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Posted on October 5, 2016 at 9:07 am
Nancy Low | Category: News

Pending Home Sales Rise in July

More Americans signed contracts to purchase homes in July, a sign that demand for home ownership remains strong.
The National Association of Realtors said Wednesday that its seasonally adjusted pending home sales index rose 1.3 percent in July to 111.3 ( up 1.3 percent from a year ago). The number of signed contracts improved in the Northeast, South and West.
Housing has staged a solid rebound in prices and sales this year, but the real estate market faces potential challenges as fewer properties are being listed for sale. Sales listings have decreased 5.8 percent from a year ago to 2.13 million. The shortage means that many buyers are paying higher prices and scrambling to make offers sooner.
Pending sales contracts are a barometer of future purchases. A sale is typically completed a month or two after a contract is signed — suggesting that finished sales should rebound after slipping in July.
The inventory shortage hit purchases of homes in July. The seasonally adjusted annual sales rate fell 3.2 percent to a rate of 5.39 million homes, the Realtors reported last week.
Inventories have fallen on an annual basis for the past 14 months. The increased demand reflected by the improving sales has failed to cause more homeowners to list their properties on the market. Many may be still recovering equity lost by the housing downturn. Without sufficient equity in their current homes, many of these owners would be unable to generate a down payment for another home with the proceeds from a sale.
But the shortage might also stem from the increase in first-time buyers this year. Existing homebuyers often sell their house in order to finance the purchase of another property, keeping inventory levels stable. But first-timers are buying homes out of savings, so the number of listings should fall when a rising share of purchases go to this group.
The lack of supply has home prices climbing at more than double the growth of average wages.
The national median home sales price was $244,100 in July, up 5.3 percent from a year ago.

Posted on August 31, 2016 at 2:07 pm
Nancy Low | Category: News

Housing Forecast 2nd Half of 2016

Mortgage rates could reach all-time lows. Fitch Ratings expects U.S. mortgage rates to reach all-time lows following the United Kingdom’s vote to leave the European Union.
New construction remains slow. In May, groundbreakings stood at an annual rate of 1.138 million, below the 1.5 million needed to get supply back in line with demand. Mst of the homes that have been built in recent years have been for the luxury consumer, rather than lower price starter homes.
Homeowners aren’t selling. Meanwhile, people aren’t moving as often, meaning fewer existing homes are coming onto the market. Prices have risen so much that potential sellers can’t afford to buy that next level home in their current neighborhood.
Demand is still strong. Home values are currently appreciating an annual rate of 5%, well above the historical average of around 3% to 3.5%
What Does This Mean for the Buyer?
Have your checkbook ready. Typical homes are selling in 42 days, the fastest rate since 2009, according to Redfin.
Be prepared to pay asking. At 95.3% of asking price the average sale-to-list percentage is also the highest Redfin has seen.
Other things to watch.
The Fed. The Federal Reserve isn’t expected to hike short term rates more than once this year, meaning monetary policy will have negligible sway on mortgage rates.
The Election. In a survey of housing economists Zillow found that market forecasts would not be affected or even positively affected if someone conventional were elected. However if someone more outside the mainstream were to become president, the economists’ forecasts would be negatively impacted.
Call Nancy at 714-496-5950
For Your Real Estate Options!Housing Forecast 2nd Half of 2016
Mortgage rates could reach all-time lows. Fitch Ratings expects U.S. mortgage rates to reach all-time lows following the United Kingdom’s vote to leave the European Union.
New construction remains slow. In May, groundbreakings stood at an annual rate of 1.138 million, below the 1.5 million needed to get supply back in line with demand. Mst of the homes that have been built in recent years have been for the luxury consumer, rather than lower price starter homes.
Homeowners aren’t selling. Meanwhile, people aren’t moving as often, meaning fewer existing homes are coming onto the market. Prices have risen so much that potential sellers can’t afford to buy that next level home in their current neighborhood.
Demand is still strong. Home values are currently appreciating an annual rate of 5%, well above the historical average of around 3% to 3.5%
What Does This Mean for the Buyer?
Have your checkbook ready. Typical homes are selling in 42 days, the fastest rate since 2009, according to Redfin.
Be prepared to pay asking. At 95.3% of asking price the average sale-to-list percentage is also the highest Redfin has seen.
Other things to watch.
The Fed. The Federal Reserve isn’t expected to hike short term rates more than once this year, meaning monetary policy will have negligible sway on mortgage rates.
The Election. In a survey of housing economists Zillow found that market forecasts would not be affected or even positively affected if someone conventional were elected. However if someone more outside the mainstream were to become president, the economists’ forecasts would be negatively impacted.

Posted on August 3, 2016 at 9:59 am
Nancy Low | Category: News

Summer Mortgage and Sales Update

Rates have inched back down this week. Janet Yellen, the Chairman of the Federal Reserve Board, in a speech on Monday, hinted that the economy is improving but the timing is unclear for a rate hike, playing down the possibility that the next increase will be this month.
These remarks along with the disappointing May jobs report and concerns over the possibility that Britain will exit the European Union helped rates to ease.
Buyers eager to take advantage of the continued low interest rates are actively seeking to purchase.
Home sales continue to outstrip supply and the Market Action Index has been moving higher for several weeks. This is a Seller’s market so watch for upward pricing pressure in the near future if the trend continues

Posted on June 18, 2016 at 5:31 pm
Nancy Low | Category: Buyers, News, Sellers

How Long to Keep Tax Records and Other Documents

Tax season is the perfect time to start culling your paper piles and computer files and getting everything in order.
If you’re meeting with a financial adviser or an attorney, you don’t want to spend hours wading through clutter to find the documents you need. If there’s a fire, flood, or theft, you’ll need access to essential documents quickly. And if you become ill, well-organized paperwork will make it easier for your loved ones to locate your health-care power of attorney, insurance policies, medical records, and outstanding bills.
Divide your financial papers into four categories: Papers that you need to keep for the calendar year or less; papers that can be destroyed when you no longer own the items they cover; tax records, and finally, a category for papers to keep indefinitely.
Keep for less than a year
In this file, store your ATM, bank-deposit, and credit-card receipts until you reconcile them with your monthly statements. Once you’ve done that, shred the paper documents (to avoid ID theft) or securely trash electronic files unless you need them to support your tax return. Keep insurance policies and investment statements until new ones arrive.
Keep for a year or more
You’ll want to hold onto loan documents until the loan is paid off. That will often be for more than a year. Then toss those papers out. If you own one or more vehicles hold onto the titles until you sell them. If you have investments in stocks, bonds, mutual funds or anything else, keep the investment purchase confirmations until you sell the investment so you can establish your cost basis and holding period. (If that information appears on your annual statements, you can keep those instead.)
Keep for seven years
If you fail to report more than 25 percent of your gross income on your tax returns, the government has six years to collect the tax or start legal proceedings. So keep tax records—electronic and paper, just in case.
Keep forever
Essential records such as birth and death certificates, marriage licenses, divorce decrees, Social Security cards, and military discharge papers should be kept indefinitely. Also hold on to defined-benefit plan documents, estate-planning documents, life-insurance policies, and an inventory of your bank safe-deposit box (share a copy with your executor or your attorney).
How to Store Your Files
Use a fireproof safe or password-protected electronic file for the following: Bank and investment statements, estate-planning documents, pension information, insurance policies, pay stubs, tax documents, and your safe-deposit box inventory list.
Invest in a safe-deposit box for papers that can’t be easily replaced: Original birth and death certificates, Social Security cards, passports, life-insurance documents, marriage and divorce decrees, military discharge information, vehicle titles, an inventory of your home’s contents (in case you need to make an insurance claim), and loan documents.
Thinking of Buying or Selling Real Estate?
Call Nancy at (714) 496-5950!

Posted on April 4, 2016 at 9:50 am
Nancy Low | Category: News

Interest Rates Still Low

You have 3 options while the interest rates remain below 4%, depending on whether you are considering a purchase, a move, or just staying put.
1. Now is still the time to purchase before another buying season erupts, with increasing prices and added competition heating the market. Rates remain low, and inventory, though still scarce, is on the market long enough to make thoughtful decisions.
2. Now is the time to consider refinancing your mortgage to secure a low, fixed rate or to even further lower your mortgage rate, if you can achieve an approximate 1% difference to make it worth your while.
3. Now is the time for a current homeowner to consider a move either up or down, depending on their stage in life. There are various ways to take advantage of this market. If one is willing to take advantage of the differential between coastal property and property more inland, where larger and newer homes might be achieved for the same price, it might be time make a move. It might be time to downsize, and take advantage of the equity built over a lifetime of ownership. Some cash can be released from a sale, allow you to still be mortgage free, and still keep property taxes reasonable by transferring the tax base. Lastly, for a growing family, it might simply be time to upsize to another property in the same area. It will be less disruptive, with same schools, shops, and social activities. Prices are not appreciating as quickly as before and will not cause stressful and hurried decision making that typified an earlier market.
Whatever your stage in life, there are always choices!
Call Nancy at 714-496-5950 to find out yours!

Posted on March 9, 2016 at 9:47 am
Nancy Low | Category: Buyers, News, Sellers

6 Things to Know About the 2016 Market

Whether you’re looking to buy a home this year or already own one, there are important factors that will affect your investment. Here are the six important things you need to know about the housing market in 2016.

1. Mortgage Rates Are Staying Low (For Now!)

The Fed’s December 2015 interest rate hike had many consumers worried that rock-bottom mortgage rates would finally come to an end. However, the economic events of the first two weeks of 2016 show that low mortgage rates will stick around for a bit longer.

Given the lackluster performance of the stock market, many investors are buying bonds and driving down the yields of these investment vehicles. This is great news for those looking for a home loan, because the interest rates on 30-year mortgage loans are highly correlated with the yield of the U.S. Treasury 10-year bond.

2. HARP Refinance Deadline Receives Extension

Many experts expect mortgage interest rates to increase further down the road. Those mortgage holders that haven’t been able to refinance to a lower rate yet should think about doing so this year — especially homeowners that are underwater on their mortgages.

As of January 2015, about 700,000 borrowers who owed more than their homes were worth were still eligible to refinance their loans through the HARP program from the Federal Housing Finance Agency (FHFA). HARP was originally set to expire at the end of 2015, but it was extended for an additional year, until the end of 2016.

Nearly 3.3 million Americans have benefited from a HARP refinance to lower their monthly payments on their mortgages. The five basic requirements to qualify for a HARP refinance are:

  • Loan was originated on or before May 31, 2009.
  • Property is a primary residence, one-unit second home, or one- to four-unit investment property.
  • Loan is owned by Freddie Mac or Fannie Mae.
  • Current loan-to-value ratio must be greater than 80%.
  • Borrower is current on the mortgage, with no over-30-day late payments in the last six months and no more than one in the past 12 months.

There are still close to 430,000 HARP-eligible loans out there.

3. Home Prices Are Rising Less Than in Previous Years

One of the necessities that will be cheaper in 2016 is the single-family home. In 2016, the national average price for a single-family home is expected to be 3% higher than last year, a much slower rate of growth than 2015’s 5% increase.

4. Rent Prices Are Increasing Faster

On the other hand, rent prices are expected to increase sharply. In the third quarter of 2015, U.S. home buyers were spending 15% of their monthly income on the mortgage payment of a typical home, while U.S. renters were spending 30% of their monthly income on the rent payment of a median-valued property.

Higher rent prices will continue to be norm in 2016. According to a survey of more than 500 large U.S. property managers, rental inventory is at the lowest level in over 20 years.

A smaller inventory of available units for rent enables landlords to demand higher prices from renters. Of the surveyed property managers, 55% reported to be “less likely to offer concessions or lower rents to fill vacancies” and 68% of them expected to continue raising their rental rates in 2016 by an average of 8%.

5. New FHA Loan Limits Take Effect

On December 9, 2015, the Federal Housing Administration (FHA) announced its new schedule of loan limits for 2016. FHA home loans allow homebuyers to access financing with a minimum 3.5% down payment of the market value of the property, among other requirements.

Given the changes to median house prices in certain metropolitan areas, in 2016 the maximum FHA loan limit is higher in 188 counties. However, the maximum nationwide FHA loan limit remains at $625,500

6. Fannie Mae Loosens Some Requirements

The Federal National Mortgage Association (FNMA), better known as Fannie Mae, is giving Americans a break in 2016. Through its new HomeReady mortgage program, Fannie Mae aims to broaden access to home financing to credit-worthy low-to-moderate income borrowers.

Some of the loosened requirements from Fannie Mae include:

  • Borrower isn’t required to be a first-time homebuyer;
  • Down payment can be as low as 3% of property’s market value;
  • Gifts, grants, and cash-on-hand are acceptable funds to cover downpayment and closing costs;
  • Nontraditional credit is allowed;
  • Income from non-borrower household members can be counted as part of the debt-to-income ratio of the borrower; and
  • Underwriting process includes additional flexibilities.
Posted on February 2, 2016 at 1:43 pm
Nancy Low | Category: Buyers, News, Sellers

Existing Home Sales Rebound in Aftermath of TRID Implementation

The immediate impact of the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosures (TRID) rule in October is quickly coming to light as existing-home sales bounce back after November’s steep drop.

According to the latest report from the National Association of Realtors, more buyers reached the market before the end of the year, and the delayed closings due to TRID pushed a portion of November’s would-be transactions into last month’s figure.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, skyrocketed 14.7% to a seasonally adjusted annual rate of 5.46 million in December from 4.76 million in November.

This is a significant jump compared to November’s 10.5% drop in total existing-home sales.

Lawrence Yun, NAR chief economist, said December’s robust bounce back caps off the best year of existing sales (5.26 million) since 2006 (6.48 million).

“While the carryover of November’s delayed transactions into December contributed greatly to the sharp increase, the overall pace taken together indicates sales these last two months maintained the healthy level of activity seen in most of 2015,” he said. “Additionally, the prospect of higher mortgage rates in coming months and warm November and December weather allowed more homes to close before the end of the year.”

Posted on February 2, 2016 at 1:27 pm
Nancy Low | Category: News

U.S. Values and Rents Continue Rise

Home values and rental prices are steadily rising, fueled by strong demand and a tight supply of available properties, a pair of reports recently showed. The solid demand drove sales growth early this year and spurred additional construction.
The Standard & Poor’s/Case-Shiller 20-city home price index climbed 5.1 percent in the 12 months that ended in August — a level many economists view as more sustainable than the sharp double-digit gains at the start of 2014.
And in September, median rents nationwide rose a seasonally adjusted 3.7 percent from a year ago, according to real estate data firm Zillow. That reflects a greater preference for renting rather than home-buying since the Great Recession, which has reduced the percentage of Americans who own homes to nearly a 48-year low of 63.7 percent.
Increases in home values continue to exceed average annual earnings, which have risen just 2.2 percent from a year ago.
“Prices are rising the fastest in markets where job growth and net migration are the strongest and inventories are the tightest,” said Mark Vitner, an economist at Wells Fargo Securities. Those same metro areas were among the leaders in the rental increases tracked by Zillow.
The housing market’s overall gains are defying the impact of a sluggish global economy. Falling commodity prices, weakened growth in China, a struggling Europe and tumult in emerging economies such as Brazil have hampered a world that is still battling its way out of the 2008 financial crisis.
Home values are rising largely because few properties are being listed for sale. The number of existing homes for sale has fallen 3.1 percent in the past 12 months. Low mortgage rates are helping would-be buyers. The average rate on a 30-year fixed mortgage fell to 3.79 percent last week, its 13th straight week below 4 percent.

Posted on October 28, 2015 at 8:59 am
Nancy Low | Category: Buyers, News, Sellers

Feds Waiting Until October to Raise Rates?

Though Federal Reserve policymakers, worried that global financial market volatility could dampen the U.S. economy, did not raise the interest rates last week, they have begun laying the groundwork for a possible interest rate increase in October.

Two voting members of the Federal Open Market Committee, which sets monetary policy, said they were close to approving a rate hike on Thursday but wanted to take more time to assess the effects of the market turmoil and China’s slowing economy. Both said they expected a hike this year.

“It’s too early to know whether this episode amounts to a bona fide shock to the economy or just a nervous spasm in the markets,” Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said Monday.

Lockhart, a centrist, is one of the 10 voting members of the policy-setting Federal Open Market Committee. It voted 9-1 on Thursday to hold the central bank’s benchmark short-term rate at near zero percent after a much-anticipated two-day meeting last week.

Lockhart said Monday that he was confident the Fed would do so by the end of the year. The rate has been near zero since late 2008 in an attempt to stimulate the economy. The Fed meets again Oct. 27-28, then Dec. 15-16.

The labor market has healed enough for an interest rate hike, he said, but he remains concerned about inflation continuing to run well below the Fed’s 2% annual target.

“As things settle down, I will be ready for the first policy move on the path to a more normal interest-rate environment,” Lockhart said.

Posted on September 21, 2015 at 1:18 pm
Nancy Low | Category: Buyers, Events, News, Sellers