Blog

Some Banks Start To Loosen Up In Underwriting

After a half-decade of tightening mortgage guidelines, banks are starting to “loosen up”.

The Federal Reserve conducts a quarterly survey of its member banks and, last quarter, not a single responding bank reported having tightened its mortgage guidelines for prime borrowers.

A “prime borrower” is defined as one with a well-documented credit history, high credit scores, and a low debt-to-income ratio.

53 banks responded to the Fed’s survey and none said that mortgage guidelines “tightened considerably” or “tightened somewhat” between September and December 2011; 50 said that guidelines remained “basicaly unchanged”; 3 said that guidelines “eased somewhat”.

Mortgage applicants sometimes remark that the mortgage approval process can be challenging. Last quarter’s Fed survey hints that looser standards are coming. 

Not since before the recession have banks lowered mortgage approval standards like this and it bodes well for this year’s Palm Springs  housing market. Real estate agents report that 1 in 3 home sale contracts fail with “declined mortgage applications” as a leading cause.

Looser mortgage lending standards should mean more home loan approvals for buyers, and fewer contract cancellations. This can spur the housing market forward.

Make note, though. “Looser standards” should not be confused with ”irresponsible standards”. It remains more difficult to meet bank standards as compared to 5 years. Today’s underwriters are more conservative with respect to household income, overall assets and credit scores. 

Even as compared to one year ago:

• Minimum credit score requirements are higher
• Downpayment/equity requirements are larger
• Maximum allowable debt-to-income ratios are lower

For buyers and refinancing households gaining approval, though, the reward is the lowest mortgage rates in a lifetime. Mortgage rates in CA continue to fall, helping home affordability reach new highs.

If you’re looking at new homes in Palm Springs or refinance one, your timing is excellent.

Home Affordability Threatened By Friday’s Jobs Report

This week, once again, we find mortgage rates are on a downward trajectory. Some conforming mortgage rates have returned to near all-time lows. After Friday morning’s Non Farm Payrolls report, however, those low rates may come to an end.

It’s a risky time for California home buyers and would-be refinancers to be without a locked rate.

Each month, on the first Friday, the Bureau of Labor Statistics releases its Non Farm Payrolls report for the month prior. More commonly called the “jobs report”, Non Farm Payrolls provides a sector-by-sector employment breakdown, and the nation’s Unemployment Rate.

In December of 2011, the government reported 200,000 net new jobs created, and an Unemployment Rate of 8.5%.

For January 2012, economists project 135,000 net new jobs with no change in the Unemployment Rate and, depending on how accurate those predictions are proved, FHA and conforming mortgage rates are subject to change. The monthly jobs reports tends to have an out-sized influence on the direction of daily mortgage rates.

Job growth is a key cog in the economic growth engine and mortgage rates change daily based on short- and long-term economic expectation. As more people join the workforce, economic expectations change; the economy tends to expand, breeding optimism among investment. When this occurs, it often spurs investment in the stock market, which tends to leads mortgage rates up.

In short, in a recovering economy, when job growth is strong, all things equal, mortgage rates rise. Home affordability suffers.

So, for today’s rate shoppers, Friday’s job report represents a risk. The economy has added jobs over 15 straight months, a streak that’s added 2.1 million people to the workforce. Although the jobs market remains weak and well off its peaks from last decade, a 15-month streak is worth watching. More jobs means more more income earned nationwide, more money spent by households, and more taxes collected by governments.

This items build a foundation for economic growth and Wall Street is watching.

If tomorrow’s Non-Farm Payrolls shows more jobs created than the estimated 135,000, mortgage rates are expected to rise. If the jobs figures falls short, mortgage rates should fall.

The Non-Farm Payrolls report is released at 8:30 AM ET.

http://www.palmspringsrealestates.com

Case-Shiller Index Says Detroit And Washington DC Lead The Market

Standard & Poors released its November 2011 Case-Shiller Index this week. The index measures the change in home prices from month-to-month, and year-to-year, in select U.S. cities.

According to the data, for the second straight month, home values fell in 19 of the Case-Shiller Index’s 20 tracked markets. In addition, also for the second straight month, Phoenix, Arizona was the lone Case-Shiller-tracked city in which home values rose.

Overall, November’s Case-Shiller Index showed a 1 percent decrease in home values between October and November 2011, and a near-4 percent decrease between November 2010 and 2011, putting home values at roughly the same levels as 8 years ago. Don’t read too far into it, however.

The Case-Shiller Index, though widely-cited, remains widely-flawed.

As a buyer or seller , relying on the Case-Shiller Index for market research can lead you to improper conclusions. To understand the Case Shiller Index’s methodology is to understand why.

First, the Case-Shiller Index draws its data from a very limited geography.

There are more than 3,100 municipalities nationwide. The Case-Shiller Index tracks just 20 of them. And they’re not the 20 largest, either. Four of the Top 10 Most Populous U.S. Cities are excluded (Houston, Philadelphia, San Antonio, San Jose) whereas Minneapolis and Tampa are not.

Minneapolis is the 48th largest city in the United States. Tampa is #55.

Next, when Case-Shiller Index gathers its data from its 20 cities, it only includes the home sale data of single-family, detached homes. This means that sales of condominiums and multi-unit homes are specifically excluded from the index. There are some cities — Chicago and New York, for example — where condominium sales represent a large percentage of the overall market.

The Case-Shiller Index ignores that.

And, lastly, when the Case-Shiller Index is published, it’s published on a 60-day delay. Its data is not “current”, therefore, and does little to tell buyers and sellers of La Quinta and the country what’s happening in their home markets right this minute. Instead, the Case-Shiller Index tells us how the housing market looked two months ago.

If you’re active in the Palm Springs Real Estate market, either as a buyer or a seller, the Case-Shiller Index does you little good. For real-time data that actionable, speak to a real estate professional instead. It’s where you’ll find your best, most reliable and relevant information.

Desert Princess Country Club

Desert Princess

 

Desert Princess Country Club: There are few places in the United States that compare to the stunning area of Palm Springs in Southern California.  Just 90 miles east of Los Angeles through Interstate 10 rests the Desert Princess Country Club, which provides people with a plethora of reasons to visit.  From the incredible housing to the fine dining to the countless options for entertainment, this is an ideal facility for anyone and everyone.

There are over 675 condos and 408 villas that provide numerous options for renters to look into.  While rental rates do vary from season to season, the average prices are $2,400 per month for a one bedroom condo and $3,200 for a two bedroom condo.  Those who are looking for a villa will find two bedroom villas around $3,800 and three bedroom villas with a pool at $4,500 per month.

Locate in the center of the facility is the Country club, which is a golfer’s heaven.  There is an incredible pro shop, a complete PGA professional golf school, and a world class 27-hole championship course to take advantage of.  While golf is a large part of any country club, this is just the tip of the iceberg for what you will find at the Desert Princess Country Club.

There are a number of local attractions that entertain guests and residents.  Some of the more notable attractions include the Palm Springs Tram, the Palm Springs Follies, and the Annual Bob Hope Classic.

This country club brings Vegas to you as there are several casinos nearby to enjoy.  While not everyone is an avid gambler, there is the “Rodeo Drive” of the desert located nearby with the wonderful El Paso shopping district.

Sports and activities have always played a major role in country club’s and Desert Princess Country Club is no different.  The 27-hole championship golf facility features lavish fairways, gorgeous Bermuda greens, 21 lakes, 85 sand traps, and four different sets of tees.  If tennis is your sport, you will enjoy two lighted tournament courts and eight additional courts.  This club also features the Moore Tennis Academy and plays host to a number of different events.

There is a workout facility that guests and residents can take advantage of with a knowledgeable fitness trainer available as well.  There are a number of yoga classes that will challenge your body while putting you into a deep relaxation.  Following the vigorous workout, you can then head over to the spa and enjoy various treatments like customized masks, body and facial waxing, and skin analysis.

In all, the Desert Princess Country Club offers a little bit of something for everyone.  From the outstanding world class golf course to the numerous tennis courts to the affordable and exquisite Villas and condos, this is the perfect location for anyone looking to live a dreamy lifestyle.

Housing Crisis Tax Relief Bill Gets The Ok From Lawmakers In California

It’s official; the Governor has said he intends to sign the Tax Relief Bill into law.  The Tax Relief Bill that the California Legislature just recently passed is a bill that could potentially help numerous homeowners who have been devastated by the housing crisis.  At the end of the day, this bill could save homeowners thousands of dollars in taxes.

The bill will essentially provide relief for homeowners who have received mortgage modifications, lost their homes to foreclosures, or were forced to sale their homes for less than they owed on their mortgages.  In essence, it will prevent the cancelled debt from being treated as taxable income.

Taxes in general are burdensome for people, but the thought of having cancelled debt being treated as taxable income is a nightmare.  An Associate broker in Indian Wells claims, p[eople buying Real Estate in Indian Wells should get help to alleviate tax concerns with sellers in the short-sale market.

If you are buying Real Estate in Palm Springs  this will save people a great deal of money while still allowing them to do short sales in Palm Springs.  They will basically be able to continue doing short sales without being found liable for the difference in the short sale price.

So what does this mean?  Look at it this way; if a homeowner who bought a home for $750,000 and sold if for $500,000 in a short sale, it was believed that the homeowner would be liable for the difference of $250,000 in taxes for forgiveness.  Now, people can say goodbye to the forgiveness and still take advantage of short sales. 

As one can imagine, many were questioning whether they even wanted to mess around with short sales prior to this bill.  No one would want to be responsible for forgiveness when it can potentially be hundreds of thousands of dollars.  Now, Coachella Valley’s market can continue to prosper because of the fact that short sales are a large percentage of why the market is so hot.

Congress originally addressed this problem with the Mortgage Forgiveness Debt Relief Act of 2007.  Although it has taken some time, California law has finally stepped up and conformed to the federal tax change, which will run through 2012. 

Sen. Ron Calderon says it’s finally time to help people who have lost their homes or people who have been looking at an insurmountable state tax bill that is not even within their price range.  He says it “will provide financial shelter for tens of thousands of Californians.”

It was the Assembly and Senate that passed the bill following the removal of a provision regarding tax fraud penalties that had Republican Gov. Arnold Schwarzenegger objecting.  In addition, the bill also said that renewable energy companies receiving grants through the American Recovery and Reinvestment Ac would not be able to report these grants as taxable income. 

Governor Schwarzenegger said he wants to sing the bill to give people who are struggling some relief.  His goal is to assist businesses and homeowners in any way he can and this is one way to do just that.

Coachella Music Festival

Coachella Music Festival has done it again with yet another tremendous concert event set to take place.  The Coachella Music Festival three day event will showcase a plethora of elite bands and musical artists featuring a wide array of different music genres.  Beat The Rain PSA will be held on the weekend of April 16th and will go thru Sunday, April 18th.

If you are looking to get a good spot, the best time to arrive is around 9:00 am as this is when parking opens.  Arriving this early will allow for possible traffic and security search at the entrance.  While camping opens up on Thursday, the Venue gates will not open until 11:00.  The good news is the party lasts all day and night as the festival will end at 1:00 am on Friday and Saturday and midnight on Sunday.

To get exact times for each concert performance you can check the web site a couple of days prior to the festival.  In addition, there will be a festival guide that is passed out upon entrance.  This will make it easy to find the band you want to see and what time they will be performing. 

There are a number of items you can and cannot bring into the festival making it all the more important you understand the list prior to arriving.  A common item that many often bring to festivals that is actually not allowed at Beat The Rain PSA is an umbrella.  The reason for this is because it can block the view of other festival goers.

Some items you are allowed to bring include chap stick, eye drops for contact lenses in a marked container, and walkie talkies to stay in touch with family and friends.  You can also bring medical prescriptions, but you will want to talk to security so they know your situation.  All medical prescriptions and accompanying names on the containers will need to match your ID.

Backpacks are allowed, but only a medium sized backpack.  A medium backpack consists of a bag that is no bigger than 20″ tall, 15″ wide and 9″ thick.  Bags will need to fit into a box that is similar in size to the system used at Airports.  If your bag does not fit in the box you cannot bring it into the venue.

As you can imagine, there will be a number of different commodities available for event attendees.  There will be flushable toilets and sinks available as well as vegetarian/vegan food.   There will be ATM’s available both inside the venue and all around the event making it easy to get money at any time.  While there will be lockers on site, just know there will be a very limited amount to rent. 

The weather will play a major role in what kinds of structures are put up to accommodate the comfort of guests.  If temperatures do get real hot there may be mist tents available.  Regardless, there will be bottled water sold for just $2.  There will also be sunglasses, visors, hats and sunscreen being sold at booths on site.

Keep in mind  parking could be tough as there will be a great deal of traffic to deal with.  Day parking is free, but there is no overnight parking allowed except for onsite campers.  There are plenty of taxis available and a bus stop and train stop is just 3 miles from the venue. 

Tickets to the event are sure to go fast considering the incredible line-up that is planned for the event in Coachella.  If the festival does not sell out in advance, you will be able to purchase tickets at the box office on the show dates.  However, this is not recommended as they are going quickly.  If you would like, you can purchase single day tickets.  Otherwise, there are three day passes that allow you to enjoy everything the weekend has to offer.  A three day pass will run you $285, which is a bargain with the event that is planned.

With that said, you may be wondering exactly who will be showcasing the Beat The Rain PSA festival.  Some of the bands that are expected to appear on opening day on Friday include Proxy, Jay-Z, Alana Grace and Grizzly Bear.  As for Saturday, MGMT, Muse, Coheed and Cambria, and Craze will be taking the stage.  Finally, the festival will come to a close with musical performances from Phoenix, Orbital, De La Soul, Gorrilaz and many more.

Indian Wells Country Club in La Quinta, CA

The Indian Wells Country Club is a golf establishment that has been around since 1956 offering members a spectacular community full of life and energy.  Indian Wells Country Club, also known as the “Fun Club of the Desert.” Between the spacious clubhouse, the private dining areas, and the fantastic golf courses, this is certainly a lively Country Club that serves up something for everyone.

At the heart of every country club is a golf course and in the case of the Indian Wells Country Club you will find two.  The club is proud to present 36 championship holes on two superb courses.  The Classic Course is the original course founded by Desi Arnaz, Paul Prom, Eddie Susalla, Linn Johnson, Earl Murphy, Milt Hicks, Bill Worthing and John Curci.  The 6,479-yard par 72 course was built in 1966 and serves up a number of challenges including a 127-slope rating.

The Cove course is the second on land stretching 6,558 yards with a slope of 121.  This course was added onto the premises several years after the Classic Course and provides golfers with a second challenge with unique and creative holes.

What makes the Indian Wells Country Club so special is that the fun does not stop at the golf course.  There are a plethora of other activities to enjoy whether you are just a member or a part of the community.

You can’t talk about this country club without mentioning the spacious 70,000 square foot clubhouse.  Inside the clubhouse you will find a state-of-the-art fitness center with men’s and ladies locker rooms, men’s grille, grille and four separate dining areas for weddings and additional functions.

Tennis is another activity that comes highly regarded in the vicinity.  Wall Street Journal even said the surroundings truly brought the tennis garden to life with the weather and scenery near by.  The Indian Wells Tennis Garden is a 55-acre tennis facility that features a year-round, world class tennis club, a 16,000 seat stadium, and a number of special events like concerts and festivals that are hosted in the stadium.

Whether you are looking to soak up the sun in a pool, stay fit in the gym, or enjoy the outdoors with some tennis or golf, the Indian Wells Country Club is a lively community for all.  With gorgeous weather and breathtaking views of the mountains, there is no better place to live.

Home Sales Continue To Soar In September

Despite the troubling economy one thing that continues to flourish is home sales. Home sales soared in the month of September by the largest amount in more than 26 years and the tax credit for first-time owners certainly played a part.

The month of September showed tremendous results with a jump of 9.4 percent bringing home sales up nearly 24 percent since January. The problem is we may be nearing the end in rise of home sales if Congress decides to not extend the credit of up to $8,000 for first-time buyers. As of right now that deadline is set for November 30.

What the market is finding is many people are jumping the gun on finding a house prior to the deadline just in case it is not extended. After all, $8,000 is a huge savings on a first home. This is what has contributed to a nationwide sales rise of 5.57 million last month. This was by far the strongest month that could have been predicted.

Home sales are not the only positive in the real estate market as the inventory of unsold homes fell nearly 8 percent to 3.6 million. This number is less than an eight-month supply considering the way homes are being sold today.

Las Vegas and Southern California are seeing incredible competition for low-priced foreclosures. Real estate agents are finding multiple offers on homes before a single one is finally accepted. The more aggressive the better nowadays.

Between the tax credit and the low-priced foreclosures or short sales, the market is booming in this area. It is not out of the ordinary right now for an agent to write five different offers for a single buyer on different properties to ensure they get one of them.

With all of this said, unfortunately economist’s fear we are not out of the woods quite yet with the real estate market. There is no question that home sales and housing construction has raised. However, it is believed that prices will resume their descent. The sales price last month was down an incredible 9 percent from last year and is even lower than the median in August at just $174,900.

Unemployment and foreclosures are the primary reasons for the low prices. Unemployment is at 9.8 percent and is expected to jump to 10.5 by next year. What’s worse is that 3 million households are currently three months behind on payments or are in foreclosure.

A dilemma many are facing is buying a home and then potentially losing their job. Few can sit back and confidently say they will have a job a year from now. For this reason, some are hesitant to make an offer on a home with the fear they may lose their job because of the economy.

There has been talk about extending the tax credit through June 30 as well as including all home buyers. This would deliver a blow of an estimated $16.7 billion. As expected, realtors and homebuilders are in favor saying the tax credit is what is getting the housing market back in the right direction.

Despite this, some analysts believe the tax credit is now as crucial as it may seem on the housing market. One problem that can arise from a tax credit extension is that some of the 1.5 million applications for the tax credit are fraudulent. There have been questions on the legitimacy of some 100,000 claims for the credit including illegal immigrants and 580 people under 18.

As sales continue to rise, the next couple of months will say a lot about what direction the real estate market will head depending on whether there is a tax credit extension or not.

Coachella Valley Sees 17.4% Increase In Real Estate Sales For July

Once again the numbers for sales in the Coachella Valley region saw increases by 17.4% for the month of July. This marked the second month in a row that there were double digit gains with as much as 23.3% rise for single-family, condos and new construction homes. With the median price all the way down to $180,000 compared to $274,000 just a year ago, it is no surprise sales continue to increase.

This is the perfect time to be looking if you are a first time buyer with cash, quality credit, and the incentive to capitalize on federal and state tax credits. Houses within the $100,000 to $200,000 range are hotter than ever with people bidding left and right. In addition, there has been an increase in the high-end market as well with homes above $417,000 gaining interest. One thing is for sure; sales are most relevant where foreclosure has been around. There was a total of 965 new and resale houses and condos closed in the Coachella Valley with a majority coming from resale single-family homes.

In Indian Wells, sales rose as much as 100 percent in the higher-priced market. There were a total of 16 sales with one reaching $3.8 million for the single sale. What you are seeing is homes above $417,000 have more and more people looking for purchase loans with an increase of 15.1 percent.

As expected, real estate agents are in heaven. The last year has been a terrific year to be a real estate agent with homes flying off the market. Some believe the bottom has long passed in terms of sales. Now it is a matter of getting prices to get out of the getter which could be awhile still.

There is no question the realistic pricing for homes has sales increasing month after month in Coachella Valley. Homes in the $800,000 range are having terrific success, but homes between $1 million and $2.2 million are beginning to see offers and deals land as well.

What is falling is the inventory on bank-owned property. Riverside County saw 58.7 percent of homes that resold were foreclosure resales. However, this is still the lowest this number has been since April 2008.
Although there have been signs of hope for the future, many still believe it is too soon to say the real estate market has gotten out of the bottom. With the continuing increase of job losses and foreclosures, it is just too soon to say the market is on an incline.

What is troubling is not knowing what the high level of mortgage defaults will do. The lender can potentially approach the foreclosure process or begin to move toward a short sale or loan modification. Instead of dropping homes into the sales market right away, banks are holding onto properties unusually long. It appears banks are trying to protect pricing of homes with the hope that holding onto homes will begin to increase the overall price.

So for now, it is difficult to say whether the bottom has been reached or if there is more to come. As soon as the job market begins to improve and foreclosure inventory decreases we will know the market is on an incline.

The Two Sides of the Real Estate Market Of Coachella Valley

As optimists continue to look for any signs of hope for the economy and real estate market, foreclosure problems have only stayed on track over the first of the year in California. Coachella Valley alone has recorded a remarkable 68 percent rise in activity compared to the same time just a year ago.

From January through June there have been a total of 391,611 California properties receive a foreclosure filing and over 12,000 notices of default, auction sales or bank repossessions in the valley. Any hope that the market had begun to turn around has dwindled with the release of these astonishing numbers.

Chief executive officer of RealtyTrac James Saccacio has said that a lot of the increased activity is due to unemployment-related foreclosures. While the real estate market continues to struggle, so to does the job market with hundreds of thousands of people jobless.Although Valley foreclosures are far higher than the rest of the sate of California, this does not mean things are happy go-lucky throughout. However, the valley has seen a fairly consistent flow of activity over the past year.

Many real estate professionals are waiting for properties in higher-income brackets to begin marketing and selling because of stock portfolio and job losses of almost 50 percent. While things are supposed to be looking up, the only number that is going up is the number of houses in foreclosure and those that are bank-owned.The only thing that has turned around for the real estate market is buyers. With so many tremendous deals to choose from, there has been a rise in sales. While there are a number of foreclosures on the market, normal sales have begun to see quite a bit of activity as well. One home in north Palm Springs even sold for $100,000 over its asking price with 24 offers coming in.

What people are finding is when a home is well priced, it is going to sell rather quickly. There are more and more cash buyers every day. Believe it or not, homes are more affordable today than they were dating all the way back to 1988 when this kind of data was first tracked.There is no question the incredible prices there are to choose from has enticed people to buy who otherwise would have not even begun looking. Overall, inventory on the Multiple Listing Service has decreased as more and more buyers are purchasing homes.

The numbers do not lie when it comes to the real estate market. While more and more homes continue to go into foreclosure, the buyer’s market is finally beginning to propel. I guess for now you have to take the good with the bad.

Next Page »