The Santa Barbara Real Estate Scene by Mark Lomas

   

        “Miramar Beach”    by local Santa Barbara artist: Chris Potter

     Buying a home? Your age may influence your decision.  For younger buyers the most important factor in choosing a property are convienence to jobs, affordability, and quality of the local schools.   For older buyers what matter most is proximity to friends, family, and health care facilities.
     A generation gap?
     A recent survey by the National Association of Realtors found sharp differences in the choices between older and youger homebuyers that reflected different life situations and changing priorities.
     Younger buyers chose older homes.  As the age of the buyer increases, the age of the home declines, with younger buyers tending to choose single family homes where older buyers opted for townhomes and condos.
     Among homebuyers age 32 and younger, 79 percent are buying their first property, compared with 5 percent among buyers ages 67 to  87.  There are many reasons for purchasing a home, but younger buyers tend to want a home of their own, while older buyers want to downsize and be closer to family and friends.
     Younger buyers don’t move far from their previous home, often staying within 10 miles.  Older buyers move longer distances, typically more than 20 miles from their previous residences.  And, as  buyers get older they are less willing to make compromises with their home purchase while younger buyers tend to make sacrifices on the price, size, and condition of their home purchase.
     Understanding your prospective buyers thinking and motivation can help you customize your marketing plan for your property. We’re often asked, “How’s the market doing?” And, we’ve learned over time, that the real estate market re-invents itself almost everyday do to so many changing factors that affect the process. Just keeping up with all the internet innovartions that are changing the way we do real estate is only one component.  Stay tuned, more interesting insights ahead!
For more information about the painting above by local Santa Barbara artist Chris Potter please visit his web site at:   Chris Potter Art

Mortgage News from Mark Lomas The Real Estate Concierge

      Here are five ways home loans are beginning to become easier to get.  The operative word in that sentence is “beginning.”  At the moment it appears things are loosening up a little, and here are five insights into what’s happening in the mortgage market right now.

     Some lenders are easing payment and credit score requirements.  In recent months lenders have relaxed their grip somewhat as the market has rebounded, and home prices have soared. As such, more ways to get a mortgage are in the offing.  And, rising interest rates could spur renewed competition among lenders.

                             

     Piggyback loans are popping up.  The term describes two mortgages taken out at the same time for one property so a buyer can avoid paying for private mortgage insurance on a traditional loan representing more than 80 percent of a home’s value.  This would also help buyers avoid higher interest rates on jumbo loans.

     Stated income loans area back.  These don’t require tax returns to prove income.  Stated income loans are important to self employed homebuyers because they tend to have flucuating income and frequently write off expenses.
     Subprime loans are emerging again. Lenders entering the subprime market now tend to require hefty down payments from borrowers, who may have a healthy income but went through a short sale or took another credit hit before the market rebounded.
     Rising interest rates could encourage competition.  Some are predicting that rising interest rates could soften consumer demand and increase the size of available loans.  Interest rates are expected to continue to rise. Some people are suggesting fixed rate mortgages could hit 5 percent in the next 12 months.  They reached 4.51 percent two weeks ago.

The Real Estate Concierge of Santa Barbara

     Year over year, transactions were up four percent in July, with the median sales price up to roughly $925,000 for a 16 percent rise according to Gary Woods the official statistician for the Santa Barbara Association of Realtors.
     Basically, the tight real estate supply with historically low interest rates and buyers flush with cash have helped push southern Santa Barbara (Carpinteria to Goleta) home sale prices to a nearly five year high. Currently sales are brisk under two million dollars.
     For more real estate news you can use click on the links below. 
 
 
 
 

The Real Estate Scene with Mark Lomas

  

Home Estates Average Sales Prices for Southern Santa Barbara, California

    The local real estate gossip from the August 2013 Montecito Journal is that,” Ellen Degeneres and Portia de Rossi are wheeling and dealing in real estate yet again. Having splashed out $26.5 million on international interior designer John Saladino’s Montecito estate, Villa de Lemma. In May they relisted their Hidden Hills ranch after taking it off the market after pricing it at $14.9 million in 2011.”

     More gossip from the journal? Sightings: Johnny Depp checking out the crowd at Lucky’s….Carol Burnett noshing at Tre Lune….and, Ellen and Portia shopping at the home store above Pierre Lafond.

     Remember: Sunday Polo Matches begin at 1pm, and 3pm. Santa Barbara Polo & Racket Club: 3300 Via Real, Carpinteria: 805.684.6683 or visit: www.sbpolo.com    Admission is $10 and children under 12 are free.

     And, just because it’s really kewl: Westmount’s powerful Keck telescope opens its Observatory doors to the public every third Friday of the month in conjunction with the Santa Barbara Astronomical Unit. 

    You are invited to call the Telescope Viewing Hotline: 805.564.6272

    

A Fisherman’s Guide To Selling Real Estate

” A Fisherman’s Guide to Selling Real Estate!” 

     The first time your fly hits the water will be the most productive cast if you do it right.  When you list a house drop it into the market carefully.  The initial presentation of the fly or the house will be the most productive if you do it right.
     Sometimes, it just best to just observe a pool for a while before presenting your fly.  If you introduce the right fly properly, those milling trout will often rise to it and make a solid hit.  But, introduce a fly too large, too small, or the wrong shape or color or one’s that’s ragged, the fish will be turned off, sometimes for the rest of your day.
     When you list a house for sale, take some time before putting it on the market.  Try and get the price right for the type of buyers you are trying to attract.  Make sure the owners make the house look as sharp as they can.
     Then put the house on the market with some finesse or flair – don’t just lay it out there.  When a house first hits the market, those buyers that are the most qualified (those who have looked over all the other homes and rejected them for one reason or another) will rise to your properly priced and presented listing.  And, if they strike, they’ll strike with a firm offer in order to beat the others.
     Over price it or introduce it with faults uncorrected and it’s likely to settle to the bottom after a time and become, “Oh, that house!”
     The statements “Your first offer will probably be your best offer” and “Offers come in pairs” are explained by this analogy.
     When a fish sees a new fly properly presented, it will hit hard and clean (make a high and firm offer).  When one fish starts to move towards the new fly, another is likely to see the action and start moving in for a strike as well (two offers).
     But, walk up to the pool and flog it with your number 4 June Bug, and you will spoil your water.  Put your shabby bungalow on the Multiple Listing Service at 15% over market, and you will have spoiled your buyer’s pool as well.
” A Fisherman’s Guide to Selling Real Estate” by Mark Lomas   
 

Matchmaking, finding that perfect person or property online!

* Stop reading now if you are even remotely humor impaired or comedically challenged!          Yesterday’s man or woman used to think, “if I need to find someone this way, I’m already lost!” But today, someone might say, ” I don’t have enough time to drive around and look at all the open houses/a potential homebuyer’s version of “speed dating”, so maybe I can use this service!”        We’ve all seen those ads for E-Harmony -  where this scary looking guy comes out and tells us how great his dating service is,  and then tries to convince us that it’s all scientific, and that people are matched on 92 points of compatibility! Yeah, right …       E-Harmony people are just regular folks like yourself,  not circus freaks, drooling sexual perverts, or couch humping Scientologists.  (Perish the thought) The product of your union wil be an “Everlasting Love!”, not some head revolving, vomit spewing, bed wetting, priest cursing, ungrateful devil child, that you’ll have to support till you’re 18. (okay, maybe I have some issues) But … if you’re still a hopeless romantic, a word of advice … look beyond the curb appeal!        Speaking of which … matchmaking and the promise of finding that perfect property is also here today!        No doubt every prospective buyer, seller, and real estate agent has heard of the Multiple Listing Service. The real estate agent’s “on the make” equivalent of a dating service.  Real estate agents even have their own codes to help inform potential suitors.  Possibly E-Harmony might want to implement this kind of methodology, as you’ll soon see, into their 92 reasons to run for the hills! (The following is gender specific … feel free to substitute whatever gender makes this PC for you … or not!)*New: A new listing!  The competition will be lining up for the first dance!  A new listing has that “special glow!” … for now.*Active: Active listing.  This gals has been danced around, but so far, no one wants to marry her.*DOM: Days on the Market.  Everyone watches this number,  like the date on a milk carton. It is an indication of freshness.  The longer she sits on the shelf, the less desirable she becomes.*CC: Contingent, but continue to show.  She says she’s engaged, but there’s no ring on her finger - the “due diligence period.”   The wedding may still be called off,  especially if the finances don’t measure up!*BOM: Back on the market.  ewww…something could be wrong here.  Definitely not a first choice.  But if it’s 2a.m., and you’re drunk out of your skull and getting desperate, she might look pretty good.  Of course, you may have to overlook that little hump, the lazy eye, and her spooky resemblence to Karl Malden.*TW: Temporarily withdrawn.   She’s not pretty, and she knows it.  She realizes that if she wants more interest, she’s gonna have to get a face lift, fix herself up, start going to the gym, and maybe buy a wonder bra.*EXPIRED: Listed, but never sells.  She thinks she’s Paris Hilton, but she looks more like Yoda after a night of heavy drinking.*PENDING: Okay, she’s bought the dress, had the rehearsal dinner, picked out the china pattern, and the wedding march has started.  Potentially the groom can still back out and run screaming up the aisle.  (Of course, such things usually only happen in the movies … still, there’s always the chance.)*SOLD:  They’re married!  Happily?  Who cares!?  It’s re-harmony! (Cue music) ” This will be an everlasting love …”That is, till he discovers that she has a raging case of dry rot in her basement, terminal fung sway, and a sagging back porch.  Oh well …

The Santa Barbara Real Estate Scene 2013

Financing for High End Properties, the Jumbo Loan

    Jumbo Loans have always played an interesting role in Real Estate.  The high end of the market depends on them.  A year ago, even the most creditworthy borrowers struggled to secure home loans of more that $729,750 – the cutoff for conventional conforming loans backed by Fannie Mae and Freddie Mac.   But, since this spring, the interest rate spread between conforming and jumbo loans has narrowed and the number of lenders offering the loans has jumped.
    As of late July, lenders were offering jumbo loans at a typical rate of 5.5 percent, down from 7 percent a year earlier and not too different from what’s available for conforming loan, according to data available on Bankrate.com.  NAR Chief Economist Lawrence Yun said in a late July press conference that sales of existing homes priced at $750,000 and aboved jumped 30 percent from mid 2009. “Credit was extremely tight a year ago, but now it’s beginning to loosen up” he said.
    Among the big players in the market, Citigroup said in a July 10th Wall Street Journal article that it has seen a 30 percent rise in Jumbo business. And, Bank of America has said that it will be making a big push into the Jumbo arena.   

Some kind words regarding this Web Site from Lender411.com by Kyle Chezum
     ” Comprehensive, interesting, fun, and full of solid advice!” We checked it out, and we’re impressed. This site is attractively designed and updated frequently with a continued emphasis on real estate analysis. Mark provides local real estate market news,statistics, trends,  and gets to the heart of macroeconomic events.
     These aren’t just financial reports. Mark provides his own conclusions on where the market rests, and what changes we can expect.  This stuff isn’t parroted from a mass media economic journal.  This is the advice of a trustworthy, experienced local professional who understands the flow of the industry in Marin County (and the Bay Area). 
     The information on Mark’s site is unique.  You won’t find this perspective elsewhere.  Looking for information that helps you keep your finger on the pulse of the Marin real estate market?  Mark’s site provides it.  If you’re already familiar with this site you know Mark’s post cover a wide variety of related topics, including subjects such as the rock and roll history of Marin, how to set up a neighborhood watch prograrm, and the effects of Social Media on our brains. Interesting? You bet. This is one real estate web site you’ll want to follow.
 We give this real estate web site/blog FIVE STARS for this reason. Check it out for yourself! Mark site is found at: www.TheRealEstateScene.com FOR MORE INFORMATION ABOUT LENDER 411 GO TO THEIR WEB SITE AT:  LENDER 411

Median Home Sales Value versus Mean

Once you understand the difference between “Median Home Sale Value” and “Mean (average) Home Sales Value” you might want to question these kinds of analysis.

In a world of statistical averages, many have asked why anyone would report a median home sale value instead of a mean average?  Many people believe the mean/average is easier to understand than the median, but the median measure is not too difficult to appreciate.  A mean/average value is calculated by adding up all the values in a distribution, and then dividing the sum by the total number of values contained in the distribution.  To find a median value, one talkes all the values in the distribution, sorts in ascending order, lines them up and finds the miiddle value.

Though they sound similar, and in many instances, there is not too much difference between the two values.  The reason a lot of newspapers focus on the Median instead of the Mean is because the mean value calculation has a limitation that can prevent it from reflecting an “Average?”  In calculating home sales price statistics this limitation occurs when the sale price of one home varies greatly from the remainder of the homes which can skewer the average.
The chart in yesterday’s Marin Independent Journal (not the chart above) reflected sales compared from April of 2010 to sales in April of 2011.  With only 3 sales in Belvedere last month the median percent change from 2010 where there had been 4 sales was a negative 25%.  Did property values in Belvedere come down 25%? No, and that’s why people need to understand how and why this methodology oftentimes skewers the reality of what’s actually happening.

Yesterday’s chart also showed that Ross, that only had 2 sales in April of 2010 and 5 sales in April of 2011, was up 150%.  Did property values in Ross increase by 150%?

This kind of data tends to confuse the general public.  When you’d like to have know what’s really going on, check with your LOCAL real estate professional.  If you’d like to find out what your home is really worth in today’s real estate market, feel free to contact me.

Consumers Gain Some Optimism


             Ellen Gibson of the Associated Press reported that, “Americans are feeling more chipper about the economy than they have in three years.
          The Consumer Confidence Index rose to 70.4 this month, up from 64.8 in January, as Americans expressed more optimism about their income propsects and the direction the economy is headed.
          It’s the strongest reading since the early days of the most severe recession the U.S. has seen since the 1930s.
 
For the whole article click here:
  Associated Press Consumers Gain Some Optimism

 

American Airlines, Parasites, and the Multiple Listing Service

American Airlines recently dumped Orbitz, an online travel agency information parasite that has preyed on the airlines by exploiting their data . As a result, Expedia (another online travel agency information parasite) has removed fares from its search results in a show of support for it’s competitor Orbitz.

Falsely, Orbitz and Expedia says, “this is bad for the consumer.” BS. It’s bad for Orbitz and Expedia that exploit the airlines data for profit. Why can’t American Airlines control their own data? How does a third party, that’s exploiting this data, have any say in how a company or business conducts their business or controls their data?

Southwest Airlines has had no problems by NOT COOPERATING with these third parties information vultures that exploit the airlines data. In fact, it’s improved their bottom line. Guess what, this is the tip of the iceburg regarding corporate online information parasites.

 

What does this have to do with Real Estate??

The real estate industry has their own version of the American Airlines Orbitz debacle playing out over the last 10+ years. When local, state, and national real estate associations (MAR, CAR, and NAR) gave away the real estate communities Multiple Listing Service data to online corporate giants like Expedia’s Zillow.com, and many others, have exploited this information that’s created on the backs of realtors.

Is that fair?  What happened to the leadership from the real estate communities associations that are supposed to look after their membership’s best interest? Realtors are still outraged that the data they create continues to be given away to these parasites.
 
The local, state, and national associations say it’s too late to put the toothpaste back in the tube, and take back control of the data we create. Then, American Airlines dumps Orbitz, and now we know the truth.

Do we continue to lie down and let these third party data vultures walk all over us, or regain control of our data from these parasites. Are our associations working on our behalf, or the Information Vultures? Is there an attorney out there familiar with these issues that can shed some light on what our options are? Is it time to create a grass route campaign to take back our data? 

Our are local, state, and national representatives in bed with these third parties? Who’s looking after the real estate community’s most valuable asset, the information and data we create? The airlines have had enough with these online corporate Information parasites. When will Realtors say, “enough is enough!”

Comment by Realtor Tim Ziffle Sr. on the National Association of Realtors, and Realtor.com

Realtor Tim Ziifle Sr.:

RPR represents the continued marginalization of the individual REALTOR in a real estate transactiopn by NAR because it further distances the individual REALTOR as being the go to source for real estate information. Just how long do you think it will be before NAR – with agreement from our local MLS Associations – develops additional and alternative revenue streams by making this aggregated library of information available to other entities other than the individual REALTOR? About as long as it took them to allow others to access and display our aggregated Realtor.com information!

REALTORS spend significant time, effort and expense to earn the right to collect and input listing and sale information into the MLS in order to enhance their ability to serve their future clients. Yet, our national and local REALTOR associations continually dream up ways to aggregate and/or manipulate this data into revenue streams that enhance the associations’ coffers but only serve to further marginalize us, the individual REALTOR, as being the local expert who is central to the real estate transaction. What active, individual REALTOR thinks this is a great idea? Please help me understand, that what I believe is NAR’s continued marginalization of the individual REALTOR, is really somehow a great benefit to me and every other individual REALTOR.

10 Reasons Real Estate Could Rebound in 2011

On December 24, 2010 Michele Lerner on Investopedia reported:
     Economic forecastsare sometimes as unreliable as weather forecasts. While consumers want to know the future of the financial markets and the housing market, it can be difficult for economist to provide a reliable guide.
     Some financial experts anticipate a continued slow real estate market in 2011, while others are mildly optimistic about the impending economic recovery.  Let’s take a look at some of the most credible predictions of what to expect in 2011:

1. Mortgage Rates will stay low   2.Lenders may loosen standards  3.Tax Cuts could lead to a faster recovery  4.Americans still want to be homeowners  5.Homebuyers are looking for long term ownership, not a fast profit
6.Home prices are expected to dip again  7.Builders will start building again  8.Inventory for all types will increase  9.Homes will keep shrinking  10.There will be more opportunities available for cash buyers, and investors (for the 10 Reason’s full explanation click on the link below)

The Bottom Line
     Time will tell what happens to the real estate market in general in 2011, but one thing to keep in mind when making your decision about buying a home, sellling a home, or investing in real estate is that this is one part of the economy that is extremely LOCAL!  Not only do housing markets vary from state to state, but also from neighborhood to neighborhood.
     Following the national real estate news can be valuable, but keeping up on local market conditions can be even more important.
For the entire article click here: 10 Reasons Real Estate Could Rebound in 2011

 

Marin Real Estate Blog by Mark Danforth Lomas of Coldwell Banker

Economic Cycles

49coloredbirdpostrainbow20091 Tough times? This too, will pass.For some, this economy is “the best of times” ; for others, it is “the worst of times.” Wall Street has gone from the “season of light” to the “season of darkness.” In the midst of the current economic uncertainty, there are those who look to future with great trepidation. For them, it is the “winter of despair.” Others look to the future through the eyes of an optimist. For them it is the “spring of hope.”
That some people are able to maintain a positive focus and perform admirable and successfully, regardless of the conditions that surround their efforts, has always fascinated me. Faced with identical circumstances, some people rise to the challenge, tapping into the best of themselves, and achieve what other can’t even imagine. Consider this: In tough times, 25 percent of businesses fail, 70 percent survive, and 5 percent thrive.
On a broader scale, some people play the cards they are dealt while other people fold em’ and go home. Some people thrive on the challenge; others wilt in the heart of the battle. The resilience of the human spirit is nature’s way of equipping us with the fuel we need to soar above whatever obstacles we encounter.
Since 1854, we have experienced 33 economic downturns in the U.S., each lasting about one and one half years, followed by an expansion of about three years. It seems we’ve discovered a way to handle these downturns more effectively over the past 60 years. Since 1948, we have had 10 recessions; the average contraction is 11 months, and the average expansion is four years. We spend 80 percent of our time in good economic times. If you work in business long enough, you will experience a downturn.
What’s the point? Economic nirvana is always followed by economic nervousness that is always followed by nirvana that is always followed by nervousness. It’s a cycle. The most important thing to know about tough times is that they pass and are replaced by good times. Businesspeople who wring their hands today will ring their cash registers tomorrow. Tough times? This too, will pass.

It’s A Different Market For Home Sellers

On November 9, 2008 Marni Leff Kottle wrote a very timely article, “It’s a Different Market for Home Sellers” in the San Francisco Sunday Chronicle’s Real Estate Magazine:
It’s a Different Market for Home Sellers

And, back in October Marni also wrote another timely and very insightful article about how hard the credit crunch has hit the Bay area. Here’s that article that was published in the San Francisco Chronicle:

Mortgage Update: Mortgage rates dropped last week, providing a dose of welcome news to prospective home buyers.  Freddie Mac reported Thursday that rates on 30 year fixed rate mortgages averaged 6.20 percent for the week ending November 6, 2008.  That was down sharply from 6.46 percent the previous week.

The retreat in mortgage rates comes as the economy is getting weaker.  The drop in rates is good news for people thinking about buying a home.  However, tight credit conditions are still making it difficult for some people to obtain financing.

Alan Greenspan and the Economy

“Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient.” Alan Greenspan, former Federal Reserve Chairsman, 2004

“A critical pillar to market competition and free markets did break down.
I still do not know why it happened?”

Alan Greenspan, the Oracle, never really understood what he was talking about when it came to the economy. Greenspan was so consumed with his own self-importance he overlooked the most basic fundementals of a healthy economy, and helped create the current melt down on Wall Street that has now spread throughout the world. Amazingly, Congress was so enamored with Greenspan they rarely questioned him. And yet, those entrusted to protect our Country…did not. Where is the accountablity?
On October 9, 2008 Peter S. Goodman reported in the New York Times: “George Soros, the pominent financier, avoids using the financial contracts known as derivatives “because we really don’t understand how they work.” Felix G. Rohatyn, the investment banker who saved New York from financial catastrophe in the 1970s, desicribed derivatives as potential “hydrogen bombs.” And, Warren Buffett presciently observed five years ago that derivatives were “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”
Amazingly, one prominent financial figure has long thought otherwise. And, his views use to be held in the highest regard in debates about the regulation and use of derivatives that he refered to as “exotic contracts” that promised to protect investors from losses, thereby stimulating riskier practices that led to the current financial crisis.
Even more amazingly, on October 23, 2008, Greenspan denied before Congress that the nation’s economic crisis was his fault, but conceded that the meltdown had revealed a flaw in a lifetime of economic thinking and left him in a “state of shocked disbelief.” Greenspan was unable to defend his resistance to recommendations to use the Fed’s power to crack down on sub-prime mortgages, and opposing efforts to impose regulations on derivatives (the complex financial instrument that include credit default swaps – that figured in prominently in the current crisis).
On October 23, 2008 Greenspan was asked by the House Oversight Committee Chairman Henry Waxman, after pointing out that Greenspan had contributed to irresponsible lending practices by rejecting appeals that the Fed intervene to regulate a surging sub-prime mortgage industry and also noted that the list of regulatory mistakes and misjudgments was long … asked Greenspan, “My question to you is simple, were you wrong?” To which Greenspan replied,”Well, partially” And then Greenspan went on to blame overeager investors who did not stop to think about risks. My question is ,”why didn’t Greenspan, the Federal Reserve Chairman, stop to think about risks?” Where is the accountability?

Mortgage Giants Receive Help

     On July 14, 2008 Jeannine Aversa/Associated Press reported that the Federal Reserve and the Treasury will take steps to shore up mortgage giants Fannie Mae and Freddie Mac, whose shares have plunged as loses from their mortgage holdings threaten their financial survival.
     The steps are also being taken to send a signal to nervous investors worldwide that the government is prepared to take whatever necessary steps to prevent the credit market crisis troubles that started last year from engulfing financial markets and further weakening the economy and housing markets.
     The Feds said that, “this should help companies ability to promote the availability of home mortgage credit during periods of stress in financial markets.”

Frannie Mae and Freddie Mac

      Last post I ran a headline that said, “Ignore the Headlines!”  Well, that might have been a little premature. Last Monday Indymac Bank, in an attempt to reassure depositors that the company is not near collapse, issued a response to letters to Federal Bank regulators from Senator Charles Schumer that “Indymac Bank’s financial deterioration posed a significant risk to both taxpayers and borrowers.”
     On Friday and Saturday depositers withdrew about 100 million dollars.
     The Center for Responsible Lending issued a report Monday claiming that interviews with former employees and lawsuits in 10 states showed Indymac pushed through loans based on bogus appraisals, worked closely with mortgage brokers who mislead borrowers about their rates and fees, and often treated elderly and minority consumers unfairly.
     While Schumer claimed Indymac Bank used brokered deposits to “finance rapid and irresponsible growth,” Indymac said those deposits,”lowered the risk for Indymac Bank and improved our safety and soundness during this turbulent period.”

     Fannie Mae and Freddie Mac reiterated Friday that the companies are adequately capitalized and that a government bailout is not imminent, but stockholders in the government chartered, publicly traded companies were not entirely reassured.
     Continuing a monthlong slide that intesified last Monday, Fannie Mae’s shares fell 22 percent on Friday and Freddie Mac was off more than 3 percent.  Investors are worried loses at Fannie Mae and Freddie Mac could force those companies to issue more common stock to raise additional capital.  And, if the companies are unable to raise capital, and the government steps in to place the companies in a conservatorship, their shares would be worthless.

Ignore The Headlines

     When prices are falling few people have the discipline to buy stocks, a house, gold, art or any other asset.  But, for those who do “pull the trigger” excel in the long run.  As John D. Rockefeller famously said,”The way to make money is to buy when blood is running in the streets.”
Consider this, the stock market is being pummeled, oil per barrel prices are going through the roof, and there’s panic that we’re in a recession.  The Fed rate cuts will lift the economy eventually, and the stock market wil typically starts responding just as the headlines get their gloomiest.  Sure, the market could fall again before recovering, but the “Recession” may be half over already – or we may avoid one all together. You just never know.
    But, let’s say you’re emotionally ready to be a homeowner.  You have good credit, plan to stay put for the next five years and have been waiting for the perfect entry point. Well, it may be time to get serious – before an inevitable rise in interest rates wipes out your advantage.  “The thing that will make home prices stop falling is the same thing that will push mortgage rates higher,” says Lending Trees chief economist Jim Syinth.  So,anything you gain by a further drop in prices might be offset by rising financial costs.
    It’s more complicated if you must sell before you can buy.  But, that logjam won’t persist forever – and if it appears you’ll be trapped for a few years, try to refinance at today’s lower rates.  Risk always seem most acute when the headlines give you ulcers.  But that’s exactly when you should think long term – and get off your thumbs.
    Ignore the headlines!

How to cut your Property Taxes!

     In California, property taxes are based on the assessed value of a home.  The assessed value is usually limited to the purchase price,  plus an inflation factor not to exceed 2% per year, plus the cost of room additions or other new construction.  This is also know as “base-year value.”
     Proposition 13: limits property taxes to 1% of assessed value.  Some communities have approved additional taxes for schools or other projects.
     Proposition  8: Passed in 1978 allows for a temporary reduction in assessed value when a property’s market value on January 1st is below the base-year value. (Proposition 8 reductions are temporary)
     Informal Review: Homeowners who think the value of their home on January 1st is below the assessed value can ask their county assessor for an informal review.  The assessor, using sales data as of January 1st for comparable homes in the neighborhood, will determine whether or not a temporary reduction is warranted. The homeowner may submit their own comps.
     Appealing an assessment: If the homeowner and assessor cannot agree on a value the homeowner can file a formal appeal with the county’s assessment appeals board.

Window of Opportunity

  The Government just announced that it will temporarily increase limits on conforming loans from $417,000 to as high as $729,000. Marin County and thirteen other counties in California qualified. This will affect only those loans originated between July 1, 2007 and December 31, 2008.  The Government is expected to be working out new underwriting standards and plans to offer these new loans soon.
     This is part of the Governments economic stimulus package approved earlier this year calling for temporary increases on loan limits to allow troubled borrowers to refinance out of sub-prime loans and make it easier for many new buyers to qualify for mortgages in high cost areas, particularly in Marin County where home prices remain among the highest in the nation. 
      This may also prove to be a window of opportunity for many buyers as the new home season begins. If your thinking of buying and selling, now may be the best time to take advantage of an opportunity that will not be available after December 31, 2008.

What Real Estate Slump?

      The Bay Area’s rich are still snapping up high-end properties for record sums. On Friday, a mystery shopper agreed to buy the unfinished penthouse at the Millennium Tower for $11 million. That’s $2,288.81 for each of the San Francisco property’s 4,800 square feet, a range rarely exceeded even when the space is built out – that is to say, when it actually includes walls and finishes.The buyer, who wasn’t identified per the building owner’s policy, put down $1 million to begin the escrow process.

     The deal is further evidence that people are willing to pay ever higher prices for luxury Bay Area real estate, particularly downtown San Francisco condominiums, even as thousands of average homeowners are wrestling with plummeting prices and fighting off the specter of foreclosure. High-end homes operate in their own universe because the availability is limited and the very wealthy are largely immune to the main factors dragging down the broader market.
    
     “On the upper end, it has definitely gone up,” said Alan Mark of the Mark Co., a marketing and research firm for the condominium industry. “There’s a deep market for large, high-end condominium residences that have great views.”     New York-based Millennium Partners is developing the $500 million, 60-story glass structure at 301 Mission St., which is scheduled to open in spring 2009. Sales began in November and despite an average price tag of $2.5 million, the company is well ahead of its goals, said Richard Baumert, managing director with Millennium.

    “The momentum has been pretty strong since the day we opened,” he said.

    And not just at the Millennium.

    During the fourth quarter of last year, 40 condos and single-family homes traded hands in San Francisco for more than $3 million – adding up to a total of $213.8 million in real estate sales.    That’s up from 22 sales for $119.4 million a year earlier.

   The trend has continued into the new year:

– A six-bedroom, five-bath home listed for $6.45 million in Ross went into escrow in January.

– A three-bedroom, two-bath property on 113 acres in Calistoga sold for $6 million on Feb. 7.

– An eight-bedroom, 9 1/2-bath house in Hillsborough traded hands for $11 million. It went on the market Jan. 28, sold on Jan. 29 and closed on Feb. 5.

– Units that sold at the St. Regis Hotel and Residences in San Francisco two years ago are trading for 50 percent more today.

     These deals are occurring even as the broader market tumbles, with resale homes in the nine-county Bay Area falling 43.7 percent in January and median prices dropping nearly 9 percent from a year earlier, according to DataQuick Information Systems.

     The high-end market is experiencing the opposite trend primarily because things like tight credit, prices that outpace incomes and subprime mortgages aren’t of particular concern to the wealthy, who can often pay all cash.

     And while there is a glut of inventory in markets hammered by foreclosures, the supply of very high-end homes is extremely tight across the region. A five-year wait for a premium property in a tony San Francisco neighborhood is not uncommon, said Malin Giddings, who specializes in upscale San Francisco real estate for TRI Coldwell Banker.

     “We have so many more buyers who have money than we have inventory,” she said. “I don’t care how much money you have, I cannot make people move.”

     On top of that, more people are becoming wealthy, as the rich are getting richer – creating additional demand that pushes prices higher.

     The top 1 percent of California’s taxpayers saw their income jump 107.7 percent from 1995 to 2005, after adjusting for inflation, according to a California Budget Project report last year. Similarly, Forbes reported late last year that the collective net worth of the individuals on its 400 richest list grew $290 billion from the prior year to $1.54 trillion.

    “The affluence in the U.S. is the greatest it has ever been,” said Richard Welty, president of Welty Capital Management in Lafayette. “They’re taking (money) out of investments and buying that dream house.”

This article appeared on page C – 1 of the San Francisco Chronicle  2/16/2008

To Buy or Not to Buy?

      Now that we’ve seen the real estate market shift by varying degrees in different neighborhoods throughout the Bay Area, is it still hip to flip…real estate?  Or, to buy or not to buy?     “Flipping” a home in the conventional sense means to purchase an undervalued property, and then refurbish and resell it to turn a profit.  Obviously there are certain parts of our country where those real estate markets have been devastated by the downturn of their local markets along with the mortgage industry’s “melt-down.” With the degree of risks involved, you’d think this would dissuade most rational people from attempting to purchase a property in a down market.  Or, should it?      Each situation, property, and market is unique unto itself.  For the first time in a while buyers are starting to see opportunities that didn’t exist before.  If you’re a buyer with good credit, the ability to put down a down payment, and have some reserves (savings, investments, ect.), you might just find yourself in the driver’s seat in today’s real estate market.  Inventory is up, sales are down, and some buyers are now realizing the advantages and opportunities.     Now more than ever, buyers and sellers need to understand their marketplace  Hopefully, they’ve associated  themselves with a reputable realtor that understands that changes are taking place almost daily.  Working with an experienced realtor that will tell you what you need to hear, not what you’d like to hear, is critical.      The last two times the real estate market fell off in the Bay Area was after the 1989 Loma Preita Earthquake and after the horrific event on September 11th in New York City.  Understandably people were very concerned ,and very cautious, about buying and selling at that time.  Curiously though, quite a few homes sold after those events in the Bay Area, and a year or two later, proved to be some of the best buys in the last 20 years.       Is this the time to be buying real estate?  Historically, even when the market has dropped off, there are some neighborhoods within the Bay Area that seem immune to market conditions.  Occasionally a home might come up in one of these neighborhoods that just sits on the market before someone even attempts to make an offer.  And, after it sells, the neighbors are sometimes shocked when they find out what it sold for.  What I’m trying to say here is that you never know what you can do until you try.  Yes, sometimes it takes time, knowledge of the marketplace, persistence, patience, an experienced professional to guide you through the maze, and sometimes a little luck.  But, you might find out in a year or two (or more?) when market dynamics revert back to more of a seller’s market, it was a good time to buy!

For Sale By Owner vs. Real Estate Agents

  TEN REASONS WHY YOU NEED A REALTOR TO SELL YOUR HOUSE1. The 2 most important considerations when selling a home is Price and Exposure. If your home has been on the market and has not sold it’s one of 2 things. It wasn’t priced right, or didn’t receive the right kind of exposure/marketing.

    For a house that has already been on the market, in a relatively strong real estate market (the Marin Real Estate market peaked in July and August of 2005 and is still strong in some areas of Southern Marin) to bring it back on in a declining market as a For Sale By Owner, for many is seen as an act of desperation.

    These sellers, even with a price reduction don’t seem to understand why they seem to only attract bottom feeders and predatory buyers looking for a steal … or realtors, that only chase listings that have expired and For Sale By Owners that they hope they can convert into a client.

2. If your house is not listed that means there is no assurances to the professional realtor that if they show your property, that their buyer might go around them and try and cut a deal with you. And, why not? It happens all the time. Some buyers, if they think they can save some money, will try anything.

    Without a listing agreement, there’s no guarantee that the buyer’s agent will be compensated. Even if the FSBO offers to pay the buyer’s side of the commission, most agents won’t want to go through a transaction with a self-represented seller across the table.

    This means the pool of potential buyers for FSBO homes is limited primarily to unrepresented and probably unqualified prospects.

3. For Sale By Owners is an attractive concept in a Seller’s market. However, when the market starts to turn cold history has shown that people tend to use Realtors.

4. In fact, a 2002 study on Home Sellers reports that the median sales price of an agent assisted home was 27% higher than ones sold By Owner.

5. For Sale By Owners are also locked out of many home search engines and Web sites including Realtor.com the number one site for buyers looking for homes for sale.

6. Buyers will feel intimidated. Potential buyers will spend less time in a FSBO home especially if the homeowner is present during the showing, and they’ll be shy about discussing it’s pluses and minuses with their own agent if the owner is within earshot.

7. Buyers will also be less inclined to make an offer if they know that they’ll be negotiating directly with the seller.

8. Having an agent on each side of the transaction creates an effective emotional buffer between the seller and buyer.

9. These are unusual times, the stock market and economic markets around the world are in a tailspin. Mortgage options are limited from what they had been, and the super jumbo loan rates have gone up significantly. This is not a good time to “test” the market.

10. And lastly, Buyers are worried about potential legal problems with For Sale By Owner sellers. As we all know real estate transactions are fraught with potential liability, particularly in California where there are extensive disclosure requirements. A For Sale By Owner who overlooks even one required form or legally mandated disclosure could face a protracted and expensive buyer lawsuit after the transaction closes.

Median Price Malarky

        The top headline in the November 16, 2007 Marin Independent Journal “Median Leaps to $978,000″ is not only misleading, but it borders on irresponsisble jounalism.  The problem lies in the statistics, and how they are misinterpreted by the media and public.  According to the Marin County Assessor, there are 61,500 detached single family homes and 13, 259 condo/townhouses in Marin.   This is the “population” used for the statistics.  These residences range from one bedroom condos to large estates.      The statistical problem with this population is that it is highly non-homogeneous.  Each month, only a very small percentage of these homes sell (200 to 300) and they are the only ones included in the statistics. More important, each month it is a different sub-set of homes that sell, so to compare the median price from one month to another month is absolutely meaningless, the IJ is comparing apples to oranges.     The median price statistic is rising because more high priced homes are selling and fewer lower priced homes are selling.  The president of the Marin Association of Realtors pointed this out in the article?   Because of this change in the mix, it is  incorrect to conclude that home prices in general are rising or are even flat.  Unfortunately, most of your readers will misinterpret the statistics…especially with headlines like ” Marin Real Estate Prices Climb Again!”     If you look at individual neighborhoods throughout Central and Northern Marin, you will see a mostly downward trend in selling prices with many sellers offering incentives to attract the few serious buyers.  Lender foreclosure sales are also starting to have an impact.  Lenders are starting to “dump” foreclosed properties to get them off thier books.     The fact that the number of sales is dropping (down 30 percent) is another indicator that supply and demand are out of balance and exposes the meaninglessness of the median price statistic.   How can prices be rising if demand is declining?   This is basic Economics 101….supply and demand.   With the exception of some prime Southern Marin properties, buyers can pick and choose, but mostly they are not buying at all.     If the IJ is going to report the median price home statistic, it would at least be helpful to include a disclaimer in the article that the statistic is completely meaningless for determining price trends.This editorial was reprinted with permission from it’s author, Keith Marsh, who is a certified appraiser in San Anselmo.  Keith’s phone number at work is: 415-456-9836 and his web site is: Keith Marsh

Bubble Bloggers, Virtual Doom and Gloomers with an occassional hint of humor

  This is not an endorsement of some profoundly virtual negative types. But, in the hope of creating (and maintaining) an open forum for ideas (whether you agree with these bloggers or not) here’s a little piece from the dark side of real estate blogs.  If you can look past the underlying bitterness that’s laced throughout these blogs, you’ll find that there are occassionally some creative insights, and great ideas.  Also, and this is the best part, the sarcasm and humor here is often pretty funny. Don’t take any of this too seriously , and enjoy.

Bubble Blogger links:

Reality Parser

The Housing Bubble Blog

Bubble Meter

Piggington

Paper Money

Housing Bubble Bust

Housing Panic

Housing Doom

Dr. Housing Bubble

House Bubble

Bubble Blogger’s Glossary:(the humor)Homedebtor (recent homebuyer): Perpetual debtor who will probably never own the house outright, thanks to cyclical refinancing (used to fund conspicuous consumption) and property taxes.Serial Refinancer: A homedebtor who is addicted to mortgage refinancing as a street addict is to crack. This type typically refinances several times a year for the purpose of “liberating” more equity to purchase such essentials as exotic vacations, plasma TVs, massive humvess, and anything bling!Loanowner: Another synonym for homedebtor, that more accurately describes what one really owns.Jealous Bitter Renter aka JBR: Someone who pays a homedebtor for the right to live in his home at a huge discount. (No downside risk of falling property prices, rising property taxes, or maintenence nightmares)Sheeple: Derogatory term for the vast herds of Homedebtors unaware of the bubble’s existenceAlligator: Investment property that eats more income than it generates, such as a neg-am Florida condo purchased in the last two years.McAlbatross: Play on McMansion. Homedebtor that cannot sell home. Described as living “under house arrest”Accidental Landlord: Cannot sell house and finds oneself in the position of becoming an unintentional landllord. This type is easy to spot.  Usually has simultaneous “for rent” and “for sale” listings on Craigslist.  Careful if you rent from an Accidental Landlord, if they sell house, the new owner may not honor the prior rental agreement.Buyer-User: Industry term for someone who buys a home to actually live in it.  An increasingly rare and endangered species.     Obviously, if you’ve found yourself caught between a rock and a hard spot none of this is too funny, and you have my deepest sympathies.  Markets run in cycles.  It is my belief that the market peaked in July and August of 2005.  As long as there are no acts of God (Earthquakes, Hurricanes, ect.) or terrorist attacks, this current market should turn around in the next couple of years.  Some areas of the country may take longer than others.   So, be careful, cautious, and talk to a reputable Realtor as to what your best options are.  All the best!

Congress and the Mortgage Industry

      Top economic minds have been clamoring for federal action to help out the estimated 2 million people who are in danger of losing their homes.  It may take more dire circumstances to push Congress ,and President Bush to do something.  Why aren’t the candidates running for the Presidency in 2008 making more of an issue out of this?     President Bush has suggested that borrowers could refinance their mortgages with fixed rate loans under a cautious remedy proposed by Bush.  This will only apply to the 80,000 who have 3% equity in their home and can prove their original loan was being repaid until it was reset.     Congress is divided on measures that would ease mortgage problems. Proposals include federally chartered mortgage companies to help refinance delinquent mortgages held by the kind of people that Bush’s plan won’t cover.     Later this month the Federal Reserve could cut interest rates, which would lower monthly payments for those struggling to pay their adjustable rate mortgages.  The Fed has issued guidelines urging loan service companies to work with borrowers who are in danger of default.     Banks could renegotiate loans.  The problem with that is that banks often sell their home loans to investors, so the original lender no longer has a stake in the credit.     The bottom line is that if the Fed doesn’t lower interest rates, more needs to be done.*  The mortgage industry can’t rely on the President and Congress to come to any kind of agreement. And, if that ever happened , how long before that could be implemented?     The American economy, since 1995, has been driven by the housing market.  Now, more than ever, we need some leadership from within the Mortgage Industy and Congress.  Stay tuned, this story seems to rewrite itself every day.*Yesterday discussions began regarding Fannie Mae and Freddie Back freezing some forthcoming rate increases for some adjustable loans that are set to reset.  This was seen as a positive beginning but right now we’re only in the theorhetical stages, so stayed tuned to see what happens.

Tips For Sellers

INTERIORS: 
  
     Appeal to the senses: There are many ways to create a more exciting and saleable interior, at surprisingly little cost.  I’ll briefly discuss the sensory selling tools that can have an enormous impact, then provide you with some suggestions:
LIGHT:   It is proven that people react more favorably to property shown under bright light than dark.  The following steps should help you keep your room as bright as possible.  Keep windows clean.  Use adequate wattage in light bulbs. Consider replacing old florescent lamps.  Use mirrors to magnify the feeling of light and space.  Use light wall colors.  Open drapes and blinds and turn on lights prior to showing.
COLOR: A fundemental rule when selling your house is to keep colors neutral and light.   Avoid highly patterened wallpaper whenever possible.  Limit bright colors to accents like flowers, towels,area rugs, and shower curtains.
SOUND: The sounds of peace and quiet are some of the best sounds to have when your home is being shown to a prospective buyer.  Other consideratons are: Avoid barking dogs and noisy children, if possible. Avoid sounds like vacumns,dishwashers,and lawn mowers.  Light classical or instrumental music can be effective to creating a pleasing atmosphere.
SMELL: Smell has more impact than you might expect.  The smell of newness is positive. Also, the smell of cleanliness is important to the selling enviroment of your home.  Fresh flowers can be very effective. Smells to avoid are: pet odors,tobacco,cooking,and oil or gas.PREPARING THE INTERIOR:
ENTRY: The entry is where the first impression of the interior is created.  Here you have the opportunity to make a big statement in a small area.  If need be: Repaint the entry using light, neutral colorss. Tile or linoleum flooring should shine.  Replace plastic switch plate covers with brass or porcelain.  A new hall light fixture can make a big impression.  Make sure area is well lit.
Entries/Halls/Stairways/Railings
KITCHEN: The kitchen is perhaps the most important room in the house.  Make sure the kitchen is virtually spotless and smells fresh.  Consider replacing outdated light fixtures with new track lighting.  If your appliances are dated by colors like harvest gold or avocado, consider having them professionally refinished in a new color like almond or white.  This will make the appliances look new at a fraction of the cost to replace them.  Spruce up cabinets by installing new knobs or hardware.  Organize cabinets to demonstrate how much room you have.  Remove small kitchen appliances from countertops to create an uncluttered look.  Chipped or damaged countertops should be replaced or repaired.

BATHROOMS:  The bathroom has become an important selling feature in today’s home.  It is a room that has moved from the utilitarian to the exciting.  There are many ways you can improve deficiencies and create interest by: Placing a vase of fresh flowers on the vanity. Install a wall telephone for a high tech look. Replace old toilet seat with a new one. Replace old light fixture with a new style light strip or make up light. Refinish an old porcelain tub using a porcelain finishing service.  Place all personal care articles out of sight.  Freshen air with lemon scented products.  Replace old towel racks with new ones.  Add color and richness with new towels and shower curtain.
Bathrooms/Powder/Master/Pool
LIVING ROOM: Use mirrors whenever possible to enhance the perception of size. Show fireplace off to its best advantage.  Sweep clean and make sure screen is in good condition.  Remember buyers look for “impressive living rooms!”
Living Rooms
BEDROOMS: The bedrooms can do as much to sell your house as they can to turn off a buyer. Make sure the bedrooms are spotless.  Organize closets to increase their perceived size.  Bedrooms should be well lit.
Bedrooms
THE END RESULT:  By showing attention to detail and understanding the buyer’s need to visualize your house against a neutral backdrop, you can dramatically increase the saleability of your property.   And, I will be very happy to assist you with recommendations to help your house sell for the highest price, with the best terms and conditions, in the shortest time possible.

Tips For Sellers

INTERIORS: 
  
     Appeal to the senses: There are many ways to create a more exciting and saleable interior, at surprisingly little cost.  I’ll briefly discuss the sensory selling tools that can have an enormous impact, then provide you with some suggestions:
LIGHT:   It is proven that people react more favorably to property shown under bright light than dark.  The following steps should help you keep your room as bright as possible.  Keep windows clean.  Use adequate wattage in light bulbs. Consider replacing old florescent lamps.  Use mirrors to magnify the feeling of light and space.  Use light wall colors.  Open drapes and blinds and turn on lights prior to showing.
COLOR: A fundemental rule when selling your house is to keep colors neutral and light.   Avoid highly patterened wallpaper whenever possible.  Limit bright colors to accents like flowers, towels,area rugs, and shower curtains.
SOUND: The sounds of peace and quiet are some of the best sounds to have when your home is being shown to a prospective buyer.  Other consideratons are: Avoid barking dogs and noisy children, if possible. Avoid sounds like vacumns,dishwashers,and lawn mowers.  Light classical or instrumental music can be effective to creating a pleasing atmosphere.
SMELL: Smell has more impact than you might expect.  The smell of newness is positive. Also, the smell of cleanliness is important to the selling enviroment of your home.  Fresh flowers can be very effective. Smells to avoid are: pet odors,tobacco,cooking,and oil or gas.PREPARING THE INTERIOR:
ENTRY: The entry is where the first impression of the interior is created.  Here you have the opportunity to make a big statement in a small area.  If need be: Repaint the entry using light, neutral colorss. Tile or linoleum flooring should shine.  Replace plastic switch plate covers with brass or porcelain.  A new hall light fixture can make a big impression.  Make sure area is well lit.
Entries/Halls/Stairways/Railings
KITCHEN: The kitchen is perhaps the most important room in the house.  Make sure the kitchen is virtually spotless and smells fresh.  Consider replacing outdated light fixtures with new track lighting.  If your appliances are dated by colors like harvest gold or avocado, consider having them professionally refinished in a new color like almond or white.  This will make the appliances look new at a fraction of the cost to replace them.  Spruce up cabinets by installing new knobs or hardware.  Organize cabinets to demonstrate how much room you have.  Remove small kitchen appliances from countertops to create an uncluttered look.  Chipped or damaged countertops should be replaced or repaired.

BATHROOMS:  The bathroom has become an important selling feature in today’s home.  It is a room that has moved from the utilitarian to the exciting.  There are many ways you can improve deficiencies and create interest by: Placing a vase of fresh flowers on the vanity. Install a wall telephone for a high tech look. Replace old toilet seat with a new one. Replace old light fixture with a new style light strip or make up light. Refinish an old porcelain tub using a porcelain finishing service.  Place all personal care articles out of sight.  Freshen air with lemon scented products.  Replace old towel racks with new ones.  Add color and richness with new towels and shower curtain.
Bathrooms/Powder/Master/Pool
LIVING ROOM: Use mirrors whenever possible to enhance the perception of size. Show fireplace off to its best advantage.  Sweep clean and make sure screen is in good condition.  Remember buyers look for “impressive living rooms!”
Living Rooms
BEDROOMS: The bedrooms can do as much to sell your house as they can to turn off a buyer. Make sure the bedrooms are spotless.  Organize closets to increase their perceived size.  Bedrooms should be well lit.
Bedrooms
THE END RESULT:  By showing attention to detail and understanding the buyer’s need to visualize your house against a neutral backdrop, you can dramatically increase the saleability of your property.   And, I will be very happy to assist you with recommendations to help your house sell for the highest price, with the best terms and conditions, in the shortest time possible.

Changes in the Mortgage Industry

     Your probably aware that there are problems in the mortgage industry in the sub prime and Alt-A lending arena.  The problems occured because underwriting standards became too lax.  This has resulted in higher incidences of mortgage defaults and foreclosures.
WHAT DO THESE CHANGES MEAN FOR THE LENDING INDUSTRY?
      * Some loan programs are being eliminated and underwriting guidelines are becoming more conservative.
      * The difference in interest rates between Conforming loans (less then $417,000) and Jumbo loans are 
      widening significantly, in some cases as much as 1.0% to 1.5%.
      * Fully documented loans are becoming the norm.  Stated income and asset loans will be requiring at least
      10% down and available only to well qualified buyers.
      * Mortgage insurance is coming back to help structure loans with less then 20% down.
WHAT DOES THIS MEAN TO REALTORS?
      * Stated income buyers will need high credit scores (720+) and a minimum of 10% down
      * Agents should “re-approve” their buyers
      * Always carefully review pre-approval letters
WHAT DOES THIS MEAN TO SELLERS?
      * Work with a trusted realtor (like myself) and lender (I can help direct you here)
      * The market for seconds has momentarily dried up…some exceptions
 WHAT DOES THIS MEAN TO BUYERS?
      * If your currently in contract to purchase talk to your lender and make sure that there are not any issues
      with your loan due to recent industry changes.
      * If you were pre-approved before 8/1/2007 you need to have your lender re-verify your terms in writing.

Mortgage Industry Meltdown

What’s Happening?
     In recent weeks, lending criteria for home mortgages have tightened considerably, making it more difficult and expensive to borrow when purchasing or refinancing a house.
What Happened?
     First, housing prices, after enjoying a huge run up over several years began cooling. Then, many borrowers who had taken out mortgages with low teaser rates could not make payments when those variable rates reset.  Mortgage delinquencies and defaults, especially in the sub prime market, began rising.
     As a result the secondary market on Wall Street for sub prime and other risky home loans dried up. Most home loans are repackaged and sold to investors.  Now, faced with nowhere to sell those loans and get fresh capital, scores of lenders all over the United States have closed, went bankrupt, or stopped making certain kinds of loans.
How will this affect Real Estate Sales?
     
In the short run the impact of this Mortgage “Crunch” may be profound.  Already in Marin County we’ve seen real estate transactions fall apart as lenders become more restrictive with their lending parameters. Right now, fewer of the remaining lenders are offering second mortgages, 100% financing, loans to people with poor credit, and “no doc” loans that require little evidence of income or assets.
      Even though there are some lenders that say they are still funding loans to those with good incomes, large down payments, and strong credit scores…consumers will pay higher loan fees to compensate for the fact that the market for repackaged loans is skittish and many lenders must keep these loans in their own portfolios.
      Stay tuned.  The immediate impact appears to be significant.  The Mortgage Brokers I’ve spoken to in Marin County believe this is temporary.  But truthfully, only time will tell.


If you need help check out:
www.bankrate.com  Free, online source for personal finance information. Has an entire section on mortgages and local rate comparisons.
Or, contact a reputable local mortgage broker!
 
     

     
    

What Realtors Do To Earn Their Commissions

What do Real Estate agents do to earn their commission ? Ever heard that question? Here’s a comprehensive and humorous take on that very question from a Home Inspector who’s worked closely with Real Estate practitioners.
   “They don’t do @*!?&% thing! Why they just stick a sign in the yard and make easy money.  I could do their job any day of the week.”
   Well, maybe you could do their job.  But it just won’t be any day of the week.  And if you intend to be successful at it (which means satisfying a bunch of clients, mortgage lenders, appraisers, and countless other associates), it will probably be EVERY DAY of the week as well as most nights, weekends, holidays, anniversaries, special occasions, sick days, snow days, and unpaid vacation days.
   Understood, there are Real Estate agents, and then there are good Real Estate agents.  Just like Doctors, Lawyers, and Indian Chiefs.  This article is about the good ones.  The ones who go to work before,during, and after the times mentioned above.
   To serve their clients and stay competitive in their profession, today’s Real Estate agent are expected, assumed, requested, required, and or demanded to perform, be knowledgeable of or have access to the following: Information Brokerage Services, Multiple Listing Services, tax rate adviser, appraiser, mortgage lender,financial planner, legal expert, credit counselor, city planner (fortune teller),building inspector, chauffeur, shuttle service, travel agent, tour guide, delivery boy, order taker, public relations expert, therapist,marriage counselor, family doctor, nurse, baby sitter, advertising executive, general contractor, construction estimator and superintendent, and multi-talented subcontractor (not excluding locksmith, yard man, maintenance man, garbage man, plumber, electrician, decoder scientist for alarm systems and programmable thermostats).
   They’re often perceived as the bad guy when interest rates go up and the bad guy when your house doesn’t sell by 10am the next day.
   It’s helpful if their talents include being a diplomat, a negotiator, a referee (similar to those used in Roller Derby and Monday Night Wrestling) and, in general, a walking bureau of information for everything about anything – including whose check is good and whose wife or husband isn’t.
   They must know about schools, churches, governments, public utilities, crime rates, world affairs, this weeks jail term for this weeks Environmental Protection Agency violations, future developments that no one has ever dreamed up yet, transportation, shopping, day care, soccer, T-ball,how many termites it takes to eat a house, every homeowners association formed since 12 BC and what kind of fences they don’t allow, should you water and fertilize the Bermuda grass before, during, or after mowing, the best place in town to buy pizza, if you can buy beer on Sundays, and at least two dozen other skills and talents that I don’t have room to mention.
   So, be nice to your broker/agent.  Next time you start thinking. “They have it so easy”, go spend a day with them.  You’ll soon realize that, like most of us, they work hard for their money, and your satisfaction really is important to them.

Mark Lomas              Marin Real Estate Blog                    MarinCountyRealEstate@gmail.com

Neighbors from Hell?

     Earlier this year ,Diane Tuman of Zillow.com, posted an article in Zillow’s Real Estate Blog in response to an article/post from Bradley Inman’s Inman Blog about a “Noisy Neighbor from Hell”. The article Diane posted led with the above photo in which a neighbor war in Utah led one neighbor to install a vent on his house in the shape of a middle finger salute.  He would not remove it until his neighbor apologized.  They did and he did.

     How many neighbor from hell stories are there out there?  Your stories are more then welcomed!

     For those Realtors that live in California, you should be aware of an initiative passed by the state, that could forever change your thinking on what  a residential neighborhood is.   The Marin Independent Journal has been reporting on a property owner in San Rafael that has been purchasing homes in a fairly exclusive subdivision of San Rafael.  Each of these homes has been converted into commercial Rehabilitation facilities.  When the neighbors found out what their new neighbor was doing, with these homes he’d just purchased ,they then found out that the State of California  supports this kind of commercial property use in residential areas.  By passing this initiative the State allows the commercial use of a property to supersede existing zoning regulations.  Think the neighbors are happy about this? 

     One party doesn’t have to play by the rules that everyone else does.  And that individual is increasing their property values at the expense of their neighbor’s property values.

     Has a precedent been set here? Can the new property owner that’s operating these rehab facilities
(for alcoholics and drug addicts), then sell the property to someone else who wants to run a similar business
for profit?

     This is only the beginning.  Another similar initiative passed by the State of California allows for large commercial Day Care Centers also to be placed in residentially zoned neighborhoods. And, as in San Rafael, the State super cedes existing zoning regulations.  One such Day Care Center is operating in Tiburon, California. 

     Is their a Rehabilitation Facility, or a large Day Care Center moving into your residentially zoned neighborhood?    Don’t be too sure….   

     Please, if you have any interesting Neighbor’s From Hell stories, I’d love to hear them ! 

Realtors, 8 Safety Tips to Protect Yourself

 It never hurts to be careful in this crazy world we live in.  Here are 8 tips for Realtors to consider so they can protect themselves. We work in a very unusual work environment, where occassionally we are meeting strangers.  Recently, in a Mill Valley, California Real Estate office, a well dressed couple walked in, and robbed the floor agent.   Another couple with a similar profile has been also robbing houses throughout the Bay Area.    If you feel this information is helpful, please pass it on to someone you know.

      1.  (Tip from Tae Kwon Do)  The elbow is the strongest point on your body.  If your close enough to use it, do!
      2.  From a tourist guide in New Orleans.  If a robber asks for your wallet or purse, Do Not Hand It To Him!  Toss it away from you…chances are he’s more interested in your wallet or purse than you, and he will go for the wallet or purse.  Run like mad in the other direction!
      3.  If you are ever thrown in the trunk of a car, kick out the back tail lights and stick your arm out the hole and start waving like crazy.  The driver won’t see you, but everybody else will.  This has saved lives.
      4.  Women have a tendency to get into their cars after shopping, eating, working, ect. and just sit (doing their checkbook, or making a list, ect. Don’t Do This!  The predator will be watching you, and this is the perfect opportunity for him to get in on the passenger side, put a gun to your head, and tell you where to go.  As soon as you get into your car, lock the doors and leave!
         If someone is in the car with a gun to your head…Do Not Drive Off, repeat Do Not Drive Off! Instead gun the engine and speed into anything, wrecking the car.  Your air bag will save you!  If the person is in the back seat they will get the worst of it.  As soon as the car crashes bail out and run.  It is better than having them find your body in a remote location.
      5.  A few notes about getting into your car in a parking lot, or parking garage:
      A. Be aware: look around you, look into your car, at the passenger side floor, and in the back seat.
      B. If you are parked next to a big van, enter your car from the passenger door.  Most serial killers attack their 
          victims by pulling them into their vans while the women are attempting to get into their cars.
      C. Look at the car parked on the driver’s side of your vehicled, and the passenger side.  If a male is sitting
          alone in the seat nearest your car, you may want to walk back into the mall, or work, and get a guard
          or policeman to walk you back out
          It is always better to be safe than sorry  (and better paranoid then dead)
       6.  Always take the elevator instead of the stairs   (stairwells are horrible places to be alone and the perfect
crime spot.  This is especially true at night.     
      7.  If the predator has a gun and you are not under his control, Always Run!   The predator will only hit you (a running target) 4 in 100 times: and even then, it most likely will not be a vital organ.   Run, preferably,  in a zig zag pattern!
      8.  Women try to be sympathetic: STOP.  It may get you raped or killed. Ted Bundy the serial killer, was a good looking, well educated man, who always played on the sympathies of unsuspecting women.  He walked with a cane or a limp, and often asked for help into his vehicle or with his vehicle which is when he abducted his victims.
       Not too long ago I was leaving a Broker’s Open House with a friend who’d used his lockbox for us to gain access to the property.  As we were leaving, a very good looking young couple pulled up in a brand new BMW and pretended they were agents also out on the Wednesday’s Broker’s tour for Southern Marin County.  They said they were agents, and could we leave the door open so that they wouldn’t have to use their lock box key.  My friend trusted them and let them in,  and the next day he was called by the listing agent (Marin County lock boxes code who was in the house, and at what time) to find out they had robbed the house.  Fellow realtors, please be careful, and all the best. 

Careful when considering using an Online Lender

         If you’re the kind of person that is more comfortable working with people  virtually, Online Lenders might be a good place to start shopping for a loan. But, if you’re the kind of person that likes to deal directly with the person that will be delving into your personal finances, there definitely are merits to working with a local lending institution or mortgage broker. Now more so then ever with all the recent events that are taking place in the Mortgage Industry.        A few years back Realtors were concerned when they found out that their buyer was working with an Online Lender. Oftentimes mortgages originated online closed late causing all kinds of problems. If your loan isn’t approved within the time frame set forth in the contract, or doesn’t fund on time to close, your out of contract. 

        I was working with a couple that had been Pre-Approved online not too long ago. When it came time to remove our loan contingency they were advised to do so by the Online Lender.  Then, when it came time to close escrow, the Online Lender decided that they would not fund the loan? Two days before closing, we found a local lender that was able to fund a week later, and they went ahead with their purchase. What a roller coaster ride!
       Initially, the only way to communicate with this Online Lender was via email.  When things went south, they were able to get a phone number for a manager that wasn’t always easy to reach?

                  Dian Hymer, an excellent journalist that is featured in the Marin Independent Journals Home and Garden section reported, “Anecdotal evidence suggests that the world of online lending has improved. Recently, well-qualified buyers with a large cash down payment had no trouble closing the purchase of their new home on time using an online lender. However, there were a few hiccups along the way.

                  Fortunately, they were hooked up with a good real estate agent who helped the process along. The buyer’s agent knew that the seller of the property was a stickler for detail and unforgiving by nature. So the agent encouraged her clients to submit a second application to a local mortgage broker. That way, if the online lender failed to perform at the last minute, the buyers could proceed with their second option and close the purchase.

      The appraiser sent by the online lender was from out of the area and knew nothing about the 
local market. The agent provided the appraiser with comparable sales information that was appropriate for the property in question. Armed with this information the appraiser was able to turn out a finished report in two days.”

      Dian also suggest,”You may be able to find a lower interest rate or fees online but there is likely to be a tradeoff in terms of service. Buyers whose loan qualifications are marginal, or buyers who are trying to buy in a competitive market, will probably have better success working with a local mortgage professional.”

Dian Hymer is featured regularly in the San Francisco Chronicle and the Marin Independent Journal.
Marin Real Estate      Mark Lomas    2007

To Zillow or not to Zillow?

            Zillow.com is a web site that does property valuations.  In uniform neighborhoods and new subdivisions, this web site has demonstrated a reasonable degree of accuracy.  In many neighborhoods throughout Marin County though, where the homes and neighborhoods are quite diverse, Zillow.com’s accuracy is questionable.  Take a moment and check out their web site.  At best, it can be helpful in providing information about a property, and sometimes a reasonable estimate as to the property’s value.  Regardless, Zillow can be very entertaining.  
  
          Zillow.com raised $32 million during its pre-launch, which was marked by a huge publicity campaign.  Here’s a company that didn’t unveil its business model or intent until it released a beta version in February and its site stalled on the day of its debut.  Anyone can dip into Zillow.com’s two terabytes of data on U.S. homes and learn Zillow’s estimates, or “Zestimates”, of their home’s current value or some variation thereof.

          Chris Lyman, a partner in a Napa public relations agency, bought a second home in Scottsdale, Arizona for $330,000 in 2003.  He said strong appreciation in the region has roughly doubled the price of the home since then, but Zillow’s estimate put the property in the $500,000s – at least 10 percent below what he believes is the true value.  “At that point, it went from being a tool to a novelty,” Lyman said. “It doesn’t have the strength that  I would rely on those numbers.”  A new home on Palmer Avenue in Tiburon, California is listed by Zillow.com as being worth $1,780,000, and could be listed hundreds of thousands of dollars below its real value in today’s market.

          So, unless you live in an area where all the homes are identical, and typically sell for the same amount as one another, enjoy Zillow.com for what it is, and then talk to a professional.

         If you look to the right of this column you’ll see a list of links or “Blogroll” which includes a link to Zillow.  Also, check out Zillow’s Blog!  It’s excellent, and also offers links to other local real estate blogs.      

www.marinrealestateblog.com

www.technopanorama.com

www.MarinCountyDirectory.com