SoldOnSantaCruz.com Blog

Investor's are back in the market

Charles Lynn (David Lyng Real Estate) — Tue, 09 Feb 2010 13:24:23 -0800

Investors are back in the market, and they’re paying all-cash, mostly for property under $500,000. The effect of this is to freeze out first-time home-buyers who have to get a loan. Banks are still chary about providing loans. About the only loans left for first-time buyers are FHA loans.

So, while the first-time buyer is working through the loan process, the investors are swooping in and buying the best property, which, after slapping a coat of paint on and, maybe, replacing the carpeting, they are putting back on the market. Sometimes, they rent out the property hoping for more appreciation down the road.

Appraisals are also affecting buyers who need a loan. Appraisals lag the market because they use past data, typically six months worth, to calculate current market value. When a market has bottomed out and begins rising, appraisals often come in under the value agreed upon by the buyer and seller. Banks are requiring buyers to come up with extra cash to make up the difference. First time buyers are having a hard time doing this, so we’re seeing many more sales fall out of escrow than normal.

Another thing hanging over the market is the so-called “shadow inventory” of bank-owned property that has not been put on sale. If the banks release these homes in a measured manner, the market should be able to absorb them.

Home sales were down significantly in January, falling 39% from December. Nevertheless sales were up 9.8% year-over-year. This is the nineteenth month in a row home sales have been higher than the year before.

The decline in sales is not a result of reduced demand, rather it was produced by a lack of inventory, or should I say, a lack of desirable inventory.

We expect sales to regain their momentum through the Spring because of the extended tax credit and because this is historically the prime time for home sales.

From talking with other Santa Cruz County real estate agents, properly priced homes in the most desired neighborhoods and school districts are being sold with multiple offers: many multiple offers.

Pending sales, which is a solid indicator of future sales, was up 19% year-over-year in January for the twenty-first month in a row.

Remember, the real estate market is a matter of neighborhoods and houses. No two are the same. For complete information on a particular neighborhood or property, call me.

Federal Tax Credit Extension

Charles Lynn (David Lyng Real Estate) — Tue, 10 Nov 2009 09:53:39 -0800

The U.S. House of Representatives

passed a bill extending and ex-

panding the Federal Tax Credit for

First-time Home Buyers on Novem-

ber 5th. The bill was passed in the

U.S. Senate the day before and will

now go to President Obama for his

signature, where it is expected to

be signed this week.

The tax credit will be extended

through April 30, 2010, with a 60-

day extension if a binding contract

is in place prior to the deadline.

First-time home buyers will continue

to receive a tax credit of up to

$8,000, while existing homeowners

will receive a reduced credit of up

to $6,500. Existing homeowners will

be eligible for the $6,500 if they

have lived in their current resi-

dences for at least five years. The

bill also will increase the qualifying

income limits from $75,000 for sin-

gle tax filers and $150,000 for joint

filers, to $125,000 and $225,000,

respectively. The purchase price of

the home is capped at $800,000.

The changes, among other things,

are aimed at encouraging so-called

“move-up buyers” to sell their first

homes and buy a larger or more

expensive place.

Under additional provisions in the

bill, taxpayers can claim the credit

on purchases completed in 2010 on

their 2009 income tax returns. The

bill maintains the provision that

home buyers do not have to repay

the credit provided the home re-

mains their primary residence for 36

months after purchase, and waives

this requirement for active duty

military personnel who move due to

a military order. “The success of the home buyer tax

credit and its positive impact on the

real estate market is clear,” said

C.A.R. President James Liptak.

“According to our research, nearly

40 percent of first-time buyers said

they would not have purchased a

home if the federal tax credit for

first-time home buyers was not

offered. This underscores the sig-

nificance of the federal tax credit to

the housing market’s recovery in

California.

California Affordability Inches Downward

Charles Lynn (David Lyng Real Estate) — Tue, 29 Sep 2009 13:04:06 -0700

Housing affordability inched downward throughout the state during the second quarter of 2009 as a result of incremental price increases and increased demand sparked by the state new-homebuyer tax credit, the California Building Industry Association said today. The quarterly National Association of Home Builders/Wells Fargo Housing Opportunity Index found that homes were less affordable in 16 of the state<s least affordable market for the fifth quarter in a row (21.2%). www.soldonsantacruz.com

Inventory Declines, While Pending Sales Continue to Rise

Charles Lynn (David Lyng Real Estate) — Tue, 29 Sep 2009 12:57:21 -0700

Inventory of single-family, re-sale homes fell for the thirteenth month in a row in August, and it is now down 43.1% year-over-year. Pending sales, meanwhile, climbed 31.3% from July, and were up 100.5% compared to August 2008. The median price for singlefamily, re-sale homes lost 7.5% in August. Year-overyear, the median price was off 13.4% Sales of single-family, re-sale homes were up, year-over-year, by 3.2% in August. Year-to-date, home sales are up 16.6%. Days of Inventory rose seven days to 129 days. In a balanced market, the supply of homes is usually around five to six months. For condos, the indicator dropped ten days to 176 days. The sales price to list price ratio rose 1.2 points to 98.5%. Condo sales rose 3.6% month-overmonth, but were off 9.4% compared to last August. Year-to-date, condo sales are up 9.5%. The median price for condos fell 28.1% from the month before, and was down 26.9% compared to last August. www.soldonsantacruz.com

Santa Cruz County Home Prices Continued to Rise in May

Charles Lynn (David Lyng Real Estate) — Tue, 16 Jun 2009 09:17:09 -0700

Santa Cruz County Home Prices Continued to Rise in May

The median price for single-family,
re-sale homes rose 4.7% from April.
The median price was off 23.9%
year-over-year. The average
price fell 9% month-overmonth,
and was down
30.2% compared to last
May.
Sales of single-family, resale
homes were up, yearover-
year, by 10.3% in May.
Year-to-date, home sales
are up 21%.
Inventory was down 39.8% from
last May. This is the thirteenth
month in a row inventory has declined
year-over-year.
The drop in inventory and the rise
in sales combined to push our Days
of Inventory indicator down 21 days
to 156 days. In a balanced market,
the supply of homes is usually
around five to six months. For condos,
the indicator rose thirteen days
to 172 days.
The sales price to list price ratio
rose 0.8 of a point to 98%.
Pending sales, a leading indicator,
were up 35.1% year-over-year.
Condo sales were up 3.4% yearover-
year. Year-to-date, condo
sales are up 28.3%.
The median price for condos
rose 17.5% from the month
before, but was down 9.2%
compared to last May.
Condo inventory was down
34.4% compared to March
2008.
Pending sales for condos is
up 25% year-over-year.
The real estate market is very hard
to generalize. It is a market made
up of many micro markets. For
complete information on a particular
neighborhood or property, call me.

The Basics: 2009 First-Time Home Buyer Tax Credit

Charles Lynn (David Lyng Real Estate) — Tue, 16 Jun 2009 09:15:39 -0700

The Basics: 2009 First-Time Home Buyer Tax Credit

As part of its plan to stimulate the
U.S. housing market and address
the economic challenges facing our
nation, Congress has passed legislation
that grants a tax credit of up
to $8,000 to first-time home buyers.
WHO QUALIFIES?
First-time home buyers who purchase
homes between January 1,
2009 and December 1, 2009.
To qualify as a Gfirst-time home
buyerH the purchaser or his/her
spouse may not have owned a
residence during the three years
prior to the purchase.
WHICH PROPERTIES ARE ELIGIBLE?
The 2009 First-Time Home Buyer
Tax Credit may be applied to primary
residences, including: singlefamily
homes, condos, townhomes,
and co-ops.
HOW MUCH WILL THE CREDIT BE?
The maximum allowable credit for
home buyers is $8,000. Each home
buyerIs tax credit is determined by
two factors:
The price of the homeJthe credit is
equal to 10% of the purchase price
of the home, up to $8,000.
The buyer's incomeJsingle buyers
with incomes up to $75,000 and
married couples with incomes up to
$150,000Jmay receive the maximum
tax credit.
IF THE BUYER(S)' INCOME EXCEEDS
THESE LIMITS, CAN HE/SHE STILL GET
A CREDIT?
Yes, some buyers may still be eligible
for the credit.
The credit decreases for buyers
who earn between $75,000 and
$95,000 for single buyers and between
$150,000 and $170,000 for
home buyers filing jointly. The
amount of the tax credit decreases
as his/her income approaches the
maximum limit. Home buyers earning
more than the maximum qualifying
incomeJover $95,000 for singles
and over $170,000 for couples
are not eligible for the credit.
WILL THE TAX CREDIT NEED TO BE
REPAID?
No. The buyer does not need to
repay the tax credit, if he/she occupies
the home for three years or
more. However, if the property is
sold during the three-year period,
the credit will be recouped on the
sale.
TAX CREDIT CAN BE USED ON CLOSING
COSTS
FHA-approved lenders received the
go-ahead to develop bridge-loan
products that enable first-time buyers
to use the benefits of the federal
tax credit upfront, according to
eagerly awaited guidance from the
U.S. Department of Housing and
Urban Development on so-called
home buyer tax credit loans that
was released today.
Under the guidance, FHA-approved
lenders can develop bridge loans
that home buyers can use to help
cover their closing costs, buy down
their interest rate, or put down more
than the minimum 3.5 percent.
The loans can't be used to cover
the minimum 3.5 percent, senior
HUD officials told reporters on a
conference call Friday morning.

Mortgage Rate Outlook

Charles Lynn (David Lyng Real Estate) — Tue, 16 Jun 2009 09:12:32 -0700

Mortgage Rate Outlook

May 29, 2009 -- Bond and mortgage
markets spasmed this week, and
the corresponding sharp rise in
rates over a two-day period served
as a reminder that even a battered
private market markets can be a
dangerous animal. It wasn't completely
clear what sparked the rout,
but there was speculation that a
combination of unclear goals in
Federal Reserve quantitative easing
programs, floods of new sovereign
debt and shoddy treatment of GM
bondholders all led to the selloff.
Yields on the 10-year Treasury
bond had lifted by just over half a
percentage point in a few days'
time, taking conforming fixed mortgage
rates along for the ride. After
standing at a familiar 5.03% on
Tuesday, Conforming 30-year
FRMs leapt to 5.29% on Wednesday
and then 5.44% on Thursday
before settling on Friday to 5.30%.
Overall, HSH's Fixed-Rate Mortgage
Indicator (FRMI), which includes
rates for conforming, jumbo
and "high-limit" conforming data,
rose by only 18 basis points to
5.64%, as the increase in the conforming
portion was tempered
somewhat by a softer response in
Jumbos. An all-inclusive average
for 5/1 hybrids increased by 10
basis points, closing the survey
week at 5.15%.
Existing Home Sales rang in at a
4.68 million (annualized) rate of
sale in April, a slight increase from
March's figure but in line with recent
figures, which have been showing a
kind of "backing and filling" pattern
for the past five months. Prices
continue to ease -- they are 15.4%
below year-ago levels, and the
supply of inventory increased back
to 10.2 months at the present rate
of sale.
New Homes sold at a 352,000
annualized clip in April, almost
exactly the same pace seen in
March. Like their 'used' counterparts,
prices here are about 15%
below last year, but inventory levels
continue to improve and now stand
at 10.1 months available. According
to the Commerce Department, the
actual number of units on the market
is now 297,000 and is starting
to approach half of the peak levels
seen a couple of years ago. The
sooner inventory disappears, the
sooner new construction can begin,
and we are approaching that day
steadily, if slowly

Santa Cruz County Home Sales Rise Ninth Month in a Row

Charles Lynn (David Lyng Real Estate) — Mon, 13 Apr 2009 09:24:54 -0700

Sales of single-family, re-sale homes were up, year-over-year, by 40.8% in March. Year-to-date, home sales are up 28.4%. The median price for homes fell 4.4% from February. The median price was down 36.5% year-over-year. The average price fell 6.9% month-over-month, and was off 34% compared to last March. Inventory was down 19.7% from last March. This is the eleventh month in a row inventory has declined year-over-year. Our Days of Inventory indicator dropped 45 days and is now at 223 days. In a balanced market, the supply of homes is usually around five to six months. For condos, the indicator was down six days to 293 days. The sales price to list price ratio rose 1.1 points to 97.5%. Days on market gained nine days to 101 days. Condo sales were up 5% from February, but were down 8.7% year-over-year. Year-to-date, condo sales are up 31.9%. The median price for condos rose 8.1% from the month before, but was down 37.9% compared to last February. Condo inventory was down 25.2% compared to March 2008. The real estate market is very hard to generalize. It is a market made up of many micro markets. For complete information on a particular neighborhood or property, call me.

American Recovery and Reinvestment Act Ups Loan Limits

Charles Lynn (David Lyng Real Estate) — Sun, 15 Mar 2009 16:39:12 -0700

The American Recovery and Reinvestment Act of 2009 reinstates last year's 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. For the few areas where the 2009 limits were higher, the higher limits will apply. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any Hsub-areaI, i.e. an area smaller than a county. The Secretary's discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009. For Santa Clara County, loan limits will be $729,750.
The Act is intended to provide a stimulus to the U.S. economy in the wake of the economic downturn brought about by the subprime mortgage crisis and the resulting credit crunch. The Act includes federal tax cuts, expansion of unemployment benefits and other social welfare provisions, and domestic spending in education,
health care, and infrastructure, including the energy sector. Some of the tax relief for individuals include:

• New payroll tax credit of $400
per worker and $800 per couple
in 2009 and 2010. Phaseout
begins at $75,000 for individuals
and $150,000 for joint
filers.

• Alternative minimum tax: a one
year increase in AMT floor to
$70,950 for joint filers for 2009.

• Expansion of child tax credit: A
$1,000 credit to more families
(even those that do not make
enough money to pay income
taxes).

• Expanded college credit to
provide a $2,500 expanded tax
credit for college tuition and
related expenses for 2009 and
2010. The credit is phased out
for couples making more than
$160,000.

• Homebuyer credit: $8,000
credit for all homes bought
between 1/1/2009 and
12/1/2009 and repayment provision
repealed for homes
purchased in 2009 and held
more than three years. This
only applies to first-time homebuyers.

• Home energy credit to provide
an expanded credit to homeowners
who make their homes
more energy-efficient in 2009
and 2010. Homeowners could
recoup 30 percent of the cost
up to $1,500 of numerous
projects, such as installing
energy-efficient windows,
doors, furnaces and air conditioners.

• Deduction of sales tax from car
purchases, phased out for
incomes above $250,000.

Santa Cruz County Home Sales Rise Eighth Month in a Row

Charles Lynn (David Lyng Real Estate) — Sun, 15 Mar 2009 16:31:59 -0700

Sales of single-family, re-sale homes were up, year-over-year, by 17.6% in February. We expect this momentum to continue as the market works its way through the glut of bankowned properties. The median price for homes fell 5.7% from January. The median price was down 37.1% year-over-year. Inventory was down 18.8% from last February. This is the tenth month in a row inventory has declined year-over-year. Our Days of Inventory indicator lost eight days and is now at 268 days. In a balanced market, the supply of homes is usually around five to six months. For condos, the indicator was flat at 299 days. The sales price to list price ratio dropped 0.6 of a point to 96.4%. Days on market gained eight days to 92 days. Condo sales were down 4.8% from January, but were up 66.7% yearover-year. The median price for condos lost 12.2% from the month before, and was down 34.8% compared to last January. Condo inventory shed 4.8% month-over-month, and was down 18.1% compared to
February 2008. The real estate market is very hard to generalize. It is a market made up of many micro markets. For complete information on a particular neighborhood or property, call me.

e-Pro designation

Charles Lynn (David Lyng Real Estate) — Thu, 05 Mar 2009 10:13:51 -0800

Local REALTOR e-PRO^®Agent Utilizing Technology

To Provide Consumers with State-of-the-Art Services

March 5, 2009 – As more and more consumers begin their search for real estate-related information on the Internet, it is critical that real estate professionals are well educated in the use of technology to the benefit of both the consumer and the agent and/or broker.

Realizing the importance of technology training, the National Association of REALTORS^® (NAR) now offers its members the e-PRO certification course -- the only technology certification program offered by NAR. The program is designed to prepare real estate professionals to make the most of Internet technology and to identify, evaluate, and implement new Internet business models. The elite group of course graduates represents only one percent of all REALTORS in the country including Charles Lynn of Lifestyles Real Estate Inc.

“The real estate industry has undergone a fundamental change over the past five years,” Charles said. “Today, more than 70% of all buyers and sellers begin their search online. As an e-PRO certified agent, I have knowledge and tools needed to provide my clients with the information they need and the customer service they demand. It’s both hi-tech and hi-touch.”

The REALTOR e-PRO^Ò certification course is an educational program unlike any other professional certification or designation course available, comprehensive and interactive. It is specifically designed to provide real estate professionals with the technology tools needed to assist consumers in the purchase or sale of a home.

The exclusive REALTOR e-PRO^Ò certification course is presented entirely online and certifies real estate agents and brokers as Internet professionals. The course is designed to help REALTORS^Ò stay at the leading edge of technology and identify, evaluate and implement new Internet business models.

Once completed, the e-PRO certified real estate professional joins the ranks of a special community of highly skilled and continuously trained professionals who provide high quality and innovative online-based real estate services. Consumers can identify the e-PRO through the exclusive e-PRO Internet Professional logo.

Both the content and the delivery platform were created by San Diego-based technology company InternetCrusade^®.Graduates use the skills they've acquired to provide clients information on properties for sale, local communities, and the local real estate market.

For more information, e-mail Charles Lynn at clynn@lsre.net , call (831)247-4577.

Soldonsantacruz.com

Mortgage Rate Outlook

Charles Lynn (David Lyng Real Estate) — Tue, 10 Feb 2009 09:52:40 -0800

Feb. 6, 2009 -- Mortgage rates moved a
little higher amid the raging "stimulus"
debate. It seems to us that more than
one factor is the cause behind the
mild lift in rates, not the least of
which are glimmers of hope amid the
economic data.
HSH's overall average for the week,
our Fixed-Rate Mortgage Indicator --
inclusive of conforming, jumbo and
'expanded conforming' interest rates -
- rose by eight basis points (.08%),
finishing the week at 5.94%. The
overall 5/1 Hybrid ARM average
moved .06 upward, landing at a
week-ending value of 5.67%. Conforming
30-year FRMs trudged upward
by nine basis points, while
Jumbo 30-year FRMs actually declined
to 6.83% for the period.
One of the factors pressing interest
rates higher is that the influential 10-
year Treasury continued to move
higher, and finished the week stalking
the 3% mark. As we've noted on a
number of occasions, the Treasury
has still considerable but somewhat
diminished influence on FRM rates in
the present environment. For example,
the 10-year Treasury has now
risen by 75 basis points since touching
a weekly low of 2.18% on December
26, but conforming mortgage
rates have only lifted by 31 basis
points over that time.
What this does mean, though, is that
spreads -- the differential between
the 10-yr Note and the average 30-
year FRM -- are starting to narrow,
an encouraging sign of sorts. Normally,
the difference between those
values runs between 150-170 basis
points or so; in late December, amid
still-considerable panic in the market,
that gap stood at a whopping 313
basis points. Since then, that spread
has narrowed to about 250 basis
points again, a signal of calming in
the credit markets. For jumbos, the
gap is now the narrowest in three
months. It does seem that the market
is trying to inch itself back towards
whatever might pass for 'normal'
these days.
After existing home sales bounced up
by 6.5% in December, the National
Association of Realtors reported that
their Pending Home Sales Index also
bumped up by 6.3 points during that
month, which means that January's
existing home sales figures are likely
to also sport a rise when they're
released. Home sales figures still
remain low but do seem to be finding
some kind of bottom around these
levels.

www.soldonsantacruz.com

CBIA Pressing for Housing Stimulus Measure

Charles Lynn (David Lyng Real Estate) — Tue, 10 Feb 2009 09:49:46 -0800

Sacramento (Feb. 3) E Housing production
in California in 2009 is expected
to decrease from the already
record-low numbers seen in
2008, the California Building Industry
Association announced today,
leading CBIA officials to strengthen
the call to state and federal lawmakers
to enact a homebuyer tax
credit in hopes of reinvigorating the
housing market and the economy.
The Association is forecasting just
63,400 units will be produced in
2009, a 3 percent decrease from
the record-low 65,380 units produced
in 2008. In comparison, the
low point of the homebuilding recession
in the early 1990s was
84,656 units in 1993, while the
worst year during the recession of
the early 1980s was 85,656 in
1982. To meet the need for new
housing generated by population
growth, the state estimates builders
should produce about 220,000 new
homes and apartments annually.
Robert Rivinius, CBIAGs President
and CEO, said the prospect of
having another year of record-low
housing production should be a
wake-up call to policy makers to
enact housing stimulus measures to
reduce any further loss to the industry
and the overall economy.
HThe housing industry is an extremely
productive economic generator
when operating at normal
levels, helping to create jobs and
generate much-needed revenue for
state and local governments,I Rivinius
said. HWe will continue to ask
state and federal lawmakers to
enact a tax credit for new homebuyers,
which has proven in the past to
be an effective means of revitalizing
distressed housing markets.I
Rivinius cites the temporary homebuyer
tax credit enacted by Congress
during the 1970s when the
housing market was going through
a similar downturn.
HWithin months of its enactment,
home sales doubled and within two
years, new housing construction
was back to normal levels nationwide,
I he said. HWe continue to
believe that in todayGs economic
climate, a tax credit for new homebuyers
would provide a much
needed jolt to the languishing housing
market, and in turn, the entire
economy.I
The forecast, prepared by the Construction
Industry Research Board,
predicts California will produce
30,000 single-family units in 2009,
down 9 percent from the 33,048
constructed in 2008, and 33,400
multifamily units, up a modest 3
percent from the 32,332 permits
issued in 2008.
HThese numbers do not bode well
for our industry, or the economy,
and we could be in for a very rough
year,I Rivinius said. HWe hope our
lawmakers at the state and federal
level will recognize how vital a
healthy housing market is to the
overall economy and enact stimulus
measures immediately to help our
industry and to help the overall
economy from falling further into
recession.

www.soldonsantacruz.com

Santa Cruz County Home Sales Rise Seventh Month in a Row

Charles Lynn (David Lyng Real Estate) — Tue, 10 Feb 2009 09:46:43 -0800

Sales of single-family, re-sale
homes were up, year-over-year, by
21.5% in January. We expect this
momentum to continue as
the market works its way
through the glut of bankowned
properties.
The median price for reversed
course, again, and
fell 1.7% from December.
Since September, the median
price has gone up,
down, up, down. This is
usually a sign the market is looking
for a bottom. The median price was
down 27% year-over-year.
Inventory was down 21.6% from
last December. This is the ninth
month in a row inventory has declined
year-over-year.
In spite of the decline in inventory,
and because home sales were
down 29.5% month-over-month, our
Days of Inventory indicator regained
the 71 days it had shed in
December and is now back at 284
days. In a balanced market, the
supply of homes is usually around
five to six months.
The sales price to list price ratio
rose 0.7 of a point to 97%.
Days on market gained
eleven days to 86 days.
Condo sales were down
12.5% from December, but
were up 75% year-over-year.
The median price for condos
lost 16.9% from the month
before, and was down 41.1%
compared to last January.
The real estate market is
very hard to generalize. It is a market
made up of many micro markets.
For complete information on a
particular neighborhood or property,
call me.

www.soldonsantacruz.com

SoldOnSantaCruz.com Blog

Investor's are back in the market

Federal Tax Credit Extension

California Affordability Inches Downward

Inventory Declines, While Pending Sales Continue to Rise

Santa Cruz County Home Prices Continued to Rise in May

Santa Cruz County Home Prices Continued to Rise in May

The Basics: 2009 First-Time Home Buyer Tax Credit

The Basics: 2009 First-Time Home Buyer Tax Credit

Mortgage Rate Outlook

Mortgage Rate Outlook

Santa Cruz County Home Sales Rise Ninth Month in a Row

American Recovery and Reinvestment Act Ups Loan Limits

Santa Cruz County Home Sales Rise Eighth Month in a Row

e-Pro designation

Local REALTOR e-PRO® Agent Utilizing Technology

To Provide Consumers with State-of-the-Art Services

Mortgage Rate Outlook

CBIA Pressing for Housing Stimulus Measure

Santa Cruz County Home Sales Rise Seventh Month in a Row

Local REALTOR e-PRO^®Agent Utilizing Technology