This new national survey gauging attitudes toward housing finds that two-thirds of Americans (65%) still prefer owning a home, despite the challenging economic environment and the housing downturn. 

Some highlights:

• 23% of renters said they will buy a home later than once planned
• Homeowners with fixed-rate mortgages with predictable payments are happier than those with other types
• 60% believe that it’s harder to buy a home than it was for their parents
• 68% believe that it will be more difficult for their children to buy a home
• 88% believe that walking away from an underwater mortgage is not acceptable
• Someone who has defaulted is more than twice as likely to have seriously considered stopping payments on their mortgage.

Qualifications: First-time home buyer who has not owned a home in the last 3 years; Open escrow 4/2/09 and close on or before 12/31/09; purchase property in CA; be a W2 employee.

Info: www.CAR.org/aboutus/hafmainpage/CARhafmortgageprotection/

• Closed Sales: 23 (Q1) v. 48 (Q2)
• Average Days on Market: 63 days (Q1) v. 45 days (Q2)
• Median Sales Price: $810K (Q1) v. $836K (Q2)
• Current active listings: 39
• Current pending sales: 29
• SOLD within last 3 months: 38

With only 39 homes on the market as of today ( Aug 24), it looks like buyers are cautiously returning to the market due to sustained low interest rates.  Buyers continue to watch signs of employment recovery and the state budget problems, which are rooted in the collapse of the housing market.  Well-priced and well-marketed homes continue to sell.

One of the critical success factors is working very closely with the lenders to ensure that the Ts are crossed and Is are dotted.  Add-on fees, tough underwriting guidelines, and lower appraisal value, longer close, etc. are a few things to educate buyers. 

Until next time…

- About.com has a good consumer-oriented website about the various aspects of short sal – definition, what to look for, what questions to ask, etc.
- The main ingredient is PATIENCE.  This is not a regular sale situation in which you may hear back from the seller within 24-48 hours.  Although the seller is the property owner, you still need the lender’s approval for the short sale.
- Have your realtor call the listing agent to find out out whether the seller qualifies for a short sale. 
- Make sure that you work closely with your realtor to advise you on the process and offer strategy.  Don’t assume that you can put a low-ball offer and get away with it.  Lenders are looking at mitigaging their losses and they will have the appropriate due diligence before approving the sale.
- Be prepared to order your own inspections.  Most short sales will not have the usual inspection reports paid for by the Seller as part of the pre-sale disclosure packet.

If you do your homework and put a comprehensive offer package together, you will increase your chances to purchase a home at fair or below market value. Be patient while waiting for lender’s approval.

Interest-rate movements are based on the simple concept of supply and demand.  If the demand for credit (loans) increases, then so do interest rates.  Conversely, if the demand for credit reduces, then so do interest rates. 

Another rule of thumb:

Bad news (i.e. a slowing economy) is good news for interest rates (i.e. lower rates).

Good news (i.e. a growing economy) is bad news for interest rates (i.e. higher rates).

Another concept: there is an inverse relationship between bond prices and bond rates.  When bond prices move up, interest rates move down, and vice versa.  This is because bonds tend to have a fixed price at maturity – typically $1,000.  If the price of the bond is currently at $900 with 10 years left on the bond, and if the interest rates start moving higher, the price of bond starts dropping.  When next time you hear your mortgage broker talking about ‘watching bond prices’, then you’ll know why.

• the U.S. Senate passed the American Recovery & ReInvestment Act of 2009 and the stimulus bill passed at $787.2 billion. • The conforming loan limit is now capped at $729,750 (up from $625,500).

• First-time homebuyer credit was increased from $7500 to $8000. The bill removes the requirement that the credit be paid back if the buyer stays in the home for at least 3 years (program expiration date is December 1, 2009).

• Interest rates to come down 125-150 basis points (please get further details from your lender).

• Over $50 billion for foreclosure mitigation

• Mortgage interest deductibility, real estate deductibility, and the $250K/$500K capital gains exclusion, are still preserved