California home prices soar to new highs

June 18, 2013 by

California home prices soar to new highs

By Christina Mlynski, HousingWire.com   • June 17, 2013

California home prices increased by the most in 33 years as a result of strong sales growth in higher-priced markets and continued housing supply shortage, pushing up median home prices in May, the California Association of Realtors said.

Closed escrow sales of existing, single-family detached homes totaled a seasonally adjusted annualized rate of 431,370 units, the report noted.

Meanwhile, sales were up 1.9% in May, up from a revised 423,420 units in April, but down 3.6% from a revised 447,530 last year.

The statewide figures represents what would be the total number of homes sold during 2013 if sales maintained the May pace throughout the year and is adjusted to account for seasonal factors that influence home sales, CAR explained.

“It’s encouraging to see median home prices across most parts of the state continuing to recover. The Bay Area, in particular, has been experiencing strong price appreciation, thanks to the region’s robust economic growth, extremely low housing inventory, and an increasing demand from international buyers,” said CAR President Don Faught.

He added, “San Francisco County’s median home price, for example, increased 28% from last May and has just surpassed its previous record high reached in May 2007.”

The median price of an existing, single-family detached home rose to $417,350 in May, up 3.6% from $402,706 in April and also rose 31.9% from the previous year, marking 15 straight months of annual price increases, CAR noted.

The year-over-year increase was the highest since at least 1980, when CAR began tracking the data.

“While home prices are increasing at levels above those observed in 2006-2007, the fundamentals of the housing market are much more solid than what we experienced a few years ago,” said CAR chief economist Leslie Appleton-Young.

She added, “More home buyers are putting down larger down payments, and many of them are opting for more stable loan products.”

However, not all cities within California are showing such positive housing recovery news.

For instance, Mortgage Resolution Partners recently entered into contracts with additional municipalities to form the use of eminent domain programs, including Richmond, Calif.

The use of these programs is to seize or restructure underwater residential mortgages, many of which are bundled into private-backed securities.

The available supply of home for sales dipped in May, and was down markedly from a year ago.

The May Unsold Inventory Index for existing, single-family detached homes was 2.6 months, down from 2.8 months in April and down from a revised 3.6 months from the previous year.

Meanwhile, homes sold quicker in May, with the median number of days it took to sell a single-family home decreasing to 27.1 days in May, down from 27.9 days in April and also dropping from a revised 45.7 days last year, the report noted.

Mortgage rates ticked up in May, with the 30-year fixed-mortgage interest rate averaging 3.54%, up from 3.45% in April, but down from 3.8% a year earlier, according to Freddie Mac.

“Historically low mortgage rates have reduced monthly mortgage payments substantially, making owning a house more affordable, even with rising home prices,” Appleton-Young concluded.

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Filed Under: California real estate, Coto de Caza real estate, Home Values, Mortgage Rates, Orange County California real estate, Real Estate Trends

RealtyTrac Foreclosure Report Shows 28% Decrease From May 2012

June 18, 2013 by Leave a Comment

RealtyTrac Foreclosure Report Shows 28 Percent Decline From May 2012

Foreclosure actions increased by 2.0 percent in May from April’s 75 month low point for foreclosure activity according to RealtyTrac’s U.S. Foreclosure Market Report released June 11. However, the good news is that May 2013 foreclosure filings were still 28 percent below May 2012 filings.

RealtyTrac reports that approximately one in 885 homes were in some stage of foreclosure in May. This does not mean that 1 in 885 homes was lost to foreclosure, but it does indicate that documents related to some phase of foreclosure (Notice of Default, Notice of Trustee Sale, and Bank Reposession) were filed.

Actual lender repossessions (REO) increased by 11 percent in May, but were down by 29 percent as compared to May 2012. 33 states reported increases in REOs with North Carolina, Oregon and Wisconsin having the highest numbers of REO properties added.

Judicial Foreclosure States Lagging In Clearing Foreclosure Inventory

Foreclosure starts were up by 4 percent in May, but were 33 percent lower than for May of 2012. States using judicial foreclosure proceedings were 5 of the top 6 states for foreclosure filings. The state of Nevada, which uses non-judicial foreclosure proceedings, was second after Florida and ahead of Ohio, South Carolina and Illinois.

In general, judicial foreclosure proceedings take longer to complete than non-judicial foreclosures. This results in homes being unavailable for sale for longer periods of time. Lenders are required to complete the foreclosure process and in some cases, they must await expiration of a redemption period before a foreclosed home can be repaired and sold.

In states using non-judicial foreclosure proceedings, the time between the initial foreclosure filing and the foreclosure sale can be as little as three to four months. Quickly turning over foreclosed homes is helpful for improving regional housing markets and making more homes available for purchase. Economists have recently cited low inventories of homes as holding back housing markets in some areas.

California is NOT a judicial foreclosure state, and bank owned properties are a very small percentage of our present inventory.

A lot has been said – by doom and gloom bloggers, and their followers – over the past few years, about the so called “shadow inventory” of foreclosure houses, just waiting for prices to come up before being unleashed upon the public – thereby pushing prices back downward.  If such a myth was anywhere close to being accurate, this past 12 months of lower housing inventory WOULD have been the ideal time for lenders to have taken advantage of.  Instead, the reduction of the number of the REO’s ( Bank owned properties.) coming onto the local California real estate market has actually worsened the problem – helping to make prices rise, in almost unprecedented fashion.

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Filed Under: California real estate, Coto de Caza real estate, Distressed properties, Foreclosures, Home Values, Housing Analysis, Orange County California real estate, REOs ( Bank owned properties.) Tagged With: , ,

Orange County a Bright Spot in Economic Outlook, Economists Say

June 14, 2013 by

Orange County a Bright Spot in Economic Outlook, Economists Say

Cuts in federal spending and insurance company losses won’t hold back a surging Orange County economy largely thanks to a robust local housing market, Chapman economists forecast.

Posted by Paige Austin, California Patch (Editor), 
OC-postcard

 

A revived housing market will propel a continuing economic recovery for the state and Orange County in 2014, with only the federal government proving a drag on the revival, Chapman University economists said this week.

“Our economy — California and Southern California — has been underperforming the U.S. growth since 2007, since the recession started,” said Esmael Adibi, director of the university’s Anderson Center for Economic Research. “But last year was the first year that job creation surpassed job creation at the U.S. level, and this year and next that trend is going to continue mainly because our biggest drag was in the housing market and now it’s coming back.”

The housing market’s resurgence also boosts other markets such as construction and retail with homes being built and residents filling them with furniture, Adibi said.

“The only sector to be under pressure is the federal government with sequestration,” Adibi said, referring to the automatic spending cuts approved by federal lawmakers.

“In the short term that’s going to be negative for the economy,” Adibi said. “But over the long term it is healthier for our government to have a reduction in the deficit.”

The “only sector that’s going to show job losses is the federal government, which some people say is a blessing because they’ve grown too much,” Adibi added.

Federal money will fund the state-managed Affordable Care Act, which will expand insurance coverage, but that too will offer mixed blessings to the economy, Adibi said.

“Like anything else you have positives and negatives,” Adibi said. “Some people will gain and some will lose. Hospitals will benefit from the Affordable Care Act, which will really kick in 2014, but insurance companies in some areas will suffer a little bit.”

Physicians should see an increased demand, but small business owners will have to pay more to cover employees, Adibi said.

“Some (small business owners) will be able to pass it on to consumers, but some will have to eat it,” Adibi said.

Orange County’s economy will also benefit from an improving tourist industry, Adibi said.

“Obviously we see strength all over the state, but Orange County is going to benefit proportionally better than the state as a whole … with other sectors outperforming the state such as healthcare, leisure and hospitality, thanks to destinations like Disneyland and Knott’s Berry Farm,” Adibi said.

Chapman’s economists say housing affordability is at an all-time high nationally.

Job growth was above average at 2.3 percent last year, the economists say.

Construction spending is expected to increase by about 16 percent in the coming fiscal year, the economists say.

The Chapman forecast projects a gain of 32,000 jobs in Orange County, or a growth rate of 2.3 percent, and 307,000 jobs in the state, or 2.1 percent higher, this year. Construction jobs should increase at 4.3 percent in Orange County, the experts predict.

The median family income in the county is expected to rise from $83,000 last year to $88,000 in 2014.

Low mortgages rates and home prices coupled with rising income will fuel higher demand for housing, the experts predict. A corresponding increase in housing prices will follow.

Home prices are forecast to rise by 8.8 percent in Orange County, compared with 7.8 percent statewide.

- City News Service 

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Filed Under: California real estate, Coto de Caza real estate, Housing Analysis, Orange County California real estate

Housing Recovery Shows Up In Job Gains

May 3, 2013 by

Housing Recovery Shows Up In Job Gains

—By CNBC’s Diana Olick, Friday, 3 May 2013

house under construction

Stronger housing means more jobs, not just construction jobs, all jobs. When consumers feel more confident about the value of their homes, they spend more money. Their homes, after all, are likely their single largest investment.

They may not take the money out of their homes, but they just feel more financially comfortable, and that comfort sends them out spending. They also spend more on home improvement.

“People are much more willing to part with their paychecks and spend when they know they are restoring the wealth in their house,” said Diane Swonk of Mesirow Financial.

Residential construction jobs increased by just over 6,000 in April from the previous month, according to the Bureau of Labor Statistics, and residential specialty trade contracting jobs (plumbers, electricians, roofers, etc.) grew by over 7,000.

Those workers need more trucks, which has been a boon to companies like Ford and General Motors, which saw sales of pick-ups jump 24 percent and 23 percent respectively.

Retailers are also seeing the effects of housing growth. Homeowners spend an average $7,400 furnishing a newly built home, according to the National Association of Home Builders.

“Spending at furniture and appliance stores is finally coming back, which has meant more hires there since the start of the year,” added Swonk.

Home prices were up just over 10 percent nationally in February, according to CoreLogic, which continues to bring thousands of homeowners out from underwater on their mortgages. That has allowed more borrowers to refinance to lower monthly payments, which in turn gives them more spending money. It also gives them more confidence that they will be able to afford more in the coming year.

“Consumers’ views regarding the housing market have been increasingly more positive,” noted Fannie Mae’s chief economist Doug Duncan. “Our April National Housing Survey, to be released next Tuesday, is expected to show that the housing market is gradually approaching its sweet spot, as the share of consumers who believe that it is a good time to buy remains high while the share of those who think it is a good time to sell continues its upward trend witnessed over the past year.”

The one hitch is that stronger jobs could mean an end to cheap credit. While the Federal Reserve said this week that it would continue to purchase agency mortgage-backed securities, which has kept interest rates low, it would only do so, “until the outlook for the labor market has improved substantially in a context of price stability.”

Interest rates are hovering near record lows, so an increase in those rates would have to be enormous to have a real impact, and that is highly unlikely. Mortgage markets today are global, so it will likely take more than a strong U.S. jobs report to send rates dramatically higher.

Housing’s own momentum is also gaining force.

“The longer mortgage rates stay low, the less harm to housing a rise in rates will cause,” said Dan Green of Wisconsin-based Waterstone Mortgage. “Like Newton said, an object in motion tends to stay in motion, and a four-percent, 30-year fixed hardly qualifies as an outside force.”

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Filed Under: California real estate, Coto de Caza real estate, Existing Home Sales, Home buying, Home Selling, Jobs, Mortgage Rates, Orange County California real estate

Phantom Foreclosures Stop Some Boomerang Buyers

May 3, 2013 by

Phantom Foreclosures Stop Some Boomerang Buyers

APRIL 30TH, 2013 BY  of Broadview Mortgage
Phantom Foreclosure
Boomerang buyers are those families that fell victim to bankruptcy, foreclosure or short sale in the past and are trying to buy again after the hardship.

Most boomerang buyers find solace in the fact that recovery is at most only a few years away.  At least that’s the way it’s supposed to be.

Zombie Foreclosures

We recently wrote about Zombie Foreclosures, which is a recent phenomenon being experienced by folks that surrender their home, most commonly after being included in bankruptcy.

Years later, when these buyers are ready to boomerang back into the market, they discover that the bank never foreclosed, and that their name is still on title to a home they have not lived in for years.

Phantom Foreclosures

As a direct lender with a specific expertise in boomerang buyers, we’ve actually successfully navigated many buyers through an epidemic of credit reporting issues resulting from inaccurately reported short sales or deed in lieu of foreclosure reporting as a foreclosure.

Using conventional financing, with 20% down and a minimum 680 credit score, boomerang buyers can buy in a little as 2 years after a short sale or deed in lieu.  Here is an email I received just yesterday that is unfortunately typical of  these faux-closures.

As you know we cant get a refi automatic approval from the DU system due to the MOP codes of 9

Hi Scott – you seem very knowledgable with the Short Sale MOP code nightmare issue.  We had an investment condo close as a short sale in July 2010.  We have a MOP code of 9 on our credit report both the 1st with WF and the 2nd HELOC with another division on WF.   no other derogatory credit – none.

Other than that – we are trying to refi for a better rate in our current primary residence in NorCal.  We owe $382k and the home is valued conservatively  at $575k with 2 recent sales in our neighborhood of $600k for same sq ft as us.  Our credit score is somewhere around 690-715 

As you know we cant get a refi automatic approval from the DU system due to the MOP codes of 9.  

I’ve written to both WF and WF HELOC asking them to remove the 9 from our MOP payment pattern but I’m not holding my breath.  DO we have ANY options?  I would appreciate any assistance.  

Are there any investors out there willing to buy a solid refi mortgage that didn’t get an automatic DU approval? 

Interestingly enough, I was already planning to write about these phantom foreclosures and ways to overcome these issues when this email came in.  I couldn’t have described a typical phantom foreclosure any better than the story being told by this real live buyer.

I look forward to speaking to this family because we can absolutely help, and have helped many boomerang buyers in this exact situation.  This isn’t a qualifying problem, it’s a documentation and lender experience problem.

How Phantoms Foreclosures Appear

What this buyer is referring to is a status code reported to the credit reporting bureaus by the lender that describes the payment status of the account.  An 8 or 9 that is reported by the lender after a short sale or foreclosure occurs is the exact problem we are talking about.  An 8 represents a charge-off, 9 a foreclosure.

After a short sale or deed in lieu of foreclosure, the account should report as “paid as agreed for less than amount owed”.  Unfortunately, simply having this description on the account is not enough.

If past short sale or deed in lieu is reporting the correct description, but an incorrect status code of 8 or 9, you will most certainly encounter the hurdles we’re talking about.

3 ways to fight a Phantom Foreclosure

For all 3 of these methods for correcting erroneous credit reporting you will need your short sale or deed in lieu agreements from the lender that prove that an agreement was reached.  Depending on how cooperative the parties are, you should be able to get this issue resolved, hopefully without too much trouble.

1.  Contact the lender from the short sale – provide them with copies of the short sale or deed in lieu agreement and ask them to correct the reporting status to the bureaus to reflect the actual number of days the loan was delinquent at the time of the agreement, confirm the reporting of the account paid as agreed, settled for less than amount owed.

2.  Contact the credit bureaus.  First, you want to check to see if all 3 credit bureaus are reporting the debt the same.  It is not uncommon for only 1 or 2 of the credit bureaus to report the short sale incorrectly.  If one or more of the bureaus is reporting the correctly, that’s a good start to making your case with the others.

3.  Talk to your lender.  Some lenders, like Broadview Mortgage, have the ability to manually underwrite conventional loans.  With proper documentation, we can make a case to the credit bureaus on your behalf and even underwrite the file without an automated DU approval.

Not All DU Results Are Created Equal

Recently, we have also encountered the interesting experience of receiving a full DU Approve/Eligible in cases where other lenders were unable to get the same results, without any further credit correction being done.

Lenders use credit services to pull credit profiles from all three bureaus, merge all three reports into one report, and deliver this report in a format that can be uploaded to Fannie Mae’s Desktop Underwriter, DU.

In our experience, some of these lenders, or more specifically their credit reporting services, are not formatting this credit data properly which is triggering a Refer/Ineligible in DU.  When run through our credit reporting services we are able to get an Approve/Eligible.

Conclusion

If you are currently in this situation, or if you are planning to buy in the near future after a short sale or deed in lieu of foreclosure, leave me a message below, shoot me an email or give me a call.  As I mentioned above, this isn’t a qualifying problem, it’s a documentation and lender experience problem.

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Filed Under: CDPE ( Certified Distressed Property Expert.), Coto de Caza real estate, Home buying, Mortgage Guidelines, Orange County California real estate, Real Estate Tips

It seems more people are ‘coming to California’ for housing

May 3, 2013 by

An article posted by Megan Hopkins, of HousingWire.com, on May 2, 2013

“In certain housing markets, it seems homes are selling like hot cakes. Buyers in California are feeling the heat more than anyone, with four of the top five fastest-moving housing markets in The Golden State.

hiway-1

Orange County, San Diego, Sacramento and Los Angeles topped the list, with Las Vegas coming in at no. 5, according to data from ZipRealty.

In Orange County, the median days homes spent on the market dropped from 52 to 15, a 71% decrease year-over-year in March. Additionally, 29% of homes in Orange County sold in seven days or less. Conversely, the median home price shot up 27% year-over-year to $495,000. 

San Diego saw a similar change year-over-year, with the median days on market dropping 59% from 49 days to 20 in March. One-quarter of San Diego houses sold in seven days or less, and the median home price jumped 22% to $390,000.

Sacramento’s homes stayed on the market 57% longer, dropping from 28 to 12 on a year-over-year basis. Nearly one-third of Sacramento homes sell in seven days or less, while the median home prices rose 31% to $390,000. 

The final California city to make the top-five list is Los Angeles, whose median days on the market dropped 56% from 52 to 15 in 2013. L.A.’s median home prices increased 26% to $307,564 and 29% of its homes sold in seven days or less. 

The dramatic drop in time these homes are staying on the market coupled with the sharp increase in median home prices point toward the supply-and-demand problem that many homebuyers are facing. 

As one of the most “bubbly” states prior to the crisis, California was one of the hardest hit states during the recession. Because it had further to go, The Golden State is seemingly making the quickest and most dramatic progress of any state in the recovery.“

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Filed Under: California real estate, Coto de Caza real estate, Existing Home Sales, Home buying, Home Selling, Home Values, Orange County California real estate

Can The Right Color Help Sell Your Home Faster?

May 3, 2013 by

How To Choose The Right Paint Colors For Selling Your HomeWhen it comes to selling your home in Coto de Caza, you’ve probably thought of the most common staging tricks, such as clearing out the clutter to make your rooms look bigger and bringing in more light to brighten things up.

However, have you considered that the colors in your house might affect whether buyers are interested?

First impressions are everything when you are selling a house, so think about how the colors you choose will likely influence your potential buyers. A new coat of paint could be a simple and effective way to make your house more appealing.

Here are a few additional tips:

Choose Mellow, Neutral Shades

When a potential buyer is looking at your house, they want to be able to imagine themselves living there. If your walls are painted in lime green or hot pink, it can be difficult for a buyer to relate the house to their own tastes.

Instead, use neutral colors, such as cream, olive, beige and ivory. Then the walls become a blank canvas where prospective buyers can project their own style preferences.

Create the Illusion of Space

In order to make a space within your home feel larger, you can use a very light neutral color such as white, tan or pale grey. This will reflect more light and give the impression of a more expansive interior.

You can also try painting the moldings the same color as the walls, which will make the ceilings look higher.

Don‘t Forget About Exterior Color

It’s easy to focus on the interior of a house and forget about the outside, but the front of the house is the first thing potential buyers will see. Curb appeal can be a huge factor in their decision.

Caution: Lead-Based Paint

One important word of caution regarding the paint in your home is the issue of lead-based paint.

Lead-based paint was most common in homes built or painted prior to 1978. If your home falls in that age category, it may require further testing to ensure that the paint covering your walls is free of lead.

Color has a psychological effect on people, whether they are aware of it or not. You’ll be amazed at the difference the right colors can make in selling or improving your home.

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Filed Under: California real estate, Coto de Caza real estate, Home Selling, Home Selling Tips, Home Values, Orange County California real estate, Real Estate Tips Tagged With: , , ,

5 Great Questions To Ask At An Open House For Real Estate

April 18, 2013 by

5 Great Questions To Ask At An Open House For Real EstateAn open house gives you a great opportunity to look more closely at Coto de Caza real estate you might be interested in buying.

It also affords you the chance to chat with the owner or real estate agent so you can bring up any issues or hesitations you have with the home.

Knowing what to ask can be difficult, so below are examples of questions to ask at the next open house you attend.

Why has the seller decided to sell now?

If you ask why the seller is moving, you could learn valuable information to help determine your offer — or possibly whether or not you want to buy the home.

Knowing whether the owners are about to go into foreclosure, have experienced trouble in the neighborhood, or if they’ve retired and completely paid off the home can help you understand how urgently they need to sell their property.

Has the seller had any other offers?

Don’t forget that you are not only negotiating with the seller for a price, you are also competing with other potential buyers.

It really helps to know what you are up against.

It is important to understand that you might not get a 100% straight answer to this question as most sellers know that competition – or perceived competition – can cause a potential buyer to move forward more quickly and at a higher price.

If you’re comfortable in this discussion, you might want to try and see if you can find out the details of any other offers.

Does the property have special ownership costs?

Ask the agent or owner about the other costs associated with owning the property, such as Home Owners Association fees within a condo complex or a gated community.

It’s important to know about these extra expenses in advance so you can make an informed offer.

You may also want to ask about any pending litigation concerning the property.  Litigation is not always a deal killer, but it’s better to know the details before you sign closing documents.

What furniture and appliances are being sold with the house?

In most cases all built-in appliances, such as ovens, microwaves, dishwashers, and refrigerators are included in the sale. Occasionally, a seller will also include free-standing items like a washer & dryer in the laundry, along with a refrigerator that matches other appliances.

If you don’t already have these items, it’s important to know whether they are included, or could be negotiated into the purchase price.

Is there anything else that you want the seller to leave with the home?

This is an important question to ask.  Especially if there are specific things in the home that you have a strong interest in.

Perhaps there is custom art work or a pool table that fits perfectly in the game room.

The seller may be eager to part with those items and include them in the sale of the home or sell them at a large discount.

The open house is a great opportunity to learn more about a home before making the decision to buy it, so be sure you ask the right questions.

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Filed Under: California real estate, Coto de Caza real estate, Existing Home Sales, Home buying, Home Selling, Orange County California real estate, Real Estate Tips Tagged With: , ,

Three Financial Reasons to Buy a Home NOW! (Part 3)

April 10, 2013 by

Part 3 of a 3 part series posted by the KCM Crew a couple of weeks ago.

Three Financial Reasons to Buy a Home NOW! (Part 3)

by THE KCM CREW on MARCH 27, 2013

Part III – Rents Are Skyrocketing

money evaporating house

“Whether you own or rent, you will have a monthly housing expense. The question is how that expense will change in the future. When you purchase a home, for the most part, you lock-in that monthly housing expense for the length of the mortgage you take (15 or 30 years for example). When you rent a home, your housing expense is impacted by movements in the supply and demand for rental properties.

Historically, residential rental rates increase by 3.2% on an annual basis. However, in the current housing environment, there is an increasing demand for residential rental properties. This increase in demand has dramatically impacted rates. Zillow, in their most recent report, revealed that rental rates in the U.S. increased by 4.5% over the last twelve months. Other studies have projected rental rate increases of 4-5% over the next few years.

The only way to have control of your housing expense is to buy.

But Isn’t Buying Much More Expensive Than Renting?

Not right now! As a matter of fact, with prices down and mortgage rates at historic lows, it is LESS EXPENSIVE to buy than rent in most areas. In a recent report, Truliarevealed it is cheaper to buy than rent in ALL of America’s largest regions.

According to Jed Kolko, Trulia’s Chief Economist:

“People who didn’t buy a home last year may have missed the bottom of the market, but they haven’t completely missed the boat. Buying remains cheaper than renting in all 100 large metros. Even buyers who can’t get today’s lowest mortgage rates will still find that buying makes more financial sense than renting in nearly all local markets.”

However, Kolko went on to say that this opportunity may soon disappear:

“Although buying a home is still cheaper than renting, the gap is closing. In 2013, home prices should rise faster than rents, and mortgage rates are likely to rise in the next year as the economy improves. By next year, buying could be more expensive than renting in some housing markets, even for people with the best credit.”

Again, the only way to lock-in your monthly housing expense is to take that decision out of the hands of a landlord by owning. With both prices and interest rates set to increase, the best time to buy is right now.” ( End of KCM Crew’s 3 part series.)

While I personally wouldn’t use the word “skyrocketing” with regard to rental prices, there is no doubt that – over my 36+ years of selling real estate in this area, rents have gone up just as substantially as home prices have.

The primary advantage is that – with a fixed rate loan – your payments will stay close to the same, while rents will definitely go up, over time.

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Filed Under: California real estate, Coto de Caza real estate, Existing Home Sales, Home buying, Home Leasing, Home Renting, Home Values, Household Finances, Mortgage Rates, Orange County California real estate, Real Estate Tips

Three Financial Reasons to Buy a Home NOW! (Part One)

April 10, 2013 by

This is part one of a 3 part series posted by the KCM Crew a couple of weeks ago.

Three Financial Reasons to Buy a Home NOW! (Part One)

by THE KCM CREW on MARCH 25, 2013

This week, we are going to look at the three financial reasons to buy a home now instead of waiting: prices are rising at an accelerated rate, interest rates are increasing and rents are skyrocketing. – The KCM Crew

Part I – Prices Are Rising at an Accelerated Rate

prices up

The price of a home is the major consideration when deciding whether or not it makes financial sense to purchase a house. Experts are not only projecting that house values will increase in 2013. They are also more optimistic in the level of appreciation they are projecting as the market begins to heat up. Here are some examples:

The Home Price Expectation Survey

The latest survey of a nationwide panel of 118 economists, real estate experts and investment and market strategists reveals they project home values to end 2013 up an average of 4.6% according to the first quarter. This is after they had projected a 3.1% increase just three months ago.

Bank of America

In a report titled, Someone Say House Party?, Bank of America analysts revised their projections upward:

“Home prices continue to show momentum amid shrinking inventory and record high affordability, prompting us to revise up our original forecast of 4.7% for home prices this year. We now expect national home prices, as defined by the S&P Case Shiller home price index, to increase 8% this year.”

Capital Economics

According to a report in DSNews, Capital Economics also upgraded their prediction:

“Strong demand and tight inventory have brought existing home sales back to ‘normal’ levels, and further gains are possible, according to the latest market report from Capital Economics. Additionally, market conditions may prompt lenders to “loosen the purse strings slightly” and lend a little more freely.

These conditions, combined with broader economic indicators, lead Capital Economics to revise its previous forecast of a 5% price gain this year up to 8%.”

Morgan Stanley

In an article from HousingWire, Morgan Stanley joined the party:

“Strong momentum in home prices as well as housing activity gave Morgan Stanley analysts enough confidence to upgrade their home price appreciation projections to roughly 7% (from 5%) for 2013, according to its latest global securitized credit report…

“The momentum in most metrics of housing activity is running well ahead of the pace we had expected,” said James Egan, Jose Cambronero and Vishwanath Tirupattur, analysts for Morgan Stanley.”

Not only are prices projected to appreciate. Experts are actually revising their projections upward as demand maintains its momentum.

Next, we will look at increasing interest rates.

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Filed Under: California real estate, Coto de Caza real estate, Existing Home Sales, Home buying, Home Values, Housing Analysis, Orange County California real estate, Real Estate Tips, Real Estate Trends
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