Category Archives: housing market

Mortgage Rates….Staying Low or Rising???

I wanted to ask people out there whether they feel interest rates are going to stay around 5% or rise?  I have had so many of my buyers get great interest rates with FHA loans.  It just amazes me how long they have stayed low.  If you listen to all the lenders ho are advertising they are saying to take adavantage of these “All Time Low Rates”, because they will not be here long.  When I heard this again today on the radio, I thought to myself, who knows?  I think you have to listen to the economists to understand. 

I think for the rates to rise the Obama adminstration needs to be worried about inflation.  However some economist, “moringstar analyist” are saying we are looking at a Double Dip.  This means that we are going to see home prices fall again, because the current adminstration has not been able to create enough jobs to prevent the double dip.  There is not enough income to support any price increases.

Anybody have any comments on what you think the interest rates will do?  Just a real estate agent trying to better prepare my clients for the future.


Tax Credit Extended for California

I don’t know if everybody knows that the state of California has extended the first time home buyer and re-beat buyer tax credit.  New applications will be available on May 1st, 2010.  The federal governments tax credit will expire April 30, 2010.    There are a few difference with the State credit and the federal credit.

The state credit will have a budget of $100 million for first time home buyers and $100 million for re-beat buyers. The major difference with a budget, is you can run out of funding and the program ends.  They plan to on the $100 million cap for New Home Credit will be reduced by 70% of tax credit allocated to each buyer.  The $100 million cap First Time Home Buyer credit will be reduced 57% of the tax credit allocated as well.  This is because the state feels that many buyer will not be able to use the whole credit within 3  years.  These credit will be served on a first come basis.  Another difference is this is a credit.  That means it goes against what you owe in your taxes.  You have to use this tax over a three year period ($3,333 per year).  This tax cannot reduce regular tax below your Tax Minimum Credit (TMT).  You cannot get a refund for the amount you do not use.

The taxpayers who are first time home buyers need to purchase (close escrow) on or after May 1, 2010 and before January 1, 2011 in order to get this credit.  Repeat buyers going for the New Home Credit need to purchase on or after December 31, 2010 and before August 1, 2011

There are a few regulations on who will be aledgeable for these two credits.  Please go to the government website and too read all the rules and updates as they become available.

New Guidelines for FHA Loans

The FHA (Federal Housing Association), who currently does about 30% of the current loans in today’s market, is changing a few of their rules and fees.  Three years ago, FHA loans made  up about 2% of the loan market.  One of the reasons that the FHA makes most of the loans now is that they only require the buyer to put 3.5% down to purchase a home.  With only 3.5% down, the FHA can also ask the seller to pay up to 3% in closing costs.  The catch to these loans is that they are not cheap and they require the buyer to carry PMI (property mortgage insurance) to protect the risk of such a low down payment.

The changes are as follows:

  • Increase FHA insurance premiums
  • Increase upfront cash by the borrower
  • Focus on enforcement and lender accoutability
  • Reduce the maximum seller concessions from 6% to 3%
  • Raise the minimum FICO score to qualify

I think these could be good changes — the FHA is trying to make sure that the buyer is more strongly qualified so that we don’t end up with people buying homes that they can’t afford.  If a buyer only puts 3% down and gets 6% back in closing costs, they are basically coming up with no cash.  Buying a home takes more than just a down payment; you also need to maintain the home which, overall, is more expensive monthly than renting.

We need to take accoutablility for our expdentures…


I’ve been talking with a lot of people in this industry over the past couple months and nobody seems to know whether the banks are going to release the REO’s all at once, or slowly release them.  The big concern in the industry is if they release them in a big clump, we could see a drop in real estate prices.  I believe this is in the back of everybody’s minds right now. 

If you buy a home now will you lose value in the next six months?  I don’t think anybody can predict this. It’s likely, however, that any amount a newly purchased home drops will be offset by the interest rate that is currently being offered. So it probably will be a wash. 

It’s going to be an interesting 1st and 2nd quarter this year. 

If you have any thoughts on this subject, share them with me! I’d be happy to respond.

Median Home Prices Show First Increase Since 2006


 San Diego County showed their first year increase since June of 2006, according to DataQuick yesterday.  It wasn’t a big increase however it was significant enough to show we might be at a turning point in the real estate market.

  “It’s a reflection of a market that has stabilized in many areas”. DataQuick analyst

 The overall median home price went from $350,000 to $360,000 a change of +2.9%.  We have seen a drop in prices over the past 13 months so this is very strong indicator of things to change.  Many analysts feel the government involvement has helped buyer/investors join the market, with all time lower interest rates, FHA insured loans, and the treasury department taking over Freddie mac and Fannie mae.  They have also just extended the homebuyer credit for another six months which could help the market keep its pace. 

 The one concern many analyst have is who is driving the market.  The majority of sales (36%) have involved homes foreclosed on in the previous 12 months, dataquick said.  This has become a sellers market for certain types of product in certain locations.  What would help the market even more is sales activity in higher-priced neighborhoods.  Transactions have remained low since sellers have not reduced enough and financing can be difficult in these price ranges.  If we do not see a new wave of foreclosures flood the market due to loans going bad and some movement in the higher end home prices we should be able to maintain a stabilized market.

 The overall housing picture appears to be turning around.  We have turned some major corner with increase of sales and home prices increasing slightly.  If the interest rates stay low and the supply stays steady we should see this market continue to climb

Mortgage Rates Remain Near Historic Lows

With interest rates remaining near 40-year lows, and reduced home pricing, it is not surprising that purchasing a home or investment property has become more affordable.

However, many economists believe that interest rates will go up in the foreseeable future. So current rates do present an opportunity for homebuyers, and despite media coverage to the opposite, home loans are being done.  

I remember when I bought my first home, I paid over 8% on my interest rate. I just refinanced my current home with a light jumbo loan and got a 5.62% rate! 

So if you think things are going to be better, don’t wait too long or you will miss a great interest rate.

 Happy Buying!





Investment Properties

In today’s market there are a lot of homes that have dropped more than 30% over the past two years.  If you have followed the market at all you would know that in Oceanside and Vista and parts of Carlsbad have been hit hard with foreclosures and short sales that have driven the declining market.  I think if you ever considered entering the market to buy an Investment property in California, this would be the time.  The interest rates continue to float at 6% or below and home prices have dropped tremendously. 

My brokerage currently has over 25 foreclosed homes in the North County on the market, some as low as $100,000.  There are homes just over 200K in Ranch Del Oro of Oceanside.  Since I am employed as the bank’s realtor I cannot buy my listings, or I would invest in one! If you are intersted in getting in the market give me a call or visit my website at for a list of area current foreclosed homes.

Thanks for reading and keeping on Investing…