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By Richard Kuhr | Agent in San Mateo County, CA

    Posted Under: Market Conditions in San Francisco County, Home Buying in San Francisco County, Rent vs Buy in San Francisco County  |  November 11, 2011 2:28 PM  |  545 views  |  No comments

     I know many of us have been thinking this for some time now, but when the news media starts saying it – well, I guess that makes people stand up and take notice. A number of recent articles in the national press are now saying that it might be the right time for consumers, who have largely been on the sidelines, to jump back into the housing market.

    I understand why potential buyers, whether first-timers or move-up buyers, remain cautious given all the economic headwinds and bad news out there. Economic growth has been slow, the jobless rate too high, and don’t even get me started about the politics in Washington, the euro-zone debt problems and the challenges facing Greece.

    But I often urge buyers to determine what I like to call your “personal economy.” That is, if you have a steady job, reasonable credit, and enough savings for a solid down payment, you might want to take a deep breath and think about taking the leap into the housing market while prices and interest rates are so low.

    Read what two of the nation’s top business publications, Fortune magazine and The Wall Street Journal, are telling their readers:

    “Forget stocks. Don't bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.”

    - “Real estate: It’s time to buy again,” Fortune Magazine article by Shawn Tully.

    “Two key measures now suggest it's an excellent time to buy a house, either to live in for the long term or for investment income.”

    - “It’s Time to Buy that House,” The Wall Street Journal article by Jack Hough.

    Tully in the Fortune piece interviewed Mike Castleman, founder and CEO of Metrostudy, who has spent more than 30 years tracking data on the inventory of new homes in the United States. Each quarter, inspectors go through 45,000 subdivisions from California to Maryland. According to Fortune, inspectors examine 5 million lots and record whether they contain a house under construction or completed.

    What has Castleman observed? The glut of new homes that the U.S. had a few years ago at the peak of the market has rapidly disappeared. Instead, he told Tully that he has seen a rapidly declining inventory that could force prices higher. In the 41 cities Metrostudy looked at, there are just 78,000 houses vacant and for sale, or under construction – less than a quarter 343,000 units at the height of the market in 2006 and less than the total a decade ago.

    "The talking heads who are down on real estate will hate to hear this, but America needs to build a lot more houses,” Fortune quoted Castleman as saying. “And in most markets the price of new homes is fixin' to rise, not fall."

    Metrostudy collects figures on the number of homes that are vacant and for sale in each city, and the number of months it takes to sell all them to determine whether individual markets have a surplus or a shortage of homes. "If we had anything like normal levels of buying, those houses would sell in 2½ months," Castleman told Fortune. "We'd see an incredible shortage. And that's where we're heading."

    Fortune says that consumers may be confused by conflicting news reports on the housing market, and that could be impacting their confidence in buying a home. On one hand, housing affordability has never been better. But on the other hand, they continue to see housing starts falling and home prices still heading down in some markets.

    Tully said economists Robert Shiller and Karl Case, authors of the S&P/Case-Shiller Home Price indices, have different views about where we ware in the cycle. While Shiller remains pessimistic, Case is more optimistic that things are starting to turn around, telling Fortune that "the lack of new home building is a huge help that a lot of people are ignoring.”

    In its analysis of the housing market, Fortune noted that it’s important to look at the economic fundamentals of home ownership to see where the market is headed. As home prices rose sharply over the past decade, Tully said the magazine warned that a bubble was forming due to the level of new construction and the cost of owning a home compared to renting one.

    “Eventually reality set in, and prices plummeted,” Tully said. “Our current view focuses on those same fundamentals — only now they're pointing in the opposite direction,” Fortune noted. “So let's state it simply and forcibly: Housing is back.”

    The Fortune article said what will drive the recovery of the housing market is a sharp drop in new home construction, as noted in the Metrostudy research, as well as a big drop in home prices. Home prices have fallen about 30% nationwide since 2006, Fortune said, and more than 50 percent in hardest hit markets. With unusually high affordability levels, the article noted, Americans will start returning to the market.

    While no one can predict with certainty the future of home prices and sales volume, it is safe to say that a turnaround will eventually happen. Timing the market is very difficult because you will never know the absolute bottom until prices have started going back up again. My advice is to look closely at your own “personal economy” and talk with a professional Realtor to see if now might be a good time for you to take advantage of low prices and rates, and join others in taking the plunge into buying a home.

  • 10 Easy Steps to Buying a Home

    Posted Under: Home Buying in San Francisco, Home Selling in San Francisco, How To... in San Francisco  |  November 4, 2011 4:28 PM  |  719 views  |  1 comment
    1. Figure out how much you can afford
    What you can afford depends on your income, credit rating, current monthly expenses, downpayment and the interest rate.

    2. Shop for a lender with excellent communication. Then research the loan programs available. Conventional loans usually require 20% or more. If you have less down payment, then you may need to go with an FHA loan, whcih allows for less down but requires a mortgage insurance premium.

    3. Find a good real estate agent. A buyer's agent is typically FREE, as they are paid by the seller for helping you.

    4. Tell your Realtor exactly what you want: # of bedroom, # of bathrooms, size, yard, city / neighborhoods, ect.

    5. Review the custom list of properties your agent sends you.

    6. Look at the homes you are most interested from the list with your agent.

    7. Select one home and review the available disclosures on that property.

    8. Make an offer. If accepted move on, if not accepted either negotiate or move to step 5.

    9. Order inspection, appraisal, & loan docs. You typical have 7 - 14 days to review or cancel.

    10. Close escrow and move in. The escrow period averages 30 days depending on loan type.

    Richard Kuhr
    Ph. 650.888.8586
    Fx. 888.699.8930
    DRE# 01804072

  • 3.89 Ocean View Lot Near San Francisco with Dream Home Plans

    Posted Under: Home Buying in Montara, Home Selling in Montara, Agent2Agent in Montara  |  November 4, 2011 4:08 PM  |  554 views  |  2 comments

  • FHA Annual Mortgage Insurance Premium to Increase

    Posted Under: Home Buying, Financing, Home Insurance  |  March 25, 2011 1:00 PM  |  395 views  |  No comments
    Changes are coming to the land of lending in April 2011

    Still on the fence about buying a home? You should let them know that the Federal Housing Administration (FHA) is increasing mortgage insurance premiums on FHA home loans as of April 18, 2011. This deadline applies to the FHA case assignment date.

    This increase could cost your buyers more money each month for their total monthly mortgage payment. What can your buyers do? If they are close to contract, advise them to buy now before the new mortgage insurance premium takes effect. They must have an active loan application for the subject property prior to April 18, 2011.

    HUD Temporary Flipping Waiver Extended
    In an effort to expand access to FHA mortgages and allow for the rapid resale of foreclosed properties, HUD announced a temporary waiver of the 90-day flipping restriction until December 31, 2011. The waiver is subject to certain conditions, and eligible mortgages must meet these conditions to take advantage of the waiver. The complete text of the waiver extension, including conditions the waiver is limited to, is available on the HUD website. www.hud.gov
  • How to Raise Your Credit Score

    Posted Under: Home Buying in San Francisco, Financing in San Francisco, Credit Score in San Francisco  |  March 25, 2011 12:34 PM  |  719 views  |  1 comment
    Some of this may seem obvious, but here some quick tips to improve your credit:

    To improve your credit score, pay your bills on time. Your most recent payment history, especially in the last two years, is the most predictive part of your credit rating, comprising approximately 35% of a credit score. Do not apply for any type of credit unnecessarily. It lowers your credit score because it's a sign you could be taking on more debt.

    Bankruptcy (Chapter 13 or 7) is the worst thing that can happen to your credit score and will take between seven to 10 years to come off your credit history. A foreclosure, short sale, deed-in-lieu or tax lien significantly lowers a credit score. Paying a bill 30 days late will noticeably drop your score, but 90 or 120 days late will cause an even greater decline.

    Avoid using more than 50% of your available credit for any current account, and focus on reducing credit card balances before paying off installment debts, like student loans or car loans. Credit scores track the age of the oldest account and the average age of all accounts. Longer credit history helps raise a credit rating, so avoid closing out credit accounts with long histories, because they're most important.

    Your credit score is a shifting number that changes frequently. Consider an online credit monitoring service that provides constant access to your credit history and score. I recommedn checking you cresit at least every 3 to 6 months for errors, possible identity theft, and your overall rating.
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