Ryan Blanco San Diego real estate agent

San Diego Housing Market Update-February 2015 Sales

Below is my monthly analysis of the San Diego housing market. It will show many different metrics to help us get an accurate “feel” for what is happening in our local real estate market!

Activity Snapshot:

One-year change in closed sales

One-year change in median sales price

One year change in homes for sale

-5.8%

+7.9%

-16.8%

Inventory levels (the number of homes on the market “actively” for sale) continues to stay strong. This San Diego housing market update shows san diego housing market updatethere are currently only 6784 active residential listings in San Diego county, which is flat compared to last month of 6798.

According to Bankrate.com, interest rates continue to trend lower compared to previous months. They are currently at 4.02% for a 30-year fixed loan (they were 3.98% at this time last month). This is well below the historical average of 6% or so, which is great for home buyers. To calculate your potential mortgage payment or see what you can afford, go HERE.

Finally, as you will see on the chart below, prices are starting to take on a more normal pattern. There are much more modest changes than the previous year, with a 10.0% increase in median prices, compared to over 20% we saw in 2013 and early 2014. However, these higher prices are now resulting in a considerable slow-down of the number of homes sold over a year ago.

The San Diego Association of Realtors analyzes housing market date for San Diego county every month. Below is their monthly report. The figures represents ALL property types.

san diego housing market update february 2015

CLICK TO ENLARGE

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com

You Can’t Always Trust Zillow’s Zestimates

Zillow is the most popular real estate website out there right now. Anyone that has been on their site has surely seen their “Zestimates.” A Zestimate is simply an automated property value estimate that appears alongside otherwise objective property information provided by Zillow.  They makes most of its money on advertising purchased by real estate agents who have supplied it with critical information (listings) in the first place.

san diego house value zestimate inaccurateReal estate agents frequently complain about these Zestimates, which — despite Zillow’s disclaimers — are often weighted too heavily by both buyers and sellers. (Typically, of course, the Zestimate is accorded such status when it happens to support the position of the concerned party. Buyers quote Zillow when the Zestimate is low, Sellers when it is high.)

Zillow makes it clear that Zestimates are not appraisals; rather, they are “a good starting point” or sometimes “just a starting point.” But what is that supposed to mean? Any number picked out of the air could be a starting point. Especially if we don’t even know if the Zestimate is liable to be high or to be low, how does that really help?

How is a Zestimate calculated and why can they be so inaccurate? Zillow takes public record characteristics (e.g. age, number of bedrooms, square footage), which can be wrong with unpermitted additions or simply inaccurate. With that information, they compare other similar homes in the area that are for sale or recently sold. This sounds great, but there are two problems that make Zestimates so inaccurate at times:

1. Zillow has no idea as to the condition of the property. They base their Zestimate on only the raw public records. They don’t know if there was $100,000 in beautiful remodeling upgrades or if the home is in total disrepair. The Zestimate tends to be a valuation for the “average” property in the area.

2. Zillow doesn’t take into account neighborhood boundaries.  We all know neighborhoods can change drastically by driving a few blocks away and this will also affect home values accordingly. Zestimates merely take a given “radius” around the subject property.san diego home market value zestimate

In my opinion, Zestimates are good for determining pricing trends for homes (taken as a percentage up or down), but the quoted home value should be taken very lightly.

So what’s the solution to the above problems with Zestimates? A professional appraiser will gladly come to the property to inspect it, and ultimately give a full blown appraisal report for around $400. The better option (at least for starters) is to have a licensed Realtor perform a CMA, or comparative market analysis for the home in question (most do this for free). While a CMA doesn’t go into as much depth as an appraiser does, they can be very accurate. Either way, these methods actually have a human (instead of  a computer generated system) analyze the subject home. They will know the condition of the home and if any additions or upgrades were done. These things obviously make a huge difference in what the property’s market value will be.

If you have a disagreement with a CMA, or even a full-blown appraisal, you have something in hand that you can work with. What comparables were used? What might have been overlooked? How much value was attributed to this feature or that? Are features of the comparables (e.g. view, street location) adjusted in an appropriate manner?

A Zestimate doesn’t allow for those questions to be asked. That is because you don’t know what data the Zestimate was based on; nor do you know how adjustments were made.

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com

San Diego Housing Market Update–January 2015 Sales

Below is my monthly analysis of the San Diego housing market. It will show many different metrics to help us get an accurate “feel” for what is happening in our local real estate market!

Activity Snapshot:

One-year change in closed sales

One-year change in median sales price

One year change in homes for sale

-16.0%

+10.0%

-16.9%

Inventory levels (the number of homes on the market “actively” for sale) continues to stay strong. This San Diego housing market update shows san diego housing market updatethere are currently only 5958 active residential listings in San Diego county, which continues in a downward trend. There were 5832 last month.

According to Bankrate.com, interest rates continue to trend lower compared to previous months. They are currently at 3.89% for a 30-year fixed loan (they were 4.08% at this time last month). This is well below the historical average of 6% or so, which is great for home buyers. To calculate your potential mortgage payment or see what you can afford, go HERE.

Finally, as you will see on the chart below, prices are starting to take on a more normal pattern. There are much more modest changes than the previous year, with a 10.0% increase in median prices, compared to over 20% we saw in 2013 and early 2014. However, these higher prices are now resulting in a considerable slow-down of the number of homes sold over a year ago.

The San Diego Association of Realtors analyzes housing market date for San Diego county every month. Below is their monthly report. The figures represents ALL property types.

San Diego Housing market update

CLICK TO ENLARGE IMAGE

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com

Mortgage Rates Near Record Low Levels AGAIN!

Morgage rates have been below 4% for a few months now. Many economists failed to call this correctly. Regardless, it’s great for potential homeowners, or those who want to refinance! For the first time in at least a year rates have dropped enough for it to make sense for many to refinance.  I’ve had a few clients refinance recently, and save a significant amount of money.

Below are some examples of rates and payment scenarios:

Lower your interest rate, monthly payment:

·         Loan Amount – $400,000

·         Loan Program – 30 Year Fixed Rate Loan

·         Old Loan:Low mortgage rates

o   Rate – 4.875%

o   Payment – $2,222.67

·         New Loan:

o   Rate – 3.875%

o   Payment – $1,880.95

·         Monthly Savings – $341.72!

Tap into your equity, without increasing your payments:

·         Old loan:

o   Loan Amount – $300,000

o   Loan Program – 30 Year Fixed Rate Loan

o   Rate – 4.875%

o   Payment – $1,651.13

·         New Loan:

o   Loan Amount – $350,000

o   Loan Program – 30 Year Fixed Rate Loan

o   Rate – 3.875%

o   Payment – $1,645.83

·         Cash Out – $50,000!

Remove Mortgage Insurance:

·         Loan Amount – $400,000

·         Loan Program – 30 Year Fixed Rate Loan

·         Old Loan:

o   Rate – 4.500%

o   Payment – $2,026.74

o   Mortgage Insurance – $206.67

·         New Loan:

o   Rate – 4.000%

o   Payment – $1,909.66

o   Mortgage Insurance – $0

·         Monthly Savings – $323.75!

And as always, if there is anything else I can help you with, or you need help buying or selling a property, contact me anytime!

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com

What You Must Know About Mortgages

san diego mortgage lender factsPlanning to buy a new house or refinance your current loan anytime soon? You will most likely have to go through the mortgage application process. And before you do, there are 3 things you may not know that could help the process go more smoothly while possibly saving you money.

1. The “Rules” can be bent
A lender will evaluate your application in a few key areas when you apply for a mortgage. These include your credit, income, employment history, savings, and debts. And many lenders have specific guidelines in each category. For instance, two common requirements are that your total mortgage payment is less than 28% of your income and your mortgage payment plus the rest any debts/monthly obligations combine to be less than 36% of your total income.

Many people don’t realize that lenders will make exceptions to these “rules,” especially if some of your other qualifications are particularly strong. For example, if your debts are a little high but your credit score and employment history are excellent, then there’s still a good chance you’ll still get approved. The Fannie Mae lending criteria actually provide underwriting guidelines for debt-to-income ratios as high as 45%.

2. Your FICO score isn’t everything

You do not have to have a perfect credit score to qualify for a mortgage. And this is completely understandable, as the average approved borrower currently has a FICO credit score of 729 (while this is a good score, it’s not excellent either)fico score knowing about mortgage process

So yes, lenders will approve much lower scores so long as your other qualifications are solid (of course, your interest rate will be slightly higher). You can actually qualify for a conventional loan with a FICO score as low as 620, and you can get a FHA loan with just 3.5% down with a score as low as 580. And if you have a larger down payment, you may be able to obtain an FHA loan with an even lower score than that. So if you’re just above the credit score cutoff, your other qualification criteria will play a larger role in whether or not you’ll get approved.

3. Shopping around is huge
Way too many people simply accept the first lender they check with. They’ll either deal with their real estate agent’s “mortgage guy” or simply apply for a loan with their own bank. Just like anything we buy these days, not all loans are created equal. Rates and fees can vary widely. A slight discount in monthly payment can add up big over the term of the loan.

Many people don’t want their credit pulled multiple times when applying for a loan. It’s true that multiple inquiries on your credit cause your score to drop by a few points. However, all of the mortgage inquiries that show up during a “normal shopping period” count as one single inquiry (even the credit bureaus want consumers to shop around). This shopping period varies between 14 and 45 days depending on which version of the FICO score your lender is using. As long as you do all your shopping within a two-week period, it doesn’t matter whether you apply with one mortgage lender or 10. The impact on your credit score won’t change.

The bottom line

The more you know about the mortgage process, the easier it will be, and the better loan you’re likely to get. Knowing the facts from the fiction is a great start, but any time you invest, learning more about the process will pay off in the long run.

 

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com

FHA Loans Are About To Get Better!

FHA lowers PMI ratesAt the end of the January, the FHA (Federal Housing Administration) will be LOWERING mortgage insurance premiums for the first time in years. The reason? Significant loses forced the FHA to borrow money from the US Treasury, but they have now recovered and have a multi-billion dollar surplus. This is the result of better performing loans and a rise in home values.

Current PMI (Private Mortgage Insurance) for 30-year mortgages with less than a 5 percent down payment is 1.35% of the loan balance. This mandatory annual mortgage insurance rate will be cut to 0.85% starting January 26, 2015. For an example on a $300,000 loan, this will save homeowners about $1500/year in insurance payments! This new lower rate applies to both new home purchases, as well as those refinancing.

If you took out an FHA loan while MIP rates were at all-time highs, it would be a great time to consider refinancing. For those who currently have an FHA loan and have at least 3% home equity, you can reduce your MIP with an FHA refinance loan. If you have more than 5% home equity, refinancing into a conventional loan can help reduce your payments significantly. In addition, mortgage rates continue to hoover around the 4% level.

If you would like to save money on your monthly mortgage payments or have been thinking of purchasing a new home, now is the time to take advantage of low FHA rates.

 

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com
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