Existing Home Sales Update

For those of you who like to see the actual numbers, here is a report just published with the sales data for the U.S. for 2011.

Existing Home Sales.

Increase in short sales give market a little breathing room

Very insightful article that may help shed some light on this subject;

Increase in short sales give market a little breathing room.

Housing Issues for 2012

As we start the New Year, I wanted to share some thoughts about the housing market for 2012. As I’ve said in the past, real estate is local; national issues and numbers really do not help any of us understand what is happening, right here in Sonoma County. Having said that, I think these five very key issues will help determine whether prices stabilize and sales improve for the upcoming year;

1. Consumer confidence and jobs:  More jobs need to be created to stimulate home buying, and prevent mortgage delinquencies from rising past their already bloated rate. Home prices are down, in some areas 35-45% down; interest rates are lower than they have been in decades, amongst the lowest rates ever! Still, would-be buyers are worried that home prices could go lower; whether or not they will they still have their job tomorrow; or have their hours reduced due to a stalled recovery.
2. Foreclosures and Delinquencies:  That “shadow inventory” of foreclosed homes still exists. Banks and other mortgage investors own about 440,000 foreclosed homes that still need to be taken back and resold. However, there is another 3.4 million loans in foreclosure or serious delinquency, according to estimates by industry analysts. Because banks are quicker to accept lower prices than conventional sellers, this could further erode the median home price as these distressed homes start to hit the market. There is a movement being supported by the Federal Reserve and others to convert some of these foreclosures into rental properties. On the surface it’s a great idea, but banks typically make very poor property managers and home owners. They are in the business of loaning money and increasing their profits, not property ownership. We’ll see how this plays out as they start some pilot programs later this year.
3. Rents:  Vacancy level are dropping to levels not seen since 2006, and rental prices are on the rise. Coupled with affordable housing prices and record low interest rates, another rent increase could be just the impetus a potential home buyer has been waiting for to take the plunge.
4. Mortgage credit and rates:  As mentioned, the Fed has taken extraordinary steps to insure that mortgage interest rates remain the lowest in decades, and federal-backed entities are responsible for backing nearly nine out of ten new mortgages! But, it is still very difficult for buyers to obtain a loan because banks are demanding lots and lots of documentation of buyer’s income, and appraisals are sometimes souring the deal; sometimes at the last minute when the lender requires a second appraisal.  When the appraisal comes in below the agreed to price, either sellers have to make another last minute price adjustment, or buyers have to come up with more cash; cash they typically have no access to. Banks went from one extreme to the other; first giving away loans to anyone who breathed, to now demanding such stringent requirements that even borrowers with perfect credit and full documentation are made to jump through a lot of unnecessary hoops. The banks are going to have to get back to a more level playing field before this will change.
5. Regulation:  Although there has been lots of talk, many analysts do not expect there to be major changes to Fannie Mae and Freddie Mac in an election year. However, there are several major regulatory changes that could significantly reshape the way banks do business in 2012. Chief amongst these is the Dodd-Frank Act whose lending rules still have not been defined by regulators. These regulations will spell out how banks price loans that are bundled and sold into mortgage backed securities. Another set of regulations will determine just how the banks determine that a borrower has the ability to repay their mortgage. Meanwhile, the regulator that oversees Fannie and Freddie is revamping the way that mortgage companies are paid for collecting loan payments. This could lead to a broader shakeup in the mortgage industry that ultimately influences how much borrowers are charged for mortgages and how banks handle loans that fall into delinquency. Again, we have gone from one extreme to the other, and there has to be a middle road where lending can return to some sort of normalcy. Of course, given the political climate and this being an election year, who really knows?
   

As I stated when I began, real estate is local; feel free to contact me if you have any questions about your home’s value, or if you are in the market to move up or down in this very exciting market. As usual, your referrals of family, friends and associates are always welcome and appreciated!

All my very best to you and your family in this New Year; I wish you health, happiness, serenity, and prosperity.

Kind regards,

Mike Bryant, Realtor®

CRS, CDPE, CIAS, SFR, Certified HAFA Specialist

Keller Williams Realty

120 Stony Point Rd., Suite 140

Santa Rosa, Ca 95401

Direct: 707-484-8825

Fax:    707-595-5950

DRE License# 01450191

mikebryant@kw.com

Americans Are Ready and Willing to Buy, But Seller Sentiment Remains Extremely Negative

Here’s a great article from the Mortgage Bankers Association that you might find interesting;

Americans Are Ready and Willing to Buy, But Seller Sentiment Remains Extremely Negative.

Make This Your New Year To Invest In Real Estate!

With interest rates at historic lows, and incredible bargains available in our local market, more and more of my clients are investing their money in real estate. Watch this short video and find out how almost anyone can get started today with very little down!

Then contact me at 707-484-8825 or email me at mikebryant@kw.com for a FREE consultation and to get a list of investment properties currently available in your area.

Do You Qualify For A Short Sale?

Have you fallen behind on your mortgage payments and don’t know what to do? Watch this brief video, and find out what a short sale is, and why it may be the solution you have been searching for.

Then contact me at 707-484-8825, or email me at mikebryant@kw.com for a FREE consultation to find out if a short sale is right for you.

 

The Sky’s the (Loan) Limit

Here’s a great article from the NAR 2012 President-elect, Gary Thomas

The Sky’s the (Loan) Limit.