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Bud Zeller's Blog

By Bud Zeller | Broker in Placerville, CA
  • Days to Close a Home Loan Drops to New Low

    Posted Under: Market Conditions in Placer County, Home Buying in Placer County, Home Selling in Placer County  |  August 25, 2014 1:30 PM  |  25 views  |  No comments

    Both closing times and credit requirements are dropping, according to the latest report from Ellie Mae. The mortgage industry services provider states in its Origination Insight Report that the average number of days to close a loan has dropped to 37 in July, compared to 41 days in June. Ellie Mae notes that's the the lowest average they’ve seen since they began tracking. On average, it took 38 days to close a FHA loan, 36 days to close a conventional loan, and 38 days to close a VA loan in the month of July.

    The report also notes that the average FICO score fell one point to 727 in July, reversing a four-month trend of increases. Researchers also noted another "sign of easing" is that 32 percent of closed loans had an average FICO score under 700 last month, compared to only 25 percent one year ago.

    Meanwhile, the purchase market climbed in July, as the share of closed purchase loans hit 67 percent, up 2 percent from June – and the highest percentage since Ellie Mae began tracking the data in 2011. Refinanced loans took up the remaining 32 percent of closed loans. 

    The report focuses on loans that closed or were denied over the course of a month, comparing the data to other time frames, according to Ellie Mae.

    Source: "Ellie Mae Releases July 2014 Origination Insight Report," (August 20, 2014)

  • California Real Estate News and

    Posted Under: Home Buying in Cameron Park, Home Selling in Cameron Park, Financing in Cameron Park  |  August 24, 2014 4:14 PM  |  17 views  |  No comments

    Talking Points …

    • California home sales posted higher for the second straight month, and while the statewide median home price rose from the previous month as well as a year ago, the pace of appreciation continued to slow, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
    • Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 398,940 units in July, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide.  July marked the ninth straight month that sales were below the 400,000 level and a full year that sales have declined on a year-over-year basis.
    • Sales in July increased 1.2 percent from a revised 394,250 in June but were down 10 percent from a revised 443,500 in July 2013.  The July 2014 sales rate was the highest since October 2013.  The statewide sales figure represents what would be the total number of homes sold during 2014 if sales maintained the July pace throughout the year.
    Other real estate data at: www.BudandDougZeller.com
  • Down Payments for Lower-Priced Homes Double

    Posted Under: Market Conditions in El Dorado Hills, Home Buying in El Dorado Hills, Financing in El Dorado Hills  |  August 18, 2014 2:05 PM  |  53 views  |  No comments

    Buyers looking at lower-priced homes are not only facing major inventory hurdles, they’re also finding that they have to bring more money to the closing table.

    The median down payment for the cheapest 25 percent of homes was 7.5 percent of the sales price last year, up from a low of 3.1 percent in 2006. That also compares to an average of 4.2 percent from 2001 through 2007, according to research by the real estate brokerage Redfin Corp., which analyzed the 25 largest metros.

    Many younger home buyers, who often seek to break into the housing market by purchasing lower-priced homes, are among those affected by the higher down payments. The median down payment for the cheapest 25 percent of properties sold in 2013 was $9,480, according to Redfin’s analysis.

    Part of the reason for the increase in down payments among lower-priced properties could be due to the smaller number of first-time home buyers applying for loans backed by the Federal Housing Administration, which requires small down payments of usually 3.5 percent. FHA increased its mortgage-insurance premiums this year, which has raised FHA borrowing costs and tightened underwriting standards. It's part of FHA's effort to boost cash reserves lost in the aftermath of the housing crisis.

    As such, some borrowers who may have applied for an FHA loan are instead using private lenders, who may be demanding higher down payments. In 2013, 39 percent of first-time buyers used FHA loans compared with 56 percent in 2010, according to the National Association of REALTORS®.

    “If higher down payments persist, we will have a millennial generation that’s missing in action in home ownership,” says Wachter.

    Source: “More Money Down Adds to U.S. First-Time Buyer Blues: Economy,” Bloomberg News (Aug. 14, 2014)

  • California Real Estate News and

    Posted Under: Market Conditions in Sacramento, Home Buying in Sacramento, Financing in Sacramento  |  August 10, 2014 12:57 PM  |  46 views  |  No comments
    Fast Facts
    Calif. median home price: June 2014:
    • California: $451,160
    • Calif. highest median home price by region/county June 2014: San Mateo, $1.12 million
    • Calif. lowest median home price by region/county June 2014: 
      Merced, $158,820
    Calif. Pending Home Sales Index
    June 2014: Decreased 2.8 percent from 110.1 in May to 107 in June.
    Calif. Traditional Housing Affordability Index: First Quarter 2014: 33 percent (Source: C.A.R.)

    Mortgage rates: Week ending 7/31/2014 (Source: Freddie Mac)
    • 30-yr. fixed: 4.12% fees/points: 0.6%
    • 15-yr. fixed: 3.23% fees/points: 0.7%
    • 1-yr. adjustable: 2.38% Fees/points: 0.4%
    More about real estate at: www.BudandDougZeller.com

  • Study: Every $1K Price Hike Sidelines 200K Buyers

    Posted Under: Market Conditions in Placerville, Home Buying in Placerville, Home Selling in Placerville  |  August 5, 2014 7:18 PM  |  56 views  |  No comments

    For every $1,000 increase in the cost of median-priced new homes, an estimated 206,269 households are pushed out of the market, according to a new study by the National Association of Home Builders.

    The study finds that government regulations imposed on the construction industry — for example, raising the price of impact fees or construction permits — translates to a hike in new-home prices. And for every $833 incurred in building fees, there is a $1,000 increase in house prices, which disqualifies more households from obtaining mortgages.

    "This study highlights the real effects that building regulations have on housing affordability," says NAHB Chairman Kevin Kelly. "Local, state and federal government officials need to know that higher regulatory costs have real consequences for working American families. Oftentimes, these government regulations end up pushing the price of housing beyond the means of many teachers, police officers, firefighters, and other middle class workers.

    Source: “NAHB Releases New ‘Priced Out’ Numbers,” National Association of Home Builders’ Eye on Housing blog (Aug. 1, 2014)

  • Market Snapshot - Why is the market in a standstill?

    Posted Under: Market Conditions in Cameron Park, Home Buying in Cameron Park, Home Selling in Cameron Park  |  August 5, 2014 4:23 PM  |  33 views  |  2 comments
    Sales of existing detached homes have remained below 400,000 since November 2013, and the year-over-year decline continued for the tenth straight month. While slowing home sales activity reversed in March, this year’s sales are significantly lower than in 2013.  Sales are expected to improve in the upcoming months but the market may continue to perform below the level of  2013 for the next couple months. 

    Read more
  • Housing Slowdown Could Be Good for Buyers

    Posted Under: Market Conditions in Pollock Pines, Home Buying in Pollock Pines, Financing in Pollock Pines  |  August 5, 2014 3:13 PM  |  27 views  |  No comments

    The growing signs of a slowdown in the housing market might be good news for home buyers. Slowing home prices—after the double-digit increases last year—mixed with still-low interest rates are making homes more affordable. Also, the supply of homes for sale today represents 5.8 months of demand, the most since October 2011, giving buyers more choices than they have had in the recent past, as inventory shortages have plagued many markets.

    "From an individual perspective, the best investment you can make is to buy a primary residence," John Paulson, who runs the hedge fund Paulson & Co., said in a statement recently. "Today, financing costs are extraordinarily low. You can get a 30-year mortgage somewhere around 4.5 percent."

    But despite low interest rates and slowing home prices, first-time home buyers have mostly been absent from the housing recovery so far. They made up 28 percent of existing-home sales in June, but typically take up 40 percent of the market, according to the National Association of REALTORS®.

    "The first-time home buyer is just not the factor that it once was," says Peter Boockvar, chief market analyst at the Lindsey Group, a D.C.-based economic advisory firm. "Without the first-time home buyer, and now with the reduction in the pace of investor purchases, the recovery will remain lumpy." 

    While first-time home buyers' numbers remain low and home prices and mortgage applications have fallen in recent months, not all analysts are predicting that housing prices will fall. Barclays analysts, for example, expect housing prices to rise about 7 percent this year.

    Source: "Real Estate's Epic Rebound Starts to Cool," The Wall Street Journal (Aug. 2, 2014) [Log-in required.]


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