Archive for February, 2012


According to the recent published CAR (California Assocation of Realtors)report, a stunning 50% decrease in index for unsold inventory for Solano county properties.  As of Jan 2011, the index was 7.1 while in Jan 2012, the index went almost halfway, 3.8%.  What does this mean?  It means that last Jan 2011, it would take approximately 7 months to sell all available properties in the market considering there will be no additional properties on sale.  As of Jan 2012, it would only take less than 4 months to sell all unsold properties.  In short, it is either an increase in demand and/or steep decrease in supply is happening.  Record low interest rates and favorable home prices continue to attract potential buyers.  NOW is the best time to purchase!


I was recently asked about current local market conditions and wanted to provide readers an update:

 We have strong data showing Vallejo and Benicia in the early real estate early.  The supply of houses is shrinking dramatically from the peak supply years.

 2005 was peak price years for these two cities.                                        

Inventory:  Vallejo: 400 homes, Benicia 50 Homes.

 2007/2008 was the worst inventory on the market and biggest price drops: 

Inventory:  Vallejo: 1,200 homes, Benicia 200 Homes.

 2009 – 2010 inventory was slightly improved and prices sagged or leveled off. 

Inventory:  Vallejo 700 Homes, Benicia 100 Homes.

 2011-now.  In the last 6 months inventory has severely tighten.  

Current levels are: Vallejo 250 Homes, Benicia 40 Homes.

 In addition to the supply, the demand was also changed dramatically. At peak inventory levels, we were only Selling 25 homes per month in Vallejo and 10 homes a month in Benicia. Last Month (December 2011) Vallejo sold 190 homes and Benicia sold 20.

 Generally speaking, real estate values are driven by Supply versus Demand.  Currently we have a tight supply of less than two month supply considering our current buying rate.  In comparison, we have a several year supply several years ago for both Benicia and Vallejo.

 Much of the demand is driven by low interest rates, prices low versus good rent resulting in positive cash flow for most investor purchases and perception of bottom prices.

 The tight inventory has resulted in price tightening and some increases.  Most desirable well priced home are now multiple offers for more than asking price.  Overpriced homes sit until prices are dropped.

 I’m willing to offer lower prices when it makes sense.   However, if a home is priced lower than market value, which Short Sales (homes whose mortgage is higher than the market value) and REO’s (Real Estate Owned by bank generally purchased by Bank at foreclosure sale) often are, then offering a lower price would be a waste of time.   If a home is priced higher or around market value and the home has been on the market for some time, then offering a lower price makes sense.

 Current home loan interest rates are 4% or less for owner occupied purchases and approximately 4.5% for non-owner occupied.  The low prices and low interest rates combined are resulting in attractive payments for homeowners and positive cash flow for investors!

Bottom line:  It is a great time to buy!

HARP: Refinance Even If You’re Mortgage Is Upsidedown

Home Affordable Refinance Program (HARP), the newest program sponsored by the government, which is informally called “short refinance.”  This program allow homeowners with no equity and those who owe more than their home is worth, to refinance into today’s record-low interest rates.

 So, what are the requirements?

1.  Fannie/ Freddy backed loans.  The mortgage must be guaranteed by government-sponsored Fannie Mae or Freddie Mac. You can check yours online by clicking the link:

Fannie Mae – – or call 800-7FANNIE

Freddy Mac – – or call 800-FREDDIE

Other links:

Builder Magazine has an article about qualifications:

Columns in the San Francisco Chronicle expand and some cases contradicts the BM article about HARP.

HARP 2.0 Congress reinstates higher FHA mortgage limit

2.  Be current.  You have to be up-to-date on your payment.  Not even 1 delinquent payment is allowed.

3.  Problem with credit.  Not an issue at all.

4.  Underwater:  Yes since this program is geared toward homeowners that are upsidedown on their loan.  

So, when is it coming and what are the limits on principal reduction?  Answer:  Good news/bad news LTV caps will be removed for all Fixed rate mortgages with terms up to 30 years. Unfortunately, lenders and borrowers won’t be able to utilize this relief until DU (automatic loan approval from Fannie Mae) is updated in March 2012.

Bottom line, this seems like the best program so far to find a bottom in real estate, and to add liquidity to the economy. Every family who accomplishes this refinance, will have more cash to spend which will contribute to economic expansion. Lastly, this program should also reduce distressed sales, which will help the recovery of the housing market.