Archives for March 2010

Costa Mesa Real Estate Update

$3 Gas & What It Could Mean…

While we have pondered the state of the economy and rates in the past few months, the price of oil keeps inching up. First, we should point out that the latest rise in oil prices does not seem to follow the patterns of the previous "spike." When oil spiked more than a year ago, there was a speculative frenzy and in addition a weak dollar supporting higher prices. Today, few are expecting oil to skyrocket and the dollar has been firmer in the past few months, though the present position of the dollar is a long way from being described as strong. So, what could be causing the latest rise and what could the consequences be for the economy?

Here is one quote published recently in CNN/Money: "I wouldn’t be surprised if gas goes as high as $3 a gallon or a tad over," said Mark Zandi, chief economist for Moody’s Economy.com in West Chester, Pa. "But that is not enough to undermine the recovery." Zandi said he expects gas prices to head lower again after the summer. Right now the economists are not seeing a long-term threat to the economy. As a matter of fact, one explanation for higher prices is that the markets are expecting a recovery will increase consumption of oil. Higher rates and higher oil prices could both be the result of the economic recovery. However, they both have the ability to slow down the recovery as well. Let’s hope for a happy medium.


Rates inched up this past week, however, the increase accelerated after this survey was released. Freddie Mac announced that for the week ending March 25, 30-year fixed rates averaged 4.99%, up from 4.96% the week before. The average for 15-year fixed also rose slightly to 4.34%. Adjustables also increased with the average for one-year adjustables rising to 4.20% and five-year adjustables rising to 4.14%. A year ago 30-year fixed rates were at 4.85%. “Rates inched up slightly this week as bond yields rose even further,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Rates on 30-year fixed loans, however, were still below 5 percent for the fourth consecutive week. The Federal Reserve reported that the financial obligations for homeowners declined to under 16.1 percent of their disposable income in the fourth quarter, which represents the lowest share since the third quarter of 2003. Similarly, the obligations share for renters fell below 24.4 percent, the lowest since the end of 1993.”
Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Current Indices For Adjustable Rate Mortgages
Updated March 26, 2010

Daily Value

Monthly Value

March 25

February

6-month Treasury Security

0.25%

0.18%

1-year Treasury Security

0.44%

0.35%

3-year Treasury Security

1.69%

1.40%

5-year Treasury Security

2.65%

2.36%

10-year Treasury Security

3.91%

3.69%

12-month LIBOR

0.852% (Feb)

12-month MTA

0.441% (Feb)

11th District Cost of Funds

1.786% (Feb)

Prime Rate

3.25%


According to the Chinese calendar, 2010 is the Year of the Tiger. But in real estate, 2010 may come to be known as the “Year of the First-Time Home Buyer.” Mark Zandi, chief economist at Moody’s Economy.com, says there will be 1.84 million homes sold to first-time home buyers in 2010, compared with 1.73 million in 2009. These buyers will invariably make some mistakes that they will come to regret a few years down the road, some experts say, including failing to use a real estate professional to help them manage the transaction. Real estate professionals have the time and the knowledge to sift through thousands of listings, creating market analyses to judge pricing and other key features, points out Ray Boss Jr., a practitioner with RE/MAX Realty Group in Maryland. "I would want someone who is going to look out for my interests first and foremost," says Boss. "Someone who knows the contracts, who has experience negotiating, and who can walk me through the entire process smoothly — step by step — and make sure I get the house that’s right for me."
Source: U.S. News & World Report

With all the bad news about underwater homeowners and strategic walkaways, you might think that American homeowners’ equity holdings are in the tank. But the least-publicized recent statistic on real estate is that, despite these scary reports, home equity is again on the rise. Is that some piece of rosy propaganda put out by housing lobbyists to stimulate more home buying? Not unless you consider Federal Reserve economists to be shills for the real estate industry. The Fed conducts massive research into loan balances and home-value changes in hundreds of local markets around the country and reports its findings quarterly. According to the Fed’s most recent "flow of funds" survey, homeowners’ net equity grew by nearly $1 trillion from the recession’s nadir in the first quarter of 2009 through the third quarter. From June 30 to Sept. 30, net equity rose by $418 billion. Source: Ken Harney, The Nation’s Housing

Vacant residential lots are looking better and better to real estate investors. The cost of a finished, ready to build lot, can cost a developer about 25 percent of the finished home price. There are a number of these ready-to-go lots on the market at about half what they actually cost to prepare. Investor groups are snapping them up, figuring that the time will come soon when they will be in demand. "The country needs 1.2 million new units for the next 10 years just because of population growth," says Scott Clark, president of American Development Partners, which has bought thousands of vacant lots all over the West. "[U.S. builders] built about 500,000 units in 2009 and 600,000 units in 2008, so there eventually will be pent-up demand. We want to get as many of those finished lots as we can because as demand begins to rise, the need for housing will become painfully obvious. The delta (ratio of change to value of underlying asset) in this investment will be significant." Source: Inman News

On Your Team,

 

Kurt Galitski

The Kurt Real Estate Group

Vice President, Weichman Realtors

877-957-6677

Posted via email from The Kurt Real Estate Group

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California Tax credit proposal if passed will have following highlights

Tax credit proposal if passed will have following highlights:

The Governor plans to set aside $200 million, twice the amount set aside last year. The credit will be offered on a first come first served basis till the fund is exhausted. Last year the fund ran out in 8 months. The legislature approved the extension Monday, which will provide an extra $200 million for income tax credits to Californian’s who buy a home between May 1st 2010 and Dec. 32, 2010 and closes escrow by August 1, 2011. $100 million for first time homebuyers purchasing existing homes and $100 million for anyone who buys a new, unoccupied home.

Ø  The tax credit will apply to buyers of new & existing homes. The last credit was only applicable to new homes.

Ø  The tax credit will be available only to first time home buyers.

Ø  The current proposal is for the purchase of an existing home, as well as a newly built residence.

Ø  The tax credit will be $10,000 or 5% of the purchase price whichever is lower.

Ø  The tax credit would begin May 1st, 1 day after the Federal Tax Credit ends April 30th.

Ø  The credit should last between May 1, 2010 and December, 31, 2010.

Ø  The credit will be given in 3 payments to a taxpayer’s personal income tax returns over 3 year period; a credit of $3,333/year.

On Your Team,

 

Kurt Galitski

The Kurt Real Estate Group

Vice President, Weichman Realtors

877-957-6677

Posted via email from The Kurt Real Estate Group

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80% of all home searches in Costa Mesa and Orange County are beginning on the internet

Over the years, one quality that’s distinguished me from many other real estate agents and brokers in Costa Mesa and Orange County for that matter,  is that I’ve always tried to find new and better ways to perform the same tasks.

 

In one sense, this has meant improving my people skills, while in another it’s meant continually upgrading my real estate education and extending my professional network, so I can provide my clients with comprehensive services.

 

One main area, however, where I’ve found better methods of working is through the application of the latest high-tech advances, which enable me to do everything I’ve always done, only much more quickly and efficiently. They let me provide my clients with up-to-date information, and they’re also helping me to optimize my time. In addition, I’ve found that the Internet has enabled me to broaden the range of services I offer and provide unprecedented convenience to my clients. With over 80% of all home searches in Costa Mesa and Orange County beginning on the internet, I have created a very successful marketing strategy that gets your home on all of the following websites in a matter of minutes.

 

 

So while we are working towards selling homes in the fastest and most efficient way, this strategy will also bring you the most exposure; ultimately bringing you the highest price possible for your home. if you hear that any family, friends or neighbors that are also interested in moving, please call or email me any time. I promise to provide the best of both world’s — state-of-the-art resources and state-of-the-heart committed, quality service! Thanks again.

On your team,

Kurt Galitski

The Kurt Real Estate Group

Orange County Distressed Properties

Vice President, Weichman Associates- Realtors

714-957-6677

Ca Broker- 01348644

Posted via email from The Kurt Real Estate Group

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Tonight is my last meeting as Chairman of Costa Mesa’s Parks and Recreation

Public service is a funny thing. Very happy to have served as chairman for the last two years, now it is time to pass the baton. Good luck to my fellow commissioner who steps up to lead us for another year.
Sent from my Mobile@KurtRealEstate.com

You may contact me directly by phone at: 714-957-6677 Visit me on the web at:
www.KurtRealEstate.com

Posted via email from The Kurt Real Estate Group

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Costa Mesa Real Estate Week In Review


The Fed Speaks

In response to our protracted recession and financial crisis, we have experienced a long period of fiscal stimulus from the Federal Reserve Board. In a typical cycle we focus on the Fed’s actions with regard to rates. However, during this cycle their activity has extended far beyond traditional stimulus. Certainly, keeping short term rates near zero for over a year has been very significant. Remember at the beginning of the crisis we were focusing upon subprime loans and the lurking danger of rate increases because of rising adjustables. However, with most adjustable rate indices at or less than 1.0%, this threat became secondary to many other issues within the housing sector.

The Fed has supplied hundreds of billions of dollars in stimulus to help stabilize the economy. Paramount has been their purchases of Treasuries and mortgage-backed securities (MBS). The Treasury purchase program has winded down and now the Fed says that they are on track to end the MBS purchase program at the end of this quarter. These actions have been significant in their efforts to keep long-term rates low to facilitate the recovery, especially in the housing sector. Now that the economy has stabilized and it looks like the recovery is beginning, the Fed is returning fiscal policies to normal, slowly but surely. Of course, the next action would be an increase in rates and the speculation has started in this regard, despite the fact that the Fed has indicated that rates will remain low for an "extended" period of time. The Fed also has indicated that because the recovery is expected to be fragile, they remain ready to reintroduce the fiscal stimulus if needed. The more immediate question is, how much will home loan rates rise when the Fed stops purchasing securities? This will be a good test to see if the financial markets have indeed begun to return to normal.


Rates were stable in the past week. Freddie Mac announced that for the week ending March 18, 30-year fixed rates averaged 4.96%, up slightly from 4.95% the week before. The average for 15-year fixed also rose slightly to 4.33%. Adjustables were mixed with the average for one-year adjustables falling to 4.12% and five-year adjustables rising to 4.09%. A year ago 30-year fixed rates were at 4.98%. "Rates for fixed-rate home loans were virtually unchanged this week as the effects of the prior storms emerged in recent housing data," said Frank Nothaft, Freddie Mac vice president and chief economist. "New construction slowed by 5.9 percent in February to 575,000 homes. Both the South and Northeast regions had all the declines due to the snow storms. In addition, homebuilder confidence unexpectedly dipped in March. With house prices starting to stabilize and even rise, homeowners on aggregate are slowly building back equity in their homes based on figures from the Federal Reserve Board. After losing almost $7.9 trillion in home equity since the end of 2006, homeowners regained almost $1.1 trillion over the past three quarters ending in 2009."
Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Current Indices For Adjustable Rate Mortgages
Updated March 19, 2010

Daily Value

Monthly Value

March 18

February

6-month Treasury Security

0.26%

0.18%

1-year Treasury Security

0.41%

0.35%

3-year Treasury Security

1.52%

1.40%

5-year Treasury Security

2.44%

2.36%

10-year Treasury Security

3.68%

3.69%

12-month LIBOR

0.852% (Feb)

12-month MTA

0.441% (Feb)

11th District Cost of Funds

1.786% (Feb)

Prime Rate

3.25%


Condominium and home owners associations desperate for money are experimenting with a tactic called “reverse foreclosure” to force banks to pay association fees. The process works like this: When a borrower stops paying the loan, banks often delay taking the property into foreclosure. When banks delay, neither the former home owner nor the bank is paying association fees. To remedy this, the association files its own foreclosure notice, taking over the title. The association can’t sell the property because of the bank’s lien on it. So the association goes to court, renounces the property and asks the judge to give the title back to the bank. When the judge does so, the bank has to pay the fees. Experts say this technique is becoming very popular in parts of the country where there are a lot of foreclosed condos.
Source: Miami Herald

Speaking to a crowd of more than 100 at the Federal Reserve Bank of Dallas, keynote speaker Carol Coletta, president and CEO of CEOs for Cities, said there is a shift occurring in the housing demands of young professionals and other city dwellers away from suburban lifestyles and a renewed interest in urban living. She, as part of her firm’s national network of urban leaders specializes in identifying trends and mobilizing activists for metropolitan development, added the cities and communities that adapt to those changing demands will be best positioned to grow and prosper. “We have to give Americans a concrete picture of the future,” she said. ‘And we have to figure out how to deliver it. Coletta said college graduates are a city’s primary economic driver, and younger generations continue to become more mobile and desire to live in urban, inner city communities. This creates communities with a more diverse income spectrum, which boosts poor or disenfranchised individuals’ ability to move up economically, creating neighborhood stability. Source: Housing Wire

Beginning April 5, the Obama administration will encourage delinquent borrowers to avoid foreclosure and instead give up their homes in short sales by streamlining the process. The program will offer a cash payment to the home owner, as well as to the servicer and second-lien holder; and protect borrowers from future lender lawsuits for the unpaid loan balance. To curtail fraud, lenders will have to consult real estate practitioners to assess home value and minimum acceptable offer; they then must accept any offer that is equal to or higher than that.
Source: The New York Times

On your team,

Kurt Galitski

The Kurt Real Estate Group

Orange County Distressed Properties

Vice President, Weichman Associates- Realtors

714-957-6677

Ca Broker- 01348644

Posted via email from The Kurt Real Estate Group

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