| List Price, Offer Price, Sales Price | March 31st, 2009 |
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List Price, Offer Price, Sales Price Of the house and condo listings that SOLD in the first 2.5 months of 2009:* • 1 in 4 accepted offers within about 15 days of going on market, i.e. almost immediately. Of these, the houses averaged a sales price of about 1% over asking price, while condos averaged about 4% below asking. The supply and demand equation is currently weaker for condos than for houses; the equation for TICs and multi-unit buildings is much weaker still — financing is now very difficult for these properties. • Those accepting offers after 45 to 75 days on market sold at an average of 3% to 4% below last asking |
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| Wild and Crazy House for Monday, March 30 | March 30th, 2009 |
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I’d love to tell you this is a real house, but it’s actually a building in a Polish shopping center. |
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The “Crooked House” in Sopot, Poland. | San Francisco Mortgage News | March 29th, 2009 |
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As of Friday, rates on conforming loans up to $417k and super-conforming loans up to $625k are down about .25% since the big Fed announcement last Wednesday—they were down further but have since retraced. Increases of super-conforming loan limits to $729k have still not been announced by Fannie and Freddie—it’s expected very soon. Rates on Jumbos from $729k to $3.5m are steady. Last week, the Fed said they’d increase their mortgage bond buying program from $500 billion by June to $1.25 trillion by December. This will help keep rates low because mortgage rates drop when bond prices rise on buying rallies. But consumers shouldn’t assume rates will drop significantly from current levels. Here’s why: Rates on loans up to $729k change all day everyday based on mortgage bond trading (whereas rates on loans above $729k are set by lenders because jumbos are currently not being packaged into bonds). The Fed’s mortgage bond buying goal has always been to elevate bond prices to certain levels to keep rates nice and low. But they are only one participant in the mortgage bond market. Private investors have been saying since last year their goal is to buy mortgage bonds before the Fed and sell at a profit after the Fed drives up the prices. Private investors will sell more and more as the Fed uses up its $1.25 trillion budget (they’ve used up 22% so far), which means Fed buying and private selling work to even each other out over the course of this year. Also Mortgage Bankers Association forecasts call for $2.8 trillion in mortgage originations this year– the fourth highest amount on record, which is putting massive strain on understaffed lenders of all sizes who then hike pricing to control volume. So rates could trade up and down about .25% to .375% in phases over the coming months—providing nice dips if timing works out just right—but we are likely to remain in the current already-record-low range. BANKING UPDATE Good news on the banking front: Treasury Secretary Tim Geithner rolled out the eagerly anticipated plan to remedy the global financial crisis that started in August 2007. The plan enables private investors to raise money with FDIC backing so they can buy currently illiquid mortgage loans and securitized loans from banks in partnership with Treasury. This provides strong incentive for long-term investors, of which there are plenty. Markets have reacted favorably so far and it will take some time to implement– but it’s a well-designed plan that shares risk among taxpayers and private investors instead of putting all risk on the taxpayer. The plan also enables markets to price these assets rather than previously-failed efforts for the government to price them. With the FASB’s plan on revising and/or limiting mark-to-market accounting rules coming early-April, we will also see increased freedom for markets to sort through the pricing issues that have been preventing any solution to getting these illiquid assets off bank balance sheets so they can extend new credit to businesses and consumers. Consumers are the ultimate beneficiary of bank recovery efforts because banks need to rebuild by taking on good borrowers and will offer these people good terms. As some big firms struggle and some smaller firms rise up, creditworthy borrowers benefit as the winning institutions vie for the business. |
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| Pricing, Buying, Selling and Negotiating in San Francisco Real Estate | March 29th, 2009 |
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Pricing, Buying, Selling & Negotiating San Francisco Real Estate At current market trends, over the next month:* • 1400 active house & condo listings will be joined by 600 new listings. • 1 in 7 or 8 of those listings will accept an offer to purchase. • 1 in 8 will expire or be withdrawn from the market (didn’t sell). • 1 in 4 will reduce its asking price. • 75 active bank-owned (REO) homes will be joined by 45 new REO listings: 1 in 3 will accept offers. • Of the listings that do accept offers, 1 in 3 or 4 will come back on market because the purchase fell through — typically due to financing difficulties, property condition issues or buyer remorse. *All numbers are approximate; neither TIC sales nor non-MLS new-development sales are included. |
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| Short Sale or Foreclosure - Who Owes the HOA Fees? | March 24th, 2009 |
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I recently had a client interested in a condo listed as a short sale. In addition to owing a first mortgage against the home, the owner had also failed to pay HOA fees for many months. I wondered if my clients would be responsible for the HOA fees after they took possession of the property. Shortly after hearing about this additional lien against the property, I got clarification on who owes HOA fees from our legal department. Here is what I learned: In a normal sale, the HOA’s late fees must be paid off at Close of Escrow. If the HOA has recorded a formal lien against the property, the buyer’s lender will almost always require it before making the loan. If the HOA has not recorded a lien, then the HOA still has an unsecured debt which they can attempt to collect against the prior owner – but not the new owner. In a short sale, if the HOA has recorded a lien, then it needs to be paid as a part of the short sale. Most banks will eat this cost and pay the HOA all the late fees. Some banks, however, will try to push this back on the seller to come up with the money. If this is the case, the buyer should be sure to wait until this issue is cleared up before allowing the property to close. In almost every case, if the HOA has recorded a lien and then the seller’s lender forecloses, the foreclosure will wipe out the HOA lien. Once the bank owns the property, the bank becomes responsible for payment of the HOA dues from the time they take title until the day they transfer title to the next buyer/owner. However, REO bank/owners are notorious for not paying HOA dues during the time they own the property. They pay up past dues at the time they sell the property to the new owner, but in the meantime many HOA’s are suffering cash flow problems. Occasionally an HOA, usually out of ignorance, may attempt to collect the unpaid dues from the new owner. If this occurs, the new owner may have to fight with the HOA to straighten out the record. If the HOA puts up a fight, the new owner may even have to hire a lawyer to clear up the matter. A good agent will check with the HOA about unpaid dues prior to close. And they will make sure that all unpaid fees and late charges are taken care of at close of escrow. |
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| Wild and Crazy House for Monday, March 23 | March 23rd, 2009 |
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This is actually just one of many houses just like it on Taiwan’s north coast. Built in the 1980s, they were meant to be seaside resort homes, but the developer ran out of money and never completed the project. According to the Taipei Times, demolition of the homes began at the end of last year. |
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The UFO House in Taiwan| Market Reports | March 22nd, 2009 |
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We have the following market reports available. Please contact me for copies and I will send them to you. Stay tuned for more reports. I will make them available as they come in. Comprehensive statistics with commentary on market conditions for San Francisco County. This report was published in March of 2009. Home buyer Tax Credit Plans - Matrix that outlines what tax credits are available for home buyers and which buyers/properties qualify. Current as of March, 2009. How Much Have San Francisco Home Values Declined? - This report evaluates data up through February 2009. Indication of SF Real Estate Market Shift to Lower-Priced Homes- This report evaluates data up through February 2009. Effect of Listing Price on How Long it Takes for Property to Sell - This information covers data from November 2008-January 2009. |
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| Glossary/Definitions of Foreclosure Terms | March 21st, 2009 |
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FNMA: AKA “Fannie Mae” - The Federal National Mortgage Association that buys and sells mortgages in the secondary market. FNMA loans have stringent requirements, including amounts. In San Francisco, most loans do not conform to FNMA standards. Freddie Mac - Freddie Mac is one of America’s biggest buyers of home mortgages. Like Fannie Mae, requirements for Freddie Mac loans are quite stringent. Most loans in San Francisco do not conform to Freddie Mac standards. Lien: A recorded claim against the property for the payment of a debt. A property cannot be sold until the lien is cleared. LTV: Also know as “Loan to Value,” it’s the ratio of a loan to the property value. For example, a property worth $400,000 with a $300,000 loan against it has an 75% LTV. REO: This means “Real Estate Owned” by the bank. An REO department is the divison of the bank responsible for administering the marketing and sale of their instituions properties. Secondary Market - This is the market for purchasing loans. Since the real estate implosion, the market for these loans has dropped significantly and only the most conservative loans are purchased. The shrinking secondary market is the major reason loans are so much more difficult to qualify for now. Short Sale: A short sale is a property that sells for less than the loans against it. When a listing is marketed as a short sale, it means there will be a negotiation with the bank to take a hit on their loan before the sale can go into escrow. Title Report: A report issued by a title company that states who has legal ownership of the property, what loans are against it and other items (ie encroachment, condo association restrictions) that can affect how title is transferred to a new owner. Workout (aka Loan Workout): A negotiation with the bank and borrower to lower the debt and/or reduce the mortgage payment. |
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There’s a whole new lingo bouncing around ever since the foreclosure crisis began. For those confused by the acronyms, abbreviations, and gerunds, here is a brief glossary of terms that are commonly used in the San Francisco market:| San Francisco Real Estate Sales Activity - March 6 - March 20 2009 | March 20th, 2009 |
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Hotsheet Statistics for the Past 2-Weeks: SF Houses, Condos & TICs We are comparing these stats to the previous 2-week period. These numbers reflect all activity across San Francisco for all types of properties. New Listings: 382 – up from 331 Back-on-Market: 56 – stable Went Contingent: 129 – down from 147 Went Pending: 129 – down from 149 Sold: 124 – down from 135 Expired/Withdrawn: 138 – down from 153 Active on Market We are comparing these stats to previous to week period. These stats break down activity by property type. SFD: 630 – up from 569; Average Days on Market = 69 There are currently 75 active REO SFD, Condo & TIC listings in SF. 54 REOs are contingent or pending. The market continues to improve for Buyers as inventory increases. For some reason, perhaps just an anomaly, REO sales activity dropped dramatically from the previous 2-week period. |
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| Thursday Hot Links | March 19th, 2009 |
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First you have to figure out where you want to live: Then you have to figure out how close stuff is:Everything Within Walking Distance of Your HomeAnd what your neighbors are up to:Civic Information and News by Neighborhood Then, after you’re done walking everywhere and snooping around, you have to find a place to eat:Chronicle Map of Top 100 Bay Area Restaurants Have Fun! |
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Are you out of town– dreaming of living in San Francisco but haven’t a clue where? Here’s how you can take a virtual tour of any neighborhood in San Francisco: 
