Posted by: msundermier | May 27, 2016

Should You Finance Energy Efficient Upgrades?

Energy efficient upgrades to a home can add value, lower your utility bills, and make you a “greener” citizen of the Earth. There are now a number of finance alternatives that have made these updates more accessible than ever before.


For example, you can lease solar systems and offset the monthly lease payment with the energy savings produced. You can also borrow money to install energy saving appliances, and have the loan payments added to your property tax bill. With all of these new finance alternatives, it has helped many homeowners who otherwise wouldn’t have been able to install these updates with their own savings.

But are these new finance options truly helping homeowners? We have spoken to a number of clients who weren’t aware of some of the fine print of these finance schemes, specifically how these lease and loan options create a lien on their property that make it difficult or even impossible to refinance their homes.

A trusted colleague told me early in my career that there is no free lunch in lending. In other words, you don’t get to borrow money without strings attached. Typically, that means you are paying interest, and in the case of real estate it also means you put your property up for security against the loan. Mortgages, for example, are recorded against the property and this loan must be paid off prior to selling or allowing another mortgage to be taken out.

Most folks recognize that they are going to pay interest if they borrow money from a solar or utility company, but what does not appear to be commonly understood is that these loans and leases are recorded against the property.

Several times in the last year, we have worked to help a client refinance to a lower interest rate and save money on their mortgage payment. During the underwriting process, we discover an additional lien resulting from a solar, window, HVAC, or other energy efficiency update. This secondary lien must either be paid off or give permission for the mortgage to be refinanced. Many times, the client either doesn’t want to or can’t pay off the loan, and the energy efficiency loan won’t allow the refinance to proceed. The refinance attempt ultimately fails. Ironically, the act to save money through energy efficient updates ends up handcuffing the client to a higher mortgage interest rate loan, thus losing more money to interest than what is being saved in lower utility costs.

Not all loan and lease terms are the same amongst the various options and vendors. And in some cases it probably makes sense to obtain one of these loans and live with the potential down sides.   Simply be sure you know the fine print. Solar and other outfits are pushing these available financing options hard on homeowners, but there are more traditional finance options available that you may want to consider as well. A cash-out refinance, home equity line of credit, home improvement loan, or other form of traditional mortgage financing may make sense as well. As always, we are happy to discuss what options you may have and objectively point out the pros and cons of each.

Posted by: msundermier | April 12, 2016

Myriad of Mortgage Options

When I began this blog in 2009, I vowed to not devote it to monologues about underwriting rules or my latest listings for sale. BORING!!!  Consequently, when I take the time to write one such as this, one with a topic that goes against the grain of the very spirit of, then I must be doing it for a darn good reason.

Indeed, the reason and timing of this post are quite significant. For the first time in a decade, the mortgage industry is expanding its options to consumers, and with it will come a healthier real estate market. This pendulum swing is long overdue, and it makes working with a mortgage broker like us an even smarter decision than ever before. How? Let me explain.

Myriad of Mortgages

Back in 2007, nearly 75% of mortgages were originated by mortgage banks (think Wells Fargo, Bank of America, etc.). For many years, the mortgage market was very homogenous; varied loan options just simply didn’t exist. Last year, the banker’s market share was less than 50%; industry analysts have been calling it an exodus of large banks. Why? The reasons are many, but a significant one is banks don’t have the wide array of options that the mortgage marketplace now offers, so consumers find brokers a better option.

There are more options to offer consumers nowadays, and brokers like us are simply better at providing the options of today’s market. Let me give you a brief overview of some of the more significant finance options that we can offer our clients that you may not find at your traditional bank.

Reverse Mortgages – These are gaining tremendous popularity for homeowners over 62 years old, and we offer them! In short, you no longer make a mortgage payment ever again by using the equity in your home to cover the payments. While these loans were traditionally designed for seniors on a low, fixed- income and high equity trapped in their home, they are being utilized by high net-worth baby boomers who are approaching retirement. They can be used as a diversified financial tool by giving retirees the option to withdraw equity from their home (which is not taxed) rather than assets from their retirement accounts (which typically is a taxable event), or as a way to continue their lifestyle while simultaneously living mortgage-payment free.

Home Remodeling Loans – FHA and Fannie Mae have fixed rate loans that allow homeowners to significantly remodel their homes, using the post-renovation value of their home to access borrowed money. These are being used to build an addition, put in a pool, or redo a kitchen. In prior years, the only way to get a mortgage for a remodel was to already have the equity in the home prior to the improvements. These programs allow you to leverage the future value of the home, thus making it easier to borrow for that needed home makeover.

“Piggyback” Loans – They went by many names in the 2000s; “80/10/10,” “Simo Seconds” & “Piggyback Financing.” It was a method used to split up the total amount borrowed into two mortgages, possibly to avoid paying PMI or to borrow more than the maximum allowed on a single loan. We have a bank who is offering these up to 90% loan-to-value; I don’t know of any traditional banks offering such a program.

Jumbo Loans – These are big loans; amounts over $475,000 in the Sacramento area. We have a number of lenders offering competitive fixed rates nearly as low as regular sized loans!

Alternative Documentation Loans – Many people have been squeezed out of getting a new mortgage because it is difficult to fully document their income (think business owners). New lenders are allowing these types of borrowers to submit bank statements or profit & loss statements to document their income; a very sound alternative that went away after the Mortgage Meltdown.

The bottom line is this: creative financing alternatives are back and no one is better at offering and executing these options than a mortgage broker. While we will continue to be a price leader for the more “vanilla” loans, these other options simply expand our loan “tool box” in order to help as many of our clients in the community as possible.


Posted by: msundermier | February 18, 2016

2016 Real Estate Market Forecast


Last week marked the beginning of Chinese New Year, the year of the Monkey. Fitting, considering last week’s financial markets around the globe were filled with “monkey business.” It seems everywhere you turn lately there are crazy things happening. The Dow Jones is down several thousand points from recent highs, suggesting we may be entering a “bear” market. Gas prices are as low as they’ve been in nearly 15 years, leading many to think economic growth is slowing. And several central banks around the world are charging negative interest rates (imagine being charged interest to keep your money in the bank!?!).

Despite the monkey business everywhere else, our local real estate market appears to be quite normal. We are seeing similar vital statistics this winter compared to recent years. Sacramento area home prices are up 10.7% over the last year. And low interest rates combined with rising rent prices are keeping demand high for real estate.

But will the world’s monkey business eventually seep into our local markets? Will we remain insulated from the worlds’ woes? Or be dragged down with them?

Bear and Monkey

Will a Bear Market join forces with the Year of the Monkey to sour the local market?

In short, I believe the recent economic turmoil will only fuel our real estate market, not hinder it. We should see the similar dynamics seen in recent years (low inventory, high demand, low interest rates) but I think they’ll be further intensified in 2016! Here are my reasons for a strong year ahead for Sacramento real estate:


Money will flow to what’s “real”
With money fleeing the stock market, it has to go somewhere. Fear is abundant in the markets (check out this cool “Fear & Greed” index tool), and money runs to safety when it smells fear. I believe it will find its way to real assets, like precious metals (gold prices are up 10% in just the last month!) and real estate.

Millennials will “get real”
It is widely documented that the millennial generation (those born roughly between the early 1980s and early 2000s) has deferred home ownership more than their predecessors. The reasons vary (they have more school debt, prefer to live in higher-priced urban areas, don’t want to be “tied down” with a mortgage, etc.) but sooner or later they’ll see the light to become homeowners. In Sacramento, the validity for homeownership is becoming quite clear.

In recent years, Sacramento has become a magnet for Millennials. This article cites everything from the dining scene to recreation to coffee as reasons why younger folks flock to the River City (excuse the language used in the article). Furthermore, rent prices have been skyrocketing in Sacramento. This article from Sacramento News & Review states we are the third hottest rental market in the country, only behind Portland and San Francisco, with average rent prices climbing 10.6% in a single year. With rents rising and no clear sign of significant new construction on the way (more on this in a moment), many who are renting should be considering home ownership, which will further spur real estate demand and prices upward.

New home construction will continue to lag
New home and apartment construction has not kept up with demand in Sacramento. Developers site high costs and red tape; others are concerned of the over-building that occurred a decade ago and don’t want to repeat history. Nevertheless, only Detroit had fewer new construction starts last year than Sacramento.
Let that last sentence sink in for a minute; the only city with slower new construction activity in the entire county is a city that lost 25% of its population from 2000-2010. Detroit is not building because they don’t need new housing units; 1 in 4 people up and left during the Great Recession! Sacramento, in contrast, GREW 25% in population during the same decade, and until we begin building new housing we will continue to see home prices and rents soar, both in urban and suburban areas.

Mortgages will remain cheap and accessible
With gas below $2 a gallon and other world banks charging negative interest rates, its clear that no one should be concerned with inflation here in the US. Inflation is Public Enemy #1 to fixed interest rates such as mortgages, so with no inflationary threat mortgage rates will remain low.
How low? In a word…ridonkulously low (well, in sort-of a word)! With low rates (30-year fixed rates below 4% and 15-year rates near 3%) and, in turn, low mortgage payments, this will only further instigate millennials and other home renters to become home owners. Furthermore, underwriting guidelines are loosening and new loan products are emerging (more on this next month in a separate post). This makes financing accessible to more home buyers, thus allowing demand to grow ever more.

Rose Colored Glasses

For the second year in a row, my forecast is looking up!

To re-cap, I’m incredibly optimistic for the 2016 real estate market.  Compared to my “rosy” forecast from 2015 (which turned out to be quite accurate, I might add), this year’s is just plain flushed! I expect strong price appreciation (10%+ for Sacramento), coupled with high volume (lots of buying and selling), and fueled by very affordable and available financing. Until new home construction is firing on all cylinders and inflation becomes a concern, the outlook for our local real estate market will remain bright.

As always, thanks for reading Matts Memos!

Posted by: msundermier | February 4, 2016

Timing The Market is Like Timing The Weather

I just returned from a trip to Switzerland with my wife and oldest daughter. The weather was incredible, despite the fact January is typically the coldest and wettest month for the Swiss.  Our good fortune was quite remarkable and I can’t help but compare our timing with the weather to how many folks feel about timing the real estate market.


The majestic Matterhorn is rarely seen this clearly during winter.  We were very lucky!


More and more clients seem to be asking for my prediction on what the upcoming year holds for real estate. The truth is I can’t time the market any more than I can time the weather!

Instead of basing decisions on good fortune from things beyond our control, I’m an advocate for planning and acting based on things we can control. This is true in most walks of life, including real estate. Below are the 3 things I encourage every client to consider before making an important real estate decision.


Plan Ahead

Most people don’t wake up and decide they’re going off to the airport to go on vacation because the weather looks good in a faraway city. Rather, a long trip requires planning. How are you going to get there?  What will you do when you get there?

Planning for this trip began in October. We figured out which cities we would visit, how we were going to get to each one, and where we would stay.  Furthermore, we have a “team” of people that we need to consult with prior to traveling (colleagues, grandparents, teachers, etc.), and each one’s input is important in figuring out if and how the trip will come together.

The same is true in real estate. You should not wake up one morning and decide to buy or sell a home on a whim or, even worse, because of what some market “expert” is predicting.  It takes planning, and a team of people to help you sort it out.  Many people take this time of year to do real estate planning so they are ready to act in the spring when market activity picks up.


Focus on Factors You Can Control

Mary and I knew January was a sketchy month to travel to Switzerland. February or March would have been better as the temperatures are generally warmer and there likely is a bigger snow pack to enjoy for skiing.  In the end, January was the month where we could pull it off due to our schedule.  In the end, it worked out great because we had Spring-time conditions in the dead of winter!

With real estate, I see many people attempt to decide to buy, sell or refinance based on the right timing in the market. I believe this is a recipe for disappointment.  The market is unpredictable and there is no way to guarantee the market is going to behave in your favor.  Rather, an important real estate decision should be based on questions you can answer: does your family need a larger home?  Are you stable in your career?  Can you afford a home?  Is your health making it difficult to maintain your home?  Do current rates make your monthly payment affordable?

Making a move based on these factors means you are doing what’s best for your timing, not the market’s.


Don’t Let The Outcome Be Determined By Factors You CANNOT Control

As much as we enjoyed our fortunate weather, our enjoyment was not going to be impacted by Mother Nature. We packed for cold weather, and had alternative itineraries for gloomy days should they have arisen.  Also, this was a rare opportunity for Mary and I to travel with just our oldest daughter (we have two younger children as well).  This factor alone meant we were going to have a memorable and unique trip to spend quality time with her, regardless of the weather.

When it comes to buying and selling real estate, it is a dangerous proposition to say that your decision will only be a smart one if the market ends up working in your favor. For example, if you are considering selling your home this spring because you are confident home prices are going to fall later this year, then how will you feel if prices keep going up?  Conversely, if you are thinking of buying this year because you’re convinced you’ll be priced out of the market if you keep waiting, then how deflated will you become if prices and/or interest rates fall instead?

The bottom line is this: you and I can’t time the real estate market any better than we can predict the weather. I encourage all of my clients to put less emphasis on what’s going on in the market, and a greater emphasis on what’s going on in YOUR life.  In other words, is buying or selling a right time for YOU?


As I said previously, now is a wise time to begin discussing and making plans for a real estate decision later this year. These types of life-changing events don’t formulate over-night. My team and I are here to help you sort out the important and complex decisions ahead.  As always, we value your trust in us to navigate you in your real estate affairs.

Posted by: msundermier | October 23, 2015

Are Californians Crazy?

Jimmy Buffett sarcastically claims in his iconic song “Fruitcakes”, California has it all.  “They’ve got riots, fires and mudslides…” so goes the tune.  Fruitcakes

In addition to these struggles, we also have an extremely high cost of living. Historically, behind only Hawaii, California has the highest median home sales price of any state in the country.  While the median home value in the U.S. is approximately $180,000, the Golden State’s median home price in August was nearly three times that at just under $500,000.  Non-Californians think we’re crazy to spend that much money on a pile of bricks.  Are we?

I guess the answer depends on who you ask.  If you ask me, I seriously believe California does have it all!  I am thankful my roots are deeply planted here, and that my career entails being both an advisor and ambassador for California home ownership.  Nowhere else in the country do you have as many diverse recreational, cultural & culinary experiences just a short drive away than right here in California.

Photo courtesy of my super hot (& photographically talented) first-mate, Mary.

Photo courtesy of my gorgeous (& photographically talented) first-mate, Mary.

I have not left California in over 18 months.  Given my family’s track record of travel, that’s a bit of an anomaly.  But, during this time, I’ve had a wider array of vacations than in any other point in my life.  In just the last year, we have taken road trips to:

Redwood National Forest – Hiking, beach combing, zip lining
South Lake Tahoe – Skiing, snowball fights
Lake Oroville – Tubing, wakeboarding, fishing
Southern California – Disneyland, Malibu beaches
San Francisco – Beach Blanket Babylon, Live Music in Botanical Gardens, sailing
Central Coast – Rugged beauty, abundant wildlife (I saw a Blue Whale!), sea kayaking

California Collage

California has it all!!!

When I put together this picture collage, it was such a wonderful reminder of the diversity of our state.  Does California have its fair share of problems?  Certainly!  “Riots, fires, and mudslides” are probably just the beginning.  But having opportunities to make wonderful memories is not one of them.

Some may consider Californians to be “fruitcakes.”  But, when you learn that CA homes have appreciated more than 50% over the last four years (its true!), perhaps it’s the ones that don’t believe in California homeownership who may be the ones out of their minds.

Stay crazy, Californians!

Over the last 5 years, there has been a growing trend of mortgage professionals electing to work for mortgage companies who operate as banks rather than brokers.  In fact, to my knowledge, my firm is one of the only new brokerages to emerge in our community since the mortgage meltdown in 2008. Did my decision to start a business on the minority model doom me from the start?  Or is our against-the-tide approach in the lending industry exactly what clients want amongst a crowded selection of impersonal, mega-corporate banks?

All sensationalism aside, the difference between a banker and a broker is simple: bankers lend their own money and brokers do not. However, a growing number of “direct mortgage lenders” actually don’t have their own money either, but rather a line of credit from a larger funding source who ultimately buys the loan from them only days after the loan closes. So they’re essentially still more a broker, like myself, than an actual bank.  A common misconception is if you go straight to the company who has the cash to lend then you can get a better deal. This is simply not true. Pile of Money

So who offers better rates?  Brokers, like myself, tend to work with “wholesale” banks that don’t sell directly to the consumer.  As a result, their only marketing expenses are compensating the brokers that deliver them business.  “Retail” banks, on the other hand, spend gobs of money advertising and having access to the consumer directly.  While they don’t pay brokers in order to acquire business, they have tremendous other overhead expenses for which to account. I often wonder how much it costs the country’s 4 largest banks to operate their 20,000 retail branch offices! The rates we offer at Blue Waters are very competitive, and most cases lower, when you compare them to other mortgage outfits.  Case in point, I recently received a referral from a VP of a large bank to help his brother refinance.  I asked him why he would refer it to me instead of the company who signs his paycheck.  He said, “your rates are way better than ours.  I’m looking out for my little bro.”

And who offers better loan program options? One often assumes that if a bank lends their own money, they get to make their own underwriting rules.  While this is true in very few instances with jumbo and sub-prime loans, the more common reality is banks and brokers alike are ultimately originating loans that are sold to investors (ie-Fannie Mae, Freddie Mac, FHA, etc.).  As such, we are all following the same guideline rules when working to get your loan approved.  Furthermore, a bank has their single menu of loan rates and options.  A broker has a multitude of different banks they do business with, so my array of options is unparalleled when comparing to a traditional bank.

The rates and programs of brokers and bankers are certainly characteristics a consumer should consider, but in the end it’s the service level that matters most in your mortgage professional.  I can’t universally say brokers have better service than banks, but I can say this: I am completely dependent on my client’s satisfaction of and trust in my company in order to stay in business.  I’m not so sure a multi-national, diversified, conglomerate, too-big-to-fail bank has the same mentality.  To me, service is more than simply doing what the client asks; it’s about educating and empowering clients to help them make sound financial decisions for themselves.

Trust Diagram

In our firm, building trust is not done with a formulated diagram. It simply comes down to just doing the right thing for our clients. Every. Single. Time

In many regards, my work is similar to that of a teacher.  It is no coincidence that I recently had the opportunity to spend a Spring Semester as an adjunct professor at Folsom Lake College teaching Real Estate Principles. Doing so was a fantastic opportunity to give back to my small community, and also a reinforcement of my desire to teach students and clients alike.

So when choosing your financial professionals I hope that you will keep Dave Ramsey’s (America’s most well-recognized and respected finance commentator) advice in mind, “when getting help with money, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Posted by: msundermier | August 13, 2015

Is What I Do Legal?

This is a blog post I’ve wanted to write for years, but haven’t had the audacity to do so…until now! Thanks in advance for reading it all the way through and please share your thoughts if you’d like.


Working simultaneously as a mortgage professional and REALTOR over the last 12 years, I’ve often been asked by folks unfamiliar with my business model,
“Can you really be both a mortgage broker and real estate agent?”
“Is that legal?”
“Isn’t that a conflict of interest?”

To be frank, most of us are uncomfortable with what is unfamiliar, and my business model of offering both mortgage and real estate services certainly is unconventional in the industry. As a result, some naysayers assume it is uncommon because it’s unlawful. While this may be true for certain federally regulated bank employees, nothing could be farther from the truth for California mortgage brokers. In fact, I firmly believe our holistic approach to real estate services is a better way to serve a client’s needs than if their mortgage and real estate services were being handled by separate companies. Let me try to explain with an analogy…

My wife and I have considered putting a pool in our backyard. We love being outdoors, so its critical we have a pool that complements the rest of our backyard’s landscape design features. As a result, we want to find a pool contractor who knows not only how to build a beautiful pool, but who also is very familiar with landscape architecture and design. It just makes sense (right?) to have a single, capable, trustworthy consultant who is a master of both aspects to create the perfect outdoor living area. Wouldn’t that be awesome?!

To us, a pool should be a complementary feature to the rest of its surroundings, similar to the mortgage services received when buying a home

To us, a pool should be a complementary feature to the rest of its surroundings, similar to mortgage services given to a client when buying a home

Well, guess how many contractors we’ve found that fit that description? Zip. Zilch. Nada. If you know of one please let me know!  Much like mortgage and real estate companies, pool contractors will often partner with landscape architects, but not one I’ve investigated is a master at both crafts.


There’s certainly nothing illegal about it. I just think certain folks are inclined to work with concrete and pools, and others with dirt and plants. They are two very different disciplines, yet so incredibly complementary to the final product.

This same paradox is true of offering services to find a home and obtain a mortgage; they require very different skills and inclinations, yet the service of one is interdependent on the other. And yet, very few real estate practitioners recognize the synergistic relationship, and even fewer have what it takes to deliver this type of bold, comprehensive service. Its not a matter of legality; just willingness and competence.

My incredible teammates and I are some of these few who are willing and able to be both your mortgage broker and REALTOR, and I can confidently say it is the best thing we can do for our clients. Perhaps that’s the reason 94% of my home buying clients also utilized us for their financing needs as well.  And of those clients who completed a survey, 89% of them were “completely satisfied” with our services (the other 11% were “mostly satisfied”), and 100% of them indicated our one-stop-shop model is a strength of our services.  Bottom line, clients take advantage of our multi-faceted services and are extremely happy.  Just like Mary’s and my vision for a beautiful backyard, our client’s transactions are well planned, executed, and cognizant of the many needs of a successful home purchase.

In short, what The Blue Waters Group does is perfectly legal. More importantly, our services are in the best interest of our clients to assure they have the best possible experiences and outcomes in their real estate transactions. Its not easy working a weekday mortgage operation that requires a high degree of analytic skill and a nights & weekends real estate outfit that requires interpersonal and negotiating skills. Ultimately, our model isn’t about doing what’s easy; its about doing what’s right, both in the eyes of the law and our valued clients.

Posted by: msundermier | March 26, 2015

Thoughts From a 3-year Old Entrepreneur

Its hard to believe, but The Blue Waters Group turned 3 this month.  I’ve learned so much in this evolution of starting, operating, and growing a successful small business.   My thoughts are best summed up by a recent Facebook post made by a dear friend of mine: “…having a small business is extremely rewarding, but a lot of work. We are the hardest and most tireless workers you will ever know. We sacrifice everything for our successes; money, time, blood, sweat, tears, and sometimes even our bodies. You’ll do almost anything to not fail. So when you see a small business owner, give them a big hug. But most importantly, give them your business and respect.”

Now that I am a 3-yr old entrepreneur, I echo my friend’s post. Owning and operating a business is not easy. My client’s needs and transactions can keep me up at night. My own need to set an inspiring example for our team members keeps me logging long hours. And I do my best to balance that with my priorities at home with our young family. Again, this is not easy, but I wouldn’t want it any other way. Serving our family of clients with my own business is an incredibly gratifying way to earn a living, and to earn trust and respect from those I care for.

We all know the statistics…most new businesses fail, and I’d be lying if my little voice (and some of my peers!) didn’t remind me of that from time to time the last few years. Hitting our 3-year anniversary helps us shed that initial infancy insecurity, and this maturation was made possible by your love and loyalty of our company. I can’t thank you enough for choosing to do business with us. Our successes are owed to you.

Thank you for the continued opportunity to run a small business. It truly is one of the greatest gifts and honors in my life.

Posted by: msundermier | February 9, 2015

2015 Real Estate Market Forecast

As usual, I’m a little tardy in posting my annual market forecast.  I assume everyone else’s Januarys are as hectic as mine, so its likely you wouldn’t even read it if I were to send this out at the turn of the New Year.  By more happenstance than design, my annual forecast release in early February has worked out over the years, as more readers view it over any other post during the year.  I’m honored you find entertainment, and perhaps a little insight, from this annual tradition.


Forecasting is a fancy word for guessing!

2014 Year In Review

Before I get ahead of myself, let us review 2014’s forecast and see how my predictions stacked up to what truly transpired.  In short, I forecasted we would see stabling home prices due to a healthy balance of supply and demand of traditional buyers & sellers.  I can’t help but brag for a moment that this was the exact script for last year’s market.  Sacramento homes appreciated less than 5% (Folsom was less than 2%), and the market maintained between 1.8-2.7 months of inventory (this is a balanced level).  Short sales and REO sales accounted for less than 15% of Sacramento area sales.  All of these signs clearly indicate a return to normalcy for our real estate market.

My accurate aim stops abruptly, however, when you peek at last year’s interest rate forecast.  With The Fed easing and ultimately exiting their campaign of buying mortgages (known as “quantitative easing”), I anticipated 30-year fixed rates would steadily climb through the year and end up around 5%.  In actuality, rates somehow defied logic and plummeted back down well below 4% towards the end of 2014.  There are a number of factors that led to this, but the main cause was the falling price of oil.  When oil costs less, so does everything else as it costs less to produce and transport goods.  With little to no threat of rising costs of goods, interest rates on mortgages tend to slip lower as investors are not worried about inflation.

Graph courtesy of

Graph courtesy of

2015 Market Forecast

There is much “writing on the wall” that makes me very excited for 2015’s real estate market.  Compared to the meager demand of buyers seen in 2014, I anticipate many more first-time & “boomerang” (folks who lost a home to short sale or foreclosure who are now looking to purchase again) home buyers entering the market.  Why?  Rent prices are skyrocketing everywhere, thus making it less financially attractive to rent versus own.  Also, lending guidelines are becoming more favorable for folks with small down payments.  For example, FHA financing (which allows down payments of as little as 3.5%) slashed monthly mortgage insurance rates by more than 35% last month.  When combining this drop with the overall decline in interest rates, homes have instantly become more affordable for most buyers.

With more first-time & boomerang buyers on the scene, entry level home prices will appreciate more rapidly than other segments of the market, but the tepid pace of entry level home sales will have a positive ripple-effect on larger homes as more folks look to move-up.  I boldly predict we will see more homes sold this year in the Sacramento area than we have in over 5 years.

As always, interest rates will be a big wild card.  It always seems an unpredictable global, political, or financial event causes rates to swing in the opposite direction conventional wisdom suggests.  Will 2015 play out the same way?  Perhaps, but given the low cost of oil (which keeps rates low) and the sputtering pace of the stock market (if stock market does poorly then rates tend to fall) I would be incredibly surprised to see rates increase more than ½% from their current marks.  30-year rates are below 4% presently and 15-year rates are inching towards 3%.

All in all, the real estate market looks rosy.  Perhaps that’s due to the shade of my glasses, but the combination of hungry buyers, willing & able traditional sellers, and accommodative interest rates and lending guidelines make it hard to believe 2015 will be a poor year for the market. As always, I’m thrilled to have a front row seat while it plays out, and I’m honored to have your trust to help navigate your real estate affairs.

Posted by: msundermier | January 16, 2015

Hear That Sound? Its a Refi BOOM!

We are only 5% into the New Year, and I have already locked 25% of the total number of loans I did in all of 2014. We are officially in a REFINANCE BOOM due to SUPER-LOW INTEREST RATES! Last month I posted a short video titled “Will Mortgage Rates Go Even Lower?” They indeed have done so, as 30-year fixed rates have plummeted well below 4% and 15-year fixed rates are nearing 3%. Rates are re-approaching levels seen in Spring 2013, when mortgage rates hit their all-time lows.

A Refi BOOM is underway
The Refi Boom has spread like wildfire. In one instance, I had one client refer a friend, who referred another friend, who referred another friend, who referred another friend…all in a single week! Thank you Ben for spreading the word about The Blue Waters Group and helping your friends save money.

If you’d like to discuss your refinance options, reach out to me ASAP. No one knows how long these low rates will hang around so let’s collectively seize them while they’re here.

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