Interest Rates Predicted to be 10% by Year’s End

That could easily have been a headline ripped from the pages in major newspapers back in August of 1994 when rates were only 6%–yet by year’s end the prediction nearly came true as a mere four months later they would rise to almost 10%!

Are you old enough to remember what normal mortgage interest rates were like?

Interest Rates DropAccording to Bankrate.com, mortgage interest rates have been attractive for such a long stretch of time that many homebuyers and homeowners might not realize that rates haven’t always been this low. Mortgage interest rates in the 4-percent range were unheard of until 2010, and rates in the 5-percent range were unknown prior to 2003, according to Bankrate.com surveys through the years and a chart of monthly average mortgage interest rates tracked by the Federal Reserve since 1971.

Prior to 2003, higher mortgage interest rates were the norm. In the early 1970s, rates hovered in the 7-percent range and spiked up above 9 percent in late 1975, late 1976 and most of 1978. At the end of the decade and throughout the 1980s, mortgage interest rates rarely dipped lower than 10 percent.

In the early 1980s, mortgage interest rates brushed the stratospheric highs of 18 percent and even 19 percent. Imagine trying to get a home loan with an interest rate of 18 percent. At that rate, the mortgage interest deduction would be a very lucrative income tax perk, but the monthly payment on a loan would be far more painful than a typicalmortgage payment today.

During the 1990s, mortgage interest rates ranged from around 7 percent to roughly 9 percent for many years. It was only in 2000 that rates began to fall to earth. They held at less than 9 percent in 2000, less than 8 percent in 2001 and less than 7 percent in 2003.


Reproduced with the permission of Mortgage-X.com

If you’ve been putting off refinancing your home or buying a new one, don’t get lulled into inaction with the thought that these new low rates are here to stay.

The information
contained in this article is educational and intended for informational
purposes only. It does not constitute real estate, tax or legal advice, nor
does it substitute for advice specific to your situation. Always consult an
appropriate professional familiar with your scenario.

 

Drew & Christine
Morgan did not necessarily participate in these sales.

DRE License Numbers
01124318 & 01174047

Drew & Christine
Morgan, REALTORS | Notary Public

 

 

Saving More For A Down Payment–is it Wise?

Is it Wise to Save More For Your Down Payment?

Are you a first-time buyer wondering how you’ll ever have
enough of a down payment to buy your first home?

Do you wonder how much down payment you need for a home? Did
you know that if you’re buying a home and using FHA financing your down payment
could be as little as 3.5?. Ten percent down loans are also making a comeback
and are quite common once again.

But should you wait and save more for your down payment so
you can be 20% down? In our current market, that might not be such a great
idea.

Home values have been increasing rapidly in the last year.
An area in Belmont known as Sterling Downs offers many first time buyers
affordable living options. But the values there have been rising with the rest
of the tide.

This graph illustrates the price trend in the last year in
Sterling Downs, Belmont. We used homes which closed escrow since January of
last year that were three bedrooms and between 900 and 1,100 square feet so
that the sale prices weren’t affected by the size of homes selling.

Clearly it would be near impossible to keep up with the increase
in the selling prices simply by saving more money each month from your paycheck. We estimate
that in 2012 to date the average Sterling Downs home increased $75,000 or just over
$5,000 per month.

If you have been waiting to buy a home and need some advice
on some of the varying financing options which are available, feel free to contact us and
we’ll refer you to one of the great mortgage brokers who can answer all of your
questions.

 


Mortgage-rates27-300x300
The information
contained in this article is educational and intended for informational
purposes only. It does not constitute real estate, tax or legal advice, nor
does it substitute for advice specific to your situation. Always consult an
appropriate professional familiar with your scenario.

 

DRE License Numbers
01124318 & 01174047

Drew & Christine
Morgan, REALTORS | Notary Public

All data was retrieved
from MLS Listings, Inc. The Multiple Listing Service for San Mateo County.

 

Belmont Median Home Price Hits Record High

What’s up with this crazy market? The stock market hit an
all time high this week and our local housing prices are right in step. Pundits
say that our housing market tracks the S&P 500 and if they’re right, we’re
in for a heck of a ride.

Belmont housing prices continued to show gains into February
as Belmont had both month-to-month and year-over-year increases in the median
price—so let’s start there.

This graph shows the median price trend for the past year in
Belmont.


February 2013 for Belmont

[click on the image for a larger graph]

MEDIAN PRICE

The median home price in Belmont increased 42% last month
over a year ago. Belmont’s February home price reached $1,108,000. To put that
in perspective that is the second highest median home price for Belmont since we began tracking the market in 1998. The only other time it was this high was in
October of 2007—right before the housing crash hit the Peninsula.

If you’ve been following our market
update you know we never leave the raw numbers alone. Since Belmont has a relatively
small number of homes selling each month when a disproportionate number of
smaller or larger homes sell in a given month it impacts the median home price and
skews it off axis.

In order to adjust for this we look at the size of homes
selling in the two periods. Insofar as we know we are the only local experts
drilling down to this level of detailed analysis.

Homes which sold in February 2103 in Belmont were 20% larger
than they were in 2012 during the same period, so while the median increase in
price was 42%, could this mean the adjusted median home price gain was actually
closer to 22%?

Looking at it another way, the difference in the size of homes
selling in the two periods was 1,970 square feet in 2013 and 1640 square feet
in 2012—a difference of 330 square feet (20% increase this year). Now let’s
multiple that by the median price per square foot the homes sold for in 2012
and we get $181,500. If we add that to the median price in 2012 our adjusted
median home price for last year would be  $961,500—meaning that using this method for
adjusting the median home price we get a 15% increase year over year; and the
reality probably lies somewhere in between. Any way you slice it, 15-20% increase
year-over-year is an amazing rebound and this increase will hopefully create
more “equity sellers” and more seller’s with equity means more sellers who can sell which will in turn increase the housing supply.

One of the most impressive statistics is that only two homes had any price reduction at all and just as few sold for less than the seller’s asking price.

SALES

Sales were down this year over last so we checked the
inventory levels to try and understand why. In January of 2012 there were 21
new listings which hit the market. Adding to an already bloated inventory that
caused the inventory level last year in February to soar to 41 homes available
for sale. Contrasting that to this year when the new listings dropped 50% to
only 14 and our inventory of homes for sale stood at a paltry 12!

PERCENT OF ASKING

In February of 2012, seven of the 19 sales, or 37%, were for
more than the seller’s asking price by on average $46,000. This February 73% of
the sellers received on average $106,000 over their asking price.

For those sellers who were less fortunate, in 2012 53% sold their
home for on average $29,000 less while in 2013 only 18% had to sell for on
average $35,000 less.

The percent the sellers received of asking were 97.3% in
2012 as compared to 107.7 in 2013.

If you are considering selling your home the above statistics
might lead you to believe that it’s back to the old days when any agent could
put a sign out front and sell your home. And while that may be true—that your
home might sell—the percentage you actually receive of your asking price varies
relative to the degree of expertise in agent’s marketing plans and advice. If
you want to be statistically guaranteed that you’ll get the best results,
contact us for a consultation. Our record for selling every home we’ve listed,
for more money, and in the shortest period of time is unmatched—of the top
Belmont REALTORS, nobody has us beat.

If you are looking for someone to help you sell your home, we’re someone you should know.

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

Drew & Christine Morgan did not necessarily participate in these sales.

DRE License Numbers 01124318 & 01174047

Drew & Christine Morgan, REALTORS | Notary Public

*All data was retrieved from MLS Listings, Inc. The Multiple Listing Service for San Mateo County.

 

Belmont’s Proposed Sewer Lateral Requirement Might Just Stink

Crocodile-in-the-sewer-urban-legends-231554_487_491

We initiated this post on the Belmont Patch and wanted to make sure the residents of Belmont know what their City Council is working on as the newest proposal in keeping Belmont’s residence safe.

I tend to stay away from expressing our opinions about the machinations of Belmont’s City Council but I thought their recent proposal which burdens every home seller with a sewer lateral inspection and repair requirement needs some public scrutiny.  

What is a sewer lateral?

It’s the underground pipe that runs from your home to the public sewer system.

What’s the issue?

In some cases, the sewer lateral can leak or even break causing sewage to seep into the ground—similar as to a leach field used in septic systems but not as sanitary. It also has the unwanted effect of possibly allowing ground water (from rain for example) to enter the sewer system which can overburden the system.

What’s the Fix?

First, you have to learn if you have a faulty sewer lateral. There is a relatively inexpensive smoke test which Belmont has been employing to detect faulty sewer laterals. The more expensive way to discover this is through a field test with a camera which is snaked through your sewer line to detect visible deficiencies.

How much does it cost if I need to repair my sewer lateral?

That depends. An short run and easy fix from your home to the street might cost under a thousand dollars but could also reach ten times that amount if there are difficulties in reaching the sewer lateral or, as in the case of many Belmont homes, the sewer lateral has a very extensive run across multiple properties before it reaches the main city sewer line.

What the City of Belmont is considering:

The Belmont City Council has been deliberating whether or not to force each homeowner to perform a test and if necessary repair the sewer lateral before they can sell their home. That proposal is called a “point of sale” or POS proposal.

What’s the problem with their proposal?

There are several issues with this approach which could cause a homeowner a problem should they need to sell their home and either not have the funds to repair the sewer lateral, or not have the time before the close of escrow. Amendments to this proposal include ways a homeowner could negotiate with a buyer to inherit the burden but so far the proposed workarounds appear to be at odds with lending and escrow institutional requirements.

What’s the answer?

The City of Belmont is currently testing sewer laterals utilizing a smoke test which offers the added benefit of detecting downspouts that may be discharging roof runoff into the sewer system rather than the storm drains. Should they find a leak they could then require the homeowner to repair their sewer lateral and have the opportunity to secure financing if needed.

The POS proposal seeks to limit the sewer lateral test to a relatively small subset of homes—only those which sell in a given year, which in 2012 was only 236—while the easily performed smoke test could potentially reach far more homes.

One wonders if the city is truly interested in fixing the sewer lateral problem or pushing it off onto those who will have little voice in the next election—those selling their home and moving away.

UPDATE–I attended the meeting with the Belmont staff and council on Thursday, the 14th to hear their newest idea of the Point of Sale requirement for sewer laterals. Be clear, the City Council has directed the staff to discuss how to best implement the POS, not whether or not the POS is the best way to deal with the issue.

Clearly there is a need to repair broken sewer lateral lines in our city. Having sewage seep into the surrounding ground is not ideal, but the larger problem appears to be the amount of water which enters broken sewer laterals during and after heavy rains. This water then ends up taxing an already overburdened treatment system and anyone who lives in Belmont knows the cost of maintaining our sewer system keeps getting passed along in the form of rate increases on our property tax bills.

But is it leaking water into our sewer laterals which is the major culprit or is it the city’s very own main lines? The smoke tests which the city has been performing clearly revealed one of the greatest issues are folks who have tied their downspouts into the sewer system rather than divert the water to run down the curb and into the storm drain. So again we question, are we moving forward armed with all of the information we need or just moving forward to give the impression we’re making progress?

The rainy season is almost over and we’d suggest the council, which appears ahead of their skis right now, take a step back and get more information and input before storming ahead. Gathering more information from lending institutions, title companies and plumbing contractors who specialize in sewer lateral replacement might prove to be a good start. Having the city deliver the results of their smoke testing to the public for scrutiny might also show some good faith that these decisions are based on solid data; then set a date for action prior to next years’ rainy season.

The question of course today is why a POS vs. requiring each property owner to test and fix their sewer laterals? If the City Council is truly concerned about fixing the issue, a POS requirement severs to only uncover a small percentage of the defective sever lateral lines—commensurate with home many homes sell each year. Since it’s an election year, this seems a politically palatable way to deliver bad news—only those moving would be affected by the cost (estimated to average $7,500 per household). But is it the best answer to the problem? Probably not.

If the council is truly concerned with the health and safety of its citizens it might continue down the path of requiring each and every homeowner to remedy this situation independent on whether or not they are moving. I’m struggling with this but the only reason I can see for not requiring every homeowner to repair their lateral is it would be politically unfavorable.

If the City Council has its way a POS would be eminent. The staff has been directed to develop a step-by-step plan for administrating this new burden. The proposal, if I can paraphrase it and as it stands now, is before a home could be transferred, it would need to have a certification the sewer lateral is intact. That encumbers the homeowner to order and pay for a sewer lateral camera inspection costing about $150-$200 dollars depending upon ease of access. The results of the test and camera footage shall be delivered to the public works department for analysis—promised not to take more than a day or two. If your sewer lateral passes, you get to pass “GO”. If not, you will be required to fix it and provide a certification to the city prior to the close of escrow. Of course the city will have its hand out for encroachment permits, building permits and so forth and they’ve offered no proposed relief on these fees in order for homeowners to comply. Or, the third option presented on Thursday, was that the buyer of the property could sign a pledge to repair the sewer later at their expense with 180 days of closing—and deliver a deposit as security of performance—an amount which has yet to be determined.

Of course this will raise all sorts of red flags for lenders, who if they get wind this requirement exists, will force the repair of the sewer lateral prior to the close of escrow as part of a lending requirement. So while we applaud the city staff for attempting a workaround, their third prong option still has some kinks in it. Namely that once the seller and buyer negotiate who will pay for this repair those negotiations will become part of the contract—the very contract the lender will scrutinize and thus require a sewer lateral certification before they will lend on the property.

As REALTORS, we’re used to handling city issues in the form of disclosure such as the new smoking ordinance, school boundary issue, or even dog and alarm licensing requirements so this newest burden which the city apparently feels we are fighting just for the sake of having to do less work, is really a non sequester for us. What this will burden is the home sale transaction—the seller and the buyer—to find a way to appease the city’s new requirement without unwittingly defrauding the lender at the same time.

The views expressed here are my own–Drew Morgan and not necesarily the views of the National Association of REALTORS, The California Association of REALTOS, The San Mateo Association of Realtors or even my wife.

Belmont Greek Festival – Free Tickets Just for Asking

It’s that time of the year again for the Greek Festival in Belmont.

Each Labor Day weekend the Greek Orthodox Church hosts its annual Greek Festival at the Church of the Holy Cross at the corner of Ralston Avenue and Alameda de las Pulgas. This year, the Greek Festival in Belmont will be held September 3th-5th 2011- Saturday, Sunday from 12:00 PM to 10:00 PM and Monday noon-8:00 PM . If you love to try great food and spirits you’ll be in heaven. The Greek Festival never disappoints when it comes to entertainment for the whole family.

As a supporter of the Greek Festival, we have complimentary tickets for you and your family. Simply use this form to request your tickets and we’ll get them to you A.S.A.P.

Greece 

Here’s some more information on the event from their web site…

Find the meaning of kefi (joy) in this three-day true Greek extravaganza. The Belmont Greek Festival will feature delicious Greek meals and desserts, nonstop music and dancing, exciting exhibition folk dancing, choral folk singing, a captivating mythology play, a fun children’s amusement area, and children’s entertainer Andy Z.

Up to 20,000 people are expected to attend, festival organizers said. All guests will receive a special 40th Anniversary commemorative program book containing articles about Greek culture, recipes, Greek language phrases, information about the festival’s history and photos from past festivals.

“Greeks are famous for their hospitality,” said Festival Co-Chair Gary Brenner. “Our Belmont festival was the first Greek festival in Northern California, and we’re so proud to welcome guests of all ages to our 40th celebration weekend.

“It all starts with lots of fantastic, mouth-watering food and drink,” Brenner continued, “and it keeps on going with the fun and excitement of our dancing, music and theater. Before you know it, you’ll be shouting, ‘Opa!’ just like the Greeks.”

Some of the favorite festival menu items will include souvlakia (Greek shish-kebab), barbecued lamb chops (with special Greek seasonings), spanakopita (spinach and cheese stuffed inside layers of filo pastry) and dolmades (grape leaves wrapped around ground beef and rice). Not forgetting the best Greek salad west of Athens, and roast lamb – the festival will feature 10 spit-roasted whole lambs turned for hours by hand before visitors’ eyes!

There will also be traditional homemade Greek pastries such as loukoumades (doughnut holes covered with honey), baklava (layers of nuts and filo pastry soaked in honey), kourambiedes (crescent-shaped butter cookies covered with powdered sugar) and galactobouriko (filo pastry filled with custard and covered with syrup).

Visit the taverna to sample Greek libations such as ouzo (anise-flavored aperitif), retsina wine and Metaxa brandy, and enjoy special wine tastings featuring Greek and American labels. Draft microbrewery beer and bottled Greek beer will also be offered to complement your meal, or just enjoy a glass sitting on the plaka (central plaza) while watching fellow visitors dance.

Cooking demonstrations will be offered daily – learn the secrets of Greek cooking and bring the benefits of a Mediterranean diet home!

Visitors also will enjoy continuous music from a live Greek band so they can dance the traditional kalamatiano, tsamiko, zeimbekiko and other Greek dances. The amazing “Sons of Ulysses” will dazzle the audience by lifting tables and chairs with nothing but their teeth!

In addition, several award-winning folk dance groups will perform throughout the weekend in their colorful, hand-made costumes. In an outdoor amphitheater reminiscent of the ancient theaters of Greece, children and adults alike will enjoy a special drama production featuring the heroes and villains of Greek mythology. The popular Festival Singers and Folk Ensemble will also perform Greek folk songs in the amphitheater.

Look for the Fun Zone children’s area in the shadow of the windmill, boasting games, rides, bouncy castles, crafts and more, just for young people. Don’t miss nationally-known children’s favorite Andy Z, a local singer-songwriter-guitarist who brings his award-winning show to the amphitheater on Saturday and Monday.

Tours of the award-winning Byzantine-style church, including the recently-installed mosaic iconography, will be given throughout the weekend, and the Holy Cross Church Liturgical Choir will sing during the church tour on Sunday at 2:00 PM.

Speak Greek? Visit the Greek Language School’s cultural booth, malista (yes)! Other festival highlights will include art, clothing, jewelry and gift boutiques, as well as religious icons and a bookstore.

The Church of the Holy Cross supports many charitable groups throughout San Mateo County, and each year, the church donates a portion of the festival proceeds to several local charities. Previous recipients of festival donations have included Samaritan House, Interfaith Network for Community Help (INCH), Children’s Advocacy Council, local schools and churches and the Belmont mayor’s choice of charity. In addition, Holy Cross Church sponsors several children from the Children’s Receiving Home of San Mateo County as special guests of the festival.

The hours of the Belmont Greek Festival are Saturday, September 4, and Sunday, September 5, from Noon to 10 PM, and on Monday, September 6, from Noon to 8 PM. The Fun Zone for children closes at 7:00 PM all three days. The Agora (our "White Elephant" room) closes at 6:00 PM all three days.

Admission is $5 for adults and $2.50 for seniors and youth ages 13-17. Children 12 and under are admitted free, accompanied by a parent or guardian.

For more information, explore their website further, or call (650) 591-4447. Yassou!

Public announcement regarding health care for children

From the Department of Insurance:

Act Before March 1st to get Lower Premiums for the Health Care Your Children May Need!!

Important Enrollment Window Closing Soon

If your children are uninsured, there are new options to get them covered, but it's important to act now!
Visit finder.healthcare.gov to search for coverage options. 

Individual Insurance

With many employers cutting back on health insurance, more Californians may need to shop directly with an insurance company or insurance agent for child or family coverage. This "individual market" insurance can be expensive, but keeping some important rules in mind may help:

  • No More Denials for "Pre-Existing Conditions"
    Because of the new federal health care law, all children must be offered health coverage if they apply. Insurance companies can no longer deny kids coverage because of a "pre-existing condition" like asthma or diabetes.
  • Apply Before March 1st to Avoid Much Higher Costs
    If you wait and apply after the "open enrollment period" ends on March 1st, you could face much higher premium costs since there are no limits on premiums outside the open enrollment period. After March 1st, the next "open enrollment period" is the month your child was born. For example, if your child's birthday is August 8th, you can apply during the entire month of August, without facing significantly higher premiums. (There are other open enrollment periods based on changes in family circumstances such as a birth, divorce, job loss, or loss of public coverage.)
  • Keep Your Children Insured to Avoid Higher Costs
    You may face a significant penalty premium increase (20 percent) if you let your child's coverage end and then apply again, so keep your children insured.
  • You Have Protections if Your Child is Denied Coverage
    Remember, the health care law means that no child should be denied insurance for health reasons. If your child is denied coverage for any reason, call the state health insurance hotline at 1-888-466-2219.

Affordable Insurance Options: Healthy Families and Medi-Cal

Boy using inhalerIf a private insurance plan is unaffordable, don't give up. With the recession hitting California families hard, low-cost or no-cost insurance from Healthy Families and Medi-Cal keep millions of California kids healthy. Your child may qualify if your family income is up to roughly $46,000 annually (for a family of three – higher for larger families). For more information call 1-877-KIDS NOW or visit www.100percentcampaign.org/needinsurance/.

Your Job

If you have health coverage through your job, it is not affected by this open enrollment period and you should check with your employer to see if your child can join your health plan too.

 

Sales of Existing Homes Double in Belmont for December 2010.

For Belmont homeowners there appears to be some stability creeping into the market. Home sales were brisk this December—double what they were in 2009. Those of you who may remember the home buyer tax credit was due to end in November last year which pulled a lot of buyers from December sales into November—all across the country. Not so much in Belmont since the qualifying purchase price had to be less than $800,000. Nevertheless we went back to compare previous December sales and they normally fall in the area of 12 for the month of December. One has to go back to 2005 when the housing market was red hot to see sales figures this high.

These first two graphs illustrate the housing activity in Belmont for the Month of December 2010 and the year end averages for the entire year. Bel chart 1

 

 

 

Bel chrt 2 year end

If we run we run down the usual list of market indicators, across the board there are some positive signs for homeowners.

Belmont December 2010

*Highlighted homes were sold by Drew & Christine Morgan. Click on the graph for a full-sized image.

DOM

The time it took for a seller in Belmont to get a contract on their home was at 58, up only slightly from last year’s 50 and is pretty well mitigated with the doubling of sales.

PERCENT RECEIVED

Belmont sellers received 98.1% of their asking price in December 2010 as compared to 97.22 in December of 2009.

Half of the homes in December 2010 underwent price reductions for on average $58,000 before they sold. Last year 42% of sellers reduced their price by on average $69,000.

Of the 24 sales this last December two sold at the seller’s asking price, 16 sold for less than asking (by on average ($33,488), and six homes sold over the seller’s asking price by on average $17,183.

Homes which sold over asking did so on average in 26 days while homes which sold for less took more than 65 days to sell.*

MEDIAN SALE PRICE

If you’ve followed this blog for any length of time you’ve heard us talk about how deceiving the median price can be in any small sample size. Once again the median home price is a bit misleading as it has the median home price in Belmont in December of 2010 at $912,500. That’s $102,750 (12.7%) more than last year’s $809,750.

So the answer lies somewhere in the numbers but ferreting out a more accurate sense of value is difficult. The size homes which sold in 2009 were on average 277 square feet smaller than the homes which sold in December of 2010, which accounts for most of the perceived median price increase. It just so happens that the size home you could get this year was also around 13% larger than last year—effectively whipping out any gain.

Using the year-end totals helps even out some of the distortion inherent in median price figures as the graph above demonstrates. If you take an average of each month’s median home price in Belmont for 2009, the average median home price was $847,604 and for 2010 it was $908,159—an increase of 7.1%. The average size of the home which sold in the two periods also increased from 1730 in 2009 to 2000 in 2020, a 15.6% increase. So was there any home appreciation in Belmont in 2010? Probably not. It appeared that in the first quarter of 2010 homes might increase in value but as quarters two and three came to a close (immediately following the conclusion of the homebuyer incentive programs) it was clear that would not be the case. The fourth quarter managed to salvage some of the losses in the two previous quarters as you shall probably hear soon n the media.

If you are considering selling your home this year be sure and contact us for a valuation of your home. We are experts in selling peninsula properties and our record of selling every home we list for sale is unparalleled in our industry.

 Note: We throw out homes we know were re-listed or underwent huge price reductions only to sell for slightly higher than their greatly reduced price.

Disclaimer: The information contained in this newsletter is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.