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I wish you all some well-deserved time off this Labor Day Weekend.

Hopefully you found the information I sent earlier this week useful.
Now, on to the rates we've been seeing this week:

30 year conforming 4.00% 1 pt.
30 year high balance 4.125% 1 pt.
30 year FHA 4.00% 1 pt.
30 Yr. FHA high balance 4.125% 1 pt.
5 year jumbo 3.50% 1 pt.
7 year jumbo 4.375% 1 pt.
10 year jumbo 4.750% 1 pt.
30 year jumbo 4.875% 1 pt.

Regards,
Tracie

Tracie Southerland

Financial Advisor & Mortgage Advisor
Email · Biography
650.319.1603
License 01190919

Exclusively for

www.opesadvisors.com

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We are in a unique time in history. Home prices are down even in our most desirable areas and interest rates are at the lowest in 50 years.

Clients I speak with often ask the questions, "But, what if housing drops further? And also, where are interest rates headed? How can I time the bottom of the housing market and the interest rates?"

As all of us know, we can never perfectly time "the bottom" or "the top". However, saying that, we think that now is one of the most opportune times.

There are two indicators that we believe illustrate this point. As shown in the graph below, after nearly a decade of deviating substantially from long-term projections, housing prices are now reverting closer to their 40-year trend line.

As illustrated in the graph below, mortgage rates are at their lowest level since formal recording of rates began 50 years ago.

The table below shows the impact of higher interest rates on purchase price. Generally speaking, for every 1% difference in rate there will be about a $86,000 differential in the purchase price for approximately the same monthly payments. Example below:

Note: Tax situations for every client will effect these results slightly.

In summary, a rise in interest rates will quickly offset any benefit of further price drops. We can't time the market, and we can't claim to know the future. However, when you look at the facts above, it is apparent this unique time in history provides our clients with an incredible opportunity.

Regards,
Tracie

Tracie Southerland

Financial Advisor & Mortgage Advisor
Email · Biography
650.319.1603
License 01190919

Exclusively for

www.opesadvisors.com

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Market Statistics for Santa Clara County 7/1/08-7/1/2010 by Chris Trapani

Here are some highlights to pay particular attention to as you review the data/graphs through July of 2010:

1. Median Price- Despite some recent negative news about the slide in the number of home sales for July, the Median Price increased in SCC in July to $562,000 (highest point over past two years since August of 2008/$570,000) from $550,000 in the prior month (which is $52,000 than July one year ago). The SCC Median reached its low point in March of 2009 at $415,000- so we have experienced an trough to date Median price increase of approximately 36%. As we predicted over the last few months of 2009 and beginning of 2010, we experienced a higher rate of upper end sales in Santa Clara County (particularly between 2-5+ million) during most of the first six months of 2010. As a significant number of these “upper end” properties close escrow in the first half of 2010, the median price in SCC climbed well into the $550,000 range. We did experience a slight slowdown over the summer, however, activity has started to move back into the $1.5-3m price ranges over the past two weeks and I anticipate a decent second half with good sales activity across the board.

2. Supply&Demand (Units)- We continue to see a significant distinction as we compare July 2008 with 2010 in the following categories; For Sale (supply/inventory), Under Contract (pending sales) and Sold (closed escrows). To illustrate when we compare July 08 with the same month in 2010 we see the following- For Sale properties/supply continues to remain significantly: down 43.6%. The number of under contract properties (pending sales) continues to soar- up 46% and the sold/closed escrows are up an impressive 31.9%. The pattern and direction of this market for the past 12 months continues to be the same story; declining overall supply/inventory, increasing new sales and closed escrows.

3. Month’s Supply of Inventory & Days on Market- The overall Months Supply of Inventory (months of inventory available based on the total existing supply divided by the rate of sales) remains near all-time low levels at 3 months supply at month end (which is down from 3.2 months supply in June 2010). This is down from a 2 year peak of 14.2 months in January of 08. NAR Months Supply of Inventory came in at 3.7 months for July (SCC continues to lead the national figures) Days on market has averaged between 45 and 60 days for the past 7-8 months, and has increased slightly over the past three months from 55 to 60 days .

4. Sales Absorption- The Absorption metrics are quite compelling with the comparison of July 2008 vs July 2010 with under contract properties up an incredible 145.3% and closed/sold escrows up 123%. 22.1% of the active properties/listings were under contract as of July 30, 2010, up from a final figure of 21.1 percent in June of 2010.

Our area is leading the way for the US in the economic recovery. California is leading the nation per most economists and Northern California, in particular Silicon Valley/Bay Area, is leading Southern California. We are fortunate to be at the pulse of real estate sales activity. As I reported earlier, the market did take a slight pause over the summer as some of the higher end sales activity cooled slightly from its first half pace. However, based on new sales activity over the past week or two, indications are that there are buyers in the upper end and properties in the $2-3m+ range will continue to sell if they are desirable and priced appropriately. Remember, in 2009 we had a very slow start and ended the year with tremendous activity as government stimulus brought many buyers out into the market (December of 2009 was the biggest closing month of the year last year). In 2010, we have had a significant sales volume increase in comparison to (much due to the increased median/higher priced home sales coming back to life) the first half of 2009, while I expect the second half of this year to be respectable, I don’t anticipate the rush/push of year end activity we experienced in 2009. 2010 will end up being a tremendous year for Sereno Group as an organization and the beginning of a turning point in a positive direction for the real estate market overall.

As a company, Sereno Group remains significantly up in sales volume (65%+) this YTD as compared to the same period in 2009. Most of the market and leading peer companies are up between 15-20% this year to date as compared to last year which is a strong indication for overall improving market conditions. We continue to work through the most balanced, healthy and active residential real estate market we have seen in over 2-3 years.

Thank you and have a great week.

Sincerely,

Chris

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The very essence of life is that it can change abruptly. And, clearly what happened in the real estate, mortgage, credit and stock markets in the past years falls into the “abrupt” category. In addition to the tremendous stress that it presented, the changed financial circumstances brought new choices to evaluate.

One place where it’s always safe to boldly move ahead is in the arena of planning. And, the three Rs are still relevant today. However, they’ve been changed to represent some of the key components of a personal financial strategy: Retirement, Returns and Real Estate.

Retirement: In the the past, many people have thought that maxing out their 401(k) plan was sufficient to fund their retirement. It’s best to reevaluate that approach and determine if that strategy will produce the expected results.
Returns: The returns we’ve seen this decade have been very different from the high returns of the previous two decades. Now is the time to determine what returns are expected going forward and to position one’s portfolio to achieve that. What returns are needed to generate an appropriate retirement income?
Real Estate: Many people in the Bay Area have 50% of their net worth tied up in their home (real estate – including a primary residence home – is an asset class), which means they also have a 50% exposure connected to that single asset. Is there a strategy in place to manage that asset?

There are many questions to consider regarding a home purchase, a refinance decision or managing investments. A comprehensive financial plan helps to avoid actions that could negatively affect one’s overall financial situation, taxes, future wealth and retirement plans.

Opes Advisors provides integrated personal finance services encompassing stocks, bonds, real estate and real estate financing. We regularly create personalized wealth building strategies for our clients by reviewing all of their assets and liabilities, as well as their commitments and long term goals.

Having a valuable plan in place takes away the insecurity of wondering where you stand. If you, or someone you know, needs to create or update their financial strategy, please contact me.

Now, on to the rates we've been seeing this week:

30 year conforming 4.25% 1 pt.
30 year high balance 4.375% .5 pt.
30 year FHA 4.25% 1 pt.
30 Yr. FHA high balance 4.25% 1 pt.
5 year jumbo 3.875% 1 pt.
7 year jumbo 4.125% 1 pt.
10 year jumbo 4.625% 1 pt.
30 year jumbo 4.875% 1 pt.

Regards,
Tracie

Tracie Southerland

Financial Advisor & Mortgage Advisor
Email · Biography
650.319.1603
License 01190919

Exclusively for

www.opesadvisors.com

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As we all know, guidelines and requirements for loan approvals are tighter than they have ever been and are becoming more rigorous still.

With the stringent lending guidelines that are in place I thought it would be a good time to remind buyers (& ourselves) of the 7 Tips to Save Your Sanity while going through the loan process.

Feel free to share this information with clients, or others, that may find this information useful.

Now, on to the rates we've been seeing this week:

30 year conforming 4.25% .25 pt.
30 year high balance 4.25% .5 pt.
30 year FHA 4.25% 0 pt.
30 Yr. FHA high balance 4.375% 0 pt.
5 year jumbo 3.75% 1 pt.
7 year jumbo 4.125% 1 pt.
10 year jumbo 4.50% 1 pt.
30 year jumbo 4.875% 1.5 pt.

Regards,
Tracie

Tracie Southerland

Financial Advisor & Mortgage Advisor
Email · Biography
650.319.1603
License 01190919

Exclusively for

www.opesadvisors.com

(0) Comments

Reader Comments

Add your comments

Please keep your comments relevant to this blog entry. Email addresses are never displayed, but they are required to confirm your comments.