This Week in Real Estate 6-26-2015

Lots of news this week.

#1. Great news for the economy.

U.S. consumer spending recorded its largest increase in nearly six years in May on strong demand for automobiles and other big-ticket items, further evidence that economic growth was accelerating in the second quarter.

#2. Interest Rates are climbing.

For the third week in a row, the 30-year fixed-rate average remained above the 4 percent mark, according to the latest data released Thursday by Freddie Mac. It rose to 4.02 percent with an average 0.7 point this week. (Points are fees paid to a lender equal to 1 percent of the loan amount.) The 30-year fixed rate was 4 percent a week ago and 4.14 percent a year ago.

As the Federal Reserve contemplates raising its benchmark federal funds rate, home loans are becoming more expensive. Indications are that the days of the 30-year fixed-rate home loan at a rate below 4 percent are gone, if not for good, certainly for a long time.

#3. The Supreme Court is making some big decisions

The Supreme Court upheld the Affordable Care Act’s (Obamacare) provision for national subsidies. This was widely considered the best opportunities for the opponents of this bill to dismantle it. But with a 6-3 decision it looks like it is here to stay. With it the tax provisions that are included for real estate. 3.8% on the proceeds of the sale of commercial properties and rents as well as proceeds for personal homes above the normal exemptions.

-Kris

Home Tip of the week

Summer is the time for outdoor chores. I know you were thinking I was going to say Fun, but these tips will allow you to have more fun (and fewer expenses) in the long run.

One of the most common areas for wood damage we see over and over in our home pest inspections is on decks. The reason is simple these wooden structures face the elements every day and night exposed.

But with just a little maintenance you can keep your deck in good shape.

#1. Power wash your deck to remove debris and dirt. Debris and dirt hold water and can accelerate dry rot.

#2. Inspect the deck for damage when it is all cleaned off. Dry rot most often happens at the ends of the boards. To test, poke with a screwdriver to see if the wood is solid. Replace boards that have dry rot, since it can worsen quickly.

#3. Make your deck is sealed well. There are several improved products that work very well. Stains, sealants and deck coating (extra thick paint).

Home sales this week in your area.

This week in Real Estate 6-19-2015 - Happy Father's Day

File under boring but important

August 1, 2015 new lending rules called the “Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure,” TRID for short were supposed to take effect. During the busiest time of the year for real estate transactions, the consumer financial protection bureau (CFPB) wanted to make the loan process more complicated and longer. Thankfully the CFPB has delayed the implementation to the TRID rules since banks are unsure on how to exactly comply with the several new clauses. But it is only put off until October 1, 2015.

In short the government is requiring more time for consumers to review all the documents sent before the lenders can issue loan documents or fund loans. The addition to regulations will add about 6 business days in a standard purchase.

So for buyers and sellers, a financed offer that normally has a 30 day escrow, we will likely have to begin to get used to 40 day escrows.

If you would like help falling asleep, you can see the complete rule and the Official Interpretations are available at:

http://www.consumerfinance.gov/regulations/integrated-mortgage-disclosures-under-the-real-estate-settlement-procedures-act-regulation-x-and-the-truth-in-lending-act-regulation-z/

First, the Good Faith Estimate (GFE) and the initial Truth-in-Lending disclosure (initial TIL) have been combined into a new form, the Loan Estimate. Similar to those forms, the new Loan Estimate form is designed to provide disclosures that will be helpful to consumers in understanding the key features, costs, and risks of the mortgage loan for which they are applying, and must be provided to consumers no later than the third business day after they submit a loan application. Second, the HUD-1 and final Truth-in-Lending disclosure (final TIL and, together with the initial TIL, the Truth-in-Lending forms) have been combined into another new form, the Closing Disclosure, which is designed to provide disclosures that will be helpful to consumers in understanding all of the costs of the transaction.

-Kris

Home Tip of the week

This tip is VERY self-serving.

On Father’s Day, I can tell you that ALL I want is to have a great time with my family. I don’t wear ties anymore. I really don’t need more stuff. So I wanted to think of some great activities that everyone can do as a family. Dads love to tell stories, so let’s make some memories

#1. Go to a Baseball game. The Giants aren’t in town, but the Sacamento Rivercats (rivercats.com) are and their games are ¼ the price and 2x as fun in my opinion. You can also see the A’s (Oaklandas.com) take on the Angels.

#2. Go golfing. (Minigolf counts)

#3. Go Fishing. Whether it is on the ocean or bay or river on a boat or just looking for sun fish on the local pond, remember only keep what you eat. Here are some kid friendly spots according to a website. Mine is secret. http://redtri.com/san-francisco/bay-area-fishing-spots/

#4. Find a new hike. http://www.napahiking.com/ then have a picnic.

#5. Build something together. Whether it is a simple bird house, a LEGO creation, or a Ikea nightmare. Make it fun to work together.

To all the fathers out there, Happy Father’s Day!

This Week in Real Estate 6-12-2015 - Evolving Real Estate Market

I love history

Coldwell Banker recently did a survey regarding the housing trends from the last 20 years. The survey explained that the recession not only changed the housing market, but it also changed the way home sellers approach the sale of their home.

The survey looks at approximately 1,500 home sellers and analyzes trends from before and through the recession, as well as the initial recovery years and today.

Below are five charts that show just how much things have changed and the lessons we've learned from the past 20 years.

 

 This research highlights why my practice has been offering buyers and sellers GUARANTEES on the performance of my services.

http://www.housingwire.com/articles/34148-the-history-of-housing-in-5-charts

-Kris

Home Tip of the week

Our recent rain was a nice treat, but also will cause additional havoc for fire season with the regrowth of many weeds and tall grasses. In our drought, it is so important that we comply with all of the Fire Wise recommendations.

Defensible space is a law as well as an approach to vegetation management. It includes an understanding of wildfire behavior and contribution of plants to wildfire intensity. It recognizes the risks posed by wildfire to us by our natural surroundings and our vegetation management choices. Another term used in the context of defensible space planning is the “Home Ignition Zone” or HIZ. The HIZ primarily determines a home’s ignition potential based on the proximity to available fuel types within 100 feet or more from a home.

Defensible space is the area around a house/structure and reaching toward an oncoming wildfire. This is an area where the vegetation has been modified to reduce the wildfire threat and to provide an opportunity for firefighters to effectively defend the house/structure. Simply put, defensible space is a zone where vegetation and fire fuels have been modified to reduce or stop fire spread. The goal is to save homes and lives.

Please visit http://www.napafirewise.org/ to learn more about how to keep you and your family safe during this fire season.

This Week in Real Estate 6-5-2015 - Market Forecast

I got the question about the “bubble”

With all the good news over the past two years with prices up nearly 50% from the bottom and in some areas in well above the peak prices of 2006, people have been asking recently “is this sustainable?” and/or “when will the bubble burst”

Well I have two answers that might seem to be contradictory, but I believe they are accurate.

#1. This growth is not sustainable. We have had approximately 4% annual growth for the past 50 years. 10% or more growth is not sustainable. Housing will become too overpriced and markets will “correct”

#2. I do not think we will have another burst anytime soon. The market has rebounded mostly because of an over correction for the previous boom. The market fell way below the 4% trend line and now we are again within 1% of that trending forecast that has been projected from 50 years ago. Also the loans that are being written today and during the boom are much more regulated and scrutinized for the borrower’s ability to pay

So No the growth is not sustainable, but No the bubble is not likely to burst.

If you would like more trend data on some markets that might have a potential bubble, you can read this article.

http://rismedia.com/2015-06-01/peak-out-seven-markets-have-hit-their-peaks/

-Kris

Ps. Happy 70^th Birthday to my Mom!

Home Tip of the week

Summer is in full swing. I don’t expect any rain for a few months. That is a good thing. It is a great time to get work done on many areas of your home that need it to be dry.

Replace windows – Dual pane windows improve the insulation efficiency of your home tremendously. They can pay for themselves in reduced heating and cooling cost in a matter of just a few years.

Painting. The #1 way to prevent wood rot and fungus damage is to keep your home well painted and all the crack sealed tight. It is recommended that you paint every 10 years. Look at your weather wall (usually the south facing exterior wall) and make sure that is seal up good. You can often delay painting your entire home for years if you make sure that this area of the exterior is well maintained.

Roof and Gutters. It is very easy to clean your gutters when all the leaves and debris are bone dry. You can often clean your gutters in just a few minutes with a leaf blower in this situation. Also now is the time to book your roofer. Often you can get the work done in the summer at a discount since the roofing contractors are not swamped during the rainy season.

If you need help in any of these jobs, I have trusted contractors that can assist.