%
California: Up 160%
Florida: Up 62%
Buying Foreclosed Homes
The 3 stages of foreclosures
Before you try it, it helps to know the landscape. (more)
It was the second highest monthly foreclosure total of the year; in February, 117,151 properties entered foreclosure.
Some of the bellwether real estate market states are among the leading foreclosure markets. Florida, had more than 16,533 properties in foreclosure in August. That led all states and was 50 percent higher than in July and 62 percent higher than in August 2005.
California foreclosures are increasing at an even faster annual rate, up 160 percent since last year to 12,506. And the formerly red-hot Nevada market recorded a spike of 24 percent compared with July and a whopping 255 percent increase from August 2005.
Rick Sharga, RealtyTrac's vice president of marketing, says the rising foreclosure numbers are in part the result of rising monthly payments on adjustable-rate mortgages, which have a low introductory interest rate that heads higher after an initial period.
"Usually, foreclosures are a lagging [market] indicator," he says. "But we've never had a situation like this with adjustable-rate mortgages amounting to $400 billion to $500 billion coming up for adjustment over the rest of the year."
For a homeowner with a 5/1 ARM (an adjustable rate loan with an initial fixed rate for five years that then adjusts annually) that's now resetting, the adjustment could add at least two percentage points to the interest rate. That could send the payment on a $200,000 loan up from about $950 a month closer to $1,200.
These exotic mortgages, which have been issued by lenders at much higher numbers the past few years, default at a higher rate than do fixed-rate mortgages. And sub-prime loans, which are much more common than in the past, have a higher default rate as well.
But, Sharga says, "The real wild card is the nature of the loans themselves. Historically, ARMs were underwritten pretty conservatively. There has been a loosening of standards with lower credit worthiness and smaller down payments."
Underlying causes
Homeowners are also in Dutch because of underlying economic conditions. Many of the worst hit markets, such as in the Midwest, are in areas hard hit by layoffs or other economic ills.
When housing markets were hot, homeowners could often avoid default through two ready made options, according to Sharga: They could sell to a ready market or they could use the increase through appreciation in their equity to refinance their homes. Increasingly, both those options are evaporating.
Contrary to what many consumers may believe, lenders are not anxious to foreclose on homes and put families out on the streets. Foreclosures tend to be money losers for lenders and are done mostly as a last resort.
Sharga says lenders are beginning to recognize that a problem is brewing and are taking steps to address it. They are much more amenable to a short sale, for example, in which they accept a low-ball, cash bid early in the default process that may not even cover their mortgage, in order to avoid a larger loss later. That can help homeowners by preserving their credit scores and easing their transitions into the rental market.
"Lenders say they're looking for ways to work with homeowners in trouble," reports Sharga. "So for homeowners looking at a default situation, the sooner they talk to their lender - and see what options are available - the better."
More real estate news: Leading home builders lower profit outlook. Companies warning include: Lennar (Charts), KB Home (Charts) and Beazer Homes (Charts).
FORECLOSUES SPIKED IN AUGUST
Rising payments on adjustable-rate mortgages contribute to 53% jump in foreclosures.
With real estate markets slowing and mortgage rates well above levels of recent years, times are getting tougher for homeowners - the number of homes entering into some stage of foreclosure is surging, according to a survey released Wednesday.
In August, 115,292 properties entered into foreclosure, according to RealtyTrac, an online marketplace for foreclosure sales. That was 24 percent above the level in July and 53 percent higher than a year earlier.
Where foreclosures are jumping Year over year gain in homes in foreclosure. Click for more stats on each state.
Nevada: Up 255%
California: Up 160%
Florida: Up 62%
Buying Foreclosed Homes
The 3 stages of foreclosures
Before you try it, it helps to know the landscape. (more)
It was the second highest monthly foreclosure total of the year; in February, 117,151 properties entered foreclosure.
Some of the bellwether real estate market states are among the leading foreclosure markets. Florida, had more than 16,533 properties in foreclosure in August. That led all states and was 50 percent higher than in July and 62 percent higher than in August 2005.
California foreclosures are increasing at an even faster annual rate, up 160 percent since last year to 12,506. And the formerly red-hot Nevada market recorded a spike of 24 percent compared with July and a whopping 255 percent increase from August 2005.
Rick Sharga, RealtyTrac's vice president of marketing, says the rising foreclosure numbers are in part the result of rising monthly payments on adjustable-rate mortgages, which have a low introductory interest rate that heads higher after an initial period.
"Usually, foreclosures are a lagging [market] indicator," he says. "But we've never had a situation like this with adjustable-rate mortgages amounting to $400 billion to $500 billion coming up for adjustment over the rest of the year."
For a homeowner with a 5/1 ARM (an adjustable rate loan with an initial fixed rate for five years that then adjusts annually) that's now resetting, the adjustment could add at least two percentage points to the interest rate. That could send the payment on a $200,000 loan up from about $950 a month closer to $1,200.
These exotic mortgages, which have been issued by lenders at much higher numbers the past few years, default at a higher rate than do fixed-rate mortgages. And sub-prime loans, which are much more common than in the past, have a higher default rate as well.
But, Sharga says, "The real wild card is the nature of the loans themselves. Historically, ARMs were underwritten pretty conservatively. There has been a loosening of standards with lower credit worthiness and smaller down payments."
Underlying causes
Homeowners are also in Dutch because of underlying economic conditions. Many of the worst hit markets, such as in the Midwest, are in areas hard hit by layoffs or other economic ills.
When housing markets were hot, homeowners could often avoid default through two ready made options, according to Sharga: They could sell to a ready market or they could use the increase through appreciation in their equity to refinance their homes. Increasingly, both those options are evaporating.
Contrary to what many consumers may believe, lenders are not anxious to foreclose on homes and put families out on the streets. Foreclosures tend to be money losers for lenders and are done mostly as a last resort.
Sharga says lenders are beginning to recognize that a problem is brewing and are taking steps to address it. They are much more amenable to a short sale, for example, in which they accept a low-ball, cash bid early in the default process that may not even cover their mortgage, in order to avoid a larger loss later. That can help homeowners by preserving their credit scores and easing their transitions into the rental market.
"Lenders say they're looking for ways to work with homeowners in trouble," reports Sharga. "So for homeowners looking at a default situation, the sooner they talk to their lender - and see what options are available - the better."
More real estate news: Leading home builders lower profit outlook. Companies warning include: Lennar (Charts), KB Home (Charts) and Beazer Homes (Charts).
Monday, September 11, 2006
California Home Sales Statistics For July 2006
Real Estate
CALIFORNIA JULY HOME SALES 2006
A total of 44,250 new and resale houses and condos were sold statewide last month. That's down 17.6 percent from 53,700 for June and down 28.8 percent from 62,150 for July 2005.
The median price paid for a home last month was $475,000. That was down 0.6 percent from June's record $478,000, and up 5.3 percent from $451,000 for July a year ago.
The typical mortgage payment that home buyers committed themselves to paying last month was $2,353. That was down from $2,362 in June, and up from $1,974 for July a year ago.
Market stress indicators are still low: Down payments are stable, speculation buying is moderate, there are no significant shifts in market mix and default rates are rising, but still low. Earlier increases in non owner-occupied purchase activity and flipping activity have leveled off. The use of adjustable-rate mortgages has dropped the last half year.
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
CALIFORNIA JULY HOME SALES 2006
A total of 44,250 new and resale houses and condos were sold statewide last month. That's down 17.6 percent from 53,700 for June and down 28.8 percent from 62,150 for July 2005.
The median price paid for a home last month was $475,000. That was down 0.6 percent from June's record $478,000, and up 5.3 percent from $451,000 for July a year ago.
The typical mortgage payment that home buyers committed themselves to paying last month was $2,353. That was down from $2,362 in June, and up from $1,974 for July a year ago.
Market stress indicators are still low: Down payments are stable, speculation buying is moderate, there are no significant shifts in market mix and default rates are rising, but still low. Earlier increases in non owner-occupied purchase activity and flipping activity have leveled off. The use of adjustable-rate mortgages has dropped the last half year.
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Wednesday, August 23, 2006
California Foreclosure Activity in 2006
Real Estate
California Foreclosure Activity Hits Three-Year High
Second quarter California foreclosure activity rose at the fastest pace in at least 14 years, the result of waning home price appreciation.
Lenders sent 20,752 default notices to homeowners statewide during the April-through-June period. That was up 10.5 percent from 18,778 the previous quarter and up 67.2 percent from 12,408 in the second quarter of last year, DataQuick Information Systems reported. Last quarter's year-over-year increase was the highest for any quarter since DataQuick began tracking defaults in 1992. Notices of default are formal documents filed with the county recorder's office and mark the first step in the foreclosure process.
Despite the second quarter surge, defaults remained below historically normal levels. On average, lenders filed 32,762 notices of default each quarter over the past 14 years. Last quarter's 20,752 total was the highest since 25,511 were filed in first quarter 2003.
"This is an important trend to watch but doesn't strike us as ominous," said Marshall Prentice, DataQuick's president. "The increase was a statistical certainty because the number of defaults had fallen to such extreme lows. We would have to see defaults roughly double from today's level before they would begin to impact home values much."
"We hear a lot of talk about rising payments on adjustable-rate loans triggering borrower distress," Prentice continued. "While there's no doubt some of that is going on, as far as we can tell the spike in defaults is mainly the result of slowing price appreciation. It makes it harder for people behind on their mortgage to sell their homes and pay off the lender."
Other factors that contribute to higher defaults include the amount of equity owners have in their homes, the type of mortgage and how long the mortgage has been held.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.
Foreclosure activity hit a low during the third quarter of 2004, when lenders filed 12,145 default notices. That year California home prices rose at an annual rate exceeding 20 percent. This year annual price gains have slipped into single digits in many of the state's larger housing markets. Last month San Diego and Sacramento counties saw their median home prices dip about 1 percent compared with a year ago. Second quarter defaults shot up about 99 percent in San Diego County and 109 percent in Sacramento County from last year.
Still, today's statewide foreclosure activity amounts to about one-third of the peak level in the first quarter of 1996, when 59,897 defaults were filed. The state was in a housing slump back then and foreclosure activity tugged home values down by about 10 percent in some areas.
Today, only about seven percent of homeowners who find themselves in default lose their homes to foreclosure. Most stop the process by bringing their mortgage payments current, or by selling their home and paying the home loan(s) off.
Notices of Default houses and condos
County/Region 2005Q2 2006Q2 % Chg
Los Angeles 3157 4587 45.3%
Orange 697 1280 83.6%
San Diego 894 1778 98.9%
Riverside 1121 2287 104.0%
San Bernardino 1093 1839 68.3%
Ventura 250 452 80.8%
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
California Foreclosure Activity Hits Three-Year High
Second quarter California foreclosure activity rose at the fastest pace in at least 14 years, the result of waning home price appreciation.
Lenders sent 20,752 default notices to homeowners statewide during the April-through-June period. That was up 10.5 percent from 18,778 the previous quarter and up 67.2 percent from 12,408 in the second quarter of last year, DataQuick Information Systems reported. Last quarter's year-over-year increase was the highest for any quarter since DataQuick began tracking defaults in 1992. Notices of default are formal documents filed with the county recorder's office and mark the first step in the foreclosure process.
Despite the second quarter surge, defaults remained below historically normal levels. On average, lenders filed 32,762 notices of default each quarter over the past 14 years. Last quarter's 20,752 total was the highest since 25,511 were filed in first quarter 2003.
"This is an important trend to watch but doesn't strike us as ominous," said Marshall Prentice, DataQuick's president. "The increase was a statistical certainty because the number of defaults had fallen to such extreme lows. We would have to see defaults roughly double from today's level before they would begin to impact home values much."
"We hear a lot of talk about rising payments on adjustable-rate loans triggering borrower distress," Prentice continued. "While there's no doubt some of that is going on, as far as we can tell the spike in defaults is mainly the result of slowing price appreciation. It makes it harder for people behind on their mortgage to sell their homes and pay off the lender."
Other factors that contribute to higher defaults include the amount of equity owners have in their homes, the type of mortgage and how long the mortgage has been held.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.
Foreclosure activity hit a low during the third quarter of 2004, when lenders filed 12,145 default notices. That year California home prices rose at an annual rate exceeding 20 percent. This year annual price gains have slipped into single digits in many of the state's larger housing markets. Last month San Diego and Sacramento counties saw their median home prices dip about 1 percent compared with a year ago. Second quarter defaults shot up about 99 percent in San Diego County and 109 percent in Sacramento County from last year.
Still, today's statewide foreclosure activity amounts to about one-third of the peak level in the first quarter of 1996, when 59,897 defaults were filed. The state was in a housing slump back then and foreclosure activity tugged home values down by about 10 percent in some areas.
Today, only about seven percent of homeowners who find themselves in default lose their homes to foreclosure. Most stop the process by bringing their mortgage payments current, or by selling their home and paying the home loan(s) off.
Notices of Default houses and condos
County/Region 2005Q2 2006Q2 % Chg
Los Angeles 3157 4587 45.3%
Orange 697 1280 83.6%
San Diego 894 1778 98.9%
Riverside 1121 2287 104.0%
San Bernardino 1093 1839 68.3%
Ventura 250 452 80.8%
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Monday, June 19, 2006
Real Estate
Top 5 Reasons Buyers Won't Commit To Purchase
Spring is the traditional peak sales season for houses and condos. Summer is usually very good until the traditional Agust slump, especially for families who want to relocate before school starts. More prospective home buyers are in the market at this time of the year than during any other season.
But 2006 is proving to be a bit different. Although 2005 was a record home sales volume year, the number or residence sales has slowed this year. There could be several reasons such as adverse weather in many areas and slowly rising mortgage interest rates. In a few communities home sales prices have taken s slight dip so prospective buyers might be waiting to see if desperate home sellers reduce their asking prices.
Another reason for waiting to buy a house or condo is the inventory of available listings is slowly rising, thus offering more homes available for sale.
In summary, for most communities it is definetely a "buyers" market". That means there are more homes listed for sale than there are qualified home buyers.
The result can be a bargain prices for savvy home buyers.
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Top 5 Reasons Buyers Won't Commit To Purchase
Spring is the traditional peak sales season for houses and condos. Summer is usually very good until the traditional Agust slump, especially for families who want to relocate before school starts. More prospective home buyers are in the market at this time of the year than during any other season.
But 2006 is proving to be a bit different. Although 2005 was a record home sales volume year, the number or residence sales has slowed this year. There could be several reasons such as adverse weather in many areas and slowly rising mortgage interest rates. In a few communities home sales prices have taken s slight dip so prospective buyers might be waiting to see if desperate home sellers reduce their asking prices.
Another reason for waiting to buy a house or condo is the inventory of available listings is slowly rising, thus offering more homes available for sale.
In summary, for most communities it is definetely a "buyers" market". That means there are more homes listed for sale than there are qualified home buyers.
The result can be a bargain prices for savvy home buyers.
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Monday, May 15, 2006
Real Estate
Pricey Homes and Lots of Them
Fewer sales mean more houses to choose from. Buyers have gained breathing room, if not a lot a great deals.
This is the time when buyers have time to shop and compare and cam make a throughful purchase. It is not like a year ago when buyers were walking around with a check in their pocket and writing offers on the hood of their car.
There were 69,499 single family homes sold in the first three months of the year in Los Angeles, Orange, Riverside, San Bernardino, Ventura and San Diego counties, according to Dataquick Information Systems, a decline of more than 8% from the same period a year earlier.
Buyers don't have that panicked feeling. 'If I don't buy therefore the post goes up, I'll get into the multiple offers and lose out'
Althogh most buyers are focused on specific neighborhoods and follow median sales prices more closely thatn the price per square foot measurements, real estate agents and idustry analyst say the latter number offers the most reliable snapshot of how a market is performing over a wide area. Homes are also clearly lingering longer on the market. Southern California had a six month supply of homes for sale in January 2005.
The lowest performing zip code in Los Angeles County was 91390 in Santa Clarita, which was still up 7.7% for the same period according to Dataquick
Pricey Homes and Lots of Them
Fewer sales mean more houses to choose from. Buyers have gained breathing room, if not a lot a great deals.
This is the time when buyers have time to shop and compare and cam make a throughful purchase. It is not like a year ago when buyers were walking around with a check in their pocket and writing offers on the hood of their car.
There were 69,499 single family homes sold in the first three months of the year in Los Angeles, Orange, Riverside, San Bernardino, Ventura and San Diego counties, according to Dataquick Information Systems, a decline of more than 8% from the same period a year earlier.
Buyers don't have that panicked feeling. 'If I don't buy therefore the post goes up, I'll get into the multiple offers and lose out'
Althogh most buyers are focused on specific neighborhoods and follow median sales prices more closely thatn the price per square foot measurements, real estate agents and idustry analyst say the latter number offers the most reliable snapshot of how a market is performing over a wide area. Homes are also clearly lingering longer on the market. Southern California had a six month supply of homes for sale in January 2005.
The lowest performing zip code in Los Angeles County was 91390 in Santa Clarita, which was still up 7.7% for the same period according to Dataquick
Thursday, May 11, 2006
Real Estate
Foreclosure Activity UP
Softer Appreciation rates drove foreclosure activity to its highest level in two years during the first quarter, including a 19.1% annual spike in Los Angeles County. However foreclosure activity is coming off all time low levels and would have to double or triple to cause market distress, said DataQuick Information Systems.
In the year's first three months, lenders issued 18,668 default notices to California homeowners, up an annual 28.7% and 23.4 increase from the 2005 fourth quarter. The Last time it was this high was the 18,738 notices at the fourth quarter of 2003.
Across the county, 4,211 homeowners received the notices, the first step in the foreclosure process. That's the most since 4,736 in the first quarter of 2004.
By comparison, an average of 11,211 default notices were issued each quarter in the county over the past 14 years. We're coming off the bottom here. We though this would happen stronger, so this is an indicator of a stronger market that we anticipated.
Factors other than appreciation also affect foreclosure activity. They include the amount of equity people have in their property, the type of mortgage, they used and how long they've had that mortgage.
The low point for statewide foreclosure activity came in the third quarter of 2004, when property owners received 12,145 default notices. Activity peaked in the 1996 first quarter which 59,897 notices. Default statistics go back to 1992.
Market watchers have been predicting for months that annual price appreciation rates would narrow and that is now happening.
Statewide, the annual appreciation rate hit a high of 22.8% during the second quarter of 2004. Since then, it's fallen to 12.4% in the first quarter of this year. Only 5% of homeowners who find themselves in default actually lose their homes to foreclosure.
Most are able to stop the foreclosure process by
bringing their mortgage payments current or by selling their home and paying off the mortgage balance.
According to the Deputy Chief Economist at the California Association of Realtors, if this market continues softening the most risk will be faced by relatively new buyers financed with interest only, straight adjustable or other creative loan products.
While the supply of properties for sale increased in the years first two months and helped mitigate the price increases, it fell in March. Inventory is still lean enough to drive price increases, something that will ease the foreclosure risk.
The underlying economic conditions that five rise to large number of foreclosures are really nowhere in sight. You need to have quite a bit of economic distress and we don't expect that over the near future.
Foreclosure Activity UP
Softer Appreciation rates drove foreclosure activity to its highest level in two years during the first quarter, including a 19.1% annual spike in Los Angeles County. However foreclosure activity is coming off all time low levels and would have to double or triple to cause market distress, said DataQuick Information Systems.
In the year's first three months, lenders issued 18,668 default notices to California homeowners, up an annual 28.7% and 23.4 increase from the 2005 fourth quarter. The Last time it was this high was the 18,738 notices at the fourth quarter of 2003.
Across the county, 4,211 homeowners received the notices, the first step in the foreclosure process. That's the most since 4,736 in the first quarter of 2004.
By comparison, an average of 11,211 default notices were issued each quarter in the county over the past 14 years. We're coming off the bottom here. We though this would happen stronger, so this is an indicator of a stronger market that we anticipated.
Factors other than appreciation also affect foreclosure activity. They include the amount of equity people have in their property, the type of mortgage, they used and how long they've had that mortgage.
The low point for statewide foreclosure activity came in the third quarter of 2004, when property owners received 12,145 default notices. Activity peaked in the 1996 first quarter which 59,897 notices. Default statistics go back to 1992.
Market watchers have been predicting for months that annual price appreciation rates would narrow and that is now happening.
Statewide, the annual appreciation rate hit a high of 22.8% during the second quarter of 2004. Since then, it's fallen to 12.4% in the first quarter of this year. Only 5% of homeowners who find themselves in default actually lose their homes to foreclosure.
Most are able to stop the foreclosure process by
bringing their mortgage payments current or by selling their home and paying off the mortgage balance.
According to the Deputy Chief Economist at the California Association of Realtors, if this market continues softening the most risk will be faced by relatively new buyers financed with interest only, straight adjustable or other creative loan products.
While the supply of properties for sale increased in the years first two months and helped mitigate the price increases, it fell in March. Inventory is still lean enough to drive price increases, something that will ease the foreclosure risk.
The underlying economic conditions that five rise to large number of foreclosures are really nowhere in sight. You need to have quite a bit of economic distress and we don't expect that over the near future.
Tuesday, May 02, 2006
Real Estate
Hot Home Market Eases Into Slower Gear
First-quarter numbers are in and the evidence is irrefutable. The real estate market is off to its weakest start in years and the sellers are making big adjustments in therir asking price to fantasy ratio.
For January to March period sales are well undcr year ago levels across the state, Los Angeles County and San Fernando Valley.
Inventory is up, giving buyers more leverage than they've had in years. Inventory levels, also offer a glimpse of what direction prices might take. To find a market this anemic in the Valley we have to go back to 1997.
In this year's first quarter 2,153 previously owned houses changed owners down 22.8% from 2,789 sales in the 2005 first quarter. The last time sales were this week came in the 1997 first quarter, 2,120 single family transactios.
Preliminary numbers from the California Association of Realtors show a similar trend. Statewide sales fell 18.3% from last year first quarter, one that was on a record pace. Los Angeles County sales dropped 19.1%
Prices have stayed in a narrow range since last July, rising from a low of $ 590,000 in September and December to March's high. Lots of market analysts and economists expect prices to behave in this fashion for a while.
There are also ample signs of the inventory build up. Neigborhoods are festooned with the most "For Sale" sales signs in years, some sporting "Price Reduced" tags. Sellers, can no longer slap 20% on top of what their neighbor's house sold for, sit back and wait for the cash to roll in.
The bigger the supply the more downward pressure is exerted on prices. Research found that when inventory levels are seven months or lower, the state media price goes up 11% on average. When inventory streches nine months or more, the median fall on a consistent basis.
March ended with state-wide inventory at 5.2 months. A year ago was 1.8 months. Inventory in the Valley was 3.6 months.
Last March it was 1.2 month supply. The market is going to continue to unwind. Wheter it's more that 10 years worth remains to be seen.
Hot Home Market Eases Into Slower Gear
First-quarter numbers are in and the evidence is irrefutable. The real estate market is off to its weakest start in years and the sellers are making big adjustments in therir asking price to fantasy ratio.
For January to March period sales are well undcr year ago levels across the state, Los Angeles County and San Fernando Valley.
Inventory is up, giving buyers more leverage than they've had in years. Inventory levels, also offer a glimpse of what direction prices might take. To find a market this anemic in the Valley we have to go back to 1997.
In this year's first quarter 2,153 previously owned houses changed owners down 22.8% from 2,789 sales in the 2005 first quarter. The last time sales were this week came in the 1997 first quarter, 2,120 single family transactios.
Preliminary numbers from the California Association of Realtors show a similar trend. Statewide sales fell 18.3% from last year first quarter, one that was on a record pace. Los Angeles County sales dropped 19.1%
Prices have stayed in a narrow range since last July, rising from a low of $ 590,000 in September and December to March's high. Lots of market analysts and economists expect prices to behave in this fashion for a while.
There are also ample signs of the inventory build up. Neigborhoods are festooned with the most "For Sale" sales signs in years, some sporting "Price Reduced" tags. Sellers, can no longer slap 20% on top of what their neighbor's house sold for, sit back and wait for the cash to roll in.
The bigger the supply the more downward pressure is exerted on prices. Research found that when inventory levels are seven months or lower, the state media price goes up 11% on average. When inventory streches nine months or more, the median fall on a consistent basis.
March ended with state-wide inventory at 5.2 months. A year ago was 1.8 months. Inventory in the Valley was 3.6 months.
Last March it was 1.2 month supply. The market is going to continue to unwind. Wheter it's more that 10 years worth remains to be seen.
Friday, April 28, 2006
Real Estate FSBOs ( For Sale By Owners) May Be Losing Millions.
For Sale By Owners, are home owners who sell their own houses without professinal help. It seems that in the desire to save the 5% or 5% fee that real estate brokers charge for their services, The For Sale By Owners earn 16% less than owners of comparable houses who put the transaction into the hands of an experience agent according to a survey conducted by National Association of Realtors.
A poll of 7,813 recent buyers and sellers located through county deed records found that the median price achieved by sellers with agents was $ 230,000 compared with $ 198,200 for those without agents. That's a difference of nearly $ 32,000 or 15%, with no significant diffferences between the types of homes sold.
A research by two intructors at the University of Texas at San Antonio found that sellers realize little gain when they turn to limited service agents to perform some but not all the tasks needed to close a sale.
The study revealed that limited service listings sold for 1.7% less than full service ones and took 17.1% longer to sell. It seems that a limited service brokerage offers "no dollar advantage".
FSBOs who participated in the Realtor survey also said they had more difficulty in undertanding and completing the necessary paperwork, preparing their homes for the marked and setting the proper price that they did in attracting buyers.
FSBOs don't price their property correctly, they don't have the resources to determine a fair and solid asking price.
For Sale By Owners, are home owners who sell their own houses without professinal help. It seems that in the desire to save the 5% or 5% fee that real estate brokers charge for their services, The For Sale By Owners earn 16% less than owners of comparable houses who put the transaction into the hands of an experience agent according to a survey conducted by National Association of Realtors.
A poll of 7,813 recent buyers and sellers located through county deed records found that the median price achieved by sellers with agents was $ 230,000 compared with $ 198,200 for those without agents. That's a difference of nearly $ 32,000 or 15%, with no significant diffferences between the types of homes sold.
A research by two intructors at the University of Texas at San Antonio found that sellers realize little gain when they turn to limited service agents to perform some but not all the tasks needed to close a sale.
The study revealed that limited service listings sold for 1.7% less than full service ones and took 17.1% longer to sell. It seems that a limited service brokerage offers "no dollar advantage".
FSBOs who participated in the Realtor survey also said they had more difficulty in undertanding and completing the necessary paperwork, preparing their homes for the marked and setting the proper price that they did in attracting buyers.
FSBOs don't price their property correctly, they don't have the resources to determine a fair and solid asking price.
Tuesday, February 28, 2006
Real Estate
January Home Sales Lowest For Month in 5 years
Home sales accross Souther California fell 7.4 percent last month to their lowest level for January in five years as the real estate market continued to cool.
Potential buyers morphing into fence sitters accounted for the dip in the market's off-season. Last month buyers scooped up 28,085 new and resale housed and condos in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. Sales plunged 30,6 per cent from 28,952 transactions in December, but a monthly decline at this time of year is typical, the company said.
December is one of the year's strongest months and January one of the weakest. Sales last month were the fewest in January since 2001, when there were 18,010. The low point for the month was 1992 with 10,994 sales and the high was in 1989, with 23,379.
We're past the frenzy, and it's kind of normalizing re-reaching a balance. Sales have now fallen for two consecutive months, but this does not signal a trend. It will take until March to get a sense of how the market concludes a long boom cycle.
While sales are following expectations, the median price is not January's median across the six county region rose an anual 13 percent to $ 469,000.00
However the rise was well below the year ago rate of increase. We actually thought it would be lower than that by now. It's just coming down slower than we anticipated. That's because demand continues to be strong. The DataQuick president notes that there are no troubling signs for the market n the horizon.
In Los Angeles County 6,761 propertis changed hands down an annual 11.4 percent. The median price, the point at which half the units cost more and half less, increased 17.6 percent to
$ 487,000.
In Ventura County, sales fell 21.3 percent to 731 transactions, and the median price increase 18,8 percent to $ 608,000.
January Home Sales Lowest For Month in 5 years
Home sales accross Souther California fell 7.4 percent last month to their lowest level for January in five years as the real estate market continued to cool.
Potential buyers morphing into fence sitters accounted for the dip in the market's off-season. Last month buyers scooped up 28,085 new and resale housed and condos in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. Sales plunged 30,6 per cent from 28,952 transactions in December, but a monthly decline at this time of year is typical, the company said.
December is one of the year's strongest months and January one of the weakest. Sales last month were the fewest in January since 2001, when there were 18,010. The low point for the month was 1992 with 10,994 sales and the high was in 1989, with 23,379.
We're past the frenzy, and it's kind of normalizing re-reaching a balance. Sales have now fallen for two consecutive months, but this does not signal a trend. It will take until March to get a sense of how the market concludes a long boom cycle.
While sales are following expectations, the median price is not January's median across the six county region rose an anual 13 percent to $ 469,000.00
However the rise was well below the year ago rate of increase. We actually thought it would be lower than that by now. It's just coming down slower than we anticipated. That's because demand continues to be strong. The DataQuick president notes that there are no troubling signs for the market n the horizon.
In Los Angeles County 6,761 propertis changed hands down an annual 11.4 percent. The median price, the point at which half the units cost more and half less, increased 17.6 percent to
$ 487,000.
In Ventura County, sales fell 21.3 percent to 731 transactions, and the median price increase 18,8 percent to $ 608,000.
Monday, February 13, 2006
Sales Up For New Homes
Strong demand and contiune low interest rates pushed new home sales across the state to their highest level in 20 years during 2005, with the best markets in Southern California.
Last year consumers bought 136,228 new homes up 4.4% from 130,480 in 2004.
Since the market start slowing down Builders are a bit more careful these days, that's acting as a hedge agains getting caught with an inventory overload that characterized the end of the 1980's market.
Los Angeles County had the state's third strongest market with 10,872 sales up 19.2%. The median price dipped 0.2% to $ 454,000.
These number include condo conversions and (that) activity increased sharply last year. Since they are lower cost homes, they pull down the median price.
Strong demand and contiune low interest rates pushed new home sales across the state to their highest level in 20 years during 2005, with the best markets in Southern California.
Last year consumers bought 136,228 new homes up 4.4% from 130,480 in 2004.
Since the market start slowing down Builders are a bit more careful these days, that's acting as a hedge agains getting caught with an inventory overload that characterized the end of the 1980's market.
Los Angeles County had the state's third strongest market with 10,872 sales up 19.2%. The median price dipped 0.2% to $ 454,000.
These number include condo conversions and (that) activity increased sharply last year. Since they are lower cost homes, they pull down the median price.
Home Affordability in 2005
Affordability Still At A Record Low
Housing affordability remain at 14% in December matching its record low label as rising prices and interest rates continued to slow the market.
In December the median price for a home in the state soared 15.6% to $ 548,430.00 and sales plunged 17.6%
In Los Angeles County, where the median price home cost $ 552.760, affordability fell an annual 5 percentage points to 12%
The minimum household income needed to purchase a median price home in California in December was $134,200 based on an average mortgage interest rate of 6.33% and assuming a 20% downpayment.
This is the beginning of a slowdown in the market that's been anticipated. Prices are still going to go up, but below the 10% range, and the volume of sales will slow significantly.
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Housing affordability remain at 14% in December matching its record low label as rising prices and interest rates continued to slow the market.
In December the median price for a home in the state soared 15.6% to $ 548,430.00 and sales plunged 17.6%
In Los Angeles County, where the median price home cost $ 552.760, affordability fell an annual 5 percentage points to 12%
The minimum household income needed to purchase a median price home in California in December was $134,200 based on an average mortgage interest rate of 6.33% and assuming a 20% downpayment.
This is the beginning of a slowdown in the market that's been anticipated. Prices are still going to go up, but below the 10% range, and the volume of sales will slow significantly.
Alberto Pacheco
818 481 9211
Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Tuesday, December 27, 2005
Some Of The Open House Visitors Are Curious Neighbors
12/27/05
OPEN HOUSES
When there is an open house in a neighborhood, the first ones to appear are the neighbors and the reason is always to compare that house with theirs. This also helps because they may have friends of family members interested in moving to the neighborhood.
Many seller insit their agent hold them, even though in their more candid moments, agents say that open house don´t generally yield a buyer for the featured house. They do, however, help agents bolster their client list of buyers. And those Neighbors Only open houses are a chance for agents to meet future home sellers.
In terms of effectiveness, the Internet and virtual tours may have surpàssed the open house as an agent frontline
A 2005 California Association of Realtors Study found that 68% of buyers used the internet to preview homes through tours and photos and 75% used it to identify the homes they wanted their agents to show them.
Alberto Pacheco
818 481 9211
Realtor Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
OPEN HOUSES
When there is an open house in a neighborhood, the first ones to appear are the neighbors and the reason is always to compare that house with theirs. This also helps because they may have friends of family members interested in moving to the neighborhood.
Many seller insit their agent hold them, even though in their more candid moments, agents say that open house don´t generally yield a buyer for the featured house. They do, however, help agents bolster their client list of buyers. And those Neighbors Only open houses are a chance for agents to meet future home sellers.
In terms of effectiveness, the Internet and virtual tours may have surpàssed the open house as an agent frontline
A 2005 California Association of Realtors Study found that 68% of buyers used the internet to preview homes through tours and photos and 75% used it to identify the homes they wanted their agents to show them.
Alberto Pacheco
818 481 9211
Realtor Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Wednesday, December 07, 2005
Lead Base Paint Disclosures Mandatory on Homes Constructed Pre-1978
Pre 1978 Housing Requires Lead Disclosure
Landlords and Home sellers have to comply with a federal law requiring that lead information be given to anyone purchasing or renovation housing that was built before 1978. Why 1978? That was the year the federal government banned the use of lead based paint in housing.
Since lead paint was widely used for many years, the older the property the higher the lead paint potential. Years of accumulated paint, stretching back before the law took effect, after lurks in layers below the surface. Landlords are specifically required "to disclose known information on lead base paint hazards before leases take effect."
Lease signing now includes a form on which landlords must indicate whether they have any knowledge of lead based paint in the rental. The law does not not require rental property owners or sellers to have the property inspected or tested for lead, nor does it require them to remove lead based paint. For buyers, the law allows 10 days to conduct lead testing if they desire, at their own expense. The buyer's time limit can be extended if mutually agreeable.
The Environmental Protection Agency publishes the helpful brochure titled "Protect Your Family From Lead in Your Home", the 16 page brochure is full of lead information everyone should know. It details how lead enter the body from various sources, including during renovations that stir up lead. Paint chips, lead dust and lead deposits can lead to lead poisoning in the body either by breathing or swallowing the lead.
Lead exposure is partaker dangerous to children, since their bodies are growing rapidly and absorb more lead than adults. As a result, one out of every 11 children in the United States has dangerous levels of lead in the bloodstream, according to the brochure.
If not detected early, children with high levels of lead in their body may experience slowed growth, behavior or learning problems, hearing problems or headaches. The most extreme cases involve damage to the nervous system and brain. Prevention of lead exposure is important.
In adults lead exposure can cause reproductive problems, high blood pressure, digestive and nerve disorders, memory or concentration problems and joint and muscular problems.
Fortunately, testing for lead in the body is easy and inexpensively A simple blood test can detect lead poisoning and establish levels of lead exposure. Treatments can include diet changes or medication. Extreme cases may require hospitalization.
For more information call The National Lead Information Clearinhouse at (800) 424-LEAD
Alberto Pacheco
818 481 9211
Realtor Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Landlords and Home sellers have to comply with a federal law requiring that lead information be given to anyone purchasing or renovation housing that was built before 1978. Why 1978? That was the year the federal government banned the use of lead based paint in housing.
Since lead paint was widely used for many years, the older the property the higher the lead paint potential. Years of accumulated paint, stretching back before the law took effect, after lurks in layers below the surface. Landlords are specifically required "to disclose known information on lead base paint hazards before leases take effect."
Lease signing now includes a form on which landlords must indicate whether they have any knowledge of lead based paint in the rental. The law does not not require rental property owners or sellers to have the property inspected or tested for lead, nor does it require them to remove lead based paint. For buyers, the law allows 10 days to conduct lead testing if they desire, at their own expense. The buyer's time limit can be extended if mutually agreeable.
The Environmental Protection Agency publishes the helpful brochure titled "Protect Your Family From Lead in Your Home", the 16 page brochure is full of lead information everyone should know. It details how lead enter the body from various sources, including during renovations that stir up lead. Paint chips, lead dust and lead deposits can lead to lead poisoning in the body either by breathing or swallowing the lead.
Lead exposure is partaker dangerous to children, since their bodies are growing rapidly and absorb more lead than adults. As a result, one out of every 11 children in the United States has dangerous levels of lead in the bloodstream, according to the brochure.
If not detected early, children with high levels of lead in their body may experience slowed growth, behavior or learning problems, hearing problems or headaches. The most extreme cases involve damage to the nervous system and brain. Prevention of lead exposure is important.
In adults lead exposure can cause reproductive problems, high blood pressure, digestive and nerve disorders, memory or concentration problems and joint and muscular problems.
Fortunately, testing for lead in the body is easy and inexpensively A simple blood test can detect lead poisoning and establish levels of lead exposure. Treatments can include diet changes or medication. Extreme cases may require hospitalization.
For more information call The National Lead Information Clearinhouse at (800) 424-LEAD
Alberto Pacheco
818 481 9211
Realtor Calbre01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Wednesday, November 09, 2005
Smoke Dedectors Are Mandatory On Every Home Sale In Los Angeles County
Fire preparedness Is More Than Making Sure The Detector Beeps
It is that time of year again when days grow shorter, nights longer and, most of the US clocks "fell back" an hour last month. This time changes serves as an excellent reminder to replace smoke detector batteries. Through valuable changing the battery in an smoke detector is only one step in ensuring that this life saving device does its job.
A smoke detector should be installed in each bedroom and on every level of your home, if you have them make sure they are in good working order. They should be tested once a month, they are equipped with a test button that, when pressed and held down for a few seconds will activate the alarm.
Use a safe contained source of smoke such as incense or "synthetic smoke" in an aerosol can to test the detector. IF the smoke detector are more than 10 years old, consider replacing them. They work 24 hours a day, seven days a week, that's more than 87,000 hours over 10 year period.
With smoke detectors, cleanliness is important. A dusty or lind-laden unit can't do its job properly. It should be vacuum with an upholstery attachment periodically to remove the dust buildup.
A recent released report by the Consumer Product Safety Commission on the audibility of smoke alarms found that linking or interconnecting smoke alarms could provide an earlier warning to fire and smoke. The study also found that wireless technology could be sa solution to better protecting American homes.
With an interconnected device, when one alarm detects smoke, it triggers all other alarms to sound. The immediate reaction provides more warning in more places. There is, on average, only three minutes to escape a house fire after the first smoke alarm goes off.
Families should create and frequently practice a fire-escape plan. Make sure everyone, including children know what the smoke alarm sounds like. Practice the escape plan during the day and at night when family members are asleep to see if everyone responds. If an older child or adult doesn't wake up, assign an adult to wake and assist that individual in the even of a fire. Always assist younger children.
Alberto Pacheco
818 481 9211
Realtor Calbre 01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
It is that time of year again when days grow shorter, nights longer and, most of the US clocks "fell back" an hour last month. This time changes serves as an excellent reminder to replace smoke detector batteries. Through valuable changing the battery in an smoke detector is only one step in ensuring that this life saving device does its job.
A smoke detector should be installed in each bedroom and on every level of your home, if you have them make sure they are in good working order. They should be tested once a month, they are equipped with a test button that, when pressed and held down for a few seconds will activate the alarm.
Use a safe contained source of smoke such as incense or "synthetic smoke" in an aerosol can to test the detector. IF the smoke detector are more than 10 years old, consider replacing them. They work 24 hours a day, seven days a week, that's more than 87,000 hours over 10 year period.
With smoke detectors, cleanliness is important. A dusty or lind-laden unit can't do its job properly. It should be vacuum with an upholstery attachment periodically to remove the dust buildup.
A recent released report by the Consumer Product Safety Commission on the audibility of smoke alarms found that linking or interconnecting smoke alarms could provide an earlier warning to fire and smoke. The study also found that wireless technology could be sa solution to better protecting American homes.
With an interconnected device, when one alarm detects smoke, it triggers all other alarms to sound. The immediate reaction provides more warning in more places. There is, on average, only three minutes to escape a house fire after the first smoke alarm goes off.
Families should create and frequently practice a fire-escape plan. Make sure everyone, including children know what the smoke alarm sounds like. Practice the escape plan during the day and at night when family members are asleep to see if everyone responds. If an older child or adult doesn't wake up, assign an adult to wake and assist that individual in the even of a fire. Always assist younger children.
Alberto Pacheco
818 481 9211
Realtor Calbre 01200694
Keller Williams Porter Ranch
www.granadahills.kwrealty.com
Monday, November 07, 2005
Beware of Fast Cash Home Sales
Beware Of Fast-Cash Home Sale Huckster
The signs are everywhere on big, blaring billboards and pieces of cardboard tacked onto telephone poles: " We Buy Ugly Homes." or sometimes "We Buy Houses."
But if you decided to deal with the "rapid resellers," don't expect to get top dollar. And exactly how much you'll get doesn't depend on the condition of your property, either. If you are willing to take your money over time, for example, you may be able to cut a better deal than if you want all your money immediately.
Ken Channa, HomeVestors director of training, says his people look to earn anywhere from 10% to 18% of the value of the house after it is fixed up and sold. That translates into offer to owners typically in the 55% to 65% range of fixed-up market value.
HomeVestors look for 3 kind of sellers:
- People who have owned adn lived in their homes for at least a decade but have not maintained their properties.
- Heirs who recently have inherited houses from a deceased loved one, houses thay may have been vacant or not well maintained for a long time, or houses that may be difficult to part with.
- Investors who are tired of being landlords and have not kept their places inf good repair.
Financially strapped owners who have not been able to make their house payments and are facing foreclosure are "not a big part" of HomeVestors' customer base says Channal. There are numerous honest investors engaged in short-term residential resales.
So, if you want or need to sell quickly, don't want to lift a finger to make your place more attractive to a wider pool of buyers, or perhaps just don't like the idea of putting a for-sale sign in your frontyard or having strangers tramping through your castle, selling to an investor may be the easiest way out.
Be forewarned, though, that choosing the right one takes as much effort as picking a good real estate agent. Start by checking them out with with your local Better Business Bureau, county consumer affairs agency or state attorney general's office.
Another tip: Look for an identifiable name and place of business with a phone number that answers during regular business hours.
Be sure your buyer has the ability to close quickly, certainly as quickly as original promised. Beware of hidden charges too. No one should charge a fee to view your property or make you an offer and there should be no sales commission, either.
The signs are everywhere on big, blaring billboards and pieces of cardboard tacked onto telephone poles: " We Buy Ugly Homes." or sometimes "We Buy Houses."
But if you decided to deal with the "rapid resellers," don't expect to get top dollar. And exactly how much you'll get doesn't depend on the condition of your property, either. If you are willing to take your money over time, for example, you may be able to cut a better deal than if you want all your money immediately.
Ken Channa, HomeVestors director of training, says his people look to earn anywhere from 10% to 18% of the value of the house after it is fixed up and sold. That translates into offer to owners typically in the 55% to 65% range of fixed-up market value.
HomeVestors look for 3 kind of sellers:
- People who have owned adn lived in their homes for at least a decade but have not maintained their properties.
- Heirs who recently have inherited houses from a deceased loved one, houses thay may have been vacant or not well maintained for a long time, or houses that may be difficult to part with.
- Investors who are tired of being landlords and have not kept their places inf good repair.
Financially strapped owners who have not been able to make their house payments and are facing foreclosure are "not a big part" of HomeVestors' customer base says Channal. There are numerous honest investors engaged in short-term residential resales.
So, if you want or need to sell quickly, don't want to lift a finger to make your place more attractive to a wider pool of buyers, or perhaps just don't like the idea of putting a for-sale sign in your frontyard or having strangers tramping through your castle, selling to an investor may be the easiest way out.
Be forewarned, though, that choosing the right one takes as much effort as picking a good real estate agent. Start by checking them out with with your local Better Business Bureau, county consumer affairs agency or state attorney general's office.
Another tip: Look for an identifiable name and place of business with a phone number that answers during regular business hours.
Be sure your buyer has the ability to close quickly, certainly as quickly as original promised. Beware of hidden charges too. No one should charge a fee to view your property or make you an offer and there should be no sales commission, either.
Alberto Pacheco
Realtor Calbre Lic 01200694
818 481 9211
Keller Williams Porter Ranch
Real Estate Consultant
http://www.granadahills.kwrealty.com Real Estate News, Mortgages, Trends
Thursday, November 03, 2005
Invest in Income Properties Like Duplexes Triplexes or Fourplexes
Enter To Hot Market Could Be A Duplex
Tired of being priced out of the market? Perhaps the answer is to buy an income producing property that you can live in, such as a duplex or triplex. The rental income could help pay your mortgage and enable you to qualify to buy a more expensive property.
Ideally, your wealth building strategy might go something like this: You move into the property and own it long enough to accumulate equity through appreciation. Then you sell. You use the proceeds earned from the portion of the building that you occupied as a down payment on a single family home.
You exchange the proceeds from the rental portion of the property into a larger rental that will have more upside potential thereby avoiding capital gains tax. This can be a 1031 Exchange.
Check the local landlord-tenant laws. Some communities like Santa Monica have rent control ordinances. In such municipalities you may not be able to raise rents to market rates. Base your projections on actual and allowable, not inflated rents.
Find out the strength of the local market. The rental market, like housing market, fluctuates over the time. The most successful rental properties are often located near shopping, transportation and good schools.
Finally, carefully consider whether you can handle being a landlord who will live close to the tenants
Tired of being priced out of the market? Perhaps the answer is to buy an income producing property that you can live in, such as a duplex or triplex. The rental income could help pay your mortgage and enable you to qualify to buy a more expensive property.
Ideally, your wealth building strategy might go something like this: You move into the property and own it long enough to accumulate equity through appreciation. Then you sell. You use the proceeds earned from the portion of the building that you occupied as a down payment on a single family home.
You exchange the proceeds from the rental portion of the property into a larger rental that will have more upside potential thereby avoiding capital gains tax. This can be a 1031 Exchange.
Check the local landlord-tenant laws. Some communities like Santa Monica have rent control ordinances. In such municipalities you may not be able to raise rents to market rates. Base your projections on actual and allowable, not inflated rents.
Find out the strength of the local market. The rental market, like housing market, fluctuates over the time. The most successful rental properties are often located near shopping, transportation and good schools.
Finally, carefully consider whether you can handle being a landlord who will live close to the tenants
Alberto Pacheco
Realtor Calbre Lic 01200694
818 481 9211
Keller Williams Porter Ranch
Real Estate Consultant
http://www.granadahills.kwrealty.com Real Estate News, Mortgages, Trends
Wednesday, November 02, 2005
Watts Home Vales Appreciation
WATTS Home Values Appreciated More Than 40 %
Watts was the once predominantly African American community, which gained international notoriety during 1965 riots, saw resale-homes values increase by more than 40% last year, according to Data Quick Information Systems, a real estate research firm. Countrywide median rose 24.8%.
Fueled by demand from latino home buyers, Watts is on target this year to fulfill analysts' predictions that the Southland entry level market still has room for hefty appreciation. A comparison sales in August for this year and last, the latest period for which figures are available, showed an increase of 41.3% in the price of single family resale homes to a median of $ 325,000.
The prices have made it a hot spot for property flippers. Nearly 10% of Watts buyers this year have resold within three months, compared with an average of 3% throughout Southern California during the last decade.
In today's Watts, latinos make up the majority. African Americans leaving Los Angeles for the Inland Empire, Palmdale, Lancaster and the Southern United States.
Watts was the once predominantly African American community, which gained international notoriety during 1965 riots, saw resale-homes values increase by more than 40% last year, according to Data Quick Information Systems, a real estate research firm. Countrywide median rose 24.8%.
Fueled by demand from latino home buyers, Watts is on target this year to fulfill analysts' predictions that the Southland entry level market still has room for hefty appreciation. A comparison sales in August for this year and last, the latest period for which figures are available, showed an increase of 41.3% in the price of single family resale homes to a median of $ 325,000.
The prices have made it a hot spot for property flippers. Nearly 10% of Watts buyers this year have resold within three months, compared with an average of 3% throughout Southern California during the last decade.
In today's Watts, latinos make up the majority. African Americans leaving Los Angeles for the Inland Empire, Palmdale, Lancaster and the Southern United States.
Alberto Pacheco
Realtor Calbre Lic 01200694
818 481 9211
Keller Williams Porter Ranch
Real Estate Consultant
http://www.granadahills.kwrealty.com Real Estate News, Mortgages, Trends
Tuesday, November 01, 2005
Non Performing Mortgage Loans
Lenders Work Out Payment Deals For Borrowers In Jams
Many folks who get behind on their loans often trash unopened envelopes from their lenders because they figure it's just another dunning notice. But when they opened and get in touch with their lender then they discover the world of loss mitigation, a relatively new cosmos in which most mortgage investors bend over backward to keep financially troubled owners in their homes.
They help you if you have a legitimate reason for not being able to meet your obligation - illness, for example or some other major catastrophe, they want to help. Where is economically feasible, we do whatever we can to get "nonperforming loans reperforming again," said Bill Merrill director of nonperforming loans at Freddie Mac.
Most companies that administer Freddie Mac mortgages have what are variously known as work-out departments or portfolio retention sections. Their goal is to help those who want to remain in their homes and not because they are paid to do so. "Profit isn't the motive, at least is not intended to be," Merrill said.
Servicers want to keep things running smoothly because they don't earn any fees when things are not running smoothly. Loans in default are much more expensive to administer. Everybody loses not just the homeowner but the investor as well, when a loan goes into foreclosure.
Help doesn't come automatically however, you have to get in touch with your servicer, unfortunately studies show that most people don't. About 56% of all delinquent borrowers allow their homes to go all the way to foreclosing without ever taking to the lender accodring to merrill. When borrowers do call, though, four out of five go on to be happy homeowners. Early intervention is key, because you are not in arrears as much, Merrill said
Here are some of the options lenders can make available to delinquent borrowers.
forbearance: An agreement that temporarily allows borrowers to pay less than a full payment, or no payment at all, for a set period. Forbearance is an option when you can show that funds from bonus, tax refund or other source will let you bring the mortgage current at specific time in the future.
Reinstatement: Sometimes combined with a forbearance, this allows the borrowert to pay the amount they are behind in one lump sum by specific date.
Repayment Plan: An agreement that gives a fixed amount of time to repay what is owed by combining a portion of what is past due with the regular monthly payment.
Loan Modification: An agreement that permanently changes one or more terms of the original mortgage so the payment is more affordable. The borrower and lender may agree to add the missed payments to the loan balance.
A lender might be able to help homeowners who do not want or cannot keep their home. Indeed there are different ways to avoid foreclosing and reduce the impact on credit standing.
A buyer could be allowed to take over the mortgage debt, even if the loan is considered non-assumable. Or if the house can be sold for less than what is owed, the lender might agree to a "short payoff" in which the lender writes off the portion of the mortgage that exceed the proceeds from the sale. A third choice allows the transfer of the title of the home to the lender in exchange for canceling the debt.
Many folks who get behind on their loans often trash unopened envelopes from their lenders because they figure it's just another dunning notice. But when they opened and get in touch with their lender then they discover the world of loss mitigation, a relatively new cosmos in which most mortgage investors bend over backward to keep financially troubled owners in their homes.
They help you if you have a legitimate reason for not being able to meet your obligation - illness, for example or some other major catastrophe, they want to help. Where is economically feasible, we do whatever we can to get "nonperforming loans reperforming again," said Bill Merrill director of nonperforming loans at Freddie Mac.
Most companies that administer Freddie Mac mortgages have what are variously known as work-out departments or portfolio retention sections. Their goal is to help those who want to remain in their homes and not because they are paid to do so. "Profit isn't the motive, at least is not intended to be," Merrill said.
Servicers want to keep things running smoothly because they don't earn any fees when things are not running smoothly. Loans in default are much more expensive to administer. Everybody loses not just the homeowner but the investor as well, when a loan goes into foreclosure.
Help doesn't come automatically however, you have to get in touch with your servicer, unfortunately studies show that most people don't. About 56% of all delinquent borrowers allow their homes to go all the way to foreclosing without ever taking to the lender accodring to merrill. When borrowers do call, though, four out of five go on to be happy homeowners. Early intervention is key, because you are not in arrears as much, Merrill said
Here are some of the options lenders can make available to delinquent borrowers.
forbearance: An agreement that temporarily allows borrowers to pay less than a full payment, or no payment at all, for a set period. Forbearance is an option when you can show that funds from bonus, tax refund or other source will let you bring the mortgage current at specific time in the future.
Reinstatement: Sometimes combined with a forbearance, this allows the borrowert to pay the amount they are behind in one lump sum by specific date.
Repayment Plan: An agreement that gives a fixed amount of time to repay what is owed by combining a portion of what is past due with the regular monthly payment.
Loan Modification: An agreement that permanently changes one or more terms of the original mortgage so the payment is more affordable. The borrower and lender may agree to add the missed payments to the loan balance.
A lender might be able to help homeowners who do not want or cannot keep their home. Indeed there are different ways to avoid foreclosing and reduce the impact on credit standing.
A buyer could be allowed to take over the mortgage debt, even if the loan is considered non-assumable. Or if the house can be sold for less than what is owed, the lender might agree to a "short payoff" in which the lender writes off the portion of the mortgage that exceed the proceeds from the sale. A third choice allows the transfer of the title of the home to the lender in exchange for canceling the debt.
Alberto Pacheco
Realtor Calbre Lic 01200694
818 481 9211
Keller Williams Porter Ranch
Real Estate Consultant
http://www.granadahills.kwrealty.com Real Estate News, Mortgages, Trends
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