If you’ve done your homework, and saved your money, NOW is a great time to buy your first home. Prices are still dropping—a little. But inventory of single family homes and condos is also dropping (so there might be fewer properties in your price range than there were—see the list below).
Interest rates are still low. That means you can still get a good deal in the real estate market. With the interest rates low, your buying power is higher than if the interest rates were high. For example, buying a $750,000 home at 4.5% would cost $650 a month LESS than buying it at 7%!!! That’s a huge savings!
In addition, the first time home buyers’ credit has been extended. You must be in escrow by April 30, and close by June 30, 2010, in order to take advantage of this credit…. Also, the property has to be less than $800,000.
Inventory of homes (both condos and single family homes) is dropping, so soon it may be a sellers’ market. Lots of people will be out there, just like you, looking for their next home, wanting to buy. Now is such a good time to buy.
Here is the breakdown of single family homes available on Oahu (as of today) in various price ranges:
79 homes: $100,000 to $350,000
141 homes: $351,000 to $450,000
262 homes: $450,001 to $600,000
203 homes: $600,001 to $750,000
100 homes: $750,001 to $800,000
59 homes: $800,001 to $950,000
59 homes: $950,001 to $1,100,000
374 homes: over $1,100,001
Here is the breakdown of condos available on Oahu (as of today) in various price ranges (this list may include leasehold properties and studios):
94 condos: to $100,000
396 condos: $100,001 to $200,000
456 condos: $200,001 to $300,000
314 condos: $300,001 to $400,000
173 condos: $400,001 to $500,000
98 condos: $500,001 to $600,000
90 condos: $600,001 to $700,000
56 condos: $700,001 to $800,000
32 condos: $800,001 to $900,000
25 condos: $900,001 to $1,000,000
149 condos: over $1,000,001
There may be a lot to choose from in your price range, or there may be only a few properties.
Call your real estate agent now. If you don’t have an agent you are already working with, please call me… Tiare Dutcher at 808-753-5327. I would be happy to help you find your FIRST home.
Wednesday, November 25, 2009
Tuesday, November 24, 2009
Finding a Best Buy
As I continue to mention there are three popular approaches in determining a best buy: 1.) for investors, rental property that yields a positive cash flow with minimal down payment. 2.) Properties where the asking price is substantially below like kind homes that have sold within the last six months. 3.) Properties where the quality or condition is above average, in a highly sought after area, in a neighborhood where the inventory for sale is relatively nonexistent and are selling at or below market value.
Of late the focus has been on the Real Estate Agent and his or her ability and understanding of the market and how best they can help their client exploit certain variation on these three points. In this regard let’s take point (2) Properties where the asking price is substantially below like kind homes that have sold within the last six months. Most recently I came across a listing in Diamond Head, Black Point neighborhood. The property was offered at $1,395,000. The land was assed at $2,179,000 and the structure was $203,900. Black Point is a very desirable area. When looking at the comps this 1,395,000 did meet the requirement of selling substantially below like kind homes that have sold within the last six months. Even if the buyer was considering tearing down the structure and buy only for the land. The assessment still gives a strong indication this is a good buy.
If you would like any further details on this property or other potential best buys please do not hesitate to call 503 475 6872, Abron Toure. Let me show you how this property or any other can be turned into a great opportunity.
Of late the focus has been on the Real Estate Agent and his or her ability and understanding of the market and how best they can help their client exploit certain variation on these three points. In this regard let’s take point (2) Properties where the asking price is substantially below like kind homes that have sold within the last six months. Most recently I came across a listing in Diamond Head, Black Point neighborhood. The property was offered at $1,395,000. The land was assed at $2,179,000 and the structure was $203,900. Black Point is a very desirable area. When looking at the comps this 1,395,000 did meet the requirement of selling substantially below like kind homes that have sold within the last six months. Even if the buyer was considering tearing down the structure and buy only for the land. The assessment still gives a strong indication this is a good buy.
If you would like any further details on this property or other potential best buys please do not hesitate to call 503 475 6872, Abron Toure. Let me show you how this property or any other can be turned into a great opportunity.
Monday, November 23, 2009
Here's an update on the financial market for the week ending 11/20/09, courtesy of Alan Zukerkorn of Hawaii Mortgage Co, Inc.
Have a Happy Thanksgiving!
Mortgage Market News for the week ending November 20, 2009Distributed to over 12,000 Hawaii Subscribers Every Friday
Compliments of Alan Zukerkorn Hawaii Mortgage Company Inc.
PHONE:(808) 988-6622
FAX:(808) 988-7722
www.hawaiimortgage.net
alan@hawaiimortgage.net
Events This Week:
Inflation Low
Retail Sales Rose
Housing Starts Down
Manufacturing Mixed
Events Next Week:
Mon 11/23 Existing Sales 2-yr Auction
Tues 11/24 GDP FOMC Minutes 5-yr Auction
Wed 11/25 Durable Orders Core PCE 7-yr Auction
Bernanke Addresses Falling Dollar
A highly anticipated speech on Monday by Fed Chief Bernanke on the economic outlook revealed no change in the Fed's stance on short-term monetary policy. There were also few surprises in the economic data released during the week. The monthly inflation readings continued to show that inflation is not a cause for concern in the short-term. As a result, mortgage rates barely moved during the week, remaining at historically low levels.
The decline in the value of the dollar has received a great deal of attention lately. While Fed officials rarely discuss the value of the dollar, Bernanke assured investors that the Fed is closely watching exchange rates. However, he then reminded investors that the Fed's dual mandate is to promote full employment and to keep prices stable. According to Bernanke, the value of the dollar is just one of many factors affecting inflation, and the Fed is not concerned by the movement in the dollar so far. With a fragile economy and high unemployment rate, he suggested that the Fed intends to keep the fed funds rate at very low levels. Tightening monetary policy to strengthen the dollar would hurt the economic recovery and slow job creation. After the speech, the value of the dollar fell to the lowest level since August 2008.
If foreign investors expect the value of the dollar to continue to fall, it may pose a risk for mortgage rates in the future. Foreign investors historically have been major buyers of mortgage-backed securities (MBS). When the dollar falls, the value of US assets to foreign investors in their own currency declines, making US investments less rewarding. With the Fed scaling back its MBS purchases over the next few months, a drop in foreign demand would further pressure yields higher to fill the void left by the Fed.
Property Issues – Condos
Last week I addressed property issues primarily for Single Family Homes. This week we look at how issues with condos, could decide if you get financing or not.
Leasehold. There are still lots of rumors out there that financing is no longer available for leasehold properties. That is not true. The basic rules still apply. The lease has to extend 5 years past the length of the loan applied for. If you want a 30-Year Fixed loan, there has to be a minimum of 35 years remaining on the lease.
Owner-Occupancy. This is where the major changes to condo financing have taken place in the past couple of years. The simple guideline on occupancy is if the owner-occupancy is below 50%, you will not get a Fannie or Freddie loan. There are still portfolio products available for these scenarios. If your equity position is less than 20% and mortgage insurance is required, the owner-occupancy jumps up to 70%. Keep in mind that the formula used by most property management companies to determine owner-occupancy as disclosed on the condominium disclosure form is flawed. The rule for owner-occupancy is owner-occupants AND 2nd homes. Most property management companies determine owner-occupancy by tabulating the number of units in which the maintenance fee statements are sent to an address other than the subject property. They will consider all of these units investor properties. The best way to determine the number of investor properties is with the Resident Manager. They know exactly how many renters live in the complex.
Insurance. It is now a Fannie Mae requirement that condo owners carry contents insurance (an H-06 policy) in addition to the coverage carried by the association. If there were a fire, the association’s insurance will not cover appliances, cabinets, etc. This coverage is a good idea regardless of any lender’s requirements.
Also Notable:
October Core CPI inflation was a tame 1.7% higher than one year ago
October Housing Starts dropped 11% from September
The Treasury will auction a record $118 billion next week
The Fed purchased $16 billion in agency MBS during the week ending 11/18
Average 30 yr fixed rate:
Last week:
-0.02%
This week:
-0.02%
Stocks (weekly):
Dow:
10,300
-25
NASDAQ:
2,140
-20
Week Ahead
A wide range of economic data will be released during the holiday-shortened week ahead. Existing Home Sales will come out on Monday. GDP, Consumer Confidence, and the FOMC Minutes from the November 4th Fed meeting will be released on Tuesday. Durable Orders, Personal Income, Core PCE inflation, New Home Sales, and Consumer Sentiment will all be packed in on Wednesday. In addition, there will be Treasury auctions on Monday, Tuesday, and Wednesday. Mortgage markets will be closed on Thursday for Thanksgiving. Expect volatility on Friday, as most traders will be gone, making for a 4-day weekend.
Have a Happy Thanksgiving!
Mortgage Market News for the week ending November 20, 2009Distributed to over 12,000 Hawaii Subscribers Every Friday
Compliments of Alan Zukerkorn Hawaii Mortgage Company Inc.
PHONE:(808) 988-6622
FAX:(808) 988-7722
www.hawaiimortgage.net
alan@hawaiimortgage.net
Events This Week:
Inflation Low
Retail Sales Rose
Housing Starts Down
Manufacturing Mixed
Events Next Week:
Mon 11/23 Existing Sales 2-yr Auction
Tues 11/24 GDP FOMC Minutes 5-yr Auction
Wed 11/25 Durable Orders Core PCE 7-yr Auction
Bernanke Addresses Falling Dollar
A highly anticipated speech on Monday by Fed Chief Bernanke on the economic outlook revealed no change in the Fed's stance on short-term monetary policy. There were also few surprises in the economic data released during the week. The monthly inflation readings continued to show that inflation is not a cause for concern in the short-term. As a result, mortgage rates barely moved during the week, remaining at historically low levels.
The decline in the value of the dollar has received a great deal of attention lately. While Fed officials rarely discuss the value of the dollar, Bernanke assured investors that the Fed is closely watching exchange rates. However, he then reminded investors that the Fed's dual mandate is to promote full employment and to keep prices stable. According to Bernanke, the value of the dollar is just one of many factors affecting inflation, and the Fed is not concerned by the movement in the dollar so far. With a fragile economy and high unemployment rate, he suggested that the Fed intends to keep the fed funds rate at very low levels. Tightening monetary policy to strengthen the dollar would hurt the economic recovery and slow job creation. After the speech, the value of the dollar fell to the lowest level since August 2008.
If foreign investors expect the value of the dollar to continue to fall, it may pose a risk for mortgage rates in the future. Foreign investors historically have been major buyers of mortgage-backed securities (MBS). When the dollar falls, the value of US assets to foreign investors in their own currency declines, making US investments less rewarding. With the Fed scaling back its MBS purchases over the next few months, a drop in foreign demand would further pressure yields higher to fill the void left by the Fed.
Property Issues – Condos
Last week I addressed property issues primarily for Single Family Homes. This week we look at how issues with condos, could decide if you get financing or not.
Leasehold. There are still lots of rumors out there that financing is no longer available for leasehold properties. That is not true. The basic rules still apply. The lease has to extend 5 years past the length of the loan applied for. If you want a 30-Year Fixed loan, there has to be a minimum of 35 years remaining on the lease.
Owner-Occupancy. This is where the major changes to condo financing have taken place in the past couple of years. The simple guideline on occupancy is if the owner-occupancy is below 50%, you will not get a Fannie or Freddie loan. There are still portfolio products available for these scenarios. If your equity position is less than 20% and mortgage insurance is required, the owner-occupancy jumps up to 70%. Keep in mind that the formula used by most property management companies to determine owner-occupancy as disclosed on the condominium disclosure form is flawed. The rule for owner-occupancy is owner-occupants AND 2nd homes. Most property management companies determine owner-occupancy by tabulating the number of units in which the maintenance fee statements are sent to an address other than the subject property. They will consider all of these units investor properties. The best way to determine the number of investor properties is with the Resident Manager. They know exactly how many renters live in the complex.
Insurance. It is now a Fannie Mae requirement that condo owners carry contents insurance (an H-06 policy) in addition to the coverage carried by the association. If there were a fire, the association’s insurance will not cover appliances, cabinets, etc. This coverage is a good idea regardless of any lender’s requirements.
Also Notable:
October Core CPI inflation was a tame 1.7% higher than one year ago
October Housing Starts dropped 11% from September
The Treasury will auction a record $118 billion next week
The Fed purchased $16 billion in agency MBS during the week ending 11/18
Average 30 yr fixed rate:
Last week:
-0.02%
This week:
-0.02%
Stocks (weekly):
Dow:
10,300
-25
NASDAQ:
2,140
-20
Week Ahead
A wide range of economic data will be released during the holiday-shortened week ahead. Existing Home Sales will come out on Monday. GDP, Consumer Confidence, and the FOMC Minutes from the November 4th Fed meeting will be released on Tuesday. Durable Orders, Personal Income, Core PCE inflation, New Home Sales, and Consumer Sentiment will all be packed in on Wednesday. In addition, there will be Treasury auctions on Monday, Tuesday, and Wednesday. Mortgage markets will be closed on Thursday for Thanksgiving. Expect volatility on Friday, as most traders will be gone, making for a 4-day weekend.
Friday, November 20, 2009
Get Ready for YOUR New Home!!!
First Time Home Buyers: There are a few things that are extremely important to remember in buying your first home, once you are in escrow.
There will be a timeline that is generated, usually by the escrow company. These are deadlines that have to be met in order to keep to the purchase contract. Make sure your real estate agent is meeting the deadlines. Usually, the agent is very aware of the deadlines, but it’s always good for you to be aware too.
One of the items on the timeline is the home inspection. It is important to have a professional do this, someone who is knowledgeable about building structure, electrical wiring, plumbing, roofs, and all the many things that make up a house or condo property. It is important for YOU to be at that home inspection, so that you can ask the inspector questions about what you are seeing…
Another important date is the final walk through. This is usually done about five days before the closing of the property, just before the property becomes YOURS. If repairs had to be done, were they finished? Was there personal property that went with the home? Is it still there? Were there items that were supposed to have been removed from the property? Are they gone? If you are satisfied with the state of the property, you can be assured that it will be just that way when you take possession in a few days. If you are not satisfied, you will need to discuss with your agent what things still need to be done…
Buying a home for the first time is a huge undertaking, and can be scary. A good real estate agent can help you through the process, answering questions and helping to alleviate your fears. If you need a good agent, call me, and I can help you. Tiare Dutcher 808-753-5327.
There will be a timeline that is generated, usually by the escrow company. These are deadlines that have to be met in order to keep to the purchase contract. Make sure your real estate agent is meeting the deadlines. Usually, the agent is very aware of the deadlines, but it’s always good for you to be aware too.
One of the items on the timeline is the home inspection. It is important to have a professional do this, someone who is knowledgeable about building structure, electrical wiring, plumbing, roofs, and all the many things that make up a house or condo property. It is important for YOU to be at that home inspection, so that you can ask the inspector questions about what you are seeing…
Another important date is the final walk through. This is usually done about five days before the closing of the property, just before the property becomes YOURS. If repairs had to be done, were they finished? Was there personal property that went with the home? Is it still there? Were there items that were supposed to have been removed from the property? Are they gone? If you are satisfied with the state of the property, you can be assured that it will be just that way when you take possession in a few days. If you are not satisfied, you will need to discuss with your agent what things still need to be done…
Buying a home for the first time is a huge undertaking, and can be scary. A good real estate agent can help you through the process, answering questions and helping to alleviate your fears. If you need a good agent, call me, and I can help you. Tiare Dutcher 808-753-5327.
Wondering which direction are interest rates likely to move in the next year?
Guy Cecala, CEO of Inside Mortgage Finance believes:
The Federal Reserve launched a program to buy $1.45 trillion of mortgage securities this year, and it has helped to keep interest rates at—or near—historically low levels. But the money should be used up by the first quarter of next year. Interest rates are then likely to rise, possibly increasing to a full percentage point by the end of the year.
Federal Reserve Bank of St. Louis President James Bullard believes:
Past experience suggests policy makers may not start to raise interest rates until early 2012, while concern borrowing costs have stayed “too low for too long” may prompt an earlier move.
There are several different factors that drive the movement of interest rates. Activity in the purchase/sell of 10 year Treasury Bond, economic news such as unemployment, what the Federal Reserve Bank decides to do with the Fed Fund rate, and many other factors.
Which direction do you think mortgage rate will move?
- Linda Le, Loan Officer, Pacific Access Mortgage, 808-561-5943
The Federal Reserve launched a program to buy $1.45 trillion of mortgage securities this year, and it has helped to keep interest rates at—or near—historically low levels. But the money should be used up by the first quarter of next year. Interest rates are then likely to rise, possibly increasing to a full percentage point by the end of the year.
Federal Reserve Bank of St. Louis President James Bullard believes:
Past experience suggests policy makers may not start to raise interest rates until early 2012, while concern borrowing costs have stayed “too low for too long” may prompt an earlier move.
There are several different factors that drive the movement of interest rates. Activity in the purchase/sell of 10 year Treasury Bond, economic news such as unemployment, what the Federal Reserve Bank decides to do with the Fed Fund rate, and many other factors.
Which direction do you think mortgage rate will move?
- Linda Le, Loan Officer, Pacific Access Mortgage, 808-561-5943
Monday, November 16, 2009
Hawaii Real Estate Market at A Glance
In October, single family home listings were on the market an aveage of 52 days before received an accepted offer and going into escrow.
Condos were on the market for an average of 47 days before going into escrow.
This represents a very brisk market since 60 - 90 days represents a normal market demand.
One factor affecting this brisk market is the low inventory of homes and condos available.
In October, there were 1282 single family homes avaialble for sale. This is the lowest inventory since Sept of 2005. There were 1828 condos for sale. Thats the lowest inventory since Nov of 2005.
With these low inventories, it's imperative that home buyers have a Realtor to keep them abreast of properties that meet their needs when they come on the market since the demand is still very high, especially for homes in the $300K to $700K price range and condos in the $200K to $500K range. Homes and condos in these price ranges that are in above average condition generally received multiple offers.
If you're looking for a home in these price ranges and need assistance, call me at 351-1507.
Condos were on the market for an average of 47 days before going into escrow.
This represents a very brisk market since 60 - 90 days represents a normal market demand.
One factor affecting this brisk market is the low inventory of homes and condos available.
In October, there were 1282 single family homes avaialble for sale. This is the lowest inventory since Sept of 2005. There were 1828 condos for sale. Thats the lowest inventory since Nov of 2005.
With these low inventories, it's imperative that home buyers have a Realtor to keep them abreast of properties that meet their needs when they come on the market since the demand is still very high, especially for homes in the $300K to $700K price range and condos in the $200K to $500K range. Homes and condos in these price ranges that are in above average condition generally received multiple offers.
If you're looking for a home in these price ranges and need assistance, call me at 351-1507.
Friday, November 13, 2009
The Changing Landscape of Lending
Underwriting Guidelines have changed quite a bit and it keeps changing. A few of the major changes are Debt-to-Income Ratio, how long credit documents are good for, use of retirement, stock and bonds as assets, credit score minimum, and verification of employments.
Below is an example of how this will affect the borrower:
· Debt-to-Income Ratio – A Debt to Income Ratio is calculated based on the amount of gross income in relation to the amount of monthly debt obligation (credit card bill, car payment… etc). Previously lenders were allowed to go rather high on the ratio. Up to about 55% debt to income ratio. The new change is 45%. How will this affect the borrower? The borrower will be qualified for a lower loan amount.
· Credit documents – Credit documents such as the credit report will go from 120 days to 90 days. This means you’ll have to updated your information to the lender as it will only be good for 90 days.
· Assets – Lenders were able to use 100% of the fund in stock and mutual accounts and 70% for retirement fund. Now, they are only allowed to use 70% for stock and mutual fund accounts and 60% for retirement. If you are planning on using funds from either account to show proof that you have enough cash for closing cost, you’ll have to make sure that there is more than enough or cash out on it and transfer it to a savings account (which the lender can use 100% of the fund).
· Credit Score – Minimum credit score is 620. Make sure FICO scores are high. The higher the score the better.
· Verification of Employment – Make sure that there are no furloughs or projected furloughs (unless they have been account for at the beginning of the loan process). The stability of your job is very important so make sure everything stated on your loan application can be verified.
More changes will be announced in the next few months. For more information, please call Linda Le, Loan Officer at 808-561-5943 Stay tune for more…
Below is an example of how this will affect the borrower:
· Debt-to-Income Ratio – A Debt to Income Ratio is calculated based on the amount of gross income in relation to the amount of monthly debt obligation (credit card bill, car payment… etc). Previously lenders were allowed to go rather high on the ratio. Up to about 55% debt to income ratio. The new change is 45%. How will this affect the borrower? The borrower will be qualified for a lower loan amount.
· Credit documents – Credit documents such as the credit report will go from 120 days to 90 days. This means you’ll have to updated your information to the lender as it will only be good for 90 days.
· Assets – Lenders were able to use 100% of the fund in stock and mutual accounts and 70% for retirement fund. Now, they are only allowed to use 70% for stock and mutual fund accounts and 60% for retirement. If you are planning on using funds from either account to show proof that you have enough cash for closing cost, you’ll have to make sure that there is more than enough or cash out on it and transfer it to a savings account (which the lender can use 100% of the fund).
· Credit Score – Minimum credit score is 620. Make sure FICO scores are high. The higher the score the better.
· Verification of Employment – Make sure that there are no furloughs or projected furloughs (unless they have been account for at the beginning of the loan process). The stability of your job is very important so make sure everything stated on your loan application can be verified.
More changes will be announced in the next few months. For more information, please call Linda Le, Loan Officer at 808-561-5943 Stay tune for more…
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