Sunday, October 31, 2004

Are you attracting thieves?

As a homeseller, you open your home. Many people come through your home. Are you at risk for crime?

The best policy is to play it safe! When your home is on the market, remove all valuables. Do not leave valuables or money in sight, or in a jewelry box that can be removed or opened. Even stashing everything into the top dresser drawer is too obvious. Furthermore, remove or hide prescriptions drugs. You probably hadn't thought of prescription drugs as a possible stolen item. Play it safe!

The National Association of REALTORS® has an article online with valuable information. To read the entire article, go here.

Friday, October 29, 2004

What buyers prefer

The National Association of REALTORS® has released a study that indicates what buyers in different "stages" of life prefer when looking for a home to buy.

The study results are published in the first-ever "2004 NATIONAL ASSOCIATION OF REALTORS® Profile of Buyer's Home Feature Preferences".

Some of the interesting results:
"Although most buyers choose homes located in suburbs or subdivisions, homes purchased by first-time buyers are more likely to be older and located in a central city, while repeat buyers are more likely to select a new home. Older buyers are more inclined to purchase in a small town."

Regionally there are differences too! "Nearly 90 percent of buyers in the South rate central air conditioning as a very important feature, compared to only 37 percent in the Northeast. Buyers in the West are more likely to desire a patio or fencing, while buyers in the Northeast and Midwest are more interested in a finished basement."

You'll want to read this very interesting survey! Do you know what the #1 desired amenity is for a homebuyer? Then read more about the entire survey here.

Wednesday, October 27, 2004

California Association of REALTORS® (C.A.R.) reports on September home sales

The California Association of REALTORS® reports that "The median price of an existing home in California in September increased 21 percent and sales decreased 0.9 percent compared with the same period a year ago."

The actual dollar figures were revealed: "The median price of an existing, single-family detached home in California during September 2004 was $465,540, a 21 percent increase over the revised $384,690 median for September 2003. The September 2004 median price decreased 1.7 percent compared with a revised $473,360 median price in August."

These are impressive numbers for the state as a whole. We are asked daily what our predictions are for the future. It's just too hard to tell! There are so many factors that can affect our real estate market. Right now, interest rates are certainly favorable!

To read the article, please go here.

Monday, October 25, 2004

National Association of Realtors (N.A.R.) reports September home sales up!

Attributing the rise in home sales to favorable interest rates, the N.A.R. reports "Existing-home sales rose 3.1 percent to a seasonally adjusted annual rate of 6.75 million units in September from a pace of 6.55 million units in August. Last month's sales activity was 1.0 percent above the 6.68-million unit pace in September 2003 and is the third-highest pace on record."

And what about the price of homes? The same article reports that "The national median existing-home price was $186,600 in September, up 8.6 percent from September 2003 when the median price was $171,800. The median is a typical market price where half of the homes sold for more and half sold for less."

The West saw the stongest activity.

To read the online article, go here.

Saturday, October 23, 2004

Oil prices up, interest rates down!

Well, who would ever think that rising oil prices would have an effect on interest rates? reports that "Long-term mortgage rates tend to move in the same direction as yields on 10-year Treasury notes, and those yields fell when oil flirted with $55 a barrel late last week."

And the rationale for this? The article goes on to explain "Higher energy prices could add fuel to inflation, too -- and rising prices would put upward pressure on interest rates. But right now, bond investors are more worried about the effects of rising oil prices on economic growth than on inflation."

Interest rates are down slightly this week from last week, with a 30 year fixed rate at 5.70% (down 0.05%). Our home buyers have been very happy with the interest rates they have been getting. Make sure you shop around for a loan, as there are many loan programs to choose from!

To read more, go here.

Thursday, October 21, 2004

Is the real estate market influenced by politics?

According to Nathan Kelly, an assistant professor of political science at the University at Buffalo, YES! He says buyers are influenced by the political signs they see in a neighborhood, feeling that political views are a sign of similar values.

An article in CNN online details how signs posted in a neighborhood have had an affect on buyer's decisions. Of course, other buyers don't care. But it is an interesting premise, none the less.

It is our feeling that the election has contributed to the slow down in our market. Consciously or not, buyers may be waiting to see the outcome of the election, then will use their judgment to guess what that affect that outcome will have on interest rates and the housing market. Then, a buyer will either jump back in and buy, or may decide that they should wait based on who is elected.

To read the online article, go here.

Monday, October 18, 2004

Los Angeles Times report on no-down buyers

Sunday's Los Angeles Times, Real Estate Section, featured an article about buyers who are using 100% financing, as they are not able to save fast enough to keep pace with the real estate market.

If you are considering becoming a "zero down" buyer, you should know that most lenders would require that you have excellent credit. Some lenders charge a higher rate of interest for 100% financing. Plus, it doesn't mean you don't need any cash ... you may still need to come up with some money for closing costs.

There are other issues involved with 100% financing which we will not go into here. But from a buyer's point of view one of the most significant considerations is ... what happens if the market goes down? Then you may end up owing more than the property is worth.

We have had several buyers get 100% financing, but their lender structures it as two loans ... one for 80% of the value, and one for 20% of the value. In this way, the borrower does not have to pay PMI (private mortgage insurance).

As always, if you are interested in further details about 100% financing, we would recommend you speak with your lender. Ask questions, and make sure you understand the ramifications of whatever financing you are considering.

Saturday, October 16, 2004

And, what has been happening to interest rates?

We've mentioned how the real estate market appears to be slowing ... but, what has happened to interest rates? Are interest rates a factor in the current market?

Freddie Mac recently reported that actually interest rates declined slightly this week over last week ... "30-year mortgage rates fell to 5.74 percent following a rise to 5.82 percent last week". The high so far this year was 6.34 for the week of May 12, it is reported.

Freddie Mac's chief economist predicts interest rates no great movement in interest rates for the next few months.

So, it would appear that interest rates are not a major factor in the slowing of our real estate market. In fact, with interest rates so favorable, one would expect that buyers would still be anxious to get into the market. Again, perhaps the slowing market is a sign of buyer caution on where the real estate market is headed. Many buyers have expressed to us that they feel the market has peaked, and that prices may decline. That remains to be seen ...

To read the entire press release, go here.

Register to vote ONLINE!

If you will allow us a slight departure from real estate ... did you know you can register online to vote in California? The deadline to register to vote for an election is 15 days before each local and statewide election day. Yykes ... that looks like October 18 is the deadline for our November elections!

California's online voter registration website is here.

Thursday, October 14, 2004

An online real estate resource for you!

As you are probably aware, there is a lot of information available on the internet. The same pertains to real estate.

One of the more useful sites is - DataQuick Real Estate News. This site compiles monthly housing statistics. Check out the "zip code charts" with links along the left side of the homepage. Those charts provide valuable insight into what has gone on for the previous month, with single family home and condo statistics indicating units sold, median price and the percent change in median price over the same month last year. These statistics are listed by city/zip code.

We refer many inquiries to this site to help to get an understanding of prices in the Southern California market.

Of course there are many great web sites related to real estate. Send us an email and let us know about your favorite(s). We'll publish the information here!

Tuesday, October 12, 2004

Do gas prices affect real estate?

As you are probably aware, record-high crude oil prices are now pushing gas prices upward. With higher gas prices comes the obvious rise in commuting cost (for those of you driving to your destination).

Let's see how this affects your housing situation.

Let's say you are getting a $300,000 loan at 6% interest for 30 years. The principal and interest payment would be approximately $1800 per month.

Now let's say that your commuting cost has gone up $100 per month due to the rise in gas prices.

If you had taken that extra $100 and put it into your mortgage payment, you would have been able to afford a loan of approximately $320,000.

If you knew that it would cost you more to commute from your home, would that have made a difference in WHERE you would buy a home? Would you have bought a home closer to your work with that extra $20,000?

Perhaps in the future the cost of commuting will be a more important factor in the selection of a community to call home.

Sunday, October 10, 2004

Observations from the east coast

Having just returned from the east coast (visiting child at college), I must report about my conversations about real estate along the way.

While at breakfast this morning, a couple from New Jersey shared their tale of a real estate market that has gone flat.

Another from Arizona lamented to me that he was not able to return to his Southern California roots because of skyrocketing prices here.

And all wanted to hear about our Southern California real estate market from someone actively involved in it (me!). Their perception was that home prices were "out of sight" and that people were lining up to buy homes. In talking with them, I sensed a bit of envy over the money part of the market, but each person I talked with was happy living in the community that they were living in. In fact, they raved about their towns!

It's not always about the money. Quality of life, family, and other factors can influence where you choose to live ... and how happy you are living there!

Thursday, October 07, 2004

California Association of Realtors® releases it's forecast for the 2005 real estate market!

With everyone wondering what will happen in 2005, the California Association of Realtors® (C.A.R.) has now made their predictions for next year's real estate market. According to C.A.R., "The median price of a single-family home in California will again increase by double-digits next year, reaching $522,930, while sales will decrease slightly from this year's pace to the second best year on record in 2005".

And what about their projections for interest rates?? Read what C.A.R. President Ann Pettijohn says:
"Homebuyers next year will face slightly higher mortgage interest rates, approaching 7 percent by year's end, which will make it more difficult for many families in California to be able to afford a home. Coupled with rising home prices, affordability in California will fall to an all-time annual low of 16 percent next year."

Which areas of the state will fare well?? According to C.A.R. Vice President and Chief Economist Leslie Appleton-Young:
"Regionally, the areas with the greatest potential for home sales growth are the inland regions of the state -- the Central Valley and the Inland Empire region in Southern California, which have experienced significant population gains in recent years as well as robust new home-building activity."

To read the press release from the California Association of Realtors, go here.

Tuesday, October 05, 2004

Sample 24 hour market watch in our area

Our multiple listing service provides interesting statistics for us. Among those are the "24-hour Market Watch" statistics.

For example, for the past 24 hours, our multiple listing service reports the following:
New Listings 71
Solds 39
Pendings 43
Price Increases 2
Price Reductions 27

Interesting! We're noting more price reductions than we've seen in a long time. It may be a trend. Sellers who were "testing the waters" with a list price, now have to bring the list price closer to the market value. The buyers appear to be putting a cautious tone on their offers, many times worrying that the value may be going down. We are also noticing that appraisers are being more careful with their appraisal values.

Let us know what you are experiencing in the real estate market where you are. Send us an email!

Sunday, October 03, 2004

L.A. Times article --- comments!

Well, as you might suspect, there were letters in today's Sunday L.A. Times regarding last Sunday's L.A. Times article about rebates from agents to buyers and sellers. (Please see our blog post of Monday, September 27.)

The title of the letters section (page E7 of today's L.A. Times) is "Rebates from agents debated." One letter makes the point that a rebate is a return on funds spent. The buyer does not pay the commission, so how is the agent giving the buyer a rebate of the commission? In addition, many buyers do not buy. Yet, realtors are not paid unless the buyer actually buys a property and closes escrow. The realtor has worked for free until that point.

Another letter from a realtor feels the rebate idea cheapens the job done by a realtor, considering the initial realtor exam and required continuing eduation, plus providing the "most conscientious service" to a buyer or seller.

No doubt this subject will come up in years to come. Our only advice would be NOT to pick your realtor by whether or not you are going to get a rebate. You cannot put a (rebate) price on working with an experienced, dedicated, professional Realtor® who has your best interests in mind.

Friday, October 01, 2004

To fix or not to fix ...

When you think of selling your home, it may be useful to equate it to selling a car. First of all, you would have your car detailed before selling it. Wash, wax, remove dents, touch up paint, clean the interior, etc. So, why not "detail your home" before selling it? Makes sense!

Many homeowners have seen the benefit of sprucing up their property before selling. Buyers have an easier time of mentally placing themselves in the home if they are also not trying to remodel the home.

Sometimes it is less clear, however, if the effort to fix up a home before selling will truly pay off. That's where a real estate professional may be able to help you. We are often consulted to help a homeowner analyze just how far they should or should not go to get their home ready to sell. Every seller's situation is different.

It also depends on the current real estate market. In some markets, fixing up is not necessary for a home to sell for top dollar. In other real estate market climates, making a home in "move in" condition would be necessary to obtain a sale.

When you are wrestling with this tough decision, do not hesitate to call your local realtor and ask for help. Their opinion and comments may save you money fixing up your home, and make you money in selling your home!