American Pacific Mortgage

American Pacific Mortgage

Wednesday, December 30, 2009

Property Sales Gaining Momentum

According to Steve Thomas of Altera Real Estate, inventories have decreased over the past year in the OC. Average time to sell is just under three months vs. almost six months’ marketing time for properties one year ago.

However, there is currently a much longer market time for homes listed at over $1,000,000 vs. those under the $1 million mark. I might guess this is due to fewer financing options available in the marketplace today for traditional jumbo loans over the $729,500 high-balance conforming loan limit in Los Angeles and Orange Counties.

Distressed properties are just over 1/3 of total listings, with 43% under $1 million listed as short sales or bank sales (foreclosures), while only 7% of higher priced listings are distressed sales.

In other news, prices overall are nearly flat over last month…except in Las Vegas where they have seen prices falling for 38 consecutive months and a peak to bottom drop of over 55%. WOW.

Wednesday, December 16, 2009

Home Values...Up or Down?

MDA DataQuick reported this week that Orange County median home prices jumped 8.1% in November. The median price was $432,250. However, the data indicates that pricier homes are selling more quickly than earlier this year which may be skewing the data. Many believe the tax credit is helping to fuel volume.

The $432,000 figure is still 33% lower than the June 2007 market peak.

Foreclosures and short sales are still huge factors. We had over 1800 new foreclosure notices files last month county-wide.

Nationwide, home prices declined by 9.8% in September 09 vs. September 08. Top-ranked states for depreciation are Nevada, Arizona, Florida, Michigan and Idaho.

Supporting the data reported earlier by the Real Estate Research Council appraisers, First American CoreLogic reports that the Los Angeles-Long Beach statistical area showed a 13.37% decrease in average values over the last twelve months ending September 09. On the brighter side, it is projected to increase by 7.92% in the next twelve months.

Monday, December 7, 2009

OC Home Prices off 15% According to Appraisers

According to the Real Estate Research Council of Southern California, values have been falling in the OC for a full three years.

Orange County home prices are down 15% from one year ago, an increase over the 14% loss reported from the prior twelve-month period. North OC losses are greatest at 20.9%, Central OC is at 17.7%, and South County and Beach communities are down only 9% over the prior year. The calculations are based on the year ending in October.

This report is in direct opposition to the California Association of Realtors report that single-family values were flat for the year ended October 2009.

Who to believe?

Thursday, December 3, 2009

5 Year Arms at 3.75%

Yesterday I checked rates and programs for a few clients interested in Five-year fixed rate loans. They only make sense if you don't plan to stay permanently in your current home (or new one). These loans are available in amortizing and interest-only loans, and depending on loan size, come are for minimum ten-year interest ony periods, although the rate is only fixed for the first five.

WOW! A rate under 4% for five years is something to talk about!

Tuesday, December 1, 2009

Thanksgiving in Cabo Pulmo, Mexico!

We ventured to the eastern tip of Baja California (Sea of Cortez) for a quiet getaway the week before Thanksgiving. We planned to scuba dive and just relax -- and that is exactly what we got! Warm, sunny weather, (80-ish days, 70-ish nights) with a bit of breeze toward the end of the week, and lots of quiet was just what the doctor ordered. The only music we heard—except for restaurant radios—was from our battery -operated IHome Ipod player! We pretty much lived in our swimsuits.

We had been warned we could run into trouble finding our way after dark, and to watch for cows on the road. We arrived without mishap around 9:00 p.m. to be greeted by an entirely dark village. Everything rolls up around that time. This was a Friday night! Directions to our home were left in an envelope at the door to the office. No keys allowed here! We literally locked up nothing all week!

Cabo Pulmo is about an hour and a half drive from the airport at San Jose Del Cabo, but seems worlds away from the activity center of Cabo San Lucas. Pulmo is located on the East Cape facing the Sea of Cortez. The last 6 miles of the trek are on a dirt road. You can take a dirt road the entire way from San Jose along the coast, but it takes much longer and isn’t wise in the dark.

Cabo Pulmo offers the only coral reef located in the Sea of Cortez. Jacques Cousteau called this the aquarium of the world, and for good reason! We dove three days, two-tanks each. We saw more fish, in sheer numbers, than anywhere else we’ve been diving. Although we missed out on seeing whale sharks, we saw huge fish balls and schools of jacks, that went on and on, forever. We saw sea turtles, and dozens of different kinds of local tropical fish. This is a fabulous place to dive and fish. They primarily use panga boats for fishing, and for diving as well. Back entry into the water only!

Steve spent much of his time painting his favorite fish, while I read a couple of books lazing in the sun. We generally just relaxed. Other than our diving, we snorkeled daily at the reef right off the beach, took a hike in the local hills, and drove up the coast to Los Barriles one afternoon.

This is not a destination for those seeking a lot of day- or night-time “action” although we had great dinners out every evening at one of the four different restaurants available. We ate a ton of fresh fish…either grilled, pan fried in oil and garlic, or in tacos. We met some interesting ex-pats who live in the area full-time, and chatted up the new divemaster over a couple of meals (and margaritas, beer and wine of course).

Be sure to shop in San Jose before you get on the road, as supplies are virtually non-existent in Cabo Pulmo (except for restaurants) and groceries are limited in La Riberia-- which is the closest “city.” On the plus side, there are no vendors on the beach, so you can have the beach essentially to yourself! We stayed in a “casita” in the village which was a large one-room home with full kitchen, bathroom, and best of all, a private outdoor shower. We had two patios, one at ground level and one at roof top level with a view of the hills and peek-a-boo water view. Our patio home was entirely private, surrounded by a hedge. We were a one to two minute walk to the beach, down a path. There are a few beachfront rentals in the village, although there are other rentals in the general vicinity that are completely isolated both on and off the shore.

I’d love to return with a group and rent a compound, or larger private home, of which there are a few in the immediate area. Viva la Mexico!

Monday, November 30, 2009

Rates Repeat Record Lows of 2009

Interest rates finished the day at their lows of the least equal to the lows of January and March. A 30 year fixed rate loan under $417,000 can be had at 4.375%-- depending of course on credit scores, loan-to-value and debt-to-income ratios.

If you have been sitting on the fence, now is the time to act! Expect delays in processing time due to high volume just as we saw earlier this year.

Wednesday, November 18, 2009

October Housing Market Stats

The numbers have just been released, and they indicate rising home prices and fairly stable volume. This is primarily attributed to continued low interest rates and prices, coupled with the federal tax credit.

The median closed sale price in Orange County last month was $436,500, which is up 3.9% over October 2008.

Sales of existing homes were basically flat, but foreclosures and defaults are rising. Entry level homes are the big news—60% of sales are in the price range under $400,000 and 10% are under $500,000. Anything in the high end, over $800,000, is taking much longer to sell and represents less than 4% of total sales.

Average down payments are just under 20% meaning most successful buyers are utilizing conventional financing. Any time a bank seller is involved, whether for bank-owned or a short sale situation, they tend to avoid FHA financing like the plague.

Short sales are picking up steam and getting easier as banks are avoiding foreclosure and are more amenable to work with the property owner.

Beautiful Buena Ventura

I visited downtown Ventura last weekend. Much to my surprise, it was a happening place! I was amazed at the number and variety of restaurants, clubs, and activities.

Although we were in Ventura earlier this year in March, on that trip we drove directly to the Harbor on a Friday evening. We had dinner at a restaurant, and slept on our dive boat in preparation for an early morning departure for scuba diving the Channel Islands. Our favorite Santa Barbara seafood restaurant, Brophy Bros, has a restaurant located there. The Harbor offers a great selection of other fun eateries and bars.

That Saturday we dove around Anacapa Island (the closest to Ventura) at three different locations. The most exciting was on the west side of the island, where we swam with a large group of sea lions, who followed us around and played with us.

During our visit last weekend—primarily for a high school football game—we stayed at a motel walking distance to the beach and historic pier, and a block to the downtown area.

After an early dinner on the pier to watch a spectacular sunset, we headed out to the game. Our first stop back in town, around 10:00 p.m., was the Bombay Bar & Grill which we had been advised was a dancing “hotspot.” Expecting to see a crowd of 20- and 30-somethings, we were greeted by a large group of all ages, dancing to a live band playing current top 40’s. No cover charge to enter! There was plenty of room at the bar, which was nice, and the bartender kindly held my purse while dancing. In the back of the restaurant, the club scene with a DJ was just getting started. Definitely a younger set there—and the action starts later.

Next we headed out on California towards Main Street, and crossed to another restaurant where we heard live music playing. On Main Street itself, we were greeted by more music on all sides. It felt like a battle of the bands. We heard everything from Jazz and Reggae to Rock and Hip Hop. I can’t wait to go back and explore some more!

Monday, November 16, 2009

More Details on the Tax Credit for Home Buyers

The tax credit extension for first-time homebuyers includes some new twists and turns:

1. Buyers must have a binding contract in place by April 30th, and the purchase must close by June 30, 2010.

2. The credit has been expanded to include a $6500 credit for existing homeowners. They must have owned a home in the last three years, and have lived in the same primary residence for five consecutive years during the past eight-year period.

3. Income limits have increased – up to $145,000 for individuals and up to $245,000 for joint filers. The amount of the tax credit decreases as the income increases.

Don’t procrastinate if you think you may be eligible for a full or partial credit and want to take advantage of this program. It can take you more than one or two offers in the current climate before an offer is accepted, and oftentimes bank sellers move more slowly to process offers than a typical owner-occupant. Most of my buyer-clients this year had to make multiple offers before one was accepted. Also, they seemed to have better luck with individuals or rehab companies than with the banks.

Remember, home prices over $800,000 don’t qualify. And, tax credit qualifiers must be at least age 18.

Rates have improved the last few days – but beware, as we are trading near the bond price highs of the year. They can deteriorate rapidly which could result in a rapid increase in rates. If you want to refinance take advantage of the rates ASAP!

Tuesday, November 10, 2009

Tax Credits and Rate Outlook

The big news last week in the Mortgage Biz was the extension of the tax credit for first time homebuyers. This credit is actually worth, dollar-for-dollar, any taxes paid or due for this year or next, up to a maximum of $8000. The amount of the credit depends on a number of factors including purchase price, gross income, etc. * This means you have to have paid taxes, or owe them, to collect the credit.

The bigger news is that the credit was actually amended to include “move-up” buyers who owned a home in the last five years.
There is quite a bit of fine print to the guidelines-- including a maximum home price of $800,000.

Please call me with questions and if I don’t know the answers, I will find out.

My daughter Katie qualified for the credit this year after her purchase of a condo in Ann Arbor. The whole process went very smoothly post-closing and she received her refund check in a few weeks.

On other fronts, interest rates continue to exhibit volatility, but are still very attractive.
Mortgage backed securities are currently trading just below their earlier highs of the year. This translates to rates that are near bottom, and long-term these will begin to rise as our economy levels out and improves. As soon as the hint of inflation is on the horizon we will see movement towards increasing yields. Translation: higher rates.

The Federal loan programs to refinance loans owned by Fannie and Freddie continue. If your loan is currently owned by one of these entities, and you do not currently pay mortgage insurance, you will not have to pay for MI, even if your current loan balance is equal to 125% of current value. Rates are comparable to current market rates, with good credit scores. The big catch is, who owns your loan? You can check this out yourself on these websites: