Riverfront Real Estate

Back to the Blog?

2008-11-04T09:50:00.000-08:00

It's been a long time since I've been active on the blog. Spencer and I began the blog not long before he was diagnosed with cancer so that took the wind out of both of our sails. Happily, after a long fight, Spencer is doing much better and will hopefully be back to work sometime in 2009. Until then I may weigh in here and there on market conditions, but as most people are aware it's new territory for the real estate industry so it's difficult to comment on what to expect for the near future. For now I have a "wait and see" attitude and am advising my sellers to do the same for now unless they must sell and advising my buyers to call their lenders and get off the fence as there really are some great deals out there.
Judy Huestis

A Little Bit of Good News

2008-05-19T14:22:00.000-07:00

Jim Wasserman reports the following in today's Sacramento Bee breaking news. Notice the median sales price in El Dorado County did not drop as much as in the surrounding counties.

Sac Bee report:
A surge of activity in April pushed Sacramento-area home sales to the highest levels in almost a year -- and produced the first year-over-year sales gains in Sacramento County in 37 months, DataQuick Information Systems reported Monday.
Overall, three counties -- Sacramento, Sutter and Yuba -- posted sales gains over the same time last year.
In April, 3,163 homes closed escrow in Amador, El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties during, according to La Jolla-based DataQuick. It was the first time sales broke the 3,000 barrier since July
The numbers confirm what many in the real estate industry have been saying in recent weeks: there's been a spate of buying and owners are getting multiple offers for discounted properties.
In Sacramento County, sales of new and existing homes totaled 1,961 in April, the highest since Sept. 2006, according to DataQuick.
The April sales tally was 26.3 percent higher than April 2007 -- the first time that year-over-year sales in the county have posted a gain since March 2005, DataQuick reported. Yuba County also posted a 23.3 percent year-over gain, its first in several years. Sutter County posted a 1.1 percent gain in year-over-year sales, its first in almost a year, according to DataQuick.
Elsewhere, sales were slower. Yolo County sales were down about 1.1 percent from the period last year -- after mostly double-digit monthly declines since the housing boom began to lose steam regionally in late 2005 and early 2006.
April sales in Placer County remained 8.5 percent below April 2007, according to DataQuick.
Besides the traditional spring-buying boost, what's driving sales in some counties? Prices have rapidly dropped with heavily discounted, bank-owned homes accounting for a majority of purchases in the eight-county capital region. That means the lower end of the housing market is fueling much of the surge.
Median sales prices -- where half the homes sell for more and half for less -- are down to Feb. 2003 levels in Sacramento County. The county's median sales price in April fell to $232,000 -- down 32 percent from a year ago and 40 percent off its Aug. 2005, high of $387,000.
The Sacramento Association of Realtors reported that 35.3 percent of sales in the county and in West Sacramento were for homes priced below $200,000 in April.
In Placer County only about 3 percent of sales are below $200,000, according to the Placer County Association of Realtors.
The county's median price in April was $352,000 -- roughly equal to prices in Oct. 2003, according to DataQuick. Prices for new and existing homes combined in Placer County are down nearly 22 percent from a year ago and down about one-third from an Aug. 2005 high of $525,000.
Elsewhere in the region:
• Median sales prices in April fell to $379,000 in El Dorado County, down nearly 12 percent from a year ago.
• Yolo County's median sales price dipped to $308,045, down nearly 27 percent from a year ago.
• Sutter County's April median was $221,500, down nearly one fourth from last year.
• The median Yuba County sales price was $199,500, down almost 31 percent from last year.

More Predictions from NAR

2008-04-22T08:16:00.000-07:00

The following is text from a NAR media feed:
Little change is expected in existing-home sales over the next few months, before improving notably during the second half of the year, according to the latest forecast by the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said the market will come into clearer focus this summer. “Existing home sales could start to show a sustained increase within a few months, unless there are some additional economic problems or excessive inflationary pressure,” he said. “We’re looking for essentially stable sales in the near term, before higher mortgage loan limits translate into more sales in high-cost markets. The wider access to affordable credit should increase sales activity notably this summer as pent-up demand begins to be met.”

The Pending Home Sales Index...[indicates]“...an era of successive deep sales declines appears to be over,” Yun said.

Existing-home sales are likely to rise from an annual pace of 4.9 million in the first quarter to 5.9 million in the fourth quarter. With relatively weak activity in the first part of the year, existing-home sales for all of 2008 are forecast at 5.39 million, increasing 6.6% to 5.74 million in 2009.

“...steady liquidity improvements in the conforming jumbo-loan market will help prices recover in the second half of the year,” Yun said. The aggregate existing-home price will probably ease by 1.4% to a median of $215,800 for all of 2008 before rising 3.7% to $223,800 next year.

Yun noted that there will continue to be wide variations in regional housing market conditions. “Some parts of the country that can expect improvement include the Northeastern region and the oil-patch states of Texas, Oklahoma, Louisiana and Arkansas,” he said. With lower interest rates and flat home prices in many areas, NAR’s housing affordability index is forecast to rise 14 percentage points to 127.0 in 2008.

The 30-year fixed-rate mortgage, which has fluctuated recently, should average 5.8% in the second and third quarters, but trend up to an average of 6.3% in 2009.

“The economy will not grow in first half of the year,” Yun said. “However, the combination of recent fiscal stimulus enactment and the lagged impact of monetary policy will help jump start the economy in the second half.” Growth in the U.S. gross domestic product (GDP) is expected to be 1.4% in 2008 and 2.4% next year. The unemployment rate is forecast to average 5.4% this year and 5.6% in 2009.

Inflation, as measured by the Consumer Price Index, is projected at 3.4% in 2008 and 2.2% next year. Inflation-adjusted disposable personal income is likely to grow 1.2% this year and 3.0% in 2009.

California Association Of Realtors:Why Buy Now?

2008-04-04T09:02:00.000-07:00

The following is the exact text from one of CAR's customer handouts.

Why Buy a Home in Today’s Market?
Buying a home in today’s market may be challenging, particularly for those with credit problems or little saved to put toward a down payment. But there are many factors impacting the current housing market that make buying a home today a viable option.
Here are five reasons for buying a home today:
1 Interest rates on long-term, fixed, and adjustable mortgages are at historically low levels. The rate on a 30-year, fixed mortgage is hovering just below 6 percent, while, by comparison, interest rates were hitting 8 percent and higher during the last market downturn in the late 1990s, and were between 10 and 12 percent at the height of the last housing boom in the 1980s. Lower interest rates make it easier to qualify for a loan, and your monthly payments are more affordable.
2 No one can put a price on the intrinsic value of homeownership. Home prices also reflect financial worth and, the good news is, across California the median sales price for a single-family home has been consistently rising for several decades. In short, housing remains a solid, long-term financial investment. While the pace of home appreciation has slowed over the last year, historical data suggest home prices will continue to appreciate over time. The projected median home price for a single-family home in California in 2008, for example, is $553,000. By comparison, the median price in 2000 was $241,350; $193,770 in 1990, and $99,550 in 1980. (source: C.A.R.)
3 The length of time a home remains on the market before it is sold has increased from roughly two weeks in 2004 to between eight and nine weeks in 2007. According to the unsold inventory index provided by the CALIFORNIA ASSOCIATION OF REALTORS®, it would take 16.3 months to sell all the homes on the market at the current sales pace, compared with 6.4 months in 2006. With more homes on the market for longer periods of time, you have more choices when it comes to selecting a home today.
4 The multiple-offer frenzy that dominated the latest housing boom has subsided, and there is less pressure on today’s home buyers to outbid one another. REALTORS® in California reported that in 2007 only 28 percent of homes sold had multiple offers, compared with 57 percent in 2004. (source: C.A.R.)
5 The credit industry crisis that has made securing a home loan difficult for many has led to heightened scrutiny of mortgage lenders. As a result, state and federal agencies have created protections for home buyers that were not in place a year ago. The U.S. Federal Reserve, for example, has proposed a plan to require lenders to confirm a borrower’s ability to afford a mortgage before making a loan and establishing guidelines for explaining subprime loan terms in order to better educate buyers. Many new public education and awareness campaigns, such as Freddie Mac’s “Don’t Borrow Trouble®” campaign, have been developed to help you achieve the dream of homeownership without the financial risks that led so many borrowers into trouble in recent years.

Opt-In to Opt-Out

2008-04-02T16:54:00.000-07:00

Judy's recommendation is echoed by me. Not only does identity theft result from the way credit reporting agencies share information, these agencies also create big headaches for people looking to obtain credit.

As an example, a client comes to me and wants to apply for a mortgage. I pull her credit. When I do, Experian, TransUnion, and Equifax (the 3 credit reporting agencies) turn around and sells my client's personal contact info to other creditors who want to solicit to my client.

Let me repeat for emphasis: when a client decides to do business with me she needs to expect dozens of cold-calls from other lenders the moment I pull her credit.

I have no idea how this is legal, but the credit reporting agencies appear to be in bed with a lobbyist who pitches this scheme as capitalism at its finest. The only way a client can avoid this annoyance is to complete the http://www.optoutprescreen.com/ request PRIOR to me pulling her credit report.

Get out there and do it. It will protect your identity, and your sanity.

Prevent ID Theft

2008-04-02T10:39:00.000-07:00

Although this is more of a Matt post I am sharing this info due to concerns about identity theft. One source of id theft comes from the bad guys intercepting pre-screened offers received from credit card companies. They'll get a hold of one of these offers and fill out the info and submit the application and then they have a credit card in your name. Not good. Sacramento Bee's financial page advised contacting optoutprescreen.com to remove yourself from the pre-screened credit list. The info below was taken directly from their website. The process took only a few minutes and you have the option to opt out for five years or life and you can opt back in at any time.
Check it out.
http://www.optoutprescreen.com/

The is from the "about us" section of the website:
OptOutPrescreen.com is a centralized service to accept and process requests from consumers to "Opt-In" or “Opt-Out” of firm offers of credit or insurance. OptOutPrescreen.com is a joint venture among Equifax Information Services, LLC, Experian Information Solutions, Inc., Innovis Data Solutions, Inc., and TransUnion, LLC (collectively the "Consumer Credit Reporting Companies").

Under the Fair Credit Reporting Act (FCRA), Equifax, Experian, Innovis, and TransUnion, are permitted to include your name on lists used by creditors or insurers to make firm offers of credit or insurance. The FCRA also allows you the ability to "Opt-Out", which prevents Consumer Credit Reporting Companies from providing your credit file information for firm offers of credit or insurance that are not initiated by you. If you want to remove your name from lists supplied by the four Consumer Credit Reporting Companies listed above for firm offers of credit or insurance, you will need to provide your personal information on the “Click Here to Opt-In or Opt-Out” link. Once you provide your information through this secure website, your name will be removed from inclusion on firm offer lists provided by all four companies. If you have previously completed a request to Opt-Out from receiving firm offers and would like to Opt-In, you may also complete your request on this website. The personal information you provide is confidential and will only be used to process your request. You can also complete this process via phone by dialing 888-5-OPT-OUT (888-567-8688).

OptOutPrescreen.com is the only internet website authorized by Equifax, Experian, Innovis and TransUnion for this purpose under the FCRA. Please note that, as a security precaution, consumers should never provide their personal information to any other company or person in connection with requesting Opt-In or Opt-Out services. OptOutPrescreen.com will not contact consumers via email, telemarketing or direct mail solicitations.
Equifax
Equifax Inc. (NYSE: EFX) is a global leader in turning information into intelligence. Equifax companies provide faster and easier ways to find, approve and market to the right customers. For consumers, Equifax companies offer easier instantaneous ways to buy products or services, and better insight into and management of their personal credit. Headquartered in Atlanta, Equifax reported annual revenue of over $1.2 billion in 2004, and employs over 4,500 employees in 12 countries in North America, Latin America and Europe. Equifax. Information That Empowers.

For more information, please visit www.equifax.com.
Experian
Experian is a global leader in providing information solutions to organizations and consumers. It helps organizations find, develop and manage profitable customer relationships by providing information, decision-making solutions and processing services. It empowers consumers to understand, manage and protect their personal information and assets. Experian works with more than 50,000 clients across diverse industries, including financial services, telecommunications, health care, insurance, retail and catalog, automotive, manufacturing, leisure, utilities, e-commerce, property and government. Experian is a subsidiary of GUS plc and has headquarters in Nottingham, UK, and Costa Mesa, California. Its 12,000 people in 26 countries support clients in more than 60 countries. Annual sales exceed $2.5 billion.

For more information, please visit www.experian.com.

Innovis
Since 1989, Innovis Data Solutions has been a consumer credit information repository that collects consumer credit data from credit grantors throughout the United States. The company is committed to protecting the privacy of consumers and preserving the quality, accuracy and integrity of consumer information.

Innovis provides information to credit grantors to assist in marketing, verification, authentication and fraud prevention. It is important to note that Innovis is not currently involved in providing services that can result in the denial of applications for credit, insurance or employment.

For more information, please visit www.innovis.com.

TransUnion
TransUnion is a leading global information solutions company that customers trust as a business intelligence partner and commerce facilitator. TransUnion offers a broad range of financial products and services that enable customers to manage risk and capitalize on market opportunities. The company uses leading-edge technology coupled with extensive analytical capabilities to combat fraud and facilitate credit transactions between businesses and consumers across multiple markets. Founded in 1968, Chicago-based TransUnion employs 4,100 associates that support clients in 29 countries.

For more information, please visit www.transunion.com.

The trademarks, service marks and logos (the "Trademarks") used in this website are registered and unregistered Trademarks. The Trademarks belong to Equifax, Experian, Innovis, TransUnion, Opt Out Services LLC and/or their respective owners. The Trademark owner has exclusive rights to the Trademarks. Any unauthorized use of the Trademarks is strictly prohibited. You may not display or use the Trademarks for any purpose without the written permission of Trademark owner.

"The Housing Crisis is Helping the Housing Crisis"

2008-03-26T15:02:00.000-07:00

The title of this blog is a quote from Spencer a few months back. It would be nice to try and make every title a reference or quote to Spencer, but we'll see how long I last...I'm not that clever. For now, it's a streak of 1.

At any rate, I wanted to address the dreaded adjustable rate mortgages (ARM) and how they have impacted the real estate market. For months now, they have been touted as the ugly poster child of the housing crisis, and rightfully so. Gobs and gobs of homeowners have lost their homes because their rates adjusted higher when it was time for the rate to reset. Ironically, this same scapegoat of our housing market may be the knight in shining armor we've all been waiting for. Let me explain.

Most forecasts for the 2008 housing market and the projected record number of foreclosures that will ensue are primarily based on the unprecedented number of ARMs that are set to adjust this year. In recent months, however, the market factors that determine how ARMs adjust have been in a free-fall. A year ago an ARM may have reset to 8.0% or more. Now, the average ARM is resetting somewhere in the mid 5%s. See this chart as an example of a rate index that influences these ARM resets, and you'll see what I mean. F-R-E-E F-A-L-L.

And why, do you ask? Well, this is where Spencer's quote comes into play. These ARM rates have been falling because the economy is sagging. The economy is sagging because, most would agrue, of our housing market. So, the housing crisis is leading to lower ARM rates that will help the housing crisis. "The housing crisis is helping the housing crisis."

What is the implication of these changing ARM interest rates? It has the potential to help many homeowners continue to afford their mortgage payments after their rates adjust, keep their homes, and avoid foreclosure. If many potential foreclosures are avoided in the coming months, it has the ability to stabilize our current housing market by preventing a big wave of foreclosed properties going up for sale.

I find it interesting that a factor that has the potential to turn around our housing market has not received much traditional media coverage. I thought it important to contrast the mass media hysteria circling this housing market with a sound, positive, albeit unsexy, perspective. I hope you enjoyed it.

Test 1, 2 ... test 1, 2

2008-03-20T13:42:00.000-07:00

As my inaugural post to the Riverfront Blog, I want to say thank you for the opportunity. I've continued to be humbled to fill Spencer's professional shoes while he battles his life's lemons. While in his shoes on this blog I intend on being the voice of lending reason. "Credit crunch", "mortgage meltdown" , "sub-prime fallout" are all-too-familiar headlines we have been consumed with. These fear tactics give the perception that no one can obtain a home loan in this environment. This is simply not true.

While I won't sugar-coat the reality of the ins and outs of future lending developments, I will make it a point of putting these developments into perspective and ultimately transcending them into our lives as homeowners in the valley.

I look forward to working with Judy and interacting with you in the blogsphere..

When Life Gives You Lemons...

2008-03-20T10:31:00.000-07:00

Spencer and I teamed up and created this blog late last year to provide up to date information about real estate matters for our clients and anyone else following along.
As many of you know Spencer has taken a leave of absence from Bentley Mortgage in order to devote his energy to fighting cancer. He was recently diagnosed with multiple myeloma and is undergoing treatment. Although I won't link to it directly here he has a blog devoted to this fight. It's very humbling to read. If you are interested in following his progress please post a comment asking for the address and I will send it your way.
Because this was our project and Spencer can't work on it, I considered abandoning the blog entirely. After much thought I decided that since we had just gotten it off the ground I wanted to keep it going so when Spencer comes back to work next year it will be in place and will hopefully have an established readership.
To that end I have invited Matt Sundermier, Spencer's friend and colleague to blog in his place.
Matt is currently in charge of Spencer's client base so he was the obvious choice. He has agreed to be my new co-blogger so look for some new posts from us both soon.
Judy H.

Hi to the Blogosphere

2008-02-01T17:27:00.000-08:00

Hello All,
Obviously, Spencer and I have stalled out on our posts. Spencer has been busy with refis due to the dropping prime rate and I have been working around the remodel of my office so we both have been busy. New content soon. We promise. That being said, call or email us direct if you have any questions. We are on the job and watching the market.

Blessings to All

2007-12-19T19:13:00.000-08:00

I know Spencer would join me in saying we are both very thankful for the blessings in our lives. We wish you peace, love and a lightness of heart this holiday season.

Kelley's Fundraiser a Success

2007-12-10T14:54:00.000-08:00

No news is posted yet on the check on KK blog but I am bursting to write about it. The Fund Raiser for Kelley Kalafatich was last night and it was a huge success. My wife Sarah worked on the event along with many of Kelley's friends. The river and Coloma Lotus community came out in the hundreds to help raise funds and show support. Sarah came home last night after counting money well into the night. The dollar amount is not in yet but it was WELL above expectations. Thanks to everyone that was there and that gave money. I can't think of a better example of what makes this community such an awesome place to live.

Subprime Bailout

2007-12-10T13:11:00.000-08:00

I struggled through a post that never made it to reality last week. I was trying to write about the Bush Adminstration's subpirme mortgage bail out. I studied lots, read lots of articles and was just having too much trouble writing about how the plan is too little too late. How it is not going to help consumers. Well here is an atricle in NY Times that does what I couldn't do.

Teaser Quote: But won’t the borrowers gain, too? Not if the planners
can help it. Relief is restricted to borrowers whose mortgage debt is at least
97 percent of the house’s value — which means that in many, perhaps most, cases
those who get debt relief will be borrowers who owe more than their house is
worth. These people would be nearly as well off in financial terms if they
simply walked away.

There is the problem. The Bush Admin is puttinga band-aid on a gushing chest wound two hours after arriving at theaccident. Itis just too little too late and the plan gets in the way ofreal reform thatneeds to take place. My industry needs tough love rightnow. Not a quick fixthat promotes the status-quo.

Let's Talk

2007-12-06T17:18:00.000-08:00

In our field, Spencer and I do a lot of talking, but more importantly we do a lot of listening. When I first became a Realtor in 1999 I felt I was a decent communicator but I found I had quite a bit to learn. The main point is active listening is different from listening. Having a dialog is not the same as two people performing monologues for each other. I know it's tough to be an active listener, we have so much to say and we're all so busy that often we don't truly hear the other person. We simply wait for them to stop talking so we can start.

I clipped an article from Realtor magazine several years ago. While the tips were written for agents interacting with clients they are universally applicable. I'd love to acknowledge the author but I don't have the full article so please don't sue me if you recognize your words and ideas here.

I'm going to share these in two posts. Here's the first half of the list:

-Talk with, not at others. This is the "simultaneous monologues" concept. Rather than waiting for the other person to stop talking so you can have your chance, listen, really listen, and reply to what was said.

-Avoid interrupting. In the course of my work I find I have the same conversations over and over with different sets of clients. The information/questions/concerns aren't new to me and it's tempting to chime in to keep things moving. As the author says, "doing so assumes too much and makes (clients) feel marginalized." Same goes for interpersonal relationships. Who hasn't had the experience where you realize someone is trying to get you to "skip to the end" because they've already determined how to respond. That doesn't make you feel as if you've been heard does it?

Value silence. This is a tough one. Want to see how hard? Practice tonight on your partner. Don't reply immediately, take a moment to consider what was said and reflect before you reply. This shows you are really listening and not simply waiting for your turn. Now, you can't do this after every sentence or your partner will smack you upside the head, but you get the idea. The person I know who is naturally the best at this is Eric Magneson, General Contractor with Magneson Hoyt Construction. After a conversation with Eric you come away feeling you've been heard. He is a Zen master at valuing silence. In a good way Eric, I'm not teasing you.

Paraphrase. Again, not something you do constantly or you really will get a smack in the head, but when appropriate, paraphrasing what the speaker said in the form of a question checks with the other party that you understand what they mean. I often say something like, "So what I hear you saying is X, is that right?" Sometimes I'm right on the money, other times I'm not.

So, that's it for now. I'll post the rest of the list in a day or two.

Note to self: do a quick post on "writing tics" soon. They're like "verbal tics" but much more insidious. I've deleted more than I care to admit from this post.

More good news for locals?

2007-12-04T23:22:00.000-08:00

Before Spencer and I set out to do this blog I saved this article from the Sacramento Bee to share with my El Dorado County clients. I have the author's permission to link to it in our blog. Thank you Jim Wasserman. Check it out and be sure to maximize the graphic on the right once you open the link. Even though the article is from late October you'll see it is still good info and potentially good news if we run true to history.

Also, don't miss Spencer's post on risk based pricing. While not good news we promised to share the good, the bad and the ugly here.

If You Have An Arm

2007-12-03T14:34:00.000-08:00

This is Spencer's area of expertise but I wanted to chime in about the current mortgage market. Spencer, please correct me if I'm wrong.

As most everyone knows, ARMs, or adjustable rate mortgages have reset or are about to reset for many borrowers. This means a higher mortgage payment which you may not be able to afford. One solution is to refinance your current loan. Do call Spencer about this as he may be able to get some of you into better loans. Contact him for the details.

Another possible solution is the temporary freezing of rate increases for ARMs currently in the works. Click here for the article in the Sacramento Bee and feel free to call Spencer or myself if you need more information.

Fannie Mae Moves to Risk Based Pricing

2007-12-01T09:09:00.001-08:00

As of today I have received word from three lenders that Fannie Mae is moving to "Risk Based Pricing." They are stating that all Fannie Mae (FNMA) lenders will be doing the same. To the average consumer that might sound like no big deal. But let me assure you this is a very big deal for home buyers that are coming into the market right now as well as current homeowners that care about their home's value. Below I will explain why:

Under the new Fannie Mae guidelines, lenders will impose an extra cost on loans that are greater than 70% Loan to Value ratio and have credit scores are less than 680. That means that anyone with what I like to call B+ credit that is looking to buy a house with less than 30% down will find, in the very near future, that the rate they will pay is higher. Furthermore, as your credit score drops below 660 and 640 and 620 there are increasingly substantial hits to interest rates.

For those that don't know, Fannie Mae is a government created private agency that is the industry standard for how conforming loans are priced and underwritten. Freddie Mac (FHMC) is the other loan guarantor that will probably follow suit within days. In the years that I have been in the mortgage world 90-95% of the loans i have done have been FNMA/ FHMC loans. Up until this point a borrower that had a lower credit score (as long as it was greater than 620) could expect pay the same rate as one with an 800 credit score.

Analysis:
This development will have a significant impact on borrowers, and especially first time home buyers. There are two reason for this: Primarily, first time home buyers (FTHBS) tend to have lower credit scores than homeowners with a track record. This is because FTHBs have less track record of paying back major consumer debt than homeowners who have an established mortgage history. That typically leads to a lower credit score. Furthermore FTHBs almost always borrow greater than 70% of the home's value whereas move up buyers are usually bringing equity realized in their current home with them.

The damage to first time home buyers will not be the only fallout from this decision. The real estate market's recovery will be driven by buyers that, for now, are either sitting on the sidelines waiting, or that have been priced out of the market. See my post on affordability. With increased rates for many potential buyers, values will have to drop even farther to increase affordability. Essentially what that means is that Fannie Mae is forcing an even larger correction on the market than what we have already experienced.

If I can rant for a moment... I find this development especially hypocritical coming from Fannie Mae. In 2004 and 2005 as home values were increasing all over the country, FNMA made several changes to their lending guidelines that were designed to make homes more affordable. This included the advent of interest only loans and increasingly relaxed standards for stated income loans. While well intended to help borrowers qualify more easily for purchases, they had an unwanted effect of pushing home values to record levels. This is because sellers knew that buyers could qualify for larger and larger payments with these enhancements and maximized their gains accordingly. In late 2004 it started to become more apparent to me that the market was approaching the top. This is based solely on my observation that basic entry level houses were becoming unaffordable for average 1st time home buyers. As we know, values continued to grow for another 1-1.5 years to the point that almost no one could afford a home creating a value bubble. Then the market began to adjust. Of the Fannie Mae borrowers defaulting within the last 18 months I have to think that they vast majority of them were those that qualified for their homes based on those affordability enhancements. So in effect Fannie Mae contributed to the bubble and is now working like heck to slow the recovery.

As for what that means for borrowers in the future. It is more and more important to maintain excellent credit scores. If you need to find out more or want to check your credit scores contact me.

Affordability Index Increases

2007-12-01T08:40:00.000-08:00

Starting this blog in the middle of the biggest real estate slump in a decade means that there is going to be a lot of bad news about housing. I don't want to be Pollyanna about the market but I am posting some good news for my first real informational post.

In the last few years we watched home buyers ability to buy a house slip away. This was especially rough on first time home buyers. It is one of the things that lead to the downturn in the Real Estate Market that we are experiencing now.

Now there is some good news for buyers in the Sacramento area. My guess is that news is going to keep getting better.
Source: Capital Public Radio
Spencer

Judy's First Ever Blog Post

2007-11-30T12:31:00.000-08:00

As the title of this post indicates, this is my first ever blog posting. I have to admit I thought blogging was stupid and pointless and then I saw the Cute With Chris podcast/blog and I knew it was stupid and pointless. After spending several hours on the CWC blog catching up on previous pod casts, inside jokes and links to all sorts of different places I had an epiphany. This blogging thing is a really cool tool. It can be fun, informative, professional or whatever the creator desires.

After my CWC experience I now knew I wanted to blog but had no idea how to do it. In a professional conversation with Spencer blogging came up and I realized he was the perfect person with which to co-write a blog. We've worked together on real estate deals, respect the work ethic and knowledge base of the other, are neighbors who like each other, and the best part, he knew how to blog so I could piggyback off his knowledge and get up to speed quickly (note the embedded hyperlink Spence). I read somewhere the successful person surrounds themselves with people who know more than they do so this blog is that concept in action!

After a lunch and many phone calls and emails back and forth Spencer and I came up with the concept for this blog. Some professional information and advice from his lending perspective and my Realtor perspective, some fun stuff, lots of links to our clients' projects and businesses as well as info about and links to the service providers we know and trust. After we get all that in here we'll see what else evolves.

That's what excites me about blogging. Its dynamic nature. Something not working? Change it. New idea? Implement it immediately. No committees, no permission, no worries. One thing Spencer and I agreed is we want to get our past, present and future clients involved in our blog so if you want to leave a comment do it! Have an idea for us? Share it! Think our blog can help someone you know who has real estate needs? Link it!

While some of this may be fun stuff and not real estate oriented, the main goal of this blog is to inform, involve and educate our readers about everything related to home and land sales. We have many years of real estate and lending experience to share and we want to be there to help guide you and advise you during your home sale or purchase.

So here we go! Day two of the blog and many more to come.

Judy H.

First Post

2007-11-29T13:52:00.000-08:00

This is the first post on the new Riverfront Real Estate Blog. The blog has been created by Judy Huestis and Spencer Rubin as a means of communicating with our clients, past present and future. We hope to provide useful information about all things real estate related especially when it comes to our community the Coloma Lotus Valley.