Friday, October 24, 2008

Welcome Friends and Clients from L.A.'s "Sherlock of Homes"

Hello Friends, Family and Clients,

Welcome to my new blog. I created this especially for those of you who have been confused, if not rattled, by the volatility of the real estate market here in California. Many of you have been asking lots of questions, so I decided that it's time to conduct an open forum to answer those questions, and to include those of you who would like to comment...or rant and rave as the case may be.

There are rumors of better days ahead as word of expected rate drops and a re-set on those nasty variable rate mortgages abound. Also, newly released statistics reflect an increase in home sales in SoCal during this past month - good news to a lot of very concerned sellers. Foreign investors are coming ashore to take advantage of California's bargain basement prices, so that also gives sellers reason enough not to throw their "For Sale" signs into their swimming pools.

Buyers, too, have reason to breathe a little easier this month. It is simply not true, repeat: NOT TRUE, that it is impossible to get funding in today's market. If you have good credit and enough of an income to show you can actually afford the home you wish to buy (what a novel idea!), then you can still get financing and take advantage of today's low rates and low prices (a lovely pas de deux). FHA loans are still being offered with as low as 3% down to qualified buyers (I got such a loan for a client just this week.)

Remember, this is California. Houses keep selling, the sun keeps shining, and the ocean keeps oceaning. You get the idea. So please send all comments and questions this way. We can volley them around, and I have a coterie of specialists at the end of my phone line who can address the questions that are beyond my scope of expertise or IQ level. (No comments required there, folks.) Hang in there - California was built with fortitude and remains the golden state - it's a state of mind!


Roger said...

What a great idea Gwen! Once again you've proven your quality of service in your dedication to both your clients and the real estate industry by offering this forum to share information. That's all from me. I just wanted to say "Hi."

Anonymous said...

I just read this article "The Big Bank Bailout" in the most recent Time magazine where financial experts were addressing each of the 5 regular Americans on their financial concerns. One of a woman who asked now is a good time to buy. The financial expert said "just as it's impossible to time the bottom or top of the stock market, it's impossible to time the bottom of the housing market". and her final word was to start shopping for a home to buy NOW.

I agree, as an ex-mortgage professional. Rates will not get any cheaper and the regulations will make it impossible for a lot of people to even get mortgage loans unless you can bring in at least 10% downpayment and verify all of your income and assets. So, for those of you who are thinking and thinking and thinking, just do it now! Trust me, it will only get more expensive and harder to get loans!!

bmullan86 said...

Fantastic idea Gwen. I hope that jinhappy is mistaken about the rates not going down as I would like to refinance my rental property. I am now contributing a little over $500 per month on top of the rent to pay the mortgage. I have been watching for the rates to come down for some time now. Any advice?

Sherlock Of Homes said...

Hi to Roger (so nice to hear from you - I miss you and B) and thanks to Jin for her inside perspective on mortgages. Jin has been an excellent mortgage broker for years, so her opinion is certainly a valued one, friends. However, in regards to that, my perspective on rate drops varies slightly (I believe this will answer your question, too, Brian).

While it's true that we never know where the bottom of the market is, the unfortunate thing is that we usually find out when it everything starts to go back up. So in place of using the crystal ball we all wish we could access, let's look at the facts: Prices are lower than we have seen in years and years, and concurrently, interest rates are very low compared to past highs. Could prices go lower? Certainly. The more REO's that hit the market, the lower prices go, as REO's affect the overall values of real estate in every neighborhood. Now, think about this: even if prices drop a bit more, what if the rates go up again? That could cancel out anything except a huge price reduction on the buying side, right? But let's continue examining the conundrum:

Some believe (and I am one) that rates will drop again. (That's where Jin and I differ slightly.) But even if they do, the question remains as to whether those savings will be passed along to the consumer or just passed along to the banks to increase their borrowing power.

Of course, if the rates drop significantly, that's when we all pile into Jin's car and car pool to our nearest lender to re-fi. But those who are waiting for that day, coupled with another drop in house prices, will still be sitting on the curb as we speed past.

Buying a home is in many ways similar to buying a car - you look for the best deal offered at the time, and if the over all market factors are providing great bargains, then purchase the car you love when you find it. If you wait to get another few thousand off, that time may never come. And if it does, the one you love will be long gone.

Most financial experts believe that NOW is the time to jump into the market if you are a buyer with good credit and money for a down payment. These are the times when investors (and any home buyer is making an investment) become wealthy.

It is obvious that we have to save the housing market if we are to save the economy. Thus, all recovery plans will be focusing on housing. So yes, the rates may come down again, but to what end? To stabilize the market enough to swing us into recovery...i.e. prices WILL go back up.

Brian, if I were you, I would continue paying down the mortgage in the responsible manner you have been. Establish a good relationship with a broker and ask that he/she put you on the email list so you can keep apprised of the daily rates and market updates. I like for checking daily rates, and CNN Money Reports online is another good source. (Brian, I just emailed you an article on the impact of extra money applied to the mortgage.)

Remember, I am not an economist, but I AM an optimist. We'll all hang in there together, friends. Or we can always invest in an apartment building and move in together and take care of each other when the sky falls. But I am gambling that the sky will still be in place tomorrow...and what better sky than the sky above our beautiful Pacific?