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CCL Market Update

Housing Market Index

The housing market index remains unchanged for the third straight month in April. It continues to signal solid confidence among home builders at a level of 58. Present sales continue to lead the way though they did dip 2 points to a reading of 63. Expectations for 6-month sales follow closely behind up 1 point to a level of 62. Traffic continues to lag in the current report up 1 point to a still low level of 44. Regional composite data continues to show the West far out in front at an unchanged level of 67, an important region for the nation’s new home sector. The South comes in second at a level of 59 and the Midwest following close behind at 56. The Northeast trails in the distance at 44. The availability of jobs together with very low mortgage rates are solid pluses for the new housing outlook. A negative in the report, however, is the low traffic reflecting lack of participation from first time buyers who continue to rent.

Housing Starts

Housing starts fell a sharp 8.8 percent in March to a 1.089 million annualized rate which is well below the prediction of 1.167 million and below the low end estimate of 1.120 million. Permits are showing weakness as well, down 7.7 percent at 1.086 million rate which is below both the estimates. Weakness in starts is split between single-family and multi-family components with weakness in permits concentrated in multi-family homes. There is strength in the year on year rates at plus 14.2 percent for starts and plus 4.6 percent for permits. Regional data show declines throughout except for starts in the Northeast with ongoing work tied to a rush last year in permits. The Midwest is showing the most strength with permits with a 24.2 percent year-on-year gain followed by the South at 11.3 percent. There is weakness in the West, however, a key region for new housing. Permits are down from a year ago by 6.1 percent. A positive in this report is strength in total completion up 3.5 percent in the month for 31.6 percent yearly gain. However, most of the report delivers negative news.

Mortgage Applications

Purchase applications for home mortgages in the week of April 15th fell 1.0 percent, while refinancing applications rose 3.0 percent from the previous week. While still 17 percent higher than last year, the purchase index has retreated from the 30 plus percent yearly gains seen in March. The low mortgage rates increased in the week, up on average 1 basis point for a 30-year mortgage for conforming loans.

Existing Home Sales

Existing home sales rose more than expected in March, up 5.1 percent to a 5.330 million annualized rate. This, however, does not offset the downwardly revised 7.3 percent drop in February. The year on year rate is weak at only 1.5 percent. Looking at the first quarter as a whole, existing home sales are up a much more respectable 4.8 percent. March’s gain is led by the most important component, single-family homes, which increased to 5.5 percent in the month to 4.760 million. Year on year, single-family homes are up 2.6 percent. Condos showings are less impressive up only 1.8 percent in the month for a yearly decline of 6.6 percent. Prices in the report are up a monthly 5.0 percent for the median, and a yearly increase of 5.7 percent. The median home price for an existing home is $222,700, the best of the recovery, besides last year’s spring selling season when the median peaked above $230,000. Higher prices help pull in more homes into the market, at 1.980 million in March for a sharp 5.9 percent gain from February. The year on year supply is still weak down 1.5 percent from last year. Supply relative to sales is at 4.5 months, slightly higher than February’s 4.4 months and down slightly from 4.6 months in March of last year. Regional data is positive with all four regions showing monthly gains led by the Northeast at an 11.1 percent gain. The Northeast also led in yearly gains up 7.7 percent, the West brought up the rear with a decline of 2.5 percent.

Home Prices

Home sellers in March sold their home for an average 17 percent gain or $30,500 more than the purchase price. This is the highest average monthly price gain for home sellers since December of 2007. The increasing home prices are stalling the market; increased home prices have caused a slower start to the spring homebuying season, with a decrease of 4.7% in home sales from March 2015 in California. About 36% of markets reached all time price peaks in the past 15 months.

 

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Written by Central Coast Lending - Go to Central Coast Lending's Website/Profile
805.543.LOAN info@centralcoastlending.com
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Great for First Time Home Buyer!

1066019
Great four bedroom Orcutt home with converted garage — great for game room or ? This one story home has an updated kitchen and is move in ready. It’s perfect for the first time home buyer or investor. Located just blocks from Alice Shaw and Righetti High School. Possible RV parking, too!
Wendy Teixeira 805.310.3505

Written by Patterson Realty - Go to Patterson's Website/Profile

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Beautiful Single Level Executive Atascadero Home!

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This absolutely beautiful single-level executive home is a must see! Soaring 14 foot ceilings add volume and high-end finishes make this home look and feel brand new. Designer neutral paint colors are warm and inviting. The thoughtful design is perfect for someone who works from home or wants a private guest suite. The fantastic kitchen is a gourmet cooks delight and the huge pantry and utility room will make your entertaining so easy and fun! A central courtyard affords a protected spot for alfresco dining. The master suite is luxurious with a fireplace, large soaking tub and fabulous walk-in tile shower and the closet is huge. Built on a lot just shy of an acre, there is plenty of room to add a pool, gardens, pets and more. There is even an RV pad in place. Plan to see this grand home very soon as it has so much to offer and is priced to sell quickly. Call your realtor to schedule a showing right away!
Kay Cementina 748.1438

Written by Patterson Realty - Go to Patterson's Website/Profile

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A San Luis Obispo Find!

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A San Luis Obispo find: A one-owner home located in one of the most central, preferred residential areas in town, where the weather is the best of SLO’s lovely weather! Close to schools, parks, downtown, medical/professional, and shopping. The living area is warm and light and comfortable. The back part of the lot has fruit trees. There is a lath house which could be restored to house another orchid collection or ?. The lower level family room/patio area contains a BBQ for all-weather cooking. Don’t miss the chance to make this house your home!
Beverly James 805.748.8613

Written by Patterson Realty - Go to Patterson's Website/Profile

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Sweet 2 Bedroom 2 Bath Mobile Home in SLO

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Sweet little 2 bedroom, 2 bath mobile home with updated kitchen, windows, new carpet and new interior paint in both bedrooms. Enjoy the spacious side yard, along with the new rear redwood decking. Home faces beautiful mountain views and is located within the Laguna Lakes Mobile Estates which offers pool, spa and clubhouse amenities!
Monica Chudgar 805.234.2908

Written by Patterson Realty - Go to Patterson's Website/Profile

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Charming & Cozy Los Osos Home

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This single story home has a wonderful charming living room and floor plan! Living room features a red brick wood burning fireplace for those cozy moments. This home has dual paned windows throughout and is light and bright. Master suite is good sized and has mirrored wardrobe doors. Kitchen has a new gas oven and cooktop and a friendly breakfast bar. Nice upgraded goose neck faucet and double sink with a window over the sink. Attractive light colored laminate flooring and newer carpeting in the living room and bedrooms. Solar panels were installed, not leased! Large two car garage has direct access into the home. Built in workbench in garage. Backyard is large and features a deck, great for entertaining. Also a very nice hobby and/or storage shed. This shed has electric power and is nicely done. Very close to the Back Bay, Sea Pines Golf course, Sweet Springs Preserve and Montana de Oro State Park!
Jan Lloyd 805.909.8263

Written by Patterson Realty - Go to Patterson's Website/Profile

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Traditions Beauty!

1065829

This 4 bedroom, 4 bath, one story home offers manufactured hardwood flooring, plantation shutters and beautiful features throughout. Enjoy the gourmet kitchen, complete with granite counters, center island, stainless steel appliances and large pantry. The master suite offers a large walk in closet with custom features, separate garden tub, large glass door shower and dual sinks. This homes final touches include stamped concrete and a spa in the back yard, great for entertaining. Garage features epoxy floors. Hurry this home won’t be on the market long.
Wendy Teixeira 805.310.3505

Written by Patterson Realty - Go to Patterson's Website/Profile

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Spacious Single Story in Providence Landing!

1065754

Room to roam in this four bedroom, split plan home. Generous sized yard too! Comfortable open floor plan offers both formal and casual living spaces with private patio off formal living room. Roomy kitchen has large island with sunny breakfast area and opens to family room. Large pantry and butler’s area connect formal dining to kitchen. Master bedroom with en suite offers separate vanity areas, large shower and soaking tub. Two guest bedrooms off entry wing have shared bath. Additional fourth bedroom on opposite side of house is adjacent to third bath with shower. Backyard has patio and plenty of space on a large Providence Landing lot. Home is just steps away from neighborhood amenities including pool, clubhouse, playgrounds and recreational fields. Come enjoy affordable luxury living in Vandenberg Village with a location convenient to Vandenberg AFB, the Lompoc and Orcutt areas, as well as for Santa Barbara commuters.
Gina Gluyas 805.310.7208

Written by Patterson Realty - Go to Patterson's Website/Profile

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The Escrow Impound Account

The pros and cons of an escrow impound account

An escrow impound account is a trust account held by the lender of your new loan to facilitate the collection and payment of your property taxes and/or home owners insurance.  If you elect to have an escrow impound account, you simply pay 1/12 of your annual property taxes and 1/12 of your annual homeowners insurance in addition to your regular required mortgage payment every month. Impound accounts are not generally required unless you have less than 10% equity in your home.

Why would you want (or not want) an escrow impound account? Let’s look at some of the pros and cons:

Pros

  • Generally you get a reduction in closing costs for establishing the account
  • There are no fees or service charges for the account
  • The lender is responsible for the timely payment of your taxes and insurance
  • No additional budgeting is required to insure that you have adequate funds to pay the large bills when they are due
  • Taxes are due right before Christmas and then tax season; who wants to have to cut multi-thousand dollar check in those months?
  • The County Tax Assessor charges a 10% penalty for late taxes, the lender will be responsible for this if they are late
  • Never suffer a lapse in insurance because you forgot to pay the bills

Cons

  • You do not earn interest on the balance of the account
  • When the account is first established, 2-8 months of property taxes may be required to be placed in the account (depending on the time of the year)

The Verdict

Perhaps I’m a little biased, but I believe the pros seem to outweigh the cons. A few other things to note:

  1. The impound account can usually be canceled at any time.
  2. The accounts are under trust regulation so the accounting is spot on.
  3. They just make life a little easier.

Lenders want you to have an impound account.  In the event of a foreclosure, they are generally past due taxes and a lapsed insurance policy, which add to the cost out of pocket for that lender when they foreclose.

Lenders prefer you to have an account so they always know the status of those payments and can minimize losses when necessary, and reduce the amount of closing costs. For lenders, an escrow impound account is incentive for your participation.

 

 

Written by Central Coast Lending - Go to Central Coast Lending's Website/Profile
805.543.LOAN info@centralcoastlending.com