SANTA BARBARA HOMES FOR SALE

Home Buyers Desires are Shifting!

Santa Barbara Homes for Sale — Fri, 11 Jan 2013 17:55:01 GMT

Mortgage Demand Rebounds After Holidays

Santa Barbara Homes for Sale — Thu, 10 Jan 2013 17:29:05 GMT

Following three consecutive weeks of declines, applications for home mortgages rose last week, even though interest rates increased, the Mortgage Bankers Association reports.

MBA’s mortgage application index, which includes applications for purchases and refinancings, rose 11.7 percent in the week ending Jan. 4.

Applications for refinancings, which make up the biggest bulk of the index, jumped by the highest amount — 12.1 percent.

Loan applications for home purchases, viewed as a leading indicator of home sales, rose 9.6 percent.

Meanwhile, 30-year fixed-rate mortgages ticked up to their highest level since early November. Thirty-year rates increased 9 basis points last week, averaging 3.61 percent compared to 3.52 percent the prior week, according to MBA averages.

Source: “U.S. Mortgage Applications Rebound in Latest Week,” Reuters (Jan. 9, 2013)

5 Tips for Buyers Who Use Downpayment Gifts

Santa Barbara Homes for Sale — Fri, 04 Jan 2013 18:02:44 GMT

About a quarter of first-time home buyers use gifts from relatives to fund a down payment for a home purchase, according to data from the National Association of REALTORS®. But lenders are carefully scrutinizing such gifts.

“Basically, the banks want to make sure that you’re not getting a second loan,” Ray Mignone of Ray Mignone & Associates, a financial planning firm, told The New York Times. “If all of a sudden $50,000 pops into your account, they want to make sure it’s not a loan against the property that they’re going to put a mortgage on.”

In a recent article, The New York Times provided some of the following tips in making make these lenders’ checks and balances go smoother for home buyers:

Have the money come in a check or wire transfer so that it’s traceable. Lenders often become cautious over cash gifts.
Have the giver provide the lender with a gift letter, which verifies the money is a gift, the specific amount being given, the relationship to the borrower, and that repayment is not required.
Deposit any gift money into the borrower’s account a few months before applying for a mortgage so the lenders have fewer questions about it, Mignone says.
Consider federal gift-tax regulations: Individual gifts of more than $13,000 must be reported to the IRS and are subject to tax.
Be aware that certain types of mortgages may limit how much of a down payment you can receive as a gift. For example, with conventional loans, lenders may require at least 5 percent in the borrower’s own money that is not a gift. However, Federal Housing Administration loans — which are popular among first-time home buyers — do not have any limits on gifts and borrowers can use gifts to cover the entire down payment.

Source: “To Givers of Down Payments,” The New York Times (Dec. 27, 2012)

New Calif. Law Requires Disclosure of Foreclosure to Tenants

Santa Barbara Homes for Sale — Fri, 04 Jan 2013 18:01:12 GMT

As of Jan. 1, property managers and landlords in California are required to disclose in writing to any prospective tenants if a notice of default has been recorded against the property. The law applies to rentals of single-family homes and apartment buildings of no more than four units.

The disclosure also includes a notice that if a new owner takes ownership of a property following foreclosure, the owner will not be able to evict the tenants for at least 90 days written eviction notices in many cases.

Supporters of the new bill say that that such a disclosure is critical for tenants in making an informed decision about where to live. Opponents, however, argued that such disclosures could worsen the financial conditions of the landlord and even hasten foreclosure.

For landlords who violate the disclosure requirement, tenants may be able to void any lease and recover one month’s rent or twice the actual damages — whichever is greater. Tenants may also be able to recover all prepaid rent from the landlord if the landlord violates the disclosure requirement, according to the new law.

The California Association of REALTORS® is offering a new form (LID) for the new disclosure to its members.

Source: “In California Prospective Tenants Will Have To Be Told If The Property Is In Foreclosure,” Realty Times (Jan. 1, 2012)
Copyright the National Association of Realtors®

Housing Called ‘Hottest Trade of 2012’

Santa Barbara Homes for Sale — Fri, 04 Jan 2013 17:58:18 GMT

Record low mortgage rates and rising consumer confidence has been helping to give the housing market a lift and helped it become the hottest trade in 2012, CNBC reports.

For example, stock shares of Pulte Homes and Lennar doubled or nearly doubled and helped the iShares U.S. Home Construction ETF rise more than 75 percent in 2012.

Housing-related stocks started moving higher earlier on in 2012 as anticipation built over an increase in home prices.

"The homebuilding sector was one of those stories that you knew it would turn around eventually, but it took a heck of a long time," Mitchell Goldberg, president of ClientFirst Strategy, told CNBC.

Still, despite the rises, the Home Construction ETF index is down more than 60 percent from its peak in 2006.

Source: “Housing Becomes Hottest Trade of 2012,” CNBC (Dec. 31, 2012)
Copyright the National Association of Realtors®

Rental Demand to Edge Higher in 2013?

Santa Barbara Homes for Sale — Fri, 04 Jan 2013 17:55:19 GMT

Five to six million new renter households may be created within the next 10 years, likely caused from low inventories of homes available and tight credit conditions, according to the Bipartisan Policy Center.

Rental demand is expected to particularly increase among seniors looking to downsize their homes, as well as young adults and a growing immigrant population.

“We expect to see an increase in household formation and for a variety of reasons that household formation is likely to be more heavily concentrated among renters and households who are likely to be renters for somewhat longer than was the case for the last 20 years,” Barry Zigas, director of Housing Policy for Consumer Federation of America, told HousingWire.

Tight credit conditions continues to be one main culprit holding back home ownership among some potential buyers.

“Credit for home ownership borrowing will likely be tighter and potentially more expensive, relative to earlier times,” Zigas predicts. “Families will likely have less wealth because the rising generation is starting with less wealth. If down payments are at any significant level, it will be a barrier to acquiring a home for longer than may have been the case in the past.”

Source: “Small Housing Inventory May Push Rental Demand for Years,” HousingWire (Dec. 31, 2012)
Copyright the National Association of Realtors®

Pending Home Sales Rise Again

Santa Barbara Homes for Sale — Sat, 29 Dec 2012 20:53:28 GMT

Pending home sales increased in November for the third-straight month and reached the highest level in two-and-a-half years, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 1.7 percent to 106.4 in November from a downwardly revised 104.6 in October and is 9.8 percent above November 2011 when it was 96.9. The data reflect contracts but not closings.

The index is at the highest level since April 2010, when it hit 111.3 as buyers were rushing to beat the deadline for the home buyer tax credit. With the exception of several months affected by tax stimulus, the last time there was a higher reading was in February 2007 when the index reached 107.9.

Lawrence Yun, NAR chief economist, said home sales are on a sustained uptrend. “Even with market frictions related to the mortgage process, home-contract activity continues to improve. Home sales are recovering now based solely on fundamental demand and favorable affordability conditions.”

On a year-over-year basis, pending home sales have risen for 19 consecutive months.

The upward momentum means existing-home sales should rise 8 to 9 percent in 2013 to approximately 5.1 million, following a 10 percent gain expected for all of 2012. The median existing-home price is projected to rise just over 4 percent in 2013, after rising more than 7 percent in 2012.

The PHSI in the Northeast rose 5.2 percent to 83.3 in November and is 15.2 percent above a year ago. In the Midwest the index edged up 0.1 percent to 103.8 in November and is 15.2 percent above November 2011. Pending home sales in the South were unchanged at an index of 117.2 in November and are 13.9 percent higher than a year ago. In the West the index rose 4.2 percent in November to 110.1, but is 3.2 percent below November 2011 with inventory constraints limiting sales.

Source: NAR
Copyright the National Association of Realtors®

Mortgage Rates End Year Near Record Lows

Santa Barbara Homes for Sale — Sat, 29 Dec 2012 20:51:48 GMT

Fixed-rate mortgages ended the year by hovering near record-breaking lows and keeping home buyer affordability high, Freddie Mac reports in its weekly mortgage market survey.

“The 30-year fixed-rate mortgage averaged 3.66 percent for 2012, the lowest annual average in at least 65 years,” says Frank Nothaft, Freddie Mac’s chief economist. “Rates on 30-year fixed mortgages were nearly 0.6 percentage points below that of the beginning of the year, which translates into an interest payment savings of nearly $98,600 over the life of a $200,000 loan. Moreover, opting for a 15-year fixed mortgage at today's rates, a home owner could save an additional $138,400 in interest payments."

Freddie Mac reported the following national averages for mortgages for the week ending Dec. 27:

30-year fixed-rate mortgages: averaged 3.35 percent, with an average 0.7 point, dropping from last week’s 3.37 percent average. The record low for 30-year mortgages is 3.31 percent, which was set in November. A year ago at this time, 30-year rates averaged 3.95 percent.
15-year fixed-rate mortgages: averaged 2.65 percent, with an average 0.7 point, holding the same average as last week. The record low for 15-year mortgages is 2.63 percent, also set in November. Last year at this time, 15-year rates averaged 3.24 percent.
5-year adjustable-rate mortgages: averaged 2.70 percent, with an average 0.7 point, dropping from last week’s 2.71 percent average. Last year at this time, 5-year ARMs averaged 2.88 percent.
1-year ARMs: averaged 2.56 percent, with an average 0.5 point, rising from last week’s 2.52 percent average. A year ago, 5-year ARMs averaged 2.78 percent.

Source: Freddie Mac
Copyright the National Association of Realtors®

HOAs Foreclosing on Banks?

Santa Barbara Homes for Sale — Fri, 28 Dec 2012 17:29:37 GMT

Homeowners and condo associations are turning the tables in Florida and foreclosing on the banks that have failed to pay dues or other expenses on the properties that they’ve repossessed, CNNMoney reports.

Banks are responsible for paying fees to homeowners associations after they foreclose on a home. But some banks are failing to pay these fees, which result in the associations having to tighten up their budgets and hike the fees to other residents.

As such, the homeowners associations are fighting back by placing liens on the repossessed homes until banks pay what they owe. If the banks don’t, the groups are foreclosing on them.

For example, the Southbridge Homeowners Association in Pembroke Pines, Fla., was owed $1 million from property owners, including several banks who repossessed homes in the neighborhood. The association ended up filing a foreclosure against Deutsche Bank for its portion that it owed on properties that it had repossessed. The bank allegedly failed to pay fees for more than two and a half years on a home it had owned in the community.

“Deutsche and other banks claim that they are just trustees of the property and that the mortgage company servicing the account is responsible for paying the fees,” CNNMoney reports.

Many of the cases are being settled between the associations and banks, resulting in the banks repaying what they owe and the foreclosure against the bank then being dropped.

But in other cases, the associations are foreclosing on the banks. In one incident, mortgage servicer NovaStar was accused of owing $22,890 in back dues and fees to the Keys Gate Community Association in Homestead, Fla., for a property NovaStar owned from foreclosure. The association ended up foreclosing on NovaStar and the home was sold at an auction for $62,000. The sale allowed the association to be paid back its debts.

Source: “Payback Time: Florida Home Owners Foreclosing on Banks,” CNNMoney (Dec. 26, 2012)
Copyright the National Association of Realtors®

Bidding Wars Heat Up in Some Areas

Santa Barbara Homes for Sale — Fri, 28 Dec 2012 17:23:30 GMT

Tight inventories of for-sale homes are causing bidding wars on homes to turn “brutal,” The Orange County Register reports. For example, some home buyers in Southern California say they’ve been up against 18 other buyers in bidding wars for a property.

For some, the bidding wars are causing frustration as they’re forced to get competitive for the home they want and go up against cash buyers.

The California Association of REALTORS® recently reported that nearly six in 10 homes were selling with multiple offers because of tight inventories. This trend is making the market particularly difficult for first-time home buyers.

Homes are receiving an average of four offers, according to CAR’s 2012 Annual Housing Market Survey report. Forty-one percent of homes are selling without a discount too, which marks the highest number since 2005.

"It's brutal out there right now, especially in that lower price range," says Bill Arseneau, a broker associate with Realty One Group in Mission Viejo.

Some buyers are panicking as they see prices get bid up. To get more competitive, some buyers are giving up contingencies and trying to make an emotional connection with sellers to stand out, such as by giving pictures of the buyer’s family and a letter to the home owners about how much they like the house and what they plan to do with it. Robert Rivera, a broker associate at First Team Real Estate in Anaheim Hills, Calif., says that after his buyers submit an offer, they’ll write a thank-you letter to help stand out too.

Source: “Low Supply Turns Home-bidding Wars ‘Brutal,’” The Orange County Register (Dec. 26, 2012)
Copyright the National Association of Realtors®

Big Houses are Making a Comeback

Santa Barbara Homes for Sale — Wed, 26 Dec 2012 17:41:19 GMT

Home owners are desiring bigger spaces again, following five years of downsizing trends.

Average sizes of newly built homes increased 3.7 percent last year over 2010, according to U.S. Census Bureau data. That marked the first increase since 2007. And builders are reporting higher demand for larger homes this year.

A recent survey by PulteGroup showed that 84 percent of home owners between the ages of 18-59 have no intentions of downsizing, even among Baby Boomers.

"There appears to be a renewed sense of optimism in housing,” says Deborah Meyer, PulteGroup’s chief marketing officer. “Homebuyers, regardless of their stage of life, still want and need larger homes. Consistent with our consumer research, the survey results show that today's buyers are equally focused on more efficient use of the spaces within their homes."

The need for more space may be coming from the growing number of people living under one roof, as multi-generations move in together.

A recent survey by the American Institute of Architects shows a higher demand for multi-generational housing. The survey also showed more home owners upsizing their current homes. Fifty-eight percent of architects reported higher interest in additions and remodels, which is up from 35 percent one year ago. Kitchen and baths topped the list.

While the desire for larger homes bodes well for home builders, “they may also add optimism to the upper end of the market, and all those so-called "McMansions"—generally considered in the 3,000- to 5,000-square-foot range—many of which lost significant value during the housing crash,” reports CNBC’s Diana Olick.

Source: “McMansions Return: Why Big Houses Are Coming Back,” CNBC (Dec. 17, 2012)
Copyright the National Association of Realtors®

Are Young Adults Missing Out on Big Housing Opportunities?

Santa Barbara Homes for Sale — Wed, 26 Dec 2012 17:35:49 GMT

With low mortgage rates and fallen home values, some housing analysts are questioning why more first-time buyers—particularly the younger generation—aren’t flooding to the market. As a recent Reuters article questions: Could they be missing out on the “sweet spot” of the housing market by delaying their home purchases?

The desire to buy is certainly there. Ninety-three percent of renters in the millennial generation say they plan to buy a home in the future, according to a poll by Trulia. But the number of first-time home buyers remains constrained: One in three home buyers are first-timers, the article notes.

“Maybe that's because some millennials—generally those now in their 20s to early 30s—don't have the jobs that qualify them for mortgages, or because they are taking time to accumulate down payments, or because the ongoing wave of foreclosures has frightened them,” writes Linda Stern, a Reuters columnist.

Whatever the case, they may still have some time to cash in, particularly as long as financing a home purchase remains so low. The Fed announced it is keeping interest rates low until the unemployment rate drops below 6.5 percent, which the Fed doesn’t expect to happen until 2015.

Real estate professionals may be able to help the younger generation work toward their goal of home ownership in the meantime too.

For example, as the Reuters article points out, those looking to buy soon should take several steps to home ownership, such as working to improve and protect their credit score. “If your score is anything less than 740, find out how you can raise it — paying down a credit card balance, putting more time between you and your last late fee,” Stern writes. The article also notes CreditKarma.com, a free site that allows you to monitor your credit score until it’s more attractive to a lender.

Young adults who are aspiring for home ownership also should start tightening up their wallets and saving for a down payment and closing costs. Also, they should learn about mortgages available from the Federal Housing Administration, which offers loan products with low down payments that are popular among first-time home buyers.

Source: “Are First-time Homebuyers Missing the Sweet Spot?” Reuters (Dec. 19, 2012)
Copyright the National Association of Realtors®

Existing-Home Sales, Prices Maintain Uptrend

Santa Barbara Homes for Sale — Fri, 21 Dec 2012 17:22:51 GMT

Existing-home sales continued to improve in November with low inventory pressuring home prices upward, according to the National Association of REALTORS®.

Total existing-home sales — completed transactions that include single-family homes, townhomes, condominiums and co-ops — rose 5.9 percent to a seasonally adjusted annual rate of 5.04 million in November from a downwardly revised 4.76 million in October, and are 14.5 percent higher than the 4.40 million-unit pace in November 2011. Sales are at the highest level since November 2009 when the annual pace spiked at 5.44 million.

Lawrence Yun, NAR chief economist, said there is healthy market demand. “Momentum continues to build in the housing market from growing jobs and a bursting out of household formation,” he said. “With lower rental vacancy rates and rising rents, combined with still historically favorable affordability conditions, more people are buying homes. Areas impacted by Hurricane Sandy show storm-related disruptions but overall activity in the Northeast is up, offset by gains in unaffected areas.”

The national median existing-home price for all housing types was $180,600 in November, up 10.1 percent from November 2011. This is the ninthconsecutive monthly year-over-year price gain, which last occurred from September 2005 to May 2006.

Distressed Sales

Distressed homes — foreclosures and short sales sold at deep discounts — accounted for 22 percent of November sales (12 percent were foreclosures and 10 percent were short sales), down from 24 percent in October and 29 percent in November 2011. Foreclosures sold for an average discount of 20 percent below market value in November, while short sales were discounted 16 percent.

“The market share of distressed property sales will fall into the teens next year based on a diminishing number of seriously delinquent mortgages,” Yun said.

Total housing inventory at the end of November fell 3.8 percent to 2.03 million existing homes available for sale, which represents a 4.8-month supply at the current sales pace; it was 5.3 months in October, and is the lowest housing supply since September of 2005 when it was 4.6 months.

Listed inventory is 22.5 percent below a year ago when there was a 7.1-month supply. Raw unsold inventory is now at the lowest level since December 2001 when there were 1.89 million homes on the market.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 3.35 percent in November from 3.38 percent in October; the rate was 3.99 percent in November 2011.

NAR President Gary Thomas said there’s been speculation of a rise in short sales before the end of the year with pending expiration of the Mortgage Forgiveness Debt Relief Act. “However, there’s been no movement in short sales, their market share is staying in a narrow range, and they’re still taking much longer to sell — typically three months,” he said.

“The fact remains it is extremely difficult to expedite a short sale, and banks’ response to client urgency is only starting to improve. However, we’re hopeful that the act will be extended before it expires on December 31 so sellers don’t have to pay taxes on forgiven mortgage debt, which would be unfairly treated as income for owners who are selling under duress,” Thomas said.

Transaction Types

The median time on market for all homes was 70 days in November, slightly below 71 days in October, but is 28.6 percent below 98 days in November 2011. Thirty-two percent of homes sold in November were on the market for less than a month, while 20 percent were on the market for six months or longer; these findings are unchanged from October.

First-time buyers accounted for 30 percent of purchases in November, down from 31 percent in October and 35 percent in November 2011.

All-cash sales were at 30 percent of transactions in November, up slightly from 29 percent in October and 28 percent in November 2011. Investors, who account for most cash sales, purchased 19 percent of homes in November, little changed from 20 percent in October; they were 19 percent in November 2011.

Single-family home sales rose 5.5 percent to a seasonally adjusted annual rate of 4.44 million in November from 4.21 million in October, and are 12.4 percent higher than the 3.95 million-unit level in November 2011. The median existing single-family home price was $180,600 in November, up 10.1 percent from a year ago.

Existing condominium and co-op sales jumped 9.1 percent to an annualized level of 600,000 in November from 550,000 in October, and are 33.3 percent above the 450,000-unit pace a year ago. The median existing condo price was $181,000 inNovember, which is 10.6 percent higher than November 2011.

Regional Performance

Existing-home sales in the Northeast rose 6.9 percent to an annual rate of 620,000 in November and are 14.8 percent above November 2011. The median price in the Northeast was $232,900, down 2.0 percent from a year ago.

Existing-home sales in the Midwest increased 7.2 percent in November to a pace of 1.19 million and are 21.4 percent higher than a year ago. The median price in the Midwest was $141,600, which is 7.0 percent above November 2011.

In the South, existing-home sales rose 7.9 percent to an annual level of 2.04 million in November and are 17.2 percent above November 2011. The median price in the South was $157,400, up 10.5 percent from a year ago.

Existing-home sales in the West rose 0.8 percent a pace of 1.19 million in November and are 4.4 percent higher than a year ago. With ongoing inventory constraints, the median price in the West was $248,300, which is 23.9 percent above November 2011.

Investors See Rising Profits From Rental Properties

Santa Barbara Homes for Sale — Fri, 21 Dec 2012 17:20:17 GMT

Rental income produced by residential properties rose 12 percent year-over-year in September 2012, CoreLogic reports.

“The rapid growth in rental income is a byproduct of fundamental shifts in the housing market, driven by a large increase in affordable investment properties and rising rents,” CoreLogic reports.

This residential investment will contribute to additional economic growth. "Overall market uncertainty can be reduced further by a reduction in mortgage risk, investment-driven economic recovery, and further clarity on housing policies, leading to more sustainable profits and outcomes for real estate and housing finance," CoreLogic reports.

Source: CoreLogic
Copyright the National Association of Realtors®

More Real Estate Pros Optimistic About Home Values

Santa Barbara Homes for Sale — Fri, 21 Dec 2012 17:18:40 GMT

More real estate professionals are optimistic about the direction of home prices, according to a fourth-quarter survey by HomeGain of more than 200 practitioners and brokers.

Sixty-five percent of real estate professionals say they expect home values to rise in the next six months, up from 51 percent in the previous quarter. In the fourth quarter of 2011, only 15 percent of practitioners said they expected home prices to rise.

“We are seeing a continued increase in optimism about the direction of home prices,” says Louis Cammarosano, general manager of HomeGain. “Real estate agents expect the recent pick up in the real estate market to continue in the coming two years.”

Indeed, the optimism in home values increases even more the further the outlook: Seventy-nine percent of real estate professionals and 62 percent of home owners say home values will likely increase in the next two years, according to the survey. Eleven percent of real estate practitioners say they expect home values to fall in the next six months.

Here are the 10 states where real estate professionals are most confident about rising home prices over the next six months:

Idaho
Michigan
Arizona
Texas
Indiana
California
Florida
Virginia
North Carolina
Colorado

The following are the top states where homeowner confidence about home values over the next six months is highest:

Arizona
Nevada
Texas
Colorado
Wisconsin
Washington
Michigan
Virginia
Massachusetts
Tennessee

Buyer Urgency Expected to Drive 2013

Santa Barbara Homes for Sale — Fri, 21 Dec 2012 17:16:22 GMT

Home shoppers will likely have more urgency in the new year, wanting to buy before home prices rise even more.

Home prices are edging up in most markets, and buyers are taking notice. Buyer surveys recently have shown that home shoppers expect home prices to continue to inch up, and they want to cash in before they rise too much higher.

“Every single thing about housing is flashing green” with household formation rising, inventory falling, and affordability hovering at record highs, James Dimon, chief executive of J.P. Morgan Chase told CNBC last month.

In 2013, rising rents are expected to push more renters to buy, The Wall Street Journal reports. Also, investors who’ve had a big appetite for housing in recent years may start to decrease their share in some markets that have seen prices rise, such as Phoenix, and focus on other markets still in recovery mode, like Chicago and Atlanta.

“Rising prices could eventually encourage more sellers to put their homes on the market, which would help boost demand even further,” The Wall Street Journal reports.

To meet the expected increase in demand in 2013, some real estate companies are going on a hiring spree. For example, Redfin says it plans to increase its 400 agents nationally by 50 percent by the end of January after having to send about half of its referrals to other companies earlier this year because demand outstripped its supply of agents.

Source: “2013: How Rising Prices Could Boost Housing Demand,” The Wall Street Journal (Dec. 18, 2012)
Copyright the National Association of Realtors®

Home Affordability Shifts as Market Heats Up

Santa Barbara Homes for Sale — Mon, 17 Dec 2012 18:56:47 GMT

Homes are becoming less affordable, according to a recent housing index. Affordability is slowly reversing a six-year trend of lows as prices inch up in many housing markets.

The National Association of REALTORS®' Composite Housing Affordability Index dropped 1.2 percent in October compared to a year earlier.

Prices in many markets are rising as a housing recovery takes shape. But also stifling housing affordability is an increase in guarantee fees charged to lenders by Fannie Mae and Freddie Mac, Moneynews reports. Those fees recently reached a peak of 46 basis points, according to Capital Economics.

Source: “The Credit Union Alternative,” The New York Times (Dec. 13, 2012)
Copyright the National Association of Realtors®

More Borrowers Turn to Credit Unions for Mortgages

Santa Barbara Homes for Sale — Mon, 17 Dec 2012 18:53:43 GMT

Borrowers seeking a mortgage or for those looking to refinance are increasingly turning to credit unions. These financial institutions are expected to surpass a record-breaking $100 billion in mortgage loan originations this year, The New York Times reports.

The growth has mostly been attributed to a surge of refinancers and a growth from consumers’ “disillusionment with big banks,” The New York Times reports.

“We’d be remiss if we didn’t give a shout-out to the major banks for being annoying to consumers and forcing people to seek out other alternatives,” says Bob Dorsa, the president of the American Credit Union Mortgage Association in Las Vegas.

Credit unions are aggressively going after business, says Ed Kovalefsky, the CUC Mortgage Corp. chief operating officer. “They try to be as competitive as possible with regard to rates,” he says.

Credit unions may offer slightly lower closing costs than banks too. Another potential advantage, housing experts note, is that credit unions mostly keep their servicing on all of their mortgage loans in-house — incentive for them to be more responsive to their customers.

However, credit unions' bigger bite out of the mortgage market may be short-lived. “Historically, when rates go up and refi goes down, our share and origination volume drops,” Dorsa says. “We’ve made a concerted effort this time to get out in front of REALTORS®, so we hope we won’t take as much of a hit production-wise as we have in the past.”

Source: “The Credit Union Alternative,” The New York Times (Dec. 13, 2012)
Copyright the National Association of Realtors®

The automated home is one step closer...

Santa Barbara Homes for Sale — Tue, 11 Dec 2012 01:02:47 GMT

FORTUNE -- The powerhouse private equity firm Blackstone recently invested in an Provo, Utah company that installs home security systems in an equity deal that valued it at $2 billion. What does Blackstone see in an industry that's not known for being particularly sexy?

It turns out that private company Vivint, which had sales of nearly $400 million in 2012 and is second in residential security only to ADT, is becoming much more than a security firm. CEO Todd Pedersen sees the security business as a way to sell his customers everything from smart thermostats, to lighting control systems to even rooftop solar systems. Says Pedersen, who favors plaid shirts and a baseball cap with "Vivint" scrawled across its front: "We've been an industry that hasn't innovated in 20 years. "

Pedersen aims to fix that. He figures that his 700,000 customers might want more than just security. His home automation system -- which comprises of a touch-sensitive control panel mounted on the wall, sensors, cameras, lighting controls, thermostats and smart phone apps -- can help keep your house safe and save energy at the same time. For example, the system links with the motion detectors of the home security system to tell when you're home and when you're not. When you're not, the heat is turned down and the lights are automatically turned off. Other systems like the Nest thermostat, which was created by former a Apple (AAPL) designer, tries to "learn" when you're home or not based on your past behavior. Pedersen claims his system is more accurate and says on average his customers can save $30 a month in heating, cooling and electric bills.

MORE: Will Adobe's new cloud strategy pay off?

Vivint's system can also tell the homeowner exactly how much power he or she is using and how. It can also be hooked up to the rooftop solar systems Vivint now offers. Studies have shown that homeowners can cut their power usage some 10% when they know how much power they're using. Users can also control heating, lighting and door locks remotely from a smart phone or tablet. Coming home early? Just tell the system that you're arriving in a half hour and the house will start to heat up. The system can even control lawn sprinklers. If the local weather report is rain, the system, which is hooked up to the Internet, will know and won't turn on the irrigation system, saving water.

Vivant so far has signed up more than 170,000 of its customers for the energy-saving system. The full home automation packages costs $68.99 a month plus a $199 one-time activation fee. But the company is not alone. Its archrival ADT is starting to offer home energy systems. Tendril, a Boulder, Colorado company, sells sophisticated home energy management systems. And big cable companies like Time Warner (TWX), Verizon (VZ) and Comcast (CMCSA) have recently entered the home security and energy management space. Says Pederson, who sleeps only 4 hours a day: "What keeps me up at night is I'm always concerned that we're not innovating fast enough." He must be hearing some big foot steps behind him.

By Brian Dumaine, senior editor-at-large

What's Really Behind the Housing Recovery?

Santa Barbara Homes for Sale — Tue, 11 Dec 2012 00:56:45 GMT

The housing market has shown several consecutive months of improvement in home prices and buyer demand. The housing market—once a downer for the U.S. economy—is now its one bright spot. But why?

A recent TIME magazine article questions what’s really behind the real estate market’s improvement.

Tim Iacano of Iacano Research credits the majority of the recovery and rise in home prices—if not all of it—to the Federal Reserve’s aggressive actions to keep mortgage rates low. The Fed’s quantitative easing (QE) program has prompted mortgage rates to fall to all-time lows in recent weeks.

The lower interest rates have increased home buyers’ purchasing power and boosted affordability.

For example, Iacano points out that a buyer today could purchase a house worth $280,000 and if he’s able to snag a record-breaking 3.3 percent mortgage rate, he’ll have a $1,100 per month mortgage payment.

“Even if mortgage rates moved back up to their 20-year average rate of 6.5 percent (what many thought were simply unbelievable rates when they first dropped that low last decade), that same $1,100 mortgage payment would finance a home purchase of just $193,000, not the current $279,000,” Iacano points out. “The difference between these two prices is nearly 50 percent!”

Source: “Is The Housing Recovery Just an Illusion Created by the Federal Reserve?” TIME (Dec. 7, 2012)
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