Monday, July 30, 2012

Californians on the move.

When Californians move, where do they go?

It turns out that when a Californian moves, he/she mostly stays in the same County (49%).
So most likely, when people move they just want to move up or move down.

4 years ago, a lot more people were going to an other state; possibly to deal more easily with the crisis, as the cost of living is so high here?  Once that wave happened, it seems that out-of-state moves settled around 20% of the movers.

Consistently, about 1% of the movers go outside of the US.  Funny to note that in 2009, at the worst time for real estate values, twice as many people left to go outside of the US.

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Thanks for reading,
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Thursday, July 26, 2012

Rents increase, more than home prices.

Rent increases outpace modest home price rises (nationwide)...

Despite widespread national asking price rises, rent increases outpaced price increases in 22 of the 25 largest rental markets, according to the Trulia Rent Monitor. Nationally, rents were 5.4-percent higher in June than they were a year ago, and rents increased year-over-year in 24 of the 25 largest rental markets – all except Las Vegas. Furthermore, rent increases accelerated between March and June in most rental markets, with rents in San Francisco rising 14.7 percent year-over-year in June from 10.9 percent in March.
I was noting in one of my May's blogs that rents were up 9.4% in San Jose.

Home price rises are not so modest, by the way, locally (- but then, ditto for rent increases).

More info on this Trulia press release.

As always, thanks for reading,

Current Mortgage rates

Tuesday, July 17, 2012

Fences and Neighbors...

A surprising number of homeowners are bucking the notion that good fences make good neighbors and taking down the fences in favor of bigger gardens and more space to entertain.

While some homeowners are turning previously neglected corners into shared garden and dining spaces, togetherness does have its down sides. Gardening expenses can be split evenly, but who pulls the weeds and who gets to pick the fruit? What happens when one neighbor wants to sell? Some people draw up legal contracts to help prevent acrimony and spell out how they will disband.

Additionally, yard-sharing is rare in new developments of single-family homes with privacy fences often required under community covenants and building codes.

A shared yard also could dampen an individual home’s value and prolong the time spent on the market, as potential buyers likely will want to put up a fence instantly, adding costs to the home.

Because of these issues, some real estate agents are advising that neighbors restore fencing when either home is offered for sale. It is best to install the fence before the listing the home, as some buyers will not want to be the bad new neighbor who required a fence.

It is my experience that fences provide ample material for problems during a transaction: over the years, the fence may have been replaced, not necessarily by both neighbors, and it may not always be at the right place. Only a surveyor will help you in that case, to determine exactly where the property line is.  Sometimes, a part of the fence has been moved to accomodate a tree, or a structure.  This brings the need to draft an agreement to recognize that and memorialize it, possibly.  An attorney is best to do that.
Obviously the matter is more present in the Hills, where lots are larger.

More often than not, it is in the front part of the properties that you would find fences that are omitted, and there one might see a "shared" front yard.  Still in that case, I believe that it is good to keep a line on the ground, or another mark of sort, to delineate the separate lots. 
Finally, I would note here to keep in mind that typically, when rebuilding a fence, you need a permit.  The City is the best source of info for this.  This is an advice to both buyers, and sellers.

Do you have an experience, good or bad on the matter?  I'd love to hear it!
Thanks for reading,

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Thursday, July 12, 2012

Buyers: the advantages of preapproval...

The advantages of preapproval.

The housing market is warming up in many areas, with multiple offers becoming more commonplace. Buyers who want an advantage in the bidding process will need more than a mortgage prequalification – they will need a preapproval.

The differences between mortgage prequalification and preapproval are significant. Prequalifying for a mortgage is based solely on what a borrower discloses to the loan officer or broker about his/her earnings, credit score, and total assets, including what is available for a down payment. By contrast, a preapproval requires a borrower to provide documentation of his/her income and assets and everything else.

The lender typically pulls the borrower’s credit report and score, while the borrower gathers together almost everything else needed for the actual mortgage underwriting: W-2 wage statements; 1099s; recent pay stubs; bank statements; and statements from Individual Retirement Accounts and 401(k)s; and other assets that could show the borrower has the resources to buy and maintain a home. 
-- An important note here: depending on your qualification, the loan will have a different cost !  Shopping for a loan is therefore often elusive: one would have to apply to different lenders to truly know to compare their rates, at the same given time (rates change several times a day, within the same organization).

A preapproval means that the file has gone through the underwriter of the bank/lender.  If approved, it is nearly certain that the loan will be granted to the buyer, subject to the specificities of the property itself, and a few other standard necessary conditions (like proof of insurance, and such...).

With so many homes receiving multiple offers, a preapproval is essential in today’s marketplace.

The preapproval letter should include the amount a borrower is qualified to borrow, as well as the loan officer’s contact information, and mention that the downpayment has been verified.

I personally advise buyers to obtain a preapproval letter for the maximum amount allowed, under the reasoning that the more qualified you are, the better you can negotiate.  If you borrow a lot less than you can, you advertise that there won't be any problem with you getting a loan.  Case in point: a cash offer is going to be always more attractive for the seller, right off the bat: there won't be any problem with obtaining financing....  What the seller wishes is the best assurance that the buyer he/she chooses is going to close the transaction.  Otherwise, the penalty is: wasting precious marketing time, at the beginning of the marketing period, which is the most important period in the property's listing cycle. 

You can see all the details in this article of the New York Times.

Thank you for reading, and if you have any particular experience in this domain, good or bad, I'd love to hear it ;-)

Current Mortgage rates 

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Wednesday, July 11, 2012

Santa Clara Cty Property Assessment up 3.25%...

I don't know if you have experienced the same thing, but my property value went up according to the County assessor's office - the notice of my property's assessed value that I just received in the mail.  This is not a surprise as we have experienced so many multiple offers since the end of last year, but sometimes reality is not completely reflected in the County's figures, and when the market goes down, one feels the need to fight what seems to be an assessed value that is too high.

In the past few years, I have helped several clients prove to the County assessor's office that their value was overinflated, by providing "comparables" from the MLS data, for similar properties sold that year.

However, when the market goes up, it is a lot more difficult to go about this procedure.

As evidenced by this June 2012 article of the Business Journal , the County is richer now, and things are looking up, at least for the County's coffers ...
My evaluation has gone up by about 2%.  How much did yours go up?

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