UCLA: No Decline in Prices

This slower market is not a sign of a recession because the Southern California and national economy is strong and there is no "vulnerability" in the job market. The speculative demand got way out of hand, which drove prices up even higher, but the speculative buyer has departed the market. Speculators enter and leave the market suddenly, since they lack the emotional component about their properties that the usual residential seller has.
So the bottom line is: "We do not predict a recession, nor do we predict a substantial decline in average nominal home prices," said Ryan Ratcliff, a UCLA economist. "The forecast is based on two arguments. There is not enough vulnerability in the usual sources of employment loss to create a recession, and the historical record suggests that average home prices do not usually fall without this kind of job loss."

Federal Reserve Increases Rate

Fed raises key interest rate to 5.25% in 17th consecutive increase on fears of inflation risks. The recent increases in bank mortgage rates areprobably a reflection of this anticipated increase, following pastpatterns."Recent indicators suggest that economic growth is moderating from itsquite strong pace earlier this year, partly reflecting a gradual coolingof the housing market and the lagged effects of increases in interestrates and energy prices," according to a committee statement."Readings on core inflation have been elevated in recent months," thecommittee stated. "Ongoing productivity gains have held down the rise inunit labor costs, and inflation expectations remain contained. However,the high levels of resource utilization and of the prices of energy andother commodities have the potential to sustain inflation pressures."In a related action, the Federal Reserve Board of Governors unanimouslyapproved a 25-basis-point increase in the discount rate to 6.25 percent. See my site at http://www.juliahuntsman.com.

California Median Home Price

According to California Association of Realtors, "The median price of an existing single-family home in California increased 8 percent in May and sales decreased 21.1 percent compared with the same period a year ago, C.A.R. recently reported. "This is the first time since November 2001 that the median price did not increase by double digits, reflecting the return to the more balanced market that we have anticipated," said C.A.R. President Vince Malta. "Interest rates, while still historically low, continue to impact sales as did the inventory of homes for sale, which reached nearly a six-month supply in May.

"According to the report, the median price of an existing, single-family detached home in California during May 2006 was $564,430, an 8 percent increase over the revised $522,530 median for May 2005. The May 2006 median price increased 0.5 percent compared with April's revised $561,750 median price. Also in May, closed escrow sales of existing, single-family detached homes in California totaled 488,260 at a seasonally adjusted annualized rate, down 21.1 percent compared with the sales pace recorded one year earlier and down 5.6 percent from home resale activity in April. "

Dataquick, on the other hand, has reported in June, 2006, and confirmed their report that May's California median home price was $469,000, "a new record"-- a mistake?
See my website and search local MLS properties at http://www.juliahuntsman.com.

That First Home

Dream homes are great to dream about, but please don't expect everything without the money to match. Expectations that are too high might cause the first-time homebuyer to miss a golden opportunity. If you've been renting and don't have much equity, the smart thing to do is look into the future at the second or even third home as the one that really represents where you want to be. People believe their parents did the right thing by buying, but many people forget that their parents may have also built up the move-up over time.

Financial coast David Bach says, "... renters may need to take a step backward when buying their first home. It's almost always better to cut the renting cycle as soon as you can and to continue to upgrade from there," he said. "Buy what you can afford now, build equity, and move closer to that dream home."

With today's loan products, there is ample opportunity to get into that first property, where you realistically may not be staying for more than 3 to 5 years, so remembering that, compromising on home features may be easier to do. Read this article about the Wells Fargo buyer survey.

Southern California Home Prices Are Holding

Even though the sales rate has slowed over the last six months, Dataquick's check of the public records tells us "the median price paid for a home in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties was $485,000 last month. That was the same as April, and up 6.4 percent from $456,000 for May last year." Home appreciation is at its lowest pace within the last 6 years, however 27,282 homes were sold in May, lower than the peak May in 2002, but an increase of over 10% from April, 2006.

Compare Interest Rate Trends

If you're a buyer or a seller looking for a buyer, the graphs on various interest rates should be of interest to you. Look at the trends since 2000/2001 to the present, and the trend is easily seen. the LIBOR and 11th District COFI are used in mortgage lending, but they all reveal the same story. By looking at the tables, it's easy to see specific interest rates and specific times. What is most noticeable is the steady upward trend over 2005-2o06.

What a Rate Increase Does to Your Mortgage Payment

More mortgage rate increases are still on the horizon; don't wait if you have the opportunity to act in the near future. This time last year (see linked article) the overal 30-year fixed rate was at 5.63 percent, this time a year later, it's 6.62% with .5 point, meaning it would be a little higher if you paid no points. The difference to you the borrower on a $350,000 loan amount is over $200/month. At 5.63 percent, your monthly principal/interest payment last year was approximately $2015.90, and at 6.62 percent this year, your payment is approximately $2239.93. See my website at http://www.juliahuntsman.com for a property search on our local MLS, and more financial information.

Public Not Buying Housing "Crisis", At Least Not In Texas

From Real Estate Center Online News:

COLLEGE STATION – Despite media reports that the housing market faces imminent collapse, a study released this week shows consumers are confident real estate values will remain solid even if mortgage rates increase.

Three-quarters of respondents to ING Direct's most recent homeowner study said they had very little concern about the future value of their homes. The study is based on a national survey conducted by Synovate, a global research firm.

Most survey respondents (85 percent) believe their homes increased in value during the last three years. While homeowners felt their homes have increased in value by approximately 6 percent in the last year, they only expect values to increase by about 4 percent in the next 12 months.

Real Estate Center Chief Economist Mark Dotzour said the survey shows many Americans are smart enough not to believe everything they see on television, such as media reports that a housing bubble is about to burst.

Dotzour said that not only is the housing market not tanking, but home price appreciation is a red-hot 12.54 percent for the entire nation.

“This is still extraordinary price movement,” he said. “You have to go back to 1979 to find this level of appreciation prior to the current boom.

“While the nation’s inventory of unsold homes was six months in April, homes typically continue to increase in value when inventories are at this level. Texas inventory levels are lower than the national average. With a five-month inventory, Texas homes are likely to continue their recent appreciation trends."

What's a Seller To Do?

In a market where inventory is building up and sellers are waiting a little longer for an offer, it's time for sellers to think once again about the best improvements to make--and not to make--to get their homes sold. Pools, for the post-baby boomer generation, may not be the right improvement--geographic demand, location, lot size, and maintenance should all be considered. According to the National Association of Realtors, house siding, and kitchen and bathroom upgrades are among the top four best improvements for bringing the best return. Surprisingly, a home office did not bring as high a return on the investment. Regular maintenance is very important, as buyers will move more quickly on a home that does not have deferred issues. In a somewhat slower moving market, a return to standard preparation for home selling will obtain a better offer and a more satisfied buyer.

1031 Exchange: Have You Thought About It?

Do you find yourself saying:

“Why should I sell – Uncle Sam would get all the profit!”
“I’d sell, but I wouldn’t have enough left after taxes to buy another property!”
“I want to get rid of this property, but the taxes would eat me alive!”

Do you want to be rid of a management headache?
Have you thought about acquiring property in a newer and appreciating area?

Please call or e-mail me for updated information on doing a 1031 exchange. You have possibilities – let me tell you the benefits of doing an exchange and how it becomes a financial planning tool. Call me direct at 562-896-2609 or e-mail me at ocean@surfside.net, or see me online at www.juliahuntsman.com.

California's Median Price for April

The statewide median price is 10.2 percent higher than April, 2005, even though number of residential sales is less. And, according to Dataquick, there was no drop in the median price for single family homes from March, 2006; there was a .1 percent increase in the median price of a condo from March, 2006. See my earlier post about the median price of the six Southern California counties as reported through Dataquick, which is lower than the statewide median.
If Orange County economist Gary Watt is to be believed, the buyer affordability index is based on assumptions about 40 years old because there were only 3 types of loans then, one being a standard conventional loan required a much higher down payment than conventional loans on the market today, including a no down payment loan which was unthinkable back then. So yes, there's a decrease in numbers of sales, but remember medians and averages don't always tell the local story. In fact, 339 out of 401 cities and communities still show an increase in their median prices from one year ago. Just click on the link for more information through the California Association of Realtors. For an MLS property search go to http://www.juliahuntsman.com.

Housing Forecasts Unpredictable

Marcie Geffner at Inman News says: "A look back at housing market forecasts over the last five or six years makes the point. Forecasters consistently under-estimated the strength of the housing boom and predicted year after year that the housing markets were headed into a period of fewer sales. That prediction may be realized this year, yet any forecast can come true eventually if the time horizon is long enough, particularly when a market is known to have been cyclical in the past."
Local market information within the larger picture is what the buyer or seller really needs to know to take action. Believing that the market is going to come down 20 percent in price is not believable at this point, yet many people continue to wait for the end of the current year believing the magic point in time will occur, and they will be ready to buy. Yet they will lose tax advantages by doing that, and an increase in interest rates may offset any reduction in market price. The best time to take action is when you're thinking about it, future events are unknown. The best plan is one that builds in contingencies for best-case or worst-case scenarios, in other words, be prepared. AS Ms. Geffner says, "Forecasts should encourage people to think ahead about what might happen and how they could prepare to make the best of whatever occurs."

Realtor vs. real estate agent -- Tune In

Yes, there is a difference, and this week's advertisements in different spots around the state talk about just that. Click here to listen: http://www.car.org/index.php?id=MzE4NzE= . The real estate industry technology whizzes who work to make real estate "data" so available to the consumer really build from the work actually performed by the Realtor professional who effects the listing and sale of property. The foundation of expertise is provided by such Realtor professionals, and all that they must do to maintain their knowledge and their skills. Consumers benefit directly from work with a Realtor who has a commitment to the service of their clients.

The median price paid for a home in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties was $485,000 last month. That was down 0.2 percent from a revised $486,000 in March and up 9.0 percent from $445,000 in April a year ago. Buyers who are looking for a huge decrease in price overall are probably not going to find that at all this year, but are more likely to find more inventory to choose from as the numbers of homes sold is lower than the same time last year. As Dataquick points out, indicators of market distress (i.e., large increase in number of foreclosures) are largely absent. "The typical monthly mortgage payment that Southland buyers committed themselves to paying was $2,354 last month, up from $2,315 for the previous month, and up from $2,076 for April a year ago." At this point, decreases in home price will be balanced out by a gradual interest rate increase.

Direction of Housing Market

It's official -- the federal funds rate has been upped another quarter point to 5 percent, the rate at which banks borrow money from each other. Usually, the mortgage rate has already risen in anticipation of that increase. Apparently, our gas price increases are not enough to counteract inflation, and the housing market's slower activity, among other things, is cited as having a cooling effect on the economy. It's not the end of the world, but something to think about if you're thinking of buying or selling this year. The NAR's May forecast predicts a rise to 7 percent this summer in 30-year-fixed rates, but is still holding to the prediction of a rise in the national median home price by 5.7 percent, California’s price was expected to appreciation about 5-6 percent over 2005 prices, and we now have “equilibrium” in the housing market, price vs. supply. Over all, locally, residential properties including condos, houses and income properties up to 4 units are selling, since 3/10/2006, on average, in 52 days within 2 percent of the list price at time of beginning escrow.

Long Beach Ranks 18th in 50 Cities

This is about the defined city center vs. the sprawl, and how the fit is for local transportation, food provision and wireless access in case of further and more gas price crises. While our food still gets trucked in as neighboring farming areas are plowed under for new housing, California still qualifies as a major food producing area. This article is about who SustainLane thinks would deal best with a gas crisis, in other words, where are we independant? Long Beach/Los Angeles ranks 18th in this list. But something to think about even more is if you're considering a move to a lower priced housing market, take a look first at local health care costs, heating, air conditioning, local property taxes and assessments, how much it costs to get your car fixed, and how far you'll have to drive it to the grocery store if you live in an outlying suburb. It's tempting to think about the price tag on a house, but before you make the leap, factor in everything you can to get your true cost.

30-year fixed-rate mortgage averages 6.58 percent this week

Mortgage rates have risen for the fifth consecutive week, the highest rates since 2002. "Consumer confidence and existing home sales unexpectedly rose. Much of this strength is attributed to a healthy labor market, which translates into greater consumer spending. This should support an active housing market over the next few months," according to Frank Nothaft, Freddie Mac vice president. We expect mortgage rates to gradually rise throughout the year," said Nothaft. "A stronger labor market, coupled with moderation in house price growth, means our outlook for overall housing conditions remains upbeat." Click here for the story.

California Median Home Price: $561,350

This represents an increase of 13 percent over the March 2005 revised median price of $496,000m and an increase of four percent from last month's revised median price. Prices in a particular area may not exactly match, but this is an indicator of statewide activity. The interest rates have also increased since March of last year: 6.32 percent frfom 5.93 percent for a 30-year fixed mortgage rate. What has dropped is the level of sales compared to the last two years. The winter months are typically slower, and March is the time when activity starts picking up, however March resales were 15 percent lower than March 2005. Click on the link for the whole article.

Most Expensive ZIP Codes

Sort on headings to find most or least expensive zip codes across the country. Note it's for the 2005 median price.

Prime Long Beach Duplex in Belmont Heights

This is a must see! Call for an appointment to see this 2-unit property with great amenities, just a few blocks from the shoreline and near local shopping and all amenities. Each unit features two bedrooms, refinished hardwood floors, updated kitchens, original 1920's tile in bathrooms; plus, deck and jacuzzi. More information available upon request. Just e-mail or call.

Median Southern California Home Price Over $500,000

According to yesterday's release by Dataquick, the median home price in 6 Southern California counties keeps going up and now exceeds $500,000. The median price is the point at which the same number of homes sold over that price as sold under that price. Buyers continue to commit to a larger monthly payment, now over $2300 a month compared to $2000 a month last year. Adjusted for inflation, current monthly mortgage payments is still about 8.4 percent higher than the spring of 1989, the peak of the last real estate cycle. While the number of sales in Los Angeles County has declined compared to this time last year, the home selling prices have not.

Adopt a Pet

From time to time it's good to think about related topics --- like if you had a new home, what would go into it? Maybe it would be a new pet, one you would consider adopting. There are lots and lots of sources and sites: private pet rescues by breed, city and county agencies and other private agencies. The City of Los Angeles puts forth an active effort through its shelters, as well as an education on animal care topics on its internet site. If you are considering a pet, rescuing one from a shelter will save one more animal and give it a much needed home. Learn about microchipping, behavior training, or even volunteering at one of these shelters, by clicking on the above link!

Have You Ever Thought About What A 'no-cost' Mortgage Means?

You really do pay for what you get, it's just a matter of how and where. You may have no "out-of-pocket" costs, but they are rolled into your loan amount and you DO pay for them. Or, another scenario is your lender pays for them, but you are charged a higher interest rate, so you ultimately pay those costs, and you will end up paying much more for them over time because they are added on to your monthly payment as long as you have that loan. Maybe that works out for you, depending on how long you plan retaining that loan. Just read this article to get a more detailed description of these scenarios.

Property Tax Exemptions from Reassessment

Did you know that in certain California counties you are able to transfer your tax base? A taxpayer who is 55 years of age or older may transfer the Proposition 13 base-year assessment value of his or her principal residence to any replacement dwelling of equal or lesser value in the same county and, sometimes, in another county ( Cal. Rev. & Tax Code § 69.5(a)(1)and (2)). And, you may have up to two years before the sale or two years after the sale of the original dwelling to purchase or construct the replacement property. The catch is, your replacement property must be of equal or lesser value than your sold property. So, if you're thinking of selling your principal residence located in Los Angeles County and moving to Alameda, Orange, San Mateo, Los Angeles, San Diego, Santa Clara or Ventura Counties, you may transfer your tax base to those locations provided all the transfer qualifications are met. Otherwise, the transfer applies if you stay within the same county you're selling in.

Mortgage Rates Leap Up

According to Bankrate.com, the 30-year fixed is overall around 6.5%, and mortages are the highest in 4 years. Fewer people are refinancing than in the last 9 months or so. Buyers sometimes forget that a change in their mortage rate will increase their monthly payment faster than a slight increase in a sales price on a new purchase, depending on the amount involved. Why wait, if you're thinking of a new purchase?

February Pending Home Sales

The leveling out of pending home sales (homes in escrow but not yet closed) is another indicator of a slowing market. The index of 100 is equal to 2001 activity, the first year NAR uses in this comparison. "The index in the West fell 7.6 percent to a level of 110.9 in February and was 14.8 percent below a year ago." See the article for other regions in the country. David Lereah, NAR’s chief economist, said most of the cooling in the housing market has already occurred. “We can expect a historically strong housing market moving forward, earmarked by generally balanced conditions across the country and fairly stable levels of home sales with some month-to-month fluctuations,” he said. “This normalization is healthy because it is taking a lot of the pressure off of the decision process for both home buyers and sellers – pressure that was driving abnormal rates of price growth across much of the country over the last few years.”

Your New Credit Score

Just when you thought you knew about your credit score, it's all changed. The 3 national credit reporting companies got together and developed a new system which they think is more consistent and objective. The current FICO score system was developed by Fair Isaac Company some years ago. The VantageScore will use a score up to 990, and is based on the type of breakdown you probably learned in school, with a score below 600 being an "F", a score above 900 being an "A".

Interest Rate Increase

The trend may be towards yet another rate increase. One-year and five-year adjustable interest rates are looking less attractive when compared wtih the 30-year fixed rate mortgage. The upward pressure on mortgage rates is a downward pressure on home prices. Rates have already edged up, slowing re-fi activity overall.

Southern California Still Sells

In Southern California, sales of new single-family houses and condominiums saw their strongest February since 1988, according to statistics compiled by real estate research firm DataQuick Information Systems. Last month, sales rose 9.5% to 4,980 from January's 4,550, and were up 19% from the year before. (Los Angeles Times, March 25, 2006.)

As we've been saying for some time, the local economy is diverse enough, and the housing supply is tight enough, that in spite of the rising inventory, overall conditions still create a demand for real estate. Condominiums are often the more affordable option for first-time buyers as it's still possible to find a 2-bedroom unit for $450,000-$500,000, or less, depending on the area and size of the unit, but some within blocks of the shoreline may still be found at this price.

California Median Home Price for February

.... was $535,470, with Newport Beach at the highest median home price and Yorba Linda at the lowest. It took longer to sell a single family home this February compared to Feb. 2005. The median price is 13.7 percent higher than last year, but 2.9 percent lower than January 2006's median price. There continues to be the highest home inventory than we've had for several years. It would take over 6 months to deplete the current supply; this time last year there was only 3 months inventory, which buyers felt accutely when they made offers which often turned into competition with other buyers.

The median price for condos statewide is $433,140, an increase in price from January. Follow the link for more info.

Buy Before Really Seeing?

The photos are good, and they do tell a story, but is it the same one you would get after you moved in? The internet is such a useful tool in previewing, but would you actually buy it based on photo previews? That's where this article claims many people are headed are in the future, but in a high priced market that demands the utmost in buyer financial resources, this is just a wait-and-see. California is the most disclosure-oriented of most of the states, but that still hasn't prevented buyer remorse. Hmmm ...

February's Southern California Median Home Price

February's prices set a new record, however the number of homes sold in 6 counties was the lowest number in 5 years. The median price according to Dataquick was $480,000, much lower than the statewide median price, but up from the So Cal median price of $469,000 one year ago. The real estate bubble forecasts are not alive and well at this point, according to this article: foreclosure activity is low, down payment sizes are stable as are property flipping rates.

Inflation Concerns Give Rise to Rate Increase

Gains in manufacturing and service industries and higher labor costs are the reason for the increase in the 30-year fixed rate, up to an average of 6.37 percent. This is the highest rate since 2003. The Los Angeles region average according to Bankrate.com was 6.48 percent at about a half point.

More Real Estate Information - Higher Demand

Back when the internet came on strong, many agents feared that consumers would end up making them an obsolete item as consumers would now use their direct market knowledge to cut out agents as unnecessary to their property transaction. But the opposite has really happened over the years. Instead, as consumers are given more information and more technology to review that information, they have required more specialized professionals to meet their demand for knowledge about properties. Will visits to properties become obsolete because consumers can access more photos and virtual tours online? In spite of what this article suggests, I doubt it. A picture may be worth a thousand words, but it's not the same as being there. But there are "second level effects" stemming from all this new transparent factual information found on the internet, and one of them is that more professionals with higher expertise seem to be required by the consumer. Rather than more answers, there seem to be more questions as consumers gain more knowledge which leads to a higher demand for better service.

Housing Cost Calculator

Here is an buy vs. rent wizard based on 2005 indexes, but still fun to try. Put your area in and how much you think you could invest towards a down payment, and calculate the results between owning vs. renting. Click on the links for further explanations on costs included, but the buyer or renter will see basic comparisons in buying vs. renting in today's market.

Affordability in "The O.C."

If the search is on for a home under $600,000, consider a condo, or a smaller single family residence, in Cypress, La Habra, parts of Fullerton and Garden Grove, Anaheim, Westminster and Buena Park, or even Foothill Ranch. Most are within a short drive time from Long Beach, 20-40 minutes, and well worth considering.

Another Queen Mary in Long Beach

It was a sunny day in Long Beach yesterday for the Queen Mary 2 and its historic visit to the original Queen Mary anchored off downtown Long Beach. Long Beach's long shoreline allowed onlookers, including me, a great view from the bluffs between downtown and Belmont Shore. Click here for more photos and photo credit.

Lofts Hit Their Stride

Dubbed the McLoft in this article, the loft is being built from scratch in the suburbs. For the displaced New Yorker or Chicagoan who doesn't want to step out onto a busy street, a new type of condo is coming of age in Scottsdale, AZ and other unlikely places. Buyers are paying as much as 50% more per square foot for a loft over a single-family home. For builders this is a great return on a projects where they don't have to meet such strict codes as in other multifamily dwellings, and some buyers want raw, unfinished space. If you're looking for lofts, try Long Beach where you can have real converted space in a not too urban city area.

So Cal Median Home Price Lower in January

DataQuick's 2/15 release puts the Southern California January median home price for 6 counties at $469,000, down 2.1 percent from November and December. January is usually a slower month for sales, but was still up from $415,000 in January of 2005, an increase of 13% overall. January 2006 had the lowest number of homes sold since January 2001. Whether or not this means an overall slowing in the market is not known just yet.

Interest Rates Back Down

The 30-year rate average went to 5.81 percent on Friday, according to Bankrate.com's averages based on its survey of 4,000 banks in 40 states.

Zillow.com is a Zing

The new Zillow.com site seems interesting, but in the end doesn't seem any more unusual than any other site based on local property tax records data, which is sometimes inaccurate in itself. This site happens to combine with aerial photo technology so that you can see the exact location, and it gives you an estimate of value. But that doesn't necessarily sync with the current market value, so the viewer should be careful about making final conclusions without further investigation. An average or a median price for a zip code area does not give spccific value for a specific property, any more than the selling price for the last market sale is the same as today's market value.

Commercial/Multifamily Originations Set New Record in 2005 - 48% Higher than in 2004

Multifamily loans made up 36 percent of the total loans made in 2005. They increased by 44 percent over 2004. While single family home and condo sales slowed, commercial and multifamily loans in the 4th quarter of 2005 were the highest ever recorded in the MBA's quarterly survey.

Quick Info on Prices and Rates

Calif. median home price - Dec. 05: $548,430 (Source: C.A.R.)
Calif. affordability index - Nov. 05: 14 percent (Source: C.A.R.)
Calif. highest median home price by C.A.R. region Dec. 05:
Santa Barbara So. Coast $1,300,000 (Source: C.A.R.)

Calif. lowest median home price by C.A.R. region Dec. 05:
High Desert $320,490 (Source: C.A.R.)

Mortgage rates - week ending 1/26:
30-yr. fixed: 6.12%; Fees/points: 0.5%
15-yr. fixed: 5.70%; Fees/points: 0.5%
1-yr. adjustable: 5.20%; Fees/points: 0.6%
(Source: Freddie Mac)

Buy Me Please!

This isn't 2003, but this chart is a good example of different market's selling times, and lately we've been in a lull where sellers might need to think about how much preparation might be necessary to compete for a buyer. In some markets, such as the last 2-3 years, sellers have been able to put minimum effort into curb appeal and get a fast offer. In any market, though, a buyer feels a lot more welcome when the seller puts some effort into their home's appearance and condition, and often when the buyer feels good, the transaction is even better. Think about how your house appears to someone else, and you'll probably come a lot closer to an easier negotiating process!

January 2006 Economic Outlook

The big question: Will home price appreciation continue? The answer at this article is yes, but slowing to around 7% as the 30-year fixed interest rate rises overall to about 6.4%. House price appreciation is seen as being driven by income, employment and population growth increases. The adjustable rate mortgage loan holders, though, may end up refinancing this year as those ARM rates do go up.

DQNews - Southern California Press Release

Buyers may be waiting for the price to drop, but local sales still indicate a 1-2% difference in selling vs. list price. The Southern California median home price was still $479,000, the same as November, but up 14% from December 2004. California Association of Realtors, meanwhile, still forecasts an overall increase in median price statewide for 2006, with a stronger increase in the inland areas. Still a good time with 30-year fixed mortgage rates hovering around 6% or less.

Rates in a Lull

Some buyers are taking advantage of this period, but many others are not. Mortgage interest rates fell for 5 consecutive weeks. While the difference may not seem like a lot, it is when multiplied out over time. If you're willing to pay even a .5 point, you can buy down your rate even more. Click on the link for more information.

Interest Rates Sill Lower

Despite rumors of one more rate increase by the Federal Reserve, long-term mortgage rates declined at the end of the week.

FHA Loan Limits Are Up

Effective January 1, the Federal Housing Administration (FHA) has just increased its highest loan limit to $362,790 in high cost areas nationwide. This is a $50,000 increase from last year's limit. FHA loans are usually available at lower interest rates than conventional loan rates, with easier lending guidelines to help first-time buyers. While extra paymentc called MPI (mortgage risk insurance) are tacked on that are not tax deductible, this is still very good news because it gives borrowers a lot more loan assistance in high markets that was not available before.

A Good Time to Refinance with the Start of the New Year

The 30-year fixed mortgage rate fell last week overall to 6.28%, down from 6.36%. This could still be a good time to consider a refinance if you're not in the market for a new home purchase. Happy and Prosperous New Year!