San Luis Obispo County Real Estate Real Time Mon, 19 May 2014 15:49:00 +0000 en-US hourly 1 Before You Jump in… Check These Pool and Spa Equipment Saftey Tips Mon, 19 May 2014 15:49:00 +0000 Have life-saving equipment such as life rings or reaching poles for available use.

Install a fence around the perimeter of the pool and spa at least four feet in height.

Use self-closing and self-latching gates.

Ensure the pools and spas you use have compliant drain covers.

Do not use a pool or spa if these are broken or missing.

Maintain pool and spa covers.
From the Consumer Product Safety Commission

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Happy New Year…and a perfect time of year to create a plan for how you can tweak and have your home be a happier place. Sun, 29 Dec 2013 23:01:02 +0000 Now’s are are a few inexpensive suggestions:

1. Paint like a scientist. Studies show that painting rooms colors that are consistent with their purpose actually makes a home’s residents happier than they were before the paint job. Spending a weekend shifting to crisp and clean green bathrooms, soothing blue or cream bedrooms, and warm browns, golds, oranges, and reds for dining and living areas turns out to be one of the least expensive ways you can use your home to give your family an emotional boost.

2. Fix (or toss) what’s broken. If your coffee machine has been sitting on the counter for four months waiting on a trip to the repair shop, you have drawers that don’t close all the way, your dining table wobbles or your shower needs regrouting, you are incurring a little drain of energy, getting a little injection of frustration every single time you look at or try to use these items. Throw out or repair items that don’t work — stat. Just let them go.

Then, create a little inventory for home projects that need to happen, and get a handyman or the appropriate contractors on the horn and get bids so you can budget and plan for getting them done.

If someone in your home is a big do-it-yourselfer, negotiate an agreement that she will have X items fixed by Y date or you will call out a repairperson.

In any event, at least get the bids on the repairs; you might be surprised at how quickly and inexpensively they can get five or 10 little repairs done on a weekend, and your in-house do-it-yourselfer might decide that her time is more precious than the repair costs.

Same goes for situational setups that are simply not working for your life and your activities: If your office space or your kids’ rooms are overflowing with clutter, after you purge (see No. 4, below), explore the many built-in and off-the-shelf storage solutions that are affordable and can render this space much more functional.

Generally, get aggressive about setting up each of your home’s rooms to help your family optimally experience whatever purpose that room is designed for: Research how you can maximize your bedroom’s restfulness, your living room’s conversationality, your office’s efficiency, and your dining area’s coziness.

3. Trick out your trims. If you’ve ever done a soup-to-nuts remodel of your home’s exterior and/or landscaping, you know that there’s nothing like the feeling of driving up to your house at the end of the workday and simply loving the way it looks. But what if you don’t have a ton of cash to drop on a complete curb appeal overhaul? I believe one of the most underestimated ways to change the way your home looks is to focus on the trims:

•Get a new door or just paint the door and get a new knocker, handle or kickplate.

•Refresh with new house numbers.

•Install exterior shutters, or paint existing shutters an entirely new color.

•Get new outside lights.

•Paint all the eaves and trims in a bold new color scheme.

You’ll be amazed; painting a home’s front door, eaves, shutters, and trims can make the entire home look like it’s had a fresh paint job.

4. Purge. Books, papers, clothing — these things accumulate as if through their own volition, and can create clutter and claustrophobia, the feeling that you have much less space than you truly do and the feeling of being trapped under a daunting pile of stuff you rarely, if ever, use.

If you crave to purge your stuff and simply seem to never get started make a game of it. Last year, I decided to get rid of 100 things in one month. The number 100 is uber-accessible, and if you give yourself a full month to do it, that can also help you feel confident that this is a mountain you can tackle.

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Economist Temper Housing Bubble Worries Wed, 26 Jun 2013 07:45:47 +0000 Although home prices are likely to continue to rise in the next few years, the national market is not in danger of a bubble, according to prominent economists. “Four of the next five years are likely to be improving years in the housing market. I don’t say five because there’s always the possibility of little hiccups in the housing market,” said Lawrence Yun, chief economist for the NATIONAL ASSOCIATION OF REALTORS®.
“But we will still be shy of the bubble years of 2005.” Yun spoke on a panel at the National Association of Real Estate Editors conference in Atlanta Friday along with Jed Kolko, chief economist for real estate search and marketing site Trulia, and Mark Fleming, chief economist for real estate data and analytics firm CoreLogic. “Right now we are not in bubble trouble, even though prices are rising as fast as we saw in last decade’s bubble,” Kolko said. Prices are still 7 percent undervalued relative to incomes and rents, he said.
By contrast, home prices were 39 percent overvalued during the housing boom with some areas overvalued by up to 80 percent, he added. Kolko said there is no sign of overbuilding and little sign of overborrowing. “Prices would have to keep rising at the current rate for several more years to put us back in bubble territory,” he said. He anticipates three factors will stem price appreciation before that happens: higher mortgage rates, fading investor interest and more for-sale inventory. Higher mortgage rates will likely dampen, but not kill, housing demand — even an increase to a 5.5 percent interest rate is still historically low, and buying would still be 33 percent cheaper than renting at that rate, he said.
Indeed, interest rates would have to rise to more than 11 percent for renting to be cheaper than buying, he said.

“Of course, it’s different for different markets,” Kolko added, and his calculations assume borrowers will stay in their homes for seven years, among other assumptions.
A recent analysis by Trulia found that prices were overvalued in nine of 100 major metros: the California metros of Orange County (overvalued by 9 percent), Los Angeles (5 percent), San Jose (3 percent) and San Francisco (2 percent); the Texas metros of Austin (7 percent), San Antonio (5 percent) and Houston (2 percent); Portland, Ore. (1 percent); and Honolulu (0.01 percent).
Rising prices and flattening single-family home rents will curb investor interest, Kolko said. That will also affect demand and therefore limit upward pressure on prices.

Low inventory has contributed to skyrocketing price appreciation, making it a necessary part of the recovery, Kolko said. But inventory will begin to rise as would-be sellers get off the fence and put their homes on the market, he said.
Rising prices have brought many homeowners from underwater, making them eligible to sell again, but negative equity is not the only factor at play in their decision.
“Prices have been rising for 15 months,” but inventory has not risen in that time, Kolko said. The reason behind that hesitance has to do with homeowner attitudes: “No one wants to sell at the bottom. Why would you sell if you could wait six months or a year?”

CoreLogic’s Fleming said home value peaks during the bubble years still loom large in homeowners’ minds.

“People have reservation prices. They are not going to bring the house on market until it gets there,” he said.

Fleming noted that the biggest problem plaguing the housing market is lack of equity. Given rapidly rising home prices, he expects the number of homeowners with negative equity will be back down to a historical norm of less than 1 percent in five to seven years.

All three economists said the housing recovery was on track. Yun said there was no danger of the economy slipping back into recession.

“Home price growth is rising very, very fast. Housing wealth is easily offsetting the impact of sequestration,” he said, referring to tax hikes made earlier this year at the federal level. Yun projects home prices for existing homes will rise 8 percent this year, followed by 5 percent next year.

He warned, however, that if price growth continues to easily outpace income growth, it will affect home affordability and run the risk of “creating haves and have-nots. The owners are smiling (and) the non-owners are frustrated that they cannot participate in” the market, he said.

Yun noted the national homeownership rate currently stands at 65 percent, down from a peak of 69 percent.

“I think it’s going to go to 63 percent possibly, before stabilizing,” he said, though he cautioned that that doesn’t mean the housing market will decline. Younger generations will pull down the average, he said.

Yun expects existing-home sales to rise 6.7 percent this year to 4.97 million before rising to 5.3 million and 5.7 million in 2014 and 2015, respectively.

“Home sales are essentially coming back to the (homebuyer) tax credit-induced sales (of 2010) even without the tax credit because of the better economy,” Yun said. But sales are still only at 71 percent of the past peak, he added.

Yun expects vacation-home sales in particular to make a “meaningful” increase this year and next, due to rising household net worth among upper-income households resulting from near-peak stock values.

New-home sales are only at 28 percent of their past peak — not because buyers don’t want them, but because builders aren’t building enough new homes, he said.

Newly constructed homes inventory is at a 50-year low and, while recovering, housing starts need to rise by 50 percent to get to their long-term average of 1.5 million per year, Yun said.

“I don’t expect that to happen,” he said, noting that historically most homes have been built by smaller companies.

But “small builders are shut out of the market. They cannot get construction loans,” Yun said.

All three economists agreed construction loans to small businesses are down and harder to get. The result will be long-term housing shortages, Yun said.

“We are frustrated the banks are not lending” when they have plenty of cash to lend, he said.

Between 2009 and 2012, the average credit score for borrowers of approved Fannie Mae- and Freddie Mac-backed home loans ranged from 760 to 770, he said, noting that a “normal” average would be 720. If standards were normal, home sales would be 15 to 20 percent higher, he said.

Fleming questioned the notion that credit standards are too tight for homebuyers, however.

“Averages are easily manipulated. It’s not about the average score. It’s about the tail: Are we giving credit to people with” low credit scores? he said.

An analysis of the spread of credit scores for those obtaining loans, rather than the average score, suggests the answer to that question is yes, Fleming said.

Compared to the late 1990s, when there was a “relatively healthy” level of credit availability, credit might be “modestly constrained,” but not too far off historical norms, he said.

Denied loan applications may have an average FICO credit score of 720, he said, but they also have a loan-to-value ratio of 88 percent.

“What are they being denied for? Lack of equity,” he said.

Fleming said he did not know if there were better measures of credit availability, other than credit score averages, currently published. He noted, however, that the number of mortgage applications actually underwritten might be one measure. The share of mortgage applications underwritten stands at 15 percent, down from around 30 percent, he said.

Still, credit isn’t tight, “we’re just making it really painful and difficult” to get a mortgage, he said, suggesting the paperwork involved was likely daunting for many borrowers.

Nonetheless, he anticipates that as interest rates rise and refinancings become a smaller share of mortgage originations, the competition for purchase loans may result in what he called “expansion of the credit box.”

As the pressure to offer more exotic loans than currently available rises, “the question will be: Have we learned our lesson in the industry?” he said.

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Loan qualifications for retirees Sat, 11 May 2013 18:02:12 +0000 Many lenders measure income by looking at dividends. Lenders generally want to see a regular annual amount on the tax return paid out over at least the last two years.
As far as part-time work, which some retirees decide to pursue, when the borrower applies for the loan, they need to be able to confirm that they are actually employed at that moment. Once the employment situation has been verified, lenders are likely to include the pay as income, but may still require a two-year work history.
Social Security income is always counted. Borrowers should be aware that Fannie Mae guidelines allow lenders to increase that income by 25 percent if the beneficiary isn’t paying taxes on it.
Some retirees may qualify for a mortgage loan by working with a portfolio lender who does not verify income. The downside to this option is that the interest rates and down payment requirements are higher.
Some lenders qualify income-deficient, asset-rich retirees by using a program known as asset depletion. In this situation, the lender takes a fraction of the borrower’s assets, amortizes it, and applies it as income. Source: The New York Times

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15-year mortgage rate Vs. 30-year mortgage rate Tue, 16 Apr 2013 03:43:08 +0000 15-year mortgage rate Vs. 30-year mortgage rate
There is no shortage of decisions to be made when
applying for a new mortgage loan. Consumers have
to select a lender and then decide between a fixed
or an adjustable rate, and then make the biggest
decision of all, 30 year or 15 year loan.
A 30-year mortgage financing loan has always been
the most popular for consumers purchasing a
house, but as interest rates remain at record low
levels, consumers are slowly turning to 15-year
loans because of how affordable they have grown
since 2010.
Statistics from the Mortgage Bankers Association
show that a 15-year loan accounted for 23 percent
of refinancing applications in November of last
year. This is up 51 percent from a year earlier. For
the whole year, 15-year mortgages made up 35
percent of all refinance loans. In 2007, 15-year
mortgage loans made up for only 8.5 percent of the
refinance market.
Rates are becoming extremely affordable for a 15-
year loan, so more consumers do not mind the
higher monthly payment because of amount that
they are saving in the long run. Consumers are
saving themselves in the tens of the thousands in
interest over the life of the loan vs. the life of a 30-
year loan.
The chart below illustrates the savings generated from
obtaining a 15-year mortgage vs the traditional 30-
year one. On a median priced home of $366,930, a
homeowner could save up to $117,000. Figure 1
breaks down payment and interest schedule for the
two types of loans.
The saving is the result of the historically low rates,
which are also lower for 15-year loans. While the
mortgage rates are not going to stay this low, as Frank
Nothaft, chief economist at Freddie Mac, said “a 15-
year fixed is three-quarters of a percentage point even
lower….You can lock that in and never have to worry
about refinancing again.”
There are advantages in selecting either a 15-year
mortgage or a 30-year mortgage. The main
advantages for selecting a 15-year loan are that:
consumers pay off mortgage faster, save money in
interest and build equity much faster. While these are
great advantages, more Americans find using a
traditional 30-year loan gives them the advantages of:
having a lower monthly payment and having extra
cash to increase their savings.

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5 Things to know when making extra loan payments Tue, 29 Jan 2013 01:27:00 +0000 This is a good time to pay down your mortgage: One of the vexing features of the post-crisis financial system is the dearth of riskless investments paying a decent return. The rates on federal government securities and insured certificates of deposit (CDs) are not much greater than zero.

Yet every homeowner with a mortgage has the opportunity to earn a return equal to the interest rate on the mortgage, with no risk, simply by making extra payments. It is the best investment opportunity most homeowners have.

The only downside to using mortgage repayment as an investment is that it has no liquidity — once you make the payment you can’t take it back if you have an unexpected need for funds.

However, most homeowners with mortgages who place their savings in bank deposits or money market funds paying less than 1 percent, rather than earning 3-6 percent by paying down their mortgage, do it for reasons other than a need for liquidity. The main reason is confusion about one or another feature of loan repayment.

Confusion about loan repayment as an investment: Some borrowers have trouble viewing mortgage repayment as equivalent to buying a bond or a CD. Yet in both cases, you pay out money now and receive a stream of income in the future based on the contracted interest rate.

The only difference is that the income received from a mortgage repayment is cancellation of interest that you would have had to pay otherwise. The difference between receiving $1,000 of interest and eliminating the payment of $1,000 of interest is one of form but not of substance.

Those with a mortgage can actually earn a little more than the interest rate on their mortgage by taking advantage of the 10- to 15-day payment grace period that is found in all mortgage contracts. By adding the extra payment to the scheduled payment, the borrower will save interest for the entire month, even though he does not provide the funds until 10 or 15 days into the month.

Note: If the borrower makes a separate payment after the grace period, his loan balance may not be reduced until the following month, which would reduce his return on investment.

Confusion over deductibility: Some borrowers who itemize their tax deductions don’t want to repay their mortgage because it entails loss of a deduction. But the loss is exactly the same as that on a taxable investment. For example, a borrower in the 33 percent tax bracket who repays a 3 percent mortgage earns 2 percent after tax. If instead the borrower purchased a CD paying 1 percent, the after-tax return is 0.5 percent. If the before-tax rate on the repaid mortgage is above the before-tax rate on the alternative investment, the same will be the case after taxes.

Confusion over mortgage life cycle: Some borrowers believe that they missed the boat on loan repayment because they didn’t do it in the early years of their mortgage when the regular payment went largely to interest, whereas now most of it goes to principal. But the rate of return on mortgage investment is not affected by where the mortgage is in its life cycle. While the allocation of scheduled payments between principal and interest changes over the life of the mortgage, extra payments go entirely to principal, no matter what stage of its life cycle the mortgage is in.

Confusion over imminent sale or retirement: Some borrowers are immobilized by plans to sell the home, as if somehow this would prevent their obtaining the expected benefit from making extra payments. But it wouldn’t — in fact, the benefit would become glaringly evident in the smaller loan balance they have to pay off out of the sale proceeds.

A similar point applies to those planning to retire with reduced income. If and when they need a reverse mortgage in the future, they will have to pay off their existing mortgage in the process, and the lower the balance, the more they will be able to draw on the reverse mortgage.

Confusion over whether the lender will properly credit their account: Numerous versions have crossed my desk, including a concern that the lender won’t credit their account until the end of the term. This is not true — the account is credited immediately or even a few days early, as noted above.

A variant is that the lender will use the extra payments for some purpose other than reducing the loan balance. The only substance to this concern is that the lender will indeed apply extra payments to any unpaid obligations, of which the most likely is an underfunded tax/insurance escrow account. Aside from that, the only thing the lender can do with extra payments, other than credit them to the loan balance, is to steal them, which they never do.

With one exception, borrowers making extra payments need not provide special instructions as to how the payments should be applied. The exception applies when the extra payment is an exact multiple of the scheduled payment – the payment the borrower is obliged to make each month.

If the scheduled payment is $600 and the borrower sends in a check for $1,200, the lender does not know whether the borrower wants to apply the extra $600 to principal, or is paying for two months. To avoid this problem, do not make extra payments an exact multiple of the scheduled payment.

Jack Guttentag is professor of finance emeritus at the Wharton School of the University of Pennsylvania.

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Foreclosure filings up in half the U.S. States in 2012 Tue, 29 Jan 2013 01:23:40 +0000 Half of U.S. states saw an annual increase in the number of foreclosure-related filings in 2012, but most of those were judicial foreclosure states where loan servicers were catching up on the backlog from the “robo-signing” controversy, according to a year-end report by data aggregator RealtyTrac.

All told, RealtyTrac reported foreclosure-related filings against 1.84 million U.S. properties in 2012, down 3 percent from 2011 and down 36 percent from a 2010 peak of 2.9 million homes.
All but five of the 25 states seeing an increase in foreclosure-related filings (default notices, scheduled auctions and bank repossessions) were states where courts handle most foreclosure proceedings.

Many foreclosure proceedings against homeowners in those states were stalled, but not derailed, by allegations that loan servicers failed to follow proper procedures in filing legal documents.

After loan servicers reached a settlement last March with state and federal officials last over so-called “robo-signing” practices and revised their procedures, they began pushing new and existing proceedings through the system again (many also started approving more short sales to meet their obligations under the terms of the settlement).

Foreclosures are handled by courts in the six states seeing the biggest annual increase in 2012 foreclosure filings — New Jersey (up 55 percent), Florida (53 percent), Connecticut (48 percent), Indiana (46 percent), Illinois (33 percent), and New York (31 percent).

Homes in New York took the longest to move through the foreclosure process — 1,089 days — followed by New Jersey (987 days), Florida (853 days), Hawaii (781 days), and Illinois (697 days).

In the 25 states that saw foreclosure filings drop from 2011 to 2012, 19 handle most foreclosures outside of the court system, and loan servicers in those states continued to move homes through the foreclosure process during the robo-signing controversy.

Non-judicial foreclosure states seeing the biggest drop in foreclosure filings in 2012 were Nevada (down 57 percent), Utah (down 40 percent), Oregon (down 40 percent), Arizona (down 33 percent), California (down 25 percent), and Michigan (down 23 percent).

RealtyTrac warned there could be a foreclosure backlog building up some states that saw filings decline in 2012, as the result of new state legislation and court rulings that make it more difficult for lenders to foreclose.

So 2013 could see “two discrete jumps in foreclosure activity,” at the beginning and end of the year, said Realty Trac’s Daren Blomquist.

“We expect to see continued increases in judicial foreclosure states near the beginning of the year as lenders finish catching up with the backlogs in those states, and another set of increases in some non-judicial states near the end of the year as lenders adjust to the new laws and process some deferred foreclosures in those states.”

The rise in foreclosure activity in many local markets in 2012 “should translate into more foreclosure inventory available for sale in 2013 in those markets,” Blomquist said. “That is good news for buyers and investors, but could result in some short-term weakness in home prices as the often-discounted foreclosure sales weigh down overall home values” in those markets.

States with the highest foreclosure rates in 2012 were Florida (with filings against 3.11 percent of homes), Nevada (2.7 percent), Arizona (2.69 percent), Georgia (2.58 percent), California (2.33 percent), Ohio (1.75 percent), Michigan (1.69 percent), South Carolina (1.66 percent), and Colorado (1.64 percent).

Among metro areas with a population of 200,000 or more, Stockton, Calif., had the nation’s highest foreclosure rate (3.98 percent). Six other California cities made RealtyTrac’s list of the 20 metro areas with the highest foreclosure rates, and Florida landed eight cities on the list, including Miami (3.71 percent) and Orlando (3.46 percent).

Zillow is projecting that a half-dozen markets in California, including some Central Valley cities hard hit by foreclosures, will see double-digit home price appreciation in the months ahead. The real estate portal’s analysis of more than 250 markets predicts that national home prices will appreciate 2.5 percent in the year ending November 2013.

“The U.S. housing market bottomed in the fourth quarter of 2011 and has since entered a sustainable recovery,” Zillow Chief Economist Stan Humphries said in a blog post.

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Help we need your support! Wed, 10 Oct 2012 19:55:11 +0000 As a REALTOR® and a constituent, I urge you to support legislation to ensure that rural communities continue to have access to valuable federal housing programs. Unless Congress acts quickly, families in more than 900 communities across the country will be unable to utilize the programs of the Rural Housing Service (RHS).
As a result of the 2010 census, RHS is now determining which currently eligible rural communities may no longer meet RHS program requirements due to changes in population or their designation as part of a Metropolitan Statistical Area (MSA). Programs such as the Section 502 guaranteed loan program are instrumental in providing opportunities for homeownership for rural families. These loans can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities. Private lenders and banks fund these loans, and RHS insures them. These loans are made at no cost to the federal government as the program’s costs are fully supported by the premiums paid by borrowers.
Congress created the definition of a “rural” community used by the RHS back in 1974; it has not been updated in the ensuing 38 years. Instead, following each census, Congress has simply “grandfathered” communities that had been eligible for RHS programs but due to changing demographics no longer met the RHS’ rural definition. The Senate has included a provision, sponsored by Senators Nelson (D-NE) and Johanns (R-NE), in the pending Farm Bill to provide a ten-year extension of eligibility for currently eligible communities. In the House, Rep. Fortenberry (R-NE) has introduced legislation to provide the same ten-year extension. But no final action has occurred on either bill.
Extending eligibility for existing communities does NOT authorize any additional funding, but would simply retain the pool of eligible communities. As our nation struggles to recover from our economic crisis, our rural families and communities need these programs more than ever. I urge you to support this extension and ensure safe access to housing financing for rural families when Congress returns to session in November

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Sellers who are considering listing their homes for sale are advised to do the following: Fri, 20 Jul 2012 02:23:54 +0000 Get rid of clutter and neutralize the home. Removing unnecessary furniture and painting rooms neutral colors will help potential buyers see themselves living in the home.

Homeowners also should put away personal items, such as jewelry and family photos.

Fix the obvious. Paint the peeling eaves, apply a fresh coat of paint to the interior and clean the carpet, especially if there are pets in the house.

Homes with dogs and/or cats immediately lose half the buyers on the market because of odors and allergies.

When the house is being shown, homeowners should leave and take their pets with them. Buyers do not want to feel like intruders by opening closets and cabinets.

Sprucing up flower boxes, adding new mulch, and trimming bushes are all recommended to increase curb appeal.

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Rents increase as vacancies dry up Thu, 19 Jul 2012 01:10:45 +0000 Despite the sluggish economy, average rents increased in all 82 markets tracked by Reis Inc., a
real estate data firm. Average rents are now at record levels in 74 of those markets and now
top $1,000 a month on average in 27 of them, including Miami, Seattle, San Diego, Chicago,
and Baltimore.Read the full story

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