Tag Archives: redwood city real estate

The Party Might Just Be Ending for Low Interest Rates

It’s safe to say that mortgage interest rates have been at historic lows since the summer of ’09, mostly around and sometimes even under 5%.  Currently, they’ve been floating around the 5 & 1/8% range.

Part of the reason for these low rates has been because the Fed has been on a buying binge of Mortgage Backed Securities (MBS).  The Fed has been buying $1.25 trillion in mortgage-backed securities in its effort to prop up the economy but has said it will end those purchases March 31.

As I speak fairly regularly with seasoned, well-informed, and intelligent mortgage lenders and brokers, one thing they all seem to agree on is that the expectation is that, after March 31st,  rates will head upwards, and will likely be in the 6% range.

Still pretty low, historically – but, a significant impact to the buying power of home buyers out there.

Just think about it, if you’re looking at a loan amount of say $700,000, this means that a 1% increase in interest rate translates to paying $450 MORE per month on the same loan.  Or looked at another way, a 1% increase in rate just reduced the sale price you can afford by about $80,000.

Quoting some highlights from a recent WSJ article:

What happens when it (the Fed) stops buying hundreds of billions of dollars in financial assets?

In its monetary-policy statement, the Fed said it would “gradually slow the pace of these purchases in order to promote a smooth transition in markets.” Suddenly cutting to zero, presumably, could prove too much of a jolt.

But even a gradual pullback could have big repercussions. Zero interest rates and Fed purchases — financed by printing money — have played a massive role in reviving stocks and bonds and rekindling the economy.

Mortgage rates will likely move up, as private-market buyers will charge more than the Fed for bearing the risks of holding government-backed mortgage securities. Now, the Federal Reserve has said they would consider reopening its program to support the mortgage market if interest rates spiked or the economy showed new weakness

In its best corporate-speak, the Fed said they will “evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets.”  That is, if markets play along. Investors are already balking at the heavy use of printing presses. Just look at the sliding dollar.

Advertisements

Leave a comment

Filed under Community Info, mt. carmel, real estate, redwood city

New Mount Carmel Listings – Week of Jan. 12

A few new listings have recently popped up here in the Mt. Carmel area. The first of which — a bit of a fixer — looks like a great value in terms of price (at least on paper). Take a look:

  • 327 Jeter: $585,000 – 2br/1ba, 1140 sq. ft. on a 6500 sf lot.  Already has an offer date set (tomorrow, 1/13).
  • 532 Ruby: $549,000 – 2br/1ba, 980 sf on a 4800 sf lot
  • 266 Lowell: $949,000 – 3br/3ba, 1370 sf on a 6500 sf lot (this one is a re-list. Had been on the market for the past year or so, at a higher list price).

Leave a comment

Filed under Community Info, mt. carmel, real estate, redwood city

Halloween Train Rides in Redwood City? Way Cool…

Courtesy of the Emerald Hills Railway:

Halloween Night Train Rides!
Saturday, Oct. 31st, 5-8:30 pm
FREE
Invite the young and the old, the dead or alive and climb aboard our locomotive to encircle an atmosphere of colorful lights, a black light loading zone, and festive scenes.

Friends, family and neighbors welcome!  All ages can ride!

This event is weather permitting and operates at the discretion of the engineer.

NOTE: On Halloween night, our street will be barricaded at both ends of the block, including Colton Court, to allow foot traffic and strollers only.  Please park legally in the neighborhood.

NEED VOLUNTEERS for set up and running the event:
*We need 4-5 volunteers for set up beginning at 12 noon Saturday.  Set up includes displaying props/décor, arranging the VIP section and setting up the driveway.
*In addition we need 4-5 more volunteers to assist running the event, in 2 shifts: 5-7pm and 6:30-8:30pm (2-3 people per shift).  Duties include chaperoning passengers and assisting/lifting children on and off the train.  Suggest event volunteers to dress festive but not scary.
*Community service certificates available-ask Jay in advance.
All volunteers need to speak english (sorry I’m not bi-lingual) and have a big heart.

Your Hosts and Location:
Jay & George Whitehill
426 Hillcrest Way
Emerald Hills, Ca 94062
jay@amsxs.com
650-369-0733
Directions from Jefferson Ave X California Way
Head north on California Way, RT @ 2nd STOP sign: Sunset Way
First LT@ Eastview Way
First RT @ Hillcrest Way
1/2 block on RT side -you won’t miss the house!

Leave a comment

Filed under Community Info, mt. carmel, real estate, redwood city

Recently Sold Homes in Mt. Carmel – 95% (average) of List Price

In the last 90 days, a little less than a dozen homes in Mt. Carmel have closed escrow. Looking at how the sale prices compared to original price, the average is that homes are getting 95% of their original asking price.  Of course, remember, this is an average.  The “range” of all those homes is between 83% and 101% of asking price.   Here they are, in no particular order:

  • 475 Sapphire: original list: $599K, sold for $605K, 10 days on market
  • 566 Avenue del Ora: original list: $599K, sold for $590K, 8 days on market.
  • 250 Myrtle St.: original list: $924,900, sold for $882K, 37 days on market
  • 277 Topaz: original list: $650K, sold for $610K, 7 days on market
  • 37 Fulton: original list: $975K, sold for $950K, 18 days on market
  • 587 Ruby: original list: $749,950, sold for $730K, 32 days on market
  • 338 Lowell: original list: $850K, sold for $830K, 188 days on market
  • 15 Eagle Hill Terrace: original list: $949K, sold for $890K, 70 days on market
  • 181 Myrtle St: original list $869K, sold for $835K, 57 days on market
  • 366 Iris St: original list: $1,110,000, sold for $975K, 99 days on market
  • 40 Inner Circle: original list: $1,199,000, sold for $995K, 189 days on market

Leave a comment

Filed under Community Info, mt. carmel, real estate, redwood city

The New HVCC Law – Does It Help, or Just Plain Suck?

aretheyinsanelgSo there’s this new law affecting the real estate and mortgage industry, called the HVCC – short for “Home Valuation Code of Conduct”, which went into effect last month, and is the byproduct of a legal settlement between NY attorney general Andrew Cuomo and Fannie Mae & Freddie Mac.

Here’s how it was “supposed” to help: to assure appraisers that they would not be unduly influenced by lenders in the appraisal process.

Here’s where it proverbially, “sucks”: costs rose, and accuracy in appraisals took a nosedive. Moreover, appraisers that are unfamiliar with local markets, inexperienced or both, are using distressed sales – foreclosures and short sales of existing houses – as their comparables

Kenneth Harney from the Washington Post (in my opinion, probably the best columnist covering real estate issues, bar none), wrote a great article recently(full contents here, but I’ll quote some of the highlights below).

How it can affect everyone:

It could directly affect the value of your house – probably negatively – by tens of thousands of dollars

The issue concerns low valuations and the new rules guiding appraisers in both price-depressed and rebounding markets. Consider these snapshots of what’s going on:

  • In San Diego, Steve Doyle, division president for Brookfield Homes, is trying to close out the final 20 houses of a 120-unit single-family subdivision. Prices range from $340,000 to $350,000. But recently there’s been a major hitch: Appraisers assigned by banks are coming in with valuations $60,000 or more below Doyle’s selling prices. The appraisers, who Doyle says are unfamiliar with local markets, inexperienced or both, are using distressed sales – foreclosures and short sales of existing houses – as their comparables. Some of the distressed properties are in poor condition, and all of them offer fewer amenities, according to Doyle.
  • In Wilmington, N.C., a loan applicant with a house in excellent condition, and an unblemished payment record, sought to refinance into a 4 3/4 percent mortgage. She had purchased the property four years ago for $160,000 and made about $20,000 worth of improvements in the interim. Her loan application, according to Paul Skeens, president of Colonial Mortgage Group of Waldorf, Md., was “a slam dunk. Nothing to it.” The house was worth $180,000 to $200,000, according to one estimate.

But when an appraiser with little local knowledge was sent in by a bank to value the house, he chose two short-sale properties that had both closed in the mid-$140,000 range, and one inheritance sale around $155,000. The last property was “in horrible condition,” said Skeens. “I’d call it dog meat.” The deal-paralyzing appraised value that came in for the cream-puff refi: $149,000.

Complaints about lowballed appraisals – from builders, realty agents, consumers and mortgage companies – have erupted since May 1, when government-sponsored Fannie Mae and Freddie Mac put their new appraisal rules into effect nationwide. Critics charge that the new system is fostering the use of appraisers willing to work for low fees – sometimes 50 percent below previous standards – and who are willing to conduct home appraisals far outside their typical areas of activity.

Under the HVCC, appraisers are now routinely assigned by appraisal management companies rather than being selected by mortgage companies or loan officers. The management companies pocket as much as 40 to 50 percent of the appraisal fee.

Frustration with the new system boiled over and made its way to Capitol Hill late last month. The National Association of Home Builders called for an immediate change in the rules governing the use of foreclosures, short sales and other distress transactions as comparables for appraisals on non-distressed, typical homes, whether new or resale.

Two congressmen – Travis Childers, D-Miss., and Gary Miller, R-Diamond Bar (Los Angeles County) – have introduced legislation calling for an 18-month moratorium on the appraisal code. In identical letters to James Lockhart, the top regulator of Fannie Mae and Freddie Mac, and Cuomo, the National Association of Realtors also requested a moratorium and complained that the code is raising costs to borrowers, distorting property values and killing sales.

Asked for comment, Lockhart said through a spokesperson that his agency is monitoring the situation, and considers “the views of market participants important.”

Bottom line: Be aware of the issue. It affects your equity, even if you’re not buying or selling. And watch to see whether Congress fixes the problem.

Leave a comment

Filed under Community Info, mt. carmel, real estate, redwood city

Schedule of 4th o’ July Activities for Redwood City

(straight from the city’s Public Communications Manager Malcolm Smith)

This year’s 4th of July spectacular, brought to you by the Peninsula Celebration Association, will be another in the long tradition of offering the very best 4th of July event on the peninsula. All the details are at www.parade.org, the home page of the non-profit Peninsula Celebration Association. The Peninsula Celebration Association has been in place for nearly 70 years with a goal of helping to make our city not just a great place to live, but also a real community of people who care.

Visit www.parade.org for the entire schedule of family fun on the 4th of July in Redwood City.

Leave a comment

Filed under Community Info, mt. carmel, real estate, redwood city

A Dying Breed: Paying Over $1M for a Mt. Carmel Home

dodoIt seems like just yesterday – ok, maybe 2 or 3 years ago – when a new listing in Mt. Carmel that came on the market with a price tag higher than $1M didn’t raise an eyebrow. Heck, there were even some bordering close to $2M that I thought “well, if someone’s willing to pay that much, then that must be what it’s worth.”

Of course, these are wildly, WILDLY different times now in real estate. That shouldn’t come as a shock to anyone, right?  Well, as experts in what we do, many of us Realtors can quickly and generally assess a home’s list price relative to its neighborhood and say, “yes that’s priced well”, or “what the hell is the color of the sky on THEIR planet?”, or “what are they smoking in their pipe?”  You get the idea.

I’m talking now, of something that seems to be getting more extinct than journalistic integrity in real estate reporting (oops! Did I just say that out LOUD?), and that is, paying over $1M for a home in the Mt. Carmel area.

Let’s do a quick look at the numbers: out of the 16 homes that have sold in Mt. Carmel in the last 6 months, only one of them sold for over the elusive $1M price tag (that would be 263 Iris, for $1.238M, which, incidentally, was one heck of a gorgeous home).

And out of the 17 homes currently active for sale, 8 of them are priced at over $1M.  A few of those have been on the market for 361 days, 259 days, 116 days, and 98 days.

Now this absolutely is not saying that any of these homes currently on the market is not worth its asking price.  As I always say, the value of your home is whatever a buyer is willing to pay you (and for you to accept). If you’re a seller, then this blog post and this one are MUST READS.

And what I also say is that if your home is on a busy street, and you want to sell it in under 1 year, do NOT price it as if it were set further in on a neighboring, non-busy street.  It’s a pretty rare breed of buyer that wants to buy a $1M+ home on a busy street, especially if they have children.  An even rarer bird is the buyer who will pay over $2M to live on a busy street – I just seem to think, if it were me and I were spending over $2M on a home, I’d be more inclined to look in, oh, Emerald Hills, Woodside, Portola Valley, Los Altos, San Carlos hills…but that’s just me, what the heck do I know about what buyers want (rhetorical sarcasm…don’t answer that!).

Time will always tell what these homes eventually will sell for.  Timing is everything – if you were fortunate enough to sell a home 3 years ago for a price that no one would touch in today’s market, you may be more lucky than anything else.

Leave a comment

Filed under Community Info, mt. carmel, real estate, redwood city