 |
Roseville Real Estate Agent Ken Patterson explains “Why Roseville CA is a great place to Buy a Home!” I don’t know Ken, I just found this blog post and wanted to share it with everyone because he seems to love Roseville as much as I do, well almost as much =), so I asked him if it would be OK to share his post…
But I’m sure you all know what it’s like when you’re driving a country road for the first time and it widens from nearly a one-lane experience of fright to a broad two-lane ‘highway’ that locals take at about 70 miles per hour. Then, suddenly and unexpectedly, the road goes from smooth concrete to asphalt to gravel, and you pull to the side, wondering what’s up ahead and whether you’ll survive it. So it is with the economy today, at least where real estate is involved. Many observers, whose words we find scattered through the financial press, are breaking out the champagne. Derek Kravitz and Alex Veiga, both of whom write prolifically for the Associated Press, recently had this to say, for example: “Five years after the U.S. housing bust sent sales and prices plunging, the spring home-buying season is pointing to a long-awaited recovery. Reduced prices, record-low mortgage rates, higher rents and an improving job market appears to be emboldening many would-be buyers. Open houses are drawing crowds. A wave of foreclosures is leading investors to grab bargain-priced homes.” Which is all pretty great—smooth driving on a newly-cemented road—but the patches of unimproved gravel continue to intrude on our progress and make the driving feel dangerous. The most recent completed sales computations, given the apparent improvement in related indicators—especially jobs—were disappointing. For sales completed in March, existing home sales fell off 2.6%, while new home sales were off by 7.1%. Even pending sales brought little solace, since newly-signed contracts dropped by 0.5% in February. (The index for March will be released tomorrow, on Thursday, April 26.) There are a few mitigating circumstances. For example, there was a striking annual decline of 2.5% in the number of existing homes on the market. And the new home sales looked especially weak because of upward revisions to the number of sales in prior months—40,000 in February, 11,000 in January. Still, these don’t appear to be the sorts of dazzling numbers that would usher in a certain and sustainable recovery. If I may climb aboard another metaphor, we should recall that the real estate market—like an ocean liner—takes a lot of time to turn around and often brings to mind the surprises that greeted the Titanic, the unsinkable ship, long ago. Our progress toward a truly sustainable market, therefore, is almost always attended by some fits and starts. But this is not a bad thing for everyone. Certainly, there are those of us who have about run out of the ability to keep holding our breaths, waiting for the ‘All Clear’ signal. Actually, I suspect this economy will continue to generate concerns and uncertainties for many months to come, if not until the cows come home. Meanwhile, the good part. There is still time, brothers and sisters. We don’t have to rush into the market with our checkbooks in our back pockets, pens at the ready, trying to grab a great deal and good financing before they’re gone. What we have here is a window of opportunity when nearly all the ingredients have come together—even the amount of time needed to engineer a solid transaction. This will surely pass, so the time to act on all of this is now. And there’s something to watch very closely. Even major financial houses are beginning to see that investing time and energy into streamlining the ‘short sale’ process can potentially save them a lot of money over the cost of disposing of a property in a foreclosure. If they can make this work…if the market moves in favor of short sales (there were apparently more of them in January than foreclosure sales for the first time ever)… we may eliminate the heavy, dark clouds with which imminent foreclosures continue to threaten the real estate recovery.
The difference this time is there is no homebuyer tax credit incentivizing people to buy ASAP. It’s truly the market (low prices and low rates), along with an ever so slightly but consistently improving economy and job market, doing its thing here. Check out the data (median sales price from March 2011 – March 2012)… Placer County Homes: 6% increase Sacramento County Homes: 1.3% increase Sutter County Homes: 9% increase Nevada County Homes: 9% increase Yolo County: Flat (no increase/decrease) El Dorado County: 5% decrease This is no guaranty that home prices in Placer, Sacramento, or any other county are on the rise, or that the market is back on track to normalcy, but coupled with all of the news I share with you on a regular basis about declining defaults and foreclosures, as well as other less talked about real estate market data it seems pretty clear to me… A more normal market, a market that will appreciate at a more normal rate going forward (1-6%), isn’t just hopefully thinking, the data tells us it’s already here. I puzzled over a bit of seemingly self-negating information Tuesday. Housing starts in the month of March declined by a striking 5.8%. This takes some of the wind out of our sails. Obviously, we don’t get to continue moving toward a sustainable recovery on a straight, easy-to-negotiate path, it’s a little more complicated than that. This should not surprise us, even if it shakes us up a bit. The other possibility, of course, is that we’re not moving securely down the recovery trail at all, and the remaining gloomsters who see us – particularly the real estate market – dropping off the edge of the earth sometime soon are giving each other high-fives because of their seeming sagacity. Pay no mind – not even to the wonderful Nouriel Roubini. We are still headed in the right direction, for the most part. After all, the seemingly self-negating portion of this indicator was that, while March starts fell by 5.8%, builders bought up 4.5% more housing permits than they did in February. Does this mean that builders are less sanguine about today’s market but, at the same time, a bit more optimistic about the future of the market – say, three plus months in the future??? It very well may. And it would serve us well to remain aware of the fact that large construction firms, lenders and real estate brokers are readying themselves for sizable growth in real estate sales – not tomorrow, but not too long after tomorrow either. We read a lot about how things will be visibly improved in 2013, we’ll see… In the meantime we ready ourselves for the possibility. Actually, last week’s was a tepid serving of economic indicators, at best. Even the fact that the Freddie Mac average fixed rate for 30-year mortgages fell to within one basis point of its all-time low of 3.87% barely elicited a smile on the face of the markets. One little piece of information, though, seemed to me extremely relevant – and under-reported: This past January saw more short sales close nationally than foreclosures. Stay with me on this. The number of foreclosures on the market has tightened up a bit. The people at DataQuick, who watch this sort of thing, warned us not to get too excited because there is still a mountain of foreclosures to process. The lenders, they said, are just pausing for a time – then watch out! Foreclosures everywhere we look! But here’s how it’s actually working. Lenders are finally discovering that they can process short sales in less time and at significantly less cost than foreclosures. Consequently, they’re putting fewer foreclosures on the market. Consequently, market inventory of distress properties has declined. And consequently, fewer homes are selling each month. Nowhere is this more true that the Roseville and greater Sacramento market, where real estate inventories are near all time lows. However, more homes are selling as short sales, which – if done right – makes everyone a lot happier and costs less to accomplish. Good deal! We may at last be in the first stages of developing short sale systems that are truly efficient and cost-effective. And these short sales may just prove to be the first version of a new generation of mortgages that meet the needs of individuals more precisely, and are far less likely to be hit by defaults. Lastly, of course, a more efficient use of short sales is surely the best way to establish the floor of today’s real estate values and to get distress sales off the back of our real estate market. The overall local economy, as well as that of the entire nation, would benefit greatly from that. We’ll see, but so far, this looks like good news and quacks like good news. It must be good news, therefore…. Some facts about the recent Mortgage Relief agreement between the banks and, well, us… FACT#1: The main fact here is that mortgage servicers will be required to contribute $20 billion to various forms of relief to borrowers. FACT #2: Of said $20 billion no less than $10 billion will be dedicated to reducing homeowner’s mortgage balance that owe more on their mortgages than their homes are worth and are either currently delinquent or at imminent risk of default. FACT #3: At least another $3 billion will be dedicated to a new refinancing program for borrowers who are current on their mortgages but are underwater. All borrowers who meet some basic eligibility criteria will be eligible for the new refinance program, which will reduce interest rates for borrowers who are currently paying much higher rates or whose adjustable rate loans are due to have their rates increase in the near-term.
FACT #5: As an enticement for servicers to provide relief more quickly, there are incentives for a tangible benefit provided within the first year, on top of that there are additional penalties for any servicer that fails to meet its obligation within three years. FACT #6: Servicers will receive only partial credit for every dollar spent on some of the required activities, so the settlement will provide direct benefits to borrowers in excess of $20 billion. FACT #7: In addition to the $20 billion for financial relief for homeowners servicers will make an additional $5 billion in cash payments to the Washington DC and all 50 participating states. That $5 billion will include…
FACT #8: As part of the deal servicers are agreeing to implement extensive new servicing standards, designed to correct the kinds of conduct that caused a need for this settlement in the first place.
FACT#9: You probably are tired of all these facts! But it’s important to know that Californians are to receive the lion’s share of the relief, $18 billion of the $25 billion! If you’re unemployed and in danger of going into default on your mortgage the nation’s Government Sponsored Enterprises (GSE’s), Fannie Mae & Freddie Mac, are making some important changes to their foreclosure and forbearance (when the bank suspends collection of payments for a period of time, kind of like a timeout on making payments) policies.
That’s adding up to a year to get back on track before any sort of foreclosure process begins! There are some exceptions to the new rules however. The house must be a primary residence, not an investment or second home. And the mortgage must be backed by one of the GSE’s themselves, not FHA or VA, and not a private/portfolio loan held by the bank themselves. That covers the basics. But, of course, there are some more details that might affect you. If you have any questions, please ask! I’m always here to help… Greg The median sales price for homes in Roseville CA for the period of Sep 11 to Nov 11, 2011 was $253,000. This represents an increase of 3.3%, or $8,000, compared to the prior quarter, however median sales price simply isn’t as much of a telling statistic as most of the media portrays it to be and in my opinion tells us nothing about the direction of actual property values, only where the most activity in the market is. As you can see from this ever volitle chart. The average listing price for Roseville homes for sale was $300,389 for the week ending Dec 28 (according to Trulia.com). For what that is worth.
Average price per square foot for a sold home in Roseville has been flat all year at about $133, where it ended the year (but it was close to that all year and hasn’t really changed all that much since the big drop of 2008).
This is my first shot as detailed, hyper-local (Roseville) market data. It should get better over time but let me know how you like it in the meantime. ~Greg
Home sales in the Sacramento region rose yet again last month, beating the rest of the state (which also rose with us, only not as much). Over 2,400 homes sold across the region in November, up just shy of 12% year over year.
Most of the demand across the board was for moderately priced homes with volume being in the $200,000 and under range. Homes in the $200-300,000 range stayed about the same while sales of homes costing over $300,000 actually slowed a bit. Foreclosure rates are still higher than we want them to be (I’d like it to be at 0) however you’ll remember in previous posts that the number today is not what matters, it’s actually almost meaningless when it comes to predicting future distressed sales, the number we need to look at is actually how many homeowners are defaulting on their mortgage payments, a number that is dropping more and more every month. The “news” knows that what sells is fear, scary doom and gloom is what gets the most readers and hits to their website. And, while the picture is not the prettiest, it’s a lot prettier than it was in the not to distant past and much prettier still than the pictures the promoters of fear want to sell you. At the end of October there were 6.3 million homeowners currently behind on their mortgage in the US. A big number, right? However the data shows that this number has been on a steady decline for the last two years. In just January of this year that number was closer to 6.9 million. The January before (2010) the number was 8.1 million!
We’re seeing the benefits of this already in the Sacramento/Placer markets as housing inventory is at about a 2 month supply. A more “normal” or healthy market has about a 4 month supply of homes at any given time. I’m also seeing the home values of many of my clients, from midtown Sacramento to Roseville, see the values of homes they bought in the last year or so RISE (not a huge rise, but that is better than declining or even being just flat). This doesn’t mean a reversal of fortune, that people who bought in 2006 are going to see the value of their homes rise to the level it was back then any time soon, but it’s a start. Bringing you the good news, with real numbers, that you don’t get anywhere else! Greg Cowart This month the FHA has reported to Congress that the MMI Fund (Mutual Mortgage Insurance Fund), the backbone of its mortgage programs and what makes FHA mortgages possible, is going to return to its mandated capital reserve level faster than previously expected.
“In the midst of a tough housing market the FHA MMI Fund continues to be actuarial sound. “Because of the Obama administration’s strategy to protect the FHA Fund – tightening of risk controls, increased premiums to stabilize near-term finances and expanded loss mitigation assistance to avoid unnecessary claims – this past year’s endorsements had the highest credit quality ever recorded and will yield historically high levels of net receipts in the years ahead.” The availability of FHA loans is a high part of our housing market and economy, both nationally and locally, and the health of the MMI Fund is also an important part of the housing market and greater economy. This is good news for both of those thing as well and, while we won’t see a more normal real estate market or economy for a while still, more and more news like this tells us the tide is turning! ~Greg P.S. The FHA has never received any sort of taxpayer bailout! The MMI Fund keeps it solvent and without the need for any sort of congressional assistance. Truly an American success story… |
Get the book that changed my life, as my gift to you for FREE
|
|
Copyright © 2012 Roseville Loan Guy - All Rights Reserved |
||
