November 2009

A Real Estate Thanksgiving!

Happy Thanksgiving!  Prospective home buyers and refinancers alike can be especially thankful this year.  According to the L.A. Times, Fannie Mae reports that during the week that ended yesterday (before the Thanksgiving holiday) mortgage rates dropped to a record low (4.78%!!), a level last seen in April, during much gloomier economic times.  Not surprisingly, these low rates have already gotten buyers off the sidelines, and inventory levels in some areas (such as the San Fernando Valley) have plummeted over the last year, according to the L.A. Daily News.

All of this bodes well for the market in the near future.  If you want a great rate, grab it while it lasts.  I have a network of great lenders and would be happy to make an introduction.   When the coming wave of inflation hits, you’ll be glad to have locked in affordable long term financing and that you own a leveraged physical asset:  real estate.  Just remember to insist on a fixed rate, or you could be in for a rude awakening down the road when rates skyrocket.

Signs of Bottoming In The San Fernando Valley?

DataQuick has reported that Southland home sales are up overall, and the same trend can be seen in the MLS data from the Northwest San Fernando Valley. Indeed sold prices have actually increased by 1% from a year ago. Also, since the gap between the “for sale” price and the “sold” price is now within 10%, which is considered to be a good sign for increasing sales, as the sellers’ expectations have gotten within striking distance of the buyer’s. This chart also appears to reflect some influence from the federal first time homebuyer tax credit and the pressure to close before it expired (although it has now been extended in a slightly different form).

Also check out the lower chart for a dramatic view of the shrinking inventory. This reflects the buyers’ frenzy that snapped up many of the better priced properties during the middle of the year (most of which were distressed.), For whatever reason, much of this inventory has not been replaced with new inventory. The moratorium on foreclosures may have had some impact on this number, as had the “shadow inventory” — properties that the banks have not foreclosed upon, for reasons of their own. Many are expecting more of these properties to be put on the market over the coming year.

BiggerPockets.com

I was recently chosen to be an official contributor as a Real Estate News columnist on Biggerpockets.com.  I have always admired Bigger Pockets for the depth and quality of content, so I was naturally thrilled to be selected to be a contributor.   The founder of Bigger Pockets, Josh Dorkin, is an amazing guy and a former Keller Williams® agent.

My first “official” Bigger Pockets post related to Fannie Mae – and their recent underwriting rules, which you can read here.   I recently had a deal fall apart.  The problem was, at least in part, related to Fannie Mae’s strict new underwriting guidelines which look very closely at the number of delinquencies in an homeowner’s association (i.e., how many owners are not current on their HOA dues.)  This once-trivial sounding statistic can be a deal killer, so buyer beware. You can read more about it on my blog at Biggerpockets.com

“DID I OX YOU????”

I loved this impression of Anton Chigurh foisting off a house on a unsuspecting couple.