22 Jun 2010
June Real Estate Mortgage News

What to say about mortgage rates?  Well, mortgage rates were little changed this week, which is actually a good thing, considering that the homebuyer tax credit expired recently. Starts on one-family homes fell 17 percent to an annualized pace of 468,000 units in May from April’s 20-month high. In addition, permits on one-unit homes fell to the slowest pace since May 2009. But, considering the expected downturn after the expiration of the tax credit, the market is holding stable.

Nonetheless, household balance sheets have been improving over the past four quarters. Basically, households gained $6.3 trillion in net worth in the first quarter from a year ago, according to the Federal Reserve. In addition, homeowners have regained $1.1 trillion in home equity over the same time period.  For homeowners, things are on moving in a positive direction.

Conforming Loan Limits ($417,000 and Under)

Loan Program            Interest Rate            Points

30 Year Fixed                  4.500%                           1.000

10/1 ARM                         4.250%                           1.000

5/1 ARM                           3.500%                           1.000

5/1 ARM I/O                   3.500%                           1.000

Jumbo Loan Limits ($729,751 and Over)

Loan Program            Interest Rate            Points

 

10/1 ARM                         5.250%                           1.000

7/1 ARM                           4.875%                           1.000

5/1 ARM                           4.250%                          1.000

Agency Jumbo Limits ($417,001 – $729,750)

Loan Program            Interest Rates            Point

30 Year Fixed                   4.750%                            1.000

Money Rates

M11                                      M21

10 Yr Bond                           3.18

Prime                                     3.25

6 Month Libor                     0.75188%

 

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27 May 2010
Market Conditions for Sunset Park in Santa Monica, California

The Sunset Park neighborhood of Santa Monica, which has approximately 2700 single family homes, has been a very active market in the past few months. There are only 23 homes currently available with an average amount of more than 100 days listed on the market.

As of the third week of May, there are currently 15 properties that are in escrow and under contract. And since March of this year there have been 19 homes that have sold and closed escrow.

This is a positive market indicator of a neighborhood that shows a high demand with a very limited inventory.

In this market, buyers are being much more meticulous with their searches.  They are definitely looking for value since longer term goals are much more of the focus. I am seeing properties selling with multiple offers and selling above their asking prices. It is evident that buyers only make offers if they perceive that the value is there and the property might not be available tomorrow.

 

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06 May 2010
Economic News Affecting the Housing Market

There was a lot of economic activity that kept investors watching every move.  As the Mortgage and Real Estate News reports:

With a Fed meeting, Treasury auctions, and major economic data on this week’s schedule, investors were watching closely for unfavorable news. In the end, there were no major surprises. Little changed in the Fed statement, auction demand was at average levels, and the economic data was generally close to expectations. The biggest influence on mortgage markets turned out to be turmoil in Greece, which caused investors to seek the relative safety of US bonds, and mortgage rates ended the week a little lower.

Beyond Greece’s economic trouble, investors have been watching to see whether other smaller European countries would slip into economic turmoil.  As a result, investors shifted funds to safer investments, including US Treasuries and mortgage-backed securities (MBS).

In a move that will have direct impact on the housing market, the Mortgage and Real Esta News reports:

Prior to Wednesday’s Fed meeting, it had been reported that support was growing among Fed officials to begin sales of mortgage-backed securities (MBS) from the Fed’s portfolio. The Fed statement made no reference to MBS sales, however. As expected, the Fed made no change in the fed funds rate. The statement described the economy in slightly more positive terms. Also, pending Home Sales, a leading indicator for the housing market, will come out on Tuesday.

While incremental, many of these moves in the economy can prove positive for the real estate market, both in Los Angeles and nationwide.

 

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13 Apr 2010
Pending Home Sales Gain, Possible Spring Surge

According to the National Association of Realtors:

Pending home sales rose in February, potentially signaling a second surge of home sales in response to the home buyer tax credit.  The Pending Home Sales Index, a forward-looking indicator based on contracts signed in February, rose 8.2 percent to 97.6 from a downwardly revised 90.2 in January, and remains 17.3 percent above February 2009 when it was 83.2. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.

The Pending Home Sales Index is based on a scale of 1 to 100.  One hundred is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.  The index breaks out differently from region to region. In the Northeast the index rose 9.0 percent to 77.7 in February and is 18.9 percent higher than February 2009. In the Midwest the index jumped 21.8 percent to 97.9 and is 18.7 percent above a year ago.  Pending home sales in the South increased 9.2 percent to an index of 107.0, and the index is 17.5 percent higher than February 2009. In the West the index fell 4.8 percent to 98.0 but is 14.6 percent above a year ago.

These numbers and anecdotal evidence from various markets around the country, has led the National Association of Realtors to suggest that there is a distinct possibility of surge in home sales for the spring.  According to the NAR’s chief economist, Lawrence Yun:

“Anecdotally, we’re hearing about a rise of activity in recent weeks with ongoing reports of multiple offers in more markets, so the March data could demonstrate additional improvement from buyers responding to the tax credit.”

All of this together looks like good news for the market as a whole and Los Angeles in particular.

 

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