Veena Grover, Fremont Realtor: Homes for Sale in Fremont & Union City

MDA DataQuick released October 2008 sales data for Santa Clara and Alameda counties. The full report can be found here, but I thought I’d summarize some of the key takeaways:

• Median house price in Santa Clara County was $515K, down 34% vs. Oct 2007. However, the number of single-family homes sold was 1022, up 24% vs. the prior year.
• Although there is certainly some depreciation in the value of homes, a major factor behind the decline in median home prices is the number of REO property sales. In both Alameda and Santa Clara County, there was a marked increase in sales of these bank-owned homes. For example, over 33% of the home sales in Santa Clara County last month had been foreclosed on within the prior 12 months. By contrast, in October 2007, REO properties comprised less than 4 percent of sales.
• In addition, sales of higher-end homes declined as a percentage of the total. For example, only 11% of homes last month were sold for greater than $1M. By contrast, in October 2007, almost 30% of homes sold at the $1M+ level.
• As we head into the holiday season now, we can expect the market to hit its seasonal slowdown, as inventory (number of homes for sale) and demand quiets down until the new years.

In my view, given the seasonal slowdown, there are very good deals to be had here in the Bay Area. Furthermore, with an incoming Obama administration that is more likely to push for policies helping homeowners facing foreclosure, I believe that the number of homes entering foreclosure will gradually stabilize over the next year and then decline. Regardless, its certainly a good time to start searching online for properties that interest you. You can do this search and get automated email updates on homes that match your criteria on my website (FremontHomesTeam.com), by clicking here.

The Bush Administration announced yesterday a new loan modification program in conjunction with 27 loan servicers, including Fannie Mae and Freddie Mac. This could enable mortgage relief (lower payments) for several hundred thousand homeowners who are at least three months delinquent on mortgages that are owned or guaranteed by Fannie Mae or Freddie Mac. Here’s how it can work:

• Lower the interest rate
  
• Stretch out the term of the loan to 40 years
  
• Lower the amount of the loan
  
• The underlying goal is that monthly payments should not exceed 38% of a family’s monthly income.
  

While the plan is certainly helpful, it isn’t as broad as the plan championed by the FDIC chairwoman, Sheila Bair. This is because the Bush administration plan focused on the Fannie and Freddie guaranteed loans, which are “conforming” loans (i.e., less risky vs. subprime loans). Bair’s plan had called for a $50BN government plan to modify loans.

I suppose one’s preference here depends on how far they believe the government should extend itself in terms of loan modifications. Regardless of your views here, based on President-elect Obama’s previous voting record on real estate or loan-related issues, I expect that a much broader loan modification program will work its way to Congress once the new term gets rolling in 2009.

There’s been a lot of discussion among the media, economists, and even us real estate agents in Fremont, about what President-elect Obama will do about the housing market. Based on a review of Obama’s previous legislative record, senior leaders of National Association of REALTORS stated that Obama has generally supported legislation favorable to homeowners. Fore example, while in Illinois, Obama supported tax credits for property owners. As a U.S. senator, he’s argued for a stronger Federal Housing Administration (FHA) and voted for the economic stimulus bill that increased loan limits in high-cost areas, like Fremont.

From a Bay Area real estate perspective, I believe increasing the FHA-backed loan limit is really important. The 2008 conforming jumbo loan limit in the Bay Area is $729,750, making it difficult for buyers of higher-end properties to get financing. This limit expires on December 31, 2008, when the lower conforming loan limit of $625,500 takes effect. It certainly explains why higher sales volume has recently been in the mid-range properties. For example, in September, the median price of a home sold in Alameda County was $389K, vs. $555K the previous September. Simply put, the more difficult financing environment has resulted in more unsold inventory (less sales) in higher-end properties, but more sales in mid-range properties, where loans are more easily available.

Veena Grover | RE/Max Accord, Fremont CA | http://www.FremontHomesTeam.com

As part of a proposed economic stimulus package, Gov. Schwarzenegger proposed a 90-day freeze on pending foreclosures in California. According to MDA DataQuick, California had 80,000 foreclosures in Q3 2008, so the proposal by Gov. Schwarzenegger is meant to slow down the pace and provide homeowners with more time to find and re-finance with other, more affordable loans. However, as an incentive to provide more affordable loans, lenders can avoid the 90-day freeze under the plan if they proved they were actively rewriting loans so that homeowners could afford to make lower payments and avoid foreclosure.

From a Bay Area perspective, while I applaud the government’s effort to call for a “cooling off” period from the time a homeowner receives a default notice from a bank, in terms of actually staving off foreclosure, the key will be a recovery in bank lending. Lets not forget that a lot of homeowners facing foreclosure in the Bay Area signed up for interest-only loans, which generally carry about a ½ point premium vs. a fully amortized loan these days. So, it all comes down to what type of risk the banks are able / willing to take – if they are willing to creatively work with homeowners to refinance during the 90 day period, great. If not, the 90 day period could simply be delaying the inevitable foreclosure for the homeowner.

Veena Grover | RE/Max Accord, Fremont CA | http://www.FremontHomesTeam.com

Very cool feature launched recently by the folks at Google Maps, which allows you to find your closest Voting Location. Simply type in your home address, and voila, you will see on the map the name and address of the closest facility. Simply go to http://maps.google.com/vote and type in your address. I tried this for my address in Fremont and Google was absolutely correct in pointing out the closest location. Kudos to the Google Maps team!

On a related note, Google Maps has a feature to see real-time election results as they come in. Click here to check it out.