Category Archives: Real Estate

Real Estate

Mortage Rates Drop to 37-Year Low

According to Realty Times ® Freddie Mac today released the results of its Primary Mortgage Market Survey in which the 30-year fixed-mortgage rate (FMR) averaged 5.19 percent this week. This is the lowest FMR that Freddie Mac has recorded since it started keeping records in 1971 or 37 years ago. A year ago, the rate for a 30-year FMR averaged 6.14 percent.

Well that’s the good news. The bad news is in order to qualify for the above rates, according to Donna Knapp of Empire Home Loans, you need to have a FICO score of 740, full documents, that is proof of your income, the assets that you have and a review of your income tax returns. However, if you have all of that,you can get up to 100 percent financing.
The couple were then qualified for a large loan to buy a home beyond their means. With a low starter teaser interest rate, they could manage to hang on the home thinking the price of the home they purchased would go up and when the interest rate increased, they could refinance or sell. However, when the interest rate rolled over to a higher rate, they could not afford the new payment. In the meantime,the value of their home had gone down and they could not refinance. All the couple could do was move out and let the home go into foreclosure.

You may ask why banks ever made stated income loans. These type of loans were designed for self employed people, who’s income is erratic, but in general have good credit and usually are a good credit risk. So,understanding how the system was abused you can also understand how we are in such a financial mess because of the loose loans that were made in the recent past. In summary, the banks did not do due diligent on their part to assure themselves as to whom they were dealing with. Now they have gone to the other extreme, making it hard for most people to get a loan to buy a home with their stifling requirements.

Real Estate

Residential Sales In Nevada County July 2007

Residential sales in Western Nevada County in July 2007 vs. July 2006 fell about 6 percent. In July 2006, 98 homes were sold at an average sale price of $479,969, which was at 96.96 percent of the asking list price of $495,078.

In July 2007, 92 homes were sold at an average sale price of $406,267 which was at 96.37 percent of the asking list price of $421,556. Sales have not really dropped very much, but the average sales price dropped $73,702.

Of course one month does not reflect the true market conditions. Lawrence Yun, NAR senior economist, said “he isn’t looking for any notable changes in sales activity. A modest upturn is projected for existing-home sales toward the end of the year, with broader improvement to include the new-home market by the middle of 2008.”

With increased population growth in California, demand for housing is not going away. New construction has dropped considerably, land is scarce and interest rates are still low. Buyers will have to come into the market place sooner then later. Various reports that I have read expect a yo-yo effect, with nation wide prices dropping 2.3 percent and then rising 2.3 percent next year. Interest rates are expected to be 6.7 percent at the end of the year and ease off to 6.5 percent the beginning of next year. (Source, National Association of Realtors® NAR)

Real Estate

Newspapers Lose Battle for Real Estate Ads

Real estate advertising will become less prevalent in newspapers as it shifts to the Web, where online home buyers are actively searching for properties, analysts say.

Currently about 15 to 20 percent of real estate advertising is online, but Mike Simonton, media industry analyst for Fitch Ratings credit analysis service, says it is poised to go higher for a number of reasons.

Suzy Antal, director of marketing for Prudential Real Estate Affiliates, a unit of Prudential Financial Inc., said many Prudential practitioners have been pulling back on advertising during the current downturn, but as they return, they’re shifting ad budgets to their own Web sites, creating blogs, and taking different approaches beyond newspapers.

“Is newspaper a high priority? No,” Antal says. “I don’t believe my buyers and sellers are going to be in that market.”

Tim Fagan, president the real estate portion of Classified Ventures, which manages website for 125 newspapers, says it plans to “significantly increase’ its investment in Homescape, a real estate-related Web site that provides home listings, but he declined to provide specific numbers.

It’s wrong to assume that online advertising is cheaper than buying space in the paper, says Blanche Evans, editor of Realty Times, a online real estate news service. After all, online users expect extensive color photographs, lengthy descriptions, and even video tours —and all of those features can add up for a real estate practitioner.