Feeds:
Posts
Comments

Archive for July, 2012

Predicting the future of real estate is not as easy as forecasting the likelihood of triple-digit temperatures in Davis during the summer. There are a few housing predictions that are guaranteed after the boom and bust years. Home prices can’t continue rising or falling through infinity and the same philosophy holds true for mortgage rates. The combination of low home prices and weekly drops in mortgage rates will have to increase in the near future.

Interest Rate Increase:As the government starts to leave the mortgage market, private industry will step in. Private industry demands a higher rate of return on their investments. Mortgages will be no different. Studies have shown that 30 year mortgage rates could increase by 1 to 3% over the current rate.In many higher priced markets, rolling back Conforming Loan Limits means that rates for the mortgages on these properties will resort back to the rates on private jumbo loans. The FHFA informed us that last year, the difference between mortgage rates for jumbo loans and jumbo-conforming mortgages has varied between about ½ and ¾ of a percentage point.As the economy gets better (and I believe it will), the pressure to keep rates low to stimulate growth will disappear.

Home Prices Increase: The all time low mortgage rates have created huge demand for the few homes on the market, which will surely force an uptick in housing values. Inventory will probably stay relatively low in the coming years, because of so much lost equity over the last five years. Currently in Davis and most parts of the country, there are way more buyers than homes to buy. That trend will ensure prices elevate.

Timing is Right To Buy: There’s a right time for selling and a right time for buying. If you can wrangle your way through the loan process, there hasn’t been a time in the recent past that was a better time to purchase a property. Waiting and hoping mortgage rates and or prices continue dropping are the wisdom of the nonsensical.

Pride Of Ownership: Many families that purchased their home during the boom and lost it to foreclosure or a short sale would probably not agree, but pride of ownership is now back in vogue. Many mortgages are now equal to a monthly rent payment. Buyers are now feeling comfortable with the direction of the housing market. These are four crucial reasons you don’t want to wait to buy a home. Take advantage of the opportunities while they last. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.

Read Full Post »

When you have buyers chomping at the bit to buy a home and take advantage of market conditions and mortgage rates, the lack of inventory has put a damper on the housing recovery. When you have twenty buyers bidding on the same property, is certainly a tell-tell sign that demand far outweighs supply. The shortage of inventory has had a huge effect for both buyers and sellers. Owners are reaping the benefits of the scarcity of viable buying options. In some neighborhoods there might be a couple of buying opportunities for buyers and this in turn has created many buying frenzies.

The supply of homes are an indicator of the issues many buyers are dealing with presently. Many areas in Sacramento have less than a one month supply of properties on the market. Davis has a three-month supply of homes available. A normal market would have about a five month supply. There are homeowners that have delayed moving, due to the absence of equity in their home. Many homeowners have decided to settle in and wait for prices to appreciate.

Prospective home buyers still have to envision themselves in a home and will not concede buying just any property. On the other hand, many buyers have bid on a number of homes and have lost out to higher bids. Would be buyers are packing open houses and some homes are sold before they hit the market. A good percentage of these buyers are paying all cash, foregoing the chance to take advantage of todays mortgage rates, for a better shot at purchasing a home. Sellers that price their home correctly are getting multiple offers that exceed the asking price in most cases.

The current state of housing and the limited inventory will be with us for the time being. There’s no magic wand that will persuade owners to sell their home and most have come to the conclusion that holding on to their present home is a wise move. Buyers will continue the fierce competition with other buyers for the occasional home that comes on the market. Housing moves in cycles and we are in a high demand, low supply phase. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes in Davis, California and the surrounding communities, including pre foreclosures.

Read Full Post »

After the shootings of five coyotes near the Wildhorse golf course, the City of Davis have cut ties with the U.S Department of Agriculture. The City Council voted unanimously to terminate the contract with the USDA Wildlife Services. Numerous citizen complaints by residents led to the shootings. The city felt since they were writing the checks, they should have been notified before the Wildlife Services took it upon themselves to exterminate these coyotes. The USDA felt the complaints by citizens around Wildhorse justified their actions.. The coyotes were demonstrating  aggressive behavior. This could have been handled differently, but ultimately the safety of the residents was first priority.

The massive water surface project has been tentatively placed on the ballot for a vote on 5 March 2013. The Water Advisory Committee will come up with its recommendations for the project and the City Council will decide what and how the ballot is presented to the residents. The decision to delay the vote was a wise move on three fronts. This gives the committee more time to cut some of the cost of this massive project ( hopefully) and secondly, it’s not competing against the school board proposed parcel tax on the November ballot. The delay also gives groups that oppose this project more time to get their point of view out to the voters.

One of the many attractions that gravitate folks to Davis is our world-famous Farmers Market. The U.S News Travel recently voted the local market in the top 10 of all Farmers Markets nationwide..Our market has been a mainstay in Davis for many years. It’s a family oriented market, especially during the Summer months. Central Park is a must see on Wednesday evening and Saturday mornings. Davis Farmers Market garnered the fifth spot in the nationwide poll, the top four were bigger city markets.

Like almost every other community throughout the country, Davis has had huge increase in homes sold for the first half of 2012. That was largely due to the weekly drop in interest rates, now standing at 3.56% and the inevitable realization that property values are close to bottoming out. Many homes priced correctly have had multiple offers. A number of serious buyers are sitting on the fence waiting for the right home to hit the market. Through the first six months of 2012, we had 242 properties that sold compared to 198 homes that sold over each of the last two years. The average days on the market were 67 days, the same number as 2011. The average sales price was $450,516 this year compared to $476,153 for the first half of 2011. That’s about a 5% drop from last years number. We do expect the sales price average to be more in line with 2011, by the end of the year. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home.

Read Full Post »

With so many homes on the market receiving multiple offers, sellers are more in control now than they have been since the housing boom. There’s more competition from buyers for the sparse amount of properties to choose from. Top tips for handling multiple offers successfully starts with the most important factor, the price an owner chooses to market their home. The chances of getting multiple offers with a home overpriced is highly unlikely. How else can you explain the number of properties that come on the market and sell quickly, compared to those homes that come on the market and sit for months with no offers. It boils down to price.

From the buyer’s perspective, it can be nerve-wracking competing against other buyers for the same home. With four or five consumers bidding on the same home with only one winning bid, the stakes are high, especially with the knowledge it might be months waiting for the next buying opportunity. That’s the downside of having limited inventory. Buyers should always assume every other offer is either full price or above. This is particularly true if the home is brand new on the market. Buyers can put themselves in a better position by creating a proposal that can’t be beat. The contract should be as seller friendly as possible. By taking on more of the allocation of cost, the buyer can in turn make their offer more attractive.

The buyers agent should consult with the listing agent and get an idea what factors are most important for the seller. From the move out date to a reduced period for buyers inspections, can assist the buyer in making an offer that’s attractive to the seller. The price is usually the most important determinant, but the terms can also be vital when sellers compare each proposal.

Bank owned properties use a different strategy with multiple offers. They will normally offer a second opportunity for each buyer with the highest and best option. This increases the frenzy and therefore increases the eventual sales price. With a traditional buyer and seller transaction, the buyer only has one chance to put their best foot forward. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling s home, scan my informative blogs, join my professional networks on Twitter and LinkedIn and easy access to view local area homes for sale in Davis, California and the surrounding communities, including pre foreclosures.

Read Full Post »

During the housing boom, there were investors making a good living on buying a property, then quickly restoring the home and selling it for a nice profit. That tactic is not as prevalent today as it was then, but it’s still part of the portfolio for many investors. Flippers are all about the right opportunity. The chosen property has to be in a debilitating state and priced well below market value. Shrewd investors can find those type of properties anywhere. The business of flipping a house is not for the faint of heart. Having a plan, patience and plenty of cash is required. Adequate savings are a necessity while money is flying out the door for the kitchen remodel, plumbers and new landscaping.

Another reason that accessible cash is vital is that you’ll probably need to hold onto the property for at least three months because of the Federal Housing Administration and flipping regulations. Houses sold less than 90 days after they were purchased aren’t eligible for FHA mortgage insurance. Those sold between 91 and 180 days are ok, but require an additional independent appraisal to make sure the price is justified. What that means for you during that waiting period is additional carrying cost. Each day you own the property cost you money in interest, utilities, taxes and insurance. The majority of homes for flipping purposes are bought with all cash. If you take out a mortgage, be sure to discuss with the lender about potential pre-payment penalties.

Every community has homes that meet the criteria of properties worth flipping. Consult with a local realtor to assist in the evaluation phase of locating homes that can be fixed up and sold for a profit. Buying a home in well-kept neighborhoods where one or two homes stick out like a sore thumb presents the best opportunity to buy and sell for a gain. A home that meet the guidelines of flipping should be purchased for at least 25% below fair market value and require no more than 10% of the purchase price toward repairs. A $150,000 home should not require more than $15,000 in total repairs. Using the 25/10 rule would assure an investor of being able to sell the home for a profit. Many beginners hurriedly jump on the first property without properly analyzing the market or the repairs needed and end up losing money. A plan and patience will mean happy returns for buying and flipping a home in todays real estate. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home.

Read Full Post »

Just like any other investment, purchasing real estate should be a long-term proposition. This is especially true in todays volatile housing market. Buy low and sell high is the goal of every homeowner. Circumstances outside the owners control can have an effect on the best time to buy or sell. A job transfer, divorce or another life altering crisis might force a move before the optimum time.

The era of get-rich-quick real estate is no longer feasible. The era of increasing long-term wealth is back. Buyers are not likely to see prices skyrocket the way they did in the early 2000’s. Since 1968, prices have appreciated over 5% annually. That includes the years of double-digit appreciation and the housing collapse that followed. The swinging back and forth pendulum is probably over for the forseeable future.

The definition for holding real estate long-term should be a minimum of seven years. Buyers today have the advantage of low-interest rates and home prices. Buyers who can find the right home and be content for seven to ten years will be happy that bought now. There are signs all over the country of a recovery from the housing bust, home prices should settle into a consistent price growth trend that’s higher than inflation over the long haul.

The smart way to own a home has three basic elements. Those three are a fixed mortgage, affordable payments and most importantly, a long-term hold. The all-time low-interest rates have made the first two desirable and obtainable. A recent survey found eight of ten adults stated owning a home is the best long-term investment a person can make. This confidence exists even though we have been mired in the longest and deepest decline in American history. Real estate is and has always been cyclical.

The last decade has been a deviation from the norm. The highs and lows we experienced during that period have been enlightening for everyone involved with the real estate industry. The lessons learned will prevent the huge fluxiation of home prices and make for a more gradual increase in housing values and a slower wealth building commitment to your home. Purchasing real estate for the long haul is the new American dream. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home,scan my informative blogs, join my professional networks on Twitter and LinkedIn and easy access to view local area homes for sale in Davis, California and our surrounding communities.

Read Full Post »

Home buyers are not the only ones celebrating the uptick in the housing market. Sellers have benefited from the plunging mortgage rates, plus the low supply of competing properties on the market. This is under the assumption, families have equity in their property. Those homeowners with no equity and not able to sell, have created a diminished number of properties available. The limited inventory has had a huge effect on the housing market throughout the United States.

The housing market is no longer characterized by falling prices and weak demand, the market is now handicapped by a restricted supply of homes for sale as demand improves. That has led to multiple offers in most markets and rising prices, due to demand outweighing supply. Nationally, 30% of homeowners have no equity and are underwater. In traditional times, those owners would be selling and moving to other homes. Since they have negative equity, most have decided to sit tight with hopes of retrieving that lost equity.

The other dilemma that has compelled many families with equity to not sell and buy, is they simply can’t find a replacement property. Those sellers turned buyers are less inclined to sell when the chances of finding a substitute home are so limited. It’s not just a coincidence that supply is shortest in markets where more homeowners are underwater. The nation has a 6.6 month supply of homes for sale in May. That is considered a sign of stability. Many of the major markets like Sacramento that have an extremely tight supply of properties are experiencing a buying frenzy. Most of these homes are bank owned and short sales.

As home prices continue to move up, owners and builders will join the fray, which will increase the inventory and have a leveling effect on housing prices. Along with an improved economy comes the inevitable rise in mortgage rates. Just a slight increase in rates can add thousands of dollars over the life of the loan. The quandary for most homeowners now, should they take advantage of mortgage rates and buy now or wait and assume that the higher price for their home will make up for the increase in rates they will pay to purchase another home. Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities, including pre foreclosures.

Read Full Post »