Increased Pending Sales

I'm starting to see a lot more homes on the market go "pending". This trend is a direct result of the recent pause in the interest rate hikes. Mortgage Brokers are encouraging their home buyers to "lock in" on the lower rates, giving the Buyers only 30 days to close escrow on a new home. So, if you're in the market to Buy....lock in your rate and hit the house hunting trail!!

Affordable Ways to Make a Home Sparkle!

A home seller doesn’t have to spend a fortune on redecorating in order to impress buyers. But it does take a little creativity and a clear understanding of the main goal: to remove personal clutter and make everything else shine.

Here are a few simple (and affordable) suggestions for making a home more impressive to potential buyers:

• Outside: Spread fresh mulch on the flowerbeds; paint the front door; and buy a new "welcome" mat.

• The mudroom: Get rid of the litter box and the pet food bowls; put cleaning supplies out of sight; and hang coats in the closet, not on hooks.

• The bathroom: Hide personal items such as athlete’s foot powder or laxatives; put toothbrushes in the medicine cabinet; buy a new shower curtain.

• The closets: Ruthlessly thin out clothes and shoes; hang what’s left on matching hangars; and replace the light bulbs with 100 watts.

• The kitchen: Get rid of all but the basics in the cupboards and clean everything off the counters.

Source: Universal Press Syndicate, Michael Walsh (08/20/2006)

Mortgage Rates at Lowest Point Since April

Thirty-year, fixed-interest home loans averaged 6.55 percent for the week ending Thursday, Aug. 10, putting mortgage rates at their lowest level since the week of April 20, when they averaged 6.53 percent, according to Freddie Mac. The decline from last week's 6.63 percent represents the third consecutive week that borrowing costs for home buyers have fallen.

"The weaker than expected job reports, combined with the Fed's decision to pass on raising rates at its last meeting, led directly to lower rates this week," explained Freddie Mac chief economist Frank Nothaft. Prospective home buyers are jumping at the opportunity to secure financing at a lower rate, with the Mortgage Bankers Association reporting that its index on mortgage applications rose 4.9 percent last week, as the refinance and purchase gauges increased 7.1 percent and 3.4 percent, respectively.

Source: Baltimore Sun (08/11/06)

Heat Wave

Wow, it's 112 degrees in Tracy right now. A record high! Actually, all week has been extremely hot in the Central Valley, with yesterday topping 116 degrees. Not a good time to be holding an Open House, which is what I am doing today!

This particular house that I'm selling has a gorgeous, big, in-ground pool. Perhaps I should throw an "Open House Pool Party" to lure the Buyers out of hiding??? Sounds like a novel idea to me! I'll rent a snow cone machine, put out the chips-n-salsa and bring in a Caribbean band. Just bring your pre-approval letter from your lender, your check book, and a beach towel.

I'll see you in the pool!

Slow Down in the Valley

Well, the market is slow here in the Central Valley. Some Real Estate advisors are going so far as to predict a crash. I'm questioned all the time by my clients, friends and family...Why aren't homes selling?

There are so many possibilities of why. Gas prices are one: Buyers that purchase a home in the Valley usually work in the Bay Area and commute Monday thru Friday. Now, who wants to spend upwards of $200 a week in gasoline just to live in Tracy?? Sure, home prices in the Central Valley are still lower than most of the homes in the Bay Area, but an additional $800 in gas can easily out weigh the Pro's of a lower monthly mortgage payment.

Interest rates are on the rise, which is more cause for the concerns of potential Buyers. Jobs are down, and inflation is on the rise. The financial instability of California in general is enough to scare the most savvy real estate investor into taking a "pause" in purchasing more property.

The answer to the golden question is.....I don't know. I can guess, I can quote, and I can predict. The bottom line is: time will tell.

Selling in a Buyers Market

Putting a price on your family’s home can be a very heartfelt task. However, when you’re listing your house to sell, price is the most crucial element!

I recently took a potential Buyer out to view some homes that were on the market. The first home we stopped at was a nice looking, two-story home in a newer neighborhood. It was priced at $569,000. After touring the home, my client’s only reaction was to say, “Wow, they must think highly of their home to price it that high!”

I had to agree. Minus all the “designer upgrades”, it was identical to another home on the market a few blocks away, priced $20,000 less. And most of the upgrades were in paint and window coverings, which are the #1 items people change when they buy a previously owned house.

So don’t put a personal price tag on your home when selling in a “Buyer’s Markets”. Be realistic and ask your Agent about other homes that have sold in your neighborhood, and choose a price appropriate to the market value.

First Quarter: Existing-Home Sales Ease

WASHINGTON (May 15, 2006) – Existing-home sales, including single-family and condo, remained historically high in the first quarter but have experienced a downtrend since hitting a record in the third quarter of last year. Even so, 26 states showed increases in sales activity from a year ago, according to the National Association of Realtors®.

The latest report on total existing-home sales shows that the seasonally adjusted annual rate* was 6.80 million units in the first quarter, down 2.1 percent from the 6.94 million-unit level in the first quarter of 2005.

The biggest increase was in New Mexico, where existing-home sales rose 26.2 percent from the first quarter of 2005. Louisiana’s first-quarter resale pace rose 22.9 percent from a year earlier, while Montana experienced the third strongest gain, up 17.5 percent. Six other states recorded double-digit sales increases from a year ago. Twenty-one states and the District of Columbia experienced declines. Complete data for three states was not available.

David Lereah, NAR’s chief economist, said rising interest rates have dampened sales. “A steady rise in mortgage interest rates has slowed home sales in higher cost areas, yet job growth in some moderately priced markets is boosting sales in other areas,” he said. “The net effect is a modest decline in home sales for the nation as a whole, but sales remain historically strong and are providing a solid underlying base for the overall economy.”

Copyright NATIONAL ASSOCIATION OF REALTORS®

Effects of Higher Interest Rates

Several risk factors that need to be monitored by prudent business decision makers:

* The Consumer Price Index is currently understated because it measures housing costs by apartment rents not house prices.

* High gas prices mean less discretionary income to spend at the movies and the mall.

* If the U.S. labels China as a “currency manipulator” and puts a 27 percent tariff on Chinese products, prices will rise, and all bets are off in the economy.

* Commodity prices are soaring, cutting loose from reality. Typically this signals massive inflation ahead. However, thousands of new hedge funds are actively speculating in all markets to try and make double-digit returns in an overcrowded single-digit investment market.

* A slowdown in mortgage refinancing will slow down consumer spending.

* A slowdown in home price appreciation will slow down consumer spending.

* Federal regulators are actively moving to rein in over-aggressive mortgage lenders.

* Corporations are flush with cash and need to invest it or spend it somewhere. As stocks shine, the luster on real estate will diminish.

* A flat yield curve indicates a slower economy is in the near future.

* If we stop or reduce the flow of immigrant workers to the United States, labor costs will have to increase.

Just food for thought!