Wednesday, March 21, 2012
theKAUFMANS: Multiple offers again!
theKAUFMANS: Multiple offers again!: There is a general sense of optimism being displayed by the recent surge of buyers that have been missing from the real estate market for th...
Multiple offers again!
There is a general sense of optimism being displayed by the recent surge of buyers that have been missing from the real estate market for the past two years.
We believe it's due in part to the pent up frustration and uncertainty of the national employment market and the economic malaise that was ever present in 2010-2011.
With interest rates at an all time low, and no immediate end of these low interest rates in sight, buyers are coming back to the market.
A fair market valued home is getting multiple offers on it again. This is happening in all the Lamorinda areas.
For an up-to-the-minute report on the recent sales and pending properties in Lafayette, Moraga and Orinda simply email us or call directly.
We believe it's due in part to the pent up frustration and uncertainty of the national employment market and the economic malaise that was ever present in 2010-2011.
With interest rates at an all time low, and no immediate end of these low interest rates in sight, buyers are coming back to the market.
A fair market valued home is getting multiple offers on it again. This is happening in all the Lamorinda areas.
For an up-to-the-minute report on the recent sales and pending properties in Lafayette, Moraga and Orinda simply email us or call directly.
Tuesday, March 6, 2012
A lot of pent up demand
There is something going on in the Lafayette Moraga and Orinda real estate market of recent. It appears as though the short sale is no longer chipping away at overall home prices in the area and we are starting to encounter some signs of a new beginning.
Last month in the Lafayette Moraga and Orinda area, there were 23 properties that sold. Of the 23, 17 were detached homes.
The average list price was $1,006,000. The average sale price was $982,000 a drop of about 2 percent.
There is also something else that's happening in our market. The return of the multiple offers. There were three houses in the past two weeks that had a minimum of 10 offers on each.
What's causing this phenomena to return. First, let's look at the fact that not a lot of real estate sold between 2008 in 2011. There appears to be a pent-up demand with not a lot of inventory, consequently we are seeing multiple offers on good lots.
I say lots rather than houses because it is the piece of land that has been the key selling point in all of these cases.
Last month in the Lafayette Moraga and Orinda area, there were 23 properties that sold. Of the 23, 17 were detached homes.
The average list price was $1,006,000. The average sale price was $982,000 a drop of about 2 percent.
There is also something else that's happening in our market. The return of the multiple offers. There were three houses in the past two weeks that had a minimum of 10 offers on each.
What's causing this phenomena to return. First, let's look at the fact that not a lot of real estate sold between 2008 in 2011. There appears to be a pent-up demand with not a lot of inventory, consequently we are seeing multiple offers on good lots.
I say lots rather than houses because it is the piece of land that has been the key selling point in all of these cases.
Thursday, March 1, 2012
Points and Mortgages
The New York Times
Points lose favor
With interest rates at or near record lows, many borrowers are seeing little reason to pay points when buying or refinancing a home. Some are even opting for what’s known as “negative points,” agreeing to a slightly higher rate to help pay closing costs.
Making sense of the story
Paying points enables a borrower to “buy down” the interest rate on a mortgage in exchange for an upfront fee. The trend away from points partly reflects borrower sentiment that rates are already low enough, according to industry experts.
A point equals 1 percent of the loan amount, so paying one point on a $250,000 refinancing costs an extra $2,500 at closing, in addition to other mortgage fees, taxes, and escrow amounts. Paying a point usually reduces the interest rate by 0.25 points over its term, so for instance, instead of 4 percent, the rate is 3.75 percent.
The average number of points paid in 2011, according to a Freddie Mac survey, was 0.7 percentage points, less than half the levels people paid in the 1990s. The average has been 0.7 percent for three years, after it hit a low of 0.4 percent in 2007; in 1995 it averaged 1.8 percent, according to Freddie Mac data.
The primary advantages of paying points are a lower rate and monthly payment. To decide if paying points is worthwhile, borrowers should consider two key decisions: How long they plan to live in the home, and how much they can afford in close costs.
Many mortgage professionals suggest following this rule: If the borrower plans to live in the home for at least five years, paying points will help the homeowner to reap savings.
Some borrowers are even going for negative points, which is also called a lender rebate or points in reverse. In exchange for accepting a higher interest rate, the lender agrees to give the borrower a credit, which is usually used for closing costs.
Points lose favor
With interest rates at or near record lows, many borrowers are seeing little reason to pay points when buying or refinancing a home. Some are even opting for what’s known as “negative points,” agreeing to a slightly higher rate to help pay closing costs.
Making sense of the story
Paying points enables a borrower to “buy down” the interest rate on a mortgage in exchange for an upfront fee. The trend away from points partly reflects borrower sentiment that rates are already low enough, according to industry experts.
A point equals 1 percent of the loan amount, so paying one point on a $250,000 refinancing costs an extra $2,500 at closing, in addition to other mortgage fees, taxes, and escrow amounts. Paying a point usually reduces the interest rate by 0.25 points over its term, so for instance, instead of 4 percent, the rate is 3.75 percent.
The average number of points paid in 2011, according to a Freddie Mac survey, was 0.7 percentage points, less than half the levels people paid in the 1990s. The average has been 0.7 percent for three years, after it hit a low of 0.4 percent in 2007; in 1995 it averaged 1.8 percent, according to Freddie Mac data.
The primary advantages of paying points are a lower rate and monthly payment. To decide if paying points is worthwhile, borrowers should consider two key decisions: How long they plan to live in the home, and how much they can afford in close costs.
Many mortgage professionals suggest following this rule: If the borrower plans to live in the home for at least five years, paying points will help the homeowner to reap savings.
Some borrowers are even going for negative points, which is also called a lender rebate or points in reverse. In exchange for accepting a higher interest rate, the lender agrees to give the borrower a credit, which is usually used for closing costs.
Tuesday, February 21, 2012
Brokers tour for Tuesday, February 21, 2012.
Today we saw four properties in Lafayette. The first one at 955 Diablo Drive listed at $629,000 with a three bedroom two bath 1587 ft.² house that needed some work. The house itself did not show well because it was very cluttered. The downside is that it only has a one car attached garage and is an upslope property. Property 2 was located at 853 Las Trampas Road listed at $1,295,000 for a four-bedroom, three bath house. The house is a two level house 3191 ft.² and has no yard. The house did have sensational views. House number three was located at 24 N. Ridge Ln. It was listed at $1,795,000 for a 4117 ft.² five bedroom, 4 1/2 bathroom house on two levels. The views were very, very nice. However the master bedroom was located downstairs. This house was on in 2011 taken off for the holiday and reintroduced this week. The fourth house was located at 804 Acalanes Rd. It is a 5620 ft.² house with five bedrooms, 5 1/2 bathrooms on 2.41 acres. The house offers tremendous amount of privacy in a beautiful estate setting. There is a shared tennis court and two wonderful pool sites available on the property. The house is a two level house, with four bedrooms and 3 1/2 baths upstairs and a separate family room and bedroom with two full baths located down stairs. The house has a wonderful light.
There were three houses in Moraga today. Two of them in Moraga country club. There was a two bedroom, two bath 2055 ft.² house at 101 Brookline St. , listed at $695,000. The other house in Moraga country club was located at 1753 Spyglass Ln. It is listed for $869,000. It is a four-bedroom, 2 1/2 bath home 2828 ft.² on .125 acres. It has wonderful views of the golf course but no backyard. Then we looked at 471 Millfield Place. It is listed at $1,299,000. It is a four-bedroom, four bath house 3644 ft.² on .27 acres. It was listed in 2011 for $1,360,000. It is a two level house with a swimming pool.
There were four houses in Orinda that we looked at. 88 Barbara Rd was on last year and is a two story home up a very steep driveway with 3 bedrooms and 3 baths in 2,121 sf. It is a difficult home to navigate up to. The second house we saw was 91 Wanflete Court in Orinda. It is a three bedroom two bath house. 1771 ft.² located on a 19,560 ft.² lot and listed for $775,000. It also had a very steep driveway up to the house. The backyard was nonexistent except for a small side yard and a concrete patio that was about 10 feet wide. The bedrooms were all hardwood floors and on the small side. 52 Rheem Blvd. was listed at $945,000. It is a three bedroom, three bath house in 2502 ft.² on .558 acres. It is a single level house that was built in 1949, and has a contemporary style. It is a lovely property, albeit sitting close to the Rheem Boulevard you certainly do get some traffic noise from the street. The last house we sort in Orinda was located at 8 Lost Valley Dr. It is a four-bedroom, three and two half bath house. 3265 ft.² on 1.1 acres. The house was built in 1965 and is a very nice house. The one drawback is that it sits close to a high tension wire. There is a pool and a waterfall.
There were three houses in Moraga today. Two of them in Moraga country club. There was a two bedroom, two bath 2055 ft.² house at 101 Brookline St. , listed at $695,000. The other house in Moraga country club was located at 1753 Spyglass Ln. It is listed for $869,000. It is a four-bedroom, 2 1/2 bath home 2828 ft.² on .125 acres. It has wonderful views of the golf course but no backyard. Then we looked at 471 Millfield Place. It is listed at $1,299,000. It is a four-bedroom, four bath house 3644 ft.² on .27 acres. It was listed in 2011 for $1,360,000. It is a two level house with a swimming pool.
There were four houses in Orinda that we looked at. 88 Barbara Rd was on last year and is a two story home up a very steep driveway with 3 bedrooms and 3 baths in 2,121 sf. It is a difficult home to navigate up to. The second house we saw was 91 Wanflete Court in Orinda. It is a three bedroom two bath house. 1771 ft.² located on a 19,560 ft.² lot and listed for $775,000. It also had a very steep driveway up to the house. The backyard was nonexistent except for a small side yard and a concrete patio that was about 10 feet wide. The bedrooms were all hardwood floors and on the small side. 52 Rheem Blvd. was listed at $945,000. It is a three bedroom, three bath house in 2502 ft.² on .558 acres. It is a single level house that was built in 1949, and has a contemporary style. It is a lovely property, albeit sitting close to the Rheem Boulevard you certainly do get some traffic noise from the street. The last house we sort in Orinda was located at 8 Lost Valley Dr. It is a four-bedroom, three and two half bath house. 3265 ft.² on 1.1 acres. The house was built in 1965 and is a very nice house. The one drawback is that it sits close to a high tension wire. There is a pool and a waterfall.
Saturday, February 11, 2012
Saturday, February 4, 2012
Housing Crisis to End in 2012?
Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.
The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.
However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.
Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”
In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.
The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.
However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.
Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”
In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.
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