Three Years In A Row Is No Fluke

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For the 3rd year in a row, Sacramento Magazine (on newsstands now) has featured me as a Five-Star Real Estate Professional, a distinction given to less than 4% of our region’s agents. Even fewer agents have won the award three years running!  These awards are primarily determined from survey responses of Sacramento homeowners and self-nominations are not allowed, so I owe this repeat honor to YOU! Thank you for always supporting and referring my business. I’ve always said your endorsements fuel our business; now I can say they put hardware on the Blue Waters mantle as well!

As many of you know, I did not begin my career as a combined mortgage broker and real estate agent. Since adding real estate sales to my services in 2004, I have had to constantly remind folks I was more than just a mortgage broker. This streak of Five-Star recognition in Sacramento’s most widespread regional magazine feels like I’ve triumphed in not just simply being an all-in-one professional, but becoming one of the region’s best at helping you buy, sell, and refinance!

I can’t emphasize enough the impact you’ve had in elevating my real estate career from a side-show to one of the main attractions in my services. Thank you again for always spreading the word about The Blue Waters Group. Please keep it up :-)!

Thinking of Selling a Rental? This is a MUST WATCH VIDEO

Many of our clients in recent years have converted their old home into a rental as they moved up and purchased a new home. With home prices rebounding to pre-2008 levels, these reluctant landlords are now considering selling their rental property. We invited our favorite CPA, Sean Boyd of Boyd & Associates, into our office to offer some tax tips. Trust me, if you are in this position you must watch this video.

 

 As always, The Blue Waters Group strives to give you valuable and timely insight on your mortgage and real estate matters.  If you are considering selling a rental property in the near future, we are here to help you navigate the many variables involved in doing so.

 

Everything Is Cooling Off

I recently went up to Donner Lake for a beautiful fall weekend. When I came back it felt like I brought the cool air back with me.  The autumn air here in Sacramento feels crisp, healthy, refreshing.

Fall is Cooling Everything Off
Fall is Cooling Everything Off

Similarly, the real estate and mortgage markets are cooling off too.  THIS IS GREAT NEWS!  Much like the changing weather, the current market changes are healthy and refreshing too.  After months of sizzling home price increases, we’re beginning to level off.  Interest rates, too, have cooled off and have fallen from their summer highs.  All of this means home buyers, particularly MOVE-UP buyers, have more opportunities to find their next home at a reasonable price.

This past summer we saw an unbelievable real estate rally.  Much like a caged animal, the market sprung from hibernation and jumped with reckless abandon  Sacramento area average home prices spiked 13.8% from April to August!!!  This rally was exciting and, thankfully, unsustainable.  Had we kept on that pace, we simply would have created a market bubble that surely would have popped in the near future.

The number of homes for sale in Sacramento is on the rise
The number of homes for sale in Sacramento is on the rise

The average sales price has leveled off in recent months

 

Instead, we’re seeing prices level off, homes sit longer for sale, and more homes available to purchase.  This is incredibly good news for home buyers.  I had several clients who looked to buy a home earlier this year who opted to sit on the sidelines and wait for the market to calm down.  These clients now look very savvy & patient (you know who you are :-), as the coming months should present them a more reasonable marketplace in which to buy.

Furthermore, the interest rate spike we saw this summer is beginning to reverse.  In May & June, the markets were largely expecting The Fed’s influence on mortgage rates to “taper.,” thus sending rates higher.  Now, the expectation is beginning to change.  With sluggish economic indicators and a political stalemate threatening to bring our country to a halt, uncertainty is high.  As a result, fixed mortgage rates have fallen nearly ½% in the last month.

Again, all of this means home buyers are in a much better position to find the right home without the worry of insane, multiple-offer situations.  If you are a first-time home buyer, there’s no need to panic about being “priced-out” of the market in the near-term. If you are a move-up buyer, this balanced market between buyers and sellers is the perfect environment to buy your new home and sell your old home.

As most clients know, our firm is perfectly suited to help you with all of your home buying, financing AND selling needs.  Many clients find this one-stop-shop form of real estate service incredibly valuable and convenient.  For the rest of the year, if you enlist us to help with all three services (buying & financing a new home as well as selling your old home), we will reduce our listing commission by ½%.  On a $400,000 home that’s a $2000 discount!

Thanks as always for reading Matt’s Memos and your continued support by returning to and referring The Blue Waters Group.

FHA Makes It Easier To Buy A Home Again

Last month, FHA announced their new “Back-To-Work” program, allowing people to buy another home only 12 months after losing their prior home to short-sale, foreclosure, or bankruptcy. This program has the potential to help you or someone you know that lost their home in recent years due to economic hardship. In recent days some of our lenders have begun to implement the “Back-To-Work” program, so we are very excited to share it with you.

Prior rules required a 3-year waiting period, so this program will help get people on the track back to homeownership much faster than previously possible.

As with any loan program, there are fine-print details. Here are some of the highlights:
-Purchase loans only
-Borrower must have experienced an “economic event” that led to employment loss and/or income loss that reduced the household income by more than 20% for 6 or more consecutive months
-Housing Counseling certification program must be completed prior to applying for the new mortgage
-Satisfactory credit history in the past 12 months, thus showing the borrower has fully recovered from the economic event

Please get in touch with me directly or pass along this post to anyone else you know who may want to discuss the possibilities, benefits, and requirements of this new program.

 

Meet Our Newest Team Member & Check Out Our Facebook Sweepstakes

We are so excited to share the latest news of our company’s growth.  We have doubled our office size (without moving!) and have added an exceptional member to our team.  Check out the video!

We are also running a Sweepstakes on Facebook through September 18th.  You can win an iPad Mini and other great prizes just for “Liking” and “Sharing” our page.  Go to www.Facebook.com/TheBlueWatersGroup for full details.

Low Rates + High Home Values = Perfect Time To Refi

Its no secret…home values are skyrocketing everywhere!  Sacramento Home Prices are up 31% in just the last year!  Besides leading to increased home sale opportunities for those looking to move-up, this trend has also led to more and more refinances.  In fact, most of my current refinance clients could not have refinanced just 6 months ago due to low or no equity.  But now, they’re experiencing the benefits that come with thier fast-rising home value.  If you’ve previously written off the possibility of refinancing, then its time to reconsider your options.  Even with only 5% equity, homeowners with credit scores over 740 have options to refi to 30-year fixed rates around 4% with no mortgage insurance.  And you don’t even need to be eligible for HARP to do it.

Speaking of HARP, the Home Affordable Refinance Program (HARP) has been extended through 2015.  HARP offers refinance opportunities for homeowners with no equity (see if you’re eligible).  It was set to expire at the end of this year but the government, in one of its rare recent occasions to agree on something, approved its continuance for two more years.

To make these opportunities even sweeter, mortgage rates remain super low.  I’ve been finding 30-year fixed rates around 3.5% and 15-year rates under 3% for clients with 20%+ equity.*

Bottom line…now’s the time to consider refinancing.  If you contact me this month to determine your refinance options, I will waive the initial credit report fee cost ($25 value).  As I’m writing this post, I have several specific clients that come to mind that should take advantage of these low rates and rising home values.  If I don’t hear from you, maybe you’ll hear from me in the coming days! 🙂  This is the perfect time to refi; I don’t want you to miss it.

*Rates shown are only meant as rough illustrations.  For full rate and APR details, please contact me. I assure you; rates like these are currently available for qualified borrowers

Award Winning Professional Matt Sundermier Gives His 2013 Real Estate Market Forecast

My real estate market forecasts are the most widely read articles on MattsMemos.com.  Their popularity is certainly not due to profound accuracy; in fact, I’m probably wrong more than I’m right.  Nevertheless, it’s been fun for me to take my best-guess and, as it turns out, it’s been fun for my followers to read.  You can read prior year’s forecasts here, here, and here.  But, you’ll get more from reading the one below which also includes home refinancing, buying, and selling tips.  If you like it, share it!  If you disagree with my projections, make a comment…I’d love to hear your thoughts on our CRAZY real estate market.

Refinancing

Everyone (including me) predicted mortgage rates would rise slightly through 2012 as the economy slowly recovered and as the presidential election brought some clarity to the fiscal and political direction of our country.  We were all wrong.  2012 saw lower rates than ever before, largely due to The Fed’s decision to buy mortgages.  When the Fed’s announced they’d steadily purchase billions worth of mortgages until the unemployment rate hits 6.5% (its currently at 7.8%), mortgage rates fell dramatically.  Presently, The Fed is buying $3.7 billion in mortgages every day, yet the industry only originates $2.5 billion daily, essentially meaning mortgages are “selling-out.” Simple economics dictate that regardless of if its a mortgage investment or a bunch of bananas, when a product sells out due to high demand, prices rise (just think of skyrocketing prices in New England right now as there isn’t enough supply to meet the demand of frantic buyers preparing for the blizzard!).  When the prices of mortgages to investors rise, the rates to borrowers fall.  As long as The Fed stays the course on buying every mortgage off the shelf, we will see these low rates remain throughout this year.  Currently, 30-year fixed rates are around 3.75%.  However, economic conditions around the globe are improving, and with brightening economic forecasts both at home (our real estate rebound will do wonders for America’s economic health) and abroad (many believe the worst of Europe’s fiscal woes are behind them), rates should increase from the record lows we saw last year.

More importantly, accessible programs (like the Home Affordable Refinance Program – HARP)  and rising home values (much more on this below) are allowing more folks to refinance as we march through 2013.  According to statisticians much smarter than me, 4 million more Americans are eligible to refinance today compared to last year simply because their home is worth more now.  If you’ve tried to refinance in the past but hit hurdles due to your home’s value, be sure to check back again.

Read these tips if you’re hoping to refinance this year

Home Buying

After 6 years of having the negotiating advantage, home buyers last year suddenly found themselves competing over a short-supply of homes for sale.  I foresee this feeding-frenzy dynamic to continue well into 2013…possibly beyond.

The Red Line shows how Sacramento home prices have steadily and dramatically increased
The Red Line shows how Sacramento home prices have steadily and dramatically increased

Sacramento County home prices rose 20% in 2012, so many sellers are less inclined to put their homes up for sale if they believe their home will continue to be worth more in the near future.  Furthermore, there’s much pent-up demand from home buyers, including ones who are now eligible to purchase after a short-sale or foreclosure.  Real estate investors also make up a big portion of the home buyer pool as they see big profits in real estate from both a strong rental market and swiftly rising home prices.  In conclusion, the imbalance between strong demand and weak supply should continue this year, leading to further steady price increases for sellers and challenging times for buyers.

If you expect to be a buyer in 2013, here are a few tips:

Home Selling

Home sellers are finally back in the driver’s seat, and likely will remain there through 2013.  Due to rising home values, many once upside-down homeowners are discovering they can now sell and break-even.  “Traditional” sales by sellers with equity now comprise over 60% of home sales, compared to only 34% from just two years ago.  Furthermore, bank-owned sales are down nearly 90% from 2010, thus showing signs banks are foreclosing on and, more importantly, re-selling significantly fewer homes.

These figures show the number of bank-owned REO homes that have hit the market in Sacramento county.
These figures show the number of bank-owned REO homes that have hit the market in Sacramento county.

In my opinion, the fear of banks’ “shadow inventory” is grossly exaggerated as many banks are trending to renting out their foreclosed homes or selling homes in bulk to investors who also turn many of the homes to rental properties (this recent Bloomberg article discusses this trend in detail).  Bottom line, 2013 will afford many home owners to sell after years of riding out the market, and to command higher prices than the last neighborhood home sale before them.

Here are a few tips for Home Sellers in 2013

To wrap up, 2013 will see rising home prices, stingy levels of inventory, and slightly elevated interest rates.  It should be a very healthy year for real estate, and likely be the catalyst for economic growth in many other sectors.  The Blue Waters Group is honored to stand alongside you in your home buying, selling, and refinance transactions in the year ahead and beyond.

Final Postcardlong

As always, thank you for reading.

-Matt Sundermier, Mortgage Broker & Real Estate Agent
Owner/Broker of The Blue Waters Group
Two-Year Winner of Five-Star Awards as featured in Sacramento Magazine

Tips for 2013 Home Sellers

Now is the Time to Move-Up – If you’ve been hanging on to that smaller house a little longer than planned, now is the time to sell and move-up to the bigger house.  Entry-level homes are in tremendous demand from investors and 1st-timers, while mid-range homes are not moving quite as quickly.  Homes under 1600 square feet went up 23% in Sacramento County last year, compared to 15% for larger homes 1600-2600 square feet.  This allows you to command the highest price possible for your old home, and better chances of scoring a deal on your next house.

Make Demands – This isn’t about greed or bullying, but today’s market enables sellers to be very firm on what terms they accept.  Don’t be bashful about waiving appraisal contingencies, demanding higher deposit amounts, and listing at aggressive prices.

Know the Code (tax code, that is) – The tax rules on short-sales are constantly changing.  Due to the fiscal-cliff negotiations at the beginning of 2013, short-sales are still exempt from federal income tax.  However, state legislation made so such extension.  Before you look to short-sale your home, get in touch with a trusted CPA and real estate attorney to know your options and outcomes.

Tips for 2013 Home Buyers

Know What You’re Looking For – You have to shop for a home with laser-focus, and act decisively when you see what you want.  Don’t window shop for too long; homes are often selling within days to above-asking-price offers. Make a list of features and amenities you’re looking for, and when you see the right house get in there and make a strong offer.

Be Prepared to Pay Market Value (if not more!) – The days of simply looking for a good deal are over.  Sellers have the luxury of being picky in today’s market (more on this later), so “low-ball” offers are easily ignored.  In 2012, Sacramento area home prices rose an average of nearly 2% per month (WOW!), so even if you end up paying a few thousand dollars above-asking price its likely these rising values will aid you to recoup that in no-time.

Credit Wounds Heal Faster Than You Think – Most folks are eligible to re-purchase a home after just 3 years since a short-sale or foreclosure, or 4 years since a bankruptcy.  All you need is a 3.5% down payment and a good credit history since your last mishap.  If you’re considering getting back in the real estate game, obtain a copy of your credit report (we can help with this) to see how your credit past has been reported.

Be Patient & Have Faith – Most clients I work with don’t get the first house they write an offer on.  Some don’t get the 10th house!  But, in hindsight all of them ultimately bought the house they were meant for.  Keep your head up, and have faith that things happen for a reason.

The Blue Waters Group is Expanding & Expecting!

Since opening our doors in early April, The Blue Waters Group has met some major milestones!  Thank you for all of your support, business and referrals that have quickly propelled us from a new start-up to thriving firm.
Our group is expanding, with the newest addition to our group, Donna Adams.  We are elated to have her on board.  Check out our latest video to meet her, as well as get info on my “expecting” news (what could I mean by that?), as well as details about an extra charity drive that we’re kicking off on Halloween (costumes included).
Thanks as always for your support!