Homebuilder Confidence Improves

Earlier this week I read this article on CNBC:

Not since the spring of 2008 have the nation’s homebuilders felt this good about the potential for new business. An industry association survey measuring builder sentiment rose for the third straight month in December, with significant gains in the component measuring traffic of perspective buyers.

The National Association of Home Builders/Wells Fargo Housing Market Index edged up two points from a downwardly revised number to 21.

“This is the first time that builder confidence has improved for three consecutive months since mid-2009, which signifies a legitimate though slowly emerging upward trend,” said National Association of Home Builders Chief Economist David Crowe. “While large inventories of foreclosed properties continue to plague the most distressed markets and consumer worries about job security and the challenges of selling an existing home remain significant factors, builders are reporting more inquiries and more interest among potential buyers than they have seen in previous months.”

Difficulty in obtaining credit, however, is still a major hurdle to recovery for the beleaguered builders, whose sales are running at half the rate they were during the recent housing boom. Industry analysts say there is considerable pent-up demand for new homes, given how many Americans have either moved in with family or chosen to rent in the wake of the housing crash, but that demand is still on the sidelines.

Potential buyers are suffering from a deep lack of confidence not just in housing but in the overall economy and job market; tighter mortgage underwriting standards are also holding much of the market back.

Builder confidence gained the most strength in the South and slipped slightly in the Northeast. Out West, where much of the overbuilding took place during the last decade, sentiment is still improving, but a significant share of smaller builders have gone out of business.

That has opened the door for big builders, like Miami-based Lennar, to expand. Lennar [LEN 19.60 -0.38 (-1.9%)] announced it acquired control of approximately 650 finished home sites in 20 communities in the Pacific Northwest for an undisclosed price from Seattle-based Premier Communities. This is the first entry into a new market by Lennar in almost two years.

Coast Sotheby's International Realty is now HÔM Sotheby's International Realty

Coast Sotheby’s International Realty is now HÔM Sotheby’s International Realty, California’s preeminent luxury real estate company. Our brokers will continue to provide you with the experience and results on which they have built their careers. Through this acquisition, their enhanced resources enable them to provide a level of service and exposure unmatched in the Southern California real estate marketplace.

HÔM Real Estate Group, headquartered in Newport Beach, Calif., has joined its luxury real estate network with Sotheby's Inernational Realty. The firm now will operate its three offices in Newport Beach, Laguna Beach and Balboa Island as HÔM Sotheby’s International Realty with Mike Shapiro as chairman and Bob Bonanno as president. Also, the offices formerly operated by Coast Sotheby’s International Realty in Rancho Santa Fe and Laguna Beach are now being operated as HÔM Sotheby’s International Realty.

The Sotheby’s International Realty network currently has more than 12,000 sales associates located in approximately 580 offices in 42 countries and territories worldwide. HÔM Sotheby’s International Realty listings will be marketed on the sothebysrealty.com global website. In addition to the referral opportunities and widened exposure generated from this source, the firm’s brokers and clients will benefit from an association with the Sotheby’s auction house and worldwide Sotheby’s International Realty marketing programs.

About Sotheby’s International Realty Affiliates LLC
Founded in 1976 to provide independent brokerages with a powerful marketing and referral program for luxury listings, the Sotheby’s International Realty network was designed to connect the finest independent real estate companies to the most prestigious clientele in the world. In February 2004, Realogy Corporation, a global provider of real estate and relocation services, entered into a long-term strategic alliance with Sotheby’s, the operator of the auction house. The agreement provided for the licensing of the Sotheby’s International Realty name and the development of a full franchise system by Realogy’s subsidiary, Sotheby’s International Realty Affiliates LLC. Affiliations in the system are granted only to brokerages and individuals meeting strict qualifications. Sotheby’s International Realty Affiliates LLC supports its affiliates with a host of operational, marketing, recruiting, educational and business development resources. Franchise affiliates also benefit from an association with the venerable Sotheby’s auction house, established in 1744. For more information, visit www.sothebysrealty.com.

7 Great Features of the HARP Loan Program

Fannie Mae and Freddie Mac will announce changes in their Home Affordable Refinance Program, or HARP. It is expected to put a great deal of weight on lenders voluntarily writing new loans for borrowers who have been hurt by declining home prices. The Federal Housing Finance Agency (FHFA), the programs regulators, have said changes will relax the representations and warranties participating lenders have to abide by as part of its revamp of the program.

The HARP program is available to homeowners who have little or no equity in the homes as long as Fannie Mae and Freddie Mac guarantee their loan and their payments have been made on time. Fannie Mae and Freddie Mac back about half of all U.S. residential loans and, according to analysts, about 3.1 million loans. In October, FHFA said it would remove the cap that excluded borrowers whose mortgages exceed 125 percent of the value of their homes from the program. 



To date, about 894,000 borrowers have used HARP to refinance.

Some great features of The Harp Loan Program mortgage refinance are:

■ Generally lower closing costs
■ Generally more lenient underwriting
■ Appraisal is sometimes not required
■ A loan under the Harp Loan Program can get the same low rates that conventional loans qualifying for a conventional refinance transaction would get. This includes adjustments for credit score, type of property, etc.
■ If your loan is owned by Freddie Mac, you may not be required to prove income.

NOTE: If your loan is owned by Freddie, you will have to do your mortgage refinance through your current loan servicer. However, Fannie loans can be done by any Harp lender who offers the harp loan program.

■ NO MORTGAGE INSURANCE (even if you owe more than the house is worth)
■ With a Fannie loan, all your closing costs can be included in the mortgage, so, except for a credit report fee and appraisal fee (if required), this loan does not require cash up front.

The Harp loan program could really help homeowners who are facing difficulties to meet their monthly mortgage payments. Search for a Harp lender who offers the harp loan program in your neighborhood and find out if you are eligible.

5 Steps To Save The Home of Your Dreams

What do you do when the appraisal on the dream home you want to buy comes in below the price in the offer the seller has accepted? I’m talking 10 to as much as 20 percent below. Chances are raising the additional cash above and beyond your initial down payment and closing costs to cover the difference between the offered price and the appraisal price will not happen! We’ll you are not alone. Some 16 percent of all sales are failing due to low appraisals. 16 Percent! Some real estate professionals and economist say that these low ball appraisals are pushing home values down further. Did you know you can fight back? That’s right you have options. And chances are you can find a way to make the deal work without increasing your down payment. I found a great article featuring 5 steps you can take to save your dream home. To get this article simply click here.

Six Reasons Why Mortgage Applications Are Rejected

1. Income issues. Most failed applications falling into this category have income too low for the mortgage amount they are seeking; often, a spouse's credit issues can create this problem, too, as the income the spouse plans to actually chip in toward the mortgage cannot be considered by a lender. But increasingly, the recent vagaries of the job market are also causing this issue, as people who have changed their line of work or have changed from salaried employee to freelancer over the last couple of years can also have their home loan applications rejected based on income.

2. Muddled money matters. If the mortgage for which you're applying plus your monthly payments on credit card, car and student loan debts will comprise more than 45 percent of your total income, you could have problems qualifying for a home loan. You might also run into problems if you rely too heavily on bonuses, overtime, cash wages or rental income -- all of these can be difficult or impossible to get a mortgage bank to consider, and if they do, they might not take all of it into account.

3. Credit issues. Today, the mortgage-qualifying FICO score cutoff falls somewhere between 620 and 660, depending on which lender and which loan type you seek. More than one-third of Americans, by some numbers, have credit scores too low to qualify for a home loan. Even if your credit score is high enough to qualify, if you have any late mortgage payments, a short sale, a foreclosure or a bankruptcy in the last two years, loan qualifying could be difficult to impossible.

4. Property didn't appraise. Since the whole industry had its hand (among other things) smacked for allowing home values to skyrocket in a very short time, appraisal guidelines have tightened up -- some would say, even more than overall mortgage guidelines. So, it is increasingly common to have the property appraise for a price lower than the sale price negotiated between the buyer and seller.

5. Condition problems. With all the distressed properties on the market, and with most nondistressed sellers barely breaking even, more home-sale transactions than ever are falling apart due to condition problems with the property. Many lenders will not extend financing on homes where the appraiser points out problems like cracked or broken windows, missing kitchen appliances, electrical problems, or wood rot.

And in the world of condos and other units that belong to a homeowners association, if more than 25 percent of units are rented (rather than owner-occupied) or more than 15 percent are delinquent on their HOA dues, new applications for refinance or purchase mortgages on units in the development are likely to be rejected.

6. Technical difficulties with application. The days when lenders just took your word for it are long, long gone. Applications with incomplete or unverifiable information are doomed.

Half of refinance applications are abandoned or rejected, as are 30 percent of purchase mortgage applications, according to the Mortgage Bankers Association. All told, the Federal Financial Institutions Examination Council (FFIEC) says that well over 2 million mortgage applications were rejected last year.

Want to avoid falling into that number? It's tough -- However, there are many ways to get advice about mortgage applications in the future. Don't go in unprepared. With the right counsel or access to the right piece of software, you can know whether or not the mortgage application will be approved before you ever submit it.

Banks are just using calculations based on pretty well-established formulae, and a professional or a professional tool with the right training can often approximate their decision based on current market trends very well.

What do you think about Google +, are you going to give it a try or are you already well on your way?

While I was purusing my company website I read this great article by, John Passerini Vice President, Interactive Marketing Sotheby's International Realty Affiliates LLC...and wanted to pass the information along.

On the web or in person, staying connected to others is a basic need and what affirms that idea more emphatically than the 750 million Facebook users and the 200 Million tweets per day from Twitter. From letting everyone know what you made for dinner to organizing protests that lead to toppling governments, the rise of Social Networking has been astounding shifting how humans interact with each other, governments and corporations forever.

Google, for all it’s amazing technical innovations and ability to harness the power of networked computers to serve humans, when it comes to the people part of the internet equation they’ve been on the outside looking in trying to figure out how to be invited, sidle or crash the social networking party.

So now we have Google +, not Google’s first attempt at becoming more social (see Google Buzz) but it’s most all encompassing attempt. Per Larry Page, CEO of Google – “Our goal with Google+ is to make sharing on the web like sharing in real life, as well as to improve the overall Google experience.” With the recent invite only public trial launch of Google + on June 28th and with over 25 Million accounts already, Google + can lay claim as the fastest growing social networking site in the short history of social networking.

But is Google + different enough to make you want to leave the Facebook bash, do you have to even leave can you, should you do both and why would you? Nobody knows at this point so instead of trying to predict its place in the world, let me try to define what it is and has.

No new technology comes without its own vocabulary and Google+ has got it share of words they hope will be as familiar as “Wall” or “Like” or “Friending.” Streams, Sparks, Circles, Hangouts and the Huddle are the buzzwords of late.

Both Streams and Sparks are similar to Facebook’s Top News or Most Recent feeds of your social connections and interests but instead of a combined feed, the Stream and the Spark allows you to separate the information. The Stream focuses on you and your friends’ social interactions of personal posts of pictures, links and comments. While Sparks, based on Google Search, focus on feeds of information about your interests created by you with for example, updates on your favorite sports team, actors, musicians, technology, cooking or even your favorite real estate company. Sparks can spark a conversation topic.

The Stream can be controlled by the main differentiator between Facebook and Google +, the Circle. Think about when you first jumped on Facebook probably “friending” or accepting friend requests from everyone and anyone you may have come in contact with only to end up with an unrealistic amount of friends and a bunch of surprising pictures from your past. With Google +, not only do you get a friend-reset opportunity but you can organize your peeps of influence so your boss or clients or even mother doesn’t have to see that photo of you or your friend from “back in the day” or even late last night if you don’t want them to. Instead of having the largest group of friends on the block and sharing everything with everyone and their friends, you can start over and invite people to be part of your work, friend or family circles and post and receive posts to focused groups of friends, family, coworkers or acquaintances. Facebook has similar security and sharing options but I think the way Google + controls who you share with is a bit simpler and intuitive and the most alluring part of Google +.

The Hangout is simply a quick way to setup a live multi person video chat with people in your Circles. A Huddle is a real time group-messaging tool that can get everyone in your circle involved in a conversation.

So those are the basics, now what to do with Google +, well the best thing to do is try it and in order to try it you’ll need an invite because it’s still in trial, invite only mode. But if you know someone who has Google+ ask them to send you an invite and you’re in the party. Or you may also submit a request for an invite by going to the learn more about Google + at https://www.google.com/+/learnmore/.

Finally, here are some great sources of information on the topic including the official Google + blog and this article from the June edition of Wired Magazine, Inside Google + by Wired plus the latest from Website Magazine

What do you think about Google +, are you going to give it a try or are you already well on your way?

The 411 on Conforming Loan Limits

Data proposed by the National Association of REALTORS® indicates that for several metro areas, including Denver, San Diego, Los Angeles, New York and Washington, DC, prices for homes 2008’s expanded conforming range have not dropped to the levels proposed for October 1, 2011. The Federal Housing Finance Agency estimates that buyers above the limits can expect an increase in mortgage rates of 0.5% to 0.75%, which may make larger mortgages unaffordable (Fears, 2011). Data indicates that the portion of the market still dependent upon the current conforming limits, such as San Diego, will be negatively impacted by lowering conforming loan limits.

Today, the bond market was in negative territory due to stock strength as signs of recovery from what CNN money calls “the worst four-week loss since March 2009.” If improvement to the stock market coupled with a decline in bonds continues, it will equate to a rise in mortgage rates. With the Fed conference this week, stock investors will be watching carefully for any announcement of any additional stimulus from the Fed.

2nd Quarter Gross Domestic Product (GDP), Coming out on Friday- Providing data on the total of all goods and services produced in the U.S. This report is considered to be the best measurement of economic activity and will be the second of the three for this quarter. Last month, readings showed the economy growing at an annual rate of 1.3%. It is expected that Friday’s report will indicate that the GDP actually increased only 1.1%. If there is a revision much larger than anticipated, mortgage rates may decline this week (especially true if the inflation does not get revised higher by the report).

University of Michigan’s Index of Consumer Sentiment - Tracks consumer willingness to spend and an upward revision of 55.4 from August’s reading of 54.9 is expected. A lower reading indicates consumers were less confident about their personal financial situations than previously thought which would be good news for the bond market and mortgage rates but a negative indicator of economic recovery.

There may be quite a bit of activity in mortgage rates this week. If economic reports are stronger than expected and if the treasury auctions show a reduction in demand, we can expect rates to move higher this week. The way trading looked late last week, it appears mortgage rates may have hit bottom for now.

It’s a great time to mention the impending conforming loan limit changes and how they will impact us. Of the 16 US metro areas, San Diego, Las Vegas and Phoenix will experience the highest percentage of decrease in limit. It appears a substantial amount of housing in San Diego is still dependent upon government backed credit and will feel the “crunch” from the lower limits. As Treasury bond yields are low and stocks uncertain, it is also a great time to stress to that rates are still at historic lows and the cost of money incredibly economical.

Mark October 1, 2011 on your calendar. Why? That’s the day the Conforming Loan Limits, the maximum loan that can be sold to FannieMae, FreddieMac, and GinnieMae (FHA loans) are going to change. The government raised the limits during our housing crisis so lenders had the liquidity to provide loans to home buyers and jump-start the housing market. Which was needed, but that will end on September 30, 2011!

Here’s how the Conforming Loan limits will change. Any loan for a single-family home that is above $697,500 in San Diego looks like it will be reduced to $546,250. (In other area of CA the conforming limits will change from $729,750 to $625,500) Loans that are above that limit are considered “Jumbo Loans” which are generally more expensive then conforming loans. What does that means to a home buyer? The new conforming loans will become more costly. Also larger down payments may also be required which will make it more difficult for first-time home buyers to get into the housing market.

If that’s not bad enough, interest rates might start to rise. If mortgage rates rise then less people will be able to qualify for home loans. If that happens there will be less buyers shopping for homes and prices will fall even more! Remember if prices drop but interest rates rise you qualify for less. As a home buyer you don’t gain by waiting!

Remember no one knows when the real estate market has hit its bottom. Don’t be the home buyer who wishes they had bought, because once the real estate market starts rebounding, it may happen very quickly.