Archive for July, 2008
“Housing and Economic Recovery Act of 2008″ Q & A With Barbara Boxer
July 31st, 2008 categories: Community Happenings, Our Market
I (and many thousands of fellow Realtors and Californians) recently petitioned our California legistlature to take action toward enacting the “Housing and Economic Recovery Act of 2008.” I just heard back from Barbara Boxer, who by the way, always responds to my queries (Thank you Barbara). Here’s what she had to say;
Dear Ms. Bonasia:
Thank you for contacting me regarding the current foreclosure crisis. I appreciate hearing from you.
I am pleased that the Housing and Economic Recovery Act of 2008 has passed Congress and was signed into law on July 30, 2008 as P.L. 110-289.
Although this legislation will not solve all the problems in the current crisis, it includes wide-ranging measures to help stabilize the housing market, provide help to homeowners and renters, and help get our economy back on track. The new law also helps communities that have been hit hardest by the foreclosure crisis by providing $3.9 billion in emergency assistance to purchase and redevelop abandoned and foreclosed properties.
I am enclosing a document of frequently asked questions , which I trust will explain the way the bill will work.
All of the costs of this legislation are covered by revenue-raising provisions within the Act, ensuring that P.L. 110-289 meets pay-as-you-go standards. The Hope For Homeowners program is narrowly tailored to keep families in their homes. No speculators, investment properties, or second or third homes will be refinanced. Similarly, lenders will have to take a significant loss on the original loan, waive any penalties or fees, and help pay for the origination and closing costs of the new loans.
The goal of this bill is to help keep families in their homes and stop the further deterioration of the communities we hold so dear. I will do everything in my power to make sure this bill does that job, but if more legislation is needed I will not hesitate to fight for it.
Again, thank you for writing to me. Please do not hesitate to contact me in the future on this or other issues that concern you.
***
ABCs of the “Housing and Economic Recovery Act of 2008″
On July 30, 2008, the President signed into law the Housing and Economic Recovery Act of 2008 to address the ongoing housing crisis. Although the crisis will not end with this legislation, it is an important first step to help keep families in their homes and stop the further deterioration of the communities being hardest hit.
Q: How will the law help struggling homeowners keep their homes?
A: Through the Federal Housing Administration (FHA), an estimated 400,000 borrowers in danger of losing their homes will be able to refinance into more affordable government-insured mortgages. The program offers government insurance to lenders who voluntarily reduce mortgages for at-risk homeowners to at least 90% of the property’s current value.
Q: When will the program begin?
A: The program will begin on October 1, 2008 and sunset on September 30, 2011. Homeowners in danger of losing their homes before October 1, however, should not wait to contact their loan servicers and should begin applying for federally insured mortgages now.
Q: Who is eligible?
A: To be eligible to participate in this program, a borrower must:
Have a loan on an owner-occupied principal residence. Investors, speculators, or borrowers who own second homes cannot participate in this program.
Have a monthly mortgage payment greater than at least 31 percent of the borrower’s total monthly income, as of March 1, 2008.
Certify that he or she has not intentionally defaulted on an existing mortgage, and did not obtain the existing loan fraudulently.
Not have been convicted of fraud.
Q: How can a homeowner access this new program?
A: Homeowners or a servicer of an existing eligible loan need to contact an FHA-approved lender. The FHA-approved lender will determine the size of a loan that a borrower can reasonably repay and that meets the requirements of the program. If the current lender or mortgage holder agrees to write-down the amount of the existing mortgage and make the new loan affordable, the FHA lender will pay off the discounted existing mortgage. Loans provided under this program must be 30-year fixed rate loans.
Q: Are lenders required to participate in this program?
A: No. The program is completely voluntary for lenders, investors, loan servicers, and borrowers.
Q: How does this law help neighborhoods that have been hit by the foreclosure crisis?
A: The impact of the current crisis has not been isolated to individual borrowers or investors, but has been felt broadly by neighbors, communities, and governments across the nation. The law strengthens neighborhoods hit hardest by the foreclosure crisis by providing $3.9 billion in Community Development Block Grants to states and localities to buy foreclosed homes standing empty, rehabilitate foreclosed properties, and stabilize the housing market.
Q: Will this law be a bailout for speculators, homeowners, investors, and lenders?
A: No. It is narrowly tailored to keep families in their homes. For example:
Only primary residences are eligible: NO speculators, investment properties, second or third homes will be refinanced.
Investors and lenders must take big losses first in order even to participate. The owner of the old mortgage can get a maximum of 90% of the current value of the home (which presumably will be considerably less than the value of the original loan). In many cases the loss will be significantly greater, but 10% is the minimum.
In addition, lenders must waive any penalties or fees, and help pay for the origination and closing costs of the new loans.
Most homeowners will have seen the equity in their homes disappear before being able to refinance under this program. In addition, the FHA will get a portion of any future profits on the house, to make sure the government recoups its investment over the long run.
Q: Will this law reward families who bought homes they could not afford?
A: Many homeowners facing foreclosure were misled, were deceived, or were in other ways the victims of unfair lending practices.
To prevent future abuses by lenders, this law will establish a nationwide loan originator licensing and registration system to set minimum standards for all residential mortgage brokers and lenders. It also strengthens mortgage disclosure requirements to help ensure that borrowers understand their mortgage loan terms.
Q: How will this law make it more affordable to own a home?
A: There are a number of provisions that will make homeownership more affordable:
Creates a refundable tax credit for first-time homebuyers that works like an interest-free loan of up to $7,500 (to be paid back over 15 years).
Grants states $11 billion of additional tax-exempt bond authority in 2008 that they can use to refinance subprime loans, make loans to first-time homebuyers and to finance the building of affordable rental housing.
Raises conforming loan limits for the FHA, Fannie Mae and Freddie Mac to $625,500. Because of the high cost of housing in California, a majority of the state’s residents were previously shut out from these programs. Raising these loan limits will lead to lower interest rates on some loans, greater refinancing opportunities, and enable more borrowers in high cost areas to avoid the type of non-traditional and frequently abusive loans that led to the current crisis.
Provides couples using the standard deduction with up to an additional $1,000 deduction for property taxes ($500 for individuals).
Q: Does the law provide help to those who still cannot afford to own a home?
A: Yes. The bill includes a number of provisions to increase the supply of affordable housing, which has been a major problem in California pre-dating the current foreclosure crisis. For example:
The bill creates a new permanent affordable housing trust fund - financed by Fannie Mae and Freddie Mac and not by taxpayers - to fund the construction, maintenance and preservation of affordable rental housing for low and very low-income individuals and families nationwide in both rural and urban areas.
In addition, the legislation provides a temporary increase in the Low-Income Housing Tax Credit and simplification of the credit to help put builders to work to create new options for families seeking affordable housing alternatives.
Barbara Boxer
United States SenatorPlease visit my website at http://boxer.senate.gov
| Discussion: 5 Comments »
June Year Over Year Sales Increase by 17.5 Percent in California
July 28th, 2008 categories: Our Market
According to the California Association of Realtors, home sales increased 17.5 percent in June in California compared to the same period one year ago making June the third consecutive month to break what was a 30 month trend of decreasing sales. Statewide home sales remained above the 400,000 mark for the second month in a row. Sales were driven in part by deeply discounted or distressed properties along with favorable interest rates making it possible for first time buyers to get into a market that in recent years had been unaccessible.
The median price of an existing single family detached home in California during June was $368,250, a 37.7 percent decrease from the revised $591,280 for June 2007, CAR reported. June prices fell 4.3 percent from May’s $384,840 median price.
“The significant declines in the median price over the past several months are largely due to a dramatic shift in the sales mix since the onset of the credit crunch and the increase in the share of distressed sales,” said C.A.R. Chief Economist Leslie Appleton-Young. “A year ago, the under $500,000 price range accounted for 40 percent of sales, the middle segment made up about 45 percent, and the over $1 Million segment captured 15 percent of the market. As of June 2008, the shared had shifted to 67 percent, 24 percent, and 9 percent, respectively.”
Highlights of C.A.R.’s resale housing figures for June 2008:
- C.A.R.’s unsold inventory of single family detached homes in June was 7.7 months compared to the revised 10.2 months for June 2007
- Thirty-year fixed mortgage interest rates averaged 6.32 percent during June 2008 as compared to 6.66 percent in June 2007. Adjustable rate mortgages averaged 5.15 for June 2008 and 5.68 in June 2007
- The median number of days it took to sell a single family home was 49.1 days in June 2008 compared with 51.5 days (revised) for the same period one year ago
In a separate report generated by C.A.R. and DataQuick Information Systems, 2.9 percent, or 11 out of 385 cities and communities, showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records rather than MLS Information. (DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online at http://new.car.org/economics/historicalprices/2008medianprices/june2008medianprices/.
June 2008 Regional Sales and Price Activity*
Regional and Condo Sales Data Not Seasonally Adjusted
|
|
Median Price |
Percent Change in Price from Prior Month |
Percent Change in Price from Prior Year |
Percent Change in Sales from Prior Month |
Percent Change in Sales from Prior Year |
||
|
|
Jun-08 |
May-08 |
|
Jun-07 |
|
May-08 |
Jun-07 |
|
Statewide |
|
|
|
|
|
|
|
|
Calif. (sf) |
$368,250 |
-4.3% |
|
-37.7% |
|
-0.7% |
17.5% |
|
Calif. (condo) |
$343,500 |
-4.0% |
|
-23.4% |
|
-0.6% |
-20.8% |
|
C.A.R. Region |
|
|
|
|
|
|
|
|
Central Valley |
NA |
NA |
|
NA |
|
NA |
NA |
|
High Desert |
$180,570 |
-10.0% |
|
-41.0% |
|
4.9% |
71.0% |
|
Los Angeles |
$396,560 |
-6.1% |
|
-32.3% |
|
-8.3% |
1.7% |
|
Monterey Region |
$450,000 |
1.2% |
|
-39.7% |
|
28.8% |
39.7% |
|
Monterey County |
$359,900 |
0.5% |
|
-49.9% |
|
32.8% |
103.9% |
|
Santa Cruz County |
$610,000 |
-1.2% |
|
-19.8% |
|
22.4% |
-8.9% |
|
Northern California |
$341,400 |
1.0% |
|
-13.0% |
|
12.1% |
-1.4% |
|
Northern Wine Country |
$415,820 |
-6.0% |
|
-34.5% |
|
8.0% |
7.1% |
|
Orange County |
$560,900 |
7.1% |
|
-22.5% |
|
-4.1% |
18.1% |
|
Palm Springs/Lower Desert |
$277,970 |
-1.9% |
|
-29.4% |
|
-4.0% |
19.0% |
|
Riverside/San Bernardino |
$261,980 |
1.7% |
|
-32.5% |
|
4.8% |
75.4% |
|
Sacramento |
$220,630 |
-5.4% |
|
-37.3% |
|
14.1% |
95.5% |
|
San Diego |
NA |
NA |
|
NA |
|
6.9% |
-20.1% |
|
San Francisco Bay |
$676,740 |
-1.5% |
|
-19.8% |
|
3.8% |
-4.7% |
|
San Luis Obispo |
$487,500 |
10.2% |
|
-22.0% |
|
-3.8% |
-16.3% |
|
Santa Barbara County |
$364,280 |
-8.9% |
|
-54.8% |
|
1.8% |
6.8% |
|
Santa Barbara South Coast |
$1,035,000 |
-13.7% |
|
-24.5% |
|
-4.2% |
-25.8% |
|
North Santa Barbara County |
$290,620 |
-2.4% |
|
-31.1% |
|
4.0% |
50.7% |
|
Santa Clara |
$740,000 |
-3.9% |
|
-14.5% |
|
6.4% |
-6.8% |
|
Ventura |
$480,430 |
-1.5% |
|
-30.6% |
|
6.3% |
-15.7% |
na - not available*Based on closed escrow sales of single‑family, detached homes only (no condos). Reported month‑to‑month changes in sales activity in June overstate actual changes because of the small size of individual regional samples. Movements in sales prices should not be interpreted as measuring changes in the cost of a standard home. Prices are influenced by changes in cost and changes in the characteristics and size of homes actually sold.
sf = single‑family, detached home
Source: CALIFORNIA ASSOCIATION OF REALTORS®
Median Prices By Region – Current Month vs. Year Ago
|
|
Jun-08 |
May-08 |
|
Jun-07 |
|
|
Statewide |
|
|
|
|
|
|
Calif. (sf) |
$368,250 |
$384,840 |
|
$591,280 |
r |
|
Calif. (condo) |
$343,500 |
$357,970 |
|
$448,550 |
r |
|
C.A.R. Region |
|
|
|
|
|
|
Central Valley |
NA |
NA |
|
$329,960 |
|
|
High Desert |
$180,570 |
$200,740 |
|
$306,310 |
|
|
Los Angeles |
$396,560 |
$422,160 |
|
$586,020 |
r |
|
Monterey Region |
$450,000 |
$444,740 |
|
$746,390 |
r |
|
Monterey County |
$359,900 |
$358,000 |
|
$719,000 |
r |
|
Santa Cruz County |
$610,000 |
$617,500 |
|
$761,000 |
r |
|
Northern California |
$341,400 |
$337,870 |
|
$392,360 |
|
|
Northern Wine Country |
$415,820 |
$442,270 |
|
$634,480 |
|
|
Orange County |
$560,900 |
$523,890 |
|
$723,860 |
|
|
Palm Springs/Lower Desert |
$277,970 |
$283,480 |
|
$393,750 |
|
|
Riverside/San Bernardino |
$261,980 |
$257,660 |
|
$388,290 |
r |
|
Sacramento |
$220,630 |
$233,230 |
|
$351,620 |
|
|
San Diego |
NA |
$446,610 |
|
$619,180 |
|
|
San Francisco Bay |
$676,740 |
$686,810 |
|
$843,390 |
r |
|
San Luis Obispo |
$487,500 |
$442,310 |
|
$625,000 |
|
|
Santa Barbara County |
$364,280 |
$400,000 |
|
$806,820 |
r |
|
Santa Barbara South Coast |
$1,035,000 |
$1,199,000 |
|
$1,370,000 |
|
|
North Santa Barbara County |
$290,620 |
$297,820 |
|
$422,000 |
|
|
Santa Clara |
$740,000 |
$769,650 |
|
$865,000 |
|
|
Ventura |
$480,430 |
$487,790 |
|
$692,730 |
|
na - not available
r - revised
Source: CALIFORNIA ASSOCIATION OF REALTORS®
Statewide, the 10 cities with the highest median home prices in California during June 2008 were: Manhattan Beach, $1,942,500; Los Altos, $1,595,000; Burlingame, $1,575,000; Newport Beach, $1,325,000; Mill Valley, $1,150,000; Los Gatos, $1,143,000; Cupertino, $1,072,500; San Carlos, $1,022,500; Danville, $965,000; Santa Barbara, $950,000.
Statewide, the 10 cities with the greatest median home price increases in June 2008 compared with the same period a year ago were: Manhattan Beach, 49.4 percent; Cupertino, 33.3 percent; San Luis Obispo, 11.4 percent; Los Gatos, 3 percent; San Carlos, 1.5 percent; Sunnyvale, 1.4 percent; Ridgecrest, 1.4 percent; Campbell, 1.3 percent; Temple City, 0.9 percent; San Rafael, 0.8 percent.
| Discussion: 2 Comments »
A Slogan To Live Your Life By
July 20th, 2008 categories: Glimpse of the Day, Lifestyle
“What would you attempt to do if you knew you could not fail?”
No matter how many times I read those words, they never fail to inspire me. In my previous incarnation as corporate executive for a (then) Fortune 100 company, I picked up many bits of ‘Rah Rah’ and squishy toys, an attempt of the company to lift moral, build a team spirit and tap into some motivational guru’s source of inspiration. But this line was different. From the moment I read it, I knew I had to leave the corporate life I was leading. “Not that there’s anything wrong with that”, another entirely uplifting saying, but the same company that spent so much time and money inspiring their teams during the good times, became inspirationally bereft and the curtain came down and there was only a weenie, not a genie behind.
So I took my little desk plaque, the one that say’s, “What would you attempt to do if you knew you could not fail?” and set out to do it. And I couldn’t be happier.
There’s another little bit of lore that I subscribe to that has also provided inspiration and direction to my life and my choices. It’s the one that says, “You reap what you sew”. Now perhaps I’ve read into this one a bit and worked it so that it describes Karma or at least my shallow view of it. Even a Karmic Novice such as me can experience the benefits of this adage and I have for as many years as I can remember.
As an example, when I give generously and my motivation is pure I always get back more than I give. This goes for love, money, support; anything and everything. Sometimes when money’s tight we tend to want to be conservative and tend to share less. I’ve been there. It’s a scarcity mentality- there’s not enough to go around so I keep it all to myself and grasp tighter and tighter on to it so I don’t lose it. I’ve found through this behavior I feel a lot of stress- all that grasping really wears you out. Over time, I had the opportunity to give when I really didn’t have much and the first thing I noticed was surprise. I surprised myself and then immediately thought, “I sure hope I don’t regret that. ” Then I turned my attention to the recipient of my generousity and through compassion, all regret and grasping immediately vanished. I thought no matter the consequences, I’ve made the right decision.
As it turns out, I am a most fortunate person. I always have more than I need and ‘most of the time’ I feel really content. So, I’ve learned that the act of giving is itself a reward particularly with a pure motivation. I can’t speak to this directly but I will surmise that if one does not feel compassion and act out of an altruistic state of mind, the return on the investment isn’t quite the same. I don’t think one can cheat Karma. But, perhaps the end does justify the means in this case. At least the benefit to the recipient is real be it money, support, encouragement, etc. The Dalai Lama speaks of being ’selfishly selfless.’ He says the best way to bring benefit on to oneself is to be a benefit to others.
So what power do these rather esoteric sayings really hold? I say they are words of wisdom and if you look behind them and realize the truth within them, they really can propel you to places that you may have feared to go before. I don’t know who came up with my favorite little saying but I really appreciate the message. That little plaque sits before me today in my little office and still holds a pure power that never ceases to remind me of my own potential. Perhaps someday, I can return the favor…
| Discussion: 2 Comments »
Barron’s Article- Long But Well Worth The Read!
July 18th, 2008 categories: Our Market
MONDAY, JULY 14, 2008
Bottom’s Up: This Real-Estate Rout
May Be Short-Lived By JONATHAN R. LAING
This real-estate rout has been more painful than prior ones, but it may be shorter-lived. Indeed, there are early signs of recovery.
Top of Form
A FEW YEARS AGO, AN ACQUAINTANCE SENT Wellesley College economist Karl “Chip” Case a T-shirt depicting a cartoon of a smiley-face house surrounded by soap bubbles, called “Mr. Housing Bubble.” But it was the words captured in a comic-book cloud on the shirt that gave this otherwise goofy image its bite: “If I pop, you’re screwed! “The dark humor hardly was lost on Case, co-creator along with Yale economist Robert Shiller of the now-canonical S&P/Case-Shiller Home Price Indices. In pairing recent sale prices of U.S. homes with the prices those same homes fetched previously, the index is substantiating what every sentient American knows: The U.S. housing market is in a deep funk, probably the worst in 50 years, according to Harvard’s respected Joint Center for Housing Studies.Home prices are down nearly 18% from the market’s peak, according to Case-Shiller, and inventories of unsold homes are at near-record levels. Foreclosures are mushrooming on “subprime” properties, or homes whose purchase was financed with subprime debt. Blowback from the crisis has left mortgage-finance giants Fannie Mae (ticker: FNM) and Freddie Mac (FRE) financially strapped, while many other lenders lack the stomach — or money — to offer new mortgages. Noted market experts such as Pimco bond-fund manager Bill Gross and economist Mark Zandi of Moody’s Economy.com predict the meltdown in housing will continue for many months, with home prices declining by 10% or more from today’s depressed levels.Yet, such pessimism appears overdone, based on much recent data. Sales of existing homes are showing tentative signs of increasing, while the plunge in prices likely is nearing an end. Total inventories fell in May to 4.49 million existing homes for sale, or a 10.8-month supply at the current sales pace, down from an 11.2-month supply in April, according to the National Association of Realtors, in just one statistic emblematic of the nascent trend.
YES, THE SUPPLY OVERHANG still is humongous, but at least the numbers are moving in the right direction, as even Treasury Secretary Henry Paulson noted last week. Speaking at a Federal Deposit Insurance Corp. conference, Paulson declared that “we are well into the adjustment process.” Inventories of new single-family homes are down 21% from a 2006 peak, he observed, while “existing-home sales appear to have flattened over the past several months, indicating that demand may be stabilizing.”Still other numbers suggest prices are close to bottoming. The S&P/Case-Shiller Index for April, released just last month, showed the biggest year-over-year price decline yet, of 15.3%. Buried in the numbers, however, and widely ignored in the media, was the news that home prices actually rose, albeit slightly, between March and April, in eight of the 20 markets covered by the index (Boston, Charlotte, Chicago, Cleveland, Dallas, Denver, Portland, Ore., and Seattle). This was in sharp contrast to the readings for March, which showed prices falling in 18 of the 20 surveyed markets. Also, the pace of monthly price declines is starting to slow in most of the markets with negative readings.“Other than Larry Kudlow of CNBC, none of the journalists who interviewed me after the latest release seemed at all interested in any of the positive developments,” says David Blitzer, chairman of the S&P Index Committee. “They seemed focused on the bad year-over-year number.”In general, transaction-based home-price indexes, including S&P/Case-Shiller, may be painting a bleaker picture of price trends than warranted. That’s because subprime housing, though less than 10% of the total U.S. housing stock, accounts for a far larger share of current sales volume, owing to spiraling defaults and distress sales. In the San Francisco area, expensive homes ($721,548 and up) have suffered a peak-to-trough drop in price of only 10.7%, compared with low-priced homes ($473,711 and under), down 40.9%, and mid-range homes, down 28.3%, according to the latest Case-Shiller numbers. The surge in low- and mid-range sales has been sufficient to push average peak-to-trough prices down by 24.6%, despite the index’s valuation-weighting.Help for the housing market also may be on the way in the form of proposed congressional legislation that would allow the recasting of some $300 billion in troubled subprime mortgages through the Federal Housing Administration. The bill, which some have derided as a bailout, would demand sacrifices by both lenders and borrowers, and could help to ease conditions in the subprime market.Of greater importance, a government takeover of loss-ridden Fannie and Freddie — the subject of widespread speculation late last week — would ease concerns about the continued availability of credit in the housing market. Fannie and Freddie, which buy mortgages from banks and repackage them into mortgage-backed securities, are the biggest source of financing for the U.S. mortgage market. Read the rest of this entry »
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June Sales Rise in San Diego As Buyers Take Advantage of New Lower Prices
July 16th, 2008 categories: Our Market
Sales of existing homes rose in June according to the North San Diego County Association of Realtors. There were over 1500 detached homes sold in June, a 2 percent increase over May and even with June of 2007. This increase in sales is attributed to buyers taking initiative and purchasing destressed properties. The median price for an existing detached home in San Diego County was $418,000 in June which equates to a 3.9 percent fall from the month prior and more than 30 percent less than one year ago.
In a recent public talk, Gary London of The London Group of San Diego said that you make money when you buy Real Estate, not when you sell. It seems as though there is a trend today where investors anticipating a recovery in our local market are staking their claims by purchasing properties, both attached and detached at serious discounts compared to recent years. Today we have a buyer’s market with prices down as much as 30% and at this time, plenty of inventory to choose from. Whether you are looking for a primary residence or an investment property, having a good selection from which to choose is key to a successful purchase.
The median price per square foot for detached homes in June was $210 in South County, $240 in North County and $298 in the San Diego Metro area, the smaller home sizes in the Metro area serves to drive up the price per square foot. As to inventory, active listings for attached and detached homes in the county dropped from May to June and are slightly below June 2007 numbers. Many sellers who need to move due to job relocations, etc. are choosing to rent their homes rather than sell in today’s market. The rental market is robust in San Diego with rising rents and plenty of demand. Rentals are usually in high demand when home sales are in the lower realm of the cycle.
In Downtown San Diego, numerous newly constructed condominiums are being rented today rather than put on the market for sale. Demand is high Downtown as the culture and life style continues to thrive making San Diego one of the most desirable American cities in which to reside. Many renters are renting to own their own piece of city life.
There are more foreclosures anticipated for this year, many analysts predict the fourth quarter of 2008 for the peak, making summer the time to research your investment. For information on Real Estate statistics or availability, contact JB Home Sellers. We’ll help you find your piece of San Diego gold.
| Discussion: 1 Comment »
Economic Forecast Calls for Rise in Home Prices and Decreasing Housing Starts
July 11th, 2008 categories: Our Market
The National Association of Realtors forecasts an increase in home sales nationwide in the second half of 2008 and in 2009, a 5% increase to 5.58 million sales. May sales around the country declined after the sharp increase of the previous month. Economists say the pullback was expected after April’s performance.
The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed. The PHSI in the West slipped 1.3 percent to 97.5 in May but is 2.0 percent higher than May 2007. This is a sign that while we are not yet ‘out of the woods’ but nearer by far than we were a year ago.
Lawrence Yun, NAR Chief Economist, said location has never mattered more than in the current market. “Some markets have seen a doubling in home sales from a year ago, while others are seeing contract signings cut in half. Price conditions vary tremendously, even within a locality, depending upon a neighborhood’s exposure to subprime loans.”
Double-digit pending sales gains in May from a year ago were notied in Colorado Springs, Colo.; Sacramento, Calif.; and Spartanburg, S.C.
Based on current indicators, the 30-year fixed rate mortgage is forecast to rise gradually to 6.5 percent by the end of this year and remain fairly steady in 2009.
The national aggregate median existing home price is projected to fall 6.2 percent this year to $205,300 and then rise 4.3 percent in 2009 to $214,100. New home prices are anticipated to decline 3.2 percent in 2008 and rise 5.3 percent in 2009. Housing starts, including multifamily units are likely to fall 28.7 percent this year due to higher construction costs and inventory conditions. An additional 9 percent decrease in starts is expected in 2009 which will impact locations where economic growth provides the need for more housing. San Diego county may be feeling the housing squeeze in 2009 which will put upward pressure on home prices, particularly those in areas near core employment hubs .
San Diego’s diverse employment sectors help sustain positive growth in our local economy. San Diego is the 3rd most popular tourist destination in the country and this brings new money into our economy all year long from all over the world. Our bio-research and technology sectors are bringing new business and high wage earners to the county and the peerless climate and environment make everyone who lives here most fortunate. Find your dream home today at a great value and join the fortunate few who call San Diego county home.
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A Green Mortgage?
July 2nd, 2008 categories: Our Market, The Greener Side
Not the green as in cash green but Green as in Clean Green. Mortgagegreen, Inc. has introduced the first National Green Residential Mortgage Underwriting Standard at the Capital Markets Partnership Organization Meeting at JP Morgan Chase in New York on June 18, 2008. The focus of this new standard is as follows;
Clearing the path for discounted financing on green-certified buildings
Accelerating the greening of the real estate industry
Resulting in significant impact of greenhouse gas emissions and global sustainability
Buildings are the largest single category of carbon-emission producers contributing to global warming. One half of the content of our nations landfills comes from new construction debris. There is a real need for change in our building technologies and change is underway with Green building standards as established by Leed, Build It Green and others, each system with its own set of criteria for certification. The rating systems are different but over time will grow more similar as research is shared and compared and BMPs are established.
Green underwriting criteria for mortgages is a wonderful new idea brought about by a shift in at least one company’s priorities. It shows a new maturity on the part of the financial sector- this same sector that has brought about the current credit debacle that has been so impactful in the downturn of the nation’s housing market. Finally, a great idea with positive consequences.
Agenda items from the June 18 meeting include topics such as “Sustainable Investment Market Brief: Giving the market what it wants”. Discussion points were on this topic included the following;
- Higher valued collateral
- Reduced risk
- No climate credit risk- stop dangerous climate change/irreversibility
- Innovation and good will
- Enhanced liquidity
- Improved investor confidence
- Near term economic stimulus
- Cheaper cost of capital
Improving the standards by which we build homes and commercial buildings and utilization of sustainable technologies creates a more valuable end-product and reduces risk on multiple levels. Mortgage programs that reward builders and buyers of Green properties will encourage more Green building which in turn will drive down costs as Green products become more prevalent and readily available which then makes Green projects more profitable encouraging more Green technology. It’s a great example of the far-reaching benefits of rewarding good behavior.
For more information about Green mortgages, visit the website for Mortgagegreen and learn how owning a Green home can save you some green.
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