Home Prices Rise Again In July

As reported by the government, home prices are rising nationwide, up 0.3 percent in July.

Furthermore, versus November 2008, the Home Price Index has clawed back to unchanged.

The housing market appears to be holding its own.

However, we have to be careful about putting our full faith in the Federal Housing Finance Agency's data. It's somewhat flawed.

The Home Price Index is a national statistic and all real estate is local
The Home Price Index's methodology specifically excludes key housing demographics
As an obvious example, HPI only accounts for homes with Fannie Mae- or Freddie Mac-backed mortgage. Lately, the percentage of homes meeting that description is shrinking.

As FHA financing rises in popularity, Fannie and Freddie back far fewer loans than in the past. Furthermore, the HPI sample set also excludes newly-built homes and multi-unit properties.

Because of these exclusions, some analysts call the HPI incomplete. The same could be said of all home price metrics, however -- including the venerable Case-Shiller Index.

Therefore, what should be of interest to today's buyers and sellers is that all of "popular" home valuation models seem to be telling the same story -- home prices have stopped falling and look like they're beginning to rebound.

For a region-by-region breakdown of the Home Price Index, visit the FHFA website.

Regular Sales are Back!

Over the last 2 weeks, I have seen a surge in Regular or Equity Sellers. For most, this term is foreign only because Buyers are hearing about Short Sales, REOs, Foreclosures or Corporate Owned sales. The regular sale is the person that actually has equity in their home. There is no bank involved that needs to give an approval of the sale of a home. Waiting 3 months for a response on your offer is not part of the process with the regular sale. People are getting the confidence in the market and feel that its a good time to sell their home.

In the last 2 weeks, I have taken 2 regular sale listings and going on my third this afternoon. Being that prices have stablized in the OC market, for the most part, sellers feel that its time to cash out and take what they can get. As a buyer, these are the best homes to put offers. They will usually be in the best condition and as mentioned previously, dont have to wait for that lender approval. These homes usually go quickly, if priced correctly. For example, I had an Open House 2 weeks back, and had 28 people visit on Saturday and 37 people on Sunday. In turn, the home sold in 5 days of being on the market.

The resurgence of the Regular sale is definitely a good thing. Its a sign of hope for the Real Estate market that has taken a big hit over the last 2 and half years. Moreover, it gives buyers today a better quality home to chose from. A home that has been lived in and taken care of. This being in contrast to the Foreclosure and short sale property that have been neglected and in many cases, abused. Hopefully, with more Regular sales coming on the market and more confidence back in the market, we can expect a bit of more normal market for 2010. Only time will tell.

Summit Event in the Desert

For those that don't know, I have a business coach that fills me in every week with the latest trends and issues dealing with Real Estate. Well, this last week, Tom Ferry ( my coach) had his yearly event that spoke to about 2000 top agents from all over the nation. He spoke about the current Buyers Market that we are experiencing, the Foreclosures situation and most importantly, how to better communication with the public and get more involved with the conversation that is occurring between Realtors, buyers, seller, investors, etc... One of the major topics was about social media and house to get connect with this conversation that most of us don't know even exist. So, my pledge after the event is to become even more informed and connected by subscribing to twitter.com and facebook.com (twitter.com/alexanderpiana and facebook search alexander piana).

Ive always said communicaiton is the key in all things Real Estate, so Im excited to get this started.

H.E.R.A is coming...

H.E.R.A ( Housing and Economic Recovery Act) is unfortunately another obstacle that any buyer, real estate agent and most importantly, lender has to deal with. Basically, on any loan done in California, expect more costs, paperwork and delays with H.E.R.A. coming this July 30th.

In summary there are numerous fees in California that affect the APR or
Annual Percentage Rate, many of which are NOT lender related fees. Here are
some of the APR affecting fees: Points, Processing, Underwriting, Wire
Transfer, Tax and Insurance Reserves, Per Diem Interest, Escrow Fee, Escrow
Courier Fees, Escrow Loan-Tie-In Fees, any other Escrow related fees.

A few months ago we were hit with HVCC. For those that dont know what this is, basically it requires on all conventional loans, to have the appraisal ordered through a central headquarters. Lenders no longer have contact with the appraisers. This new guideline nearly cost me a deal this week, due to the fact that the appraiser decided to state on his appraisal report that the home NEEDED new paint and the woodflooring needed to be replaced. Last I checked, most REO/Foreclosure properties require one of the two.

If anyone one has their own stories on either HVCC or H.E.R.A , Id love to hear it.

The Recent Foreclosure Moratorium affect on Home Purchasing and Those asking for help...

If you have been already putting offers on homes and to try to pick up that next great deal, don't expect a whole more of opportunities to come your way this summer. With the latest 90 day Moratorium of Foreclosures, there will be an even tighter lock-down on the current inventories in California. Lesser amount of homes going to foreclosure will tighten up the already decreasing inventory, making that deal harder to come by.

In simple Supply/Demand terms, the demand for homes has increased steadily over the last 4 months and the Supply of homes as sharply decreased. This bottle-necking of Foreclosures isn't going to help in a much needed Inventory increase for buyers looking to get into the market.

On the other hand, is the governors 90 day Moratorium even going to work for those that need it? Historically , those that are in Notice of Default and are getting help from their bank for a loan modification, tend to default on the loan within the next year anyways. The offerings that the banks are giving aren't what the home owners are needing. Homeowners are looking for major reduction in payment, interest rate and/or principle reduction. Yet the banks, for the most part, aren't going jumping to do major changes to the current financing. Most of these loan mods are for a temporary period and is more a band aid for people to continue in making their payments.

Watch those rates...

As I expected, rates went up last week and currently changed the payment the of 3 of my current clients. Now,we have to look at lesser priced homes and/or go into other areas to view homes in our price range. Many times I have clients tell me that they want to buy because of prices being so low. What they also have to consider is the current rate they get their financing at. Here's an example, my client went from being able to buy at $280k last month, to now only qualifing for $250k. This is the only way she can keep the same payment.

I believe inflation was the cause of the recent increase in rates. Typically we see changes in the rates around the summer time for one reason or another. If you've got pre-qualified in the last 3 months and haven't spoken to your lender in a while, I highly encourage you to give them a call to confirm your payment once again. Don't be victim of payment shock with the new rates...

Spring is Here! What does this mean for Home Buyers?

This last weekend I was showing homes in the Anaheim ,Fullerton, Buena Park and Santa Ana areas. Almost every property that I showed had at least 5 offers already submitted!! Mind you, that most of the homes I show have ONLY have 3 -4 days on the market!! Is it me, or was there a switch that was turned on by people looking for Real Estate?? The competition on buying homes is cranking up!

Granted, I have been experiencing an increase in buyer activity since late last year but the are some major reasons why we are seeing a push recently in these last few weeks.

Some of the reasons are the following: 1.The Traditional Spring Time Real Estate movement ( people looking to buy during the spring and summer months due to the fact its easier to move when kids are out of school) 2. Tax Refunds being returned and Obamas First Time Buyer Tax Credit of $8000). 3. People moving there funds in 401Ks and stocks into a more promising Real Estate market 4. INTEREST RATES are still at an all time LOW and people want to take advantage before rate increase ( and they will, most likely to curb inflation) 5. Inventories of homes. (Although, we are experiencing less and less inventory every month, there are still several months of inventory on the market)

To give this a statically view, we just heard that February had produced some 44% increase in Home Sales in comparison to last year at this time. In addition, a 5% increase from Jan 2009. From what I have seen, heard and read, I have a good feeling that March Home Sales numbers are going to blow Febuary right out of the water!