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California Spring Home Buying Season 2014
There is a lot of good news for home buyers as we enter the Spring home buying season.
Interest rates have recovered from the first of the year. Historically interest rates rise at the beginning of every new year and then settle down about 6 weeks later. 2014 was not different as home buyers watched interest rates drop almost 1/2% from January to February. While rates are still almost 1% higher than this time last year, they have remained in the 4%’s since last June.
The inventory of available homes for sale is increasing. Home owners have seen nice increases in home equity over the last 2 years and many can now make that move they have been putting off. California in general has risen 1 full month since February, 2013. In February, 2014 California saw a 4.7 months supply of available homes. Some very popular areas are still struggling but the trends seem positive.
Lenders are again offering a mixed bag of financing options. During 2011-2013 just about every lender was offering only 30 year fixed mortgages as the safest instrument available. We are now seeing lenders offering adjustable rate mortgages with attractive rates. Adjustable rate mortgage can be very attractive if you know you will be moving within the locked rate period. Many first time buyers typically live in their first home 5-8 years. For these buyers an adjustable rate mortgage with a lock period of 5-7 years can be a nice option. Be sure to check with your lender for all of the disclosures associated with these mortgages.
The California Spring Home Buying Season in 2014 looks brighter for home buyers.
FHA to offer Mortgage Insurance discount to first-time-buyers
Carol Galante, FHA commissioner, announced on Tuesday that FHA would offer discounts on mortgage insurance premiums to first-time buyers who completed housing counseling.
FHA mortgages have been an important sources of loans for many low-income and middle class home buyers for years. During the housing meltdown, FHA became the preferred lender when traditional banks pulled back on mortgage lending. However, the FHA target market also were some of the most at risk home owners and many lost their homes during the meltdown. FHA came under fire from Congressional leaders for poor lending standards, as millions of Americans lost their homes during the meltdown. In an effort to shore up their financial base, FHA raised mortgage insurance levels over the last few years and now carry the highest insurance levels in the market place. This rise in mortgage insurance premiums has caused many buyers to abandon the program for more conventional financing.
During her speech on Tuesday at the NCSHA The Affordable Housing Opportunity conference, Ms. Galante told the audience that first-time buyers who complete HUD-approved home buying counseling will get a discount on their mortgage insurance. According to HUD Secretary, Shaun Donovan, evidence is showing that home buying counseling actually lowers the risk of default for borrowers.
Are you the right seller for my buyer clients?
I read a survey recently published by the National Association of Realtors in which buyers were asked what were the most important aspects of deciding which was the right home for them. National surveys interest me, but I find personal surveys much more informative. So, I asked some of my current buyers what helped or hurt them in their home searches. I found the results mirrored what the NAR survey came up with, with a few differences.
One of the things my clients said they wanted was market priced homes. They were immediately turned off by homes that were over priced. These clients spend a lot of time, I mean a lot of time, researching homes on-line. They get information from me but they also search other websites as well. These are smart, sophisticated people who can spot an over priced home quickly. They can’t understand, and neither can I, why a seller would over price their home when it is so easy to find similar homes in the same neighborhood with better pricing.
Another issue is actually viewing homes. I had a couple recently view a nice home in my area that was properly priced but when we arrived for the viewing the home owner was there. The owner then proceeded to walk my clients through the home giving running commentary about everything he had done to the house. They felt uncomfortable opening closets and cabinets with the owner standing there. When I had shown them other homes, where the owner wasn’t present, they spent time engaging each other in what worked and didn’t work about the house. In this case, I got almost no feedback from them about the house and they left quickly after the owner left the room.
Photos, or the lack of photos, is a hot button for my buyers. If they see a home for sale and there are only a couple of photos of the property, boy do I hear about it. My clients need to see photos of the kitchen, bathrooms, backyard, living spaces and exterior of the house. It is almost impossible for me to interest them in homes with few photos available.
Homes for sale in As-Is condition. In California, our purchase agreement speaks to the condition of a home several times. The agreement specifically states that the home is purchased in as-is condition but it also provides the buyer the opportunity to have physical inspections done so the buyer can be satisfied of the condition of the home. If a listing says the home is only for sale in as-is condition or that the seller won’t make any repairs, my buyers become hyper-critical of everything they see. They also suspect there are problem with the home they can’t see. I know that in short sales, as-is condition is the norm, but if we are talking about a traditional sale, having a seller say “I won’t make any repairs” is a real red flag to my clients.
Having limited showing times is another issue for some of my clients. All of my current clients work for a living and their employers expect them to be at work during working hours. Recently one couple was interested in a home but it could only be viewed Monday-Friday 10AM-4PM, excluding nap time 1PM-3PM. No matter how much we tried to negotiate a showing outside those hours, the answer was always no. I had another couple a few years ago interested in a house. I called to set an appointment with the owner and was told their daughter was sick. No problem, nursing a sick child puts extra stress on any parent but when I asked if I could call back in a couple of days to see if the child was better I was told no. The owners would call me when it was convenient, I never did get a call.
If one of more of these scenarios describes you as a seller, then you probably aren’t the right seller for my buyer clients.
San Diego Holiday Events
Like everything else, San Diego offers events for all ages through out December with a San Diego flair.
San Diego Bay Parade of Lights
Where else will you find a floating holiday light parade? This annual tradition will be on Sundays, December 8 and 15. Viewing is available along San Diego Bay starting at Shelter Island and moving to Harbor Island, the Embarcadero, Seaport Village and ending at the Ferry Landing in Coronado. The parade begins at 5:30PM and continues until the last boat finishes usually around 9:00PM. The even is free and if you are lucky, you might be able to snag free parking as well.
Mission Bay Christmas Boat Parade of Lights
Not to be outdone by San Diego Bay, Mission Bay also offers a parade of lights. The event will be held on Saturday, December 14. The parade will begin at 7:00PM and end at 9:00PM. Best viewing is along Crown Point, the east side of Vacation Village or the west side of Fiesta Island. The event and parking are free.
San Diego’s crown jewel, Balboa Park, is all dressed up for the holidays. There are lights and displays along all of the plaza areas in the park. The huge Christmas tree is twinkling at the Organ Pavillion. The displays are open to the public through December and parking is free.
Gaslamp Holiday Pet Parade
Not to be outdone by their human counterparts, pets take over the Gaslamp Quarter on Sunday, December 8 for their own brand of holiday fun. The entry fee is $20 and can be paid at the event which starts at 1:00PM and continues to 5:00PM. Humans are given a break, the event is free for them. Prizes will be awarded in both canine and non-canine catagories. There is even an Ugliest Sweater Contest. The event is at the Hilton Gaslamp Park at 401 K St., San Diego 92101.
Old Town and Las Posadas
Old Town celebrates the holidays with a Mexican flair on Saturday and Sunday, December 14 & 15. There will be candlelight tours, holiday singers, live performances and complementary refreshments. The event will run from 6:00PM-9:00PM both days. The traditional Las Posadas re-enactment will be on Sunday starting at 5:00PM. Some of the park attractions will have their standard admission fees.
Neighborhood Light Displays
Still my favorite, many San Diego neighborhoods take holiday light displays to a whole new level. You will find these events all around the County, Google for events in your neighborhood. Bundle up and bring a thermos of hot chocolate for a fun, free family event.
San Diego holiday events come in all shapes and sizes with something for everyone. What ever your December looks like, I wish you peace and joy.