Home prices post record drop
S&P/Case-Shiller index of 10 major cities fell 6.7% in October. Housing markets remain ‘grim.’
Home prices fell 6.7 percent in October, compared with a year ago, according to the S&P/Case-Shiller 10-city home-price index, a record drop as housing markets continued to deteriorate.
Bay Area Sales
|
All Homes |
Number Sold |
Number Sold |
Percent |
Median |
Median |
Percent |
| Alameda | 1,560 | 985 | -36.9% | $581,000 | $565,000 | -2.8% |
| Contra Costa | 1,627 | 879 | -46.0% | $567,500 | $528,500 | -6.9% |
| Marin | 285 | 206 | -27.7% | $847,500 | $871,000 | 2.8% |
| Napa | 125 | 81 | -35.2% | $599,000 | $562,000 | -6.2% |
| Santa Clara | 2,028 | 1,317 | -35.1% | $673,000 | $678,000 | 0.7% |
| San Francisco | 568 | 479 | -15.7% | $760,000 | $814,750 | 7.2% |
| San Mateo | 678 | 504 | -25.7% | $749,000 | $780,000 | 4.1% |
| Solano | 629 | 313 | -50.2% | $441,000 | $375,550 | -14.8% |
| Sonoma | 542 | 363 | -33.0% | $535,000 | $470,000 | -12.1% |
| Bay Area | 8,042 | 5,127 | -36.2% | $620,000 | $629,000 | 1.5% |
Source: DQ News
Southern California Sales
| All Home Sales | No Sold Oct-06 |
No Sold Oct-07 |
Percent Change |
Median Oct-06 |
Median Oct-07 |
Percent Change |
| Los Angeles | 8,451 | 4,368 | -48.3% | $520,000 | $500,000 | -3.8% |
| Orange | 2,929 | 1,700 | -42.0% | $625,000 | $573,750 | -8.2% |
| Riverside | 4,408 | 2,463 | -44.1% | $412,136 | $350,000 | -15.1% |
| San Bernardino | 3,547 | 1,603 | -54.8% | $365,000 | $330,000 | -9.6% |
| San Diego | 3,449 | 2,327 | -32.5% | $490,000 | $460,000 | -6.1% |
| Ventura | 961 | 538 | -44.0% | $590,000 | $535,000 | -9.3% |
| SoCal | 23,745 | 12,999 | -45.3% | $482,750 | $444,000 | -8.0% |
Source: DQNews.com
TAX BREAK FOR MORTGAGE DEBT FORGIVENESS
President Bush signed into law today a new measure giving tax breaks to homeowners who have mortgage debt forgiven. Under preexisting law, the debt forgiven by a lender, such as for short sales and refinances, was generally taxable to the borrower as debt discharge income. With the passage of the Mortgage Forgiveness Debt Relief Act of 2007, a taxpayer does not have to pay federal income tax on debt forgiven for a loan secured by a qualified principal residence.
This tax break applies to debts discharged from January 1, 2007 to December 31, 2009. Qualified principal residence indebtedness is debt incurred in acquiring, constructing, or substantially improving the residence (up to $2 million for refinances).
For purposes of calculating capital gains, any debts discharged excluded from income under the new law must be subtracted from the basis of the taxpayer’s principal residence (but not below zero). However, taxpayers may generally exclude from capital gains income up to $250,000 (or $500,000 for married couples filing jointly) for properties owned and used as their principal residence for at least two of the last five years.
Ryan’s mortgage blog:
There are many calculations to determine whether or not it is a good time to refinance. Predicting what the market is going to do is one way to go about it. It is a gamble, but like all gambles, it can pay off. For the non-gamblers out there, crunching the current rates is the best way to go. See if refinancing with current rates will save you money. A ton of other factors come into play such as how long you plan on staying in your house, do you need cash-out, etc… If the comparisons do not come out in your favor, at least you will get an idea of what current rates need to be in order for you to think about refinancing.
For an example I compiled one of several different ways to compare your current mortgage to a possible refinance. In the scenario, I will be looking at how much you would save on your monthly payment, as well as how much interest you will save. This is based on having your current mortgage for 2 years, and you’ve been paying the principle and interest, so that 2 years of interest is factored in. The rates I used are pretty close to what today’s rates actually are for this jumbo loan with good credit.
$800,000 Value of home
$500,000 Loan amount left (JUMBO loan – non-conforming)
30 Year Term – Principle and Interest
Current rate = 8%, Monthly Principle & Interest (P/I) Payment = $3,668, Total Interest left for life of loan = $741,479
No Cash Refi(no closing costs) rate= 7.5%, Monthly P/I = $3,496 ($172 saved monthly), Total Interest = $758,589 ($17,110 lost in interest over 30 years)
Normal Refi (typical closing costs) rate = 6.625% Monthly P/I = $3,233($435 saved monthly), Total Interest = $652,563 ($88,916 saved over 30 years)
As you can see, your monthly payments lowered, but you will end paying more interest for the No Cash Refi because you basically lost the two years you of interest you just spent. The
5 year ARM – Principle & Interest
Current rate = 7%, Monthly Principle & Interest (P/I) Payment = $3,326, Total Interest over 5 years = $170,247
No Cash Refi(no closing costs) rate= 6.5%, Monthly P/I = $3,160 (166 saved monthly), Total Interest over 5 years = $157,673 ($12,574 saved over 5 years)
Normal Refi (typical closing costs) rate = 5.875% Monthly P/I = $2988($338), Total Interest over 5 years = $142,007 ($28,240 saved over 5 years)
I only showed the interest for 5 years since most people refinance out of the ARMs within that time. Measuring the savings on total interest is tough on this one because you have already paid 2 years of interest, so the dilemma is do you compare them for final 3 years or the full five? So I just showed what the original 5 years interest was. Since this would adjust after 5 years, I didn’t bother doing it for the full 30.
If you want to know other ways to compare figures, just let me know, I would be happy to show you or do calculations for you. I can be reached at rbaker@PeregrineLending.com or 805-540-0866. Hope everyone has a great holiday!!!
Here’s another home price change map, this one courtesy of First American Loan Performance API (click the map to enlarge). It shows price changes between October 06 and October 07. Utah and Hawaii appear to still be a Sellers market.
Here is what they say happened in 31 metro areas:
| Honolulu, HI |
17.91% |
|
Salt Lake City, UT |
11.63% |
|
Austin-Round Rock, TX |
8.62% |
|
San Antonio, TX |
7.89% |
|
Raleigh-Cary, NC |
4.56% |
|
Houston-Sugar Land-Baytown, TX |
4.52% |
|
Charlotte-Gastonia-Concord, NC-SC |
4.47% |
|
Dallas-Fort Worth-Arlington, TX |
3.92% |
|
Seattle-Tacoma-Bellevue, WA |
2.18% |
|
Portland-Vancouver-Beaverton, OR-WA |
1.73% |
|
Chicago-Naperville-Joliet, IL-IN-WI |
-0.22% |
|
Philadelphia, PA |
-0.61% |
|
New York-Northern New Jersey-Long Island, NY-NJ-PA |
-1.83% |
|
Atlanta-Sandy Springs-Marietta, GA |
-2.13% |
|
St. Louis, MO-IL |
-2.76% |
|
Detroit-Warren-Livonia, MI |
-3.16% |
|
Minneapolis-St. Paul-Bloomington, MN-WI |
-3.33% |
|
New York-White Plains-Wayne, NY-NJ |
-4.13% |
|
Miami-Miami Beach-Kendall, FL |
-4.85% |
|
Boston-Quincy, MA |
-6.01% |
|
Cleveland-Elyria-Mentor, OH |
-8.10% |
|
Washington-Arlington-Alexandria, DC-VA-MD-WV |
-8.11% |
|
Tampa-St. Petersburg-Clearwater, FL |
-9.21% |
|
Phoenix-Mesa-Scottsdale, AZ |
-10.08% |
|
Orlando-Kissimmee, FL |
-10.16% |
|
Los Angeles-Long Beach-Santa Ana, CA |
-10.45% |
|
Miami-Fort Lauderdale-Miami Beach, FL |
-10.89% |
|
Oakland-Fremont-Hayward, CA |
-11.44% |
|
Las Vegas-Paradise, NV |
-11.65% |
|
Cape Coral-Fort Myers, FL |
-14.01% |
|
Riverside-San Bernardino-Ontario, CA |
-15.70% |
The County has a proposed ordinance for water conservation that could add undefined costs and requirements to every home at the point of sale, every newly constructed home, and every commercial bldg which is located in Los Osos, Nipomo and the Mesa within certain specified boundaries. The county supervisors are proposing this to go into effect in the middle of January.
It will mandate installation of recirculating hot water piping throughout the house for every water fixture more than 20′ from the hot water heater, will mandate toilets that only flush 1 gallon per flush, requires an application and certification process, requires the hiring of a licensed plumber/contractor, etc.
There’s a Venice Beach home on ebay that’s ECO-Friendly. No Energy Bills. No Toxic Materials. Lower Water Bills.
“This home boasts nearly 100 environmental and energy-saving concepts to meet this goal. Solar panels have been fitted into the roof, capable of providing 4.4 kilowatts of energy, allowing the home to meet the energy demands of its occupants without having to rely on the grid. Electric skylights open in the morning and close with the cool of the evening to reduce energy and improve the houses efficiency.”
I went to the movies to see the new Will Smith movie, I am Legend. The prices have gone up! $9.50 for a ticket but what really was outrageous was the $5 for the large drink and $6 for a medium popcorn.
Costco offers movie tickets for Regal and other cinemas for $7 each. If you’re looking for a stocking stuffer this may be a good choice.
