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More small businesses, including those in the real estate industry, are catching on the Groupon bandwagon, creating a deal to get potential home buyers moving. It can create buzz about your business, too. 

Groupon, which launched in 2008, offers daily deals on products and services and boasts more than 115 million subscribers in 175 North American markets.

However, recent news reports from around the Placerville, El Dorado County, California regions note you should beware of expiration dates.

Article by Fox Business News highlights how some real estate professionals are using Groupons: “Through list marketing, a real estate agent could send out a promotion to local residents offering home sellers $500 back at closing for $25. The agent could offer the deal October through December, which are typically slow months for home sales. To foster loyalty, the agent could send a similar deal out next year, but only to her previous customers.”

Source: “How to Build Your Own Groupon,” Fox Business (Nov. 8, 2011)

The 30-year fixed-rate mortgage, the most popular choice among home buyers, dropped to its second lowest reading on record this week, Freddie Mac reports in its weekly mortgage market survey. 

“Market concerns over the European debt market drew investors to U.S. Treasury securities, lowering bond yields and mortgage rates,” says Frank Nothaft, chief economist at Freddie Mac.

Here are how rates fared for the week:

30-year fixed-rate mortgages: averaged 4 percent, with an average 0.7 point, down from last week’s 4.10 percent average. The 30-year fixed-rate mortgage is the second lowest on record, just behind the 3.94 percent record reached on Oct. 6. A year ago at this time, 30-year rates averaged 4.24 percent. 

• 15-year fixed-rate mortgages: averaged 3.31 percent, with an average 0.7 point, falling from last week’s 3.38 percent average. Last year at this time, 15-year mortgages averaged 3.63 percent. 
• 5-year adjustable-rate mortgages: averaged 2.96 percent this week, with an average 0.6 point, dropping from last week’s 3.08 percent. At this time last year, 5-year ARMs averaged 3.39 percent.
• 1-year ARMs: averaged 2.88 percent this week, with an average 0.6 point, dropping from last week’s 2.90 percent average. A year ago at this time, the 1-year ARM averaged 3.26 percent. 

Source: Freddie Mac

Other real estate information and assistance for the Placerville, El Dorado County, California region at: www.DougandBudZeller.com

The Federal Reserve on Wednesday issued a new call about the importance of fixing the housing market, which could then have a trickle effect in strengthening the rest of the economy.

The Fed will consider buying more mortgage-backed securities to help, said Ben Bernanke, the Fed chairman. Such a move could send borrowing costs even lower. 

“The housing sector is a very important sector,” Bernanke said at a news conference. “Problems in that sector are a big reason why our economy’s not recovering more quickly.” The Fed is holding a two-day policy meeting — which ends Thursday — to weigh options. 

Economists believe that if more people were buying homes then it could lead to a boost in consumer purchases for other sectors, from furniture to appliances. They note that the housing market has led the economy out of recessions in the past, since it creates jobs and more spending on goods and services. Plus, the Placerville, El Dorado County, California of the “Sierra Foothills Region” offers great opportunities and home values.

Source: “Fed Focus: Housing Could be Key to Stronger U.S. Rebound,” Reuters News (Nov. 3, 2011)

Buyers may be drawn to distressed properties. After all, “the No. 1 reason to buy a foreclosure is the potential for a good bargain,” says Daren Blomquist of RealtyTrac.com. 

Indeed, discounts often can range from to 20 or 40 percent off on a short sale or foreclosure compared to a sales price of a nondistressed home. 

But despite the big bargains, buyers need to tread carefully before jumping in. Blomquist provides some of the following tips in buying a foreclosure in a recent article at Business Insider. These correlate to our region of Placerville, El Doorado County, California. 
 
But, consider these factors:

Beginners may want to focus on REOs ?

Beginners may want to focus on ”distressed properties” ?

Don’t expect appreciation right away!
 
You can read more of Blomquist’s tips at Business Insider.

 Source: “Here Are Five Things You Should Always do if You’re Buying a Foreclosed House,” Business Insider (Oct. 31, 2011)

Overall, today’s home buyers tend to be fairly knowledgeable about the real estate market, but there are still a few points of confusion in the process, a new survey by Zillow of 1,000 potential home buyers finds. 

Here are the five main areas of confusion the survey revealed: 

• Appreciation: About 42 percent of home buyers believe home values will appreciate by 7 percent a year. Reality: Historically, home values in a normal market appreciate by 2 to 5 percent in a year. 
• Mortgage insurance: 41 percent of buyers think they will have to purchase private mortgage insurance, regardless of the amount of their downpayment. Reality: Buyers only need to purchase PMI if their downpayment is less than 20 percent of the home’s purchase price.
• Appraisals: 56 percent of the buyers said the purpose of the appraisal was to determine if a home was in good condition. Reality: That’s the purpose of a home inspection; an appraisal estimates fair market value. 
• Home owner’s insurance: 37 percent of home buyers said that buying home owner’s insurance is optional. Reality: Lenders require homebuyers to purchase homeowner’s insurance. 
• Ownership: 47 percent of home buyers said a prospective buyer owns a home after the purchase contract is signed. Reality: The purchase and sales agreement is the beginning of the closing phase, but it can be a long process until they finally take ownership. 

Source: Zillow Inc. 

Other helpful information regarding the Placerville, El Dorado County, CA. regions at: www.dougandbudzeller.com

The California Housing Finance Agency (CalHFA) has initiated or threatened foreclosure on approximately 200 CalHFA borrowers because they are no longer living in the homes, as required by state regulations, according to the Senate Office of Oversight and Outcomes. Some of the borrowers have rented out their homes to cover the mortgage payments and moved to more affordable properties.

According to the Senate report, the borrowers, who owe more on their mortgages than their homes are worth, are reluctant to sell the properties because they would lose much of their investment.

CalHFA finances its $4.2 billion worth of low-interest mortgages through the sale of tax-free bonds. U.S. Internal Revenue Service rules specifically prohibit that money from the sale of bonds be lent to home buyers who do not live in their properties, CalHFA Marketing Director Ken Giebel said.

The agency makes some exemptions for clients who have suffered severe economic problems, such as losing their jobs, but in 21 cases, CalHFA foreclosed on borrowers who rented out their homes without permission, something that is specifically prohibited by loan document disclosures, Giebel said.

More information at: http://www.latimes.com/business/realestate/la-fi-california-agency-foreclosures-20111025,0,1517667.story

Rising rents are forcing renters to outspend home owners on housing costs, according to a new study. 

Since 2005, home owners’ housing expenses have climbed from 31.9 percent of their household budget to 33.2 percent. On the other hand, in that same time period, renters’ expenses have jumped from 35.6 percent to 38.4 percent, according to the October CoreLogic U.S. Housing and Mortgage Trends.

In the last 26 years, home owners have increased the amount they spend on household expenses by 12 percent while renters have increased it by 22 percent, according to the study. This is also what we’re finding in the Placerville, California regions.

Earlier this month, Capital Economics economists noted that for the first time in 30 years the median monthly mortgage payment is about the same — or less — than the median rental payment. 

Yet, with the bleak job market, home ownership rates continue to fall in many parts of the country, particularly among younger generations. CoreLogic found in its report that the home ownership rate for the 25-to-34 age group dropped from 51.6 percent in 1980 to 42 percent in 2010. For the 35-to-44 age group, home ownership rates fell from 71.2 percent to 62.3 percent over that period.

 Source: “Renters Outspend Owners on Housing,” RISMedia (Oct. 25, 2011) and Capital Economics

More studies are pointing to how foreclosures can hurt home owner’s health. 

In the most recent study, home owners aged 50 and older who were unable to make their mortgage payments were found to have high rates of depression and a “higher likelihood of making unhealthy financial trade offs regarding food and needed prescription drugs,” according to the study, recently published in the American Journal of Public Health.

Researchers found that nearly one-third of the home owners aged 50 or older who were delinquent on their mortgage reported fair or poor health, compared to 19 percent who were not delinquent. True in the Placerville, California regions and yours? Probably?

“More than a quarter of people in mortgage default or foreclosure are over 50,” says Dawn E. Alley, the study’s principle investigator. “For an older person with chronic conditions like diabetes or hypertension, the types of health problems we saw are short-term consequences of falling behind on a mortgage that could have long-run implications for that person’s health.” 

An earlier study released this year, conducted by Princeton University and Georgia State University researchers, found that the higher the foreclosure rates, the more risks to your community’s health. Researchers had found that a higher number of foreclosures in Arizona, California, Florida, and New Jersey were found to coincide with a rise of stress-related health problems in those states, including an increase in the number of hospital visits for preventable conditions and increase in emergency room visits and hospitalizations for hypertension. 

Source: “A Health Crisis Follows Foreclosure Crisis,” Los Angeles Times (Oct. 25, 2011)

Living near an occupied property in foreclosure can bring down home prices nearly twice as much than just living next door to a vacant home, according to a new study by the Federal Reserve Bank of Cleveland, which analyzed sales data of nearly 10,000 homes in the Cleveland area. This data seems to be in line with our Placerville, CA. regions.

“The impacts of homes with multiple indicators of distress are larger than the impacts of homes that are only vacant, delinquent, or recently foreclosed,” the researchers found.

Some findings from the study:

• Homes within 500 feet of at least one vacancy sold 0.8 percent lower. 
• Occupied home that had recently entered the foreclosure process lowered the sales price of nearby homes by 1.8 percent.
• Sales within 500 feet of a home where a delinquent borrower abandoned the home saw, on average, a 3.1 percent drop to home values. 
• The largest drop was from homes that were tax delinquent, vacant, and foreclosed: Home sales prices within 500 feet were found to be 9.6 percent lower. 

Source: “Study Finds Foreclosures Harm Home Prices More Than Vacancies,” HousingWire (Oct. 20, 2011)

Borrowers who are current on their home loans may be able to refinance for lower interest rates, even if they are seriously upside down.  The Federal Housing Finance Agency (FHFA) announced today that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac. Other program enhancements include, among other things, reducing certain fees, eliminating the need for a new property appraisal if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013.  New federal guidelines for the HARP changes should be released to mortgage lenders and servicers by November 15.

More information is available from FHFA at http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf.