Friday, July 30, 2004

Seniors find California is expensive!

The National Association of Home Builders (NAHB) reports that "California remains among the most expensive states for homeowners aged 55 to 74..." with "Eleven of the top 25 most expensive counties in the country were in California, led by Marin in fourth place (22,212 homes, $616,915 average home value) and San Mateo in fifth (49,245 homes, $570,032 average home value). Other California counties included Santa Clara, San Francisco, Santa Cruz, Santa Barbara, Monterey, Napa, Contra Costa and Alameda."

To read the article online, go here.

Wednesday, July 28, 2004

Should you buy now? has an interesting article for home buyers and predictions for the future of the real estate market. It references the Federal Reserve economic experts. These experts declare that "the housing bubble will not burst, because there is no bubble, and that the acceleration of home prices is losing velocity."

According to the Bankrate article, the study says that " are now more affordable than they were in the 1970s and '80s."

The report concludes that their "... it appears that home prices have risen in line with increases in personal income and declines in nominal interest rates."

The report, titled "Are Home Prices the next "Bubble"?" is available here (you will need Adobe Acrobat to view the report, that is a pdf file).

To read the article, go here.

Monday, July 26, 2004

Southern California Real Estate - still strong?

With interest rates still at low levels, we are still seeing strong demand in the real estate market. It's not super-strong, mind you, as it has been in the past. Yet, multiple offers continue. Maybe it's not ten multiple offers, but three. And maybe the buyers don't offer tens of thousands of dollars over the asking price, but rather a few thousands.

We have been reading/hearing that interest rates are expected to rise through 2005.

Thinking of waiting for the market to turn? Well, think again. Consider this:
If you make $60,000 a year and plan to save 10%, you will save $6,000 in the next year.
But, if the home you want to buy (let's say it's $300,000 in today's market) appreciates 10% over the next year, at the end of that same year it will be worth $330,000. Can you save fast enough to buy at the end of the one year? You do the math.

And, let us know what you think!

Saturday, July 24, 2004

What's better - real estate or stock?

Found an interesting article on that burning question. Please read here.

Mortgage Bankers report on loan applications for week ending July 16

The Mortgage Bankers Association reports that for the week ending July 16, loan applications decreased approximately 4% (on a seasonally adjusted basis) over applications made the previous week. The additional stats are that "On an unadjusted basis, the Index increased by 19.9 percent compared with last week but was down 50.5 percent compared with the same week one year earlier."

Interesting! Let's see if the downward trend continues.

For the entire press release, please read here.

Thursday, July 22, 2004

Is this the trend? Housing starts decline.

The National Association of Home Builders (NAHB) reports that housing starts for the month of June declined - down a little over 8% over May. The spring months were especially busy, due in part to the low interest rates. And, as interest rates began to climb, many buyers decided to get into the market before the rates went higher!

However, the NAHB reports that it is still expected to be a record year for home starts.

To read the entire press release, please go here.

Tuesday, July 20, 2004

Mortgage rates rise reports that mortgage rates have gone up slightly. The 30 year fixed rate loan is now at 6.11%, compared to 5.83% a year ago.

There is still strong activity in the loan market. reports that the loan lock in period is important, and many people are opting for a longer rate lock in period. You may have to pay money to have your interest rate locked in for a longer period than the lender is normally offering. You will want to figure out just how much that rate lock in is going to cost you, and if it's worth it!

The article at explains how to look at this:
"Start out by doing some math, then exercise judgment. Let's say you want to borrow $200,000. You can pay one point for a 90-day lock at a rate of 6.25 percent. You're betting $2,000 that the rate will rise substantially.

"If rates don't rise, you lost a $2,000 wager. Your monthly principal and interest payment on a 30-year fixed-rate loan are $1,231.43.

"But what if rates do rise, to 6.5 percent? If you hadn't paid the rate-lock fee, your monthly payment would have risen $32.71. But you paid the two grand, saving yourself from that $32.71 extra in monthly payments. You would break even on your 62nd monthly payment -- five years later.

"If rates rose to 6.75 percent, your $2,000 rate-lock fee would save you $65.77 a month in house payments. You would break even in 31 months.

"This is where your judgment comes in: How fast do you fear that rates will rise, and how long are you willing to wait to break even on your rate-lock fee?"

The article goes on to give the opinion that it may not be worth locking in your interest rate, as the rate tends to go up slowly.

Well, you certainly will want to do your own calculation, and rely on the advice of your tax advisor, loan consultant or other financial advisor in this decision. But, it's something to think about!

To read the entire press release, go here.

Sunday, July 18, 2004

And, then the Federal Reserve gives their "crystal ball" report
According to the Federal Reserve,  "U.S. house prices are likely to grow at the slowest pace in more than three decades as interest rates climb and land prices take a tumble over the next three years".
This study appears to agree with many who feel that home prices have taken such a large jump in recent years, that the housing market simply can't continue to grow in such leaps and bounds.  With the almost certain rise in interest rates (predicted to happen through 2005), many feel that the housing market is sure to cool off. 
Many people are wondering if there is a chance of a market correction, as we saw in the early 1990's, with house prices dropping in a considerable amount.   Remember, however, that while the prices declined, they also rebounded and grew even more!
To read the entire story, please go here.


Friday, July 16, 2004

According to the National Association of Home Builders (NAHB), home buyers ranging in age from 55 to 74 prefer to live in suburban areas near metropolitan markets.

The top growth areas are: Sumter County, Florida; Nye County, Nevada; Washington County, Utah; Pinal County, Arizona; Beaufort County, S.C.; and Archuleta County, Colorado.

The data is from 2000, but the NAHB states "Although the data is from 2000, it’s the most up-to-date information available on the active adult market."

To read the entire press release, go here.

Wednesday, July 14, 2004

California home affordability factor down

If you've been out looking for a home in Southern California, you probably already know this!

The California Association of Realtors® (CAR) reports that "The percentage of households in California able to afford a median-priced home stood at 19 percent in May, an 8 percentage-point decrease compared to the same period a year ago when the Index was at 27 percent".

In the United States, CAR reports that you need to have income of $42,810 in order to buy a median-priced home priced at $183,600.

Now the stats go up in California - naturally! CAR calculates that you need to have income of $108,450 in order to buy a median-priced home priced at $465,160.

To read the entire press release, please go here.

Monday, July 12, 2004

Baby Boom Report

In a report prepared by Del Webb Corp. about baby boomers (born between 1946 and 1960) many interesting statistics are shown.

First, baby boomers currently comprise about 28% of the American population. After the baby boomers is GenerationX (born between 1968 and 1979).

19% of the baby boomers surveyed said that parenting was harder than they expected it would be.

36% of baby boomers expect to move when their kids leave home.

This report states "The Baby Boomer Survey, conducted in April and May 2004, reveals Boomers are embracing the idea of Empty Nesting, the stage in life when children move out of their parent's home for good. While Boomers have an array of emotions about the situation, most look forward to getting back to what they were always accused of being - the "me generation."

For more interesting reading about the baby boomer survey, please go

Saturday, July 10, 2004

Yet ... mortgage rates actually go down!

The National Association of Realtors reports that mortage rates have actually gone down. Lenders had been raising interest rates in anticipation of the raise by the Federal Reserve Board. But, since economic indicators were less than expected, long term (housing) interest rates were lowered slightly.

To read the press release, go here.

Friday, July 09, 2004

National Association of Realtors® predicts strong real estate market - even with interest rates going up

The National Association of Realtors® (NAR) states that "Interest rates are rising due to healthy economic growth and they won't dampen the general strength of the nation's housing market."

The NAR is predicting record home sales this year.

To read the press release, go here.

Wednesday, July 07, 2004

Mortgage Bankers report on home loan applications

In their weekly report on loan applications, the Mortgage Bankers Association reports that for the week ending July 2, mortgage loan applications were up about 19% over the prior week.

However, when compared to the same week last year, mortgage loan applications were down over 30%.

Refinances were up slightly over the previous week.

To read the entire press release, go here.

Monday, July 05, 2004

Remodeling? Be a good neighbor!

Interesting article online at the National Association of Home Builders site titled "Homeowner Remodeling Etiquette". Having recently had several neighbors involved in remodeling jobs ... ranging from a total tear down and rebuild of a home to a room addition ... some of the ideas shared in this article hit home!

For example, the article starts with a simple one:
"Before starting the home of their dreams, the National Association of Home Builders (NAHB) Remodelors™ Council advises home owners to inform the neighborhood of their plans, length of construction time and who will be doing the remodeling job."

That makes sense! It's certainly easier to "tolerate" something that you are informed about. What if the job goes on for months and months? If you know that's the anticipated time frame, you will be able to understand and accept (in my opinion).

There are other tips in the article - mainly reminding us to be considerate of our neighbors.

To read the entire article, please go here.

Sunday, July 04, 2004

happy 4th!
We will be back in the office on Monday!

Friday, July 02, 2004

The internet plays a strong role in home buying!

The California Association of Realtors® (CAR) has released a study titled "2004 Internet Versus Traditional Buyer Study". In that study, the CAR reports that the number of home buyers using the internet in 2004 is 56%, up from 28% in 2000 (the first year this study was performed).

Other statistics from the study are:

Time spent considering a home purchase before contacting a realtor:
Internet buyer: 5.9 weeks
Traditional buyer: 2.1 weeks

Time spent researching homes before contacting a realtor:
Internet Buyer: 4.8 weeks
Traditional Buyer: 1.6 weeks

Time spent looking for a home with realtor:
Internet Buyer: 1.9 weeks
Traditional Buyer: 7.1 weeks

These statistics make sense. Our internet buyers are more informed about the market, and have done more "homework" than "traditional" buyers. Therefore, it takes them a shorter period of time to make a decision on buying a home.

To read the press release with even more statistics, go here.