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Market update January 8, 2010

What’s going on in the market? Scott Cooper of Big Valley Mortgage knows his stuff! Read on…

Rates

Conventional 30 Year 4.875%-5.125%
FHA/VA 30 Year 5.0%-5.25%
Jumbo Conventional 30 Year 5.125%-5.375%
Investor 30 Year 5.25%-5.50%

5 Reasons to Buy Now!

1) Tax Credit Going Away:

$8,000 for First Time Buyers & $6,500 for Move-Up Buyers
• Must be in contract by April 30th, 2010
• Must close by June 30, 2010

2) Rates Positioned to Rise

The Fed has stated that it is set to discontinue buying Mortgage-Backed Securities in March.  (Many Analysts expect Rates to increase over 1%)
Low Rates= Low Payments!

3) Sales Prices Still Low

With increased sales activity and low inventory, we are seeing many properties appraisal for more than the sale price.  In addition, the recession is officially over and the economy is in the beginning stages of recovering.  These are good indications of increased sales prices in the future.

4) Appraisal Ordering is Getting Tougher

HA is implementing an HVCC style appraisal ordering process. This means we will lose the benefit of picking the appraiser.

5) Continued Tightening in Underwriting:

As lending tightens buyers who qualify today, may not qualify tomorrow.

Current Underwriting Basics

• Minimum Credit Score to Buy – 620 FICO
• Foreclosure – Can buy after 3 years
• Chapter 7 Bankruptcy – Can buy 2 years after discharge
• Chapter 13 Bankruptcy – Can buy with 1 year clean payment history from date filed
• Short Sale – Can buy 2 years after a short sale with no lates in the year prior to the short sale
• Can buy 3 years after a short sale with lates in the year prior to the short sale

Bottom Line: If you’re paying at least $1,000 in Rent, you should own!

 

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Buy a Home in 2010

Are you a first-time homebuyer? Are you a homeowner considering purchasing an investment property? Either way, you are among a large group who are planning to buy a home in 2010.

A recent Move.com survey revealed that many Americans have “buying a home” as one of their top New Year’s Resolutions! 17.7% of Americans want to be come First Time Home Buyers and 15.7% are planning to purchase an Investment Property.

Here are the Top Four Reasons to buy now!

1. Record Low Interest Rates.

2. Record Low Home Prices.

3. Tax Credits for Home Buyers – through April 30, 2010.

4. Tax Benefits of Home Ownership over the long term.

Read more about the benefits of buying a home.

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Pricing your home to sell

Price it right out of the gate!

Pricing your home correctly is the single most important key to getting it sold. Of course location and condition come in a close second. Even if you do find an eager buyer who is willing to overpay for your home, the deal will screech to a halt when the lender’s appraisal comes in under the value of the contracted price.

There is a magic ”window of opportunity” when a property first hits the market. This is when it attracts the most attention from buyers and real estate agents who represent motivated buyers. If your home is priced too high, both buyer and agent will discard it from the prospect list, and probably won’t revisit it. They will assume they are dealing with an unrealistic seller.

Factors that affect the price of a home

Location: You can’t get away from this one. If your house is located in a desirable area that is in demand, you will be able to get a higher price than you can for the same house in a less desirable area. Freeway or road noise, busy corners, train proximity will detract from a home’s desirability, while good schools and convenience to shopping & commuting will add to desirability.

Condition: A house that has been better maintained and shows better will always sell for more than one that has had deferred (neglected) maintenance and needs work. A home that has been properly prepared for sale  home will always show better! A house that has been updated with modern amenities will also command a higher price.

How to set the price

CMA (Comparable Market Analysis): A comparison of similar properties in the same general area that compares actual sold prices. A Real Estate Agent can generate a CMA for you at no charge. A current popular consumer CMA tool is Zillow.com. Do not put too much confidence in the accuracy of this tool as it does not take into effect condition or other amenities of a property.

Current Active & Pending Properties: In our current “Buyer’s Market,” it’s important to analyze the competition. Price your home below the competition (Active properties) to generate an offer. Note at what price point Pending properties received an offer. Don’t try and test the market by starting out with a higher price in hopes that you will get an offer.. You will end up lowering your price, and can often end up chasing the market downward, and getting a lower price than if you had priced it right in the first place.

Buy, sell or hold? Auburn CA homes for sale and real estate trends.

Do you wonder if it’s a good time to buy an Auburn CA home? Real estate mogul Donald Trump said a few months ago in an interview on Good Morning America: “If you want to buy a house there’s probably never been a better time.” Trump also commented that the golden real estate rule of location, location, location still applies. He said to hold off selling if you can, but if you do need to sell, make sure your home is in the best condition possible. He may not have a hair style to emulate, but he seems to have the knack for real estate investing!

We are bombarded daily with negative headlines about the real estate market. I had a conversation with my mother-in-law on Thanksgiving Day about this very subject. She said, “yes, it’s a great time to buy, but there’s no money to lend.” That is a commonly held belief that is absolutely not true! Yes, qualifying is more stringent, but there is money to lend. FOR BUYERS, there has not been a better time to buy in a very, very long time. Some of you may say, “We haven’t hit bottom yet.” The only sure way to know we’ve hit bottom is to be looking back at it.

Isn’t it ironic that when prices were rising a few years ago, buyers were doing everything they could to buy…even when the advantage was to the seller! They were afraid of missing out. Now that the advantage is to the buyer, they’re afraid once again, but this time it’s the fear of possibly paying too much. We have had a 20%-plus decrease in median home price in the greater Auburn area in the past 2 years. This is the point when smart buyers decide it’s time to buy a home. They know they can’t predict the end of a slump, but they know there has been a considerable fall in prices, and it’s time enough to make a sensible purchase.