Rate Update and Has Housing Reached Bottom?

Mortgage rates ended this past week nearly unchanged as all eyes were on the record $109 billion in Treasury auctions. General demand for US debt remained strong, highlighted by foreign buyers purchasing 61% of the 7-Year Treasury Notes auctioned on Thursday. Currently, the 30 Year Fixed sits at 4.750% (4.929% APR) and the 15 Year Fixed is at 4.250% (4.557% APR). This week, we look forward to Jobless Claims and the Unemployment Rate, which will be the most highly anticipated economic data of the month. Mortgage rates could also be influenced this week by Tuesday’s Pending Home Sales, a leading indicator for the housing market.

Real estate appears to be turning around according to the past two weeks of housing data. In the past two weeks, Existing Home Sales rose 7.2%, to the highest level since August 2007, the fourth straight monthly increase; New Home Sales rose 9.6%, to the highest level since September 2008, the biggest jump since early 2005, and the fifth increase in seven months; Home Inventories dropped to a 7.5 month supply nationally, the lowest level since April 2007, and the number of homes on the market dropped to its lowest level in 16 years; and the S&P/Case-Shiller 20-City Home Price Index and 10-City Home Price Index both rose 1.4%, the second consecutive month of increase, and more than double the rate of increase seen in May.

California, one of the infamous “Sand States” hit hard by foreclosure activity along with Nevada, Arizona and Florida, has fared particularly well of late. Home Inventories in the state are well below the national number, currently at a 3.9 month supply. Home values might also be turning the corner as demand for the lower-end housing remains very high. In the latest S&P/Case-Shiller US Home Price Index, San Francisco was one of the few bright spots of the cities surveyed, posting a 3.8% price increase from the prior month.

One large mortgage originator, SunTrust Bank, believes strongly in the California housing market. SunTrust recently announced loan amounts up to $2 million under their “Key Loan Program”. They also updated the “SunTrust Declining Markets Index” to reflect only seven Metropolitan Statistical Areas (MSAs) in California which remain in areas that continue to show declines in property value. Those MSAs are Hanford-Corcoran, Madera-Chowchilla, Merced, Modesto, Riverside-San Bernardino-Ontario, Sacramento-Arden-Arcade-Roseville, and Salinas.

With home purchases increasing at a feverish pace, home values beginning to turn the corner due to waning supply, and mortgage rates poised for a rebound from their historic lows, the opportunity to acquire real estate may never be better than right now.

Central Coast Lending, Inc.
(805) 771-9870

Chipotle Coming to SLO?

There was a mention in a Trib article today about the hotel renovation going on in the old Copeland Sports building that the first floor is going to be a Chipotle. Based on the popularity this chain restaurant seems to have with college-age kids, it should do well in downtown SLO.

IPhone/Blackberry MLS Search Coming

The MLS Search application that will work with GPS-enabled phones is on schedule and estimated to be in my hands in a few weeks! What this will allow you to do is run this application on your phone to show you available homes around where you are at that moment. Or, you can search just like you do on the website.

I’ll be the first Realtor to offer this for the Central Coast and I’m anxious to see how it works. And yes…I will be offering this application for FREE!

New Robocall Law Starts September 1st

Businesses that try to push products on consumers with automated and unsolicited calls will face fines of up to $16,000 per call, according to the Federal Trade Commission.

“American consumers have made it crystal clear that few things annoy them more than the billions of commercial telemarketing robocalls they receive every year,” FTC Chairman Jon Leibowitz said in a news release.

Calls from politicians, public service announcements and “informational” calls will be exempt from the new rule. A call alerting a traveler that his or her flight has been delayed would still be allowed, for example.

Banks, telephone carriers and most charitable organizations are also excluded from the ban, the FTC says.

The FTC asks people to report questionable robocalls by visiting its complaint Web site or by calling 1-877-FTC-HELP.

Read the entire article here

Price Reduction for Morro Bay Duplex

Our latest listing at www.985Allesandro.com in Morro Bay is now $329,000. You can’t get a single family home in Morro Bay for this price without it being a tear down or needing major work. But with this property, you get TWO homes (a duplex). Live in the front house and rent out the back and it can reduce your mortgage payment to an affordable level. Or, if you need room for the in-laws, this would be a ideal too.

Check out the photos on the property website listed above.

Rate Update and Should You Refi?

Strong housing sector data contributed to a stock market rally this past week and pushed mortgage rates slightly higher on Friday. July Existing Home Sales rose 7% from the month prior, to the highest level since August 2007. This marked the fourth straight monthly increase. First time home buyers accounted for 30% of all transactions thanks in part to the $8,000 federal tax credit. Additionally, the National Association of Home Builders reported an improvement in home builder confidence as housing affordability remained near record levels and single-family housing starts increased for a fifth consecutive monthly. Currently, the 30 Year Fixed sits at 4.750% (4.929% APR) and the 15 Year Fixed is at 4.250% (4.557% APR). This week the Fed will auction a record $109 billion of 2, 5 and 7-Year Notes, which will be a good indicator of foreign demand for US debt. We will also have Consumer Confidence and GDP later this week.

If you have not already taken advantage of the near record-low interest rates, you most likely want to get your loan applications in to your mortgage professional very soon. Although inflation data remains somewhat tame, economic experts are growing nervous about the prospect of rates remaining at these levels for much longer. Housing sector data continues to show signs of improvement, Consumer Confidence and Unemployment numbers appear to be leveling and poised for a turnaround, and the Fed’s $300 billion Treasury purchase program is due to conclude in October. All of these factors will put upward pressure on rates.

Some homeowners are holding off on refinancing, instead subscribing to the old adage that you should only refinance your current mortgage if you can improve your interest rate by a minimum of 1%. Keep in mind this formula was derived when an average mortgage balance was around $20,000. In today’s real estate world, the average principal balance on a mortgage in CA is approximately $250,000, and improving your rate by 0.250% or 0.500% can result in saving hundreds of dollars per month.

Homeowners can also look to significantly decrease the remaining term of their mortgage by looking to a 20, 15 or 10-year fixed mortgage. Many borrowers are able to maintain the same payment while cutting years off their mortgage term and paying substantially less in interest over the life of their loan. Also, since interest is “front-loaded” on a mortgage, borrowers may also increase their mortgage interest deduction on their federal tax returns by resetting the payment schedule on their loan.

Most mortgage brokers and bankers offer free prequalification for homeowners. If you have not done so already, contact your mortgage professional today to inquire about the potential benefits of refinancing.

Central Coast Lending
(805) 771-9870

Time Running out for First Time Homebuyers Credit

To get the $8,000 first time homebuyers credit you need to close escrow by December 1st. That’s 99 days from now. With the new appraisal law you’ll want to make sure you leave enough time for escrow to close. Allocating 60 days to escrow to be safe means you have 39 days to get an accepted offer on a home. But try not to cut it close since you may find something during your inspections that may mean you don’t want that house. Make sure to jump on scheduling the inspections when you get an accepted offer and escrow opens.

Another Good Movie I Saw

Saw Inglorious Basterds last night and liked it a lot. If you liked Tarantino’s Pulp Fiction, you’ll probably like this movie too.

BTW, Costco is still selling the Regal tickets for $14.99 for two ($7.50 a ticket). Now that tickets are over $10 at the theater, getting tickets at Costco is a real good deal. They are good for any Regal Entertainment Group which includes Regal cinemas, United Artists, and Edwards Theaters.

Home Sales Rise (but not here)

I ran into a fellow Realtor the end of last week and the first thing they said was “did you hear that home sales are rising?”. I guess they had seen that headline in the paper or online but didn’t read the article. The National Association of Realtors released numbers showing that the number of home sales is higher than last year in every region but the West. You had to read the entire article to see the West numbers as it was at the bottom of the article.

You bet I would like to see that home sales are rising in our area too but that just isn’t the case yet. I wonder how many real estate agents contacted their clients in the past few days and mentioned that home sales were rising? Sad part is that some (most?) don’t spend time to know what is going on in the market and actually may believe this is fact here. The rest that know that statement is false but still tell their clients that deserve the used-car salesman label that some place on my profession. I don’t know about you all, but if I had a Realtor that I was counting on giving me advice and guidance for such a big purchase, I’d want someone that was telling me things based on facts, not telling me false things to try to push me to buy a home.

I did a check on how the local market is doing so far this month. We’re at 385 Pendings. Last month we ended with 516 so it looks like this month will be similar to last months unless something weird happens this last week of the month.

The table below shows what SLO County homes went Pending Sale so far this month.

Here’s the breakdown on what cities the Pendings for Homes are in for August (through a few mintues ago). Check out Paso!

Arroyo Grande – 16
Atascadero – 16
Cambria – 12
Cayucos – 1
Creston – 1
Cuyama – 1
Grover Beach – 6
Los Osos – 7
Morro Bay – 4
Nipomo – 10
Oceano – 2
Pismo Beach – 5
Paso Robles – 48
San Luis Obispo – 16
Santa Margarita – 1
Templeton – 5

Vandenburg Missle Launch tomorrow

An unarmed Minuteman III strategic missile is scheduled for launch from Vandenberg Air Force Base tomorrow morning. Although the launch window extends from 03:01 to 09:01 PDT, the Air Force will probably attempt to launch at 03:01, the instant the window opens.

Clouds or fog do not normally affect a Minuteman launch. However, the current cloud layer above southern California may be an exception.

The public viewing site for Vandenberg launches is off of Corral Road near Vandenberg’s main gate. To access the area, take Highway 1 to the Santa Maria Gate and proceed on Lompoc Casmalia Road. At the barriers, turn right onto Corral Road and bear left to the top.