Jumbo Loans Cheaper Than Conforming Loans - The Real Estate Report September/October

Jumbo Loans Cheaper Than Conforming Loans - The Real Estate Report September/October

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  local market trends TheReal Estate Report Sඉඖ Fකඉඖඋඑඛඋ඗ 12-month moving average to last year’s, we get a percentage showing market momentum. CONDO/LOFT STATISTICS… The median price for condos was up 12% year- over-year. Closed sales were off 11.5%. There were 285 condos/lofts sold last month. Year-to-date, sales are down 1%. The sale price to list price ratio stayed over 100% for the eighteenth month in a row: 105.1%. This is an extraordinarily tough market for buyers. It’s important to be calm and realistic. If you don’t know what to do or where to begin, give me a call and let’s discuss your situation and your options. Jumbo Loans Cheaper Than Conforming Loans The Mortgage Bankers Assn. reported the average contract rate for a conforming loan with a 20% down payment was 4.73% last week, compared with 4.71% for a similar jumbo loan. Jumbos are defined as mortgages over $625,500 in much of California. The difference was more pronounced in the "hybrid" loans, popular with affluent buyers, that have a fixed rate for five, seven or 10 years before becoming adjustable. Wells Fargo was making 30-year fixed jumbos with no upfront costs to borrowers at 4.75% on Thursday, compared with conforming loans at 5%. For a loan with a rate fixed for the first 10 years, Wells was writing mortgages at 4.125% for jumbos compared with 4.875% for conforming loans. The reason for the difference is that Wells Fargo has been keeping low-risk jumbo loans on its books rather than selling them as fodder for mortgage-backed securities. Big banks are flooded to the gills with deposits that are costing them virtually nothing. Wells Fargo, for example, reported that as of the second quarter this year it was paying an average of 0.14% a year interest on its $1 trillion in deposits. AUGUST MARKET STATISTICS The median price for single-family, re-sale homes scored another solid gain in August, rising 27.5% year-over-year. Sales of single-family, re-sale homes were off 9.6% year-over-year. There were 217 homes sold last month. Home sales are up 7.5% year-to- date. The sales price to list price ratio has been over 100% for seventeen of the past eighteen months. SALES MOMENTUM… for homes fell 1.9 points to +5.6. PRICING MOMENTUM… has been on the up-swing the past eighteen months. It rose 0.9 of a point to +19.4. WE CALCULATE… momentum by using a 12-month moving average to eliminate seasonality. By comparing this year’s American Marketing Systems, Inc. 2800 Van Ness Avenue San Francisco, CA 94109 (415) 447-2009 [email protected] http://www.amsires.com/staff/robb DRE #01403882 Robb Fleischer Robb Fleischer | [email protected] | (415) 447-2009 SEPTEMBER/OCTOBER 2013 Inside This Issue > LOCAL MARKET TRENDS.....................1 > MORTGAGE RATE OUTLOOK ...............2 > HOME STATISTICS ..............................2 > FORECLOSURE STATS ........................3 > CONDO STATISTICS ............................3 > MOMENTUM CHARTS ..........................4 Aug 13 Jul 13 Aug 12 Home Sales: 217 259 240 Median Price: 977,000$ 890,000$ 766,500$ Average Price: 1,320,335$ 1,304,399$ 992,263$ Sale/List Price Ratio: 107.5% 107.0% 104.0% Days on Market: 36 32 49 Aug 13 Jul 13 Aug 12 Condo Sales: 285 327 322 Median Price: 815,000$ 860,000$ 727,500$ Average Price: 937,714$ 1,003,320$ 806,332$ Sale/List Price Ratio: 105.1% 105.8% 101.0% Days on Market: 37 36 54 (Lofts/Tow nhomes/TIC) Trends at a Glance (Single-family Homes) Homes: detached YTD Peak % Trough % Peak Trough 3-month 47% 0% 50% Jun-07 Feb-12 12-month 28% -2% 28% Apr-08 Mar-12 Homes: attached 3-month 33% 4% 36% Jul-08 Jan-12 12-month 27% 6% 27% Aug-08 Jan-12 San Francisco Price Differences from January 2012 & Peak & Trough -40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 0 8 FMAMJ JASOND0 9 FMAMJ JASOND1 0 FMAMJ JASOND1 1 FMAMJ JASOND1 2 FMAMJ JASOND1 3 FMAMJ JA San Francisco Homes: Year-Over-Year Median Sales Price Change © 2013 rereport.com
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  Page 2 The RealEstate Report The chart above shows the National monthly average for 30-year fixed rate mortgages as compiled by HSH.com. The average includes mortgages of all sizes, including conforming, "expanded conforming," and jumbo. MORTGAGE RATE OUTLOOK Sep 6, 2013 -- Just when you think there is sufficient clarity as to where we're going economically, and that you've got a firm grip on how the Fed is likely to act, along comes a piece of data or two which derails both of those trains of thought. In a week where all the data suddenly seemed to strong or stronger relative to recent trends, investors continued to shift money out of bonds, driving yields and mortgage rates higher. At one point, the yield on the influential 10-year US Treasury topped the 3 percent mark, a more than two-year high, and nearly double yields of a year ago this week. And then, with a thud, came the August employment report. HSH.com's broad-market mortgage tracker -- our weekly Fixed-Rate Mortgage Indicator (FRMI) -- found that the overall average rate for 30-year fixed- rate mortgages returned to multi-year highs, rising by the same seven basis points (0.07%) it declined last week to again hit 4.75%. The FRMI's 15-year companion added six basis points (0.06%), climbing to 3.82%, the highest such figure since July 2011. Popular FHA-backed 30-year FRMs climbed a full ten basis points, returning to 4.36%, while the overall 5/1 Hybrid ARM moved by a four hundredths of a percentage point to a relative bargain of 3.45% for the week. One feature of the soft employment report is that it cut the legs out of the rise in mortgage rates, at least for now, as daily rates eased back on Friday. That said, we harbor no illusions that mortgage rates are poised to decline greatly, but they should steady a bit as we move into next week. The most significant new data come out later in the week, with measures of prices, retail sales and consumer moods all due. Rates will probably be steady to slightly higher again next week, but the climb may be slow and the move small. One other note: The Mortgage Bankers Association reported that, according to their data, jumbo fixed rates are averaging below conforming. There are several reasons why this may be showing in their survey, including a change in the mix of borrowers for conforming loans and the inclusion of lower-than- private-cost "agency jumbo" prices in their jumbo averages, among other items. Media members are encouraged to give a call or drop a line if they would like to know more. 0 50 100 150 200 250 300 350 $300 $500 $700 $900 $1,100 $1,300 $1,500 0 8 FMAMJ JASOND0 9 FMAMJ JASOND1 0 FMAMJ JASOND1 1 FMAMJ JASOND1 2 FMAMJ JASOND1 3 FMAMJ JA San Francisco Homes: Sold Prices & Unit Sales (3-month moving average — $000's) Ave Med Units © 2013 rereport.com Unit Median Average Sales DOM SP/LP Median Average Sales Median Average Sales San Francisco 977,000$ 1,320,335$ 217 36 107.5% 27.5% 33.1% -9.6% 9.8% 1.2% -16.2% D1: Northwest 1,275,000$ 1,482,380$ 19 27 112.7% 18.6% 6.3% 11.8% -1.9% 3.1% -17.4% D2: Central West 856,000$ 932,305$ 39 33 112.1% 14.4% 17.7% 5.4% -1.9% 3.1% -35.0% D3: Southwest 650,000$ 627,684$ 19 45 108.1% 25.5% 8.7% 0.0% -8.5% -16.8% 0.0% D4: Twin Peaks 1,130,000$ 1,264,359$ 22 45 105.2% 3.2% 7.6% -15.4% 8.7% 10.6% -29.0% D5: Central 1,590,000$ 1,891,605$ 38 24 112.8% 12.4% 8.5% 11.8% -3.9% 5.3% 18.8% D6: Central North 2,250,000$ 2,250,000$ 2 26 105.1% 61.3% 62.7% -33.3% 26.3% 42.9% -60.0% D7: North 4,150,000$ 4,273,770$ 10 46 97.4% -3.7% 1.0% 150.0% -16.5% -31.5% -23.1% D8: Northeast 2,500,000$ 3,181,250$ 4 98 96.9% 165.7% 238.1% 300.0% 19.0% 71.7% 33.3% D9: Central East 940,000$ 1,080,440$ 25 36 110.0% 19.7% 35.9% -16.7% 1.6% 6.5% 19.0% D10: Southeast 590,000$ 599,767$ 39 38 106.1% 14.3% 18.0% -31.6% -4.2% 0.0% -29.1% August Sales Statistics (Single-family Homes) Prices Yearly Change Monthly Change 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 01-06 04-06 07-06 10-06 01-07 04-07 07-07 10-07 01-08 04-08 07-08 10-08 01-09 04-09 07-09 10-09 01-10 04-10 07-10 10-10 01-11 04-11 07-11 10-11 01-12 04-12 07-12 10-12 01-13 04-13 07-13 30-Year Fixed Mortgage Rates
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  Table Definitions _______________ Median Price Theprice at which 50% of prices were higher and 50%were lower. Average Price Add all prices and divide by the number of sales. SP/LP Sales price to list price ratio or the price paid for the property divided by the asking price. DOI Days of Inventory, or how many days it would take to sell all the property for sale at the current rate of sales. Pend Property under contract to sell that hasn’t closed escrow. Inven Number of properties actively for sale as of the last day of the month. Notices of default, the first step in the foreclosure process, in San Francisco fell 7.9% in July from June. Year-over-year, notices were down 73.1%. Notices of sale, which set the date and time of an auction, and serve as the homeowner's final notice before sale, dropped 22.2% from June, and were down 67.9% year-over-year. After the filing of a Notice of Trustee Sale, there are only three possible outcomes. First, the sale can be cancelled for reasons that include a successful loan modification or short sale, a filing error, or a legal requirement to re-file the notice after extended postponements. Alternatively, if the property is taken to sale, the bank will place the opening bid. If a third party, typically an FORECLOSURE STATISTICS investor, bids more than the bank's opening bid, the property will be sold to the third party; if not, it will go back to the bank. There were 44 sales cancelled last month. Only six homes went back to the bank in July. There were four in June. There are currently 184 properties scheduled for sale. With the recent surge in prices, many of them will probably be cancelled. The total number of properties owned by the banks was down 44.5% year-over-year. The banks now own approximately 292 properties in the city. For further details and a city-by-city breakdown of foreclosure statistics, go to http://foreclosureradar.com. 0 50 100 150 200 250 300 350 $300 $400 $500 $600 $700 $800 $900 $1,000 $1,100 0 8 FMAMJ JASOND0 9 FMAMJ JASOND1 0 FMAMJ JASOND1 1 FMAMJ JASOND1 2 FMAMJ JASOND1 3 FMAMJ JA San Francisco Condos: Sold Prices & Unit Sales (3-month moving average — $000's) Ave Med Units © 2013 rereport.com -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 0 8 FMAMJ JASOND0 9 FMAMJ JASOND1 0 FMAMJ JASOND1 1 FMAMJ JASOND1 2 FMAMJ JASOND1 3 FMAMJ JA San Francisco Condos/Lofts: Year-Over-Year Median Sales Price Change © 2013 rereport.com Unit Median Average Sales DOM SP/LP Median Average Sales Median Average Sales San Francisco 815,000$ 937,714$ 285 37 105.1% 12.0% 16.3% -11.5% -5.2% -6.5% -12.8% D1: Northwest 975,000$ 1,002,667$ 18 36 106.7% 25.4% 28.1% 50.0% 7.7% 8.3% 38.5% D2: Central West 827,000$ 754,400$ 5 20 107.6% 11.8% 4.3% 66.7% 1.1% 3.4% 66.7% D3: Southwest 500,000$ 500,000$ 1 48 125.6% 58.5% 57.9% -83.3% 9.6% 5.4% -80.0% D4: Twin Peaks 504,000$ 516,717$ 6 34 114.5% 9.7% -2.0% 50.0% -24.2% -24.7% 0.0% D5: Central 860,000$ 951,034$ 35 35 110.9% 0.6% 4.6% -10.3% -20.0% -10.9% -30.0% D6: Central North 738,500$ 855,650$ 30 34 107.4% -8.0% 8.7% -11.8% -10.0% -2.7% 7.1% D7: North 1,160,000$ 1,133,978$ 29 25 106.5% 44.1% 24.3% 11.5% -3.1% -16.4% -34.1% D8: Northeast 812,500$ 1,050,604$ 50 46 101.2% 30.0% 31.6% -28.6% 7.9% -4.3% -12.3% D9: Central East 755,250$ 897,916$ 107 36 103.7% 4.9% 4.1% 12.6% -8.9% -1.1% -7.8% D10: Southeast 335,000$ 335,000$ 3 156 96.9% 12.0% 14.4% -62.5% 3.1% -8.7% -40.0% August Sales Statistics (Condos/TICs/Co-ops/Lofts) Prices Yearly Change Monthly Change
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  The Real EstateMarket Trends Report is published and copyrighted by http://rereport.com. THE REAL ESTATE REPORT San Francisco Robb Fleischer American Marketing Systems, Inc. 2800 Van Ness Avenue San Francisco, CA 94109 Go online to see the full report with the district by district breakdown: HTTP://WWW.AMSIRES.COM/STAFF/ROBB -25.0 -20.0 -15.0 -10.0 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 0 8 FMAMJ JASOND0 9 FMAMJ JASOND1 0 FMAMJ JASOND1 1 FMAMJ JASOND1 2 FMAMJ JASOND1 3 FMAMJ JA San Francisco Homes: Sales Momentum Sales Pricing © 2013 rereport.com -50.0 -40.0 -30.0 -20.0 -10.0 0.0 10.0 20.0 30.0 40.0 0 8 FMAMJ JASOND0 9 FMAMJ JASOND1 0 FMAMJ JASOND1 1 FMAMJ JASOND1 2 FMAMJ JASOND1 3 FMAMJ JA San Francisco Condos/Lofts: Sales Momentum Sales Pricing © 2013 rereport.com