'Brookside Escondido' Category
Homeowner Confidence Rises Nationally, But Western Homeowners Remain Pessimistic
July 15th, 2010 Categories: Brookside Escondido, Rancho Bernardo, Real Estate News
RISMEDIA, July 5, 2010—As some parts of the U.S. housing market work their way out of the housing recession, while the majority of markets continue to decline, homeowners across the country had mixed opinions of the state of their own homes’ values, according to the Zillow Q1 Homeowner Confidence Survey. Nationally, homeowners were overconfident, with half (50%) believing their own home’s value declined in the past year. In reality, 65% of U.S. homes declined in value, according to Zillow’s Q1 Real Estate Market Reports.
Meanwhile, 7% of homeowners, which translates to 5.3 million homes, said they would be “very likely” to put their home on the market in the next 12 months if they see signs of the housing market improving. By comparison, 5.2 million existing homes were sold during 2009. An additional 8% said they would be “likely” to put their home on the market, and another 14% said they would be “somewhat likely.” These homeowners represent “sidelined sellers,” a component of shadow inventory that if materialized, could significantly delay timing of a market recovery.
The most pessimistic homeowners reside in the West, even as home values in many California and Colorado metros have stabilized over the past year, according to the Zillow Q1 Real Estate Market Reports. Eighteen percent of Western homeowners believe that their home gained value over the past year when in reality 31% of Western homes gained value. That resulted in a Misperception Index of -12 (a Misperception Index of zero would indicate that homeowner perception is in line with reality, and a negative Misperception Index indicates that homeowners are overly cynical about their own homes’ values).
On the other end of the spectrum were Southern homeowners, who were overly optimistic, even as many Southern markets continue to see significant decreases in home values. Thirty-four percent of Southern homeowners said that their home gained value over the past year when in reality 27% of homes gained value. That resulted in a Misperception Index of 14.
Homeowners in the Northeast and Midwest recorded Misperception Indexes of -2 and 4, respectively.
“It is clear that there is a lag between market realities and public perceptions of home values. For quite a while after the market peak, Western homeowners continued to believe their own homes’ values were doing better than they were in reality,” said Zillow Chief Economist Dr. Stan Humphries. “Conversely, after years of press coverage about declining home values, homeowner perceptions are now in line with market conditions from early last year, although the Western market has improved since then.
“We see the opposite phenomena in the South where home values in most markets – with the exception of Florida – took some time to begin falling. Many markets there have recently joined the housing recession in earnest, with five of the nine Southern states tracked by Zillow hitting their home value peak after 2007, but homeowners there are likely to believe the downturn has not affected them. This could also be a result of the fact that most attention has been on the hardest-hit areas of California, Florida, Nevada, Arizona and Michigan, and homeowners outside of these markets may have less information about what has happened in their local markets.
“However, when homeowners across the country do start to believe that their home’s value has stopped declining, we can expect to see a lot of new inventory entering the market via sidelined sellers. This added inventory, combined with current elevated inventory levels and continued high rates of foreclosure in many areas, will likely serve to keep home values treading near the bottom for several years. Inventory must come down for home values to go up.”
Homeowner Perception of Future Home Values
Looking forward, homeowners are fairly positive about their own home’s value over the next six months, but like Misperception Index, the degree of optimism varies wildly among regions. In the Northeast, more than half (51%) of homeowners believe their home’s value will increase over the next six months while in the Midwest less than one-third (29%) of homeowners believe their home’s value will increase. Nationally, 39% of homeowners believe their own home’s value will increase during the next six months.
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Brookside Escondido – Lower Rates Mean Increased Purchasing Power
May 21st, 2010 Categories: Brookside Escondido, Escondido, Mortgage News
Great news going into the weekend. We have seen a nice drop in rates over the last week, about 0.50% across the board. This drop equates to an increase in buying power and an increase in buying options.
Increased buying power, four examples with a 30 year fixed:
- A payment of $1,565 at 5.25% equated to a loan amount of $283,400. Same payment but at 4.75% equates to a loan amount of $300,000. Loan amount increase of $16,600.
- A payment of $2,175 at 5.25% equated to a loan amount of $393,875. Same payment but at 4.75% equates to a loan amount of $417,000. Loan amount increase of $23,125.
- A payment of $3,440 at 5.375% equated to a loan amount of $614,300. Same payment but at 4.875% equates to a loan amount of $650,000. Loan amount increase of $35,700.
- A payment of $5,577 at 6.00% equated to a loan amount of $947,000. Same payment but at 5.50% equates to a loan amount of $1mil. Loan amount increase of $53,000.
Increased buying options:
Let’s say the buyer was already going to borrow $417,000 or $650,000. The reduction in interest rates would lower their payments by $127 at $417,000 and almost $200 at $650,000. This loan payment reduction might now allow buyers to look at communities with amenities such as a community pool, tot lot/playground, and common ground landscaping; amenities that many families are looking for but were unable to afford due to the $50 to $200 additional HOA fee. The lower mortgage payment now leaves room to absorb that HOA fee. This gives the buyer more properties from which to choose.
I wrote a very similar email in July of 2008. In that email, the rate decrease for conforming loans was from 6.25% to 5.875%. We are still a full percentage point lower! Please have your buyers contact me as soon as possible to see how much more they can afford at today’s rates.
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When Is It Time To Short Sale My Home? Top Three Questions Answered
May 7th, 2010 Categories: Bel Etage, Brookside Escondido, Foreclosures & Short Sales, Real Estate News, Salviati, Santa Fe Valley, Savenna, bank owned
How would I initiate the short sale process?
A. To initiate the short sale process, contact your lender(s). Typically, the department to contact is your lender’s Loss Mitigation Department. Either you or your authorized representative needs to ask the lender for a short sale package or kit. Most lenders will make their particular processing forms and procedures pertaining to their required short sale documentation available to homeowners. 
Unlike what many people believe, some lenders will also allow you to apply and get approval for a short sale even when the homeowner has never been late or missed a mortgage payment. Please note that lenders will typically only consider a short sale after the borrower has: missed two mortgage payments; has no means to continue paying the mortgage; provided all the necessary financial and hardship documentation to the lender; agrees that they will not derive any proceeds from the sale.
Q. Should I contact a real estate agent?
A. Absolutely. But before selecting a real estate agent to represent you, determine whether or not they are knowledgeable about preforeclosure, foreclosure and bankruptcy options. Your agent should not be giving you advice regarding your personal financial situation. Any real estate agent who asserts that he or she is prepared to assist you as a homeowner in a potential short sale outcome must also be willing to follow the specific administrative procedures of the particular lender involved. In addition, the real estate agent should also acknowledge that they essentially confine their guidance to determining the property’s value and how to best market the property, versus advising the homeowner on the best preforeclosure/foreclosure resolution.
Q. Should I contact an attorney?
A. Absolutely. We recommend that you contact an attorney with the understanding that the attorney needs to not only be well versed in real estate law and foreclosure law in your particular state or province, but also needs to be a proven negotiator on behalf of their clients. Not all short sales or other pre-foreclosure or foreclosure options are structured alike. Therefore, the role of a highly competent attorney in such matters-one who can skillfully negotiate on your behalf-can make a world of difference.
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