Saturday, December 20, 2008

Lake Havasu Real Estate and Mortgage Rates

Wow...Mortgages are nearing 4.5% and still falling. Interest rates have never been lower only encouraging home purchase. There has never been a better time to buy in our lifetime. Mortgage Rates at record lows and Lake Havasu Real Estate at 5 year lowes. This is the time to buy. Everyone is waiting to find the perfect entry point and I believe it is now. You don't want to be the person who looks back five years from now and says I should bought when it was this price or that price. I should have bought 10. Now is the time to buy Lake Havasu Real Estate. Call today or e-mail me for more information.

Mortgage Rates Head Towards 4.5%

The news is abuzz about the Treasury lowering home loan rates to 4.5% to stem the foreclosure crisis and stimulate more purchasing activity but details have been lacking. The Treasury Department stated it is looking for additional ways to help the struggling housing industry and believes lower rates may be one possible solution. This is just an idea being discussed and there is no concrete plan in place to make this happen.
This idea is similar to the November 26th announcement from the Federal Reserve where they indicated the intent to purchase up to $500 billion in mortgage-backed securities from Fannie Mae, Freddie Mac and Ginnie Mae. In addition they would buy another $100 billion in direct debt issued by those firms. The November news caused bond prices to spike higher and forced mortgage rates lower. Just like any commodity, whenever tremendous buying interest exists, prices rise. Mortgage rates fell almost .500% in rate following the announcement. However, the following week, market forces continued and mortgage interest rates pulled back some from those lows.
It’s very important to remember that there are no details to support the Treasury’s idea as of yet. The Federal Government does not directly dictate home loan rates. Rates are determined by price movements of Mortgage Backed Securities (MBS), which compete for investor funds in the open market. The Treasury can buy mortgage bonds on the open market but remember that they are not the only entity buying and selling these instruments.
The Treasury is in a very tough position in trying to manipulate home loan rates. Creating a new Federal mortgage program could be very risky. How would rates be set, who would qualify, and can the funds be used for purchases and refinances are just some of the questions being asked. The other critical concern is implementing such a program without destroying the current mortgage securities market. Doing so could have the unintended consequence of causing additional economic turmoil.
Rates are not going to 4.5% with the wave of a wand by Hank Paulson, Ben Bernanke or president-elect Obama. As a matter of fact, the massive borrowing to fund the TARP, (Troubled Asset Relief Program which is part of the Bail Out Bill) program has had a negative effect on rates. At this time, the announcement still leaves a lot of uncertainty. What we do know is that rates are at historic lows and house prices have moderated setting up a great scenario for people who need to refinance or are looking to buy a home. It may or may not happen but waiting for rates to fall to 4.5% may leave people sorely disappointed.

Monday, December 15, 2008

Homes sales Jump in Lake Havasu

Lake Havasu City’s Real Estate market continues to show improvement with more sold signs going up on homes than for sale signs.Pat Landry, president of the Lake Havasu Realtors Association, says it is a buyers market right now, and prospective homeowners are recognizing it.Residential homes sales jumped from 70 in November 2007 to 84 this past month, bringing the yearly total to 1,131 homes sold. That number is still down from this time last year when the number of homes sold was right at 1,167, but Landry is confident Lake Havasu City should surpass the 2007 numbers by the end of the year.The total number of active listings for November 2008 was 1,518. In November 2007, the total number of active listings was 1,763.“People are looking to buy, and right now is the best time,” she said.The city’s part-time winter residents are having an impact. Landry is seeing quite a few “snowbirds” returning, although she could not provide an exact figure.A good amount of those winter residents have surprisingly been from Canada, she says. Many Canadians are delaying their arrival, though, until the exchange rate improves from the Canadian dollar to the United States dollar.Interest rates are certainly playing an important part with home sales, Landry says. Rates are as low as they have been in over 10 year right now at 5.5 percent.“It’s a wonderful time to buy,” Landry said. “Interest rates have dropped to as low as 5.5 percent.”Landry has heard talk rates could continue to drop in the next few months to around 4.4 percent.Landry said the government has really worked to keep interest rates low. She believes this could lead to a very successful year in 2009 for realtors.“I can’t remember a time when the interest rates were as low as five percent,” she said.Landry is not sure what impact the new Obama administration would have on the housing market, as of yet. She does expect the market will continue to improve, though, through 2010.With lower interest rates, mortgages continue to go down. According to Landry, a mortgage for a $200,000 would be around 1,073 a month right now, with a five percent interest rate. She said typically interests rate are between six and seven percent. At 6.5 percent, the mortgage for a $200,000 home would be around $1,264 a month.The average sale price in Lake Havasu City dropped substantially from November 2007. Homes sold at an average of $187,354 this past November. That number is down almost $100,000 from last year, when the average sale price was $275,558.Those figures are right in line with the median sale price of homes in the city. Last year in November, the median sale price was $236,950. This year for the month of November the median price was $158,950.One area not seeing much improvement is the number of vacant lots sold. Permits are way down. Landry says people just don’t see the need to build right now when they can purchase resale. She said it is unfortunate, because this is keeping a lot of contractors out of work, but people just don’t want to seem to take the time to build, and construction costs are quite a bit higher.The number of foreclosures continues to rise, as well. In October, foreclosures were 35-40 percent of the homes sold. That number rose to around 61 percent in November.Landry says the yearly total is still relatively average. From Jan. 1 through November 2008, the number of foreclosures in the city stood at 406, 40 percent of the overall number of homes sold.The market is showing improvement, but Landry knows that some realtors are still struggling. She has some suggestions for those realtors. Landry said it is important that realtors reach out to people. Most of her clients have come from referrals. Landry has spent countless hours marketing, making phone calls and sending out letters to prospective buyers.She says it is also important for realtors to keep in touch with their homebuyers, especially first-time buyers, who typically know very little about what they are getting into.“There is nothing more exciting than the first time you buy a home,” she said. “You really have to guide first-time buyers.”

By Tony Waggoner
Today's News Herald

Thursday, December 4, 2008

Patience Really is a Virtue in The Foreclosure Market

Foreclosure, Forelcosure, Foreclosure… That is what buyers these days want. The problem is the best deals usually take the most amount of time. If your lucky you can pick up a bank owned property in Lake Havasu, write a contract, and close in 30-45 day but more often than not it takes longer. This is something that buyers need know. When dealing with a bank everything just takes more time. Right now in Lake Havasu 30%-40% of all homes sold have some sort of Dealing with a Bank.

First lets look at Short Sales or Pre-Foreclosure situations. A short sale is when a bank agrees to accept less the seller owes to sell the home to the new buyer and to not have to take possession of this home. These types of sitiatuations take the longest.The bank will usually aggree to take fair market value or a little bit less to not have to take the property back. This is time consuming on every front for both buyers and sellers. It take can take up two weeks just to get a response that they received the contract. It can take up to 3 months to hear if they have accepted the contract and can possibly take up to six months to close. This is generally worst case scenario and many of the banks are implementing great programs to help move these homes as quickly as possible. But be prepared that you could one of the few that takes several months to close.

Next, lets look at Foreclosed homes. These are homes that are already owned by the bank. This is also a time consuming process but usually a little bit less time consuming. The first thing you should know is it is all a process and a home has to transfer through it departments. For example, lets say your neighbors home is foreclosed on. The bank first takes it over and changes the locks, but then it has to go through the process. A home can be owned by the bank and not put on the market for several months because they might need to clean it up or clear up some of their own paperwork. Once it is put on the market is works like most home sales do. You find a house and submit an offer. Now they may make a counteroffer. This takes a little bit longer than a normal sale. It take up 2 week to get an offer. Then you are usally notified verbally that the bank has agreed. The bank sends special addendums out and the buyers signs them. This means you can move forward with inspections but you still probably won’t have an official contract signed by both parties. This will cause additonal worry and stress but it is pretty standard procedure. The problem you face not have a signed contract is that you can’t lock your rate on your loan. Once you get all the paperwork back the buying process moves pretty much on a normal pace.

Some of the best deals in Lake Havasu or Foreclosure and Pre-Foreclosure properties. With this information maybe you can eliminated some stress and have patience with the process. Knowing what your up against will help you to go in with your eyes wide open. If you would like any further information about Foreclosure and pre-foreclosures properties or a list of available properties please feel free to e-mail me at amber@havasuhomesource.com