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Category Archive: ‘Thinking of Buying?’

Mortgage Rates Higher


Interest rates have been moving higher for the last six days, and have priced in the 1/4% increase that the Fed is expected to do next month.  If the Fed does finally bump the Fed Funds rate, there should be some relief that’s it’s over, but don’t expect that lenders will give much back.

From MND:

Mortgage rates continued pressing into the highest levels since July–themselves the highest levels of the year.  In just over a week, the most frequently quoted conventional 30yr fixed rate has moved from 3.75 to a range of 4.0-4.125%.  Most lenders are quoting the same contract rates as Friday, with the weakness instead seen in the form of higher upfront costs.

What’s with all the drama?  In a word: the Fed.  There had been some remaining disagreement about when the Fed was most likely to begin raising rates after nearly 7 years of the record low 0-.25% target.  Last Friday’s jobs report helped get everyone on the same page.  Unfortunately, the consensus is that the hike is all the more likely.  While mortgage rates are not directly linked to the Fed Funds Rate, most interest rates tend to rise when expectations for a Fed rate hike increase.

When rates rise as much as they have and for as many consecutive days as they have, it becomes increasingly likely that they’ll take a break and bounce back somewhat.  If you wait to lock, you will feel like a genius if that happens, but you could be looking at significantly higher costs if it doesn’t.  In this case, the risk of loss is greater than the potential reward for timing the bounce correctly.  Lenders aren’t likely to give back meaningful amounts of the ground we just lost unless the bounce is sustained and substantial.

“Borrowers and loan officers hoping for a fast rebound from Friday’s sell off were disappointed today, as we lost further ground and rates rose slightly.  Since October 27th, treasury yields have soared from 2.03% to 2.35%.  MBS lost roughly 150 bps during the same period, and our “sub 4%” rates are in the rear view mirror at the moment.  At some point, we’ll level off, and perhaps even undo some of the carnage, but until we do, I’ll be advising locking early rather than risking further losses.”

It wouldn’t take much for homebuyer demand to soften a bit.  Higher rates, fewer foreign buyers, the lack of good buys, and the holiday malaise could send the market into a slumber for the next 2-3 months.


Posted by on Nov 9, 2015 in Inventory, Jim's Take on the Market, Thinking of Buying?, Thinking of Selling? | 1 comment

Village Townhouses


Downtown Carlsbad has an allure mostly because it is next to the beach, plus a good walk around town is enjoyable.  But those who want to buy a home nearby have their work cut out for them – there is very little for sale.

TM is hoping to capitalize on the lack of inventory, and sell 2,100sf condos within walking distance of the village and beach that offer ocean views and a 2-car garage – for around a million dollars:

Posted by on Nov 4, 2015 in Builders, Carlsbad, Jim's Take on the Market, Thinking of Buying? | 2 comments

Supplemental Property Tax

tax man

When you buy a house, the county tax assessor sends you regular property-tax bills, which are based on what you paid for the house – usually around 1% of the purchase price per year.

But in almost all cases, the sellers paid a different amount of taxes, which were based on their purchase price.

Thus, the supplemental property tax makes up the difference.

The escrow company will pay taxes at the old rate, or give you a credit depending on the time of year. When you close a escrow during the period when taxes are due (November 1st – December 10th and February 1st – April 10th), the escrow company just pays the tax for the buyer – but at the seller’s old rate.

The county wants to collect every penny, so they pro-rate the difference between the old and new taxes due for the remainder of the tax period, and they send you a supplemental-tax bill.

We used to have to manually calculate the amount.  It is hard enough trying to explain what a supplemental tax bill is, let alone come up with the right amount.  Thankfully, the assessor has devised their own calculator, at this link – it is a great tool:

Their FAQs are here:

Posted by on Nov 4, 2015 in Local Government, Thinking of Buying? | 1 comment

New Listing in the PQ!

Chaco map


Buyers who demand top-rated schools and want the convenience of being Carmel Valley-adjacent on the 56 corridor but only want to spend mid-$600,000s for a turn-key house should check out this gem in Crestmont!

Open House 12-3pm on 10/31 (Laker Joe) and 11/1 (Richard).

All three schools (Deer Canyon, Mesa Verde, and Westview) are rated a 10 at greatschools website, and are within walking distance too!

Kitchen recently remodeled with custom cabinetry, granite slab counters, and stainless appliances. Bathrooms have granite slabs and travertine too! Milgard windows and sliders, newer furnace/central A/C, hickory engineered hardwood floors, stamped concrete patio, new landscaping, and a low HOA fee of $12/mo plus NO MELLO-ROOS! All on a friendly culdesac with no houses behind – plus great access to everywhere; get to the beach in 15 minutes! Zillow’s school scores are inaccurate – at the greatschools website, all three are ranked a 10!

Posted by on Oct 30, 2015 in Bubbleinfo TV, Jim's Take on the Market, Thinking of Buying?, Why You Should List With Jim | 6 comments

Rents Pushing Higher

higher rents

Speaking of newcomers, it won’t just be outsiders who fuel the future demand.

Mortgage rates dipping into the threes make buyers giddy, but today’s low rates are just the sweetener.  Demand is being driven by the soaring rents.

Rich people can choose in or out – I heard the story yesterday about the doctor couple who have been renting a house in Santaluz for 13 years.  But for those with static incomes, the reality is grim.

More on rents here:

Posted by on Oct 15, 2015 in Jim's Take on the Market, Real Estate Investing, Thinking of Buying?, Thinking of Selling? | 5 comments

Boomers Survey

This survey is dated 2014, and they should update it every year – or at least until I’m right about having a boomer liquidation sale coming down the pike!

This survey asks several different questions, but notice how 20% to 30% of the responses seemed to divulge some stress or uncertainty about their future:




Uh-oh.  It looks like this homeownership thing could be a boomer addiction:



It’s still early in the game for most boomers.

But here’s where the game changers start to come out.  Only 58% don’t plan to sell?  Fine, they aren’t going to make the market – it’s the other 42% that will determine our real estate future:


Fluff question below – of course we like our home, at least until selling it becomes a better idea:


Almost a quarter of boomers know they are already short on income, and will be hitting the housing ATM.  How many others who didn’t expect to use their equity in 2014 will eventually need to cash out for various reasons?


Here’s where the real trouble starts below – 46%???





The best question towards the end of the survey once respondents have loosened up – and lo and behold, 61% of boomers aren’t sleeping that well.

If it only ends up being 20% to 30% of boomers who make a move, that’s still at least 15 million people in America who will be deciding our market!

The biggest concern?

Elderly folks who haven’t moved in a generation (or two), who know their money is running out and happen to see a couple of lower-priced sales nearby.  In a effort to bank as much equity as possible, they hit the panic button and grab the first realtor they find who then dumps their house for 95% of value.

It’s a downward spiral that could pick up steam quickly.

Posted by on Oct 12, 2015 in Boomer Liquidations, Boomers, Forecasts, Jim's Take on the Market, Thinking of Buying?, Thinking of Selling?, This Is America, Why You Should List With Jim | 19 comments

Sentiment Index


Only 1,003 people surveyed but they were asked 100 questions.  From MND:

In case you missed it, last month Fannie Mae began to transition the multi-graph and narrative report detailing results of its National Housing Survey (NHS) into a different format, the Home Purchase Sentiment Index (HPSI).  The Index distills responses to six survey questions about consumers’ home purchase sentiment into a single number which the company says “reflects current and forward-looking housing market outcomes and complements existing data sources to inform housing related analysis and decision making.”

The HPSI summarizes consumers attitudes about whether it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier.

Read full article here:

Posted by on Oct 8, 2015 in Jim's Take on the Market, Thinking of Buying?, Thinking of Selling? | 0 comments