Study: Buyers, Sellers Will Jump Off the Fence This Year

Consumers are more committed to buying or selling this year, according to Prudential Real Estate’s fourth quarter Consumer Outlook Survey. Of the 2,500 consumers surveyed, 78 percent held a favorable view of real estate, a five-point jump from the previous quarter and 15 points higher than at the end of 2012. Sixty-three percent said they were more committed to buying and selling in 2014.

One generation in particular has a favorable perception of real estate right now: Millennials. The generation peaked at 87 percent with a favorable perception of real estate in the latest survey.

“Consumers understand that the U.S. economy and residential real estate continue moving in positive directions,” says Earl Lee, CEO of HSF Affiliates LLC. “Accordingly, they’re feeling much better about their personal situations and want to take advantage of attractive home prices in many markets and interest rates that remain low by historical standards.”

However, two events in 2013 — the government sequestration and rising interest rates — have influenced their personal finance decisions, consumers say.

And while they’re optimistic, consumers are also realistic, believing that the rate of appreciation of U.S. home values will slow after a strong run in 2013. They say their No. 1 concern about the housing market is “decreasing home values,” followed by “saving enough for a down payment.” Respondents to the survey also say that tight housing inventories would likely impact their home-buying decisions this year, and 67 percent expect to face more buyer competition.

“Normalcy is returning to residential real estate,” says Lee. “People are seeking homes for all the right reasons: to gain shelter and security, raise a family, and generate long-term wealth.”

Other findings from the survey:

  • 96 percent say owning a home is important.
  • 78 percent say that home ownership is an important part of the American dream.
  • 72 percent say that finding the right home and community are key to their family’s happiness.
  • 64 percent say a good real estate agent can help them make the right choices about the type of home and community they want.
  • 62 percent say a good agent can help maximize home ownership investment.

—By REALTOR® Magazine

Shadow Inventory Plummets to Lowest Level in 6 Years

Daily Real Estate News | Friday, January 10, 2014

Shadow inventory — also often known as “pending supply” — dropped to the lowest level since August 2008, to 1.7 million homes, CoreLogic reports in its latest report. The shadow inventory is down 24 percent compared to year-ago levels.

CoreLogic estimates shadow inventory by the number of properties that are seriously delinquent in foreclosure or held as REO by a mortgage servicer but not currently listed on the MLS.

“Nationally, loan performance continues to improve,” says Mark Fleming, chief economist for CoreLogic. “The rate of seriously delinquent loans is at a new five-year low, down 26 percent relative to a year ago. The shadow inventory continues to decline as well, decreasing at an average monthly rate of 46,000 units over the last year. Healthy market levels of shadow inventory are around 650,000 units, so there is more to be done, but the trend is in the right direction.”

In November, completed foreclosures were down 29 percent year over year. But foreclosures are still elevated by historical standards. In November 2013, there were 46,000 completed foreclosures, but between 2000 and 2006, completed foreclosures averaged 21,000 per month nationwide.

While the foreclosure pipeline is gradually clearing, many home owners across the United States are still struggling to make their payments. About 812,000 homes in the United States were in some stage of foreclosure in November 2013. The percentage is down by 34 percent from a year earlier when foreclosure inventory stood at 1.2 million.

The five states with the highest foreclosure inventories as the percentage of all mortgaged homes are: Florida (6.6 percent), New Jersey (6.5 percent), New York (4.7 percent), Maine (3.5 percent), and Connecticut (3.5 percent).

Source: CoreLogic

Fannie, Freddie Fee Hikes Delayed for Review

The incoming director of the Federal Housing Finance Agency says that he will delay Fannie Mae and Freddie Mac’s planned increases on mortgage fees until he has time to review the reasoning behind it.

The move by Mel Watt, D-N.C., who was confirmed by the Senate earlier this month, comes after FHFA’s current acting director Edward J. DeMarco announced the hikes.

Fannie Mae and Freddie Mac said earlier this month that they intend to charge more to lenders who guarantee loans for borrowers with mid-range-or-below credit scores, as well as borrowers who don’t meet certain down payment guidelines. The fee increases, which lenders likely would have passed down to borrowers, could have cost a borrower with a $200,000 30-year mortgage about $4,000 extra over the life of the loan — or about $11.11 extra per month.

The fees were set to take effect in March and April. Critics in the mortgage and housing industry had argued that the fees were too high and that fee hikes on lenders are usually passed on to borrowers via higher interest rates.

“I felt it was important to announce my intentions now because of the prospect that some lenders could start to price the proposed changes into the market well before the effective dates,” Watt wrote in an email to reporters.

Watt will be sworn in as FHFA’s new director on Jan. 6.

Watt also said he would delay fee hikes planned for states with long foreclosure timelines. The hikes would likely have meant higher fees specifically for four states with the longest foreclosure process: New York, New Jersey, Connecticut, and Florida.

Fannie and Freddie back about 60 percent of all U.S. mortgages.

Source: “New FHFA director stops rate hikes short,” HousingWire (Dec. 23, 2013) and “Fannie Mae Fee Increases to be Delayed by FHFA Under Watt,” Bloomberg (Dec. 21, 2013)

Top 5 Reason Buying/Selling Now

Investors have played a key role in the California housing market recovery for the past four years.  Low mortgage rates, attractive home prices, and low yields on alternative assets have fueled demand for investment properties, particularly where distressed homes have dominated sales.

In keeping with common wisdom that today’s real estate market is ideal for a long-term investment strategy, two-thirds (66 percent) of investors who worked with a REALTOR® indicated they are going to keep the property for more than a year, while about one-fourth (26 percent) of investors intend to flip the property within a year, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ “2013 Investor Survey.”

Additionally, three-fourths of investors are of the small mom-and-pop type, owning 1-10 other investment properties, with 15 percent owning just one property, 46 percent owning 2-5 properties, and 14 percent owning 6-10 properties, the investor survey found.

Of the properties purchased by investors, single-family homes were the preferred property type, with 78 percent of transactions involving single-family homes.  Multifamily properties comprised 14 percent, 7 percent were other property types, and bulk sales made up only 1 percent.

The median sales price of an investment property was $272,500.  More than eight out of every 10 investors made repairs to their investment properties, spending a median of $10,000 – or 4 percent of the median sales price.  Investors spent a greater percentage (4.2 percent) of the sales price rehabilitating properties costing $250,000 or less than they did on properties costing $500,000 or more (3.4 percent).

Among the reasons investors bought or sold now include profit potential (34 percent), good price (26 percent), low interest rates (10 percent), personal reasons (6 percent), and location (4 percent).

 

 

Free Home Buyers Fair – LA Area

LOS ANGELES (May 13) – The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) will host a free “Endeavor to Achieve Homeownership Home Buyers Fair” to help prepare prospective first-time home buyers enter the California housing market and assist previous homeowners who have suffered economic hardships regain their footing.

Held on Saturday, May 25, 2013, from 9 a.m. to 5 p.m. at the California Science Center, home of the Space Shuttle Endeavour, the fair features free sessions on topics including repairing poor credit, recovering from a short sale or foreclosure, accessing down payment assistance, and learning what it takes to become a homeowner.  A key highlight of the fair focuses on teaching consumers how to obtain $30,000 down payment assistance grants offered by Wells Fargo.

“Prospective home buyers who want to take advantage of this once-in-a-generation home buying opportunity can attend this one-stop shopping event to obtain the valuable information needed to help them take the first step toward homeownership,” said C.A.R. President Don Faught.

Other sessions offered are: How to Find and Qualify for a Home Loan; Understanding the Home Inspection Process; Avoiding Foreclosure; Wealth Development, led by CNN contributor Louis Barajas; How to Fix and Monitor Your Credit; Long-term Homeownership Preservation; Credit Recovery from Economic Downturn; Finding and Working with a REALTOR®; and more.

Exhibitors include housing non-profits, state and local housing agencies, diversity housing representatives, mortgage lenders, consumer credit counselors, and home inspectors.

All sessions will be offered in English, Spanish, and Korean languages. For more information, visit http://on.car.org/homefair.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with 155,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

 

How to Make Your Deck Look Brand New Again?

 

Things You’ll Need

• Pressure Washer    • Stain     • Brushes      • Rollers   • Wood cleaner     • Tray for holding stain
• Old towel or paper towels for cleaning hands

 

Instructions

1. Cleaning—You will want to start by sweeping the deck to remove all dirt and small particles.

2. Next you will get out the wood cleaner. Armstrong Clark makes a good product and it works very well. This will remove all of the old stain.

3. To completely remove all the old stain from the woodwork, you may need to also use a pressure washer.

4. Let the deck dry for at least 48 hours before starting to apply stain.

5. Staining the deck—You are now ready to start applying the wood stain. Use your brushes for any posts and a roller or pad with long handle for the floor of your deck. This will keep your application even and looking nice and professional. Using the roller and/or pad with long handle will make the job go faster and relieve an aching back.

6. When the project is complete, you will need to let the stain dry again for at least 48 hours before walking on your deck.

An oil based stain will be more water resistant and has a longer life over other types of stains. It also only requires one coat on most woods instead of multiple coats.

Be sure to let the deck dry completely after washing and again after you apply the stain. Jumping the gun and walking on the deck too soon could mean starting the whole project over again.

How To Be The Most Attractive Home Buyer?

 

The spring season tends to flood the housing market with buyers, and in markets with low inventory levels, the competition is stiff.

As home prices continue to recover and interest rates remain at near-record lows, some houses are receiving multiple offers and to win the bid, buyers need to stand out from the crowd. According to the National Association of Realtors, houses sold in 71 days in January, down from 99 days a year ago.

Since markets are moving fast, experts recommend sellers have their loan pre-approved and down payment ready before starting their search.  “The market is changing,” says Cara Ameer, broker associate and Realtor at Coldwell Banker Vanguard Realty based in Ponte Vedra Beach, Fla. “Inventory is low and demand is high—a buyer needs to know exactly what their parameters are.”

Multiple bids are becoming the norm, so be ready to compete and do your homework to seal the deal. The longer thenegotiations, the more chance you could lose out to someone else who made a better offer, says Ameer. Be reasonable without being difficult because until an offer is signed, sealed and delivered, other buyers can bid on the property.

While you have to compete in the current market, maintain your budget. “You don’t want to end up paying more for the house than it’s worth,” says Daren Blomquist, vice president at RealtyTrac.

Experts warn against cutting corners like skipping the inspection or engaging in a bidding war. You don’t want to unduly stretch yourself just to get into a property,” says Blomquist.

To help you become a homeowner in this competitive market, experts recommend the following tips for being the most attractive:

Plan Ahead

“You have to plan four months before you’re going to buy,” says Michael Corbett, Trulia’s real estate expert. Check your credit for accuracy and avoiding making any big purchases or taking on any big debt during this time.

“[Debt] brings down your credit score and increases your debt-to-income [ratio] which are two critical things banks look at when qualifying and preapproving you for a loan,” says Corbett.

If your debt-to-income ratio is too high, experts recommend paying down as much debt as you can to lower this ratio.

Set Your Home Price

“Don’t look at a $300,000 home if all you can afford is $250,000,” says Ameer. Less supply on the market increases the likelihood for multiple offers, and you won’t be able to compete. “If properties are selling at 95% of asking price, don’t think you’ll get a deal at 85% of asking price,” she says.

If you do spot a great deal on a house, don’t wait days to make an offer, warns Corbett. Since time isn’t on your side, learn how to spot a great deal by researching an area’s home prices.

“Do a little due diligence and go to open houses—do your homework,” says Corbett. Being educated will help you negotiate and could prevent you from paying more for a house than it’s actually worth because you’re emotionally involved.

Know that Cash is King

The more cash you have, the more appealing you are as a buyer. Putting 20% or more down makes you look more financially stable and gives sellers comfort that you’ll qualify for a mortgage, says Corbett.

Cash can cover a multitude of problems when you make an offer, whether it’s difficulty with the mortgage process or a lower-than-expected appraisal. “A buyer can contribute more cash to cover the different between the appraisal and offer price,” says Blomquist.

If your appraisal is low, don’t expect the appraiser to come up in value, says Ameer. “Appraisers are under scrutiny with the banks and they have to justify everything they do.” They’re required to follow Uniform Standards of Professional Appraisal Practice (USPAP) guidelines, as well as lender guidelines.

Appraisers use surrounding properties for comps, says Ameer, and if there are only foreclosures, that’s a bad hand to be dealt. You can always review the appraisal for discrepancies and suggest different comps but don’t expect the value to change.

Get Preapproved before Your Search

Getting prequalified for a mortgage gives a ballpark for what you can afford to buy and will streamline your search process.

If you’re financing your house with a mortgage, have a pre-approval letter with you and if you’re paying cash, have proof of funds that shows you’re good for it.

Getting preapproved will also help you to compete with an all cash buyer, says Walter Molony, spokesperson for the National Association of Realtors.

When you know what you can afford and are preapproved, you won’t be shopping outside of your price range, says Corbett. “It makes you a much stronger buyer when you can turn in that preapproval letter with your offer.”

Limit Your Contingencies

Experts suggest having as few contingencies as possible to be an alluring buyer. “Don’t overcomplicate your offer to the seller,” says Ameer. Certain contingencies based on your ability to get a mortgage, the appraisal and home inspection are standard, but piling on more could make the seller less inclined to work with your offer.

Experts advise making an offer based on a satisfactory home inspection. “It gives you the opportunity to walk away if you find in an inspection that there are too many problems with the house,” says Corbett.

Making your offer contingent on you selling your house first will make you a less appealing buyer. If you need to sell your house before buying a new one, then sell your home first and rent or move in with family or friends while you look for your new home, says Blomquist. “As a seller, you’ll sell that home quickly. Then as a buyer, you’re much more appealing than a buyer contingent on a sale.”

Add a Personal Touch

Corbett suggests sending a letter to explain why you want to buy that house. “You become a person who really loves and appreciates the home instead of just a number,” says Corbett. Sending a letter is just one extra little thing that will help level the playing field.

Be Flexible with Closing Dates

“Let the seller know that you would be flexible on the closing timeline,” says Corbett. Find out when the seller would ideally like to close on the house and see if you can match it.

Read more: http://www.foxbusiness.com/personal-finance/2013/03/21/how-to-be-most-attractive-homebuyer/#ixzz2RaeDAmrV

For Third Week, Mortgage Rates Sink Lower

DAILY REAL ESTATE NEWS | FRIDAY, APRIL 19, 2013

Average fixed-rate mortgages moved lower this week amid data showing weaker consumer spending, Freddie Mac reports in its weekly mortgage survey. It marked the third-consecutive week that mortgage rates went down.

Freddie Mac reports the following national averages in rates for the week ending April 18:

  • 30-year fixed-rate mortgages: averaged 3.41 percent, with an average 0.7 point, dropping from last week’s 3.43 percent average. A year ago at this time, 30-year rates averaged 3.90 percent.
  • 15-year fixed-rate mortgages: averaged 2.64 percent, with an average 0.7 point, dropping from last week’s 2.65 percent average. Last year at this time, 15-year rates averaged 3.13 percent.
  • 5-year adjustable-rate mortgages: averaged 2.60 percent, with an average 0.5, dropping from last week’s 2.62 percent average. Last year at this time, 5-year ARMs averaged 2.78 percent.
  • 1-year ARMs: averaged 2.63 percent, with an average 0.4 point, rising slightly from last week’s 2.62 percent average. A year ago at this time, 1-year ARMs averaged 2.81 percent.

Source: Freddie Mac

Los Angeles Real Estate and the $25 Billion Foreclosure Settlement

If you own a home that has a mortgage on it, this LA Times article is a must read!

This LA Times Article answers the key questions about who qualifies to receive a direct financial benefit from the foreclosure settlement the week of February 7, 2012.

If you have questions about your best options, contact the LA Real Estate Team today.  Whether you want to keep your home or sell it we can help you…and our services will COST YOU NOTHING.  If you are considering a SHORT SALE, LOAN MODIFICATION, OR BANKRUPTCY, we can educate you without any cost or obligation.

Kevin Ward

310.734.8160

Los Angeles, Beach Cities and South Bay Homes for Sale

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