To add more info to one of my previous blogs ( "Refinancing problems? Here is a suggestion" ) on the refinancing options for people owing more than the value of their home, I'd like to reproduce the information I just received from Joan Fischer from First American Home Buyers Protection (a home protection plan company), which originates from DSNews.com (Authors: Krista Franks and Carrie Bay).
A little long, but of great interest for some people.
Francis
Wednesday, January 11, 2012
Sunday, January 8, 2012
Rental market is tight here in the Silicon Valley
I have been exposed to the rental market recently through 2 properties that I have put on the market for rent locally, one in Palo Alto, and one in Redwood City. (Not all agents deal with rentals BTW...).
I have experienced first hand what has been known for a while now: that the rental market is difficult in the Bay Area (for renters), and prices have gone up since last year - if I had to guess I would say by about 10% easily. In each instance these properties had several applications within a few days of being on MLS.
Several reasons can explain this increase:
- a better economic outlook in the Valley, leading more people to come here than people leaving the area, (which, incidentally, is also tied to registration in some schools such as the French-American schools and the German-American schools of the Bay)
- a significant number of people loosing their home (i.e. short sales and foreclosures) who find themselves renters suddenly,
- a relative lack of new construction - although there are some new projects being built around which will somewhat address this penury.
Although this is true in general nationwide, it is more accute in Cities like San Jose, as described in this recently published article in the Business Journal, which goes over a few of these figures and facts.
Thanks for reading !
Francis
Useful links
Latest Mortgage rates
I have experienced first hand what has been known for a while now: that the rental market is difficult in the Bay Area (for renters), and prices have gone up since last year - if I had to guess I would say by about 10% easily. In each instance these properties had several applications within a few days of being on MLS.
Several reasons can explain this increase:
- a better economic outlook in the Valley, leading more people to come here than people leaving the area, (which, incidentally, is also tied to registration in some schools such as the French-American schools and the German-American schools of the Bay)
- a relative lack of new construction - although there are some new projects being built around which will somewhat address this penury.
Although this is true in general nationwide, it is more accute in Cities like San Jose, as described in this recently published article in the Business Journal, which goes over a few of these figures and facts.
Thanks for reading !
Francis
Useful links
Latest Mortgage rates
Monday, January 2, 2012
Appraisal problems in the real estate world ..
Appraisals have always been a large part of the normal real estate transaction:
while a sales price is negotiated between the seller and the buyer, the bank has its say: they will lend to the buyer a percentage of the lower of the two figures: negotiated sales price, or appraised value.
If they do not think that the property is worth the negotiated price, they will lend less. But the thing is that real estate is not an exact science, and if you have 2 appraisals done on a property by two different appraisers, they will come up with 2 different values. With the crisis the way it has unfolded, appraisals have become very stringent, very conservative. Let's just say that the banks are a lot more careful with how they lend money.
It is apparently a big problems for builders too:
one out of three builders reported losing signed sales contracts during the preceding six months because appraisals on their homes were less than the contract sales price, according to a survey by the National Association of Home Builders (NAHB).
Builders claim that due to faulty appraisal practices, brand new homes with upgrades get compared to distressed properties that have been sitting vacant and in disrepair. The result, in many cases, has been that the new house gets appraised at less than the cost of construction.
According to the NAHB survey, 60 % of respondents reported they were experiencing appraisals coming in below their contract sales price. Of those reporting that they had encountered this problem, 53 % said the appraisal amount was actually less than the cost of building the home.
This has some very real consequences:
In normal times, housing accounts for more than 17 % of the nation’s GDP. Constructing 100 new homes generates more than 300 full-time jobs and $8.9 million in local, state and federal tax revenue that supports local schools and communities across the land.
More than half of the single-family builders and developers surveyed by NAHB indicated they had decided to put any new construction or land activity on hold until the financing climate improves.
One last word to buyers and sellers alike: unless the property sold is very desirable, and the buyer does not need a loan, this appraisal question may influence the outcome of the real estate transaction.
Francis RollandSunday, December 25, 2011
Foreclosure Evictions Temporarily Suspended
Foreclosure Evictions Temporarily Suspended
Both Freddie Mac and Fannie Mae are temporarily suspending all scheduled evictions involving foreclosed occupied single-family 1- to 4- unit residences with owned mortgages beginning December 19, 2011 through January 2, 2012.
The suspension will apply only to eviction lockouts related to Freddie Ma and Fannie Mae owned REO properties and will not affect other pre- or post-foreclosure processes. During this period, legal and administrative proceedings for evictions may continue, but families living in foreclosed properties will be permitted to remain in the home.
Francis
useful links
Mortgage rates
Both Freddie Mac and Fannie Mae are temporarily suspending all scheduled evictions involving foreclosed occupied single-family 1- to 4- unit residences with owned mortgages beginning December 19, 2011 through January 2, 2012.
The suspension will apply only to eviction lockouts related to Freddie Ma and Fannie Mae owned REO properties and will not affect other pre- or post-foreclosure processes. During this period, legal and administrative proceedings for evictions may continue, but families living in foreclosed properties will be permitted to remain in the home.
Francis
useful links
Mortgage rates
Friday, December 16, 2011
Silicon Valley Counties: real estate activity
To keep in perspective: a lot is being said in the press about real estate in the Bay Area, including a lot of foreclosures and short sales happening all the time. But really, when you add all properties combined, (houses and condominiums, townhouses, PUD’s etc…), what really happened to the market in our area in the past 3 years? I think simple graphs can help us understand how we fare here in the Silicon Valley. In the Counties of San Mateo & Santa Clara, let us look at a simple measure: the average sales price:
Individual Cities can be very different. For instance Palo Alto has the following history in the same 3 years, showing here in blue the average time to sell a home:
the variations in sales prices are not as steep as the averages in the County.
Let me know and I will prepare a study of your own City/ neighborhood.
Thanks for reading !
Francis
useful links
Mortgage rates
Individual Cities can be very different. For instance Palo Alto has the following history in the same 3 years, showing here in blue the average time to sell a home:
the variations in sales prices are not as steep as the averages in the County.
Let me know and I will prepare a study of your own City/ neighborhood.
Thanks for reading !
Francis
useful links
Mortgage rates
Friday, December 9, 2011
On the local political front, a little note on Sunnyvale...
The Silicon Valley Association of Realtors (SILVAR) Opposes Sunnyvale Plan to Regulate Real Estate Transactions
As part of the development of Sunnyvale's Climate Action Plan, the city is considering prohibiting the sale of property until an energy and water efficiency inspection is completed for owner occupied homes and energy efficiency retrofits are made to commercial property. The proposals were discussed as part of a city council study session this week.
SILVAR opposes this proposal because of the detrimental impact it will have on property owners and the ability to close transactions in Sunnyvale. Also, because the mandates would only impact properties at the time of sale, it would take decades before it would impact a significant amount of the housing stock.
SILVAR presented written testimony in opposition to the proposed mandate to the council, and SILVAR Past President Mark Burns had previously spoken at a meeting and asked the council to remove the recommendation from the draft report.
None of the council members spoke in favor of keeping the time of sale mandate in the draft. Council Member Chris Moylan made a strong statement in opposition to the recommendation. The draft climate action plan will be out for public comment and review over the next several months, so stay tuned for updates.
Thanks for reading.
Francis
useful links
Mortgage rates
As part of the development of Sunnyvale's Climate Action Plan, the city is considering prohibiting the sale of property until an energy and water efficiency inspection is completed for owner occupied homes and energy efficiency retrofits are made to commercial property. The proposals were discussed as part of a city council study session this week.
SILVAR opposes this proposal because of the detrimental impact it will have on property owners and the ability to close transactions in Sunnyvale. Also, because the mandates would only impact properties at the time of sale, it would take decades before it would impact a significant amount of the housing stock.
SILVAR presented written testimony in opposition to the proposed mandate to the council, and SILVAR Past President Mark Burns had previously spoken at a meeting and asked the council to remove the recommendation from the draft report.
None of the council members spoke in favor of keeping the time of sale mandate in the draft. Council Member Chris Moylan made a strong statement in opposition to the recommendation. The draft climate action plan will be out for public comment and review over the next several months, so stay tuned for updates.
Thanks for reading.
Francis
useful links
Mortgage rates
Friday, December 2, 2011
The Marriage of Weddings and Real Estate...
Many couples about to tie the knot are doing a different type of wedding registry nowadays, one that allows them to collect cash for a down payment on a home, according to a recent article in The Washington Times.
Dana Ostomel, founder of Deposit a Gift in New York City, says that about 15 % of their registries are to raise down-payment funds for a home and another 15 % are for home-improvement funds to pay for upgrades like a new roof or furniture. "Given that 75 % of today’s engaged couples already live together and are older, very often they are already established with the household basics that you find on a traditional registry," Ostomel said. "What they want is the gift of big-ticket items and longer term goals, like the gift of home ownership.”
The FHA permits gifts from a wedding to be used as a down payment, but lenders are required to document that the funds are gifts. About 27 % of first-time home buyers use gift money from relatives and friends for a down payment, according to a 2010 National Association of REALTORS® Profile of Home Buyers and Sellers survey. Source: The Washington Times
Francis Rolland
useful links
Mortgage rates
The FHA permits gifts from a wedding to be used as a down payment, but lenders are required to document that the funds are gifts. About 27 % of first-time home buyers use gift money from relatives and friends for a down payment, according to a 2010 National Association of REALTORS® Profile of Home Buyers and Sellers survey. Source: The Washington Times
Francis Rolland
useful links
Mortgage rates
Tuesday, November 29, 2011
1st 10 Months, 2010 and 2011...
Curious to see the evolution of average prices, from one year to the next?
It turns out it is pretty similar.
Here looking at the compared graphs of both the County of San Mateo, and Santa Clara, from one year to the next:
The one thing that appears at this point is a slight decrease in prices of single family residences in the County of Santa Clara. But this happened too at the end of 2010. Overall the curves are fairly similar.
What is also apparent in these graphs is that the average values are higher in the County of San Mateo than in the County of Santa Clara.
Finally, the end of the year is looking up for the San Mateo County so far.
Francis
useful links
Mortgage rates
It turns out it is pretty similar.
Here looking at the compared graphs of both the County of San Mateo, and Santa Clara, from one year to the next:
The one thing that appears at this point is a slight decrease in prices of single family residences in the County of Santa Clara. But this happened too at the end of 2010. Overall the curves are fairly similar.
What is also apparent in these graphs is that the average values are higher in the County of San Mateo than in the County of Santa Clara.
Finally, the end of the year is looking up for the San Mateo County so far.
Francis
useful links
Mortgage rates
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