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Bud Zeller's Blog

By Bud Zeller | Broker in Placerville, CA
  • Subprime Lending Making a Comeback?

    Posted Under: Market Conditions in Granite Bay, Financing in Granite Bay, Property Q&A in Granite Bay  |  March 1, 2014 10:57 AM  |  417 views  |  No comments

    Lenders are returning to the subprime market – although still at only a fraction of what subprime lending was before the mortgage crisis, BusinessWeek reports.  

    Some subprime lenders that collapsed during the financial crisis are coming back into business with new nonprime loan offerings. 

    “There needs to be a solution for people who don’t fit in the box, and rebuilding nonprime lending is it,” says Bill Dallas, with his new venture NewLeaf Lending in Calabasas, Calif., which will begin issuing nonprime loans. However, he says this time around tougher lending rules will require borrowers in some cases to put up to 30 percent down as well as require more careful documentation of borrowers' incomes, credit, and work history. 

    About $3 billion of subprime mortgages were issued during the first nine months of 2013, according to Inside Mortgage Finance. In 2005, subprime originations totaled $625 billion.

    Subprime loans – mostly targeted to those with credit scores below 660 – took a lot of blame in the financial crisis. Lenders sold high-risk products to investors with adjustable-rate mortgage products that had interest rates that could triple after two years, in some cases. Also, many of the loans had required little documentation about the borrowers' income and assets. The loans were blamed for sparking a huge wave of defaulting borrowers. 

    Since then, federal regulators have restricted many high-risk mortgage products. Lenders are also requiring higher credit scores and greater documentation of a borrowers' financial situation. 

    Source: "Subprime Mortgages' Modest Comeback," BusinessWeek (Feb. 20, 2014)

  • Google-Controlled Homes?

    Posted Under: Tech Tips in Granite Bay, Property Q&A in Granite Bay, Home Ownership in Granite Bay  |  January 19, 2014 4:29 PM  |  494 views  |  No comments

    Search-engine giant Google wants to help make homes smarter and more connected, and took another step at that by by announcing its acquisition of connected device maker Nest Labs. 

    Google announced it will pay $3.2 billion in cash to acquire Nest Labs, a company that develops “smart” home appliances such as thermostats and smoke detectors that can program themselves and be controlled and monitored over smartphones. 

    "This allows us to accelerate and stay in front of the coming wave of products for what we like to call the ‘conscious home,’" says Nest leader Tony Fadell. 

    Google’s acquisition follows several previous efforts by Google to get into the connected home business. For example, the company’s Android @Home platform was created to allow users control home appliances from their Android smartphones and tablets. However, the device failed to catch on, CNN reports. 

    At the International Consumer Electronics Show last week in Las Vegas, the “connected home” garnered a lot of attention as several companies touted new technologies to allow home owners to better monitor and control their homes from anywhere. The market for connected homes is expected to reach $10 billion this year and bloom to $44 billion by 2017, according to GSMA, a wireless industry group. 

    Source: “Google Buys Nest Labs for $3.2 Billion,” CNNMoney (Jan. 14, 2014)

  • More Ultra-Lux Homes Falling Into Foreclosure

    Posted Under: Market Conditions in Granite Bay, Foreclosure in Granite Bay, Celebrity Homes in Granite Bay  |  December 5, 2013 3:21 PM  |  583 views  |  No comments

    Though foreclosures have fallen nationwide, one housing sector has seen a big increase: ultra-high-end homes. 

    Foreclosure activity on homes valued at $5 million or more has soared 61 percent since October 2012, RealtyTrac reports. Meanwhile, the overall national foreclosure rate for all housing types has fallen 23 percent this year. 

    Still, the number of $5 million-and-up homes facing foreclosure is small — less than 200 — compared to the 1.2 million homes of all housing values that have received foreclosure notices this year. 

    “But each of these high-value properties represents a much bigger potential loss for the foreclosing lender compared to a median-priced property,” says Daren Blomquist, vice president of RealtyTrac. 

    There was a delay in high-end foreclosures compared to other housing types, possibly because the home owners had the financial means to hold out longer, RealtyTrac notes. 

    The top five markets for high-end foreclosure activity are Miami-Fort Lauderdale-Pompano Beach, Fla.; Los Angeles-Long Beach-Santa Ana, Calif.; Atlanta-Sandy Springs-Marietta, Ga.; Orlando-Kissimmee, Fla.; and New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa.

    An improving housing market will likely mean these ultra-high-end properties won’t sit unoccupied long.

    "Any foreclosure properties in this type of ultra-luxury market usually get purchased very quickly, since there is one thing all super-rich buyers want: an outstanding deal on a real estate transaction. And in most cases, foreclosures of this magnitude come with several million more dollars of built-in value,” says Emmett Laffey, CEO of Laffey Fine Home International, which covers the New York area.

    Source: “High-end Foreclosures up 61 Percent Year-to-Date in 2013,” RealtyTrac (Dec. 3, 2013) 

  • Generational 'Home Buying Trends'

    Posted Under: Market Conditions in Granite Bay, Home Selling in Granite Bay, Home Ownership in Granite Bay  |  July 9, 2013 3:44 PM  |  679 views  |  No comments

    At 31 percent, Gen X comprises the largest group of recent home buyers, according to NAR's Home Buyer and Seller Generational Trends report released today. Gen Xers were followed in numbers by Gen Y buyers (28 percent), and then younger Baby Boomers (18 percent), older Baby Boomers (14 percent), and the Silent Generation (10 percent). The Greatest Generation, also known as the G.I. Generation, represented less than 1 percent of recent buyers.

    The report — a compilation of survey data from 8,501 recent home buyers — also shows that 80 percent of buyers who are aged 57 and younger bought a detached single-family home in 2012. Buyers over the age of 57 are increasingly purchasing townhouses and condos.

    The report also found that among all generations of home buyers, the first step in the home buying process is looking online for properties for sale.

    Older buyers are less likely to finance their home purchase in comparison to younger buyers; when they do finance, the share of the home they financed is typically smaller.

    Survey respondents cited benefits from working with a real estate professional. Among age groups, younger buyers are more likely to want their agent to help them understand the process as they are more likely to have never purchased a home before. Additionally, younger sellers are more likely to use the same real estate agent or broker for their future home purchases than older sellers.

    When it comes to selling, Gen X is the largest group who are recent home sellers followed by both younger Baby Boomers and older Baby Boomers, the Silent Generation, and Gen Y. The G.I. Generation represented less than 1 percent of recent sellers.

    Source: NAR

  • Cities With the Longest Commutes in the World

    Posted Under: Quality of Life in Granite Bay, Traffic & Public Transportation in Granite Bay, Home Ownership in Granite Bay  |  June 6, 2013 3:04 PM  |  1,318 views  |  No comments

    Three of the 10 most traffic-congested cities in the world are in the U.S., according to the annual INRIX Traffic Scorecard. 

    Emerging in the top 10 at No. 3, Los Angeles commuters spend, on average, 59 hours a year in highway backups. 

    Honolulu came in at No. 7 on the congestion list, despite being only the 53rd most populous city in the United States. Commuters in Hawaii face, on average, 50 hours a year commuting during peak travel times. 

    San Francisco rounded out the top 10 list, with commuters there facing an average of 49 hours in traffic back-ups. 

    Brussels, Belgium, topped the list with the worst traffic jams in the world. Antwerp, Belgium, came in at No. 2. To view the complete list of the world's most congested cities, visit Forbes.com.

    Source: “The 10 Most Traffic Congested Cities in the World,” Forbes (June 2013)

  • When prices of 'homes with pools' take a dip?

    Posted Under: Market Conditions in Granite Bay, Home Selling in Granite Bay, Foreclosure in Granite Bay  |  March 23, 2013 9:51 AM  |  675 views  |  2 comments

    Another mystery of human behavior: Home buyers will pay a premium for a house with a swimming pool in August—even though soon it may be too chilly to sit poolside.

    "When it is sweltering outside, a swimming pool just looks attractive. There's an emotional connection because it reminds us of fun times we have in the summer," says Jaren Pope, assistant professor of economics at Brigham Young University.

    When swimming-pool homes go into contract in the summer, they sell for an average 0.22 percentage points more than the base-line price determined by researchers. For a $1 million house, summer adds roughly a $4,000 premium.

    In just a couple of months, however, "the home buyer is left scratching his head and wondering why he paid extra for a pool," he says. Conversely, a swimming-pool home that goes into contract in January sells for 0.15 percentage points below the researchers' base line. 

    Source: http://online.wsj.com/article/SB10001424127887323628804578348764099184402.html?mod=WSJ_RealEstate_MiddleBuckets1

  • Ivy League School Offers Free Homes?

    Posted Under: Agent2Agent in Granite Bay, Property Q&A in Granite Bay, Home Ownership in Granite Bay  |  February 26, 2013 9:06 PM  |  590 views  |  No comments

    Princeton University is offering free houses to the public, but they have to be able to haul the domiciles away.

    The homes—which have in the past been used as university offices or for other purposes—are all located south of campus on Alexander Street and have been made available to the public for free in as-is condition. 

    The homes are slated to be demolished to make room for future Princeton University Art and Transit project, which will include a train station and retail ventures. As such, the homes will need to be moved for any one who wants to claim them. The homes will need to be relocated by the end of April.

    The homes are currently empty.

    Anyone interested in the free homes are encouraged to contact the Princeton University Office of Community and Regional Affairs via phone (609-258-3204) or email (pucra@princeton.edu).

    Source: “Princeton University Giving Away Homes for Free -- With Just One Big Catch,” AOL Real Estate (Feb. 25, 2013)

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