Welcome to the "Z" Team!

The Appraisal Foundation’s Appraisal Practices Board is seeking public comment on a proposal about how to adjust comparable sales for seller concessions when making valuations.  

“A common tool used to help facilitate a property transaction is to have the seller provide financial assistance or incentives to the buyer,” the board’s proposal states. “Such assistance may be considered a seller concession or financing concession and this is important because it may have an influence on the contract price. The purpose of this guidance is how to identify, verify, analyze and adjust sale comparables for both seller and financing concessions.” 

You can view the appraisal board’s second draft at the Appraisal Foundation Web site, and submit public comment on the draft proposal through Feb. 29. 

We believe financial assistance or incentives often help families buy a home. Appraisers can reflect and adjust for concessions in their analysis. This has been our experience here in the “Sierra Foothills” region of Placerville, El Dorado County, California.   What comments or recommendations could you offer?

Source: REALTOR® Magazine Daily News

In markets where foreclosures and distressed properties are common, experienced appraisers should be used to conduct the complex appraisals, says Appraisal Institute President Sara Stephens.

However, the Appraisal Institute has acknowledged that new rules blocking lenders from hiring their own appraisers mean that appraisers are often hired by appraisal management companies, which generally absorb some of the fee that appraisers earn. 

The National Association of REALTORS® has long asserted that appraisals conducted by less experienced appraisers can derail transactions and impede the market’s recovery. A recent REALTOR® Magazine webinar addresses these issues and offers advice on how to work with appraisers. Download the presentation slides or playback the event recording.

 Source: “Unskilled Appraisers Seen as Problem,” NASDAQ (01/17/12)

This is likely occurring in your region as we contend with it in the “Sierra Foothills” of El Dorado, Placer, Amador and Sacramento Counties of California. More information at: www.sierraproperties.com or www.dougandbudzeller.com

Several recent indicators for the real estate industry are pointing to a market that is on the mend and entering recovery mode. 

Housing experts’ predictions for the new year tend to center around a market stabilizing before entering a gradual, albeit very slow, recovery. However, the tone is more upbeat than it has been in years for the housing market. This reflects current trends in the Placerville, El Dorado County, CA., regions.

Here are a few of the signs that are showing the market moving in a more positive direction: 

Home sales: Existing home sales are expected to increase 12 percent this year, following a 2 percent jump last year, Moody’s Analytics predicts. The signs are already showing: In November, pending home sales — a gauge for future home buying — reached its highest level in 19 months, the National Association of REALTORS® reported. (Read more.)

Consumer confidence: With mortgage rates at record lows and housing affordability high, about 71 percent of Americans say now is a good time to purchase a home. Also, more Americans are optimistic that home prices will rise over the next year — about 26 percent say prices will rise in 2012, an increase of 4 percent over the last survey, according to Fannie Mae’s December National Housing Survey

More information at sources: “Housing Outlook Is More Upbeat,” USA Today (Jan. 15, 2012) and “Consumers More Confident, Survey Says,” Deseret News (Utah) (Jan. 16, 2012)

Borrowers who have a history of paying rent on time may see a boost to their credit score.

Experian, a leading credit report company, added a section to its credit reports last year that reflected on-time rent payments, which helped give a boost in the credit scores to some on-time rent payers. Now the two other major credit reporting companies are following suit. 

recently announced they are also adding a score that reflects payment histories from landlords, The New York Times reports.

“Evidence of positive rental payments could be a plus for consumers,”  Joanne Gaskin, FICO’s director of product management global scoring, told The New York Times. 

Nearly half of high-risk consumers saw an increase of 100 points or more after their rental history was added to their credit report, says Brannan Johnston, the managing director of Experian’s rent bureau. Consumers with average or higher credit scores, on the other hand, did not see any major difference to their scores. 

For former home owners who lost their homes to foreclosure, they may be able to rebuild their credit histories more quickly now by showing they are “very responsible renters,” Tim Grace, senior vice president of CoreLogic, told The New York Times. 

Full article at source: “A Good Rental History Can Help Borrowers,” The New York Times (1/ 5/12), other news from Placerville, El Dorado County, CA. at: www.sierraproperties.com

Due to falling home prices and record low mortgage rates, pushing home ownership in reach to more families, according to the U.S. Department of Housing and Urban Development (HUD).

Home owners are bringing in nearly double the median income they need to cover the cost of an average home, HousingPredictor reports. 

“With interest rates at historically low levels and markets across the country beginning to improve, home ownership is within reach of more households,” Bob Nielsen, chairman of the National Association of Home Builders, said in a statement.

However, some consumers are finding more stringent lending standards for getting a mortgage a roadblock to home ownership, and some housing experts have blamed tighter underwriting standards in recent years for continuing to hold back the housing market. 

Source: “Home Affordability Reaches 1971 Level,” HousingPredictor (Jan. 11, 2012)

More news from the “Sierra Foothills” of El Dorado, Placer, Amador and Sacramento Counties of California at: www.sierraproperties.com or www.dougandbudzeller.com

Home buyer affordability continues to be pushed higher due to mortgage rates remaining at record lows, Freddie Mac reports in its weekly mortgage market survey. 

“Mortgage rates ended the year hovering near historic lows in an already affordable housing market,” Frank Nothaft, Freddie Mac’s chief economist, said in a statement.  With affordability so high, Nothaft notes “it’s not surprising then that over 5 percent of households in December plan to purchase a home over the next six months, the highest share since May,” according to The Conference Board. 

For the ninth consecutive week, 30-year fixed-rate mortgages, the most popular choice among home buyers, have been at or below 4 percent. In fact, only twice this year did 30-year rates average above 5 percent, Freddie Mac reports. 

Here’s a closer look at rates for the week ending Dec. 29.

• 30-year fixed-rate mortgages: averaged3.95 percent, with an average 0.7 point, inching up from last week’s all-time record–a 3.91 percent average. A year ago at this time, 30-year rates averaged 4.86 percent. 
• 15-year fixed-rate mortgages: averaged 3.24 percent, with an average 0.8 point, also up slightly compared to last week’s record 3.21 percent average. Last year at this time, 15-year rates averaged 4.20 percent.
• 5-year adjustable-rate mortgages: averaged 2.88 percent, with an average 0.6 point, increasing from last week’s 2.85 percent average. Last year at this time, the 5-year ARM averaged 3.77 percent. 
• 1-year ARMs: averaged 2.78 percent, with an average 0.6 point, slightly up from last week’s 2.77 percent average. A year ago, 1-year ARMs averaged 3.26 percent. 

 Source: Freddie Mac

 More news from the “Sierra Foothills” of El Dorado, Placer, Amador and Sacramento Counties of California at: www.sierraproperties.com or www.dougandbudzeller.com

The latest monthly data shows total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums, and co-ops, increased 4.0 percent to a seasonally adjusted annual rate of 4.42 million in November from 4.25 million in October, and are 12.2 percent above the 3.94 million-unit pace in November 2010.

Full article at: http://bit.ly/trTuv9 via @AddThis

More news from Placerville and the El Dorado, Placer, Amador or Sacramento Counties regions of California at: www.sierraproperties.com or www.dougandbudzeller.com

Economic growth, an improving job picture, greater consumer spending, and slight improvements in the housing market are all recent indicators that 2011 is ending on a much brighter note, Fannie Mae reports in its fourth-quarter report. 

“It’s important to recognize that we’re ending 2011 on a stronger note than we’ve seen throughout the year,” Fannie Mae Chief Economist Doug Duncan said in a statement. “Unfortunately, however, our 2012 outlook is not as rosy as our forecast for the fourth quarter of 2011.”

Fannie Mae’s Economics & Mortgage Market Analysis Group predicts that despite recent improvements, the housing market will remain “subdued next year — a reflection of the winter season, an expected slowdown in economic activity, and a potential increase in distressed sales.” The nation’s fiscal problems as well as the European debt crisis are also expected to threaten the nation’s economic recovery in 2012.

Source: Fannie Mae

We hope your activity has picked up like ours has here in the Sierra Foothills regions of Placerville, El Dorado County, California.

At its Tuesday meeting, the Federal Reserve reaffirmed its pledge to keep interest rates low and opted to not take any new measures to bolster the economy, saying the economy has already been showing signs of “expanding moderately.” The economy has shown some improvement in employment and consumer spending in recent weeks. However, the Fed cautioned at Tuesday’s meeting that the “housing sector remains depressed.”

In reaffirming a pledge it first issued in August, the Fed said the federal funds rate — which serves as a benchmark rate for many types of loans, including mortgages — will remain near zero until mid-2013. The Fed said it will continue with plans to move $400 billion of its bond portfolio into longer-term securities, which ultimately could send long-term interest rates even lower.

Overall, the Fed said the economy has steadily been showing signs of improvement and is on track to post its strongest gains of the year in the final months of 2011. But the Fed said that the European debt crisis will continue to pose a major threat to recovery with “strains in global financial markets continue to pose significant downside risks.”

Let’s hope this helps your market and ours in Placerville, El Dorado County, CA.

 Source: “U.S. Fed Leaves Rate Unchanged, Says Economy Expanding Moderately,” Bloomberg News (Dec. 13, 2011)

Recent home buyers are staying well within their means with notably higher incomes and modestly higher down payments than buyers in the previous year due to the restrictive mortgage credit environment, despite historically favorable housing affordability conditions, according to 2011 NATIONAL ASSOCIATION OF REALTORS®’ Profile of Home Buyers and their Sellers Housing Survey.

The share of first-time buyers declined to 37 percent in 2011 compared with 50 percent in the 2010 study.  The study shows the median age of first-time buyers was 31, and the median income was $62,400, up from $59,900 in the 2010 study. The typical first-time buyer purchased a 1,570 square foot home costing $155,000; the estimated median monthly mortgage principal and interest payment was $794.

The typical repeat buyer was 53 years old and earned $96,600, notably higher than the $87,000 median reported in the 2010 profile. Repeat buyers purchased a median 2,100 square foot home costing $219,500, with an estimated median payment of $1,006.

“Tight Credit Conditions” like this exist in your region just like ours of Placerville, CA.  

More information at: http://www.realtor.org/press_room/news_releases/2011/11/home_buyer_and_seller