Posts Tagged: ‘Housing’

South Bay Sales Prices Take A Rest

November 8, 2013 Posted by Andre Hemmersbach

Per the Multiple Listing Service (MLS) data for the greater South Bay area, real estate prices seem to have taken a bit of a rest in the last few months as the median listing price and median sales price have dropped (See Chart Below). While certain high demand zip codes could still be experiencing sales price increases, multiple sources that measure housing values have been reporting that the rate of sale price increases have started to slow nationally. FHFA HPI

The frenzied atmosphere of this summer’s home buying season created conditions in which buyers had to make tough decisions on paying over value, waiving inspections, waiving appraisal contingencies and other contractual milestones that protect them from potentially harmful financial situations. For those who are still looking to purchase a home and were frustrated by the absolute chaos of multiple offer and “bidding war” situations during the summer months, may take hope in the recent slow down in activity.

Supply and demand is a basic driver of price in any free market and the lack of homes for sale has continued to be an issue (See Chart). Just a short 16 months ago a home owner wanting to sell his property had a tough time getting a fair price for his property because of the glut of foreclosures and short sales that were his competition. That is no longer a problem as distressed sales in the South Bay and the nation as a whole,  have dramatically decreased. According to most experts the supply of homes for sale will  probably not increase any time soon (Foreclosure Rates).

Demand from home buyers while still strong, seems to have slowed a fraction. To blame could be seasonal issues along with higher interest rates and sales prices. The latest Homeowners Affordability Index (HAI) report from the California Association of Realtors (CAR) showed that affordability in California has slipped every quarter since it’s high in the first quarter of 2012. Mortgage applications for purchases as reported by the Mortgage Bankers Association, a very reliable forward looking indicator for home sales has also fallen almost every week since the September 22, 2013 release.

Current conditions for buying a home appear as favorable now as they were in the 2nd quarter of 2012. Rates are still a extremely low historical levels and while we are still in a seller’s market buyers are not running over each other at the site of a new house on the market. At least until Spring buying season 2014, buyers should be able to make rational decisions based on real issues and not the “if I don’t get this one, I’ll miss the market” mentality.

Please let me know if i can be a resource you you or your acquaintances on any matters of real estate.

List Price vs Sales Price 11 1 2013

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The Federal Reserve’s Monumental Task

August 9, 2013 Posted by Andre Hemmersbach

Through financial news reports and various investment magazines I have been made aware of a coming moment in time somewhere in the future when the Federal Reserve will have to make an important decision to do something about their Quantitative Easing Program. Well many believe we are on the eve of this great day in the upcoming September 18th Fed meeting. Just the mere mention of slowing the program down by Federal Reserve Chairman Ben Bernanke has sent the fixed income market into turmoil since May 22nd. The program’s name itself “Quantitative Easing”, sounds safe enough and does not conjure up any visions of impending doom but the manner in which the Fed “unwinds” the program could have major ramifications. Because the Fed indirectly controls interest rates for credit cards, cars, business and home loans it also has a big influence on the well being of our and the world economies. The link below will take you to a speech given by President Richard W. Fisher of the Federal Reserve Bank of Dallas and voting member of the Federal Reserve of the United States, that in my opinion is the best and most simple explanation of what the Fed has done and now must do. It clearly explains and depicts with charts the monumental task that faces the Federal Reserve over the next few months and years.

http://www.dallasfed.org/news/speeches/fisher/2013/fs130805.cfm

If I can be resource to you, your family or friends on any matters of Real Estate, I would be honored to help. I can be reached in my office at 310 540-1330.

Have a great week!

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Little Known Mortgage Underwriting Guideline Exception

August 1, 2013 Posted by Andre Hemmersbach

Over the last several years the news about lending and lending guidelines has for the most part been pretty negative so when there is something positive to highlight it makes my job a bit easier.

One of Fannie Mae’s (FNMA, the government institution that buys almost all the fixed rate mortgages made today) little known rules that could help certain individuals is how they look at borrowers who are purchasing, refinancing or doing a cash-out refinance for and elderly parent or disabled child.

If the elderly parent, or in the case of a disabled adult child, is unable to work or does not have sufficient income to qualify for a mortgage on his or her own FNMA will allow the borrower of the elderly parent or disabled child to purchase or refinance the home as the owner occupant at the owner occupant rates, loan to values and guidlelines even if they are not going to occupy the property.

There would be several additional documentation requirements but as a whole it pretty simple. More astonishing than the fact that FNMA allows this as an exception is that not all lenders follow the rule or even know about it.

If i can be a resource to you on any real estate matters please call me.

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South Bay Home Prices Higher and Inventories Still Low

July 26, 2013 Posted by Andre Hemmersbach

Sales prices in the Greater South Bay area have continued to move higher as inventories are still very low. These trends however, are rearward looking events and represent contracts that were written before the mortgage rate increases from 45 days ago. Of real interest are what the numbers will look like in August and September after homebuyers have had some time to digest and concider the higher mortgage rates and the higher monthly housing payments that corresponds with those higher rates.

Robert Dixon of RE/MAX Estate Properties in Palos Verdes thinks that the higher mortgage rates are not going to affect property prices in any substantive way. The number of borrowers who are deciding they have missed the oppurtunity to buy their first home are equal to the number of fence sitters that finally have decided “we better move now, before rates move even higher.” Robert does feel that the higher mortgage rates in conjuction with the traditional end of the summer buying season approaching will bring back a more normalized negotiation environment between buyers and sellers. “The last several months have seen a frenzy of buyers who are climbing over each other to have their offers accepted.”

Greater South Bay Listings vs Sales Prices

Greater South Bay LIstings vs Sales Prices

By Andre Hemmersbach

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Negotiations

July 20, 2012 Posted by Andre Hemmersbach

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