Archive for March, 2008
New Rules: No More Funny Money, Credit is King
March 28th, 2008 Categories: RE Week in Review, Real Estate News, mortgage loans
We’ve been waiting for it - here it is! The new economic stimulus package has reached the mortgage product market - and we have the new “conforming jumbos”.
New loan limits are 125% of the median house price - $580,000 for a Davis jumbo.
The days of the computer generated approval are over! You will need to provide full documentation - income verification, asset statements, credit scores - to qualify for a loan approval. Maximum seller contribution is 3% for a single family home. Non-traditional credit is no longer allowed, and the maximum debt-to-income ratio has been lowered to 45%.
Credit is king - you will be rewarded for your good credit, but if your FICO is less than 640, well, how do you feel about renting? For an 85% loan, plan on having a credit score of 700. To get cash out, look for a 720 FICO. For second homes, loans are based on a 60/40 loan to value ratio, and dependent on a 660 FICO.
Loans will be risk based. For the same loan (with one point), someone with a FICO of 720 or higher may get a 5.75%, while the person with a 659 FICO will pay 6.375% for the same loan.
Additionally, the FHA reform bill is pending to make FHA changes permanent. In Yolo County, the loan limit is $580,000, with a minimum FICO score of 660 and a minimum of 3% cash. For example:
Sales price: $575,000
Cash required: $ 27,359
Loan @ 6.75%: $566,991
Payment: $3677 Principal and Interest
Insurance: $100
Tax: $599
MMI: $233
Total Payment: $4609/ month
Is this all a good thing? Yes, it is. The loan practices of the past decade have defrauded us all, and most of all, they have not been good for the people who have signed up for interest only 5 year ARMs. Well-intentioned people were finally able to buy a house. Inexperienced and often poorly informed, they instead entered in to a loan obligation that they could not sustain. Perhaps if the traditional loan practices had been in place they never would have been buying a home in the first place.
And for those who do have good credit and the ability to sustain a loan, the new jumbo limits are now aligned with the very real price of homes here in Davis.
Find out more details about how the new loans will work in Davis by calling Vicki, Greg or Cara Mengali at Mortgage Resource Network.
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Davis Home Prices : 20 Year View
March 22nd, 2008 Categories: Davis RE Trends, RE Week in Review, Real Estate News
With the abundant news of the mortgage disaster swirling around us, it seems like a good time to take the long view and consider the history of prices in Davis over the past 20 years - the center figure is the median price:
1987 $118,000
1988 $154,300 +21%
1989 $192,000 +25%
1990 $234,700 +22%
1991 $246,600 +5%
1992 $243,200 (2%)
1993 $205,200 (16%)
1994 $187,900 (8%)
1995 $191,600 +2%
1996 $195,400 +2%
1997 $203,500 +5%
1998 $213,300 +4%
1999 $231,500 +9%
2000 $266,600 +15%
2001 $318,700 +19.5%
2002 $393,300 +24%
2003 $438,660 +11.5%
2004 $514,700 +17.3%
2005 $605,900 +17.7%
2006 $601,100 (1%)
2007 $571,100 (5%)
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Up Putah Creek: My Kind of Hummer
March 13th, 2008 Categories: Davis Nature, Photo Tours
Who has the patience/time to sit still enough to see the many amazing little lives around us? Fortunately I live with one who has both time and know-how, and this spring my husband Manfred Kusch has been watching hummingbirds build nests and raise a family, minks swimming in the creek, sacramento suckers (fish, not a baseball team) spawn and more. Enjoy these photographs of spring life along the creek…
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2007 vs 2008: Davis Housing 3 Month Snapshot
March 12th, 2008 Categories: Davis RE Trends, RE Week in Review, Real Estate News
There were 16 homes on the Coldwell Banker realtor tour in Davis yesterday - signs that although late, spring inventory is finally starting to come in. For those of you from out of town, the listings you look at will seem like a throwback to 2005. Prices are still up, homes are better prepared than they were 3 years ago, but they are still Davis homes - sometimes needing a little updating or staging. Ad could read “average home, comes with wonderful town”.
TIP: If you are looking for a gorgeous updated Streng (mid-century modern) tucked away on a lush, quiet cul-de-sac in the center of town, call me to see 826 Cherry Lane. It is an awesome treat!
STILL STRANGE: We are still seeing certain homes selling quickly for over asking price in multiple offers (Almond Lane, Dartmouth, Pine Lane) while other perfectly good homes languish without offers. The schism is so noticeable yet hard to explain. One thing about the homes that sell quickly, they are clean, bright, well priced and thoughtfully prepared for market.
FEW CONDOS: We are up to 28 condos on the market - they are either built in 1972 or they are brand new - not much in between. Price range is $239k for a McKeon Condo to $529k for the exciting downtown Roe Building Unit 201. Average price is $351k with an average of 42 days on the market. I have several condo searches going on and it is not easy to find the happy medium.
THE NUMBERS: Here is a comparison of the period from 12/1 - 3/7 for both 06/07 and 07/08 for Davis only:
Number of units: 91 vs 48
Median price: $508k vs $514k
Days/market: 87 vs 85
Average price: $552k vs $521k
For January and February for the 2006, 2007 and 2008:
Price per sq/ft $363 vs $319 vs. $309
For more information, contact Jamie Madison at 530.574.0596
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“They are going like hotcakes and I can probably get you $100k off”
March 3rd, 2008 Categories: Real Estate News
A client recently called from a weekend real estate foray with this comment given to her by the listing agent, followed by “let’s write an offer!”. Never one to discourage enthusiasm, I agreed to meet just as soon as I checked it out.
I found the listing on the MLS and there were 8 of these lots that had been on the market (DOM) for 74 days, none sold. Digging deeper I saw that 3 had sold about 9 months ago. Deeper yet, I saw that the listed properties had been previously listed for a whopping average of 287 days without selling. And reading on a little further, I learned that the listing agent was also the owner. Real meaning?
“They’re selling like hotcakes” - 3 out of 11 sold almost a year ago, the rest have been on the market an average of 361 days…
“You can probably get $100k off” - I am desperate to unload!
Other things that my client had not considered…building will require a well and a septic system, fencing and electricity brought to the site. Morever, it is in a floodzone, meaning increased insurance and whatever else the future holds.
The property really is pretty, especially now that the trees are leafing out and spring has sprung. She may very well decide to go ahead and it might be a great decision when we look back in 5 years time. The point is, KNOW what you are getting into. Listen and then call your agent. A good agent can quickly get the lowdown on a particular property. This may hold the key to your decision about how you make the biggest purchase of your life.
- Jamie Madison
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