Patty McMillen's Blog » 2009 » August

Ukiah Area Video

Patty McMillen — Thu, 27 Aug 2009 16:54:50 +0000

Buyer Hesitation Begins to Dissolve

Patty McMillen — Thu, 27 Aug 2009 16:44:52 +0000

After four years of declines, home sales on a national basis finally appear to be turning around. Closed sales, which have risen three straight months, and pending contracts, up for five straight months, are at levels above normal spring and summer increases.

First time buyers in particular have stepped up to take advantage of deeply discounted prices, low mortgage rates, and the buyer tax credit. In a few markets, the rebound has been quite heated, with sales doubling from year-ago levels. In some cases there’s even multiple bidding – though mostly over foreclosed and other distressed properties. Nonetheless, it’s clear that buyers are returning.

What’s more, home prices and mortgage payments in relation to income are comfortably below historical levels, at least in many markets. That suggests home prices have overcorrected downward. Some markets, as a result, could experience a snap back in home prices, with price gains in the high single digits or low double digits, compared with historical average annual price appreciation of 4 percent.

Still, the housing market is far from being out of the doldrums. The economic rebound will be one of the most tepid we’ve ever seen. Consumers are being extra cautious, saving more to pump up their depleted retirement accounts. The unemployment rate in 2010 is expected to be at around 10 percent. The federal budget deficit will force up mortgage rates next year, though not alarmingly.

But because consumers’ view of home values is fundamentally changing, the momentum of rising home sales will likely continue in 210. Buyers are no longer hesitant about home purchases on the fear of further price declines. And that sets the stage for a steady release of pent-up housing demand.

Lawrence Yun – Chief economist of the National association of Realtors. . September 2009

Single-Family Starts Rise 1.7%

Patty McMillen — Fri, 21 Aug 2009 18:42:00 +0000

Single-family housing starts rose 1.7% in July following a 17% surge in home construction during the previous month. The U.S. Census Bureau reported that single-family housing starts increased at a seasonally adjusted annual rate of 490,000 in July, up from 482,000 in June, as construction activity rose for the fifth consecutive month. The June rate was revised upward from 470,000, which means starts jumped by 17.3% from May to June, higher than the 14.4% the Census Bureau reported last month. The Census Bureau also reported that multifamily starts fell to an all-time low of 80,000 units in July, down 72% from a year ago. “The credit market and overbuilding are hammering multifamily housing construction,” IHS Global Insight economist Patrick Newport said. He noted that the securitization market collapsed in 2008 and the banks have tightened credit on commercial real estate mortgages. “Going forward, multifamily starts are nearing a bottom, and should start growing later this year,” Mr. Newport said.

Article Curtusy of Rick Costa with American Mortgage Partners 8-19-09

Appraisal Letter -inman News PM

Patty McMillen — Mon, 17 Aug 2009 17:37:29 +0000

Dear Editor:

Getting appraisals for properties continues to be an exhausting process that neither the buyer nor the seller can be adequately prepared for (though I continue to try).

A recent example was a property that is tucked away in a lovely but tiny little subdivision isolated from the surrounding homes. This subdivision has one or two sales per year, with homes ranging in size from 1,500 square feet to 8,000 square feet.

The lending company wanted three comparables within a mile. The deal fell apart and the next buyers (much to my seller’s delight) offered them $5,000 more, and our local appraiser had no problems with the value. Knowing when to prepare your client for this “numbers game” is difficult, as the explanations will more than likely confuse them if given in cases where we don’t have problems.

Chris Tesch
Realtor

Article pulled from inman News, PM Edition

What Does Fair Market Value Mean?

Patty McMillen — Wed, 05 Aug 2009 17:14:04 +0000

“Full cash value” or “fair market value” means the amount of cash or its equivalent that property would bring if exposed for sale in the open market under conditions in which neither buyer nor seller could take advantage of the exigencies of the other, and both the buyer and the seller have knowledge of all of the uses and purposes to which the property is adapted and for which it is capable of being used, and of the enforceable restrictions upon those uses and purposes.

For purposes of determining the “full cash value” or fair market value” of real property, other than possessory interests, being appraised upon a purchase, “full cash value” or “fair market value” is the purchase price paid in the transaction unless it is established by a preponderance of the evidence that the real property would not have transferred for that purchase price in an open market transaction. The purchase price shall, however, be rebuttably presumed to be the “full cash value” or “fair market value” if the terms of the transaction were negotiated at arms length between a knowledgeable transferor and transferee neither of which could take advantage of the exigencies of the other.

Excerpt from The Revenue and Taxation Code