Thanksgiving Gift: A new member of the family

By Alicia Lanier, REALTOR

In more years than I can remember, I enjoyed having my three daughters, their spouses and my darling grandchildren all under my roof and seated round the Thanksgiving table. What a celebration of blessings and bounty! And, making this lovely day even more special, was the arrival just a few days prior of Newman, my newest grandson, who weighed in at 7 pounds and 19 inches long upon birth. My Congratulations to Newman’s parents, Suzy and Mike, and his 3-year-old brother, Strummer.

I hope that each of you enjoyed a Thanksgiving holiday as awesome as mine.

Realtors Call for Government “Buy Down” of Home Loan Interest Rate Deduction

By Alicia Lanier, REALTOR

America’s largest trade association, the National Association of Realtors (NAR), is calling for a home loan interest rate deduction of one percent to stimulate housing sales.

In a presentation to the annual conference today in Orlando, Florida, NAR’s Chief Economist Lawrence Yun said: “Today we’re actually seeing favorable conditions for affordability, and this has led to rising home sales in areas that have seen the most marked home value declines. Some homeowners who were hesitant before have realized that, in many cases, now is a good time to buy a home.”

Affordability is as high as it’s been since 2003, as measured by NAR’s Housing Affordability Index. The current index is at 130, which means that a family earning the median family income has 130 percent of the income necessary to qualify for a conventional loan covering 80 percent of a median-priced existing single-family home.

This increased affordability has led to improved home sales. In Arizona, California and Nevada, sales rose 20 percent or more between the first and second quarters of 2008. Shrinking inventory is another sign that the real estate market is stabilizing. Inventory of new homes has been falling since a peak inventory of 570,000 new homes in August 2006, and as of September 2008, new-home inventory had fallen to 394,000. Inventory of existing homes was at 4,266,000 in September – a 9.9-month supply at the current rate of sales, down from an 11.2-month supply in April.

“These signs are encouraging, but more must be done,” said Yun. “Our research indicates that an interest rate deduction of just one percentage point could result in as many as 840,000 additional home sales, which would further reduce the inventory of homes by as much as 20 percent.”

To encourage more buyers into the housing market, NAR has proposed that the government buy-down mortgage interest rates to ensure fixed low rates for home buyers. NAR also presented a four-point plan to Congress last month recommending, in part, that the repayment feature be removed from the first-time home buyer tax credit, that the tax credit be extended to all buyers, and that higher FHA and conventional loan limits be made permanent – up to $729,000 in high-cost areas – to give buyers in these areas access to safer, more affordable mortgages.

“NAR will continue to press for housing stimulus, but recovery will also depend on restoring consumer confidence, and Realtors(R) are an essential part of that,” said Yun. “Buying a home has been a path to long-term wealth accumulation for a vast number of homeowners, and Realtors(R) know this. Our members must share their local market insights and knowledge with their customers and clients to help them make informed, smart decisions in these difficult times.”

Alicia Lanier is a REALTOR, e-PRO, and member of the Coldwell Banker Sterling Society which places her among the top 11% of agents internationally.  Contact her at Alicia.Lanier@cbnorcal.com or 408-491-1634

Embracing This Time of Change for Our Country

By Alicia Lanier, REALTOR

Someone said long ago that the only thing certain is change. Indeed. And, in the recent Presidential and Congressional elections, a majority of our nation’s voters were clear in choosing change now!  In a message to thousands of agents on his real estate team, Coldwell Banker Silicon Valley President Joe Brown had this to say about the sea change coming for our country and its real estate markets:

Regardless of your political persuasion, this week’s election was one for the history books. After a long, defining, historical race to the White House, Senator Barack Obama defeated Senator John McCain, earning him the position of the 44th President of the United States. President Elect Obama, in his acceptance speech said, “It’s been a long time coming, but tonight, because of what we did, on this date, in this election, at this defining moment, change has come to America.”

In interviews following his win, Obama said that his first order of business will be to focus on restoring our economy. Only time will tell if the change he has promised becomes a reality but for now, President Elect Obama’s plans for the White House remain clear.

“We must move forward, quickly and aggressively, with a middle-class rescue plan that will create jobs, provide relief to families, help homeowners and restore our financial system,” said Obama.

Among the notable plans he has to help stimulate the economy (according to CNNMoney.com):

• Allowing savers to temporarily tap into their retirement plans without early withdrawal penalties
• Require financial institutions participating in bailout to put a 90-day moratorium on foreclosures for homeowners “acting in good faith
• Allow troubled homeowners to refinance to a loan insured by FHA
• Create a 10% tax credit for homeowners who do not itemize their taxes
• Create a $10 billion fund to help victims of predatory loans
• Authorize bankruptcy judges to reduce mortgage principal

Said our President Elect: “If the government can bail out investment banks on Wall Street, then we can extend a hand to folks who are struggling on Main Street.”

Again, only time will tell, but the hope for something new and a better future for all of us is welcome news right now.

National Association of Realtors (NAR) President Charles McMillan concurs noting, “We’re in a good place. Realtors are excited by this historic election and stand ready to work with our new president and the new Congress on issues that are at the heart of the American dream of homeownership.”

Though buyers are still cautious, things seem to be brighter in Silicon Valley. Many of our Agents are gearing up their business for the start of 2009. Buyers—though cautious—are out touring properties, visiting open houses and meeting with their Realtors. We seem to have a lot of buzz, though little of it has resulted in notable amounts of activity. I think much of that is due to the volatility in the stock market over the last several weeks and the lack of knowing who our next President would be. Now that one of the two is settled, I think we should see a return to stability and security in this region.

My message this week to everyone is let’s embrace this time of change. Whether you are a Republican, a Democrat or an Independent, we all need to join together in restoring our market and move ahead from here with the bright prospects of our future just beyond us. It is very possible that the worst of times has passed. But even if they haven’t, real estate remains an important investment, not only financially, but personally as well. It is in times like these that we need to be reminded of and embrace the American dream and remind ourselves that owning a home is more than an investment—though it remains one of the best investments we will make in our lifetime. Our home is where we raise our families, build traditions and create memories that will last a lifetime. And I can’t think of a better investment in our lives and our own well-being than that. ~ Joe Brown, President, Coldwell Banker Silicon Valley

Alicia Lanier is a REALTOR, e-PRO, and member of the Coldwell Banker Sterling Society which places her among the top 11% of agents internationally   Contact her  at  Alicia.Lanier@cbnorcal.com or 408-491-1634

In Memorium: Square Feet Blog at Mercury-News

By Alicia Lanier, REALTOR

Too bad the San Jose Mercury-News has pulled the plug on Sue MacAlister’s Square Feet blog … her good bye ran late last week and I suggest you take a look at http://blogs.mercurynews.com/realestate/2008/10/27/goodbye-to-square-feet/

Here’s hoping that Sue will find another venue for her blog after she returns from her vacation.

Homeowner Strategies in Uncertain Times

By Alicia Lanier, REALTOR

Are there any among us who are untroubled by the ongoing news stories about the country’s economic distress? I would say not. But the individuals who are most concerned are those whose adjustable rate mortgages are about to “reset” to a higher interest rate. Many are now considering more conservative options, like refinancing to a 30-year fixed-rate loan.

Financial experts recommend that homeowners who are concerned about their ability to continue making their mortgage payments do the following: try to refinance an adjustable rate mortgage into one that is fixed for a set amount of time; create a household budget to help determine the debt-to-income ratio; avoid using credit cards, which can add unnecessary stress when the bill arrives; keep an emergency fund of liquid assets with enough to cover three-to-six months worth of household expenses; and only purchase necessities.

If your loan is due to reset, avoid mortgage shock and make sure you know what index your loan is tied to, says the California Association of Realtors (CAR). It is important that homeowners who have adjustable-rate mortgages (ARMs) are aware of the index to which their mortgage is linked, as this determines the monthly payments. Payments of loans tied to the LIBOR, which is in the interest rate that banks charge each other to borrow money, could increase if the loan resets in November or December because of the recent increase in the index’s rate. Most ARMs are set to the one-month, three-month, or six-month LIBOR. Homeowners who are concerned about possible payment increases should contact their local bank, credit union, or mortgage broker to rewrite their ARM into one with a fixed interest rate, if possible.

Rates on adjustable-rate mortgages are determined by two factors –the loan’s index (LIBOR, COFI, Treasury) and the lender’s margin. A guideline to help determine the new rate when a loan resets is to add the lender’s margin to the new index. For example, if a homeowner’s ARM resets according to the six-month LIBOR index, which was 3.70 percent as of Oct. 22, and the lender’s margin is 2.5 percent, then the new rate would be 6.20 percent.

CAR says some mortgage brokers recommend that homeowners who have ARMs and are unaware of to which index their loan is set, should review their loan documents again to determine if they should consider refinancing into a new loan with a fixed rate or possibly one linked to a different index.

Alicia Lanier is a REALTOR, e-PRO, and member of the Coldwell Banker Sterling Society which places her among the top 11% of agents internationally   Contact her at Alicia.Lanier@cbnorcal.com or 408-491-1634