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Can the market stand on it’s Own?

Feds Say: It’s Time the Market Stands on its Own
April 1 will be the first day that the Federal Reserve will end its debt purchase program and allow the struggling U.S. mortgage market to operate unassisted. As a result, the Fed is predicting mortgage rates could rise about three-quarters of a percent to about 6 percent according to a statement by Boston Fed President Eric Rosengren.

There is a fear here in the states and apparently in the worldwide court of opinion that the U.S. government is simply printing money to use to purchase mortgage-related securities. Analysts say this is largely contributing to the decision by the Fed to pull back. If that fear caused a sell-off of U.S. government bonds, it would push borrowing costs substantially higher and derail the economic recovery.

As in any decision of this magnitude most likely it will be evaluated and adjusted as needed. Inflation always follows recession and must be monitored closely to keep it in check. If they can!

Timing is everything!

The market is showing signs of improving “right now” Is it time to buy?

Home prices in the Southland, which sustained one of the nation’s biggest declines, are rising, propelled by buyers eager to snatch up deals on deeply discounted foreclosure properties.  Outlying areas such as the Inland Empire  and Central Valley are continuing to struggle and will probably do so for some time. However, pockets of recovery are beginning to emerge and Orange County is certainly one of these communities that is posting a gain in sales numbers and pockets of price increases. Market share of foreclosures and short sales is very low as inventory decreases it is shortening the  market time for current homes available for sale.

Some may thnk that California would continue to be a poorly performing state based on the depth of the value loss, but Californians have learned to think like speculators over the years. Speculators know you buy when the news is still bad and market timing means you don’t wait until the market starts going up.” 

If you are thinking of catching the bottom of the market you might want to get started now! There is certainly talk of a shadowy foreclosure inventory looming on the horizon but if it does materialize it will sell quickly. There is much demand for this type of property

Reasons to Sell your home during the Holidays

Here are some great reasons to put your home on the market during the Holidays!

1. Holiday decorated homes are very appealing.

2. Many people want to buy before the end of the year for tax reasons.

3. Buyers have more time to look for a home during the holidays.

4. Serious buyers have fewer houses to look at during the holidays, so you have less competition.

5. By selling now, you can specify a delayed closing or occupancy until early next year if you desire.

6.  You may still restrict showings during your personal family events.

Bottom Line? By listing now you may have fewer actual showings, but more qualified and motivated buyers

The Reason? You have less competition, resulting in a quicker sale

Currently inventory is dwindling and spring may bring new competition. There are many buyers looking for homes today!!!

Call Mary Burke at 949-275-6544 or visit my web site and complet a short form to find out what your  home is worth in the current market.

California Housing Market Turns Corner

California has turned the corner in the housing down turn according to the California Association of Realtors! Increased sales and increasing prices could lead to a Sellers Market. We are not there yet but click here to read the article by LA report Daniel Taub

The holiday season is a great time to find your new home! Many buyers will be preoccupied with finding the best bargains at the store. However, savy home buyers will find thier best bargains in the middle of the holidays.  Inventory has decreased and there is still a lot of competition. Prices are starting to creep up but no significant changes at this time! Calculate the difference between higher prices or higher interest and you will see the time to act is NOW! 

Vist my web site and search the listings to find your new home! The time to get started is today. If you would like to discuss your real estate plans give me a call at 949-275-6544. I look forward to hearing from you!

New Tax Credit Guidelines

 

TAX CREDIT Currently the government is offering a first time home buyers Tax credit of $8000k! To qualify you must be a first time home buyer-defined as anyone who has not owned a home in the last 3 years! The Senate has just voted to extent this program until April 2010. Repeat buyers who have had their homes 5 years would also get an incentive. Senators agreed on Wednesday to extend the tax credit for first-time buyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current home for at least 5 years. The tax credit will be available to buyers who sign purchase agreements by the end of April 2010. They would have until the end of June 2010 to close on there new homes. To see if you qualify click here!

If you are interested in taking advantage of the current low interest rates and low prices Irvine or Newport Coast please contact Mary either by phone 949-275-6544..  Or visit my web site and browse the many listings available on my Interactive Map Search program. I look forward to hearing from you!

 

What about Short Sales

Over the last couple of years we have been experiencing a new kind of home for sale product called a short sale. For those who don’t know what that is the description is basically a home on which more is owed against it than it is worth or can be sold for. The seller is asking the lender or lenders to accept a pay off for less than owed to sell the home and remove their obligation. Any seller considering this kind of transaction should consult their tax accountant or possibly a real estate attorney to find out just what their final obligation will be. The tax man cometh and there is no escaping him. Homeowners receive a 1099 for the amount of debt that was forgiven but currently the government is allowing them to file another form to take this tax burden away. How long this will go on is not clear so take all precautions when starting down this road. Not to mention “recourse” and “non-recourse” loans. Better get some help understanding this.

For buyers who want to pursue this type of purchase it can be a lengthy process of waiting. The seller and sellers agent will set an asking price on the property to try and solicit offers. Generally this price will be low as they need to attract an offer (ever heard of “come on” price?) to entice the bank to seriously respond to their short pay request. The process of negotiation with the bank should be started as early as possible but some banks don’t tend to respond until they receive that initial offer. So a price is set and offers are solicited often bringing in even lower offers than the asking price. Once the bank recieves the offer a negotiator or servicer is assigned. He or she will then determine the current value of the property either by appraisal, drive by appraisal or BPO. They will then use this information to determine the final offered price which is  pretty much on take it or leave it terms. Here’s a news flash: the bank can wait!  And it is not that they are greedy as some people may think. It is that this is a business and they must try and recoup as much as they can for the property. And from the stand point of value it greatly undermines everyone’s value to have these homes sell at so much less than they are worth.

Often the buyer that has been patiently waiting is lost at this point. Sometimes it is because they have not been patiently waiting and have moved on to purchase a home that is more readily available. Another reason is the price offered by the bank is often higher than the “come on” price and is not acceptable to the buyer. Remember they are looking for a “deal” and anything percieved as not a deal is not acceptable. Perception of “deal” -That is a subject for another day!

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The Short Sale offer. If you are not faint of heart and have a lot of patience then it is a good time to jump into these transactions. Apparently the banks are now getting a bit more interested and starting to respond a little quicker. Still could take 4-6 months but I am seeing some success stories with times closer to 3 months. However, come prepared. Bidding on a short sale is the same as bidding on a bank sale with respect to what documentation must be submitted to the bank in order to be considered. This is the important part-the bank won’t even look at your offer without the proper documentation which includes:

1. Prequalification from a lender-Best if you have a direct lender!

2. Credit scores: these can be included in your prequal lender or provided from a report you generate yourself. BEST is to have your lender provide them. Mortgage scores can be different from if you were buying a car or furniture.

3. Proof of funds for down payment. This is a must. You must be able to prove you have the down payment available. 

Also with inventory decreasing and with this trend forecasted to continue there will be much more competition from other buyers. Most of these homes receive multiple offers and only the best are even considered. This doesn’t necessarily have to do with price (but that is very important) but can also be about credit scores, down payment and the strength of the buyers ability to purchase. 

Bank Owned properties (foreclosures) The same rules apply but in this case you will not have to wait long for an answer. It is almost always highest and best but cash or a big down payment can sometimes trump offers that are monitarily close. Very competitive so no sense in underbidding! Most of these sell for close to or above the price asked.

Remember, Interest rates are still historically low! A rise in interest rates can easily change the cost of the home per month and over the length of the loan. If you are thinking of purchaseing a home in this great buyers market please call Mary Burke -LifeStyles Realty-949-275-6544 for assistance.  

Seasonal Versus Distress?

Hello World! Time for another update from your realtor Mary Burke in Irvine California! I hope everyone had a wonderful summer and it ready to start looking ahead to fall. Today I would like to discuss Seasonal Real Estate versus Distress Real Estate

It is no surprise to anyone that we have been going through a most difficult time and our real estate prices have declined around 30%. Now this is a serious hit to homeowners but they seem to be adjusting very well and are pricing homes to sell in the current market conditions. However, this is not good enough for most buyers today! They are looking to cash in on future decreases in price. Unfortunately without a crystal ball no one can predict what will happen to prices in the future. We can only deal with the here and now. I have been in California most of my life and consider myself a native. I am no expert but I have been following trends since the 70’s. If you must compare I could buy a home in the mid 70’s for what people now pay for a car! The rise in prices was quick and steady and everyone can see where we have ended up. There is no going back to the good old days! Every 7 years or so we have an adjustment and this time it is a big one! But the free market being what it is it is necessary to sometimes bring back the balance of our world.

So that being said I would like to speak about Seasonal Trends. Besides the every 7 years cycles that so many people talk about there are the year in and year out cycles as well. Every year the cycles are the same. Spring and Summer are the busiest selling seasons. This is due to school schedules and families need to relocate at the optimal time for their children to settle into new areas and make friends. The next best season would be fall. For some reason there are many people who don’t make it by September and are still around usually until October or specifically Halloween. After that we are looking towards Christmas and this is a great time to move into a new home-I have done this-and this magical season with its festive decorations can be a major factor in appealing to home buyers. But make no mistake From December until March is definitely off peak time and there is generally much less to choose from. If you are looking for a bargain this is usually the time to find it. In the past it has mostly been the left over inventory that was either overpriced or not as desirable so not exactly the best picks. Of course there are always exceptions but overall inventory will mostly be less “fabulous” homes.

Currently we are seeing a decline in inventory that is not typical in any year. We are seeing record sales with no replacing inventory. Homeowners who do not need to sell will not list their homes in this time of decreased prices. And, even though we have been promised by many analysts a boat load of foreclosures this also has not materialized. But I believe even if it does it will not further depress the market. Buyers are so hungry for these types of sales they will out bid each other. And with banks not being so willing to under price these homes I believe it will actually help the market numbers overall. So to summarize time of year can be just an important a factor and this year may be more important due to lack of homes for sale. If you are looking to find a home and want to take advantage of the first time home buyer credit you must purchase and close escrow by December 1st. So the clock is ticking! Please let me know if you need any assistance and would like to schedule a time to discuss your future real estate plans! I am happy to help you in any way I can. Please visit my web site IrvineVillages.com to view current listings and for more information! I look forward to hearing from you!

Closing Delays?

We have a new requirement that is part of the Mortgage Disclosure Improvement Act (MDIA). This implements new loan procedures to protect borrowers and foster greater transparency in mortgage lending.  For loan applications submitted Starting July 30, 2009

  •  If the APR quoted on an initial Good Faith Estimate is no longer accurate (within a 0.125% range) at close of escrow, a lender must generally provide a residential borrower with a new disclosure
  • If a new disclousre is generated it also begins a  new three-day recission period and borrowers have a right to rescind before consummating the loan. 

Be aware that if you are in escrow and anticipating a predetermined close day there could be an additional three days added to your closing date due to this additional waiting period.  A lender’s failure to timely provide corrected disclosures has the potential of delaying funding of the loan and close of escrow. 

It is best to read your Good Faith Estimate very closely and remember that interest rates are always changing and your loan is susceptible to these fluxes until your loan is locked. 

Tax Credit Towards Down Payment for FHA!

Just out: The Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment. This will enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment

Previously, most buyers wouldn’t receive the funds until after they filed their tax return, and that deterred some people from using the credit. 

We are hearing that FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

If you are planning on purchasing a home with an FHA loan and are a first time buyer that qualifies for this tax credit -please call your mortgage company or loan officer for details. This of course is brand new so nothing happens quickly in government! Still, this is a great step in the right direction! Let’s hope for more good news as time goes by. If you would like some assistance please visit my web site Email  or phone 949-275-6544 directly. I am happy to take your call and assist you in any way I can.

Catch the Wave?

Here we are in May already! Time flies quickly by! The stock market is doing better this week, Chrysler is going Bankrupt and housing sales in Irvine has been hitting its stride.

You may have heard many people describe real estate as cyclical but I would compare the ups and down of real estate to catching a wave. It seems like you must “catch it” at just the right time! We have already seen a huge inventory of bank foreclosures come and go. There are very few of these right now and who knows if there will be another “wave” in the future. The optimal time may or may not have passed but it is still a very “good” time.  Inventory of homes for sale in Irvine is disappearing at a very fast rate. Albeit mostly in the under the Million price range it still is amazing to see homes so quickly disappearing fromt he mls “active’ list! The governement is offering incentives and interest rates are very low. How long will they stay this low-You might ask? Many economists are predicting we are getting close to the end of the recession and now they are worrying about inflation. This usually follows a recession! Some people mistakenly believe that when interest rates go up-prices go down. But sadly that is not the case! History has shown us double digit interest rates on mortgages when the prices were rising. In fact, since it is “inflation” it makes everything rise! If youi would like to hedge your bet against this possibility you would do well to buy real estate. Of course paying cash would be a great hedge against the future but if not, finance with a 30 year fixed low interest rate and get ready to ride out the next wave. 

Remember, no one has a Crystal Ball so everything is subject to interpretation. There are many indicators you can use to time the market and interest rates, supply and demand, decreasing foreclosures, are just a few. Several areas in California are still leading the foreclosure list including Riverside/San Bernardino and some other counties like Merced. But unless you are interested in buying in those areas you would do well just to look at the “local market activity”. Real estate is always LOCAL. If you would like more information on buying a home today please give me a call at 949-275-6544 or just send me an Email  . You can visit my web site and view all the homes for sale in Southern Orange County! I look forward to hearing from you!

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