New Long Beach Market Trend Graph

Here is the new Market Trend Graph for Long Beach. Listings are climbing and open escrows are staying pretty flat.

They Listed at $600,000 and Sold for $400,000 -- What Happened?

A great article about homeowners expectations in the past few years. Some made alot of money some hoped they would make alot of money. The moral of the story is a properly priced home will sell. If not, then expect the worse case scenario....


"The market was hot and we were optimistic." That was the climate when Dave, who asked that we not use his real name, and his wife put their house on the market for $600,000. The house, located in a Washington, D.C. suburb, received no offers. More than a year passed, during which time they painfully pecked away at the price, dropping the listing $10,000 here, 20 grand there. It finally sold for less than $400,000. What on earth went wrong?
Click Here For Full Article

New Long Beach Market Trend Graph

Listings are rising a little faster than escrows last month.

Mortgage Update: 100% Financing a Thing of the Past?

The mortgage industry is facing a tough time right now as what we considered the norm in the past few years, is undergoing a drastic change. Due to the recent turmoil in the secondary mortgage market the 100% or 80/20 type programs are getting tougher to qualify?

Whats happening is the minimum FICO credit score requirements are being increased and Combined Loan to Values are being reduced. So instead of an 80/20 type of program, some are being limited to 80/10 or 80/15. As a result potential home buyers may be required to put money down.

This seems especially true for loan programs that have a limited or reduced documentation features. Programs such as Stated income programs, No documentation programs etc.

Other changes are increased reserve requirements (Monthly Payments) ranging from 4 to 6 months in the bank.

So if you are a potential home buyer who has sat on the fence waiting for something to happen, the best thing to do is to talk to a highly qualified mortgage professional. See what you qualify for and buy now as it may cost you more later by waiting.

Darrin Neu

C.A.R. reports entry-level housing affordability at 25 percent in California

The percentage of households that could afford to buy an entry-level home in California stood at 25 percent in the fourth quarter of 2006, compared with 27 percent for the same period a year ago, according to C.A.R.'s First-time Buyer Housing Affordability Index (FTB-HAI). The minimum household income needed to purchase an entry-level home at $477,400 in California in the fourth quarter of 2006 was $96,760, based on an adjustable interest rate of 6.36 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $3,230 for the fourth quarter of 2006.
Read the whole story...

New Long Beach Market Trend Graph

Here is the new Market Trend Graph for Long Beach. Inventory is inching up but so are escrows. This trend should continue through the busy season.

No More Subprime Loans

What does this mean for you? I've had borrowers with questionable FICO scores in the past who could, if they were willing to pay enough, get financed for a real estate purchase. What's been happening is as variable rates unlock and start to go up, marginal borrowers default on their loans and go into forclosure. Since these people were mortgaged up to the max and prices have come down, this left the second trust deed holder out in the cold. Since this is happening on a massive scale, subprime lenders holding that second are now going out of business in record numbers or are just unwilling to lend on those high-risk people. This is cutting off the bottom of the list of those who can afford to purchase a home. In the long run, this will keep prices from rising much for a while in the first-time buyer's market. On the plus side, it should keep interest rates in check for a while. Here are some interesting stories I found only today:

Late mortgage payments hit 3½ year high - MSNBC.com

You've Defaulted on Your Mortgage: Now What? - ABCNews.com

Stocks Tumble on Mortgage Concerns - Forbes.com

U.S. Subprime Mortgage Delinquencies at 4-Year High - Bloomberg

More on what you should do now in a later post.

Deborah