Jeff's Blog

Making Sense of the Market (July 2010)

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Mon, 02 Aug 2010 19:24:48 -0700

Making Sense of the Market Today

August 2^nd, 2010

This time around, let's look at some basic trends to see where the Placer County Real Estate market is now that we have an economy teetering on recovery. One of the most basic weather vanes is to look at Absorption Rate. That is the percent of homes that are sold in any one month (or looked at another way – how many months will it take to sell all the homes currently for sale). A neutral market is one that has 4 to 6 months of inventory on hand. A seller's market has less than 4 months (more buyers than sellers); and a buyer's market is one that has over 6 months of inventory (more sellers than buyers).

Let's also break the market into two sections. One with homes that sold under $300,000 and the other $300,000 and above.

Placer County Absorption Rate (All Homes Under $300,000)

It is easy to see in this graph that over the past 2 years we have moved from a Buyer's market to a Seller's market with between 2 and 3 months of inventory over the past 13 months in the under $300,000 price range. I'll break the home sales down to REO (Bank Owned/Foreclosed homes), Short Sales (homes owners are negotiating with the bank) and Non-Distressed homes (no direct bank involvement). If we look at homes sold during this time period we see what started out as an REO market in January of 2009 has turned into a pretty equal mix of REO, Short Sale and Non-Distressed Sales. Non-Distressed sales are those where the bank is not involved in the transaction and currently makes up 37% of the sales with the remainder made up of Short Sales at 33% and REO at 30%. With the combined REO and Short Sale listings, distressed sales still make up nearly two thirds of all the sales in the under $300,000 range.

Placer County Market Trends Under $300,000 (Metrolist)

Here is the last graph of the under $300k showing inventory, sold and pended homes.

Placer County For Sale - Sold - Pended (Metrolist)

This is an interesting chart because it shows that we have had a fairly significant increase in inventory over the past 4 months while sales have had a slight increase. Increased pendings does not always reflect an immediate increase in the number of sold homes – as you can see with the numbers for last summer. Some offers are canceled and many short sales take longer than 30 days to close.

Over $300,000

For the over $300,000 price range we are currently looking at nearly 5 months of inventory with 22% of the homes selling each month. That is considered to be a neutral market.

Placer County Absorption Rate for Over $300,000 (Metrolist)

And here below, is the market breakdown for the homes sold in Placer County looking at REO, Short Sale and Non-Distressed sales. Over the past 18 months Non-Distressed sales have made up 57% of the reported sales on Metrolist listing service. April 2010 was 58%, May was 59% and June was 58%. Compare that to the 63% distressed sales in the under $300,000 price range.

Placer County Market Trends for Over $300,000 (Metrolist).

Placer County For Sale - Sold - Pended Over $300,000 (Metrolist)

As you can see below, we are starting to see a rebound in the sales of homes over $300,000 this year in the county area.

There are some signifcant differences in home sale trends when you compare the under $300k to the over $300k homes. Besides the overall basic trends described here, I cannot stress enough that home prices are extremely specific to your location. If you have questions about the value of your home, please feel free to contact me at (916) 303-0257.

Linux for Realtors?

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Fri, 23 Jul 2010 20:49:06 -0700

Linux for Realtors?

A few days ago I went to a local Linux User Group (LUG) meeting at the library here in Lincoln, California. While I had used Linux several years ago when I worked at an electronics company, I have not kept up to date on the technology but rather sticking with Windows Vista for my Real Estate and Photography needs.

And complaining about Windows Vista...

So, after attending the LUG I decided to give it a try... and after a few days I have it running everything I need for both my real estate and photography needs. In general, it is relatively easy to install and manage a Linux system. Once you have it set up, regular updates are performed automatically just like Windows or Apple OS/X.

First, you need to select what type of Linux to run. Based on what I heard at the LUG, I decided to try Ubuntu Linux. It is the most popular installation. I downloaded the installation file and created a cd so I could “run it live” without damaging any of the Windows components. I liked what I saw, so next I backed up all of my data files to a USB hard drive.

Next, I attempted to set up by PC (An HP G60 Laptop) in a dual-boot mode where I can use both Windows Vista and Linux. This broke my PC and I decided to 'go for broke' (now I know where that term came from) and do a Linux only installation. That's how we learn, right?

Installation was done right from the live CD version of Ubuntu. It automatically recognized my HP LaserJet 3200 on my office network and the HP OfficeJet 6300 All-In-One attached via USB. Firefox browser allowed full access to all the features on our local Multiple Listing Service (Metrolist in Sacramento), and my web pages... everything except Adobe Lightroom for Photography and ZipForms 6. Lightroom was not a show stopper because the current version of Linux has some good photography software that will read and do non-destructive modifications to RAW files. I use my desktop PC for heavy duty photography work where I use Lightroom and Photoshop to organize and do final edits. ZipForms 6 proved to be a bit of a problem for a while. I was getting Java error messages even when I had a later version of Java installed than what it said it needed. I finally installed VMware (the only package requiring a purchase) to run XP within Linux to access ZipForms 6 professional over the web (XP is still a better operating system than Vista in my opinion and it runs faster in Linux!)

I have full access to my printers – including the USB OfficeJet 6300 that I drag around when needed from XP as well as Linux. Open Office comes with the Linux installation and is fully compatible with Microsoft Office... for free. I've been using Open Office for the past two years even though I had an extra copy of Microsoft Office available. I can either save files in MS Office format or use the default format because MS Office can read Open Office docs (spreadsheets, presentations, document files).

Summary

I now have a faster laptop, that I use to preview photographs as well as do all things real estate related. I do have to jump into XP when I write up or modify a contract but that's not a big deal. I think I'm going to stick with Linux rather than upgrade to Windows 7.

Everything on the G60 laptop was recognized by Linux automatically – my wireless and wired LAN, Windows Network Shares, Printers and USB hard drives. Everything on the keyboard works like a champ – adjusting the brightness, audio, etc. I watch YouTube and Hulu videos (after downloading some addons that are done just like MS Internet Explorer when it sees something you need).

What didn't work (for those more technical)

I mentioned that it took me a few days to get everything running.... well specifically trying different things for ZipForms 6 and Lightroom. For ZipForms 6 I tried upgrading Java to the latest “free” version, then manually installed Java from Sun (free also). This was a bit of a chore... since I didn't read the instructions first (wink), and didn't resolve the issue.

So I tried a windows emulator called Crossover. It did not work for either the web based ZipForms 6, the Standard stand-alone ZipForms 6 version or Lightroom. Then I tried VMware Workstation and it worked running a 'virtual' copy of XP for ZipForms 6. A free version of virtual machines called VirtalBox is another option and I didn't test that solution. I suspect that ZipForms 6 professional will work using Firefox and a standard Sun Java installation one of these days.

In the meantime I'll keep updating Java and Firefox and when they work I won't need the virtual XP any longer.

Now... do I replace my old Blackberry Curve with an iPhone4, the Samsung Captivate or the new Blackberry 9800 Torch/Slider that's coming out in August? There are certainly more apps available for the iPhone4 such as ZipForms 6 professional access, and California Association of Realtor apps too.

Hmmmm, any suggestions here? Think I'm crazy? Well, that's why they call me Crazy Jeff.

Jeff Engle

Realtor and Photographer in Lincoln, CA

Employee Programs for HP, Intel, Apple, Yahoo, Weyerhaeuser, and More!

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Wed, 23 Jun 2010 17:16:58 -0700

Hello Neighbors,

Fun news.

Neighborly is now partnered with several different large companies in Northern California and the Bay Area. Most are tech companies, which happily takes us back to our previous lives...

Neighborly has been working for several months to get these relationships in place, and they've all gone live simultaneously.

Neighborly now offers special programs to employees of:

- Hewlett-Packard
- Intel
- Apple
- Oracle
- Microsoft
- Yahoo
- AMD
- Genentech
- KeyPoint
- Sony Playstation
- Levi Strauss
- Meriwest Credit Union
- CommonWealth Central

If you work for one of those companies, how do you get access to Neighborly's special employee programs?

Log into your employee discount portal and search:

a) Home & Garden > Real Estate category or
b) Finances & Money > Real Estate category

What is your employee discount portal called?

It could be different at each company. Examples:

1) HP's system is called "Passport”
2) Microsoft’s system is called “Benefits Prime”
3) Intel’s system is called “Vault”
4) Apple’s system is called “Passport Unlimited”
5) Weyerhaeuser's system is called "MyDiscount".

Contact your internal HR rep for help with your system.

Many thanks!

Jeff Engle
http://www.PlacerAreaHomes.com

CNN reports Strategic Defaulters May Not Buy Again Soon others say 'Walk Away' - who's right?

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Fri, 28 May 2010 17:35:46 -0700

Strategic Defaulters May Not Buy Again Soon

After the much publicized article in the LA Times where the author encouraged individuals to 'walk away from their home' this is an important note about the impact of this action.

Here is an excerpt from CNN via Realtor Magazine:

How long will it be before former home owners who walked away from their mortgages can buy again? Mortgage lenders are saying that in the future, losing a home because of illness or job loss will be seen differently than choosing to abandon a mortgage obligation for other reasons.

"If you made a strategic decision to default on paying your mortgage, it will work against you," says Bill Merrell of the National Association of Review Appraisers and Mortgage Underwriters. It will probably be seven or eight years before walkaways are able to buy another home, says Jay Brinkmann, chief economist for the Mortgage Bankers Association. "Credit scores are only one component of a complete credit decision," he says. "[In these cases] credit scores are not a good indicator of their willingness to continue to pay their mortgage."

Source: CNNMoney, Les Christie (05/28/2010)

If you know of someone who needs to explore options regarding their home, please introduce them to me. I understand these decisions are difficult and emotional, and it is important to get all the facts and understand the options available first.

Jeff Engle

http://www.PlacerAreaHomes.com

SFR (Short Sale/Foreclosure Certification)

"Strategic Defaults" - Borrowers Who Can Afford Their Homes, but Walk Away

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Mon, 10 May 2010 16:11:43 -0700

Strategic Defaults, Borrowers Walking Away, Homes in Foreclosure

Hello Neighbors,

60 minutes did a story last night on something we see in this business on a daily basis.

"Strategic Defaults". When a home owner CAN afford their mortgage, but they decide to walk away from their home and let it go to foreclosure.

Here's the link:

http://www.cbsnews.com/video/watch/?id=6470184n

Although I agree with the depression-era view - that losing your house is the last straw - it's clear not everyone else does.

Regardless of your moral or ethical view of this trend, the economic impacts are something to find concerning. We simply don't have economic models for this behavior.

We know banks are sitting on foreclosed homes and not releasing them to the market. If 1 of every 5 upside down borrowers is choosing to walk away, then the foreclosure rates are going to continue to be record setting for years to come.

If you need to short sell, give Neighborly a call.

Please don't walk away. We can help you protect your financial future by doing the right thing.

Jeff

http://www.PlacerAreaHomes.Com

Neighborly Realty

New Flood Insurance Information for Natomas

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Wed, 05 May 2010 10:27:18 -0700

This just in from our friend Chris Altobell with Farmers Insurance. It looks like buyers in Natomas may have a few extra hiccups:

Hi Jim,

The National Flood Insurance Program has been suspended; meaning new flood policies cannot be issued. This will likely have an impact on your clients looking to close escrow on a house in the Natomas area (or any other area) where flood insurance is required by the lender.

The flood program will not be reconsidered for extension until the Senate resumes its session on April 12th.

Here's why it is being suspended:

1) The proposal for extending the flood program is part of a larger package of programs that are under consideration for extension. There is opposition to extending some of the other programs, not the flood program.

2) There are many in Congress who want to make reforms before granting a long-term extension to the flood program.

I'll keep you posted on any further changes.

Cheers,

Chris

Have questions?

Chris can be reached at the following:

Altobell Insurance Agency
1700 Eureka Rd., Ste 120
Roseville, CA 95661
(916) 797-0990 (office)
(916) 214-2126 (cell)

www.farmersagent.com/caltobell

Thank you Chris for the updates!

Jeff

http://www.PlacerAreaHomes.com

Pending Sales UP!

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Fri, 30 Apr 2010 12:11:42 -0700

Latest Data is Out - Sales are UP.

Escrow Rates Shoot Up, PENDINGs Increase, PENDING Home Sales

Hello Neighbors,

Hopefully this graph of existing home sales will come across well. If not, call me for the data.

What I find amazing is the ratio of homes that have gone PENDING (in escrow) vs. the amount that are on the market. It's gone nuts in the last month or two.

PENDINGs were at a record 2,921 in March - that is several hundred higher than any month since 2008.

While homes on the market have increased at a much slower pace (only 3,963 for the same March measure).

Meaning? There are segments of the market that are absolutely now a "Seller's Market". ...which is how we operated between 2002 - 2005.

Here is the data:

Win a house in Rocklin Ca

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Mon, 19 Apr 2010 14:02:48 -0700

Win a 5 Bedroom Home in Rocklin !!

St Jude Dream House Contest, Free House in Rocklin, Free Home in Rocklin

Hello Neighbors,

What a fantastic opportunity and for a wonderful cause. For a $100 entry ticket, your family could win a 5 Bedroom home in Rocklin. Yep. 3,096 square feet. Free. Built by Standard Pacific Homes. The address is already set - 2122 Ranch View Drive in Rocklin's Whitney Ranch. This is made possible through a St. Jude charity program.

Here is the link: http://www.stjude.org/stjude/v/index.jsp?vgnextoid=2360a4095bd67210VgnVCM1000001e0215acRCRD&vgnextchannel=61d5dc15925b0210VgnVCM1000001e0215acRCRD

The drawing is on June 27th. Good luck.

Please do invite Neighborly to the housewarming party!

More about St. Jude and their children's programs: http://www.stjude.org/stjude/v/index.jsp?vgnextoid=f2bfab46cb118010VgnVCM1000000e2015acRCRD

Jeff

http://www.EnglePropertiesOnline.com

Prequalification Explained by John Graham

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Tue, 16 Feb 2010 20:27:02 -0800

Placer County 2009 Recap

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Tue, 16 Feb 2010 20:22:57 -0800

2009 Placer County Single Family Detached Home Market Recap

2009 showed single family detached home prices stabilizing with less than a 1% increase of home prices between the first half and second half with the average sale price moving from $335,398 to $337,672 based on the sale of 2,867 sales in the first half and 3,241 sales in the 2^nd half.

Non-distressed sales comprised 59% of the sales in the 1^st half and 54% of the sales in the 2^nd half, showing a light decrease in value of about 2% between the first half and 2^nd half.

Bank Owned (REO) homes made up just over 29% of the total homes sold for each of the periods with .37% increase in value overall.

Short Sales increased from 12% to 16% of the sales volume between the first half and 2^nd half of the year and registering nearly a 5% drop in value.

Distressed sales (Bank Owned and Short Sales) continue to be a dominate force in the market for Placer County making up 42% of the sales for the 1^st half and 45% of the sales in the second half.

2009 Single Family Detached Home Placer County Home Sales

	1^st half	2^nd Half
Type of Sale	# of Sales	% of Total	# of Sales	% of Total
Active Owner Sales	1913	59%	1623	55%
Bank Owned (REO)	954	29%	874	29%
Short Sale	375	12%	476	16%

The good news is that home prices showed considerable stability, especially for 3 bedroom homes. Overall 39% of the homes sold within 30 days and 54% sold within 60 days (Combined Days on the Market). 54% of the Bank Owned (REO) homes sold within 30 days and 69% sold within 60 days. Only 7% of short sales sold within 30 days, and 17% within 60 days.

Time on the market – Single Family Detached Home Sales

Sale Type

30 Days

60 Days

90 Days

Average*

Overall	39%	15%	11%	70 days
Non-Distressed	42%	17%	12%	64 days
Bank Owned (REO)	54%	15%	9%	38 days
Short Sale	7%	10%	14%	141 days

* Average market time may not include prior listings

Under $250,000 home sale analysis for Placer County

Home prices for the under $250,000 price range rose 1% between the first half of 2009 and the 2^nd half. Average prices rose from $200,055 to $202,185. Interestingly, Short Sale prices showed level prices between the first half and 2^nd half for this price range. Bank Owned (REO) sales decreased as a percentage of sales by 13%. This decrease was made up by an increase of both Non-Distressed sales of 9% and Short Sales of 4%. Distressed sales (Bank Owned & Short Sales) decreased from 78% of the sales in the first half to 69% in the 2^nd half. Distressed sales seem to be moving up in the price range with more traditional non-distressed sales starting to appear in this price range.

Single Family Detached Homes Sales Analysis

Under $250,000

Sale Type	1^st Half 2009	2^nd half 2009
Non-Distressed	22%	31%
Bank Owned (REO)	57%	44%
Short Sale	21%	25%

Single Family Detached Homes Time on the market

Under $250,000

Sale Type	30 Days	60 Days	90 Days	Average*
Overall	43%	14%	11%	62 days
Non-Distressed	55%	16%	10%	45 days
Bank Owned (REO)	54%	15%	10%	38 days
Short Sale	6%	10%	15%	134 days

* Average market time may not include prior listings

An Important Note

This analysis is for homes reported sold through the Metrolist (MLS) system and does not include all homes sold in the county. In addition, home prices are very neighborhood specific. Your neighborhood will most likely have different price characteristics than the overall average. Please consult your Realtor © for detailed analysis of the value of your home. This information is provided to indicate general trends, and all information is deemed reliable but not guaranteed.

Inventory

Last, let's look at the inventory. Currently at the first of February there are 1910 single family detached homes on the market for sale. That's about 7% less than the 2050 range we saw in June and September newsletters. REO bank owned properties currently make up 8% of the market – a slight up-tick from the 6-7% we saw throughout most of 2009. Short sales have increased again to a whopping 53% of the inventory. This is up from 41% in June and 46% in September 2009. Owner Occupied or non-distressed inventory dropped to 38% of the inventory – down from 52% in June and 50% in September.

Placer County Single Family Residence

January 2010 Inventory vs Sales

Type of Sale	Inventory %	Sales %
REO	8	29
Short Sale	53	34
Non-Distressed	38	37

Distressed sales make up 61% of the sales for single family detached homes in Placer County, and 63% of the sales. REO Bank Owned sales are still a driving force in the market while only comprising 8% of the inventory they comprise nearly a third of the sales.

Placer County Single Family Residence

Under $250,000

January 2010 Inventory vs. Sales

Type of Sale	Inventory %	Sales %
REO	10	36
Short Sale	76	24
Non-Distressed	14	38

For the under $250,000 priced homes, distressed sales made up 86% of the inventory and 60% of the sales. REO Bank Owned sales comprised 10% of the inventory and over a third of the sales.

Pre-qualification explained by John Graham of Neighborly Financial

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Thu, 10 Dec 2009 12:30:46 -0800

Energy Savings equal Tax Savings

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Mon, 19 Oct 2009 09:09:20 -0700

Hi Neighbors,

Some of my home buyers have used this energy credit. Often the tax credit can be used along with other rebates offered by PG&E and SMUD.

Here's an article published by RISMEDIA with more details:

As the weather turns chilly in many parts of the country, homeowners are looking at improvements to help them keep their energy costs down-and the government can help with part of the bill.

Upgrade your insulation, windows, doors, roofing, heating and air-conditioning system or water heater, and you could qualify for a federal tax credit for 30% of the purchase price of the product-up to a $1,500 maximum credit. The credits can be claimed on a homeowner's income taxes for 2009 or 2010, whatever year the improvements were purchased. With a credit, the amount comes off any taxes you owe. The credit is nonrefundable, meaning it allows taxpayers to lower their tax liability to zero, but not below zero, according to the Internal Revenue Service.

"It's a good time to be thinking about this," said Ronnie Kweller, spokeswoman for the Alliance to Save Energy. The alliance notes that a more energy-efficient home, along with the lower fuel costs and the mild weather expected for this winter, should make for lower heating bills a blessing for many cash-strapped consumers.

To qualify for the credit, you must place those purchases in service between January 1, 2009 and December 31, 2010. "The $1,500 cap applies to the aggregate amount of credits claimed in both years combined," said Robin Christian, senior tax analyst at the tax and accounting business of Thomson Reuters. "Also, only improvements made to your principal residence qualify-vacation homes are not considered."

Typically, for more costly improvements-including solar water heaters, solar panels, small wind-energy systems and geo-thermal heat pumps-the credit is for 30% of the purchase price, with no cap, according to the Energy Star website. Fuel cells also are covered, at 30% of the cost, up to $500 per 0.5 kilowatt of power capacity. Credits for these improvements are available through 2016, but you must claim them for the tax year in which you made the purchase. And all but the fuel-cell equipment can be used for a vacation home as well. To qualify for the credits, all of the products must be used inside a home. That means equipment used to heat a pool or hot tub doesn't qualify, Christian says.

Also, the federal tax credits don't always cover the cost of installation. The installation costs for heating and cooling systems and some other higher-cost improvements qualify, according to the Energy Star site. But installation of windows, insulation, doors and roofs doesn't. The tax-credit rules are different if you are building a new home. In this instance, you can qualify for the credit for some upgrades, including geo-thermal heat pumps, solar panels, solar water heaters, small wind-energy systems and fuel cells. But you won't get a tax credit for the purchase of windows, doors, insulation, roofs, heating and air-conditioning systems, and nonsolar water heaters, according to the Energy Star site.

Make sure any products you purchase come with a Manufacturer Certification Statement, a signed statement from the manufacturer that says the product qualifies for the tax credit. You will need that and any receipts when you claim the credit on your taxes. Monica Rebella, a certified public accountant in Tustin, Calif., suggests making a copy of receipts since the print can wear off over time.

When looking to make a home more energy efficient, consumers typically first turn to insulation and windows. "If you need insulation, that is the most cost-effective upgrade you can make-even without a tax credit," said Karen Schneider, website manager for Energy Star. "If you have a 50-year-old home and never looked at the insulation, now is the time to do that." Many insulation projects, such as upgrading or adding insulation in an attic, are easy for do-it-yourselfers, said Michael Chenard, director of environmental affairs for home-improvement store Lowe's. "Insulation is one of the easiest things to do that is covered by the tax-credit promotion," he says. Replacing windows also can be done by amateurs, as long as the measurements are accurate, Chenard said.

The federal tax credit doesn't cover the cost of installation, says Art Donnelly, of Legacy Builders & Remodelers Corp., on Long Island, N.Y. Still, the credit makes the cost of a more efficient window competitive with a lower-grade window that doesn't qualify, Donnelly says. And because of the weak economy, it's also easier to pick up the phone and get an appointment for a window installation today, he adds.

Jeff

http://EnglePropertiesOnline.com

REO Buyers have option to select their Escrow and Title companies

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Fri, 16 Oct 2009 17:10:27 -0700

NAR reports that REO Buyers can now select their Escrow and Title companies. Here is the text of the

REO Buyer Can Select Escrow and Title: Effective October 11, 2009, the Buyer's Choice Act prohibits an REO lender selling residential property up to four units from directly or indirectly requiring the buyer to purchase escrow services or title insurance from any particular company. A buyer, however, who has received written notice of the right to make an independent selection, may agree to the REO lender's escrow or title recommendations. An REO lender that violates this law can be held liable for three times the charges the buyer incurred, whereas a violation by the seller's agent may be subject to license disciplinary action. This law expires on January 1, 2015. Assembly Bill 957.

Jeff
http://www.EnglePropertiesOnline.com

Longer escrows... Yup!

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Wed, 14 Oct 2009 16:03:43 -0700

Hi Neighbors,

As mentioned in a blog article from a couple of months ago, be ready for potential extensions in escrows due to changes in financing regulation.

But... don't just take our word for it, take a look at what the California Association of Realtors (CAR) just published.

THANK YOU CAR!

NEW LOAN DISCLOSURE RULES MAY POTENTIALLY AFFECT CLOSE OF ESCROW

Starting July 30, 2009, if the APR on an initial Good Faith Estimate is no longer accurate (within a 0.125% range) at close of escrow, a lender must generally provide a residential borrower with a new disclosure and a three-day right to rescind before consummating the loan. REALTORS® are forewarned that, because of this new three-day waiting period, a lender's failure to timely provide corrected disclosures has the potential of delaying funding of the loan and close of escrow.

This new requirement is part of the Mortgage Disclosure Improvement Act (MDIA) implementing new loan procedures to protect borrowers and foster greater transparency in mortgage lending. For loan applications submitted on or after July 30, 2009, the new MDIA changes to the Truth in Lending Act are generally as follows:

Applicability: The new MDIA rules pertain to federally-related mortgage loans covered under RESPA and secured by a consumer's dwelling. The rules apply to both purchase and refinance loans.

Early Disclosures: A lender must provide a borrower with an initial Good Faith Estimate within three business days of receiving the borrower's written loan application as specified. For this provision, a "business day" is generally defined as a day on which the lender's offices are open for business.

Upfront Fees Restriction: Neither a lender nor any other person may impose an upfront fee on the borrower (except for credit report) until the borrower has received the early disclosures in person or, if mailed, three business days after the early disclosures are mailed. For this rule, a "business day" is defined as all calendar days except Sundays and legal public holidays as specified.

Seven-Day Waiting Period: A lender must wait seven business days after providing the early disclosures before consummating the loan. For purposes of this waiting period, a "business day" is defined as all calendar days except Sundays and federal legal holidays as specified. A borrower may waive the waiting period in writing in case of personal financial emergency, such as an imminent foreclosure sale.

Re-disclosure Requirement: If the final Annual Percentage Rate (APR) at loan consummation varies more than 0.125% (or 1/8 of one percent) from the initial APR on the early disclosures of a regular transaction, the lender must provide the borrower with a corrected disclosure at least three business days before the loan is consummated. For purposes of this waiting period, a "business day" is defined as all calendar days except Sundays and federal legal holidays as specified.

Three-Day Waiting Period: For corrected disclosures, a lender cannot consummate a loan until three business days after the borrower receives the corrected disclosure in person. If the corrected disclosure is mailed, the borrower is deemed to have received it three business days after it is placed in the mail. A borrower may waive this waiting period in writing in case of a bona fide personal financial emergency, such as an imminent foreclosure sale.

Source: The new MDIA rules and regulations are set forth at 74 Federal Register 23,289 (May 19, 2009) (to be codified at 12 CFR 226) available at http://www.federalreserve.gov/reportforms/formsreview/RegZ_20090519_ffr.pdf.

Again, our sincere thanks to CAR for this content.

Home ownership: A good investment

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Tue, 13 Oct 2009 14:06:35 -0700

Hi Neighbors,

I've written about this before, but I think it is especially true for the Sacramento region. Now is the time to buy. Historically if you look at home values increasing over time, home prices have kept pace with inflation over the long run. With our current adjustment, the Sacramento - Placer - El Dorado counties are now actually below the long range trend. That indicates to me that not only will this region be among the first to recover, but will some modest appreciation. Of course the big caveat is the overall economy. You have to have jobs in order to have a decent economy.

Another thing to keep in mind from an investment point of view, your home values increase based on the purchase price of the home. So if your home is purchased for $100,000 and it increases 2% your HOME is now worth $102,000. But let's say you bought the home with 30% down. You have actually increased your $30,000 investment by $2,000. That's a 6 2/3% increase in your home equity. If your put down 3.5% FHA your increase based on investment is even greater.

The important thing to remember is that home ownership should make sense for you, and when you factor in all of the benefits and costs involved typically your ahead of the game when you buy a home. Some of those benefits may be intangible - like being able to have your children go to the schools you want them to, being able to have a home that fits your lifestyle, etc.

Here's a great quip from the NAR bulletin on this very topic:

The American dream of homeownership is still a good bet, financial advisors say firmly.

Despite the downturn in the last couple of years, homes have still appreciated an average of 4 percent a year since World War II. Plus, it's a leveraged investment; a 10 percent down payment yields a 1,000 percent return if the price of the home doubles.

There are also valuable intangibles. Owning a home provides independence, security, community, and a roof over the owner's head. No one can say that about investing in stock.

Source: Associated Press, Dave Carpenter (10/12/2009)

Jeff
http://www.EnglePropertiesOnline.com

Home Buyer Calculator available

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Mon, 12 Oct 2009 15:02:25 -0700

Hi Neighbors,

I'd like to share two links to home buying calculators reported from Business Week via the National Association of Realtors.

There are a number of free tools to help potential home buyers decide how much home they can afford to buy.

One of the best calculators is offered by the National Association of REALTORS®. It is simple to use and includes all the important criteria, says BusinessWeek columnist Marc Roth, founder and president of Home Warranty of America. If that doesn't work, Roth also recommends the real estate-related calculators offered by Michael Bluejay.

Source: BusinessWeek.com, Marc Roth (10/09/2009)

Happy Columbus Day

Jeff
http://www.englepropertiesonline.com

Homes prices expected to rise in 2010 (California)

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Wed, 07 Oct 2009 20:37:20 -0700

Hi Neighbors,

Leslie Appleton-Young, California Association of Realtor's Chief Economist released the 2010 California Real Estate Market Forecast. In that:

The median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year, according to C.A.R.'s "2010 California Housing Market Forecast," presented today at CALIFORNIA REALTOR® EXPO 2009 in San Jose. Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009

The report has some regional data in it. For example the peak of the housing market for the Sacramento Region was August 2005 where the median priced home was valued at $394,450. August shows that median price to be $192,050 or down 51%.

NOTE: Real estate is a neighborhood market. For example, the report shows that Concord's median price was down 16% Year-To-Year while neighboring Walnut Creek saw 13% decline. Placer County has a whole for example has not been hit as hard as Sacramento County as a whole. But when you look at it neighborhood by neighborhood great variations exist.

Another interesting note is that for California almost 20% of the sales were All Cash, up from 8% in 1998. My first time home buyers sure saw this action in the under $250,000 homes! Competition has been fierce.

Builder incentives drying up

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Wed, 07 Oct 2009 19:34:22 -0700

Hi Neighbors. Last weekend I was out with one of my buyers looking at new homes. One thing we noticed was a lack of 'incentives'. This is in line with this article published in thw Wall Street Journal:

Home builders are cutting back on the freebies they've been tacking on new homes for the last couple of years to woo buyers.

The reason is simple: Demand is almost back in sync with supply. According to Jeffrey Laverty, analyst with research firm Oscar Gruss & Son, new-home inventory has declined from 12.4 months in January to 7.3 in August, close to the six-month mark considered standard.

While eliminating incentives like free cars and free pools, some builders are continuing to offer to pay points on mortgages and discounts on upgrades-"Incentives that make sense," says Laura VanVelthoven, Hovnanian's corporate vice president of marketing and sales.

Source: The Wall Street Journal, Dawn Wotapka (10/05/2009)

There are still incentives, just not as much as there was a few months ago. As one salesman told me about the Pulte homes selling in Roseville is that they have kept their prices in line with demand and have not needed extra incentives. Good point! Check out the bottom line of what features you are getting and the total price for the product when you do your comparison shopping (often times not that easy with new homes).

Jeff
Neighborly Realty
http://www.EnglePropertiesOnline.com

Neighborly Financial Joins Calaveras County Search & Rescue Efforts

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Wed, 07 Oct 2009 19:28:18 -0700

Hi Neighbors,

John Graham of Neighborly Financial has been gone the past several days helping a search and rescue effort in a nearby county.

From John:

I went to help search for the missing deer hunter in Calaveras County, last Wednesday. We spent all day looking for the subject. We were able to track his footsteps from the truck for about 7 miles, step by step, until darkness forced us to retreat for the night. Attached is a photo of the footprint we were following during the Calaveras County search. As of Friday, his location is still unknown. I have no details on the outcome, other than he is alive.

I am a member of the Placer County Sherriff's Search and Rescue team. We are recognized as one of the largest and better trained teams in the state, and therefore we get called out to assist with searches in many other counties. We assist with both backcountry and urban searches, for missing hikers, hunters, motorcycle riders, children and Alzheimer's patients. We also assist the Sherriff with evidence searches for criminal cases. We get called out about once or twice a month. Volunteers spend many hours training and in the field on searches. We all serve as ground searchers, willing to hike in any conditions and any terrain, but also we are divided into teams with specialties in 4WD, radio communications, motorcycles, mountain rescue, horses, and canine search, to name a few.

NICE work John. Another example of supporting our local community. We love doing it, just wish it wasn't a tough story.

Our thoughts go out to this family as they continue the search

Jeff
Neighborly Realty
http://www.EnglePropertiesOnline.com

Add a bathroom and increase your home's value

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Wed, 07 Oct 2009 19:23:07 -0700

Hi Neighbors. The NAR (National Association of Realtor's) posted this excerpt of an article originally published in the Chicago Tribune. Neat tidbit to share:

More than 80 percent of new single-family homes have at least two bathrooms, which occupy an average of 300 square feet of floor space, or 12 percent of the total area, according to a study by the National Association of Home Builders.

The home builder's study reports a major return on value for extra bathrooms: "When the number of bathrooms is approximately equal to the number of bedrooms, an additional half-bath adds about 10 percent to the home's value, and one additional bath adds about 19 percent."

A mid-range bathroom remodel, which costs $10,500 on average nationwide, repays a home buyer at least 100 percent of the outlay when the property is sold, the home buyer study concludes.

Source: Chicago Tribune, Mike McClintock (09/21/2009)

Now is a great time to do some of those home improvements you have been thinking about.

Jeff
Neighborly Realty
http://www.EnglePropertiesOnline.com

Shadow Inventory of homes?

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Thu, 01 Oct 2009 15:55:57 -0700

Hello Neighbors,

I attended this month's Finance Forum (meeting) at the Sacramento Association of Realtors branch office.

Interesting stuff.

A term we've been hearing more and more of recently was discussed..... "Shadow Inventory".

What is Shadow Inventory?

Homes that are in some sort of Notice of Default (NOD) or foreclosure proceedings... but haven't yet been taken back by the banks. Meaning? Homes that are vacant - or will be soon - that aren't yet being reported on the bank's financial books.

How much?

I heard an estimate this morning that shocked me: 35,000 - 40,000 homes in the "Greater Sacramento area". Now that area probably includes parts of Sacramento County, Placer County, and even El Dorado County. If those numbers are correct, it is a HUGE amount of homes that will some day come to market. If. If. If.

Impacts?

Obviously, if such numbers exist, that has huge macro-economic implications. Prices will drop. Banks will be in financial trouble. Buyers will benefit - if they can get loans. Sellers will have to hold tight for much longer, or compete with insanely low price points.

HOWEVER, there is a problem - accurate data.

No one has actually published the data we need to verify such speculation. Search MLS and you will find that there isn't much bank owned inventory now. It's dried up. You can search county tax records, but those tools aren't very user friendly. It would take days and days to compile such data. One industry professional says the inventory is there... another say the Obama plans have curbed the problem.

So?

We continue to listen. Speculation runs from all ends of the spectrum. If we had the data, we could guide you in the right direction. Until then, we (all of us in this industry) continue to be reactive instead of proactive.

I'm looking forward to changing that behavior.

Jeff
Neighborly Realty
http://www.EnglePropertiesOnline.com

Making Sense of the Market (Placer County/Sacramento Region)

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Wed, 30 Sep 2009 17:07:09 -0700

Hi Neighbors,

Making Sense of the Market Today

Current Home Inventory (MLS Single Family Detatched homes only)

Placer County currently has 2068 homes on the market at the end of September. This is 8 more than last month, and has been a fairly consistent running number throughout 2009.

Of the 2068 homes:

134 or 6% are Bank Owned (REO) homes. This number has been steadily declining over the past 9 months.

965 or 47% are Short Sales

971 or 47% are Organic, non-distressed owner sales

REO homes comprise a smaller percentage of Placer County Inventory

Foreclosed homes are decreasing in number as well as percentage during 2009, however the number of Short Sales have increased keeping distressed homes for sale at 50% or more of the homes on the market.

September 2009 Home Sales

342 homes were sold in Placer County during the month of September. 114 were Bank Owned (REO) homes accounting for 34% of all sales.

80 homes sold were short sales accounting for 24% of all sales.

138 homes sold were normal non-distressed 'active' or 'organic' sales.

REO (Bank Owned) homes are a driving force in our market. Again as we've consistently seen this year, REO sales are a driving force in the market. Even though they only account for 6-10% of the inventory they account for a third to half of the sales.

Sales Trends

The dollar value of sales have been fairly consistent throughout 2009.

Average and Median home price sales for Placer County

Month	Average	Median
Jan	311055	285000
Feb	336324	300000
Mar	320151	290000
Apr	342600	295000
May	348024	300000
Jun	345403	288000
Jul	345708	299500
Aug	336949	305000
Sep	327072	290000

9 Months Overall	336083	295000

Home Inventory and Sales for Placer County

Over the past 9 months inventory levels of single family homes and prices have remained fairly stable. The biggest change has been the decreasing volume of REO Bank Owned homes and the increase of Short Sales (both from an inventory perspective as well as volume of sales). Short Sale homes as well as non-distressed homes are selling at a price point set by the REO sales. Looking forward no major changes are forseen in the market other than the expiration of the First Time Home Buyer tax credit.

Hope this has been useful

Jeff
http://www.EnglePropertiesOnline.com

What to expect for home appreciation

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Tue, 29 Sep 2009 13:25:05 -0700

Hi Neighbors,

When you are purchasing or remodeling a home one of the things to consider is appreciation. What will the value of my home be in 5 or 10 years? In the past couple of decades, we've seen some incredible swings. Overall during the past 7 or more decades home prices have kept pace with inflation and most people buying a home did so because of life style reasons rather than as an investment. The Los Angeles Times recently publlished an artlce that sums up what some economists are predicting over the next few decades.

Housing Economists Predict Slow Growth
The fundamentals that drove the increase in housing values for the last century - increasing population, incomes, and household wealth - may not follow in the United States in the future. Some housing experts speculate this will change the economics of homeownership.

Over the next few decades, "We can expect a gradual rise [in home values], but not the bonanza we've become accustomed to between the end of World War II and 2006, and especially the last 20 years," says Robert Reich, public policy professor at UC Berkeley and U.S. Labor secretary in the Clinton administration.

The reasons for the change include the absence of pent-up demand that followed the Great Depression and World War II and the aging of the baby boomers who carried that housing demand forward, says housing consultant Thomas Lawler.

Source: Los Angeles Times, Peter Y. Hong (09/27/2009)

This is an interesting article and is of course only one prediction. Other things to consider is that left and right coast prices often rise more than the interior. Also, some area that have been hit the hardest such as Sacramento and some areas around Los Angeles may (in my estimation) recover a bit more than other areas because right now they are clearly below the historic appreciation points expected without the 'bubble'. In addition, there is continued population increase in California that will put more pressure on home prices.

The bottom line is that if your a home owner or planning to be one look at a home as a long term investment and include the tax advantages (consult your tax accountant) of home ownership. Investors also need to justify purchase of a property on the basis of a conservative market and not expect to make a windfall from appreciation.

Thanks for reading,

Jeff
Neighborly Realty
HTTP://www.EnglePropertiesOnline.com

Technorati

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Mon, 28 Sep 2009 13:59:42 -0700

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Technorati is a blog catalog that makes it easy to search and review blogs that interest you.

Low income assistance funding may be coming

Jeff Engle PlacerAreaHomes.com (Neighborly Realty) — Mon, 28 Sep 2009 13:42:14 -0700

Hi Neighbors,

Great news today. Many of our communities have assistance programs for low income household to provide them with various assistance to get a home, however many of these are not funded. A good example is the city of Roseville's assistance program where there is a minimum of a 1 year wait and priority is given to city employees (great program if you are a city employee). The city of Rocklin and Lincoln have similar programs, but lack funding. The Obama administration may help fund more of these programs as reported below:

The U.S. Treasury is contemplating a new program that would provide as much as $15 billion to purchase tax-exempt mortgage bonds issued by states over the next three years.

The program would be beneficial for low-income home buyers who have long depended on state programs for low-interest mortgages. States have been unable to offer these mortgages in the last year because they haven't been able to sell mortgage bonds. This program would solve that, according to the National Council of State Housing Agencies.

Details are expected to be announced on Sept. 30.

Source: Bloomberg, Dawn Kopecki (09/28/2009)

Give me a call if you would like more details on local buyer assistance programs.

Jeff
Neighborly Realty
http://www.EnglePropertiesOnline.com