Market News
June 18, 2009 Page 1 of 5
C.A.R. Mortgage Update
This week’s C.A.R. Mortgage Update contains information about first-time home buyer tax credits, risingmortgage rates, conforming loan limits, second mortgages and home equity lines of credit, and mortgage
insurers.
California running out of $10,000 tax credits
First-time home buyers wanting to take advantage of the state’s $10,000 tax credit may have less time than
originally expected. California set aside $100 million to help home buyers purchase newly built homes,
hoping to jump start the residential-construction market. According to state officials, the tactic has worked
well and is helping to entice home buyers into the market. However, there only is approximately 20 percent
of the program’s funding remaining.
The program launched in March, and as of June 3 nearly $24 million in tax credit certificates already had
been issued, according to the state’s Franchise Tax Board, leaving nearly $76 million in credit available.
Many applications still are in the pipeline awaiting approval. If all of the submitted applications are
approved, only $17.5 million would remain in the fund.
The California state legislature is considering adding another $200 million to the program. However,
securing approval may be difficult due to the state’s estimated $24 billion budget deficit. A bill to extend the
program already has won Assembly approval and now is awaiting activity in the state Senate.
To read the full story, please click here:
http://money.cnn.com/2009/06/12/real_estate/10000_California_tax_credit/index.htm?postversion=2009061
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To view additional articles, please visit the following:
Spike in mortgage rates slows refinancing in Silicon Valley
To read the full story, please click here:
http://www.mercurynews.com/topstories/ci_12573064
Lenders’ phones silent as rates rise
To read the full story, please click here:
http://www.sacbee.com/business/story/1940229.html
A tale of two markets divided by the conforming-loan limit
To read the full story, please click here:
http://www.latimes.com/classified/realestate/news/la-fi-lew14-2009jun14,0,4908426.story
Second mortgages: Lines of danger?
To read the full story, please click here:
http://www.ocregister.com/articles/foreclosure-little-lacour-2462009-foreclosures-housing
Mortgage insurers to the rescue?
To read the full story, please click here:
http://online.wsj.com/article/SB124482038723610165.html#
June 18, 2009 Page 2 of 5
The Wall Street Journal
Tips for selling your home to a first-time buyer
Favorable home prices, low mortgage rates, and tax credits are luring many first-timers into the market.
Although favorably priced foreclosures and short sales may be the most appealing option to first-time
buyers, traditional sellers also are able to compete and attract these buyers.
KEEP THIS IN MIND
• One advantage traditional sellers have is that lived-in, well-maintained homes are easier for buyersto imagine themselves living in compared with vacant foreclosed homes. Lived-in homes have
great appeal to first-timers for practical and financial reasons.
• A survey conducted last year found that 81 percent of first-time buyers said move-in conditionswere very important, while only 7 percent reported they were looking to purchase fixer-uppers.
• Lived-in homes offer warmth and emotion, a sentiment that some agents say can go a long way inselling a property. Additionally, these properties likely have well-maintained lawns and
landscaping, as opposed to vacant, foreclosed homes, often which have dead or overgrown lawns.
• Extra touches like a fresh coat of paint, decluttering, and the removal of unpleasant odors will helpto make a good first impression with buyers.
• Offering to help pay closing costs or buy down a mortgage rate also can help traditional sellerscompete in today’s market. These may be enticing options to buyers, especially those who plan to
live in the home for more than a few years.
• To help buyers more easily transition into homeownership, sellers may want to consider offering ahome warranty that covers major systems in case problems arise after the sale closes.
• Most buyers know that home prices have declined in many markets, so they’re being moreaggressive in their offers. Sellers are advised not to quickly write off low-ball offers. As one agent
advises, every offer deserves a counteroffer to get the conversation started.
To read the full story, please click here:
http://online.wsj.com/article/SB124510978756816993.html
June 18, 2009 Page 3 of 5
In Other News…
Press Enterprise
Inland housing defaults, repos drop in May, though experts say conditions still dire
To read the full story, please click here:
http://www.pe.com/business/local/stories/PE_Biz_S_foreclosure11.4559e2d.html
Los Angeles Times
Don’t reduce your property insurance coverage to reflect lower home values
To read the full story, please click here:
http://www.latimes.com/classified/realestate/news/la-fi-lew7-2009jun07,0,3514957.story
The Mercury News
Neighbors are forcing neighbors into foreclosure
To read the full story, please click here:
http://www.mercurynews.com/realestatenews/ci_12580945
Los Angeles Times
Median home prices drop below 1989 levels in some parts of Southland
To read the full story, please click here:
http://www.latimes.com/business/la-fi-cheaphomes10-2009jun10,0,4802553.story
June 18, 2009 Page 4 of 5
The Sacramento Bee
Use of short sales on rise in Sacramento housing market
To read the full story, please click here:
http://www.sacbee.com/business/story/1933643.html
The New York Times
Beware of neighbor’s home foreclosure
To read the full story, please click here:
http://www.nytimes.com/2009/06/14/realestate/mortgages/14mort.html?_r=1&ref=realestate
June 18, 2009 Page 5 of 5
What you should know about the market…
• Parents searching for homes in quality school districts should considering visiting
www.schoolmatters.com. This site is a service of Standard& Poor’s and allows users to find andcompare schools, while also providing statistics that illustrate students’ achievement levels in each
school. The database on the site also offers information on extracurricular activities and provides
ratings and reviews directly from parents.
• A common mistake first-time home buyers make is focusing solely on the monthly mortgagepayment and not taking other homeownership costs into consideration. Many renters do not pay
for water, and in some cases may not pay for either heat or electricity. To ensure that all costs are
taken into consideration and that the home is truly affordable, buyers are advised to ask the seller
for recent copies of water, electric, and gas bills.
Correction: Due to an editing error, the June 11 issue of C.A.R.’s “Market Matters” incorrectly stated that
consumers wanting to check an appraiser’s name and license number should contact the California Dept. of
Insurance. The correct agency is the California Office of Real Estate Appraisers. Consumers and/or
mortgage brokers and agents can visit http://www.orea.ca.gov/html/lic_appraisers.asp to check anappraiser’s license.
