Is it a good time to buy?

This seems to be the question du jour from my friends. This came up again during lunch when a friend asked if he should consider buying now. I tried various ways and reasons why I believe it is a good time to purchase by introducing reasons why buyers may have an advantage now: market has an abundance of inventory; sellers are getting into trouble due to high unemployment rate in California and in Silicon Valley thus, having to sell; distressed sales are resulting in homeowners becoming renters and the rental market is now exploding; very low interest rates; spring time selling cycle is here again. All of these mean that the buyers will have an advantage. But the look on my friend's face was that of a person who was not convinced after all of that talk. I know he believed me, but I must have lost him somewhere between unemployment and rental market. Glossy look; a new approach was needed.


I decided rather than the anecdotal approach, especially this friend and others like him in Silicon Valley who are engineers, I thought the best method would be to show them the numbers. No further explanation would be needed. I don't want to be the recipient of that look again.......


Not even a year ago, it was still common in many of the highly sought after communities in Silicon Valley to get multiple offer and sell above asking price. Is it a good time to buy? Well, let's look at the data. Let's focus particularly on the column that is labeled %LP Rec'd (percentage of Listing Price received); what percentage of the listing price did the seller receive?

Overall for Santa Clara County, last month, listings in every single city sold for less than what the sellers wanted (except for condos in Gilroy). Look at some of the higher priced communities like Saratoga and Los Altos Hills (90% and 88%, respectively). It was very common for properties in Saratoga to sell easily for 5% over list price with multiple offers within days of hitting the market.






Is it a good time to buy? What do you think?





Steve Mun, Silicon Valley Realtor
www.stevemungroup.com

Received Gold Standard from QSC

Obama's Housing Plan

My short sale client was asked me today if I had any more details about the Obama administration’s efforts to help homeowners keep their homes. Honestly, I breezed over the newspaper articles like most people and had not taken the time to do in depth research. I figured I should read up on the actual plan a bit more.

The plan is called the Making Home Affordable Program.

There are many complex facets to the program, but I am highlighting what I consider to be important bullet points of the facts.

There are essentially two components to the program that the President Obama’s Making Home Affordable Program has proposed to help most homeowners.

The first component program - Home Affordable Refinance Program to assists those responsible homeowners who are current on their mortgage payments but may be unable to re-finance their loans because they their home value has decreased significantly.

• Have LTV (loan to value ratio of their homes) range from 80-105%
• Borrowers should contact their lenders to see if they qualify
• Borrowers will pay current low mortgage interest rates, plus lender points and fees
• Pre-payment penalties, balloon payments, and cash-out re-financing are not permitted
• Borrowers may re-finance using 30 years or 15 years fixed rates
• Program ends June 2010

To see if they qualify, go to the following link.

http://www.financialstability.gov/makinghomeaffordable/refinance_eligibility.html

The other component program – Home Affordable Modification Program to assist those homeowners who are already behind in their mortgage payments or are facing foreclosure. There is still quite a bit of uncertainty about this program which has not been hammered out as of yet. But here is what is known so far.

• Must be below the conforming loans maximum limit of $729,750
• No minimum or maximum LTV requirement
• Do not have to be delinquent to qualify
• Must have gotten the current mortgage prior to January 1, 2009
• Must be experiencing some type of hardship
• Borrowers must contact lenders to see if they qualify
• Only covers primary residence where the borrower resides
• First, the lender will try to bring down the monthly mortgage payment down to 38% of debt to income ratio income
• The program will match further reductions in monthly payments dollar-for- dollar, from 38% to 31% of debt to income ratio for the borrower
• Loan modifications can be made until December 31, 2012

To see more details, go to the following link

http://www.financialstability.gov/makinghomeaffordable/modification_eligibility.html


Steve Mun, Silicon Valley Realtor
www.stevemungroup.com