Is it time to buy?

http://www.car.org/library/media/papers/pdf/BeyondtheHeadlines_41008.pdf

What you need to know about the market
• Former Federal Reserve Chief Alan Greenspan Tuesday said he expects the drop in U.S. home prices will probably end early in 2009 as housing inventory is reduced, and added that “…it is very likely that home prices will stabilize well before that.��? He noted that the damage from the subprime crisis won’t be fully apparent for
months but called the current credit crisis the worst in 50 years. Greenspan was speaking at a banking conference in Tokyo.

• Despite living in an area with one of the highest foreclosure rates in the nation, 63 percent of Sacramentans believe 2008 is a good time to buy a home, according to a recent survey of 1,200 residents conducted by Sacramento State University’s Institute for Social Research. Forty-seven percent said now is a good time to buy, while 16 percent said waiting six months would be better. Affordability, cited by 50 percent of respondents as a barrier in the 2006 survey, was identified as an obstacle to homeownership by only 36 percent of those surveyed in 2007. Although more optimistic about the home-buying market, 75 percent believe it will be at least two years before the Sacramento housing market recovers, and 58 percent said they worry at least some of the time that their income will not be sufficient for them to pay their bills.

• Housing developments designed for adults age 55 and up have boomed over the last decade. According to San Diego-based MarketPointe Realty Advisors, some 113 such developments and 33,500 housing units have been built during that time in Southern California alone. The majority (87) are located in Riverside County and the Coachella Valley. It is estimated that more than 40 percent of households will be 55-plus by 2012.

It’s a wonderful time to buy a house. But unfortunately mostly everyone’s broke out there and unemployment is climbing higher and higher everyday. Isn’t that usually how it is. Great time to buy, or it always goes on sale when your broke. Smiles

I just recently heard that over 700 people applied for the one position MID had open. It’s time to buy! Sure, if you got the cash to invest. But if you don’t have the capital & you own a house, it might be time to refinance. Talk to your banker or book keeper first. Get educated!

And if you are looking to buy a house, don’t always go with a Realtor just because they showed you the property. Always ask for referrals, I repeat! Always ask for referrals from any realtor you plan to work with & fallow up on them. Make them work for your business.

They are hurting for your business more so then you are hurting to jump into such a large commitment. One more thing, just let it happen. Don’t ever push into it or go out of your way to make it happen. If its meant to be, it will be. The ball is in the buyers court with everybody out there in the Real-estate Business. The consumer is the boss and very well should always be.
Efren J
Always giving it to God..

Yes, it's a great time to buy as opposed to 2005 at the high end. However, what if it's a better time to buy later this year or early next year? I realize that lenders don't have a crystal ball, however lenders have to be careful about luring customers with stories about how great it is to buy and that their new purchase will only grow with equity. btw...You still have not answered me Ms. Chen on my previous question. I would also like to know if you ever told any of your past customers that their home will only go up in equity during the last 2 yrs or so? How do you feel about the market this year? Are you buying a home yourself since you think it's such a great time to buy? Thanks.

Mine was purchased in 1983, 64 months to payoff.

I figure another nine months, unless location is that good. Broker friend of mine joked he had a seller with real equity. Buyer came in nearly immediately, but apparently had not noticed tightening on lending, as when asked, as didn't quibble on pricing, asked how much down, apparently seller someone in my position, the buyer questionedthe term, "down?", no planned to borrow it,,,,, to which rather than waste time, suggested buyer prequalify with a bank....

Too much inventory out there, not to be better buying if you have cash, the loan resources, and in it to purchase a good house, location, able to do what remodel you want, realistic on it, and .... all buyers have reasons to do as they do. Glad I don't have to sell mine at this time. I do think it hasn't bottomed out yet. My former line of work, am studying the market, as former partners expressed an interest, so despite disaster in foreclosures, they feel longterm Modesto area worth investing in.

jdc104 jim christiansen

Cindy Chen, during the 2005-2006 yrs, have you ever represented to any of your previous clients that their home purchase will go up in value during the next couple of years and did you represent any buyer that used risky loans for their financing? Just wanted clarification on this matter. Oh and as for any lenders you recommend. Have they or he/she used risky type loan products for your clients? And what exactly was your position during those years on Zero Down loans that used teaser rates to entice home buyers? I think anyone who blogs on ModestoFamous.com would like to know that before using your services. Afterall, you were the one who started using this community forum as a way to advertise your services and therefore, you opened the door for these type of questions to occur. Thank you.

Hi, I did answer your last question. It should be posted on the other blog, as the most recent blog.

Real Estate is a long term investment, and 05-06 was already buzzing with market downturn in the media. The buyer's I represented at that time had to get a home because they had no where to live, were planning to have a home for the next 10 years and needed the tax deduction. Clients who did not need any of the above decided to wait.

California Association of Realtors has a mandatory disclosure to inform consumers of market conditions: Market Codition Advisory CAR form MCA.
Make sure your Realtor provides this form in your disclosures. In today's Foreclosure market, you should recieve this info within 7 days of an accepted offer.

Yes, I have personal experience with risky loans, preventing and fixing them. As you prob. do as well. There are too many specific individual factors to discuss and resolve in one blog.

It is important that consumers know their own finances. I cannot give financial, legal or loan advice. My own personal financial position is to put 3-20% down and have a 30 year fix.

Have you EVER represented a buyer who used a risky loan (teaser rates ARM)? A simple yes or no would suffice. As for the Advisory Form...it does not fully protect an Agent in my opinion if that agent was deemed to be negligent to his or her client. Anyone can throw a few advisory/disclosures out there in a file full of 30-50 pages and have folks signing documentation that they really don't understand. That is why is so important for you to just come out and admit whether or not you have EVER represented anyone in a risky loan situation. And as for your Mortgage Broker agents that you recommend, have they signed buyers up for those of risky loan programs and is it less expensive for buyers to deal direct with their bank or mortgage company rather than use a Mortgage Broker? Consumers have a right to make a decision that could save them hard earned cash. I mean...why would I want to use an agent who works for a Mortgage Broker(who will charge me an extra fee) when I can use my direct mortgage company/bank/credit union? Don't insult other readers on this blog by stating that your mortgage broker will work hard...has access to hundreds of lenders and so on. In fact I would say a person would not only save on the fees but probably get a better interest rate by foregoing a Mortgage Broker and dealing direct with their bank or credit union. Why pay another large fee to the mortgage broker agent? Oh, and does your mortgage broker ever give you a kickback or referrals from other agents?

Thanks

Hi ursovague,
I feel I've answered your question. It's not necessary to harass me. It sounds like you had a bad personal experience, and any answer I give you would not make up for your loss. If there is something I can assist you with, I'm happy to do so.

It's illegal to give kick backs. My clients and I have compared fees of credit unions and Mortgage Brokers. I shop around for lower fees, the best rate and for someone who I can trust and found that and that is who I use for my own personal loans.

I'm not a loan consultant, and the client can choose to use any service provider they want. Yes, I inform my clients to the best of my knowledge ramifications of each type of loan.

I blog as a past time every three months or so hoping that this can help educate consumers far before the buying/selling process, so that they don't get into risky situations. Most of my time is dedicated to servicing my clients. I won't be able to respond to ursovague again as I feel I've spent plenty of time on the same question.
If anyone else has similar concerns that can be resolved then I'll respond.

I am in no way trying to harass you or anyone else. All I am doing is blogging on behalf of potential consumers out there. Folks have a right to know what they are getting into and a lender or real estate agent should be able to man/woman up and admit if he or she ever did represent a buyer who used a risky loan. I think I have the right. I call it freedom of speech without asking for anything in return except an answer.

I did answer the question everytime, inc. all additional new questions.
I don't feel it's right to blantently disclose mine or my client's personal financial information. So I answered best possible way without invading anyone's privacy.

to divulge any personal details about yourself. It was a simple "yes or no" question. So you did not answer it. Therefore, you should change your name to Real Estate Answered Sometimes.
lol

Good night.

having been in the business from the principal position, not as a broker or agent, but personal residence, and responsible to investor partners, the idea of education of the buyer to really understand the procedures, a good idea for personal protection of the investment, not getting burned, knowing if you may be getting suckered, or actually understanding and admitting you might not understand the loan terms so you ask questions until you do, so you know the risk you're taking buying a property, especially using other people's money, granted to you as a bet you have the ability to pay.

Reviewing the experience of some of my friends I felt should know better, as long as they've been in the business, and that of the govt, and professionals such as Bear Stearns as example that were surprised, and totally burned by the melt down in real estate, must be risky business at this time, to post on real estate in a blog, as the news, despite the "glowing" statistics that opened this, and I'm from Riverside County, Sun City, Palm Desert and seniors like Florida long a development, but friends of mine in the biz my age, find they got a lot of first mortgage paper back, and the property, having to deal with their buyers went for seconds beyond reason on what had been pretty good value properties, in the recent bubble. Worse, some of them had made the same mistake, made it harder to deal with.

I personally, look at the deal on a unique basis, what we have to invest if anything, and location, what it seems good for. I'm out of the business, as disability, reduced that capability to manage properties, and limited income, and took position to deal with reduced life style costs, rather than take out equity loans beyond my income stream, as could pass on the new SUV, etc, which is what a lot of people did, result of suggestions from financial touts, to use mortgage with interest tax deductible to pay for such things, than credit card or car financing, no longer deductible interest on the 1040 form. I'm lucky to have been put out of the industry most likely, never had the chance to try out the new mortgage version of the old dot com financing off the credit card. On paper a lot of these schemes look like they should work, often only do you find the gimmick doesn't work, on the experience somebody tried them out and failed, and you found out about it As a nation, we've found out recently on the grand scale.

In my case, the use would have been medical expenses, something that many used the second and sometimes third financing, and ever rising values, to cover uninsured calamities of illness, mental illness, or items not covered with co-pays, elective surgeries, or calamities not insured. This is still at top of the heap for bankruptcy actions, often for many in the foreclosure picture, who weren't in the no-down first time buyer category so often cited in rip off schemes.

The nationalization of home development, with large national building firms, with mortgage arms, builds out large scale, with some of the gimmmicks tried to float the market beyond its deflating demand, with three month, six month and one year paid by seller financing terms, in attempt to keep pricing up, CTX would be one of them in that, I saw the signs. These firms more into the big box, not local so much in demand, or in use of local crews, regional by nature, sort of like every corner has to have a Starbucks, a Walgreen's, a WalMart to be civilized on a mass scale. Temporarily, housing on sale list using such gimmicks, kept a price up ten percent, but a real value ten percent below that the 80 percent financing actually a 90 percent loan in practice. Buyer had to determine if the cash flow of first year, so important to the deal to pay a higher than the trend in market to lowering values, as this happened in the mixed market in 2006. Similar to decision on teaser rates, do you really get that raise in salary ahead of the reset, or do you find a better deal than Countrywide in time to refi in less than 2 years hold, with interest enough to reduce payments, and possibly better equity position?

Its similar to betting the rate on one credit card, to pay the balance on another will never end, and lately, even with the IPO success of VISA recently, credit card problems have come in with the mortgage crisis. Too many paying off mortgage debt on what was supposed to pay the visa bill balance with your master card teaser rate.

At any rate, the bubble, which i got into researching in 2005 predicting the deflation due to odd, too many 100 percent financing schemes, has burst, the downside as bad as I've followed the trend, still on track, though denied in media, govt reports until the numbers say, no.... still downward.... has been a disaster for the lenders, investors (40 percent of foreclosures first wave in Merced, were investors, not first time buyers) title company employees, brokers, agents, and homeowners, that ursovague, I cannot blame rea from posting best spin, keep up with the other surviving realtors, try and generate some purchasing, as there is a lot of foreclosed on inventory, and as a homeowner with 28 percent loan to value (was 23, but I have to presume my own market price is down due to devaluation of the market these losers have cost us all) that unrealized equity (I have yet to sell, paid off in 63 months) may go down further, or not stabilize, or return to rising in value, until this mess works itself out, so putting positive spin on the here and now of the market, which certainly has some good values in the foreclosed on bank owned properties for new buyers priced out of the recent bubble, who may have the down that qualifies them under new lending rules, rea is not wrong in being optimistic in this market, as that's part of the job.... selling.....

Buyer beware, was the old caveat taught me. Its hard to support the lamentations of people who just made up income on non documented loans, and didn't scream while the loan proceeds disbursed, as to their own shady declaration, of an ability to pay, until turned out tehy really couldn't vs those who were tricked into signing over solveable loan issues like those who dealt with Lonnie Ashlock, who as long as he serves his jail sentence at home, ought to at least have to do alternative work program, picking up butts in parks, etc, rather than just the ankle bracelet gps.

its a mess. Was bored, so thought I'd add another comment on this one. It will be awhile before we see the inventories reduced such we really find out what the new "normal" market is, but just my opinion, as I do art mostly these days, profession that rarely pays well, but I've got rent covered, and my renters pay me so I can pay mine, and the mortgage so far. Be a bummer so close to pay off, to lose it now.

jdc104 jim christiansen

Glad you decided to add your two cents. I really enjoyed reading your input. Please continue to add more comments in the future to other blogs. It is a tragedy that millions of homeowners were not prepared for some reason or another. It's almost as if it was mass hysteria to some degree. Prices were out of control and going up by the minute back in 05. Folks were using their homes as ATMs. More and more neighbors were competiting against one another. If one purchased a brand new boat. Their neighbor down the street had to have one bigger and better. Cars and expensive furniture were the norm back then. Not anymore. That over priced furniture isn't worth more than 10% of what it originally cost the owner when it was new. Times have changed. Hopefully all of us have learned from our mistakes and the mistakes that others have made.

Good luck.
It appears you have your head screwed on straight and no one is going to jack you into doing something you don't understand.

I actually got a notion that laloma area, where I had shopped before finding property I still have on mjc side of graceada park neighborhood, had hit hysteria values over Scott Peterson case, as started reading the saga of the agent buying the house, Sharon Rocha being one herself, knew she got top price, but it was the guy investing in the notoriety of the place, etc, and of course, did get a hit of national media, as I feel one of the nicer neighborhoods in area, and looked at how he financed the deal, got me to really go back to looking at the market, etc..... after proper pause in career to deal with mental health, so hard to believe I'm accused these days of head screwed on straight,

The story in the Bee, couldn't believe it, that guy blew it, bad, .... so what if he a nice guy, violated real estate 101, wouldn't have him as my agent, but in fat market, virtually anyone can make a sale, test of professional, builder, developer, agent, broker, is the downside of the business, survive, get creative, problem properties, do well then, you are knowledgeable.

but father was in the biz, and we weathered storm in 1970s that had rather quick and sudden decline in family fortune in Riverside, that landed us in Modesto, smallest division of Dad's former company with multistate profects, a lot of units, to a few problems, such I don't forget the lessons he taught my siblings and I about it can and did happen to us. Good training at 22 years old, was buying one of our houses with my brother, on inheritance from grandfather, all of $3600 each.

I figure I've purchased my property a few times, major remodel to get in, settlement with ex wife, half a remodel again, due to problem tenants, and why I use professional property manager, find I was far better at commercial leasing than the issues of renters. And when my father died, had only been President of the Company myself a couple of years, though been construction boss for some time, mom and auntie not into credit line re-up, so got real efficient as construction company, and sold off properties, such as principle, handled enough sales for me for some time..... and settled a few family estates, more than one.... successfully, but following some of the rules the prior generation of investors in the family noted we should follow.

My brother and I gave up on the stock purchase, and decided to go do other stuff, left the assets with mom and our aunts, as we benefitted anyway, prefer mom keep playing tennis, be our bridge partner as needed, and sold off the big house she no longer wanted to clean up, moved into the held free and clear property so she could go visit our sister at Stanford, for a time in Holland (nine years) or Larry in Boston, where he and his wife own a few properties, not bad for a guy who plays chess for a living. So we earned ours, hoping mom lives to 90 or 100, only 80 at this point, but nice to be in good health, still have health insurance, something I don't have and have almost died not long ago, pneumonia not so expensive as my cousin's cancer death at time his son of to UCSB, so the family trust issues come up all too fast in the family, can see how easily that equity can get wiped out.

thanks for the comment here on the issue forum by other blogger, who has put out some good advice on issues for buyers, as I promote the art stuff and blues festival issues here for free, and agent must be sharp enough to know, this site is read, way to connect in business, that isn't real good right now for many. New sales nationally down to 1991 levels, I recall that, had some of the last properties to sell then, our residential income units, the commercial already divested, sort of slow at the time. We made good money, but not exactly robust market, lending a bit tight, held out for cash offer we did get.

Depressing for most when you see, around 450 sales last month, but 1500 or so turnins to the bank, adds a net 1000 more to inventory for sale....... which of course lowers price on my house, at least appraisal value, even though I don't plan to sell for some time.... but what if the Big C struck, this lending issue affects liquidity in conversion of that equity to paying the surgeon.....

jdc104 jim christiansen