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Lee Ginsburg is an award-winning Realtor with 30 years experience in Peninsula residential real estate. With the utmost attention to detail, Lee delivers expert marketing, negotiating, and management of all financial matters. With a strong commitment to honesty, fairness and hard work, Lee has successfully helped first time home buyers, move up buyers and investors.

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Thursday, November 12, 2009

My Thoughts for Real Estate in 2009 in San Francisco and the Peninsula

The year began with home prices free falling and no end was in sight. In April we, in the business began seeing the light at the end of the tunnel. Homes in the starting price points began selling and inventory started to stabilize. Banks were pricing their homes on the low range and were receiving multiple offers. I consider single family homes under $700,000 to be the starting price point on the peninsula. Homes over a million dollars were having trouble due to the higher interest rates for loans of that size and the lack of lenders willing to loan. Loans under $729,750 were backed by the government and hovered around all time lows all year. Loans were broken up into different categories. Rates for loans under $417,000 were below 5%; rates for loans between $417,000 and $729,750 were slightly higher. Above that they took a jump. Finally we are now seeing the rates for the larger loans fall into line. Today rates are below 4% fixed for five years for under $417,000. That could be the right loan for many people. Many people took advantage of these record lows to purchase, their first home, investment property and to refinance. During the summer, sales began to increase as compared to the month before and the year before and are still moving along quite well. Prices are showing increases over the previous month but not over the previous year. The appraisal policy changed and that added to a longer time in escrow plus many properties not appraising. Many appraisers were favoring the conservative approach and it has affected many sales. I can’t talk about 2009 without mentioning Short Sales. This occurs when the home is worth less than what is owed on it. The bank has to agree to accept less than they are owed. Not too easy but possible. Often it is 2 different banks. As the economy went bust; The Short Sales and Foreclosure were only in the starting price points. As the year comes to a close it has spread like the swine flu into the higher priced areas as well. Interesting how the table has turned. The Short Sale process seems to be going much smoother and a little quicker, from 6 months down to 3 months. I must give credit where credit is due. Wachovia Bank has come out with a 14 day short sale process. If you have a Wachovia loan and are having trouble making payments give me a call. Also when speaking of 2009 I must call it the “Year of FHA”. Federal Housing Administration guaranteed loans for buyers with low down payments. They guaranteed loans with only a 3.5% down payment allowing many first time home buyer the opportunity to take advantage of the market and achieve the American Dream of Home Ownership. These buyers do have to pay mortgage insurance but it is still a great opportunity. The new tax code allows Mortgage Insurance to be deducted. 2009 has put a strain on many Home Owners Associations. Many individual owners and sellers are not making the monthly HOA payments causing increases for the people making the payments. When a bank forecloses they will make the payments but nothing prior to taking title. I believe legislation should be passed giving HOA dues priority over other liens just like property tax is. I must also give credit to our government. The $8000 tax credit given to anyone whom has not owned a home in 3 years has been a huge boom. As of this writing they just extended it to April 2010 and are allowing the move up buyer, (anyone who has owned their home for 5 of the last 8 years) $6500. If you would like to take advantage of the credit or would like more information please give me a call at 877-Lee-Sells (877-533-7355) Inventory in some starting price point areas is less than a month’s supply, but in the higher price areas it is up to a year’s supply. Three months supply is considered normal. More makes it a buyer’s market and less is a seller’s market. Pricing the home right the first time has become the big key to a home selling in 2009. Overpriced homes even slightly overpriced homes are not getting seen, and by the time it is reduced the property has become stale and winds up selling below the market. Homes must be priced comparable to the bank owned and short sales because that is the market today. Overall many homes have sold in 2009 but at lower prices than the years prior. Please do not hesitate to contact me if you would like to know about a specific area.