Rates Improve

Rates have improved to begin the week. The bond market has improved and rates are to the lows we saw two weeks ago.

30 year fixed –

Last week:

3.500 percent (3.612 percent APR)


3.500 percent (3.582 percent APR)

0.030 cost improvement


15 year fixed –

Last week:

3.000 percent (3.258 percent APR)


3.000 percent (3.221 percent APR)

0.037 cost improvement

As you can see, the note rate stays the same, but we have seen an improvement in cost. In other words, it is now cheaper to get lower rates. After last week’s brief rise in prices, we are back to record low prices.

Last week we saw a number of important housing numbers released. Generally, the MBA Purchase Applications, FHFA Price Index, and Pending Home Sales numbers suggested an overall positive trend (link), which jumpstarted talk about a march towards housing recovery.

Then, New Home Sales and Median Home Prices were released the next day, and these numbers gave more cause for concern (link).  December new home sales declined below expectations, dropping the month 2.2 percent from November.  December’s new home sales capped off 2011 as the slowest year on record for home builders. Median home prices also dropped in December, making 2011 prices down 12.8 percent from 2010.

LA Warns Realtors about using Drones

I received an interesting email from the California Realtor Association this week. It was warning Realtors in the Los Angeles area to not use unmanned aircraft to take aerial photos.  I guess some agents are using remote controlled airplanes with cameras attached to take photos of higher end properties.

Turns out that there is a FAA regulation that allows people to fly remote control airplanes as a hobby but they can’t be used for commercial purposes.  A few years ago, I was looking how to do this since camera technology has progressed so much. I’m glad I didn’t spend too much time (and money) pursuing that.

How Complete of a Search of Local MLS Listings do we Offer?

On our site we have what’s called an IDX search (stands for Internet Data Exchange).  IDX allows me to display other Broker’s MLS listings in my search.  What’s different than a direct search of the MLS by an Agent that’s a member of the MLS is that with IDX, Broker’s can “opt-out” of IDX, meaning their listings would not be seen on my site or any other Agent that had an IDX search.  Until a few minutes ago, I didn’t know how many listings were “opt-out” of IDX and couldn’t find anyone in the Realtor Associations that knew the answer.

I just compared the listings, as of today, were in the IDX data feed vs. a direct search of the MLS.  The IDX had 2310 residential listings while the MLS had 2318. So, 8 listings were opt’ed-out of IDX.  I didn’t spend time to figure out which 8 listings they were though.

What this means is actually great news. The search on my site has 99.7% of the total MLS listings (as of today)!!

This will become more important going forward as there is a new thing in the real estate industry called “Listing Syndication”. This is where Brokers can opt to send their listings to 3rd party sites like Zillow, Trulia, Century21.com, Remax.com, etc.  The big franchisor websites like Century21.com, Remax.com, Keller Williams, Prudential, and the others are NOT Brokerages. They are third party companies that allow local franchisees to use their name for a price. These franchisor websites are getting MLS listings for their search through Listing Syndication, like Zillow and Trulia are.  There is one big difference between IDX and Listing Syndication in that Brokers can decide not to send their listings to a particular 3rd party website. If a large broker in an area decides they aren’t going to send their listings to a competitor’s franchisor site, that could reduce the number of available MLS listings on one of these sites to 80%, 70%, 60% or lower.  And there’s no rule that says sites have to disclose the percentage of MLS listings they have for a particular city or area.

Why would you want to search for listings on a site that was missing a lot of MLS listings in a particular city?

If you want to search on a site with 99.7% of the available MLS listings,  you are already here…SloCountyHomes.com!!  No other website with will have any more searchable MLS Listings for the Central Coast than SloCountyHomes.com.

Central Coast Lending Launches New Website!

Before we get to our rate update, we would like to announce that Central Coast Lending has launched its new website with a complete redesign in appearance and structure.

The new website is designed to be a resource for both clients and the general public.  The website provide daily updates about the economy, interest rates, and the housing market, so that readers can decide when the time is right to act. When ready to act, the site has included detailed information about available loan programs, necessary qualifications, insider tips, and expert advice. Then, the site includes an online application for a home loan, critical forms and documents, and the functionality to transfer critical documents directly to Central Coast Lending loan officers.

Some headlines from the website last week:

December Housing Starts Slip: After an impressive November, December housing starts slipped 4.1 percent (down from 9.1 percent). However, year-over-year, the numbers were up 24 percent.

Initial Jobless Claims Drop 50k: Initial jobless claims fell to their lowest level since September 2005.

The Industry: When to Pay Points for a Lower Rate:  CCL co-owner Jason Grote looks at that age old question – when to pay points for a lower rate?

Expert: Why Interest Rates are so Low:  CCL loan officer Jason VanDyke takes a look at why interest rates have fallen to record lows.

As for rates this week, they have risen slightly in reaction to increased fees. Congress has elected to pay for the payroll tax cut extension with an extra fee for mortgage holders that amounts to $10 per month for a $100,000 loan and so on as the loan amount gets larger.  Rates are still available for as low as 3.250 percent (3.525 percent APR), but the points associated with that amount make paying the cost too expensive.  We offer a 30-year at a 3.500 percent rate (3.633 percent APR) that is more cost-effective.

We hope to see you check out our new website! Pleases call with any questions – 805.543.LOAN.

Statistics Dashboard Updated

Our statistics dashboard has been updated with December 2011 listing data. If you aren’t familiar with our dashboard, it has over 2,000 graphs of local real estate market statistics in an easy-to-use dashboard. No other site or Realtor offers this level of insight into the local market.  It will take a few seconds to load the dashboard but then every graph you choose will be QUICK as it doesn’t need to go out on the Internet to download additional data.

See the dashboard here


Interest Rate Update

Remember quantitative easing? Quantitative easing is a program in which the Federal Reserve buys government treasury bonds to stimulate the economy. By injecting cash into the economy, the Fed hoped to keep credit available and interest rates low.  In total, the Fed ended up transferring $76.9 billion to the US Treasury in 2011, which is the second highest total ever (behind the 2010 total of $79.3 billion).

JPMorgan posted a record profit of 19 billion in 2011, but also spent $3.2 billion during the same time fighting lawsuits, most of which were over poorly written mortgages. As a result of legal costs, JPMorgan’s 4th quarter fell 23 percent from a year earlier, and bank stocks dropped as a result.

Retail sales rose 0.1 percent in December to a seasonally adjusted $400.6 billion. November also logged gains of $400 billion, due in part to record Black Friday weekend profits. It was the first ever time sales had reached the $400 billion mark in back-to-back months.

Last week, applications for unemployment benefits increased 24,000 to a total of 399,000.  The increase was largely due to companies reducing their work forces after the holiday season and is typical of early January.

Lastly, transcripts of the Federal Reserve meetings in 2006 were released last Thursday, and gave us an insight into the mindset of its officials prior to the housing collapse. What was the attitude like in the meeting room at that time? Largely unconcerned. The New York Times reported that officials joked about the antics home builders used to lure buyers, and emphasized that the fundamentals of the economy were strong.

By the end of last week, the national average of the 30 year fixed fell to 3.88 percent (3.94 percent APR) and the 15 year fell to 3.22 percent (3.37 percent APR). Central Coast Lending offers a 30 year rate as low as 3.5 percent (3.582 percent APR) and a 15 year rate as low as 3.0 percent (3.203 percent APR).  Interest rates continue to inch slightly lower, and conditions remain extremely favorable for refinance.

Another Tough Year for Local Real Estate Agents

1610 of the 2300+ Real Estate Agents on the Central Coast had at least one Residential Sale (buyer or listing) in 2011. That’s 700 that didn’t make a single penny. Actually they lost about $1000 for the year because of Realtor and MLS dues.  Only 896 agents had Sales over $1 Million.

$1 Million in Sales is about $19,000 in earnings once you take out the commission splits, Brokerage fees, and Realtor/MLS dues. 515 Agents had over $2 Million in Sales in 2011.  338 had over $3 Million. 225 over $4 Million.  148 over $5 Million.  108 over $6 Million. 85 over $7 Million. 63 over $8 Million.  47 over $9 Million. 34 over $10 Million. 27 over $11 Million.  2 Agents had over $20 Million in Sales, which a few years ago would have been a couple oceanfront home sales.