bay area housing market 2013 – The Real Estate Beat

Resources for Lower-Income Homebuyers – YEAH!!!!!!!!

Reading the paper this morning – it was refreshing to see information to help local want-to-be homeowners find some assistance. Enjoy this article I found in SF Chronicle. If you have questions – email me anytime at info@TheCatonTeam.com

Resources for lower-income homebuyers

Programs available to give low-income people a chance in difficult market

By Carolyn Said at SF Chronicle

San Francisco — Wakeelah and Andre Davis “always wanted to own a home and had been saving up,” said Wakeelah, an AC Transit bus driver. Like many first-time home buyers, especially those of modest means, they were consistently outbid by investors who could pay all cash.

“I kind of gave up for awhile,” Wakeelah Davis said. Then she came across a Richmond two-bedroom. The online listing said it would only be sold to people who wanted to live in it. The listing asked, “Tired of being beat out by cash offers?

“That sparked my interest to come back and try,” she said. “I thought maybe I’ll have a chance.”

The ad had another unusual requirement: It asked prospective buyers to write a letter about themselves, their house-hunting quest and their ties to the community.

“I told them I was born and raised in Richmond and I love the area. I graduated from Kennedy High and that’s where my son wants to attend,” said Wakeelah, whose son Dre’onn, 13, is now in middle school.

Even though theirs wasn’t the highest offer, the Davis family was selected to buy the house.

The seller was a nonprofit with a mission to buy, renovate and resell foreclosed houses only to owner-occupants under the unwieldy name “Foreclosure Recovery and Asset Building Management Project.”

“We want to help low- to moderate-income families get into homeownership so they can increase their self-sufficiency,” said Nicole Taylor, CEO of the East Bay Community Foundation in Oakland, which provided seed money for the program as a project of Self-Help Community Development Corp. “The idea was that maybe we could help families turn around their lives by providing them with an opportunity to buy this key asset that can grow in value.”

The mission also includes boosting local communities.

“We seek families who have roots in the community so they can maintain their family ties and help neighborhoods by having more stable families,” said Paul Staley, vice president of Self-Help Community Development Corp.

Pilot program

In operation since 2010, the program has handled just 18 homes, mainly in Contra Costa County, although it’s branching into Oakland. Taylor sees it as a pilot program and hopes to find funds to expand.A variety of similar programs exist that buy, fix and resell foreclosures to homeowners. Some use funds from the federal Neighborhood Stabilization Program, which was set up to help communities hard-hit by foreclosures and blight but is winding down.

But all such programs “are just a drop in the bucket,” said Maria Benjamin, executive director of Community Housing Development Corp. of North Richmond, which provides financial education to prospective home buyers, including those in the Self-Help program. “They are few and far between; there just isn’t enough money.”

Besides the resold-foreclosures programs, there are a variety of resources for low- and moderate-income people seeking to buy homes (see box). Though not enough to meet demand, it behooves prospective home buyers to learn about them, experts said.

Some advocates say the government should be doing much more to encourage and support lower-income homeowners.

Sasha Werblin, economic equity director at Berkeley’s nonprofit Greenlining Institute, which tries to extend opportunities to people regardless of race or income, listed several policy areas where she hopes legislators and regulators will take action.

They include pushing banks to create “sustainable mortgage products that work for middle- and low-income borrowers,” she said, adding that it’s critically important that borrowers demonstrate income to pay back loans, to avoid a repeat of the subprime lending disaster. Another step would be a bank-backed pool of funds for down-payment assistance, she said. She’d also like to see lenders pay closer attention to borrowers’ payment history, giving credit for a history of on-time rent and utilities payments – something that current credit scoring systems don’t take into account.

“We’d like the administration to take a more comprehensive and proactive stance about homeownership for everyone,” she said.

Wish list for help

Sheri Powers, director of the homeownership center at Oakland’s Unity Council, works directly with prospective home buyers. Her wish list for government help includes a way to urge banks selling foreclosures to sell to owner-occupants rather than investors.

“If they are serious about stabilizing communities, giving preference to buyers who want to occupy homes would make a huge difference,” she said. “Right now, they just want to sell as fast as possible. If an investor has cash, they’ll just lap it up – even if it’s $20,000 or $30,000 lower” than financed offers that take longer to close.

Resources for home buyers

A variety of programs provide help for low- and moderate-income home buyers, ranging from advice to money. Each program has different criteria.

Counseling and education

Find an agency near you for home-buyer education workshops and information on financial-assistance programs.

Neighborworks agencies, www.nw.org/network/nwdata/homeownershipcenter.asp

— HUD counseling agencies, www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?&webListAction=search&searchstate=CA

Down payment and financial assistance

Most programs have income and/or geography requirements. Many large cities – including San Francisco, Oakland, San Jose, Alameda, Hayward and San Leandro – offer programs. Do a Web search of your target city and “down payment assistance.”

— California Home Financing Agency (CalHFA), www.calhfa.ca.gov/homebuyer/programs/chdap.htm, provides a deferred-payment junior loan of up to 3 percent of the purchase price.

— Wells Fargo East Bay CityLift, www.unitycouncil.org/citylift-main-page-2/L. Down-payment grants of $20,000 are available for about 150 home buyers in nine participating East Bay cities.

— California State Teachers’ Retirement System, www.calstrs.com/home-loan-program. The retirement system is working to restart its down payment assistance program for teachers.

— CHF Platinum www.chfloan.org. Down payment assistance for low- and moderate-income borrowers in California; works only with FHA loans

— WISH (Workforce Initiative Subsidy for Homeownership), www.fhlbsf.com/community/grant/wish.aspx. Federal Home Loan Bank runs through participating banks. Provides 3-to-1 match for down payment funds. Must be used in conjunction with a local down payment assistance program, for instance from a city, county or employer.

— IDEA (Individual Development and Empowerment Account) www.fhlbsf.com/community/grant/idea-profile.aspx. A matching loan for households that participate in a home buyer education and savings management plan.

— Mortgage Credit Certificate (MCC), www.calhfa.ca.gov/homeownership/programs/mcc.pdf. This federal program allows qualifying homeowners to deduct a larger portion of their interest payments from their tax bill. Lenders are willing to account for this in calculating borrowers’ income.

Low-down payment loans

FHA (Federal Housing Administration) and VA (Veterans Affairs) loans are two key sources for people with lower down payments. Counselors recommend a couple of other options for lower-income borrowers that do not require the extra cost of mortgage insurance.

Union Bank Economic Opportunity Mortgage, www.unionbank.com/EOM

— CitiBank HomeRun, www.citibank.com/citimortgage/employee/lowdown.htm

Homes for sale

Neighborhood Stabilization Program, hudnsphelp.info/index.cfm?do=viewGranteeAreaResults The federal NSP program, which gives money to local governments to buy, fix and resell foreclosures, is winding down. This site details local grant recipients, some of which may still have homes for sale.

— Freddie Mac lets home buyers subscribe to lists of its foreclosed homes for sale in their area, www.homebase.homesteps.com

— Fannie Mae has an online database of its foreclosures for sale, www.homepath.com

— Several Bay Area cities offer “below-market-rate” units for sale to lower-income homeowners. Search the city’s name and “below market rate.” San Francisco’s program is at http://sf-moh.org/index.aspx?page=299

— Homes from the self-help program are listed at East Bay Asian Local Development Corporation www.ebaldc.org/ and Community Housing Development Corporation www.chdcnr.com/

I read this article at: http://www.sfchronicle.com/realestate/article/Resources-for-lower-income-home-buyers-4512719.php

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at: Info@TheCatonTeam.com

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Thanks for reading – Sabrina

How Much Would You Pay For…

Being a full time Realtor – I get some great questions. One of my favorites pertains to upgrades and how they affect resale value. Please enjoy these two articles I found very interesting. My comments are in italics.

Buyers Will Pay Extra for These Features

By DAILY REAL ESTATE NEWS

Some home shoppers say they are willing to spend thousands of dollars above the price of the home in order to have certain interior features.

The most coveted home features tend to center around the kitchen, such as stainless steel appliances and a kitchen island, says Errol Samuelson, president of realtor.com.

24/7 Wall St. used data from the National Association of REALTORS® to determine some of the most desired home features. Here are eight features that made the list and how much extra, on average, buyers say they’re willing to pay for having that feature in a home:

Central air conditioning: $2,520
New kitchen appliances: $1,840
Walk-in closet in master bedroom: $1,350
Granite countertops: $1,620
Hardwood floors: $2,080
Ensuite master bath: $2,030
Kitchen island: $1,370
Stainless steel appliances: $1,850

Sometimes paying the premium for a fixed up home works out for a buyer. This past weekend my client felt it made more sense to pay more for a turn key home since the interest rate is a right off and you’d have a higher write off with a more expenseive home – compared to spending their weekends fixing up a home. Each client is different with a unique budget and point of view.

What would you pay for?

Before making the decision to buy, people shopping for homes consider hundreds of factors. They include location of the house, the school district, size of the lot and also interior features. Most buyers insist on a house that grants most of their wishes, but shoppers often settle for a house without getting everything they want.

When it comes to certain interior features, many are willing to spend thousands of dollars above the price of the home to have them included. At least 60% of buyers said they would be willing to pay more for central air conditioning, new kitchen appliances and a walk-in closet in the master bedroom if they did not already have these features.

Many of the features homeowners desire involve the kitchen. They include stainless steel appliances and a kitchen island. The kitchen is a major focal point for home buyers, said Errol Samuelson, president of Realtor.com.

“People, in general, have shown more interest in having big and beautiful kitchens, and the kitchen is acting as an informal gathering place,” Samuelson said in an interview with 24/7 Wall St. “We have gone from the ’70s where it was about Hamburger Helper … and now we’ve got the Food Network where people are more interested in exploring cooking.”

The desirability of some characteristics vary depending on the home buyers’ age. In the survey, more people age 35 to 54 found the internal features of a house to be very important in making a decision than any other age group. When people are younger and buying their first home, they are primarily interested in jumping into the real estate market to build equity, and the features are less important, Samuelson said. “For the younger demographic, home is a place to sleep and a place to store your clothes, but you are out all the time,” he said.

When people get older, settle down with a spouse and start raising a family, they still consider the home and its features as investments. However, they often start to build more of a connection with the house, and the details of the home become important to improving quality of life in the home, and less so for long-term investment. The house becomes a “personalized area that separates [the occupants] from the outside world,” Samuelson said.

While a high percentage of people said they would pay more for some features, how much they were willing to pay was not necessarily that high. Although six in 10 home buyers without a walk-in closet said they would be willing to pay more for a house with one, those people said they would only spend an additional $1,350, much less than what a walk-in closet typically costs.

The features described are not necessarily the most important deciding factor for potential home buyers, Brendon DeSimone, a Realtor and real estate expert with Zillow, told 24/7 Wall St. When looking at house, he said, the first things people consider are factors such as the neighborhood, the school district and the difficulty of the commute to work.

“Everything starts with location,” DeSimone said in an interview. “You can have the best house in the world, but if it’s not in the neighborhood and school district where everyone wants to live, you are just not going to look at it.”

Using data from the National Association of Realtors, 24/7 Wall St. reviewed the 11 features that most homeowners were willing to pay more for. We also looked at the median amount that these people would be willing to pay to obtain that feature. In addition, we looked at data from the National Association of Realtors about whether prospective home buyers found certain features to be very important. That information was further broken down by factors such as home buyers’ age, whether they were looking to move into a new or previously owned home, and whether someone was a first-time or repeat buyer.

Based on those factors, here are the 11 most desirable home features:

11. One or more fireplaces > Percentage of home buyers willing to pay more: 40% > Amount willing to pay extra: $1,400

Some 40% of home buyers without a fireplace said they would spend additional money for at least one and cough up an extra $1,400. The fireplace, while always popular, was less necessary when several TVs were going in the house all at once, Samuelson said. But he speculated that having a home with fireplaces may become more popular in the future as people spend less time watching TV and more time on tablets and e-readers. These people may find the fireplace a good place to cozy up and use their devices, he said.

10. Eat-in kitchen > Percentage of home buyers willing to pay more: 40% > Amount willing to pay extra: $1,770

The people most interested in an eat-in kitchen tend to be in the 35-to-54 age range, with 30% of those prospective home buyers indicating this is “very important” in a house. Meanwhile, just 21% of those under 35 years of age and 20% over 55 feel the same way. More people, especially those who are raising families, want kitchens that look into family entertainment rooms. Some have even made it a family hangout by placing big-screen TVs and other electronics in the kitchen. “Buyers who are in families want to be in one space and do it all,” DeSimone said.

9. Home less than 5 years old > Percentage of home buyers willing to pay more: 40% > Amount willing to pay extra: $5,020

Some people simply want a newer home. For those willing to pay more for a newer home, the median that people would dole out was more than $5,000. Although this is a lot of money compared to most features, that money could be a wise investment in the long run. Maintenance costs are considerably less in newer homes compared to older homes, Samuelson pointed out. He also noted that newer homes tend to be much more efficient, attracting people who are environmentally conscious.

8. Stainless steel appliances > Percentage of home buyers willing to pay more: 41% > Amount willing to pay extra: $1,850

Like most features, stainless steel appliances are most important to people between the ages of 35 to 54, with 23% considering them to be a “very important” investment, compared with just 16% of those under the age of 35 and a mere 11% of those over the age of 55. From a cost perspective, stainless steel appliances are not necessarily the best investment. Samuelson noted that stainless steel wears out far easier than most other common materials. Also, the children in the house can also get their fingerprints on the appliances, requiring more cleaning. However, Samuelson said people are primarily driven to buy stainless steel appliances because they look more attractive.

7. Kitchen island > Percentage of home buyers willing to pay more: 48% > Amount willing to pay extra: $1,370

Kitchen islands are most important to people ages 35 to 54, with 24% indicating that it is a “very important” characteristic. Just 19% of people under 35 and 13% over 55 considered this feature important. DeSimone noted that kitchen islands often come in handy for those who are raising a family. It provides additional room to put out food for the family and allows the kitchen to become more organized. Although the desire for a kitchen island is high, those who do not have one but want one are only willing to shell out $1,370, less than most other features.

6. Ensuite master bath > Percentage of home buyers willing to pay more: 49% > Amount willing to pay extra: $2,030

Once again, the ensuite master bathroom tends to be more important to people ages 35 and older. “It kind of goes to the ‘home is my sanctuary’ mentality,” Samuelson said. This, along with a walk-in closet in the master bedroom, has become more important in the past 10 years or so. Many people are eager to make their bathroom more “homey” by doing things such as installing televisions on the wall. The fact that many master bathrooms have two sinks is also an appealing option for married couples, Samuelson added.

5. Hardwood floors > Percentage of home buyers willing to pay more: 54% > Amount willing to pay extra: $2,080

Some 25% of buyers under the age of 35, and 28% of those between 35 and 54, considered hardwood floors “very important” when looking for a home. Only 17% of people ages 55 and up felt the same way. In previous generations, homes with carpets were considered better in order to conserve energy, DeSimone said. Even today, older people are more likely to feel more comfortable with carpeting because the insulation makes the home a little bit warmer. But for younger people looking to have many guests at the house and for people with children, hardwood floors are desirable because they are easier to clean than carpets.

4. Granite countertops > Percentage of home buyers willing to pay more: 55% > Amount willing to pay extra: $1,620

Among homeowners between the ages of 35 and 54, 24% viewed granite countertops as “very important,” compared to 18% of people under 35 and 18% of people over 55. Although just one in every five prospective home buyers said granite countertops were very important, 55% of those who bought a home without such a countertop said they would pay extra for it. Both DeSimone and Samuelson agreed that the granite countertop is more of a style issue than anything else. “There has been more emphasis on the beautiful kitchen these days, and granite countertops are a part of that,” Samuelson said.

3. Walk-in closet in master bedroom > Percentage of home buyers willing to pay more: 60% > Amount willing to pay extra: $1,350

A whopping 60% of homeowners were willing to pay extra for a walk-in closet in the master bedroom, with 44% of people between the ages of 35 and 54 viewing this feature as “very important,” compared to just 35% under the age of 35 and 36% of people 55 and older. DeSimone said the walk-in closet is desired for two main reasons: space and status. The space is very desirable for people as they get older and acquire more clothes, allowing people to be more organized. Having a walk-in closet in the master bedroom is also a status symbol. When giving a house tour, DeSimone said, people want to say, “Hey, check out my closet,” in the same way they say, “Hey, have you seen my new kitchen?”

2. New kitchen appliances > Percentage of home buyers willing to pay more: 69% > Amount willing to pay extra: $1,840

About 69% of homeowners said they were willing to spend more money for new kitchen appliances. Unsurprisingly, people who are looking to buy a new home find this far more important than people who are eyeing previously owned homes. People who are the first to live in a specific house tend to want everything to be new in the house because they consider the house truly “their own,” DeSimone said. People also do not want to have to deal with the stress of broken appliances. “They don’t want to come home after a horrible stressful day at work and find the dishwasher isn’t working or the fridge is making noises.”

1. Central air conditioning > Percentage of home buyers willing to pay more: 69% > Amount willing to pay extra: $2,520

Nearly seven in 10 homeowners said they would be willing to pay more on central air conditioning — the same as new kitchen appliances and more than any other feature. Central air conditioning was considered “very important” by more than 60% of people in all age groups. Samuelson noted that although people were willing to shell out approximately $2,500 for the feature, that is far less than what it would actually cost to install central air conditioning. “There is a difference in people’s preference and what they are willing to pay for,” Samuelson said. “They may want the steak but are on a macaroni budget.”

I would love to hear your two cents! Comment here or email me anytime at Info@TheCatonTeam.com

I read this article at: http://realtormag.realtor.org/daily-news/2013/04/29/home-buyers-say-they-ll-pay-extra-for-these-features?om_rid=AACmlZ&om_mid=_BRfpyKB8yORuS4&om_ntype=RMODaily

And

http://www.usatoday.com/story/money/personalfinance/2013/04/28/24-7-home-features/2106203/

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at: Info@TheCatonTeam.com

Visit our Website at: http://thecatonteam.com/

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Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

Are Home Prices Rising Too Fast?

Hello Readers!

Found this article and had to share it. Why? Because this is on all our minds. My 2 cents are in italics.

When the real estate market hit bottom you could feel the thud. Buyers were leery of buying afraid home prices would continue to fall and sellers wouldn’t sell if their life depended on it not wanting to take any kind of loss. Thankfully those days are behind us. What a difference 1 year makes….it is obvious the memo is out and buyers are ready to buy again. However, sellers are not quite there yet. It seems that the bulk of properties for sale since 2009 were pre and post foreclosures, overinundating the market with options. Come 2012 and today, with sellers not quite ready to put their homes on the market inventory remains low in our area – thus pushing prices up.

No Realtor or client enjoys markets like this. Multiple offers, over bidding, no contingencies – all this is back in force right now. Ideally we would like to see a normal healthy market with normal growth. But with so few homes for sales and pent up buyers jumping off the fence – it is amazing to see this change that has taken place in the real estate world.

Enjoy the article – and would love to hear YOUR thoughts too!

Are Home Prices Rising Too Fast?

Some housing analysts are concerned that the sudden rise in home prices could make homes more unaffordable again if the price increases outpace income growth, The Wall Street Journal reports.

Average housing costs for home buyers who took out a mortgage were around 22.5 percent of average incomes, according to John Burns Real Estate Consulting. That is down from 38.5 percent in 2006, the peak of the housing bubble. The historical average is about 33 percent.

But with home prices rising in many markets and, in some, rising at a faster pace than income levels, will more people soon be priced out of the market?

Housing analysts say that, for now at least, lower mortgage rates are offsetting the higher prices of homes.

Borrowers have seen their purchasing power rise by around 33 percent over the past four years due to the low interest rates, The Wall Street Journal reports. For example, a borrower can make a $1,000 monthly mortgage payment and qualify for a $222,000 mortgage at today’s low interest rates, compared to 2008 when they’d likely qualify for $165,000 when mortgage rates were around 6.1 percent — nearly double what they are today.

Borrowers are able to withstand home-price increases because of the low rates, not because household incomes are growing, The Wall Street Journal reports. If mortgage rates tick back up to the 6 percent or 8 percent range, homes may look overpriced relative to incomes, according to housing analysts.

By: DAILY REAL ESTATE NEWS

Source: “Why Rising Interest Rates Could Eventually Curb Price Gains,” The Wall Street Journal (April 10, 2013)

I read this article at: http://realtormag.realtor.org/daily-news/2013/04/15/are-home-prices-rising-too-fast?om_rid=AACmlZ&om_mid=_BRbDWVB8x72-5F&om_ntype=RMODaily

And Here: http://blogs.wsj.com/developments/2013/04/10/why-rising-interest-rates-could-eventually-curb-price-gains/

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at: Info@TheCatonTeam.com

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Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com/

Thanks for reading – Sabrina

The home bidding wars are back!

Always nice to find a good article to share. Enjoy By Les Christie CNNMoney

The home bidding wars are back!

The bidding wars are back. Seemingly overnight, many of the nation’s major housing markets have gone from stagnant to sizzling, with for-sale listings drawing offers from a large number of house hunters.

In March, 75% of agents with broker Redfin said their clients’ offers were countered by rival bids, up from 56% who said so in late 2011.

The competition has been most intense in California, where 9 out of 10 homes sold in San Francisco, Sacramento and cities in Southern California drew competing bids during the month. And at least two-third of listings in Boston, Washington D.C., Seattle and New York generated bidding wars.

“The only question is not whether a new listing will get multiple bids but how many it will get,” said Kris Vogt, who manages 14 Coldwell Banker offices in the Sacramento area. One home in an Elk Grove, Calif., subdivision recently received 62 separate bids. The final sale price was for more than $150,000, well above its $129,000 asking price.

In Cambridge, Mass., two condos that could be combined into one large home hit the market two weeks ago for $800,000 each, according to Pat Villani, president of Coldwell Banker Residential Brokerage in New England.

“The brokers stopped taking names after the number of bidders reached 250,” she said. The winning bidder offered $2 million for both units.

Homebuyers eager to purchase before home prices and mortgage rates rise are finding few homes for sale as sellers hold out for better deals, said Glenn Kelman, Redfin’s CEO.

Many homeowners are still underwater, owing more on their mortgages than their homes are worth, and they want to wait until selling becomes profitable again. By doing so, they can avoid short sales, which carry big hits on credit scores, 85 to 160 points, according to FICO.

“Many people have been holding on for a profit and they’re just now getting their heads above water,” said Kelman.

Those who want to sell and buy a new home are encountering a market where it’s difficult to find a new place of their own, said Vogt.

Over the past few months, Jackie and Cliff Kaufman have bid on four different homes in St. Petersburg, Fla., including one short sale and a foreclosure.

The pair, who have two adult children and run an online jewelry business, said they bid $5,000 more than the $495,000 asking price on the first home they had their eye on and never heard back from the seller’s agent. They were later told the house sold for nearly $550,000.

Next, they bid on a short sale listed for $600,000. This time, they came in $10,000 above the asking price and again, they were beaten out. The house was only on the market for two days.

The third attempt to make an offer on a bank-owned property was also met with silence.

“It was very frustrating,” said Jackie Kaufman. “We felt we were always on the outside of the loop and that people who won the homes had the inside track.”

By the fourth try, the couple successfully bid through a listing agent, who they believe pushed their bid harder in order to earn a double commission since she was representing both the buyer and seller in the deal. And they managed to get the place for $30,000 less than the asking price.

They were lucky. Inventories of homes for sale continue to shrink. In February, the National Association of Realtors reported a 19.2% decline in inventory year-over-year. While the number of homes for sale should rise with the onset of the spring selling season, housing inventory is expected to remain low, pushing prices higher.

Related: Fastest growing boomtowns

And new home construction, especially in markets hit hard by the housing bust, is still moving forward at a snail’s pace, since the cost to build the homes is often more than what the property ends up selling for, said Jeff Culbertson, president of Coldwell Banker’s Southern California operations.

Even though home prices are on the rise, the balance between buyers and sellers has been thrown off balance, said Kelman.

“With buyers out in force and sellers cautious, the market is in an awkward ‘tweener’ phase,” he said.

I read this article at: http://money.cnn.com/2013/04/04/real_estate/bidding-wars/index.html?source=linkedin

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at: Info@TheCatonTeam.com

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