Sales in Orange County on the Mend!
September 7, 2009 by Mark Roknich
Each year, sales and closings in the three months of September, October and November are typically strong. This year should prove to be no different.
Despite some ongoing concern about the US housing market, especially in commercial real estate, I have noticed an uptick in interest here in Orange County, based upon closed sales, and in particular, upon inquiries by first-time and move-up buyers in the lower price ranges. Inventory is dropping.
Prices have stabilized over the summer in most prices. For single family homes in the $300-500,000 range, prices have actually risen off their bottoms! But the lower prices, combined with still low mortgage interest rates, continue to offer buyers improved affordability and much lower monthly payments.
Multiple offers are common when homes are priced right, as measured by condition and comparable properties. Equity sellers are affected, of course, by competing short sales and REO’s, but buyers prefer “traditional” sales when possible, and will pay a premium for the confidence that can be had by buying from a seller not in distress.
Call me right now at (949) 240-5892. It’s a great time to purchase a rental property, your first home, or an extra condo for that child just graduated from college. Move-up buyers also benefit in a market such as this…keep your current home, convert it to a rental, and purchase that next California dream home!
The New Housing Bailout Plan
February 24, 2009 by Mark Roknich
The press is buzzing about the Obama Administration’s new foreclosure prevention plan. So what’s it all about?
Restructuring: part one of the plan makes available $75 billion of U.S. Treasury funds to restructure the loans of homeowners who are behind, or likely to fall behind, on their mortgage payments. The intent is for lenders to lower the borrower’s monthly payment to 31% of the borrower’s monthly gross income. This does not imply a principal reduction, but could include a reduction in interest rate.
This plan does not apply to investors, or those of us with jumbo mortgages, and the Treasury will not subsidize any mortgage adjustments that require an interest rate below 2% to get to the aforementioned 31% threshold.
Refinancing: the second part of the plan helps homeowners refinance into cheaper loans even if the homeowner is “upside down” on his mortgage. Fannie Mae and Freddie Mac, the quasi-government housing agencies, will refinance up to 105% of the value of the homes already held or guaranteed by Fannie and Freddie.
Recapitalizing: part three adds $200B to the money allocated to Fannie and Freddie in order to keep all this going.
So there you have it: the three-part plan from our national government. Now, of course, the Federal Reserve Bank is working through its monetary policy to backstop and stimulate with trillions; the Congress has also just approved a stimulus/bailout/spending plan for another trillion, so bucks are being borrowed and spent in order to soften the already hard landing we have been feeling in the real estate market.
Conclusion: does any of this directly or indirectly affect you? The answer is maybe directly, and probably indirectly. Neighborhoods with low turnover since 2005 have been less affected by foreclosures and short payoffs, as compared with other neighborhoods where turnover was high near the top of the market. If you and your neighbors have been in your homes for many years, that’s probably a good thing for all!
Some of us may be able to take advantage of the new bailout plan, which is supposed to be available beginning March 4th, when additional details are also supposed to be available. If you are interested in finding out how this all applies to your home mortgage – give us a call at (949) 240-5892, or drop us an email.
Interest Rates in the “Fours!”
December 23, 2008 by Mark Roknich
Four-Something has arrived! When we last wrote this column, we predicted the arrival of a mortgage interest rate BELOW five percent. It happened, and it happened quickly!
Just this past Friday, for the first time, I received an announcement via email for a mortgage, with the interest rate quoted at 4.375% with a typical 1-point origination fee (4.5% APR). That rate applies to a conforming loan under $417,000; higher rates apply to larger mortgage amounts.
Four-something for a 30-year fixed? That is a benchmark of historic proportion! It could be the beginning of the much needed bottom in Orange County housing prices, if the opportunity for rates like those lasts awhile, and if lenders regain their footing in the market.
It’s condo time! Investors, first-time buyers, and parents who want their kids to be nearby after graduating high school or college (but not THAT nearby…), now might be a great time to make an investment in the future.
Owner-occupied (think: the kids) purchases can be made with very little downpayment. VA and FHA-insured loans are available with only a small investment, but are accompanied by higher monthly payments, of course.
But with a larger downpayment and a conventional mortgage, break-even cash flow is closer to reality than any time in a decade.
Here’s another thought, for those of you who are inclined towards single family homes rather than condos: 20 percent downpayment will buy a single family residence in Orange County, and still get under the magic conforming figure of $417,000 to get those great 4.x% loans. And rates are still extremely low for loans above $417,000….lower than any time in the past few years.
Have we piqued your “interest?” Rates in the “fours” won’t last forever. What an opportunity! Call us at (949) 240-5892, or send us an email, and let’s start strategizing and building a real estate portfolio!