Larry Dorsey's Blog

Entry Level Home Affordability Increase

Sat, 22 Aug 2009 00:00:00 GMT

The percentage of households that could afford to buy an entry-level home in California stood at 67% in the second quarter of 2009, compared with 49% (revised) for the same period a year ago, according to a report recently released by the California Association of Realtors® (C.A.R.).

C.A.R.’s First-time Buyer Housing Affordability Index (FTB-HAI) measures the percentage of households that can afford to purchase an entry-level home in California. C.A.R. also reports first-time buyer indexes for regions and select counties within the state. The Index is the most fundamental measure of housing well-being for first-time buyers in the state.

The minimum household income needed to purchase an entry-level home at $224,180 in California in the second quarter of 2009 was $39,930, based on an adjustable interest rate of 4.92% and assuming a 10% down payment. First-time buyers typically purchase a home equal to 85% of the prevailing median price. The monthly payment including taxes and insurance was $1,330 for the second quarter of 2009.

At $39,930, the minimum qualifying income was 34% lower than a year earlier when households needed $60,460 to qualify for a loan on an entry-level home. Recent decreases in home prices and mortgage rates have brought affordability into better alignment with income levels of the typical California households, where the median household income is $61,030.

The First-time Buyer Housing Affordability Index declined 2 percentage points in the second quarter of this year compared with the first quarter of 2009, due to a 6.4% increase in the price of an entry-level home.

At 86%, the High Desert region was the most affordable area in the state. The San Luis Obispo County region was the least affordable in the state at 50%, followed by the Orange County region at 53%.

-RISMEDIA August 22, 2009

Real Estate Jitters

Fri, 24 Jul 2009 07:49:00 GMT

Here is a typical scenario illustrating the effects of buyer's remorse. Your home was on the market for a few weeks, and you are now feeling fortunate because an attractive offer has been presented by qualified buyers. Once the ink dried on the contract forms, however, it seemed that everything suddenly threatened to come unraveled.

Once the buyers' earnest money check cleared their account, they suddenly came up with a list of concerns that never occurred to them before the purchase agreement was signed. Their fears and demands have turned them into touchy adversaries instead of the sweet young couple looking forward to starting a family. How could the atmosphere have changed so quickly?

Buyers and sellers are both susceptible to different forms of stress reaction known in the real estate field as "Buyers' Remorse" and "Sellers' Remorse". Fortunately, neither one of these conditions is contagious to real estate agents! An important part of our job is to help our sellers and buyers through their buying or selling jitters with understanding and humor.

Manhattan Beach Real Estate Update

Fri, 24 Jul 2009 00:40:00 GMT

a neighborhood with 15,387households , house depreciates14% in the last 12 months, there are 290homes for sale, including 70foreclosures .

Are You a First Time Home Buyer?

Fri, 24 Jul 2009 00:35:00 GMT

Being a first time home buyer is intimidating and a big life experience. First time home buyers often don't know where to begin. We can help. From mortgages, to home searches in your best places to live and schools information we can give you the tools you need to move forward. One of the first steps to being a first time home buyer is to get your financial house in order and make sure your credit is great. Once pre-approved for a mortgage, the home search process (the fun part) begins.

There are lots of styles of homes and neighborhoods research you'll want to explore as a first time home buyer before settling for a place and looking for homes. Search homes online and get help from a buyer's agent to help you secure a great first time home at a fair price. The mortgage types for first time home buyers may be more difficult to get these days and the process intimidating. Once your offer is accepted be sure to check out moving resources to get quotes on movers and other tools for first time home buyers moving into a new area.

As a first time home buyer be sure to keep some things in mind before you settle down. Is the neighborhood great? Is the area appreciating? Does your home have the room you need for family growth? How is the job market in the area and how close are your favorite hot spots? Once you find the right place, unpack and enjoy! Your first time home buyer experience is now complete.

Ladera Heights Real Estate Market

Fri, 24 Jul 2009 00:00:00 GMT

a Suburban neighborhood with 3,627households , house depreciates14% in the last 12 months, there are68homes for sale, including 74foreclosures .

How to Stop a Foreclosure

Thu, 26 Mar 2009 23:38:00 GMT

When you’re faced with the possibility of losing your home to foreclosure, what do you do? The huge increase in foreclosures over the last year means that banks and lenders are overloaded with homes, and are likely to work with you rather than against you. Here is some advice from Forbes about how to stop a foreclosure.

First, make sure that you are completely honest about your financial situation. If you figure out what went wrong, you’re putting yourself in a better position to come up with a solution. Look over your original loan documents, income and budget. Also, examine your expenses and monthly spending. You might want to work with a housing counselor. If you do, make sure the counselor is approved by the U.S. Department of Housing and Urban Development.

Next, contact your lender as soon as possible. Talk with them about your specific situation, and whether there might be a short-term solution. If your problem is temporary, stemming from recent unemployment or medical bills for example, they will likely work with you to keep you in your home. Many lenders will work out a monthly repayment plan that will get you caught back up in your payments.

Your lender might also modify the terms of your loan. President Barack Obama’s $75 billion mortgage relief plan, which recently launched, aims to help up to 9 million homeowners in danger of foreclosure by working with lenders on loan modifications. Check out MakingHomesAffordable.gov for more housing relief information.

If your lender will not work with you on a plan, you may have to sell your home. The lender will set a deadline for you to find a buyer and pay off your mortgage balance. They might be willing to accept a smaller sum, but keep in mind that you might owe income taxes on the difference.

You might consider hiring a lawyer if you can’t come to a deal with your lender. You are likely eligible for some form of free legal aid, and you can contact the National Association of Consumer Advocates or the National Association of Consumer Bankruptcy Attorneys to find a list of lawyers in your area.

Should I Buy a Home Now?

Wed, 11 Feb 2009 14:59:00 GMT

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.