The vast majority of homes selling today are priced under $300,000. Of the 208 homes sold in April, 191 were sold for $300,000 or less. The most active price bracket is the under $150,000 range which tallied 105 closed sales in April.

For homes in Redding, the average cost-per-square-foot has remained relatively steady at about $108/sq ft. The average home is defined as a home with between 1500-2000 sq ft.

Inventory has tightened significantly over the past year. 1034 homes were listed for sale in early May 2011 compared to 751 today. The number of bank-owned homes in the inventory has dropped more than half from 202 last year to 96 today. Short sales have increased their share of market activity with 69 active listings and 235 in escrow today. Last year there were 94 active listings and 153 short sale properties in escrow.

Of the 632 pending home sales, 63% are distress sales-bank-owned or short sale listings. This percentage is in line with what we have been seeing in the local markeplace these past two years.

Interest rates for home loans continue to push lower. Today, a 30-year fixed rate loan is available (for those with good credit and verifiable income) at 3.75%. A 15-year fixed is down to 3.09%.  This good news is dampened somewhat by a rise in mortgage insurance fees associated with FHA loans, one of the more popular types of loans in this area.

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN DOWNTOWN REDDING

NEARLY 30 YEARS OF LOCAL REAL ESTATE EXPERIENCE

530-224-6767 OR 530-941-7492

bradgreps@yahoo.com

www.thereddingrealestateguy.com

So far everything looks like business as usual until move-in day. Sunny calls the owner and says the tenant found another place and they want their money back. She has the owner cut her a check for the deposit amount. Within a week or two, the owner gets a letter from their bank indicating the cashier’s check was a phony. The owner is out hundreds to more than a thousand dollars due to the fraudulent check.

The easy way to avoid being ripped off  is wait until the tenants deposit check clears before issuing a refund. Also, do your own credit check and background check on any prospective tenant.

Finally, rent the movie Pacific Heights to find out how lucky you are you didn’t rent to Carter Hayes!

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN DOWNTOWN REDDING

NEARLY 30 YEARS LOCAL REAL ESTATE EXPERIENCE

530-224-6767 OR 530-941-7492

bradgreps@yahoo.com

www.thereddingrealestateguy.com

Generally speaking, a homestead exemption applies to the dwelling where the homeowner resides. It can be a house, condo, mobile home, boat, stock cooperative or community apartment project. As long as you own it, and reside there as your principal residence, you should qualify. Homestead protection does not extend to voluntary liens, mechanic’s liens, federal tax liens, child support or alimony liens. If a declared homestead has not been properly filed, the benefits of that law will not apply if the judgement was obtained prior to the date the homestead was declared.

Single persons are limited up to $75,000, family units up to $100,000 and persons over 65, disabled persons, and persons 55 with low income up to $175,000 in equity protection. For example, if a single person owned a home valued at $200,000 with a $150,000 mortgage, he or she’s $50,000 equity is fully protected by the homestead exemption, with $25,000 to spare!

Declared homesteads require the homeowner to complete, sign, notarize and record appropriate forms (available at your local county assessor or recorder office) to provide these additional benefits to a homeowner:

1. If the homeowner voluntarily sales their property, the equity protected by the homestead exemption is safe from creditors for six months after the sale.  Automatic homesteads provide no such protection.
2. Formally declaring homestead protection creates the presumption it is valid, forcing the burden of proof on the creditor that the debtor’s homestead is invalid. In the case of the automatic homestead, the debtor has the burden of proof the dwelling is a homestead.
3. Judgement creditor’s lien attaches to surplus equity in a declared homestead. The lien only has value if the property has surplus equity, which will fluctuate with the current market value of the home.  If no homestead declaration is recorded before the judgement lien was recorded, the creditor could reach any equity in the property in excess of the prior liens.

Any equity protected by the homestead exemption is safe for six months after the voluntary sale of the property and theoretically  the sale proceeds can be invested in a new dwelling that qualifies for a homestead within the six month period protecting this money from the judgement creditor again.

I have only scratched the surface of this complex law. Consult with a qualified attorney for any questions about how this law may protect you from creditors wishing to force the sale of your home to pay a debt. Bankruptcy and probate attorneys are familiar with the details of this law and how to apply it to your particular situation.

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN DOWNTOWN REDDING

NEARLY 30 YEARS OF LOCAL REAL ESTATE EXPERIENCE

530-224-6767 OR 530-941-7492

BRADGREPS@YAHOO.COM

www.thereddingrealestateguy.com

Mary Lake Sunset

Starting April 1, home buyers utilizing FHA financing will see a significant increase in the Mortgage Insurance Premium (MIP) paid upfront by buyers. The MIP premium will rise from the current 1% to 1.75%. Besides the one-time upfront fee, the monthly MIP will also rise 0.1% for loans under $625,000 and 0.35% for loans above $625,000 beginning June 1.

       MIP is charged to FHA buyers to cover the cost of foreclosing on loans and liquidating properties which go into default. FHA loans are originated by banks and mortgage bankers using their own capital, with the stipulation HUD will step in and take over the loan if the buyers default. Since the federal government backs these loans, borrowers can purchase a home with as little as 3.5 % down payment monies. In theory, the MIP pays the cost of administering the program so taxpayers do not have to subsidize this loan program. VA loans for veterans are structured similarly.

Other changes to the FHA loan program coming soon include reducing the amount a seller can credit the buyer for closing costs. Currently, sellers can offer up to 6% of the purchase price for the buyer to use for loan fees and other costs to secure a loan. Indications are this will be capped at 3% in the near future.

The reasons cited for the changes in a recent article in The Los Angeles Times include the fact demand for FHA loans has increased to 40% of all new home purchases. Despite the rapid growth in usage, capital reserves have declined far below levels mandated by Congress. Combined with increasing delinquencies, the program is under pressure to rebuild reserves and make the program self-sustaining once again. During the housing bubble, FHA loans were only utilized by a small number of home buyers because conventional loans offered no money down loans.

Borrowers looking now can avoid these fees by taking action before the fee hikes take effect by either buying now or asking your loan officer to secure a case number and buy a home within 60 days after the upfront MIP takes effect.

Feel free to contact me with any questions.

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN DOWNTOWN REDDING

NEARLY 30 YEARS LOCAL REAL ESTATE SALES EXPERIENE

bradgreps@yahoo.com

www.movetoredding.com

530-941-7492

For several decades now, the guarantee fee has been charged by government sponsored entities(GSE’s) Fannie Mae and Freddie Mac. This fee is not broken out in any disclosure documents provided by the lenders but is incorporated into the interest rate paid by borrowers. The interest rate has three components: the guarantee fee, a loan servicing fee and the largest part of the interest charge going to the bank or investor who buys the loan.

The guarantee fee, the one that is going up, is basically a form of mortgage insurance which offsets losses to investors should the loan go into default (non-payment). The fee increase was incorporated into a larger bill signed into law by President Obama in December, which extended by two months the payroll tax deduction.

The fee increase amounts to 10 basis points which equates to a tenth of one percent added to the mortgage interest rate.  One way to avoid the fee is to seek out a lender that holds their loans (aka portfolio loans) instead of selling them off to the secondary market. Credit unions and community banks are lenders most likely to retain their loans.

The guarantee fee not only helps government sponsored entities Fannie and Freddie offset risks, it helps pay the overhead expenses to operate these agencies, in theory saving taxpayers from subsidizing them with tax dollars. However, the housing bubble burst has cost taxpayers in many ways including losses of home equity caused by price declines, losses in retirement accounts due to reactions on Wall Street to the bubble burst and taxpayer dollars given to these GSE’s to shore up their balance sheets.

This fee increase will be hardly noticeable considering mortgage rates are currently near record lows. In fact, some analysts believe rates are excessively high considering the fact the Federal Reserve is loaning money to banks at 0% and banks in turn are loaning money out at nearly 4% for a 30-year fixed rate loan. The typical margin is 2-2.5%, not 4%!!

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN DOWNTOWN REDDING

NEARLY 30 YEARS LOCAL REAL ESTATE EXPERIENCE

BRADGREPS@YAHOO.COM

530-941-7492

• 207 home sold in February 2012 compared to 129 a year ago
• 92% of homes sold in February had a list price under $300,000
• 732 homes were listed for sale as of March 5, down 37% compared to the previous year
• 541 homes were pending compared to 472 in early March 2011
• 141 bank-owned homes and 204 short sales equalling 64% of pending home sales are “distressed” properties
• 418 homes have closed escrow in 2012, up 69% for the same time period in 2011

Mortgage rates for fixed-rate loans are averaging 3.17% for a 15-year loan and 3.9% for a 30-year loan. Investors paying cash and first-time buyers using FHA loans dominate the market.

Wild cards which could impact home sales in 2012 include Adjustable Rate Mortgage interest rate resets and strategic defaults by homeowners underwater on their loans. Of the 47 million loans nationwide, 3.6 million are delinquent and 12,533,155 are underwater 125%  or more!  We still have a long way to go before the housing market recovers and returns to any sense of normalcy. At least we appear to be headed in the right direction!

BRAD GARBUTT

BROKER/REALTOR ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN DOWNTOWN REDDING

NEARLY 30 YEARS LOCAL REAL ESTATE EXPERIENCE

FREE CONSULTATIONS TO BUYERS AND SELLERS

530-941-7492

BRADGREPS@YAHOO.COM

WWW.MOVETOREDDING.COM

• 75% agree it is” appropriate and reasonable for the federal government to provide tax incentives to promote home ownership.” Renters and owners alike agreed to this statement. 81% of Democrats and 71% of Republicans and Independents answered in the affirmative.
• 66% believe the federal government should help home buyers secure a 30-year fixed rate mortgage. Loans insured by HUD’s FHA loan program is an example of how the government can help buyers purchase a home with a low down payment and fixed-rate.
• 73% oppose changing or eliminating the mortgage interest deduction regardless of which political party they were affiliated with. 77% of Republicans, and 71% of Independents and Democrats agreed with this statement.
• 68% would be less likely to support a candidate in favor of eliminating the mortgage interest deduction.  Respondents from all three parties agreed in virtually equal numbers.
• 96% of home owners, including 84% who are upside down on their mortgage, are happy with their decision to own.
• 79% would advise a family member of friend to buy. 69% of home owners “underwater” on their mortgage would give the same advice.
• Regardless of the turbulence which recently impacted the housing market, 74% still believe homeownership is their best long-term investment.
• Nearly 80% consider owning their own home is very important to them.
• Nearly 70% of non-home owners say buying a home is still one of their goals
• Worries about continued employment and saving for a down payment are deemed the biggest barriers for those wishing to buy a home.

These survey results of 1500 likely voters are consistent with other recent polls by Pew Research and New York Times/ CBS News. This survey was featured in a January 11, 2012 article published by the National Association of Home Builders.

It would appear, despite the negative fallout from the burst of the housing bubble, the American Dream of home ownership is alive and well.

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN DOWNTOWN REDDING

NEARLY 30 YEARS LOCAL REAL ESTATE SALES EXPERIENCE

530-224-6767 OR 530-941-7492

]]> http://movetoredding.com/2012/01/19/american-dream-of-homeownership-alive-and-well/feed/ 2 http://movetoredding.com/2012/01/19/american-dream-of-homeownership-alive-and-well/ http://feedproxy.google.com/~r/BradGarbutt/~3/vrkFF1rWP40/ http://movetoredding.com/2012/01/03/redding-real-estate2011-year-in-review/#comments Tue, 03 Jan 2012 20:16:11 +0000 Brad Garbutt http://movetoredding.com/?p=5475 2011 was another difficult year for property sellers here in the north state but buyers took advantage of low prices and near record low interest rates for financing their purchase. Sales were up while prices declined. Here is a summary of how 2011 stacked up based on data from the Shasta Multiple Listing Service (MLS):

• 2404 homes changed hands compared to 2066 in 2010, an increase of 14%
• The median price dropped from about $160,000 to $145,000 for homes sold on Shasta MLS
• The average Redding home value held steady starting the year at $106/sq ft to $107/sq ft at year’s end
• 1161 closed sales were bank-owned homes
• 258 closed sales were short sales
• Nearly 60% of closed sales were distress sales
• Inventory of active homes dropped from 1242 in January 2011 to 940 in January 2012
• Interest rates average 4% for a 30-year fixed rate compared to 4.75% one year ago
• 2011 land sales total 178 compared to 201 in 2010
• Mobile home closings totaled 129 in 2011 compared to 135 in 2010
• 25% of the closed sales sold for $100,000 or less
• 71% of the closed sales sold for $200,000 or less
• 89% of the closed sales sold for $300,000 or less
• The most expensive home sold was $2.6 million for a home in Palo Cedro
• Only four homes sold for over $1 million
• The least expensive home that sold was for $17,000 in Shasta Lake City

2012 kicked off with 904 active listings, 494 pending home sales, 134 bank owned properties listed for sale and 207 short sale listings. Of the 494 pending sales, 146 are bank owned and 178 are short sales, indicating 66% of pending sales falling into the distress category. A significant percentage of the short sales fail to close because lenders refuse the buyer’s offer with many of these ultimately being foreclosed upon or are deeded back to the bank by the owner.

The drop in median price is due to the lopsided nature of our local market where sales are focused in the lower price brackets.  Rumor has it more and more bank owned properties will saturate the market in the months ahead. Thus far, sales of bank-owned properties are brisk with no lack of demand by eager first-time buyers or investors paying all cash. Home and apartment rents have remained fairly level since the real estate bubble burst in 2006.

I expect a steady increase of units sold year-to-year with 2010 being the bottom. Prices will remain soft for homes priced over $300,000 while some appreciation can be expected for homes valued under $200,000.

BRAD GARBUTT

BROKER ASSOCIATE

530-224-6767 OR 530-941-7492

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN DOWNTOWN REDDING

NEARLY 30 YEARS LOCAL REAL ESTATE SALES EXPERIENCE

On or after January 1, 2014, all single-family residential properties undergoing alterations or improvements will have to replace all noncompliant fixtures before certificate of final completion can be issued by the local building department.

On or after January 1, 2014 specific building alterations or improvements to multifamily and commercial properties must replace noncompliant plumbing fixtures as a condition for issuance of a certificate of completion and occupancy by the local building department.

On or after January 1, 2017 a seller of a single-family home must disclose in writing to a potential buyer the new requirements for plumbing retrofits and whether the property includes non-compliant plumbing.

On or after January 1,2019 a seller of multifamily or commercial property must disclose in writing the plumbing retrofit requirements and if any noncompliant fixtures exist in the property to be sold.

By January 1, 2019 all non-compliant plumbing fixtures in multifamily or commercial properties must be replaced with water-saving plumbing fixtures.

The law does not appear to mandate point-of-sale retrofits for single-family homes. However taking out a building permit before, during or after the home purchase could trigger the reqirement that plumbing fixtures be replaced. Home buyers will want to famailiarize themselves with the requirements in order to avoid expensive retrofit costs after purcahsing a pre-1994 built home.

BRAD GARBUTT

RELTOR/BROKER ASSOCIATE

REAL LIVING REAL ESTATE PROFESIONALS

CORNER OF COURT AND PLACER IN DOWNTOWN REDDING

NEARLY 30 YEARS LOCAL REAL ESTATE SALES EXPERIENCE

BRADGREPS@YAHOO.COM

530-224-6767 OR 530-941-7492

Last year at this time, 1582 homes sold and closed. This represents a 16% increase in sales activity. Two factors contributed to the increase in my opinion-higher affordability due to lower home prices and historically low interest rates. Currently, home buyers with good credit can secure a 30-year mortgage at or below 4% and the 15-year rate is close to 3.3%! Low interest rates increase affordability and buying power for first-time buyers and investors are finding buying rental homes pencil out better than expected.

Inventory of available homes has been tight in 2011 with only 1159 active home listings available today. Last year in early October 1537 homes were listed for sale, 25% more than today. Pending home sales are higher despite the skimpier supply with 485 homes in escrow today compared to 421 a year ago.

Bank owned properties (REO’s) and short sales (distress sales) account for more than 60% of sales activity. Of the 485 pending home sales, 150 are bank owned and 150 are short sales. There are 186 active listings which are REO’s and 214 short sale listings.

Home prices continue to decrease, dropping 7.5% thus far in 2011. Last year home prices dropped 11%, which was the steepest decline since the housing bubble burst in 2007.  Overall, prices are down 45.6% from the peak in 2006, The avearage sales price today of $176,299 is similar to 2002, when the average price was $174,023.

Home prices appear to have stabilized for the low end of the market for the typical Redding home (defined as a home between 1500-2000 sq ft). In the first quarter of 2011, the typical home sold at $106.15/sq ft, $107.31/sq ft in the second quarter and $108.83/sq ft for the quarter that just ended.

Of the 221 homes that sold in September 2011, 195 were priced under $300,000. No homes priced over $550,000 sold in September. Nearly 100 of th0se sales were priced at or below $150,000.

The raw numbers indicate we have two distinct markets in the Redding/Shasta County area: the very active low-end market below $200,000 and the sluggish mid-to upper-end market! If banks are holding off listing homes which would appeal to first-time buyers and investors, they should reconsider. Many, well-qualified buyers are ready, willing and able, just waiting for affordable properties in good condition to be placed on the market.

Contact me if you have any real estate questions.

BRAD GARBUTT

REALTOR/BROKER ASSOCIATE

530-941-7492 or 530-224-6767

bradgreps@yahoo.com

REAL LIVING REAL ESTATE PROFESSIONALS

CORNER OF COURT AND PLACER IN DOWNTOWN REDDING

NEARLY 30 YEARS LOCAL REAL ESTATE EXPERIENCE