Hat tip to DB for sending this along, fromReuters:
Bethany and Karl Schreiber are hunting for a nice big house in the pricey Washington, D.C., suburbs and they are facing a deadline: In just a few months their third child will be born, and the tiny two-bedroom they’ve been inhabiting will officially get too small.
But there’s a second deadline looming for them as well. Beginning on October 1, the government will dial back on the size of mortgages it guarantees in high-cost areas like San Francisco, New York and Washington.
After that, the maximum loan amount that Fannie Mae and Freddie Mac will back is scheduled to drop from $729,750 to $625,500. And that may make mortgages more expensive or harder to get for buyers like the Schreibers, who are shopping in the $700,000 range and would prefer to make a downpayment of 10 percent or less.
“If we wait a year, we may not be able to afford as big a house,” Bethany said in an interview. “Rates and housing prices are probably going to go up.”
The Schreibers concede their timing is mainly inspired by their own family circumstances. But others may be motivated to act now because of reduced government-backed loan assistance, housing experts say. Those programs were put in force as part of the stimulus package after the housing collapse.
“For people planning on exiting the market altogether (such as retirees), that is a compelling proposition,” says Stan Humphries, chief economist at Zillow. Home sellers may have to be patient to get the price they want. The curbs on government-backed loans could, at the margin, reduce the available pool of buyers, he said.
While we have seen some wild bidding wars lately (here’s one that sold for $655,000 over list), there are plenty of others that aren’t selling, for a variety of reasons.
After two and a half months, this 1927 Paul Williams house out in the wilds of La Cañada Flintridge has emerged from its interior design cocoon, having been made over top to bottom by a group of more than 50 designers. “Before” photos and a little history here. The private property is this year’s Pasadena Showcase House of Design, a music and arts education fundraiser that’s been held since 1965. Today we’re checking out the main house, which is 7,205 square feet and has four bedrooms, four bathrooms, and a carriage house.
This freeway-close location reminds me of the REO on Skyros in Leucadia, which is about the same distance to the Detroit river, and the same price – and Skyros is pending:
Bad neighbors aren’t just annoying. They can cost you real money when it’s time to sell your home.
A nearby property’s overgrown yard, peeling paint and clutter can easily knock 5% to 10% off the sale price of your home, said Joe Magdziarz, the president of the Appraisal Institute and a real-estate appraiser with 40 years of experience. A true disaster — a junky home in deplorable condition and a yard packed with debris — could cost you even more.
Even when real-estate markets were in better shape, messy neighbors caused problems. Kamie Dowen put her Harrisburg, Pa., home on the market five years ago but had problems selling because of a nearby property.
Toys littered the lawn, even in winter. The porch sported “a pumpkin that was two years past due,” Dowen said. A garage door, damaged after the owner ran into it with his car, was never fixed.
Frustration can lead to guerrilla tactics. Jeanine Brydges Watt of Windsor, Ontario, got so fed up with her neighbors’ yard that she waited until they went on vacation, then mowed the lawn and threw out the trash, which included old diapers and split-open bags of garbage.
Watt said she wasn’t worried about being arrested for trespassing. The messy neighbors were renters and probably thought their landlord had done it, she said. And Watt’s other neighbors were thrilled.
“If they had been asked, none of the other neighbors would have ratted me out,” she said. “They were happy we cleaned up the eyesore.”
You may not be willing to risk arrest, but there are other tactics you can try if a neighbor’s property is hurting your home’s value.
Larry Summers, one-time director of President Barack Obama’s National Economic Council, believes the economy is recovering, albeit not as fast in some areas as desired, but enough to forestall a double dip.
“There is no longer any talk of a depression,” he told journalists at a Lincoln Institute of Land Policy seminar in Cambridge, Mass., over the weekend. “Now, there’s very little talk of a double dip.”
He pointed out that the economy has grown for seven straight quarters and the unemployment rate has fallen.
“The stock market has had the best two-year run since the beginning of the 20th century,” he said. He also said corporate profits are best in any two-year period since World War II.
But he acknowledged things are not improving fast enough.
“To be sure, we have a huge concern that the recovery is not nearly as rapid as we would like,” he said. “The housing sector remains extraordinarily weak. The nation’s long-term debt situation is not where it should be. There have been major steps in financial regulation but we can’t be certain we will avoid another financial crisis.
“But the catastrophe that could have been averted has been averted , and I think it has been averted with a combination of the right diagnosis, determined effort to act on that diagnosis, a good deal of luck and an important change in psychology.”
Summers, who served in the administration from 2009 until early this year, returned to Harvard as president emeritus. He was Treasury secretary under former President Bill Clinton and chief economist of the World Bank.
Foreclosures are inching up again, while closely watched defaults shot up 34 percent in March — the largest monthly increase for San Diego County in more than two years.
Analysts at DataQuick Information Systems on Tuesday reported there were 1,837 mortgage defaults in March, up 34 percent from February but down 19 percent from a year ago.
The company’s numbers also show there were 1,047 foreclosures in March, a 17 percent increase from February but an 8 percent decrease from the same time last year.
Some industry leaders predict monthly numbers will continue to rise this year as banks are apparently becoming more expedient with foreclosure processes and people continue to walk away from their homes, even when they’re able to afford the mortgage payments.
March’s monthly increases may indicate that lenders are becoming “more comfortable going forward with notices of defaults,” said Dave McDonald, a branch manager for New American Funding in Bonita and a past president of the California Association of Mortgage Brokers’s San Diego chapter.
Another factor that could lead to more defaults: homeowners who took on five- and seven-year adjustable rate mortgages, or ARMs, during the height of the market. McDonald said those consumers are expecting drastic changes in their loan terms this year and in 2012, which could mean increases in monthly payments. In the past, he’s seen them go as high as $800 more a month for some homeowners.
Since refinancing is an unlikely option, McDonald suspects many will end up defaulting on their loans. “It’s the next wave (of defaulters,)” McDonald said.
Gary Laturno, a San Diego real estate broker whose expertise is in foreclosures, is still in the wait-and-see category with foreclosures and defaults this year.
Still, Laturno concedes the state of the county’s distressed market is volatile. He’s still seeing a number of “strategic defaulters,” homeowners who walk away from their homes because they are so underwater, even when they can afford to make the payments.
“I think we have a long way to go” before the distress is over, said Laturno, also a San Diego attorney.
The national existing-home sales in March increased by 3.7% over the previous month’s total, which makes sense as the spring buying season got rolling.
Nationally the March sales were down 6.3% year-over-year, and median price was down 5.9%.
How did we do locally?
To generate bigger samples, and to test out more of the tax-credit influence, these are the detached sales and pricing from March 1st to April 15th:
Town
Zip
2010
2011
Cardiff
92007
8/$601
11/$416
Carlsbad NW
92008
22/$333
22/$313
Carlsbad SE
92009
88/$271
70/$257
Carlsbad NE
92010
12/$262
15/$233
Carlsbad SW
92011
21/$312
25/$297
Del Mar
92014
13/$781
20/$597
Encinitas
92024
44/$348
44/$335
La Jolla
92037
35/$658
39/$563
RSF
67+91
19/$463
33/$431
Solana Bch
92075
6/$442
6/$708
West RB
92127
52/$266
55/$273
East RB
92128
66/$281
59/$266
RP
92129
56/$286
43/$256
Carmel Vly
92130
52/$333
55/$345
Scripps Rch
92131
42/$281
40/$264
Total
All Above
536/$342
537/$333
Total
All SD Co.
2,759/$248
2,608/$239
Overall, our market is holding up well, in spite of no tax credit this year. SE Carlsbad, 92009 is still struggling, but sales are up sharply in the Ranch, and Carmel Valley continues to see strong sales and higher average pricing.