Westlake Village Real Estate Blog

The Obama administration unveiled its long-awaited white paper titled “Reforming America’s Housing Finance Market,” which proposes solutions to revamping the nation’s mortgage system. The Administration’s intent is to wind down the federal mortgage giants Fannie Mae and Freddie Mac and to curtail the Federal Housing Administration (FHA). To help reduce the government’s role in mortgage funding, the white paper focuses on a series of short steps to increase fees and down-payment requirements which will make government loans less attractive and allow banks to compete in offering loans without government guarantees.

To get that ball rolling HUD has already announced an increase in the FHA annual mortgage insurance premium of 0.25% effective April 18, 2011That increase would take the annual premium from 0.90% to 1.15% and increase a borrower’s monthly payment by $60 on a $300,000 purchase.

The second step would take effect Oct 1, 2011 with the plan to lower the ceiling on jumbo conforming loan limits in high-cost markets from $729,750 to $625,500.

Whether you are buying or selling a home within the FHA price range, take note. These changes will reduce the number of buyers who can qualify.

I’d like to thank Brownie Stanisch, at Prospect Mortgage, once again for this information.

If you want to follow the trends, just follow the headlines. In the past two weeks we have seen headlines pointing to a more positive real estate market. From the Huffington Post and other news outlets, 30-Year Mortgage Rates Top 5%. Why is this positive? As interest rates creep up, sooner or later home buyers begin to notice. The sentiment that there is no hurry, that an even better deal will be there tomorrow, begins to slip away. As this article points out, if interest rates rise from 5% to 6% and the price of a home drops from $500,000 to $450,000, the actual cost of the home over 30 years will be $90,000 higher.

From the LA Times, California Luxury Home Sales Jump 21% (even the wealthy like a bargain). And the Wall Street Journal, Cash Buyers Lift Housing, cites data from the National Associations of Realtors indicating 28% of home sales last year were all-cash deals – double the rate in 2008.

Finally, from the LA Times again, Now May Be the Time to Buy a Home. Says the usually pessimistic economist Christopher Thornberg, principal with Beacon Economics in Los Angeles, “Certainly, we’re pretty sure we’re at the bottom” for home prices, as quoted in the luxury home sales article.

What does it all mean? If you are a home buyer, it may be time to step up to the plate. Stories of homes selling in multiple offers are not uncommon. This means you could soon find yourself paying both a higher interest rate for your mortgage and a higher price for your home.

If you are a seller who is buying up, now may be the time to pick up that dream home. And if you are selling because of a personal or financial situation, don’t wait for prices to rise dramatically unless you have a lot of time. During the 1990s, in the LA area,it took 9.5 years for home prices to regain their 1990 peak.

It’s official: I am pleased to announce that I have earned the nationally recognized Short Sales and Foreclosure Resource certification. The National Association of REALTORS® offers the SFR certification to REALTORS® who want to help both buyers and sellers navigate these complicated transactions, as demand for professional expertise with distressed sales grows.

According to a recent NAR survey, nearly one-third of all existing homes sold recently were either short sales or foreclosures. For many real estate professionals, short sales and foreclosures are the new “traditional” transaction. REALTORS® who have earned the SFR certification know how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities.

“As leading advocates for homeownership, REALTORS® believe that any family that loses its home to foreclosure is one family too many, but unfortunately, there are situations in which people just cannot afford to keep their homes, and a foreclosure or a short sale results,” said 2009 NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “Foreclosures and short sales can offer opportunities for home buyers and benefit the larger community, as well, but it’s extremely important to have the help of a real estate professional like a REALTOR® who has earned the SFR certification for these kinds of purchases.”

The certification program includes training on how to qualify sellers for short sales, negotiate with lenders, protect buyers, and limit risk, and provides resources to help REALTORS® stay current on national and state-specific information as the market for these distressed properties evolves. To earn the SFR certification, REALTORS® are required to take one core course and three Webinars. For more information about the SFR certification, visit www.REALTORSFR.org or call 1-877-510-7855.

The Glass Is Half Empty

The median price of homes in Ventura County is 35% below the peak in 2006. Thousand Oaks is off peak by 30%, while Westlake Village and Agoura Hills are off by 20 from Dec. 2006 to Dec. 2009. Moorpark and Simi Valley are both off around 35%.

With federal home-buying incentives set to end in April, the budding housing market could be nipped.
Given the budget deficit and the lack of federal stimulus money, unemployment could jump again. And jobs shipped overseas may never come back.

The Glass Is Half Full

The housing market has stabilized and more gains are expected. Housing usually is the first indicator that a recession is ending.

Distressed sales are being absorbed as fast as they hit the market.

Ventura County’s median sales price is 15% higher than a year ago.

Locally, temporary unemployment is up, with the hope being that some temporary work will lead to full-time employment.

Thousand Oak retails sales are better than expected.

The Thousand Oaks Auto Mall has some of the best sales in the country.

While this is the worst recession since the Great Depression, we are, in the words of Cal State Channel Islands professor Sung Won Sohn, “beginning to see the light at the end of the tunnel.”

P.S. from Sher: In the Acorn articles I read about these two forums, there was no mention of the “shadow” inventory – the many homes that are in distress either as short-sales or bank-owned properties that are not on the market. But given the low supply of homes and condos on the market – only about 550 homes currently in the Conejo Valley, compared with 1300 by mid-2006 – it’s easy to believe many of these will be absorbed by demand. Currently, as Mark Boud of Irvine-based Real Estate Economics, said, “We’re burning off distressed sales faster than we’re creating them.”