Home buyers negotiating branden chhuor

Reasons To Buy a Home Today

Reasons To Buy a Home Today

Branden Chhuor, October 22,2014 (All rights reserved, permission to reprint with appropriate citations)

Many people in my Southern California market have asked me, “Is it a good time to buy a house?” My general response, “It depends on your situation.”
In most situations, people are looking at properties for sale to live in, not rent out. If this matches your situation, then it is definitely still a good time to buy, even with the increasing house prices within the past couple of years. The four factors I look for in determining when it is a good time to buy your Southern Californian dream home or first home are the following:
Rent
Inflation
Interest Rates
Timing

RENT
A market with rising rent means that the real estate market is getting back on its feet and vacancy is low. When you have a situation such as today where rent is climbing faster than house prices year over year, then you are faced with the dilemma of cost to rent versus cost to own. As such, I would rather buy and lock in my monthly payment at a fixed amount than risk facing rent increases. Why pay for someone else’s mortgage? In addition, as a homeowner you would also reap the tax benefits and principal pay down on your mortgage.

INFLATION
Inflation is another factor I look at because it affects our purchasing power and the value of currency. I am surprised that the US Federal Reserve continues to downplay inflation and dismisses the notion of it. Have they not seen the prices of gasoline, milk, beef, and other consumer goods have all gone up over 30% the last 4 years while wages remain stagnant? I am betting that wage will eventually catch up with inflation and when that day comes, house prices will further increase to match the cost of material and labor to build a house. As a homeowner, you will be hedged against inflation because you will be paying a fixed monthly payment while your property steadily increases in value over time. Again, you will be paying down the principle, increasing your equity position instead of paying someone else rent.

INTEREST RATES
Interest rate is the cost of borrowing money and we are currently at a 16 month low on the 30 year fixed rate ranging 3.8%-4.1%. From a finance perspective, it’s not costing much to borrow money and people should take advantage of. People don’t realize 10-15 years ago, the 30 year rate was nearly double at 6%-8%. Buying real estate for most people means leveraging their position by putting a down payment and borrowing between 5%-95% of the purchase price. If you are borrowing, doesn’t it make sense to borrow when interest rates are at and near the all-time low? Let’s say you (a borrower) with a solid credit score and you are looking for a conventional 30 year fixed rate with 20% down payment. Let’s assume that for every 0.50% increase in interest rates, it will result in a 5% drop in house prices. Here are some scenarios to show what I mean:
Scenario 1: Home price of $500,000 at 4.25% = $1,968 monthly mortgage
Scenario 2: Home price of $475,000 at 4.75% = $1,982 monthly mortgage
Scenario 3: Home price of $450,000 at 5.25% = $1,988 monthly mortgage
As you can see, yes, prices do drop as interest rates rises, but there’s a good chance your monthly payment has gone up.

TIMING
Like that old saying goes, “Timing is everything”. The same goes for real restate. If you buy it a little too late such as 2007, then you were upside down on your property for the next 5-7 years. I believe today is still a great time to buy due to the fact that we just came out of the recession and real estate prices have adjusted. Southern California real estate historically has a cycle of 8-10 years of appreciation and then 3-5 years of depressed prices. If history holds true, then we are in the beginning of an appreciation cycle. Considering the other factors mentioned above, it’s safe to say the timing is still there for people to buy their first home.

Hopefully this reading gives you some idea of what I usually look for when people ask me the

Home buyers negotiating branden chhuor

Home buyers negotiating branden chhuor

question, “Is it a good time to buy a house?” This point of view is for those looking to buy a dream home or first home for the long haul of 5 years or more. If you are looking to buy for investment purposes, then it will depend on the area you are targeting. Stay tuned for the next article on real estate investing. Please feel free to reach out to me if you have any questions or comments.

property for sale orange county

OC Housing News

10/21/2014

OC Home rates are up 6.4 % in September and also Property for sale Expert ask’s if the GSEs are going back to subprime financing?

An autumn chill sneaked into the property for sale orange county, freezing the average residence cost listed below the $600,000 limit touched briefly previously this year and keeping a lid on sales.

The average cost of an Orange County residence– or cost at the midpoint of all sales– was $585,000 last month, CoreLogic DataQuick reported Monday.
That’s up $35,000 from September 2013 for a 6.4 percent year-over-year acquire, DataQuick amounts show.  However it’s down $5,000 from August. Orange County’s mean cost generally dips around 1.3 percent from August to September as kids return to school.
September saw 2,980 Orange County houses, condominiums and also townhomes change hands, 64 systems greater than in September 2013.

The 2.2 percent rise was the very first year-over-year acquire in 12 months, however was due generally to the huge come by transactions that happened in late 2013 because of rising home loan prices and also lowering purchasers able to pay last year’s ballooning home rates.

September’s sales total amount was 34 units listed below August’s– again, normal for this time around of year. DataQuick amounts show that September sales fall around 10.4 percent from August to September.
Regionwide, the Southern California mean cost was $413,000, up 8.1 percent, DataQuick stated. Last month was the initial time in more than two years that none of the Southern California’s 6 regions uploaded double-digit year-over-year rate gains.
“Price appreciation has dipped into single-digit territory as even more would-be customers obtain priced out, financiers back off and also incomes increase modestly at most effectively,” DataQuick Analyst Andrew LePage stated.

Irvine Renter 11 Astute Observations

Mel Watt revealed a variety of changes created to release the credit report box and also promote borrowing. This does not suggest a go back to subprime.
Those people that viewed the real estate bubble in addition to breast and extensive it’s reasons are significantly worried for going back to the heartbreaking loaning methods of the past. Although some degree of credit rating report aiding to release was unavoidable, the last thing any type of one of us should want to watch is a go back to careless subprime loaning, especially since the United States Taxpayer is responsible for all the losses.

GSE-warning
Recently’s statement of launching requirements at the GSEs thrilled everyone in the realty market. Lenders, real estate professionals, as well as homebuilders all are glad the chance to shut additional deals, yet prior to they commemorate, they should take an exceptional check out exactly just what was in fact announced as a result of the fact that none of it will certainly have much influence on the industry.
Mel Watt and Julian Castro expose property plan alterations
Sarah Wheeler, October 20, 2014
… Watt mentioned that the FHFA was explaining the Representations as well as Warranty Framework to help reduce repurchases.

“We realise that the Representation and Warranty Framework did not offer sufficient top quality to make it feasible for loan provider to understand when Fannie Mae or Freddie Mac would exercise their option to need repurchase of a funding. And also, we know that this concern has really added to lending institutions imposing credit past overlays that raise the cost of lending as well as restrict providing to customers with much less as compared to best credit scores or with much less standard monetary circumstances.”.

Watt mentioned the FHFA’s modifications consist of simply pointing out life-of loaning exemptions, which fall under 6 groups: loan_qualification.
1. Misrepresentations, misstatements and also non inclusions.
2. Information mistakes.
3. Charter compliance problems.
4. First-lien leading concern as well as title matters.
5. Lawful conformity offenses.
6. Unwanted home mortgage items.

For financings that have currently made repurchase comfort, Watt mentioned that just life-of-loan exclusions could trigger a repurchase under the Reps and guarantees structure.
In one of one of the most significant policy adjustments, Watt revealed that the FHFA is establishing a minimal number of financings that should be identified with misstatements or information inaccuracies to trigger the life-of-loan exemption, to make certain that the GSEs will absolutely be responding to a pattern of misrepresentations or information blunders, not just outliers.
The FHFA is additionally consisting of a “significance” demand to the misstatement and also inaccuracies implying to make sure that GSEs could possibly take into consideration whether the blunder would definitely have protected against moneying the funding at the front end.
Watt asserted the GSEs would certainly be announcing additional information on adjustments related to representatives as well as guarantees in the near future, including: two_years.
Establishing an independent dispute resolution procedure.
Recognizing solution systems as well as alternate treatments for lower-severity financing problems.
Repairing representations as well as solution guarantees.
Transforming compensatory charges in addition to repossession timelines.
… “I wish our activities offer appropriate surety to enable your company to reassess existing credit report overlays and even a lot more highly make responsible financings available to creditworthy customers. This will certainly lead to a real estate market that is not simply much better for debtors, yet additionally a lot better for the Enterprises along with loan provider and also helpful to our nation, Watt specified.
Castro explained HUD’s technique to expand ease of access to credit history with its Blueprint for

Access projects:
Overhauling the Single Family Housing Policy Handbook to provide loan provider clearness on policies and also conformity. Presenting the Supplemental Performance Metric to record a more in-depth perspective of a lending institution’s portfolio efficiency, contrasting lending carriers on their efficiency with others doing business in specific credit guide ranges.
Redrafting the Loan Defect Taxonomy to enhance 99 numerous codes straight into 9 categories of funding troubles.
Starting a Ginnie Mae aviator program to provide smaller sized loan provider more access to the added market.
These changes will certainly be welcomed with a great deal of enjoyment in the market as well as partially improve loaning as it makes clear the limitations, yet it doesn’t materially change anything.

Source: http://ochousingnews.com/blog/gses-returning-subprime-lending/#ixzz3Gng5JTD9.

housing market newport beach

What is the medium priced home in Newport Beach?

According to Zillow the Newport Beach Medium Home price is at 1.35 Million.

 

Is It a Buyers’ Market Sellers’ Market?

The median home value in Newport Beach is $1,347,900. Newport Beach home values have declined -2.8% over the past year and Zillow predicts they will fall -0.2% within the next year. The median list price per square foot in Newport Beach is $800, which is higher than the Los Angeles Metro average of $345. The median price of homes currently listed in Newport Beach is $1,795,000 while the median price of homes that sold is $1,554,000.

Foreclosures will be a factor impacting home values in the next several years. In Newport Beach 0.8 homes are foreclosed (per 10,000). This is lower than the Los Angeles Metro value of 2.0 and also lower than the national value of 4.4

Mortgage delinquency is the first step in the foreclosure process. This is when a homeowner fails to make a mortgage payment. The percent of delinquent mortgages in Newport Beach is 4.2%, which is lower than the national value of 7.2%. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Newport Beach homeowners underwater on their mortgage is 4.5%, which is lower than Los Angeles Metro at 11.6%.

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