FHA reduces mortgage insurance premiums!

Mortgage RatesWhen was the last time you heard of prices going down?  That is what happened today when the FHA announced they are cutting their annual mortgage insurance premium from .85 percent to .60 percent for less than 5% down payment option and from .80 percent to .55 percent for 5% or more down payment. This will help offset current higher interest rates and help make housing more affordable in 2017! Don’t forget that the conforming loan limit has also increased to $636,100 which applies to FHA financing as well.

Let me know if you have any questions! Happy New Year!

Ray Kozak

4 Ways to Make a Home Show-Ready

When a home hits the market, it needs to be show-ready. That doesn’t usually require spending a fortune on a remodel, however. Just targeting a few key areas in the home can go a long way.

The New York Times recently highlighted a few tips from real estate pros on preparing a home for sale, including:

Add three points of light. “Every room should have at least three points of light,” Alison Draper, a real estate professional with Halstead Property, told The New York Times. The three points could include a table lamp, floor lamp, and a task light. Or, it may include an overhead fixture and two table lamps.

Shine the floors. You likely can still salvage a worn floor with some polish or professional cleaning. “Unless your floors are severely damaged, it doesn’t make sense to have them refinished,” Pat Christodoulou, a home stager in Connecticut and New York, told The New York Times. She suggests hiring a handyman with a floor buffer, which might cost about $300 to wax and polish the floor of a small living room.

Tidy up the bathroom. The key: Make it sparkle. Re-caulk necessary areas. Investigate small upgrades that can have a big impact on brightening the space, such as swapping out an old faucet or even adding a new shower curtain, bath mat, and fresh towels. For a bathtub in need of some TLC, a professional refinisher can reglaze it, repairing any dents, rub out rust spots, and recoat it for about $500 for a standard-size bathtub, according to Homeadvisor.com.

Deep clean. The key: Make the home sparkle. Wash the windows, inside and out. Vacuum the dust in exhaust fans. “Deep cleaning is so important because while an apartment can show very neatly, it’s the details that people pick up on,” says Heather McMaster, an associate broker at the Corcoran Group. Get more deep-cleaning tips.

Source: “Preparing a Home for Sale,” The New York Times (Sept. 16, 2016)

Are Home Buyers Gaining an Advantage?

Bay Area real estate market shift

Are homebuyers gaining an advantage? Many take wait-and-see attitude, challenging sellers to negotiate prices

By Richard Scheinin – this article appeared in the East Bay Times on Sept. 21, 2016

In the Bay Area housing market, it appears to be a game of cat and mouse.  Sales of single-family homes in August crept up ever so slightly from the year before as many buyers took a wait-andsee attitude, challenging sellers to negotiate — something unheard of in the overheated market of 2015.  Could a price break be coming to the region after years of steady appreciation? Perhaps.

“Outside hotly contested areas, we’re seeing price adjustments of a kind we haven’t seen in some time,” said Timothy Ambrose, treasurer of the Bay East Association of Realtors. “Buyers start thinking, ‘Well, should I wait?’” But hang on, he and other experts warned. The regional market is a complicated one, with techies still driving up home prices in micromarkets

“We’re seeing price adjustments of a kindwe haven’t seen in some time.”  — Timothy Ambrose, Bay East Association of Realtors

From Palo Alto to Oakland’s Rockridge neighborhood. And this wouldn’t be the first time the overall market has slowed in late summer, as children go back to school and families call off their house hunts.

According to the latest numbers from the Core-Logic real estate information service, home sales across the region’s nine counties crept up by just 0.3 percent in August compared with the previous year. Looked at county by county, there was a seesaw pattern: Sales were up 2.9 percent from a year earlier in Contra Costa County, but down 6.8 percent in Santa Clara County.

“The Bay Area eked out a very small year-over-year gain for home sales,” said Andrew LePage, a research analyst for CoreLogic. “Now why is that the case when the job market’s doing well and interest rates are still incredibly low? Once again, it’s because of affordability and constraints” in the housing supply.

“And it’s not just that there’s not enough houses for buyers — there’s too many buyers who can’t afford a house.” Prices remained on the stratospheric side, though August gains tended to be in the modest single digits, and not a single recordbreaking high was set. The median price was $734,000 in Alameda County, up 7.2 percent from a year earlier, and $510,000 in Contra Costa County, up by just 0.1 percent. In San Mateo County, the $1.2 million median price represented a 9.1 percent increase, while Santa Clara County’s median remained flat at $925,000.

It was the first time since February 2012 that Santa Clara County failed to register a year-over-year price gain. The county reached its peak in April and May, when the median hit $1 million.

LePage said the end of the county’s four-year streak isn’t necessarily a big deal. “I don’t think one month makes a trend,” he said. “There’s not a lot to say until we see the next two or three months come in.”

The Silicon Valley market is unpredictable, said Pacific Union agent Wendy Kandasamy, based in Palo Alto: “The market is so dynamic. It’s hard to say with certainty when a property will sell.”

She called August — typically the doldrums for home sales — an anomaly, ticking off details of five sales for $5 million and up. One fivebedroom house in Palo Alto sold for $7,795,000 — almost $1,900 per square foot, a figure Kandasamy called “extraordinary.”

Yet in lower price brackets, she said, buyers have backed off, and sellers find themselves negotiating.

Her client Clifford Chao can attest to that. A Google engineer, he and his wife, Jackie Ling-Chao, who also works in tech, spent months house hunting.

Initially, they set their budget between $1.8 million and $1.9 million, but that wasn’t getting them the house they wanted in a top school district. So they decided to stretch the budget. “It’d be painful, but we could,” Chao said.

And then the unexpected occurred: He noticed that “certain houses that should be getting 10 offers suddenly couldn’t sell. It was only happening in this one price range of between $2.1 and $2.4 million. Everything seemed to tumble, sometimes by about 10 percent.”

The couple watched, waited and successfully bid on an Eichler-style home in Palo Alto: four bedrooms with a spacious backyard on a 7,000-square-foot lot. It listed for $2.3 million. After a previous buyer backed out, Chao and his wife got it for $2.17 million.

“I think we did get a little bit lucky,” he said. “It’s what we wanted — perfect.”

Alain Pinel agent Mark Wong also finds the market to be mixed. On the one hand, he identified six homes that sold last month in Cupertino for between $200,000 and $417,000 over the asking price, the latter attracting 23 offers. Yet such bidding battles are no longer the rule, and with the market’s long-range prospects unknowable, he has advised some clients to get off the fence.

His clients Shue Pun and her husband, Heman, decided to sell their Cupertino townhouse, where they had lived for 13 years and raised their son. Listing it for just under $1.1 million, they held an open house that attracted 110 visitors — but no offers. “A real disappointment,” Shue said.

But a few weeks later, a couple with two young children — “a perfect fit” — bid $1.05 million. The Puns, who purchased the townhouse 13 years ago for $520,000, accepted the offer and now plan to buy a house in San Jose, close to their church.

Like the Bay Area weather, the region’s real estate market varies from town to town and neighborhood to neighborhood, said William Doerlich, president- elect of the Bay East Association of Realtors. He estimated that upward of 50 percent of his clients work in tech.

“They’re tired of the $4,500apartmentinPotrero Hill,”, Doerlich said, so they move to the East Bay, preferably close to BART and in a “walkable” district, and they “gobble up” houses, whether in Oakland or Dublin.

Or in Fremont, where his client Erin Suth found an old cottage house on a spacious lot. Built in 1924, it was completely renovated. It listed for $430,000.

Suth, 26 and a regional manager for a recruiting company — not even a techie — bid $450,000 and now owns her first house. “It’s darling,” she said. Contact Richard Scheinin at 408-920-5069.