C.A.R Mortgage Updates
July 1st, 2009 categories: Buyer's Advice, Seller's Advice
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Weakness in mortgage refinancing
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http://online.wsj.com/article/SB124508720715715781.html
http://www.mercurynews.com/realestatenews/ci_12603922
California housing market shows pockets of recovery
A surge in home sales that started in some of California’s more affordable inland areas has begun to spread to several more expensive coastal areas, another indicator that the state’s real estate market may be in recovery mode.
KEEP THIS IN MIND
- Many homes in the lower end of the market are receiving multiple offers, with some prospective buyers bidding well above asking prices. Inventory levels for homes priced under $500,000 stood at 3.2 months in May 2009, compared with 9.4 months in May 2008.
- Some buyers, especially those in historically higher-priced markets such as the San Francisco Bay Area, are newly optimistic about buying homes and are realizing that the combination of low interest rates, favorable home prices, and first-time home buyer tax credits may not realign for many years.
- Some housing economists caution against interpreting signs of increased sales activity as meaning the market has bottomed. Interest rates on 30-year, fixed-rate prime mortgages have risen above 5 percent in recent weeks and could continue to increase as fears of inflation impact interest rates. Additionally, the federal tax credit for first-time home buyers is scheduled to end November 30, which may remove the incentive to purchase.
- Although the median price in the state has risen for four consecutive months, prices in some higher-income neighborhoods still are declining. Some agents say that declining prices in these neighborhoods are a reflection of borrowers’ problems getting jumbo mortgages to make purchases.
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http://online.wsj.com/article/SB124545407944432853.html
The Los Angeles Times
Forecast for California: gradual clearing
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http://www.latimes.com/business/la-fi-cal-econ18-2009jun18,0,6354615.story
The Sacramento Bee
Leading economic indicators up more than expected
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http://www.sacbee.com/830/story/1957522.html
CNN
$6 billion available to buy foreclosed homes
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http://money.cnn.com/2009/06/23/real_estate/money_for_foreclosures/index.htm?postversion=2009062312
The Sacramento Bee
Sacramento area misses move-up home buyers—they’re staying put
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http://www.sacbee.com/business/story/1959684.htm
San Francisco Chronicle
Appeal assessment if you think it’s too high
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http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/06/21/BUGJ18ABE8.DTL&type=business
Reuters
Echo boomers a lifeline for embattled U.S. housing
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http://www.reuters.com/article/smallBusinessNews/idUSTRE55L0AO20090622
The Los Angeles Times
Home resales in U.S. rise 2.4% in May to 4.77 million rate
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http://www.latimes.com/business/la-fi-homesales-wire24-2009jun24,0,2268595.story
Bloomberg
Housing eludes recovery as job losses, foreclosures climb
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http://www.bloomberg.com/apps/news?pid=20601213&sid=aw.NN1SqL7xk
What you should know about the market…
• Buyers who are having difficulty arranging financing or coming up with a down payment
may want to consider rent-to-own or lease-options. Generally, these deals require buyers to pay
extra amounts of rent each month, in addition to the normal market-rate rent, plus up-front fees
of approximately 5 percent of the purchase price. The owner keeps the regular rent, but the
additional payments are used to buy down the price of the home. While rent-to-own options
may be a viable choice for some buyers, most real estate experts recommend buyers and
sellers work with attorneys experienced in drafting lease-option agreements.
• Although rent-to-own options enable buyers to walk away from the deal for a variety of
reasons, including deciding the home or neighborhood isn’t a good fit; one drawback is that by
walking away, buyers agree to forfeit the up-front fees and the additional monthly rent they’ve
been paying. Additionally, at the end of the term, if the buyer still is unable to secure financing
they also may have to forfeit the money.
