Despite downturn, 2008 was record year for sales of high-end homes - San Jose Mercury News

By Sue McAllister

Mercury News

Posted: 04/05/2009 01:01:00 PM PDT

Last year was a grim time in the real estate market, wasn't it? Foreclosures, falling values, the credit crunch.

Nonetheless, in Santa Clara County more homes sold for $5 million or more than at any time since the dot-com-nirvana year of 2000. And in San Mateo County — home to luxury-home strongholds like Atherton and Woodside — it was a record-breaking year for sales of super-expensive castles.

Only in the final quarter of 2008 did the recession finally bite into the top end of the market, sending sales plummeting. While the super rich weathered the early days of the credit crisis far better than most, experts say, last fall's stock market crash drastically impaired their ability to snap up multi-million-dollar manses.

At least 31 homes in Santa Clara County and 60 in San Mateo County sold for $5 million or more in 2008, according to MDA DataQuick, which gathered the information from public records. There were probably even more such sales, the company said, because buyers and sellers of very expensive homes often opt to "hide" the price when their deeds are recorded.

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Jumbo mortgage rates starting to become more affordable - MarketWatch

CHICAGO (MarketWatch) -- Jumbo mortgages became more expensive and harder to come by as the nation's credit crisis deepened. That might be starting to change.

"Jumbo" refers to mortgages that are too large to be bought by Freddie Mac or Fannie Mae. The "conforming loan limit" for those government-backed entities is $417,000 in many parts of the country, but goes as high as $729,750 in high-cost areas of the continental United States.

Bank of America recently began trumpeting its jumbo program, offering 30-year fixed-rate jumbo mortgages with rates in the high 5% range, said Vijay Lala, product management executive for the bank. "We decided it was time to really go after that market," he said.

More lenders may soon join in, said Guy Cecala, publisher of Inside Mortgage Finance.

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Housing law changes key capital gains rule

A little-publicized section of a 2008 federal law intended to help homeowners could reduce the amount of capital gains, or profit, that home sellers may exclude from taxation.

Under the previous law, a homeowner could exclude up to $250,000 in capital gains ($500,000 for a couple) from the sale of his principal residence if he had lived there for at least two of the past five years. The period of occupancy didn't have to be successive. It just had to meet the test of two of the past five years.

For example, if the homeowner paid $500,000 for the house, owned it for five years but lived in it for only two years and sold it for $750,000, he would walk away with a tax-free $250,000 gain - cash in his pocket. (For the sake of simplicity, this example doesn't include adjustments that reduce the amount of capital gains.)

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Obama Refi Plan

The Making Home Affordable program is officially official. Mortgage lenders are now processing applications and paperwork for the help-the-homeowner plan often referred to as "The Obama Plan".

Because Making Home Affordable is a new program, there have been a lot of questions about how it works, who is eligible, and how to apply for a Making Home Affordable refinance.

What follows is a collection of questions and answers from my clients, the press, plus other things I think you should know.

Of primary importance -- first -- are two points:

1. Only Fannie Mae- and Freddie Mac-backed loans are eligible for The Obama Plan
2. Fannie Mae and Freddie Mac use different sets of refinancing rules

Be forewarned. In some respects, Fannie Mae and Freddie Mac are like the National League and the American League -- it's the same game, but with different rules. Or, maybe a NFL / CFL comparison is more apropos.

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Making an Offer on a Home. It’s not all about the Benjamin’s… — The Phoenix Real Estate Guy

If you read enough Q&A sites, talk to enough people, and listen closely, you will often hear this when people talk about making an offer on a home:

“We put in a full price offer and didn’t get the house!”

or

“The seller’s accepted an offer from someone who offered less than we did!”

Most peoples gut instinct leads them to believe that what matters in making an offer on a home is the price. Part of this may stem from real estate agents incessant harping that “price is everything”. And while aggressive pricing is the key factor in getting a home sold (at least in the Phoenix real estate market, and many other US markets as well), there are other factors besides price that a seller should evaluate on any offer their home receives. And if the seller is evaluating other factors, the savvy buyer will consider those factors when making an offer on a home…

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Government cracking down on mortgage scams - San Jose Mercury News

Associated Press

Posted: 04/06/2009 08:36:26 AM PDT

WASHINGTON — Top federal and state officials today announced a broad crackdown on mortgage modification scams, accusing "criminal actors" of preying on desperate borrowers caught up in the nation's housing crisis.

Government officials say scammers are seeking to take advantage of borrowers in danger of default. The frauds often involve companies with official-sounding names designed to make borrowers think they are taking advantage of the Obama administration's efforts to help modify or refinance 7 to 9 million mortgages.

Officials say such operations almost always are fraudulent, and that help is available for free from government-approved housing counselors.

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Selling in Spring

Tips for Winning Over Spring-Time Home Buyers

By Elizabeth Weintraub, About.com

Spring is the optimum time to sell a home. Regardless of whether it's a buyer's market or a seller's market, inventory almost always rises in the spring. Why? Because the largest number of buyers are actively searching for a new home during the months of April, May and June.

Tip: If your home has been languishing on the market since the holidays, take it off the market. Give it a chance to "cool down" for a few weeks before putting it back on the market. Nobody is going to look at your home in the spring if the DOM show it's been on the market for several months. Buyers gravitate toward fresh, new listings!

Here are 15 things you can do to improve the odds that your home will stand out among the sea of new listings flooding the spring-time real estate market:

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How not to be a victim of foreclosure fraud

by Jay Hammond on March 31, 2009

As the number of struggling homeowners facing foreclosure continues to rise, so do the number of unscrupulous individuals and firms will to prey on them.

“A mortgage lender or a financial counselor can assist you in finding real options to avoid foreclosure,” said Sissy Osteen, an Oklahoma State University Cooperative Extension resource management specialist. “If someone is offering to consult with your lender and offers to arrange to stop or delay foreclosure for a fee be sure to check his or her credentials, reputation and experience. It’s important to protect yourself and not be a victim of a foreclosure scam.”

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First-Time Home Buyer? Choose When to Claim Your Tax Credit | RISMedia

RISMEDIA, April 4, 2009-With the deadline for filing federal tax returns fast approaching, the National Association of Home Builders (NAHB) has made information available for qualified home buyers about how and when to claim the $8,000 first-time home buyer tax credit.

The basic eligibility requirements for the credit are: the home must have been purchased on or after Jan. 1 and before Dec. 1, 2009; the buyer may not have owned a home in the three years prior to the purchase; and the buyer must have a modified adjusted gross income (MAGI) less than $95,000 for single tax payers or $170,000 for married filers.

Two factors affect the amount of credit qualified buyers can claim: it can only be equal to 10% of the purchase price of the home, up to a maximum of $8,000; and it is reduced for buyers with a MAGI between $75,000 for single taxpayers ($150,000 for married filers) and the upper income limit.

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6 Reasons Why It's Still a Good Time to Buy

The housing market is looking healthier. Here are six reasons why now is the time to jump into the market.

1. Uncle Sam is willing to help. First-time buyers (defined as anyone who hasn’t owned a home in the last three years) are entitled to a maximum $8,000 tax credit; interest rates are at record lows; and the Federal Reserve is doing its best to make mortgage loans available. (Sign up for a Webinar to learn more about the home buyer tax credit)

2. People have to live somewhere. About 800,000 new households are formed each year in this country, ensuring that the housing market will tighten, even if the economy doesn’t soar.

3. Borrowers leverage their investment. If you put $10,000 into the stock market and it earns 10 percent, you’ve earned $1,000. If you put $10,000 down on a home and its values increases 10 percent, you’ve made $10,000.

4. When prices come back up, you’ll have instant equity. In parts of the country where foreclosures have driven down prices, better times will mean the price of the home you buy will rise rapidly.

5. Mortgage costs stay the same. If you get a fixed-rate mortgage, the monthly payment stays the same – while everything else, including rent, goes upward.

6. You own it. There is something comforting in the notion that your home is your own. You can paint it any color you want, let the dog run in the back yard and hang a swing for the kids in the front.

Source: The Wall Street Journal, June Fletcher (03/27/2009)

Is California real estate coming back?

No state has been harder hit by the housing bust than California.

It has piled up more foreclosures and has endured among the worst home-price declines. The median price of a single-family home sold in February was $247,590, down 41% from 12 months earlier, according to the California Association of Realtors (CAR).

And home construction in the Golden State has nearly vanished: December housing permits shrank to about a quarter of what they were during the boom years, according to the National Association of Homebuilders.

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Buying Foreclosed Homes: Be Careful

If you're looking for a great deal on a house, one option might be to purchase a home that's in foreclosure.

But Early Show financial contributor Vera Gibbons says the process isn't for everyone: It's complicated and fraught with potential stumbling blocks.

There's certainly no shortage of properties in or approaching foreclosure to pick from.

Some three million foreclosures are expected this year alone, according to the Web site RealtyTrac.com>, three-to-four times the usual number.

Prices usually range from 20 to 80 percent below market value, depending on where the house is located.

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Home Inspections

Question: What Types of Home Inspections Can a Buyer Do?

A reader asks, "My husband and I had our offer accepted last night on a house in a really cool neighborhood. The house is a little old, so we're concerned that it might not pass a home inspection. Our agent says a home inspector might refer us to other inspectors. What other inspectors? What types of home inspections can a buyer do?"

Answer: Your real estate agent should be able to give you a list of the types of home inspections that are generally conducted in your area. She is correct in saying that your home inspector might suggest that you hire other inspectors.

Does a Home Inspector Check Everything in a House?

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Featured Homes Near Lynrbook High 040309

Oak Knoll, $1,748,000, 5 Bedrooms, 4 Bathrooms, 4634 SqFt
Vicanna Dr., $1,099,950, 5 Bedrooms, 2 Bathrooms, 1800, SqFt
Alderbrook, $899,888, 3 Bedrooms, 2 Bathrooms, 1300 SqFt
Danromas Way, $899,888, 4 Bedrooms, 2 Bathrooms, 1790 SqFt
Corvette Dr., $899,000, 3 Bedrooms, 2 Bathrooms, 1133 SqFt

5 Recommendations for Navigating Today’s Mortgage and Housing Markets

”There are five distinct strategies that can help home owners, buyers, and sellers successfully navigate today’s turbulent mortgage and housing markets,” said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.

1. Understand and Utilize the New Tax Credits. Many home owners are not aware that the latest government stimulus package gives them a special tax credit of up to $1,500 for making certain home improvements. Also, if you are buying a primary home and you have not owned a primary residence in the last 3 years, you may qualify for the new $8,000 first-time-homebuyer tax credit. “Although you can’t use the credit to help with your down payment, the credit can be claimed on your 2008 tax returns if you buy the home in 2009,” Nicholas said. “This means that even if you buy the home after you file your taxes on April 15, you can simply file an amended 2008 tax return and the IRS will send you a refund check for $8,000.”

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Mortgage Rates 'as Low as 2 percent'

Some of the 3 to 4 million homeowners eligible for loan modifications could see interest rates as low as 2 percent under the Obama administration's new "Making Home Affordable" (MHA) initiative.

Originally dubbed the "Homeowner Affordability and Stability Plan," MHA contains a provision to modify mortgages for qualified homeowners struggling to make the monthly payment.

A loan modification, unlike a refinance, changes the terms of the existing loan without writing a new one. Modifications are designed to make mortgages more affordable.

Also called a "workout," this provision is open to anyone including those who haven't missed payments, but may be at risk of missing payments.

The modification plan is open to anyone with any loan that has a balance under Fannie Mae and Freddie Mac limits, which now as high as $729,750 in some high-cost areas.

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Buyer Feedback

The most important question a home seller can ask a buyer who has just finished viewing a home is "What did you think?" Yet, many sellers (and their agents) hesitate to get buyer feedback after showings. Why? Some people don't know which questions to ask, and others, most likely, are afraid to hear the answers.

Buyer feedback is essential. Without it, home sellers won't know what they are doing right and what could be improved upon. Because after all, it doesn't really matter what the seller thinks. It's the buyer's opinion that matters.

Here are sample questions that you can use to get buyer feedback:

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Pending home sales rise 2.1 percent in February from January

An index that tracks signed contracts to purchase previously occupied homes rose in February from a record low a month earlier as buyers took advantage of deeply discounted prices and low interest rates.

The National Association of Realtors said today said its seasonally adjusted index of pending sales for previously occupied homes rose 2.1 percent — in line with expectations — to 82.1 in February from January's record low of 80.4.

Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future home sales.

Because of falling home prices and mortgage rates, homeownership is more affordable than it's been since at least 1970, the trade group said.

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