California Real Estate | Homes for Sale | Blog

I believe that behind every action, there will be an equal and opposite reaction. Many experts have discussed the negative things happening in the present California Mortgage and Real Estate Industries. Certainly, it is broadcasted all over the media and is hard to miss. What we are going to do is see it in a different approach and focus on the brighter side that can be found in the light of negatives in the current California Real Estate Market.
Thanks to the tightening lending guidelines because sincere and competent home buyers are coming out. The deceitful buyers disappeared! As a seller, the times of taking your home off the market for 30 days, while thinking how buyers would pay vanished. With the underwriting guidelines tightening this will be accompanied with more competent buyers that are financially stable and fully capable of buying real estate. There will be also a rise in rent and occupancy rates. If lending guidelines are stricter, only those deserving will qualify for a home loan. Hence, they need to rent! Investors will certainly search for duplexes and multi-family units in today’s market, as their prospective improves.
Foreclosure rates are rising across California. Underwriting guidelines are promoting the once standard procedures followed to ensure to a great extent that the borrower could actually meet the proposed mortgage payments, in addition to their other living expenses! Certainly, you have seen across the media that the Foreclosure market has gone through the roof. At all costs, this is something that should be avoided. It should not be the banks’ business to take people’s properties and homeowners simply shouldn’t be living above and beyond what they can afford. By having a correction, homebuyers will once again be held to standard guidelines that reflect a person’s ability to have the funds for a home to be true and accurate.
There is an increase of properties on the market, and there are some great deals available. Buyers now have more options than ever before. It seems like just a couple of years ago, there were several offers on the table for sellers to entertain and buyers had a limited choice of homes available to them on the market. Now that we are in a buyers market, this is a great time for buyers to take advantage of this inventory and “seize” the perfect home desired to suit their family’s needs.
Hundreds of mortgage lenders have closed their doors this year. The current mortgage industry is weeding out the “mortgage professionals”, looking to “make a quick buck” that held a “get rich quick” mentality.” While there are many great people in the lending industry, there were also many misleading or uneducated individuals, giving advice on the average person’s largest financial decision! Consumers will now be working with seasoned mortgage professionals that know how to survive in such a market. Across the board, one thing is clear. Many of them are focusing more than ever on customer service and this is a GOOD thing.

For the fourth straight month, home sales rose in California. This would normally be great news, however the larger picture shows that sales decreased by 28.5% over last year February. In addition the median price has fallen by an astonishing 26.2%.

Here are some statistics from the California Association of Realtors:

Statewide, the 10 cities and communities with the highest median home prices in California during February 2008 were:

• Santa Barbara, $1,150,000
• Redwood City, $875,000
• Danville $875,000
• Encinitas, $842,500
• Santa Monica, $787,000
• Mountain View, $784,000
• San Clemente, $770,000
• San Mateo, $750,000
• Sunnyvale, $741,750
• San Francisco, $737,750
• Carlsbad, $675,000.

Statewide, the 10 cities and communities with the greatest median home price increases in February 2008 compared with the same period a year ago were:

• Encinitas, 25.7%
• Santa Barbara, 23.4%
• Walnut Creek, 21.5%
• Redwood City, 14%
• Carlsbad, 10.9%
• Sunnyvale, 5.3%
• Mountain View, 3.4%
• Rancho Mirage, 2.6%
• Santa Monica, 1.5%
• Los Angeles, 1.5%
• Santa Clarita, 0.9%.

Is now a good time to buy? Many would say YES! If you can qualify for a loan, there are some great deals to be had. If financing is an issue you might want to check into the CalHFA loan program, as there are less stringent requirements needed to qualify.

Take Advantage of the Market: Invest in California Real Estate Now!

With the prices going down and interest rates falling, buyers should grab this chance that doesn’t come around that often. Try switching your point of view and see the forest, instead of the trees. Take advantage of the buyer’s market. Plunge in to get the best price, interest rates and luxury of time that goes with a buyers market! By the end of 2008 beginning of 2009 it is projected that the prices will start to rise at 2-4% annually.

California real estate experts forecast that in 2009 the Real Estate Market will stabilize back to normal with prices rising at an average of 2-4% annually and interest rates playing around 7%. The foreclosure condition will stabilize and start going back to normal levels.

There are many schemes on how to take advantage of the current California Real Estate Market. You can search for under priced properties with potential to increase in value. The good thing about a declining market is that there is ample time to distinguish properties and compete with few other buyers. Have a keen eye for great buys and seize it the minute it comes on the market with a reasonable offer. This strategy is more effective than to get something that has been sitting and attempt to get it in a low ball. All real estate transactions take time. Do not be mislead into thinking that properties will appreciate instantly. The secret to this trade is: BUY LOW, SELL HIGH.

Guaranteed by time, Real Estate has shown to be a worthy investment. For instance, you buy a $500,000 house and it appreciates at a more normal return of 5%, that means it will be worth $525,000 after one year! That $25,000 is an increase and not a 50% return on your original investment. Unlike investing in the stock market, what can you do to increase the value of your asset? Pray? And when everything is done, you have to deal with paying capital gains tax on the return. Speaking of taxes, real properties provide opportunities for unbelievable tax savings. How? Uncle Sam is promoting home ownership, he will be rewarding you with tax write offs (the ability to depreciate) your home and write off mortgage interest! It is highly recommended that you always keep in touch with a CPA in order to be updated with the local tax laws amazing benefits as they apply to your individual situation.

If you invest in the stock market, mutual funds and the like, you usually invest the same value as that investment is worth on that day. With real properties you have the direct control to increase its value by simply updating the kitchen, enhancing the curb appeal of the house with lawn and grass, a new paint job and other multiple upgrades. You have the muscle to increase the value of your real estate. These are just a few in the long list of wonderful benefits if you invest in California real estate now.

After a year of dismal news in the residential sector we are seeing that mortgage rates in the commercial sector are still holding steady, according to a report released today by the California Mortgage bankers Association.

Delinquencies have risen slightly over the year, however they are no where near as drastic as seen in the residential market. This is mainly because the amount of a commercial loan is generally two times the amount of a residential loan and the down payment required is quite a bit more.

Vacancies have also held steady over the past year. As long as the units are being leased, mortgage holders should be able to pay their monthly payment.

While this news is good for California’s commercial market, it is expected that eventually the downturn in the residential market will seep into the commercial market, however the impact will likely be no where near the monumental downturn that has recently taken place in the residential sector.

California residents will have reason to rejoice this tax season!

The economic stimulus package announced this week includes rebates between $600 to $1,200 for most Californian families plus $300 per child. The big news that is relevant to the California real estate market is the fact that the plan also includes a drastic reduction in rates for loans between $417,000 and $729,00.

Jumbo loans (Loans over $417,000 in California) are generally priced at a much higher interest rate than loans for homes at a lower price point. The interest rate on a jumbo loan can be 1.5%+ more than a loan for a lesser amount. This mean that many homes in California markets are just plain unaffordable for consumers looking to buy - even in the current market.

The stimulus plan effectively raises the cap for conforming loans (loans that up until now were capped at $417,000) and the corresponding interest rate associated with them. This will give California markets a much needed boost in affordability as more consumers become qualified to purchase.

Hopefully this will be enough to begin to remove consumers from the sidelines and into the buyers category.