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National Association of Realtors Projections

by Lois Cox and Keeping Current Matters

IT'S A GREAT TIME TO BUY!

2014 Projections BlogSize

 

Community Service Day 9-27-13

by Lois Cox

 

  Lois and fellow agent Cindy Engel 

Pleasanton Prudential Helps Out Local Seniors

It was a rewarding day for all as real estate agents of Pleasanton’s Prudential California Realty helped local seniors as part of Prudential’s company wide Community Service Day.  Armed with brooms, paper towels, cleaning products and rubber gloves, agents attended a short instructional meeting at the Senior Housing on Case Avenue in Pleasanton. Agents swept floors, washed windows, cleaned bathrooms, flipped mattresses, made beds and ironed, “We basically did whatever the senior needed help with” said our in office community organizer, Karla Brown. Prudential is committed to caring for the people and communities where we live and serve. This is only a small part of our involvement with our community. Prudential’s Pleasanton office is involved annually in Shredding Day, Pleasanton Military Families Pack Out (for local service men and women), Can Food Drives, Toys for Tots Collection, Warm Coat Drive and Santa Photo Day. It’s all about giving back to the community that we love. It’s the little things that count the most, just ask the seniors they helped!

Mortgage Rates After Bernake Announcement

by Lois Cox and Keeping Current Matters

bigstockphoto_Property_Prices_814896Last week, Bernard Bernanke startled many by announcing that the Fed will not wind down their bond buying program right now. The program is part of an overall stimulus package geared at bringing back the national economy. The Fed’s purchase of these bonds over the last few years has driven mortgage rates to historic lows. The assumption that there would be a reduction in bond purchases has caused 30 year mortgage rates to spike upward over the last few months.

Surprisingly, Bernanke revealed the Fed will continue bond purchasers at the current pace. What happened and what does it mean to mortgage interest rates?

What would have happened if they reduced bond purchases?

According to Bankrate.com:

“The Fed could have caused rates to shoot up this week if it had announced the tapering of its bond-purchasing program.”

Why did the Fed decide not to start winding down bond purchases?

Moody’s Analytics reported that there were three reasons:

  1. Subpar economic data
  2. Tighter financial conditions
  3. Uncertainty surrounding fiscal policy

What does this mean to a buyer applying for a mortgage?

Those at Bankrate.com explain:

“For now, borrowers have dodged another spike in rates. The Fed's announcement might even cause rates to drop in coming days, says Paul Edelstein, director of financial economics at IHS Global Insight.

‘Mortgage rates should fall back -- not massively, but to some extent,’ he says.

That doesn't mean homebuyers and homeowners should wait for lower rates, mortgage professionals say.

Eventually, once the Fed lets the mortgage market and the economy start walking on their own, rates will probably head back to the 5 percent or 6 percent range, says Scott Schang, manager for Broadview Mortgage Katella in Orange, Calif."

When will the Fed begin winding down bond purchases?

According to an article in the Wall Street Journal:

“Federal Reserve policy makers decided this week that the economy isn't in the right place for them to start winding down their bond-buying program. By the time they meet in December, it might be.

The decision to not start winding down the bond-buying program now was close… The economy only needs to get a little bit better over the next few months for the central bank to get its nerve back. That should be an easy bar for the economy to clear.”

Bernanke himself has not ruled out that the Fed could still scale back the stimulus this year. He stated:

"If the data confirms our basic outlook, then we could move later this year.”

Bottom Line

Ed Conarchy, a mortgage planner at Cherry Creek Mortgage in Gurnee, IL had a great quote in the Bankrate article:

"Remember that rates go up like a rocket and fall like a feather."

Still, Bankrate.com itself probably put it best: Grab the gift before it's gone!

Coffe and Bagel OR Financial Fredom??

by Lois Cox and Keeping Current Matters

 

http://mortgagecoach.com/skip-the-bagel/

Today’s InfoGraphic courtesy of our great friend Dave Savage from Mortgage Coach.

 

What to Consider When Buying a New Second Home

by Lois Cox and Keeping Current Matters

Today I am happy to have Mark Scheets, a writer for Total Mortgage Services, as my guest blogger. –

http://www.kcmblog.com/wp-content/uploads/2013/09/Adirondack-Chairs.jpgSooner or later you may reach a point in your life where you are financially stable and plan to purchase a second home.  For the most part, people who look to buy a second home are either looking at it as an investment or somewhere to vacation.  It is important to become familiar with the process when looking for and making the decision to purchase a second home.

Purchasing a second home is similar to the purchase of your first home, but there are also some important differences that you may not be aware of.  Two of the most important things to consider when buying a second home are to know what you’re looking for and how much you can spend before beginning the process.

When considering buying a second home, timing is a big aspect of the purchasing decision.  If you are in the middle of your career or ready to retire, you need to ask yourself what is the point of buying a second home.  Many homeowners will ask themselves “Do I want to use this home as a personal retreat or as a rental property?” Another question often asked is “Can I afford this?”  You may have to wait 6 months or a year, but having a good understanding of the current market and knowing when you are planning on making the purchase, will get you what you want.

Get Help

One step that will benefit you when looking for a home, is hiring an agent.  Most people find their agents through friends, family members or colleagues.  The agent’s job and expertise is in helping guide you down the correct path and being there to answer whatever questions you may have.

Do Your Research

Your second home can be whatever you want it to be, but one thing to keep in mind is that the location and property need to be a good fit with your current lifestyle.  A good idea for buying an investment property is to make sure that it is somewhat near your current home, in order to be close to it in case of an emergency.  When considering a vacation home, especially one that is far away, it is a good idea to talk to the locals who live there to get their prospective on the area.  This is important because you will not be at the house year round; and you need to see yourself enjoying living there.

Whether you have planned to purchase a second home for years, or have finally started considering it, it is extremely important to make sure all of your finances are in order.  It is a good idea to know exactly what is needed financially to get your plan into motion.   When applying for a second mortgage, there will be stricter lending and mortgage requirements, especially if you will not be living in that home.

Be Prepared

Another aspect to take into consideration is your taxes, which will be based on the use of your second home.  The IRS has declared “if you live in your home for more than 14 days, or more than 10% of the time you rent it out in a year, then it is considered your personal residence”.  If these conditions are not met, your home will be considered a rental property and you must report all rental receipts as income.

When the time comes to finally figuring out how to purchase your home, weighing your options are important.  It’s good to know that buying an existing home is far cheaper than buying land and building.  Many people with second homes have made financial mistakes with their home and are looking to sell quickly to cut their losses and move on.  This fact could help a buyer if the house is similar to what they are looking for, as it can be had for a cheaper price.

A mortgage on a second home will have a higher interest rate than one on a first home.  It might be a good idea to consider a home equity line of credit (HELOC).  A HELOC allows the buyer to tap into their existing home’s equity so that you can provide a bigger down payment.

Protect Yourself

If the time ever comes where you decide you would like a second home, make sure that you do your research.  Being aware of what you are getting into is always smart before diving in.  There are various differences between the ownership of a primary home compared to a secondary home and knowing these differences will help out immensely.  However you decide to use it, those who pursue the ownership of a second home will have to take extra precautions in protecting their investment.

 

 

Housing Inventory Making a Comeback!

by Lois Cox and Keeping Current Matters

neighborhood_v12

Housing Inventory Making a Comeback! 

The shortage of homes for sale earlier in the year created an imbalance of supply to demand which resulted in double digit year-over-year price increases nationally. According to a recent Wall Street Journal article, the inventory of homes for sale is now beginning to reach more normal levels. The article reported:

“Housing inventories increased in August and stood just 2.5% below their levels of a year ago, offering the latest sign that more sellers are testing the market after swift home-price gains over the past year.

Nationally, there were 1.98 million homes listed for sale in August, according to a report released Thursday by Realtor.com. That was up by more than 24% from the low point in February and up 1% from July. Inventories have increased for six straight months.”

What about Home Prices?

This doesn’t mean prices will collapse. The inventory levels are still depressed, just improving. As the article mentions:

“While the overall level of homes for sale remains relatively depressed, the report suggests that inventory may have hit a bottom earlier this year after an extended two-year decline.”

However, as we mentioned last week, properly pricing your home in this market can be tricky. You should depend on the advice of your real estate agent.

Pricing Your Home To Sell Quickly

by Lois Cox and Keeping Current Matters

 

House price tagThe housing market is finally recovering. Sales are up and so are prices. That means good news for anyone thinking about selling. However, we must be careful not to fall into the trap of over exuberance. Pricing a house incorrectly when it is first listed for sale can be a huge mistake.

Ken H. Johnson, Ph.D. at Florida International University and Editor of the Journal of Housing Research, referring to previous research by John Knight, revealed:

“Sellers as well as Brokers/Agents should therefore be aware of the critical necessity of getting the price correct from the start. Sellers wanting to over list will ultimately take longer to sell and will sell their property for less, on average, according to Knight. Brokers/Agents’ desire to take a listing and get the price right later will ultimately lead to their working harder according to Knight, and they are not doing their sellers any favors.”

Why Are We Bringing This Issue Up Now?

Recent price increases seen in housing have been the result of a lack of salable housing inventory across the country. This inventory challenge is beginning to correct itself and many believe that price increases will begin to taper off.

Bill McBride, the author of the renowned economic blog Calculated Risk, explains:

“I think that inventory bottomed earlier this year, and that the NAR will report a year-over-year increase in inventory very soon (probably for September). As more inventory comes on the market, buyer urgency will wane and price increases will slow and even decline seasonally in many areas this winter.”

If you are putting your house on the market, make sure you consult with a real estate professional before establishing your price. That is the only way you can guarantee getting top dollar in this market.

Displaying blog entries 1-7 of 7

Contact Information

Lois Cox
Berkshire Hathaway HomeServices Drysdale Properties
4725 First Street, #150
Pleasanton CA 94566
925-400-7301 Direct
Fax: 866-466-7886

Cal BRE# 01005829