11.5.09 Senate Passes Tax Credit Extension, House Set to Vote

Yesterday the Senate voted to approve the extension and expansion of the homebuyer tax credit set to expire at the end of this month. Congress will vote today and is expected to pass the measure. The new rules of the tax credit will continue to allow first-time homebuyers or anyone who has not owned a home in 3 years to claim an $8,000 deduction on their taxes. Additionally, buyers who have owned their homes at least 5 years will be eligible for up to $6,500 in tax credits. The extension will last until the end of April, 2010, with all deals needing to close by the end of June. The credit can only be used for the purchase of a principal residence of $800,000 or less, which in the Bay Area will mean that some homebuyers are unable to taxe advantage of the credit. Also, there are income level restrictions on who is eligible for the tax credit ($125,000 for individuals, and $225,000 for those filing jointly).
The tax credit extension is good news for Bay Area home sales. We will continue to see a strong group of buyers out to take advantage of good home prices and tax incentives leading into 2010.

10.28.09 Further Reports of Tax Credit Extension

Senate Democrats would like to extend the homebuyer tax credit. Details are scarce as an exact agreement has not been reached yet, and an amendment for an extension of the tax credit has not been brought to the Senate floor yet. According to this source, 'about 1.5 million tax returns filed with the Internal Revenue Service have claimed the credit, at a cost of $10 billion, since it was first approved in February 2008.' This measure clearly helped boost the housing market during the economic downturn. It remains to be seen if the first-time homebuyer tax credit will simply be extended into 2010 or if it will also be expanded to include all homebuyers and how it will be phased out. An extension of the tax credit is good news for local homebuyers who can continue to take advantage of great values in the Bay Area with the added incentive of tax relief.

10.6.09 Presidential Support for Homebuyer Tax Credit Extension

For the first time, the White House confirmed that President Obama will support an extension of the first-time homebuyer tax credit beyond November of this year. There appears to be bipartisan support for this to take place.

This is excellent news for the local housing industry. There has been a tremendous amount of movement and competition among buyers over the past several months. Allowing more first-time buyers the opportunity to take advantage of this tax credit into next year will help the local market remain strong. There have been consistent indicators of a housing recovery in our area during the past few months.

8.27.09 Home Prices Rising

There was a 2.9% increase in national home prices from the 2nd quarter of 2009 compared with the 1st quarter, according to the Case-Shiller index. Home sales are being helped due to the government economic stimulus effort, but also due to home prices reaching affordable levels for many buyers. Many buyers are taking action in recent months to try to purchase a home before prices rebound and begin to go up again. There is good momentum in the market right now. However, there could still be problems with a full housing recovery due to the problem of foreclosures, a high unemployment rate, and an influx of bank-owned properties into the market which would increase inventory and put a damper on increasing home prices.

8.21.09 Home Sales Up, So Are Foreclosures

Two recent news articles indicate that while figures on home sales continue to grow, there are an increasing number of American homeowners who are underwater on their mortgages. The number of American homeowners with a mortgage who are behind in their mortgage payments or in foreclosure is 13%. One analyst has predicted that by 2011 nearly half of American homeowners will be underwater on their mortgages, in other words they will owe more on their house than their house is currently worth. This situation is going to exacerbate the problem of foreclosures.
The most recent report on home resales showed a 7.2% increase, the largest monthly increase in at least 10 years. First-time homebuyers continue to create movement in the marketplace as they hurry to close a deal before the November 30th deadline for the first-time homebuyers tax credit.

8.4.09 Pending Home Sales Index Rises

For the fifth straight month, the Pending Home Sales Index created by the National Association of Realtors showed a national increase in June. This index measures signed contracts for previously owned homes. Low prices, good interest rates and the first-time homebuyer tax credit are helping sales. Regionally, the West and South are showing the strongest gains in sales activity. Read more here.

7.27.09 New Home Sales Rise

The news of the day- new home sales rose 11% in June, the largest increase in 8 years. Buyers are taking advantage of lower home prices, low interest rates, and the federal tax credits available to first-time homebuyers. The window of opportunity for this tax credit closes in November, so first-time buyers are flooding the market during the popular summer housing season. Summer is the most convenient time for many families to think about moving. The opinion of some economists is that the worst of the housing recession is behind us.

7.9.09 Intero CEO's Opinion on Market Recovery

Check out the Intero Insider Real Estate Blog. The latest post by CEO of Intero, Gino Blefari, gives his opinion as a veteran of the local real estate industry on how soon and in what way a market recovery will occur in the Bay Area.
Intero, my brokerage, and Coldwell Banker, my sister and mother's brokerage, hold the number 1 and 2 positions, respectively, for market share in Santa Clara County. This gives us, the Tse Group, tremendous leverage in our ability to network and market your property in order to receive top dollar. Call us today. (408)863-3089.

7.8.09 Spike in Foreclosures Expected

Due to the government's efforts to stabilize the national housing market, a backlog of foreclosures was created while a moratorium went into effect in order to stabilize housing prices. At this point, many banks are done sorting through homes in foreclosure to help those eligible for a loan modification. Those homes in foreclosure that cannot be re-worked into a new loan will begin to be acted on in the coming months. It remains to be seen how big of a negative impact this will have on the housing market. Read more here.

7.2.09 Obama 'Making Home Affordable' Plan Expands

President Obama has made changes to his initiative to help troubled homeowners by expanding who is eligible to refinance their mortgage into a more affordable loan. For the specifics on the new measures in the Making Home Affordable plan, read here.

6.27.09 Safety Tip

A friend of mine from Kiwanis Club of Los Gatos sent a worthy personal safety tip to all of us in the group and I wanted to share it with you:
Put your keys beside your bed when you go to sleep at night.
This allows you to use the panic button on your key fob to activate your car's security system which will sound the alarm and scare off any potential intruders, or alert neighbors that you are in need of help if something should happen to you inside your home.
It is also a good idea to have your keys out in your hand as you are approaching your car in a parking lot, so that you can trigger the alarm if it becomes necessary.
In addition, an elderly person could signal that something is wrong by carrying car keys around in their pocket during the daytime at home and then using the car alarm as a beacon for help if there were some kind of accident or injury.
The car alarm signal can in most cases be triggered by pushing the button from a fairly sizeable distance from your vehicle, including while inside your home with the car parked in the driveway, garage or curbside. It is worth testing this out with your own home and cars, and then rest easier knowing that you have a new makeshift alarm system at work for you.

6.21.09 Financial Overhaul Plan

Obama has unveiled his thoughts on how to overhaul the financial industry. Creating a new agency to protect consumers, simplifying the home loan process as well as making a traditional 30 year fixed rate mortgage loan the default option for homebuyers are some of the ideas coming to light in the last week. Read more here on the ways in which the goverment could try to take control of the housing/mortgage industry in order to alleviate the problems caused by the housing bust.

6.11.09 Rising Mortgage Rates Slow Refinancing

An article today in the San Jose Mercury News highlighted the effects of the mortgage rate increases over the last three weeks. Many individuals who were in the process of trying to refinance their homes but did not have low interest rates locked in have had to put on hold their refinancing plans now that the rates have gone higher. The average rate for a 30-year, fixed-rate loan of less than $730,000 was 5.59% this week, up from only 4.82% three weeks ago.
The rate hikes are also affecting buyers, who now no longer have as much buying power.

The article also highlights what I have already observed with my own listings in the last two weeks (see 6.7.09 post)-- homes on the lower end, under $500,000, are selling extremely well and receiving multiple offers in many cases. The midrange, under $800,000, is also moving quite well.

6.8.09 Santa Clara County Market Trends

Today is the first time in Santa Clara County since July 2005 that there are more homes with a 'sale pending' status than an 'active' ("for sale") status. That is just under 4 years since the last time this occurred. View the graph here.
The good news evident from the data in this graph is that more and more homes are making it to 'pending' status, which means that the lending side of these transactions has finally started to proceed more smoothly again.
We are entering the busy Summer months for residential real estate activity. With fewer homes on the market, there may be quite a lot of competition among buyers for the most desirable properties for sale. It will be crucial to have homes priced to sell, which will create opportunities for a multiple offer situation. I am highly experienced in negotiating this type of situation involving multiple counter-offers to get my clients the best dollar value for their home. Contact me to find out what your home is worth in today's market.

6.7.09 Multiple Offers on Listing

The latest property I listed, 488 W. Hacienda in Campbell, was held open for two weekends and generated an amazing amount of buyer interest. We received 9 offers on the property and it is now under contract after 9 days on the market! Contact me to find out how I can effectively market your property in today's market to help you achieve this kind of interest in your home.

6.6.09 Fluctuating Interest Rates

Conforming and FHA rates hit their highest marks of 2009 at the end of this week. The range of rates had been mostly between 4.75% to 5.25% for a 30 year fixed conforming loan thusfar in 2009, but has now inched higher to between around 5.25% and 5.625%. Historically, these rates are still good, but there is a bit of volatility right now in the market, which those trying to get a loan should be aware of. Mortgage bonds dropped to their lowest levels of 2009 on Friday, and mortgage rates move in the opposite direction as mortgage bonds, thus causing the increase in rates. Feel free to contact me for current interest rate information. I work with several excellent lenders.

6.4.09 Good News/Bad News

There is good news for the housing market in California. (http://online.wsj.com/article/SB124353047811163187.html) Many indicators are showing that things are looking better, especially in the Bay Area. Highlights from the above Wall Street Journal article include:
· Sales of existing, single-family homes increased 49.2 percent in April in California compared with the same period a year ago, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) April sales and price report.
· As the level of unsold inventory declines, the state’s median price will likely stabilize. Inventory levels for homes in the under $500,000 segment shrank to nearly three months in April, compared with almost 10 months a year ago, while unsold inventory in the more than $1 million segment rose to approximately 17 months, compared with roughly 10 months in April 2008.
· The median price of an existing, single-family detached home in California during April 2009 was $256,700, an increase of 1.4 percent compared with the prior month, but a 36.5 percent decrease from the revised $404,470 median of a year ago.
· Favorable home prices in many parts of the state have led to an increase in affordability for first-time buyers. In the first quarter of 2009, affordability rose to 69 percent, enabling many to take advantage of first-time buyer programs and near record-low interest rates. (Courtesy of Market Matters/California Association of Realtors)

The bad news is that interest rates have jumped in the last week, which will affect buyers, sellers and those trying to refinance. Buyers will encounter higher mortgage payments, which will scare some out of the market, thus hurting sellers' chances of receiving their asking price. Those trying to refinance and stuck in the paperwork process may be stuck with higher rates now because the lower rates of last week could not be locked in. (http://online.wsj.com/article/SB124381108186970343.html)
On a positive note, while the interest rates have started creeping back up, they are still historically at a very good level.

6.3.09 The Market is Heating Up

The Pending Home Sales Index, created by the National Association of Realtors, has shown a nationwide increase for the month of April. The Index is based on signed real estate contracts that have not yet closed for existing single-family homes and condos. (http://www.realtor.org/rmodaily.nsf/pages/News2009060201)
The $8,000 first-time buyer federal tax credit is also helping heat up the market. In order to take advantage of the credit, a transaction must be completed by November 30, 2009. The Summer months should see a great deal of activity as buyers are looking to take advantage of this tax benefit.
The Department of Housing & Urban Development (HUD) has also just announced that qualifying buyers can use the tax credit for closing costs on FHA loans, to buy down the interest rate or make a larger down payment.

5.28.09 EcoBroker Certified

As an EcoBroker Certified real estate professional, I have received special training on issues pertaining to energy efficiency and other environmental aspects of homes. I can help buyers understand the cost savings and potential for increased comfort of living in a home with energy efficient upgrades on features such as windows, insulation, heating/cooling systems, and appliances. There is also a health component to upgrading a home and I have knowledge of indoor air quality improvements related to proper ventilation, use of low-VOC paints and adhesives, and other environmentally-friendly building materials. For sellers, the advantage of working with an EcoBroker is an understanding of the key improvements that can be made to a home in order to increase the property's value and make it more attractive to potential buyers. Buyers are interested in the cost-savings inherent to energy efficient upgrades.
I encourage you to explore the EcoBroker web site (http://www.ecobroker.com/misc/learn.aspx) for information on different 'green' topics relating to home ownership. There are many ways to enhance a home's market value and 'green' quotient at the same time.

5.27.09 Real Estate a Good Investment

According to a recent Gallup poll (http://www.gallup.com/poll/118300/Savings-Accounts-Real-Estate-Seen-Best-Investments.aspx?CSTS=alert), investing in real estate and keeping money in savings accounts are currently seen as the top two best long-term investments by Americans. Confidence in the real estate market is returning and many believe that now is a great time to buy.

Locally, there are great deals to be found due to the huge inventory of homes for sale. Now is a terrific time to be looking for an investment property. Prices are down, rents are good, interest rates are good, and money is being freed up by banks again so that the loan/financing aspect of deals can get done without a hassle.

5.24.09 2009 Economic Stimulus Plan

Here is some information I have received regarding the areas of the stimulus plan created by President Obama that directly affect potential home buyers and home owners:

There are four sections of the 2009 economic stimulus plan that could be beneficial to homebuyers and home owners:
1) The Home Improvement Tax Credit
The tax credit for making energy efficient home improvements is now 30% of the cost of the improvements, with a maximum of $1,500. Energy efficient exterior doors and windows, insulation, heat pumps, furnaces, central air conditioners and water heaters are some eligible items. The contractor and/or manufacturer can give certification that energy efficiency standards are being met.

2) The First-time Home Buyer Tax Credit
The tax credit available to first time home buyers has increased to $8,000 for homes purchased between January 1, 2009, and December 1, 2009. This credit no longer needs to be paid back as long as you live in the home without selling it for at least 3 years.
The income limitations remain the same ($75,000 for single tax payers claiming the full credit and $150,000 for married tax payers). Also, the credit remains refundable. This means that first-time home buyers who owe less than $8,000 in taxes for the year are still eligible for the full $8,000 credit when they file their tax returns.

3) Higher Reverse Mortgage Loan Limits
The loan limits for FHA-insured reverse mortgages have been increased to $625,500 across the entire country. This coincides with another little-known change in the reverse mortgage arena: the availability of reverse mortgages on home purchase transactions. This is a fantastic opportunity for senior citizens to buy a new home and live mortgage payment-free without having to wait for their old home to sell. Seniors could also use this strategy to buy a new home and turn the old home into a rental or otherwise wait for market conditions to improve before trying to sell the old home.

4) $729,750 FHA and Conforming Loan Limits Restored in High Cost Areas
This makes higher cost homes more affordable in housing markets that have higher than average home values.

5.23.09 Saratoga Market Update

Tse Group publishes a newsletter full of housing statistics and analysis which I distribute when I doorknock in Saratoga. We of course have access to the data for all of the Bay Area and can provide information on market trends in all of the different localities. The May 2009 Tse Group Saratoga Newsletter demonstrates that between March '09 and April '09, the inventory of houses remained virtually the same as well as the number of closed sales. However, from March to April there was an increase in median price as well as the percentage of the list price received, which is a positive trend to watch as we head toward the strong Summer months.
Comparing April of this year to April '08, there is a marked increase in inventory as well as average days on the market for home sales. This of course has created a very strong buyer's market currently. Potential buyers have a multitude of homes to choose from, and are able to negotiate down from the list price when making an offer. For anyone looking to relocate to Saratoga (or just about anywhere in the area), now is a fantastic time to find a great deal. Median home prices in Santa Clara and San Mateo Counties are down approximately 30% from one year ago. Things seem to have bottomed out in January '09 and have since leveled off. This is a great time to act! Call or email for more information on the statistics if you do not already have your own hard copy of the Tse Group Newsletter.
(atse@interorealestate.com, (408)807-8808)

5.22.09 Best Local Japanese Cuisine

I ate with my family at one of our favorite spots last night. Kitsho in Cupertino is one of our favorite Japanese restaurants. (Kitsho, 19541 Richwood Drive, Cupertino, CA 95014, (408) 873-1444, Closed on Sundays) Another great Japanese spot in the South Bay is Tanto. This is really one of the most authentic Japanese places to dine. (Tanto, 1306 Saratoga Avenue, San Jose, CA 95129, (408) 249-6020, Cash Only, Closed on Mondays) Lastly, if you are a fan of ramen, a great lunch spot for a hot bowl of noodles is Ramen Halu. (Ramen Halu, 375 Saratoga Avenue, #M, San Jose, CA 95129, (408) 295-4510, Cash Only) Happy eating!

5.21.09 Welcome

Welcome to the Tse Group Real Estate Blog.
We will be providing information regarding the residential real estate market in the Bay Area. In addition, general information on various housing issues, interesting news and happenings in the Bay Area, and some of our own local favorites will make their way into the blog.
Please enjoy.

Andy Tse