Monthly Archives: October 2013
Bidding wars are heating up in the Golden State, with nearly half of the homes sold in California so far this year fetching more than the asking price, the California Association of REALTORS® reports.
According to CAR, 49.5 percent of homes on the market have sold above list price so far this year, nearly double the 2012 figure (25.9 percent). The historical average in California for above-list-price sales is 18 percent.
Limited inventory is contributing to the multiple-offer situations on more than 72 percent of the sales, CAR’s 2013 Annual Housing Market Survey found. Distressed sales are also accounting for a high percentage of the bidding wars: 91 percent of REO properties have attracted multiple offers this year. Seven of 10 equity home sales attracted more than one bid this year, compared to 51 percent in 2012, CAR reports.
"Sellers are more upbeat about the housing market and are more comfortable with their financial situation,” says CAR President Don Faught. “As the real estate industry and the economy continue to recover, many sellers regained confidence in owning a home since the Great Recession. The number of home sellers planning on repurchasing, in fact, increased to the highest level since 2007, which suggests that repeat buyers could be the driving force in the housing market in 2014."
Source: “California is Sellers' Market as Over-List Price Sales Soar,” Mortgage News Daily (Oct. 30, 2013)
Mortgage rates are nearing the 5 percent mark, prompting many home buyers to rush to take advantage of rates while they’re still low.
“Most people agree it is only a matter of time before rates hit 5 percent,” Peter Grabel, a mortgage loan originator at Luxury Mortgage Corp. in Stamford, Conn., told realtor.com®. “The housing market has clearly turned the corner in most areas. I think a year from now, people will look back and realize that this was a great buying opportunity.”
Some forecasts show rates could edge even higher to 5.5 percent or even 6 percent in 2014. The Federal Reserve has announced that it will soon start tapering its $85 billion monthly bond-purchasing program, which is expected to send mortgage rates rising from recent record lows.
Currently, 30-year fixed-rate mortgages are averaging 4.2 percent, according to Freddie Mac.
In a recent blog post, realtor.com® illustrates the effect of rising mortgage rates on buyers’ pocketbooks:
Example: A buyer gets a 30-year fixed-rate mortgage at a 5 percent interest rate on a $300,000 loan.
Monthly payment: $1,610.46
Total payment: $579,569.69
Total interest: $279,769.69
Example: A buyer gets a 30-year fixed-rate mortgage at 6 percent interest rate on a $300,000 loan.
Monthly payment = $1,798.65
Total payment = $647,515.44
Total interest = $347,515.44
The buyer with a 6 percent interest rate would pay about $67,746 more over the life of a loan than the buyer who was able to get an interest rate at 5 percent.
Source: “Buy a Home Now or Pay More Later?” realtor.com® (Oct. 8, 2013)
Foreclosures have fallen by double-digit percentages nationwide, but in a few pockets, foreclosures still remain problematic.
In five states alone, foreclosures accounted for nearly half of all completed foreclosures nationwide. According to CoreLogic’s latest foreclosure report, the following five states had the highest number of foreclosures for the 12 months ending in August:
- Florida: 111,000
- Michigan: 60,000
- California: 58,000
- Texas: 43,000
- Georgia: 40,000
The following five states had the highest foreclosure inventory as percentage of all homes with a mortgage:
- Florida: 7.9%
- New Jersey: 6.2%
- New York: 4.9%
- Maine: 4%
- Connecticut: 3.9%
Meanwhile, these five states had the lowest number of completed foreclosures in the past 12 months:
- District of Columbia: 94
- North Dakota: 463
- Hawaii: 492
- West Virginia: 501
- Wyoming: 723