Will you want some cash with that ?...

Freddie Mac reported this week that 79 % of homeowners who refinanced their first-lien home mortgage either maintained about the same loan amount or lowered their principal balance by paying-in additional money at the closing table in the first quarter of 2012.

Of these borrowers, 58 percent maintained about the same loan amount, and 21 percent of refinancing homeowners reduced their principal balance; the share of borrowers that kept about the same loan amount was the highest in the 26-year history of the analysis.

“Cash-out" borrowers, those who increased their loan balance by at least 5%, represented 21% of all refinance loans; the weighted average cash-out share during the 1985 to 2008 period was 50 percent.

The median interest rate reduction for a 30-year fixed-rate mortgage was about

1.5 % points, or a savings of about 27 % in interest rate, the largest percent reduction recorded in the 27 years of analysis. Over the first year of the refinance loan life, the median borrower will save about $2,900 in interest payments on a $200,000 loan.

More info on this Freddie Mac article.

Francis Rolland

Silicon Valley Real Estate

Local market trends

Francis - on Trulia

Current Mortgage rates

Some perspective on the market...

Finally, after a long waiting, CAR - the California Association of Realtors - released the figures that enable me to make my yearly update of the following graphs.

One set of figures is missing as the information is compiled in a different way: the median price for the Bay Area (comprised of the nine Counties around the Bay Area).

Still, interesting to have some perspective on prices over such a long period of time....

Thanks for reading,
Francis

Silicon Valley Real Estate

Local market trends

useful links

Current Mortgage rates

Good news: housing inventory is up..

After some grueling months in the trenches, (if you happen to be looking for a house to buy), seeing the number of homes available on the market dwindle to something not seen since 2005, we relish a breath of fresh air:  the number of houses and condominiums available for sale is finally coming up a bit, promising more balance in the market may be?  We'll see.

When the market is sharply up, people often think that it is "great" for Realtors. Not quite so, unless you strictly work for sellers. If buyers have too hard a time to purchase a property, it does not benefit the community as a whole. Hence the sigh of relief when the market is more balanced.

In the past month, and as of the 18th of May, we have seen the number of homes on the market for sale, in the whole County of Santa Clara, come up from about 1575 to 1720. (below is the average for a given month...).

At the same time, the percentage of houses (not condos) sold for more than listing price has gone up to 44.5%.  By the way, this statistic is available every Saturday in the San Jose Mercury News in the real estate section.

Thanks for reading!
Francis

Silicon Valley Real Estate

Local market trends

useful links

Current Mortgage rates

Rents are up 5% nationwide

Taken from a Trulia article:

Rents Continue To Climb, Rising Nationally 5.0 Percent Year-Over-Year

Asking rents rose over the past year in almost all large metro areas included in the Trulia Rent Monitor. In the largest metros, rents rose 6.2 percent in New York and 6.1 percent in Chicago, but only 0.6 percent in Los Angeles. Rents rose strongly in Miami (12.1 percent) and Denver (9.9 percent), which also experienced large asking price increases. Meanwhile, rental affordability declined in places where rents rose while prices fell, most notably in San Francisco (rents up 11.1 percent), Seattle (9.7 percent), San_Jose (9.4 percent) and Boston (9.2 percent).

On the ground I find that there is a complete penury of rentals in the area centered around Palo Alto, and that rents have gone up in the Silicon Valley by a lot more than 10% in some cases.  It is good to check with your Realtor on the latest values if you are thinking of renting out your property for a while.
I often advise to also check Craigslist's listings.

Francis Rolland

Silicon Valley Real Estate

Local market trends

Francis - on Trulia

Current Mortgage rates

Buy? Sell? Another tack, another take...

Buy now, sell now?? 

This is another take on my previous post, another perspective, quite interesting and informative if you have been thinking about buying, or about selling a property in the "new market" of today.

The article, albeit a bit long, does offer a few tidbits of information which verifiably qualify as interesting, - information taken "from the trenches".

Coldwell Banker: "Reality Check"

My clients know me, I do not like to influence them into a purchase, or a sale.  But there are things that I do advise clients to keep in mind and stay informed about.  Of course the new market, as radical as it is, is one of them.

If you need a sounding board, don't hesitate to write or call me,

Thank you,

Francis

Silicon Valley Real Estate

Local market trends

useful links

Current Mortgage rates

Buy a home? Good time?

Consumer attitudes toward home buying shift.

More consumers may be looking to purchase homes with a shift in several key housing market indicators, according to Fannie Mae’s March 2012 consumer attitudinal National Housing Survey. More Americans now expect both home rental and home purchase prices to increase over the next year. Nearly 1/2 of consumers expect higher rental prices, the highest number recorded since monthly tracking began in June 2010. These trends may be providing Americans with an increased sense of urgency to buy a home as 73% of Americans now believe it is a good time to buy a home, up from 70% in February.

Highlights of the survey include:

- 33% of respondents expect home prices to increase over the next 12 months, a five percentage point increase from last month, the highest level over the past 12 months.

- On average, Americans expect home prices to increase by 0.9 % over the next 12 months (up slightly since last month).

- 39% of Americans say that mortgage rates will go up in the next 12 months, a five percentage point increase from last month.

- On average, respondents expect home rental prices to increase by 4.1 percent over the next 12 months, a significant increase since February, and the highest number recorded to date.

- 48% of respondents think that home rental prices will go up, a three percentage point increase from last month and the highest number recorded to date.

- 66% of respondents say they would buy their next home if they were going to move, up one point since last month, while 30 percent say they would rent, up one point versus last month.

More info on the FannieMae article in question.
Thanks for reading!
Francis

Silicon Valley Real Estate

Local market trends

useful links

Current Mortgage rates

Curious about the (new) San Antonio Shopping Center ?

If you are wondering about what is coming up at the San Antonio Shopping Center, at the crossroads of El Camino Real and San Antonio Rd in Mountain View, here is some information about what is going on there:
San Antonio Shopping Center.

Francis

Silicon Valley Real Estate

Local market trends

useful links

Current Mortgage rates

House financing, refinancing? Hidden fees..

Let's be technical here, just a bit, to understand better what is in a loan "rate".

A hidden fee is set to rise
The guarantee fee – a hidden fee inside the interest rate quoted on a home mortgage – has been mandated by Congress to increase this spring, and other increases are likely later to take place later this year and next.

A little bit of background on the subject:

The guarantee fee has been charged by government sponsored entities like Fannie Mae and Freddie Mac for more than three decades. The fee does not show up in borrowers’ mortgage documents or good-faith estimates, and it is little known outside the industry. According to a Fannie Mae spokesman, the fee “gets incorporated into the underlying rate the borrower pays.”

An interest rate is usually made of up 3 parts: The largest goes to the bank or the investors who buy the loan; the smaller portion is for the mortgage servicer that collects monthly payments; and then there’s the guarantee fee. Fannie and Freddie charge guarantee fees as a form of insurance against default for the loans they acquire and resell to investors.

The guarantee fee will rise 10 basis points on April 1; the increase was included in the two-month extension of the payroll tax reduction last December. A basis point is equal to one one-hundredth of 1 percent, or 0.01 percent.

One way to avoid the guarantee fee is to use a lender that does not sell off its loans – for instance, a community bank or a credit union.

In addition to offsetting risks, the fees provide a primary source of revenue for Fannie Mae and Freddie Mac. Both organizations started raising fee rates in 2008 during the housing crisis, as foreclosure costs rose.

Read the full story in this New York Times article.

Francis

Silicon Valley Real Estate

Local market trends

useful links

Current Mortgage rates