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Sherrie Faber
DRE #01272361
First
California Realty, Inc.
Sausalito,
CA 94965
Direct:
(415) 339-9200
Fax:
(415) 331-1178
eMail:
First California Realty
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September 26, 2006
2006 Home Sales Still Third Highest on Record
STUART, FL - According to the National Association of Realtors (NAR), 2006 is on pace to be the third best year in history for transaction volume. True, values have become stagnant or even begun to decline but the facts are the transaction volume is still stronger today than all but two years in this country's history.
The 50 Year Mortgage Is Introduced In California
Last year Fannie Mae announced a pilot program to test-market a 40 year product throughout the country. Today approximately 5 percent of new mortgages in the country are written for a 40 year term.
Now, as a result of skyrocketing housing prices and slow increase of interest rates, 50-year-mortgages are being introduced. Given that we are living longer, this doesn't seem as impractible as it would have a few decades ago.
The 50-year loan originated in Southern California where several banks rolled out the product in March of 2006. It is generally offered as a variation on the 5/1 hybrid adjustable rate mortgage where the initial rate is fixed for five years and then adjusts according to a predetermined index (commonly the London Interbank Offered Rate or LIBOR.)
The concept is simple - string out the time required to pay back money loaned and the payments will be smaller. In a market where traditional mortgage payments are freezing people out of homeownership each such innovative program will allow another sliver of those shut out to qualify for loans. Lenders expect them to be particularly popular with homeowners who have been making only the minimum payments on their option mortgages and are getting a little panicky as their rate adjustment date nears.
Longer term mortgages also have some significant advantages for the lender. Some borrowers will keep the mortgage for full term, which smoothes out the lender's cash flow and lowers the cost of advertising. Every business person knows it is cheaper to keep an existing customer than woo a new one.
According to Bankrate.com about 25 percent of new mortgages in California are 40 year loans so the 50 year home loan "is the next step." One banker says he has taken over 200 applications already for the new product.
Metro Home Prices Cool, But Appreciation Remains Strong
Compiled from Real Estate News and Outside Sources
Wednesday, May 31, 2006
The growth in single-family home prices continued to cool in the first quarter, but many metropolitan areas are still showing double-digit annual gains, according to the latest survey by the National Association of Realtors. At the same time, metro area condo price appreciation has generally cooled to normal levels.
NAR President Thomas M. Stevens from Vienna, Va., said "After five years of booming sales, we are now experiencing normal market conditions across most of the country . . . Inventories levels have come up to balanced levels between home buyers and sellers, so the pressure has come off of home prices and most owners can expect steadier gains in home values for the foreseeable future."
Baby Boomer Survey Shows Big Appetite For Real Estate
Excerpted from Real Estate News
Friday, May 19, 2006
WASHINGTON, D.C. - Baby boomers have a higher rate of homeownership than the national average and one out of four own more than one property, according to a new study of the largest generation in U.S. history commissioned by the National Association of Realtors®.
The comprehensive study of nearly 2,000 Americans born between 1946 and 1964, conducted for NAR by Harris Interactive®, also shows boomers are optimistic about the future, but many are not adequately prepared for retirement.
David Lereah, NAR's chief economist, said . . . "As a group, boomers are in their peak earning years . . . "On one hand is an almost insatiable desire for real estate . . . and their appreciation of housing as a great investment."
One-quarter of respondents own one or more other kinds of real estate in addition to a primary residence: 13 percent own land, 8 percent own rental property, 7 percent a vacation home or seasonally occupied property, 2 percent commercial real estate and 3 percent some other kind of real estate. |
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