by Gagner | Aug 14, 2013 | Real Estate News
Just 44% of California residents could afford the median-priced home in the first quarter, a real estate group’s index says. The chance of finding affordable housing in California is dwindling as median home prices and interests rates continue to rise—fast. According to a study published by the California Assn. of realtors, only 44% of residents could afford the average priced home in California. This is compared to 56% during the same period as last year. Many would-be first time buyers are having their home owning dreams crushed, especially considering this time last year home affordability hit its highest level since the California Assn. or Realtors began publishing affordability statistics in 1988. The percentage is expected to decline even further as home prices and interest rates continue to sharply rise. In June, the average home price hovered around $428,510, a big jump from the $378,960 average in March. According to Freddie Mac, interest rates rose from 4.37% in July and from 3.41% in March. Read the full article at Los Angeles Times...
by Gagner | Aug 14, 2013 | Real Estate News
In June, 58% of the sales in the state were made in all-cash, according to a report by RealtyTrac. But it’s not just Nevada. All-cash deals in Florida comprised 57% of home sales during the month; in the state of New York, it was 51%, and in Vermont, a whopping 80%. In markets like these, lingering foreclosures and depressed home prices are attracting private equity firms and other investors looking to buy before home prices go much higher, RealtyTrac said. In other markets, where there are fewer distressed properties, the all-cash deals are a lot less prevalent. Nationwide, cash deals comprised 30% of home sales in June, down from 31% a year earlier, RealtyTrac reported. But in states like Texas, Utah and New Mexico, such deals were practically non-existent. Related: Buy or rent? 10 major cities “The U.S. housing market is slowly but surely moving toward a more normalized and sustainable pattern after a flurry of institutional and cash buyers flocked to residential real estate last year, pushing up prices and picking clean the best inventory available in many areas,” said Daren Blomquist, vice president at RealtyTrac. The biggest metropolitan hotspot for investors right now is Atlanta, where all-cash deals represented 42% ofsales in June and investors represented 27% of buyers, the highest ratio in the country. Atlanta is still struggling with one of the highest foreclosure rates in the country, making it a prime target for investors. Hit hard by foreclosures when the housing bubble burst, Phoenix was one of the first places investors flocked to. A year ago, 25% of all homes sold went to deep-pocketed investors. In...
by Gagner | Aug 13, 2013 | Real Estate News
On Tuesday, August 6, 2013, President Barack Obama spoke about the new Congressional proposal to shut down Frannie Mae and Freddie Mac, the government-run behemoth mortgage companies that were rescued by a $187 billion taxpayer bailout during the financial crisis. If Congress follows through with the plans, borrows will probably end up paying slightly higher mortgage rates under the House and Senate bills that would slowly phase out Fannie and Freddie over five years and establish a much more limited government role in insuring mortgage securities. Supports of the bill say this would keep mortgage rates available and affordable for everyone. The underlying idea behind both of the House and Senate bills is to shift more mortgage financing risk away from the government and to the private sector to prevent taxpayers from having to pay for future bailouts. However, there will be a price homebuyers would have to pay for having private investors shoulder the majority of borrowing risk to protect taxpayers. Mark Zandi, chief economist at Moody’s Analytics said, “It will mean higher mortgage rates. The question is how much higher.” Zandi estimated that the average borrowers could pay up to $75 per month in extra interest payments (half a percentage point) on a mainstream mortgage under the Senate proposal, and about $135 more under the House plan. These figures are for a conforming loan of around $200,00 with the borrower providing 20% of the down payment. Story from SFGate: Read more at...
by Gagner | Aug 7, 2013 | Real Estate News
Just 44% of California residents could afford the median-priced home in the first quarter, a real estate group’s index says. The chance of finding affordable housing in California is dwindling as median home prices and interests rates continue to rise—fast. According to a study published by the California Assn. of realtors, only 44% of residents could afford the average priced home in California. This is compared to 56% during the same period as last year. Many would-be first time buyers are having their home owning dreams crushed, especially considering this time last year home affordability hit its highest level since the California Assn. or Realtors began publishing affordability statistics in 1988. The percentage is expected to decline even further as home prices and interest rates continue to sharply rise. In June, the average home price hovered around $428,510, a big jump from the $378,960 average in March. According to Freddie Mac, interest rates rose from 4.37% in July and from 3.41% in March. Read the full article at Los Angeles Times –...
by Gagner | Jul 18, 2013 | Uncategorized
As part of our partnership with Habitat for Humanity, Bridge Realty has pledged a fundraising goal of $2,500 to directly benefit the Carter Work Project. These funds will help buy land, labor and supplies that build the homes for families in need. With your donation, you will be helping families break the cycle of poverty and build long-term financial security. Habitat for Humanity and the Carter Project offers affordable, no-profit house payments for families in the Bay Area. Research has shown that decent housing improves health, increases children’s educational achievement and strengthens community ties. Donating through this site is simple, fast and totally secure. It is also the most efficient way to make a contribution to our fundraising efforts. Many thanks for your support — and don’t forget to forward this to anyone who you think might want to donate too! Thanks to your help, Habitat for Humanity and the Carter Project will be transforming the lives of families throughout the Bay...
by Gagner | Jun 22, 2013 | Uncategorized
With so many active real estate agents in San Jose, how do you know which one will provide the best service and net you the maximum offer for your Cambrian home? Generally, it is recommended that you interview at least 3 active agents in your particular area and carefully check their references. If you are willing to do a little extra effort to net a higher value for your home, I suggest working with a realtor that is experienced in creating added home value (more on that shortly). When interviewing a realtor, you first want to learn about their specific knowledge of your neighborhood and community. Do they really understand the home values within your neighborhood? Are they familiar with the schools (including API scores) and nearby amenities? What is their track record for selling homes in your area? What would their pricing strategy be for listing your home (starting at the highest price is not necessarily the best strategy for netting you the best offer). What resources can they offer (repair services, gardening, staging, etc)? Have they done a thorough CMA for your home (competitive market analysis). Does their personality mesh well with yours? These are just a few of the major items. Additionally, you will want to determine what is important to you and what areas you will require the most help. I have another possibility for you to consider. If you have been reading my previous posts, you know that I am both a licensed real estate broker and a developer. If you are really looking to maximize the sale of your home, have the initiative...
by Gagner | Mar 27, 2013 | Before Photos, Sellers, Uncategorized
Here is a story about how one person made a great profit in Cambrian real estate with some extra cash and a small amount of effort. A previous blog of mine spoke to the hot condo market that exists in Cambrian today, and this posting takes it a step further by illustrating how big money can be made. As in all investing, the idea is to buy an asset (in this case a condo) at a low price, add value and then sell at a higher price. Sounds simple, and it is if you follow a proven strategy and avoid any big mistakes. So here goes…. In February 2012, my friend put a $274,000 offer on a condo that the bank was short selling. It required a $10,000 deposit and the bank did not give final approval until the end of October (yes, it required more than 8 months for an answer). Once the bank gave final approval, they gave my friend 10 days to close the transaction. Luckily, he had the cash in a bank account which allowed him to get the transaction done. As a side note, IF he had not had the money, there are hard money lenders who provide experienced real estate investors cash in less than 2 weeks (for a cost). Since February, the market had gone up in value, so instead of keeping the condo as a rental (his original plan), my friend decided to rehab the interior of the unit and resell to a retail buyer. This practice is commonly called “flipping”. Using a contractor I referred him to, he remodeled the...
by Gagner | Mar 9, 2013 | Uncategorized
Ever watch “Flip this House” or any other TV reality show that illustrates real estate developers making huge returns on home remodels? It is true that there are big profit opportunities in flipping real estate, however just like any other investment opportunity, there are also risks. Whether or not you intend to sell your Cambrian home, this article outlines how you can safely add value to your home without taking big risks. Of course, remodeling requires some upfront capital that won’t be realized until you sell. Let’s take a look at those items that can really add BIG dollars to your home’s resale value. As a real estate developer myself, I can provide first hand examples of the value which can be created in remodeling homes. In my previous article I outlined simple cosmetic changes that add value (ie clean-up, landscape, paint, carpets, etc). The big ticket items are what add big ticket profits. Of course these are items like new kitchens, baths, roofs and fixing bad configurations. Can you live thru a remodel OR move out before selling? That is the question. If so, and taking a small risk is within your means and temperament, remodeling can pay great dividends. Expenditures for remodeling should match the quality of the home and neighborhood. It is not necessary to have a hi-end contractor do a remodel in an area of mid-end homes, no matter how picky you are. Remember, if you are doing the remodel to sell and make a profit, it is only necessary to make the house attractive to another retail buyer looking in your particular neighborhood (not...
by Gagner | Feb 26, 2013 | Uncategorized
If you have been reading the papers lately, you’ve probably heard that banks have started avoiding foreclosures, and are electing to either help home-owners do loan modifications (refinances and lender workouts) or a short sale. Why is this? It is primarily driven by government pressure and large lawsuits that the major banks lost in 2012. The conclusion by the major finance institutions is that it has become more cost-effective and lower risk to pursue loan modifications and short sales. There is a catch for home-owners considering approaching their bank for a loan mod or short sale….your request will not be considered simply because your house is “under-water”. In either scenario, the home-owner must prove a hardship to the lender. Hardships include: loss of employment, illness & medical, divorce or death, increase in mortgage payment and natural disasters. Hardships DO NOT include: loss of equity, wanting to resize, increased family size and excessive discretionary spending. If you fall into the category of a hardship outlined above, then there is a good chance it makes sense to approach your bank. Loan modifications typically add to the length of your loan, reduce interest or provide you a defined time frame to get caught up. Rarely are principals reduced, however it does happen, so it never hurts to ask. If you have a hardship and want to stay in your home, requesting a loan mod should be your first strategy. If a loan mod will not help you given your long-term goals and objectives, a short sale is an option to consider. A short sale essentially lets the owner with a hardship sell...
by Gagner | Feb 20, 2013 | Uncategorized
If you are somebody trying to buy a Cambrian house to live in, you’ve probably found yourself in a frustrating competition with buyers that have “all cash”. Why do they always seem to get the deals, even though their offers are often not the highest one? The answer is maddeningly simple. In this upward trending market, the appraisal price required for the bank to fund your loan often does not match the price required to win the deal. And sellers understand this, therefore often accepting a lower all cash offer which has no appraisal and finance contingency. There is a significant disconnect between appraisal values and today’s home prices, which is causing huge grief for buyers using conventional financing. The obvious question is this: why won’t appraisers recognize that prices are rising and appraise homes at a price required for your offer to get accepted? The reason is two-fold: 1. Appraisals are done using sold comps, which are backward looking and often don’t reflect current market realities. 2. The lack of inventory and sales in Cambrian makes it very hard to find recent comps reflecting the recovering market. These two factors force appraisers to often come in at very low values relative to the offers a seller has to consider. Given the scenario above, sellers often have a choice. They can either accept the lower “all cash” offer OR take a chance with a higher “conventional loan” offer that may not appraise for the offer price. By accepting a conventional loan offer, the seller accepts a certain amount of risk. Taking this risk means the seller is betting that...
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