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Blog By Scott Harrison Bay Area Realtor of 20+ years

May 19 2009 Alameda county home prices this year.

Home prices countywide is mixed with a wide variance between the median sale prices over the last 2 months . I feel at this points the markets hit hardest are now raising and most of the markets not hit very hard are still dropping.

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Single Family Apr. 2009

Feb 2009 Change $ Median Price

Alameda

$636,500 $545,000

+ 91,500

Castro Valley

$480,000

$407,500

+ 72,500

Danville

$804,500

$900,000

- 95,500

Dublin

$602,500

$560,000 + 42,500

Fremont

$484,000 $465,000

+ 19,000

Hayward

$245,000

$260,000

- 15,000

Livermore

$391,000

$382,500

+ 8,500

Newark

$366,000

$380,000

- 14,000

Pleasanton

$665,000

$760,000 - 95,000

San Leandro

$309,000

$337,500 + 28,500

San Lorenzo

$287,600

$301,944 - 14,344

San Ramon

$693,000

$599,500 + 93,000

What we are seeing is a lot less bank owned properties comming on the market and dropping home inventories this year.

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March 20Th The Los Angeles Times article implies that Second homes and Investment properties could be included in the new Fannie and Freddie programs. It explains the benefit of stopping new foreclosures from property owners who may not have equity, are not behind on their payments and how Private Mortgage Insurance might not impact some owners. Read more

March 12 2009 How the 2009 Stimulus plan can help you.

1. If your a first time home buyer and have not had a primary residence in the last 3 years but you can own rental property there is a tax credit if you buy. More details on this word document.

2. If you own a home and have a mortgage which is hard for you to make the payment you may qualify even if your mortgage amount you owe exceeds your home's value. More details on this word document.

Or go to the California Association of Realtors page on these issues at this link.

Looking at forclosure? The state of California just gave your bank insentive to participate in short sales. The California Legislature, as part of the recently-passed budget package, approved Friday, legislation SB2X-7 and AB2X-7, which provide for a 90-day foreclosure moratorium for those who first loan was recorded between Jan. 1, 2003 and Jan. 1, 2008

Febuary 15th 2009 Stimulus Packages passes
On the housing front, the good news is that the legislation resets the conforming loan limit cap at $729,750, up from $625,500. Numerous counties in California experienced a marked decrease in their conforming loan and FHA limits on Jan. 1, and the stimulus bill reinstates 2008 loan limits through Dec. 31, 2009.

The bill also increases the first-time home buyer credit from $7,500 to $8,000, and removes the requirement that the credit be paid back if the buyer stays in the home for at least three years. It also extends the expiration date for the credit from July 1 to Dec. 1, 2009. Homebuyers must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009, to be eligible for the $8,000 credit

More info at this link

If you know someone who is having some trouble making your house payment specifics on how the Stimulus Package can assist you even if your home value is below your loan ballance can be seen at this link.

Everyone who is interested in the Real Estate market wants to know about their local market. Statics's for each city in Contra Costa and Alameda County can be viewed at http://scottgharrison.homestead.com/ScottInTheNews.html I have access to this info for other counties also just e-mail me your request.

Septerber 30th While the economy and market wonders how the Congress will decide to fuel the economy and east credit worries. A new rules is due to go into effect in 2009 that effect the capital gains exemption of $250,000 or $500,00 on the sale of a principal residence. This could have a huge impact on some sellers who in the last 5 years have had some non qualifying use. For more on this story click here

August 25th Housing stimulous package overview.

Encouraging First-Time Homebuyers to purchase – for primary residence only.

A. Gives a first-time homebuyer a REFUNDABLE Federal tax credit that works like an interest-free loan of up to $7,500 or 10% of the purchase price, whichever is smaller. (With a tax credit, you subtract the credit amount from the total you would otherwise pay to the IRS. So, if you owe $1,500 and you qualify for the credit, you would end up getting a $6,000 refund. But there are two big catches:

1. If you earn a modified adjusted gross income of more than $75,000 or $150,000 if you are married and filing jointly, the credit starts to phase out. For single people, it phases out at $95,000 of annual income, while for married people filing jointly, it phases out at $170,000.

2. You have to pay the credit back over the next 15 years, in equal amounts each year when you file your federal taxes. This makes it more like an interest-free loan than a true credit.

3. The tax credit is retroactive to home purchasers on April 9, 2008 and expires July 1, 2009.

B. Additional deduction – a homeowner who takes the standard deduction on their federal income taxes and does not itemize, can take an additional federal tax deduction of $500, or $1,000 if they are married and filing taxes jointly. This is gravy – you get it in addition to the standard deduction.

2. FHA A. Permanently increases the FHA loan limit in high cost areas to $625,000 after the stimulus bill expires on 12-31-08.

B. Increases the FHA down payment to 3.5% (Gifts allowed from family members, state and local bond programs)

C. Eliminates Down payment Assistance Programs as of 9-30-08. (Credit approval required by then).

D. 12 month moratorium on FHA risked-based premiums effective 10-01-08.

3. FHA Reverse Mortgages

A. Raises the loan limit nationally (not by count) to $625,000. Limits fees that can be charged on reverse mortgages…….

4. VA – increases VA Guaranty to raise no down VA loan • Prevents a lender from starting foreclosure against a returning veteran for 9 months after a soldier returns.

5. Neighborhood Stabilization

A. Provides $4 Billion in emergency assistance to communities hardest hit by the foreclosure and sub-prime crisis to purchase foreclosed homes at a discount and rehabilitate or redevelop the homes to stabilize neighborhoods and stem the significant losses in home values of neighboring homes. • These homes would be sold or rented to moderate income individuals and families whose income does not exceed 120% of the area median income.

B. Provides $180 million for pre-foreclosure counseling and $30 million in grants for legal counseling to assist homeowners in foreclosures.

6. Loan officer licensing – establishes a nationwide loan originator licensing and registration system that will set minimum standards for loan originator licensing to improve the oversight of everyone originating mortgage loans.

7. Re-negotiating mortgages (program expires 9-30-2011)

More details on these programs is available There just is not room to cover each aspect completely.

July 9Th 2008 Update: Local Lenders inform me that conventional lenders have labeled Alameda and Contra Costa Counties as "Declining Markets" and now many lenders are requiring a 25% down payment minimum.

A positive note I just added the AmeriDream down payment assistance program to my web site information on line. This program assists buyers with seller contribution to down payment allowing as high as 10 % of the sale price passed through a non profit for down payment and closing costs. Keep in mind that the down payment assistance programs are set to discontinue

Real life short sale experience.

This year I have closed 3 short pay sales. It is not always easy Example 1.

I have written 7 offers for buyer 1. wanting to buy those cheep homes that are Bank Owned or Short Sales. This is a update on the what has happened.

Short sale Via Corolla had 3 offers as of 5/18/08 and as of 9/3/08 it is Pending.

Short sale Via Vista had 3 offers as of 5/18/08 and as of 9/3/08 it is Pending.

Short sale Via Peidras has many offers on 6/18/08 and is Active as of 9/3/08.

Short sale Via Karl had 3 offers on 5/18/08 and is pending as of 9/3/08.

Bank owned St John status 5 offers 5/18/08 and is pending as of 9/3/08.

Bank owned Hacienda asking $329,900 offered 6/18/08 status Pending on 9/2/08

Hopefully this will not happen to you but on 8/30/08 the buyers lost his job. After 3 months and 2 weeks none of the 7 properties have sold.

This is not an isolated case. This week after waiting 3 month for the first and second lender to answer an offer from another buyer an agreement was reached but the seller got a work out offer from the bank and is going to keep the home and not sell and this buyer is out searching for a home again.

May 27th 2008 What I see today in one market.

I pulled up the numbers on all homes for sale in the zip code 94579 with the low of $299K and high at $825K and found about 1/3 were pending. I ran the homes under $436K and found 18 pending and 22 active which is almost 50%. These numbers reflect a hot market for the homes under $435K and is likely the beginning sign of the market turning around in this zip code.

Will you miss this market when it sling shots up again?

It is going to be easy to miss the signs that the market is turning around unless your Realtor is telling you the % of the short sales market and tracking them in each city your interested in. Some markets will not be so sensitive while others will shoot ahead in a big way. Since the number of short sales is held in the Realtor MLS confidential section which is not available to the public sites like Realtor.com, Zillo.com, Prurealty.com or any other public sites are allowed to display this info.

The markets which are not going to be so difficult to spot will be the markets with a low number of short sales and markets which has a high number of bank owned properties. The markets which have a high number of Short Sales will be the ones that surprise most when they sling shot into the over asking sellers market. To understand why consider that these short sales are taking 45-95 days for the banks to respond too. During that time the home shows active on the market and may have 3-7 offers awaiting a response from the bank. As the market heats up the bank owned and standard owner sales will almost all go pending leaving a large number of buyers awaiting the short sale bank decision on their offer. Most agents and buyers will see a large number of active homes so they will think there will be plenty of time to pick up on a deal because the inventory is so high. Lets assume this happens and 125 short sales are active and in 60 days 125 buyers get their offer accepted with a 30 day close (that is 90 days before people tracking sold prices will see it) and then the buyers who's offer did not get accepted go out looking again which would be about 625 buyers flooding out looking for homes in a small market of 100 active homes it will make a big impact. When you consider the number of buyers on the side lines waiting for the market to turn before the make offers jumping in it would sling shot things up in a big way.

Of course the accuracy of this prediction is only known after buyers market is gone.

Written 5/5/2008 By Scott Harrison Prudential Ca. Realty

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Credit scores will be very important to future pricing on conventional loans.

Below are the increases FHLMC (Federal Home Loan Mortgage Company) will charge starting 6/1/08.

Credit score of 720 + best rates no adjustment.

680-720--.50 unless under 60% or less

660-680-- 1.25 from 70% up and .50 between 60 & 70%

640-660--1.75 from 70% up and .50 between 60&70%

620-640--2.50 from 70% up and .75 between 60-70%

620 and below--2.75 from 70% up and .75 between 60&70%

I would imagine that Fannie Mae will do this also. These costs just reflect the delinquencies the agencies are seeing in their portfolios at the moment. This is true risk based pricing.

1) Our loan agents can help improve your score and thus make pricing more affordable.

2) Consider FHA/VA/Cal Vet loans - no pricing adjustments as long as the middle score is over 620

from Tom Wardrope Vice President Cherry Creek Mortgage Company

Claudia Kim Loan officer 925-474-1115 3/12/2008

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Why are we in this market, what is causing it and how long will this last ?

I have studied the home sale averages from today to 2005 and found that values is some cities are around the same as 3 years ago. This drop in prices has created a hardship for many and an opportunity for those looking to buy.

Some big factor contributing to this slow down is often buyers bought using a loan program allowing them to place 3% or less as a down payment to buy a home and used an adjustable rate mortgage (ARM) that was fixed for 3-5 years with the loan agent saying to the borrower “you can always refinance” when it starts to adjust. If their homes value has gone up and then dropped they often don’t have the equity in their home that would allow them to refinance since many of these loan programs have new rules or been eliminated.

Another contributing practice allowed borrowers to use stated income on loan applications which often led borrowers to sign papers with inflated income numbers. Today many of these home owners are trapped preventing them from getting out of these loans because they did not qualify when they bought or don’t have the equity needed to refinance. This will contribute to the market decline or cause it to persist longer.

Home owners trapped often use a short sales to get out of their situation. Short sales are often price below market by agents desperate to make a living and sellers who don’t care how much it sells for. A short sale is an alternative for those seller who owe more that what the property is worth and has stopped making mortgage payments. The seller can not make any money from selling the home and the lien holder (bank) has the say so if the sale can take place once an offer is made on the property.

The mortgage reforms that congress passed recently is going to extend the effect of this market by prevent those who used stated income loans from reusing that type of program to refinance trapping many in their ARM loans and preventing home buyers with less than 5% down from buying until they have saved up the down payment.

By Scott Harrison Realtor December 2008

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"Why a dropping market is a good time to buy a home."

By Scott Harrison

If you already own a home and are looking to trade into a dream home now is the best time.

Moving your equity from a lower priced home to a higher is the best direction today. Since the higher priced home often looses more value in a recession than a lower priced home, you will come out ahead (see the example below). You also come out ahead because property taxes on the bigger home are going to be lower. If your next dream home is going to have a great location, be just the right size, floor plan and have the features you want, today is by far a better time because you have lots of selection and you won't be rushed into buying a home that is not really your dream home.

Don't own? Timing the real estate market can be more tricky than the stock market because of the size of the investment and other factors. Eight months from now will you still have the same amount of cash for the down payment? Or will that new car be in your drive way? Can you still qualify with the higher debit of the new car payment? Will the interest rates be reasonable or will high rates be the reason the timing is not right later? Will lenders continue to tighten up lending standards? Is an other child in the cards will the loss of the second income keep you back. In 8 months could some thing be looking uncertain at work and you will have paid 8 months more rent without any tax shelter or tax benefits. Just why are your waiting?

There are a lot of things that could come up and with too many buyers do come up. Over the long run "buying and holding real estate is much better than holding to buy real estate" You do not have to be a home owner selling to see the benefits of owning just look at any 30 year chart comparing real estate and any other investment.

Lets compare buying a more expensive home in 3 different market situations.

Sold value Difference Buy bigger

Flat market $100,000 $100,000 $200,000

Rising market +10% $110,000 $110,000 $220,000

Falling market. - 10% $90,000 $90,000 $180,000

Would you would want to sell when the Difference was smallest? If you feel you can’t afford it today what makes you feel you will be able too afford it when the market is up and more expensive? There are other factors to look at and I will be happy to discuss them with you. Call for your free consultation today Scott Harrison 510-388-4536

It is a good time to buy and you can start you search on line at this link or just call Scott Harrison 510-388-4536 to take your next step into your dream home.

Find out when out next first time buyer seminar will be.

Information about buying a Townhome or a Modular Home

What are the tax brakes if I am selling a Home?

Where can I find information on first time home buyer programs?

Are Bank Forclosures or short sales a good deal?

What Is My Home Worth?

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Want to check out Scott's biography? Some office awards

Find out about Scott G Harrison his accomplishments. Alist of real estate sold can be viewed below as well as client referrals.