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Coto de Caza, CA Real Estate News

By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
A conforming mortgage is one that, quite literally, conforms to the mortgage guidelines set forth by Fannie Mae or Freddie Mac. Each year, the government sets the maximum allowable loan size for a conforming mortgage, based on "typical" housing costs nationwide.  Loans in excess of this amount are typically called "jumbo". While home prices increased from 1980 to 2006, so did conforming loan limits.  Since then, however, as home prices have dipped, the conforming loan limit has held. Now, in 2010, for the 5th consecutive year, the government set $417,000 as the nation's conforming mortgage loan limit. The 2010 conforming loan limits, as released by the government, are: 1-unit properties : $417,000 2-unit properties : $533,850 3-unit properties : $645,300 4-unit properties : $801,950 Bu...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
Mortgage markets improved last week as foreign buyers of mortgage debt helped to push mortgage rates to a 4-week low. It marked the 3rd consecutive week that rates improved, breathing extra life into this year's ongoing Refi Boom. Fixed-rate, conforming mortgage rates fell about 0.125 percent on the week. ARMs did about the same. There wasn't much data to move mortgage rates last week; investors worked mostly on momentum and trends. However, the Friday University of Michigan Consumer Sentiment survey release garnered some attention.  After worsening in August and September, consumer sentiment fell for the third straight month in October.  Analysts worry about what it could mean to the economy.  Holiday Shopping season is here and consumer spending fuels the economy.  If households hold ...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
From today's Los Angeles Times:   If you fit the criteria and are considering buying another house in the coming year, you might want to speed up the process and close by the June 30 expiration date. By Kenneth R. Harney,    November 15, 2009  Reporting from Washington - Take a close, hard look at the new $6,500 federal tax credit for so-called move-up home buyers that passed the Senate and House recently. Though it's been getting second billing to the original $8,000 credit for first-time purchasers -- now extended by Congress through June 30 -- the $6,500 credit for current homeowners just might have your name on it.How does it work? When will it be available?The new credit is available now. It took effect Nov. 6, the day President Obama signed the legislation that created it. This m...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
For the eighth straight consecutive month, national foreclosure activity in the U.S. was dominated by a small set of states. As reported by RealtyTrac.com, more than half of October's foreclosure-related activity came from just 4 states: California Florida Illinois Michigan The remaining Top 10 states in terms of total foreclosure activity included Arizona, Georgia, Texas, Ohio, New Jersey, and Maryland. Foreclosures are up 19 percent from last October, but a deeper look at the RealtyTrac report revealed two positive developments for the housing market. Foreclosure activity is down 3 percent from last month Foreclosures per Household decreased in 9 of the 10 most heavily concentrated states Furthermore, Nevada's foreclosure pace is down 4% from last year.  This is a big deal because Nev...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
Despite the economy's improvement and prodding from Congress, banks don't seem ready to open their purse strings just yet. Nationally, mortgage approval standards are tightening. The data comes from a quarterly survey the Federal Reserve sends to its member banks.  The Fed asks senior bank loan officers around the country whether "prime" residential mortgage guidelines had tightened in the last 3 months. For the period July-September 2009: Roughly 1 in 4 banks said guidelines tightened Roughly 3 in 4 banks said guidelines were "basically unchanged" Just one bank said its guidelines had loosened. Combine the Fed's survey with recent underwriting updates from the FHA and from Fannie Mae and it becomes clear that mortgage lenders are much more cautious about their loans than they were, sa...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
Consider this a last call for FHA Streamline Refinances.  Starting next Tuesday, the popular rate-lowering program gets strict on borrowers. There's 5 days left. Under the current streamline refi guidelines, FHA homeowners have minimal program eligibility requirements. FICO scores must be 620 or higher The refinance must provide a "tangible benefit" No mortgage lates allowed in the last 12 months Beyond that, everything else goes, practically.  There's no income, asset, or job verification with the current FHA Streamline program. Neither is there an appraisal requirement.  It doesn't matter if you're 50% underwater. Until next week, that is.  Beginning November 17, FHA Streamline Refinance applicants must show evidence of income and employment, plus proof of cash required to close. Furt...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
Mortgage markets were extremely volatile last week, carving out a wide range between Monday and Friday.  Thankfully for rate shoppers, the overall momentum was positive. Mortgage rates fell for the second time in as many weeks. Rates still sit higher versus their early-October lows. For pure "news", last week was a busy one: The Federal Reserve held the Fed Funds Rate near 0.000 percent The Unemployment Rate crossed 10 percent The First-Time Home Buyer Tax Credit was extended to April 2010 Combined, the 3 events reinforced the growing belief on Wall Street that the U.S. economy is in recovery, but not yet out of the woods.  This particular philosophy has been excellent for mortgage rates, helping to hold conforming 30-year fixed mortgage rates near 5.250 percent since the start of the y...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
Congress both extended and expanded the First-Time Home Buyer Tax Credit program Thursday.  The White House says the President will sign it into law today. The up-to-$8000 tax credit's expiration date has been pushed forward to spring, requiring homebuyers to be under contract by April 30, 2010, and to be closed by June 30, 2010. The program's basic eligibility requirements remain the same: Buyers can't purchase the home from a parent, spouse, or child Buyers can't purchase the home from an entity in which they're a majority owner Buyers can't acquire the home by gift or inheritance All parties to the purchase must meet eligibility requirements The new law includes some notable updates, however.  For one, the definition of "first-time home buyer" has been expanded to include most homeow...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
The Federal Open Market Committee caps off a scheduled, 2-day meeting today in the nation's capital, its 8th meeting of the year. The group adjourns at 2:15 PM ET and, as is customary, will issue a press release reviewing its monetary policy and the health of the U.S. economy.  The FOMC's post-meeting statements are brief but comprehensive. They're a window into the mind of the Federal Reserve and Wall Street picks apart every sentence for clues. It's why FOMC meetings tend to shake up the mortgage markets -- for good and for bad.  After its September 2009 meeting, the FOMC said in its press release: Financial markets have improved Housing activity has increased Economic activity has "picked up" Since September, the momentum has picked up.  Credit risks have reduced further, home sales ...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
The housing market continues to steam forward. As reported by the National Association of Realtors®, the Pending Home Sales Index posted its 8th consecutive monthly gain in September. It's the longest winning streak in the history of the index and Pending Home Sales are now at their highest levels since December 2006. A Pending Home Sale is a home under contract to sell, but not yet closed.  It's the precursor to an Existing Home Sale.  Trade group data shows that nearly 80 percent of "pending" homes close within 2 months.  The majority of those remaining close within months 3 and 4. When the Pending Home Sales Index rises, it tells us that market activity has picked up.  September's data confirms what we've been noticing since February -- the Buyers Market is ending. With more homes un...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
Mortgage markets improved last week after a series of hugely volatile trading sessions.  Rates carved out a wide range on the week, culminating in a late-Friday plunge that dropped rates by about 1/8 percent. It was the first time in 5 weeks that mortgage rates fell. Volatility like that of last week is nothing new on Wall Street; it's been a running theme in 2009.  Volatility occurs when markets don't agree on what's next for the economy and, this year, there's been a lot of disagreement like that. Data has been inconsistent.  Take last week for example. At 9:00 AM Tuesday morning, the Case-Shiller Index showed home prices rising nationwide.  Because many analysts believe housing fueled the recession, strength in the sector is widely construed a positive for the economy. Mortgage rates...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
This is an article by Jeff Collins, in this morning's Orange County Register: Home-data firm First American CoreLogic predicts that Orange County house prices will be up 9.5% next August from this past summer. If accurate, the median price of an Orange County house would increase by nearly $48,000 from the $500,000 median reported by DataQuick in August and September. Those price gains would outstrip appreciation rates for the nation’s 10 largest metro areas, First American reported. For example, Los Angeles County is forecast to see home prices rise 6.3%, the highest rate among the big 10. That’s followed by Miami-Dade County’s projected 6.1% gain. First American projected that California’s house prices will increase 7.9% by August, while nationwide prices will go up 4.6%. First Americ...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
Some days, newspaper headlines are a terrible place to get your real estate news.  Today is one of those days. After the September New Home Sales report showed sales volume down from August, the mainstream media jumped on the story: New Home Sales fall a surprising 3.6% Surprise Drop In New Home Sales Stocks slide as New Home Sales fall But the headlines miss the point, somewhat.  Yes, home sales volume is important to housing, but it's not as important as home supply. A deeper look at the New Home Sales data reveals an interesting comparison point: New home sales volume fell 3.6% The number of new homes available for sale fell 3.8% In other words, sales outpaced supply -- a running theme this year and a positive signal for housing. Since peaking in January 2009, the supply of newly-bui...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
The national housing supply fell to a 2-year low last month, according to the National Association of Realtors®. At the current sales pace, existing home inventories would sell out in 7.8 months -- 30 percent faster versus November 2008. For a 10-month window, that's a major housing supply reduction and it helps to explain why multiple-offer situations have been so common lately. Moreover, the same report from NAR showed sales activity reaching its highest point since July 2007, too. If you're looking for evidence that the long-standing Buyers Market is ending, this month's Existing Home Sales report might be it. Even median sales prices -- typically dragged lower by distressed and foreclosed properties -- declined at its slowest pace in a year.  The market may have turned a corner. Hom...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
For August, the Case-Shiller Index showed annual home values improving across 19 of 20 U.S. markets. It's the first time in 3-plus years that the benchmark housing index has shown such strength. According to a Case-Shiller Index spokesperson, "The rate of annual decline in home price values continues to improve." It's yet another sign that housing may have already bottomed. However, just because the Case-Shiller Index shows a stabilization in home values, that doesn't necessarily make it true. This is because real estate happens on the local level and the Case-Shiller Index is more "national". It tracks data in just 20 U.S. cities. Homeowners everywhere else are unaccounted for. Furthermore, even within the 20 tracked Case-Shiller markets, there's no allowance for the natural sub-marke...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
Mortgage markets were volatile last week, making it very difficult to shop for mortgage rates. On most days, lenders issued multiple rate sheets with the trend putting rates higher in the morning, and lower in the afternoon. Overall, mortgage rates were unchanged on the week. It broke a three-week streak through which mortgage rates rose. Rates remain roughly one-half percent higher than the lows of early-October. The biggest positive for rate shoppers last week was tame economic data -- specifically concerning the Producer Price Index and the housing sector. The Producer Price Index is an inflationary, Cost of Living-like measurement for businesses and it went negative in September. Analysts weren't expecting that and the surprise pulled rates down an eighth. Similarly, in housing, bot...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
According to the government, home values edged lower last month. The Federal Housing Finance Agency's Home Price Index report shows values down by 0.3 percent from the month prior -- the index's first down month since April. The Home Price Index is based on the value of homes financed via Fannie Mae or Freddie Mac and, in this sense, the FHFA Home Price Index is more of a "national" real estate index than its private-sector cousin, the Case-Shiller Index. But like the Case-Shiller, the HPI is as notable for what it specifically excludes as for what it includes. Most notably, the Home Price Index doesn't account for homes meeting any of the following descriptions: Is considered new construction Is a multi-unit property Is financed by an entity other than Fannie Mae or Freddie Mac Given ...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
With crude oil at its highest levels since October 2008, retail gas is up 8 cents per gallon this week. It's bad news for home buyers and mortgage rate shoppers.  The same force that's driving oil higher is linked to rising mortgage rates. We're talking about the weakening U.S. Dollar which is now at its worst levels versus the Euro in 15 months. Crude oil is priced in U.S. dollars, by the barrel.  When the dollar loses value, more of them are needed to buy the same barrel of oil.  As a result, predictably, the price of crude oil goes up. Now, there are other reasons why crude oil is rising, but the fading U.S. dollar is one of the major ones and it's why we're addressing it. The dollar has a similar impact on mortgage rates. Mortgage rates are based on the price of mortgage bonds that ...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
Housing Starts on single-family homes gained last month, marking the 8th time that's happened this year. A "Housing Start" is a home for which the foundation has been excavated and, considered alongside other key market metrics, September data suggests that the housing market has stabilization is complete. Momentum in housing is overwhelmingly positive: Homes under contract are soaring National home supplies are way down Home values are up in a lot of markets Despite the positive news, the press is calling September's Housing Starts data a "bummer". Citing a drop in monthly building permits, the media purports that housing will slow in the months ahead.  The conclusion may be right, but the rationale is may be wrong.  The probable cause for fewer permits isn't that the housing market is...
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By Bob Phillips, CDPE, SFR, South Orange Co., CA
(Realty ONE Group)
The new Good Faith Estimate makes its debut January 1, 2010. Expanded from 1page to 3, the legislators responsible for the new Good Faith Estimate want it to be simpler for homeowners and home buyers to understand than the former version. By most accounts, Congress will meet this goal.  The new Good Faith Estimate includes plain-English explanations of every fee, charge, and interest payment involved in a purchase or refinance.  It also includes a section called "The Shopping Cart" in which applicants can compare lenders. The new Good Faith Estimate is concise, too.  Using a series of "Yes/No" checkboxes on Page 1, mortgage lenders specifically note: The interest rate on the mortgage Whether the interest rate can change over time Whether the loan carries a prepayment penalty The length...
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