Miscellany

We are quite proud of our web site, trying to bring some information and value to people interested in real estate, or a real estate transaction, and lo and behold, our site was unavailable for the entire day today. Our administrator tells us that their communication provider suffered a calamity in their system, and the calamity? In this age of wireless and the taking for granted of almost everything, somebody cut a wire and disabled every web site these guys host. Our apologies. Irritating possibly, but earth shaking? Hardly.
Our market area continues to have a glut of listed properties for sale, and the national media with a little help from our local dummies continue to "view with alarm", in an attempt to do what? I do not know. California properties continue to show a rise in median home prices, moderating to be sure, but a rise. Gasoline prices are down substantially, and interest rates are at their lowest in the past 7 months. Toss in the employment figures which are just fine and you have a situation which favors the home seeker and offers no discoverable reason for putting off a purchase if buying a home is in your plans or on your wish list. In our market the choice is broad, the financing favorable, and you could be well settled in for the Christmas holidays.
In our own company which has recently introduced a cash to buyer program, we simply add to the reasons for buying now. As a "by the way" this program which has no gimmicks and favors the client has been met with some disfavor by our competitors. A recent post to "craigslist" was flagged, which if you know the site, can be done anonymously and without reason. Childish. We're quite content to compare our service and fees with anyone, and we have a substantial faith that the intelligence of consumers will lead them to pursue their own self interest. We obviously feel that self interest also leads to our door.
On a mortgage note. While there doesn't seem to be persuasive evidence that rates are going to move up significantly, there are in existence a large number of 2/28 and 3/27 mortgages coming to term early next year. These are the fixed for two or three year loans that mutate into variable, and usually carry a prepayment penalty. That first jump can be troubling. We urge you, if you have such a loan, to call us, or another reputable broker, and be prepared to move into an affordable fixed rate mortgage before the term is up. If you prepare in advance you can pay off at the anniversary without penalty and never be exposed to a payment increase. Call us to talk about your situation if you wish. Conversation is free, and if we do a loan for you you'll be pleased with the treatment and the fees.
Apologies again if you were inconvenienced by our web outage. This is the door to our office and we like to keep it open and the light on. Thanks for visiting.

Random Thoughts

The news is full of, ...well, news. Consider it data I suppose but what to make of it, and what does it portend? The National Mortgage Bankers Association reported that purchase mortgage applications were 26% below year previous for the same time period. Say what you will, that's a bunch. The California Association of Realtors reports that sales of existing homes are down from year previous rate, no surprise there, but also that median home values in the state are still rising, albeit at a lower rate than previously. Other data suggest that consumers are incurring debt at a slower pace than in previous periods. Unless you own a credit card company that could probably be construed as a good thing. As a mortgage broker I view debt reduction as a very good thing indeed. In the real world of real estate listings there is still a glut, and while price reductions are the order of the day, they lack real significance since they represent only a lowering of expectations of owners, not an actual reduction in value. Into the mix of information add the very stabilizing element of very favorable interest rates. As of today a 30 year fixed rate mortgage, 80% with good credit, is available for no more than 6.25% with zero points. Oil prices have dropped, at least for now. All in all both the economics and the psychology should be saying, "it's a good time to buy a home". So how come the market is slumping? Just an opinion on my part, but here goes. I think that because some of us think that owning our own nest is a great idea in and of itself we sell this notion as the American Dream and encourage everyone to buy into the notion. A lot of people who are only marginally persuaded that home ownership is the be all end all bought into the concept for economic reasons. They watched Bob and Carol and Ted and Alice reaping major rewards in rapidly rising equity and decided to join in the party, overcoming a possible aversion to the maintenance problems of home ownership and the risk of marginalizing their cash position in the interest of having a place to live that made them a lot of money besides. Now with values slowing in their rate of growth, and the perception that if that's possible a greater flattening is also possible, the specter of signing on for a long term commitment in excess of a quarter million dollars is daunting. Careful consideration will make the prudent person a little hesitant to take that plunge. If the view is you're going to have to make those mortgage payments from your income instead of constantly converting a growing equity into liquidity, maybe signing on for that debt load isn't such an exciting alternative to renting after all.
None of this is intended as a negative view of the market. In fact I think the market is strong, buyers have many choices, financing is available at good rates, and not surprisingly, homes that are appropriately priced are selling. When we list a property for sale the owner has tasked us with finding a person willing and capable of taking on debt in the quarter million to half million dollar range in order to buy their home. This is an exercise that requires time and marketing skill. The marketing skill we have, the time has to be granted us by the home owner. This is a time for patience. 120-180 days is not unrealistic in a normal real estate market to market and sell a home.