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Home Prices Rise as Distressed Sales Fall in Livermore, CA!

December 6, 2012 By Leave a Comment

Did you know that the current average listing price of a Livermore home is $1,068,938? The real estate market continues to charge ahead, with a list-to-sales ratio of 100.2%.

This means that the vast majority of  Livermore home sellers are getting their asking price, and then some! Home buyers in Livermore Valley aren’t just off the fence, they’re ripping out the posts.

We can credit some of the market activity to continued low mortgage interest rates, an improved employment picture, and a scarcity of homes on the market. But the reduction of distressed home inventory is the biggest story in California home sales.

The California Association of Realtors® reports that equity sales continue to gain market share statewide. Traditional home sales in California for October 2012 were 63.4% of the market. This is the highest level of equity sales since June 2008!

Distressed home sales, consisting of bank-owned property and short sales, represented 36.6% of the market.

Within the distressed sales, there is a ratio worth following between bank-owned homes and short sales. Bank-owned homes accounted for 11.8% of the distressed market in October 2012. Meanwhile, short sales accounted for 24.4% of the market and continue to gain ground as foreclosures shrink.

This matters because short sales are based on current market value, whereas foreclosures are usually discounted. Short sales are not as harmful to surrounding property values, and so watching this ratio trend in their favor is encouraging.

There are a few concerns on the horizon, including the much-publicized “fiscal cliff”, and the pending expiration of the Mortgage Debt Relief Act of 2007.  Industry trade groups are doing heavy lobbying to make sure the importance of a healthy housing market is not forgotten by lawmakers.

Meanwhile, our home market in Livermore Valley needs one more thing to sustain growth – namely, more homes for sale! Now is the time to make your home selling plans for 2013!  As your Livermore Valley real estate professional, I will provide you with a comparative market analysis and all the facts on recent home sales. I will also provide you with an expert marketing strategy to sell your home quickly and for the best possible price.

Contact me today for your home selling consultation in Livermore, Pleasanton or Dublin!

John Kurtzer
Your Livermore Real Estate Expert
RE/MAX Accord

Livermore Real Estate
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Avoid Short Sale Snafus When Buying a Livermore Home!

November 2, 2012 By Leave a Comment

The Los Angeles Times recently produced a dour article about short sales, suggesting that these home purchases can fall apart without much ado. However, purchasing a home through a short sale in Livermore Valley can be accomplished without pain if you follow a few rules of thumb.

1. Short sales are not intended to be a better deal for the home buyer. They are simply called “short” because the home sale, at current market values, will not be enough to cover the seller’s outstanding mortgages.  Therefore the mortgage lender must approve the sale and agree to the loss.

Short sales, when priced wisely, should be in line with comparable homes on the market.  It doesn’t make sense to price a home below market if the bank is likely to reject it – no matter how many buyers take the bait.

2. As a home buyer, be sure that your mortgage pre-approval gives you enough time to consider a short sale. Stay in contact with your mortgage lender and obtain extensions, or re-qualify, as necessary. Keep your information updated and do not make major changes to your job or credit profile.

3. Because short sales involve highly motivated sellers, it’s tempting to lowball your offer – but if the bank refuses it, you’ve wasted your time and possibly alienated the seller. Make a respectable offer in line with the market.

4. As the Los Angeles Times article suggests, you may need to consider ordering the home inspection up front and paying for it out of pocket, if the closing timetable is too aggressive.  But in most cases you can negotiate a reasonable extension of the closing date. After all, it’s in the bank’s best interest to have the deal go through.

5. Livermore Valley home inventory includes a number of short sales, and it may not be possible to avoid them without significantly limiting your choices. Rather than fear a short sale purchase, work with an experienced real estate professional – like me – who understands these situations and can guide you through them.

The truth is, distressed property sales will be part of our Livermore Valley real estate market for years to come. New short sale policies are taking effect with lenders as of November 1, 2012, and we may see more short sales hitting the market as a result.  Some homeowners are leveraged too heavily with mortgages to have any other means of moving on, even as home values recover.

Let me help you with the home buying process in Livermore Valley! For the latest price trends, and for help with your real estate questions, contact me!  I have the local expertise you can trust for Livermore, Pleasanton and Dublin. Whether you are buying a home for the first time or for the tenth, I can provide the latest market data and the professional guidance you need.

John Kurtzer
Your Livermore Real Estate Expert
RE/MAX Accord

Livermore Real Estate
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Will a Past Foreclosure Prevent Buying a Livermore Valley Home?

October 18, 2012 By Leave a Comment

With home values rising and monthly rents becoming costly, there are plenty of former homeowners wishing to re-enter the Livermore Valley real estate market. For some, the mortgage hurdle is complicated by a prior foreclosure, personal bankruptcy or a short sale on their credit history.  If you’ve experienced one of these events, what does it mean for your home buying prospects?

Simply put, you’ll need to wait awhile, but the time period may be shorter than you realize. The Wall Street Journal reports that over 700,000 former homeowners are now eligible to return to the market, despite previous foreclosure or adverse record. Here’s a framework for example:

Chapter 13 bankruptcy: no matter the type of mortgage you had before, you could be eligible for a new FHA mortgage in 1 to 2 years. You will need to have clean credit, a good income, and meet a minimum down payment of 3.5%.

Prior foreclosure or short sale on an FHA-backed mortgage:  you will need to wait at least 3 years before being eligible for another FHA loan. Good credit and a consistent work history will be essential.

If you had a mortgage previously backed by Freddie Mac or Fannie Mae, and experienced a short sale or foreclosure, you may need to wait to 7 years before you are found eligible for another such mortgage.

Loan modifications: if your lender agreed to alter the terms of  your prior mortgage, either temporarily or permanently, this could impact your credit score. How much of an impact depends on how the lender reported it – if at all – and how your loan performed after the modification.  There is no typical waiting period in this case, save for the length of time it may take for your credit score to recover.

In all cases, remember that banks are cautious today. You can expect some extra scrutiny if your prior mortgage did not show “paid as agreed” for any reason. The good news is, the stigma of a  prior foreclosure, bankruptcy or short sale is  temporary. Your best bet is to talk to a reputable mortgage lender, and see how your own situation fits in with the current underwriting guidelines. I can refer you to local lenders who are experienced and trustworthy. You may be able to buy a Livermore Valley home sooner than you think!

When you have questions about the Livermore Valley real estate market, contact me! I have the local market expertise you can count on for Livermore, Pleasanton and Dublin! Whether you are buying or selling a home, or “just looking“, I can provide the latest market data and the professional guidance you need.

John Kurtzer
Your Livermore Real Estate Expert
RE/MAX Accord

Livermore Real Estate
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New Short Sale Rules Will Help Livermore Valley’s Real Estate Market

August 30, 2012 By Leave a Comment

If you are a Livermore Valley homeowner struggling with negative equity and a personal hardship, there’s good news: short sales are about to get easier. Effective November 1, 2012, short sale rules are changing for mortgages backed by Freddie Mac and Fannie Mae. These government-sponsored entities are involved in over half of all active residential mortgages in the United States.

The new rules create a cohesive short sale process between Freddie and Fannie and their respective mortgage servicers. The upshot is a reduction in red tape and a wider door of opportunity for struggling homeowners.

For example, homeowners who are current on their mortgage payments could be eligible for a short sale, as long as they have a personal hardship along one of these areas:

  • Divorce
  • Business failure
  • Excessive obligations
  • Death of borrower or co-borrower
  • Job loss
  • New job/relocation more than 50 miles away

In cases where the homeowner is already behind on the mortgage and experiencing a hardship, the short sale will be treated with priority. Also, the paperwork process will be reduced for these homeowners.

It gets even better from there. Mortgage servicers will be given the authority to approve all qualifying short sales directly. No more delays while waiting for Freddie or Fannie approval.

There is also incentive for second mortgages to cooperate with the short sale. Usually, second lien holders refuse to sign off on a short sale because there’s nothing in it for them. The new short sale rules provide up to $6,000 in compensation to a second lien holder. While this may not seem like much, the take-it-or-leave-it deal gives all second liens the same treatment; no more bickering back and forth, and no wasted time.

The only unpopular rule could be the contribution requirement. Homeowners who have sufficient financial assets will be required to chip in on the short sale. In return, they will be off the hook for the difference between the sale proceeds and the mortgage balance.  This is a reasonable compromise that replaces the Mortgage Debt Relief Act of 2007 which expires at the end of this year.

The new short sale rules help Livermore Valley real estate on several fronts. First of all, short sales involve the fair market value of the home, whereas foreclosures are discounted. Short sales also keep the homeowner engaged in the process, preventing home abandonment and neighborhood blight. Last but not least, our home inventory should improve as more short sales come to market. Because they are listed at fair market value and our absorption rate is strong, the new listings would be welcome.

My experience in Livermore Valley real estate will help you whenever you are buying or selling a home! Whether you need the latest market data for Livermore, Pleasanton and Dublin  or you just have a few questions, contact me! I will provide you with reliable, professional guidance throughout all of our market conditions.

John Kurtzer
Your Livermore Real Estate Expert
RE/MAX Accord

Livermore Real Estate
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Spring Real Estate Sales Show Price Increases for Livermore Valley!

May 18, 2012 By Leave a Comment

There’s good news in Livermore Valley real estate this spring! According to the California Association of Realtors, median home prices statewide increased to $308,050 during April 2012. This is a 5.7% price increase from March 2012, and a 4.7% increase from a year ago. California median home prices have not been above $300,000 since December 2010.

Here in Alameda County, we are experiencing an upswing in both home prices and sales activity! The median home price increased from $425,000 in March 2012 to $456,910 in April 2012. Overall sales volume is up 12.5% from a year ago.

The days on market for an Alameda County home averaged 61.4 during April, down from 74.6 in March, and down from 69.4 a year ago.

Reduced home inventories, combined with an improving economy, have boosted home prices throughout the Livermore, Pleasanton and Dublin communities. However, we still have distressed properties on the market, and an unknown amount of foreclosures that have yet to be processed through the system. Homes will have a variety of price points depending on the unique factors involved in each local market.

There is also some urgency concerning short sales, as the Mortgage Debt Relief Act of 2007 will expire this December. Under the Mortgage Debt Relief Act, distressed home sellers are spared income tax burdens that could otherwise apply to discharged mortgage debt. Home sellers with negative equity have a strong incentive to complete their short sale transactions during 2012.

That fact, combined with recent short sale process improvements by Freddie Mac and Fannie Mae, could fuel more short sales activity this year. If you have questions about how a short sale could impact your future tax filing, visit the topic on IRS.gov and see your professional tax preparer.

When you have questions about the Livermore Valley real estate market, contact me! I have the local market expertise you can count on for Livermore, Pleasanton and Dublin! Whether you are buying or selling a home, or “just looking“, I can provide the latest market data and the professional guidance you need.

John Kurtzer
Your Livermore Real Estate Expert
RE/MAX Accord

Livermore Real Estate
View Livermore Listings
Visit My Website

 

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