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Low Cost Loans Could Soon Disappear

by Craig Whitlock

We've witnessed the substantial increase in mortgage rates over the past 9 weeks and now we're confronted with another dimension of financial challenge.  The Obama administration is looking for ways to trim back the two housing finance giants - Fannie Mae and Freddie Mac.  The consensus is that there'll never be a more favorable combination of rates and terms than what exists right now.

Some of the remedies being considered in Congress include:  higher insurance fees on FHA annual premiums, reduction in loan amounts backed by Fannie and Freddie in higher-cost areas such as Los Angeles (set to take place 10/1/11), increase fees to lenders who package their mortgages for resale in the secondary money market which then are automatically passed on to the consumer and increasing the minimum down payment size to 20% to 30% to meet a new standard of a 'qualified residential mortgage'. 

I doubt that all of these measures would become reality, but some could and at minimum this article that appeared this week in the LA Times signals the kind of thinking around Washington these days.  It ended on an ominous note:  "Bottom line:  Get ready to pay more for mortgages, no matter what happens to Fannie Mae and Freddie Mac." 

So if you're thinking that waiting a little longer might be better to capture a lower price, you may find that any price savings could easily be overshadowed by increased mortgage costs.  Buying sooner could be better than later. . . .

LA Westside Sales Highlights - January 2011

by Craig Whitlock

This report will provide a quick overview as to how the Westside micro-markets are currently performing and then compares that data to the same period a year ago.  The key market indicators are:

Pending Sales Activity - sometimes referred to as the 'Number of Properties Under Contract'.  This is a forward-looking indicator of current sales activity where there has been an accepted offer and escrow has opened.

Median Sales Price - that point at which half of the properties have sold for a greater amount and half have sold for a lesser amount.  This indicator pinpoints where in the price spectrum homes have sold rather than reflecting a drop in home value.  There is a common mis-perception that a drop in the MSP directly indicates a drop in home value.  It is far more likely that the drop indicates either smaller, older and/or homes in lower-priced areas have sold during the period.

Months Supply of Inventory (MSI) - a leading indicator of market supply, which directly impacts pricing.  Generally, a five to six month supply indicates market equilibrium while anything less signals a 'seller's market' and anything above a 'buyer's market'.

           LA Westside Homes For Sale - Sales Highlights Chart - January 2011

           LA Westside Homes For Sale - Sales Highlights Chart - January 2011   Information not guaranteed.  © 2009 Terradatum and its suppliers and licensors (http://www.terradatum.com/metrics/licensors)

To view a portfolio of four additional reports trended over the past 12 months:  Properties For Sale, Days On Market, New Properties For Sale and Supply & Demand, visit the Market Sales Data section.  If you have any questions or would like to discuss this data at greater length, just drop me a note or call. 

Your Time To Buy A Westside Home Could Be Now!

by Craig Whitlock

No doubt you've heard this line before.  Michael Corbett, author of "Before You Buy:  The Homebuyer's Handbook for Today's Market" believes that market factors right now are ideal to make a great deal on a new home.  Of course, he's speaking of reasons external to your personal financial situation and there's some sound points here that are made.

"Prices are bumping along the bottom and interest rates are really low" he exclaims according to a recent article in the LA Times.  "When you have those two together, you have the perfect buying opportunity." 

He touches upon a key point regarding Short Sales - one that I generally counsel my clients.  They're not the best deal around town for a variety of reasons and should not be regarded as similar to buying an REO (bank-owned or REO) property. 

He does however extend one piece of advice that I would take issue, which is to get 'pre-qualified'.  You should rather, get 'pre-approved'.  A 'pre-qual' letter issued by a lender is based upon facts discussed on the phone (without verification) whereas a pre-approval letter is based upon a lender's examination of hard and physical data such as 2 years of tax returns, income and employment verification and so on.  Sellers want to be sure a buyer can perform and regard a pre-qual letter as not worth anything more than the paper its written on.

Visit Now May Be The Best Time To Buy to read the entire article and Buyer Resources for more tips and information to help you along the way.

 

 

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Craig Whitlock
COLDWELL BANKER BRENTWOOD
11661 San Vicente Blvd., 10th Floor
Los Angeles CA 90049
Mobile: (310) 488-4399
Fax: (310) 820-1457

Broker/Agent does not guarantee the accuracy of the square footage, lot size or other information concerning the conditions or features of properties provided by the seller or obtained from Public Records or other sources as presented in this website.  Interested parties are advised to independently verify the accuracy of all information through personal inspection and with appropriate professionals.  Information herein deemed reliable but not guaranteed.

CalBRE LIC 01827537