After Years Of Booms And Busts: Don’t Panic
The Los Angeles Times reports from California. “Interest rates on an average 30-year fixed-rate mortgage hit 4.1% this week, a low for the year, according to Freddie Mac. It’s helping to ease the pain of home prices that have climbed by one-third in Southern California over the last two years. When rates start to rise, there may well be a flurry of sales as buyers rush to lock in lower payments while they still can, said Mark Goldman, a mortgage broker who teaches real estate at San Diego State University. In the long run, Goldman and other market watchers say, higher rates may help to damp home sales, which are already running well below historical averages. But they’ll be balanced out by clearer lending guidelines and slightly looser credit requirements.”
“And mostly, Goldman said, they’ll be taking place in a market that — after years of booms and busts — appears to be behaving somewhat normally. ‘We’re in a period of extraordinary equilibrium right now,’ he said. ‘Don’t panic.’”
The Marin Independent Journal. “Flips have dropped significantly in Marin, from a high of 7.2 percent of all home sales in the last three months of 2012 to 4.8 percent of all sales in the second three months of 2014, according to RealtyTrac. ‘I’m cautious going into next year,’ said Brett Foley, who makes his living flipping. While Foley has prospered, leaving a job managing construction crews to flip full-time, this house and another he’s remodeling in Mill Valley could be his last hurrah.”
“‘We’ve had an incredible year and a half, almost two years. Nothing lasts forever, so is it going to level off? Absolutely,’ said Bob Ravasio of Coldwell Banker.”
The Independent. “Joe and Debbie have owned their Mission San Jose home for over 20 years. When a neighboring house similar to their 4-bedroom rancher sold recently for $1.4 million, the couple started thinking it might be time to cash in. They have long wanted to live in Livermore, and the sale of their home would make the move easy. But they won’t necessarily buy here. They may decide it’s time to rent.”
“Their daughter already rents here, paying $1,800 a month for a charming 2-bedroom bungalow in Old North Side. She would love to purchase her own home. Something similar to the house she currently lives in would likely sell for about $450,000.”
“‘Home ownership is still important for the country. It’s the most proven way to build equity and it gives families security,’ David Plouffe, former advisor to President Obama and incoming VP of Uber, said in a recent interview with Realtor Magazine. ‘It doesn’t mean it’s right for everybody. We live in an economy where people who are in their 20s are going to have eight or 10 jobs and will move around a lot. It’s different than it was a couple of generations ago, when you bought a home, planted roots, and you were going to be there forever,’ he added.”
From KUSI News. “The average price of a typical home in San Diego is $625,000 while the national average, according to the USD Burnham Moores Center for Real Estate, is $175,000. Many renters who want to take the leap to home-ownership are sitting on the fence right now because they are worried there will be no net to catch them when they make the leap to buy a home. Real estate agent Sean Hillier says it’s hard to find properties to show. ‘Right now market is kinda slow for summer, but a lot of home buyers are kinda hanging back saying I think things are kind of overpriced here,’ says Hillier.”
“Real estate experts say home prices are almost as high as they were at the peak of the market in late 2005. Norm Miller says, ‘There are about 8,000 listings, and less than 250 are in the affordable range.’ If interest rates are so low right now, why can’t people buy homes? With minimum desired credit score of 620 and a down payment of 20%, when wages have not gone up for many, it is just not feasible right now. ‘If you have aspirations for a high quality larger home, I don’t see it in San Diego county,’ says Miller.”
The Union Tribune. “Tens of thousands of San Diego County homeowners continue to owe more on their properties than they are worth. In the second quarter of this year, there were 46,585 county homeowners underwater on their homes, Zillow reported. Those with negative equity make up about 10 percent of property owners in the county who have a mortgage, down from 21 percent in the second quarter of last year. The homeowners were underwater despite an increase in the county’s median home price of more than $100,000 over the last two years.”
“‘There were a lot of people that got caught at the top (of the housing bubble),’ said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. ‘During the run-up, people were just out at a frenetic frenzy in 2006 and 2007. They didn’t care what price they paid for property.’”
The Record Bee. “The impact of Mortgage Electronic Registration Systems (MERS) on county records was a topic of interest during the Lake County Board of Supervisor meeting on Tuesday. District 3 Supervisor Denise Rushing requested the issue be placed on the agenda after hearing from several local residents during public comment at previous meetings regarding the unlawful foreclosures. According to Larry Anderson, 76, of Kelseyville, Bank of America has been using MERS to foreclose on his house, as well as the houses of his neighbors. ‘It affects a lot of seniors,’ Anderson said. ‘What MERS is doing is proven fraud.’”
The Press Enterprise. “Were it not for the catchy real estate listing, an apocalyptic bunker near Barstow that was built in the Cold War would continue to be relegated to a life of obscurity. Now, in the face of drought, raging fires, earthquakes, super flu and conflicts in Ukraine and the Middle East, Kevin Layne put out there: ‘Here’s that 8,100-square-foot underground bunker in the Mojave Desert … that you’ve always wanted,’ he wrote on Twitter, linking to a $750,000 listing for the 3-story underground abode.”
“Broker James Langley, a co-owner of Kursch Group in Victorville, said his client, Gil Stoffels, bought the desert bunker in 2006 as an investment and put it on the real estate market about a year ago. ‘He’s ready to sell,’ Langley said, and a recent $200,000 price reduction is meant to draw buyers in. Stoffels said he bought the communications center on a ‘total fluke’ when it seemed everyone was flipping homes for profit.”
“The self-described entrepreneur who got his start in the logging business and the ’school of hard knocks,’ and now invests in properties, was taken in by its originality. ‘I don’t need to sell the bunker, but I’d like to,’ Stoffels said. ‘I haven’t, so far, because I’ve gotten a boat-load of ridiculous offers.’”