Mortgage rates tumble to lowest since 1971

From the Associated Press:
Mortgage rates are falling as this week's dramatic action by the Federal Reserve provides a boost to the dismal housing market, but the nation's unemployment rolls are stuck at historically high levels amid a deepening recession.

Mortgage giant Freddie Mac on Thursday reported that rates had fallen to the lowest level on records dating back to 1971. Average rates on 30-year fixed-rate mortgages dropped to 5.19 percent, down from the year's previous low of 5.47 percent, set last week.

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Should buyers avoid shortsales?

Some friends of mine asked me this very question as they prepared to put in an offer on a short sale in a nice little neighborhood in Escondido. They, like many other buyers in today's market, had heard the horror stories about short sales. Buyers putting in offers and not hearing back for months, delayed closings, frustration galore!

Sure, short sales can be a little scary, but sometimes they work out just great. We helped a family purchase a short sale in Chula Vista just a few months ago. The home once appraised at close to a million dollars...and they got it for about $650,000. Needless to say, the short sale worked out for them!

So what's the deal with short sales? Some are good, and some are bad...but here are a few tips.
-Is the listing price for the short sale approved by the bank? If so, the process can move much more quickly.
-Always ask the listing agent how long it will take the bank to respond to your offer. Some take weeks and even months...others can respond in just days!
-Is the list price for the home fair? Do your homework. If the list price comps out, chances are the home is priced well and is a pretty good deal. The closer your offer is to the list price, the more quickly the process may go. Sometimes the bank will hold onto the "lowball" offers for months, waiting to see if anything better pops up. If you want to make a "lowball" offer, you probably want to keep looking at other properties.
-Will the home appraise out? If the agreed-upon purchase price is fair, then the home should appraise and you should have no trouble securing financing. But if the home appraises for less than the contract price, you may not be able to get a loan...OR...be responsible for kicking in the extra bucks! or sometimes you will just renegotiate the sales price with the bank. Bottom line...the home needs to be priced fairly!
-If the short sale price is not approved, is there more than one mortgage? If so, is the first and second with two different banks? Sometimes this slows things down. It goes more quickly if both mortgages are with the same bank.
-Sometimes you can get "outbid" by a higher offer, even when you are in escrow.
-Is your financing secured? After waiting for the bank to respond to your offer, once they do, the clock really starts ticking! They expect you to get all your inspections completed and financing in order FAST--often in shorter time frames than normal sales. Be sure you are ready to go!
-Is the listing agent experienced with short sales? Experienced listing agents can speed things along by constantly communicating with the bank.
-Always work with a buyer's agent that is experienced in short sales. This will save you many headaches! Contact us at christinevt@prusd.com for a free consultation.

30 Year Rates Drop to 4-Year Low

Freddie Mac reports a decline in the 30-year fixed mortgage rate to 5.47 percent during the week ended Dec. 11 from 5.53 percent last week and 6.11 percent a year ago.

Some lenders are locking in even lower rates as they build on momentum started when the Federal Reserve announced plans last month to purchase a substantial number of mortgage-backed securities. HSH Associates and Inside Mortgage Finance are reporting interest on 30-year fixed loans at 5.33 percent and 5.09 percent, respectively. Freddie Mac chief economist Frank Nothaft says mortgage rates also were driven downward by the recession and rising unemployment. Source: The Washington Post, Dina ElBoghdady (12/12/08)

New Signs Point to End of Housing Meltdown

Columnnist Dean Callbreath from the San Diego Union-Tribune argues that there is growing evidence that the San Diego housing market is beginning to slow and may actually bottom out sometime next year.

"Just last week, the Anderson Forecast at the University of California Los Angeles, one of the state's premier economic-analysis groups, predicted that California real estate prices will hit bottom by the middle of next year. Unfortunately, the UCLA Anderson Forecast has been unrealistically optimistic over the past couple years, so its rosy prediction may not match reality.'
On the other hand, the more accurate economic forecasting team at the Anderson Center at Chapman University in Orange (they produce charts these days showing how much better their predictions are than UCLA's) predicted a 6.7 percent decline in housing prices next year for California – great news compared with this year's 34.2 percent."

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San Diego Rents: Slow but Steady

SAN DIEGO UNION-TRIBUNE:

With slight drops in both vacancies and monthly rates, the local rental market is sluggish but stable, the San Diego County Apartment Association reported in its twice-yearly survey of landlords and apartment managers.

The average rent for all unit types countywide was $1,188, a slight decrease from the $1,201 reported in the spring survey, but a year-over-year increase of 1.7 percent.

The countywide vacancy rate on all unit types was 3.6 percent, a decrease of 1.2 percent from the spring survey and an increase of 0.2 percent year over year.

“Last spring we saw an increase in vacancies due to an increase in the supply of foreclosed homes being rented,” said Robert Pinnegar, the association's executive director. “Now it appears that those units are being absorbed and vacancy rates are returning to where they were a year ago.”

The report echoed findings released in October by the RealFacts research firm. That survey, which focused on large complexes of 100 or more units, found that rental and vacancy rates were essentially flat during the third quarter.

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Leonardo DiCaprio's Home Listed for $8.9 Million

According to the LA Times, Leonardo DiCaprio is selling one of his Malibu homes for 9 million dollars. The 2 bedroom, 2 bathroom 2,400 square foot home offers private access to a cove (apparantly the actor loves privacy) and the home features a guest house and a small pool.

He purchased the house for $6.35 million back in 2006, so looks like Leo is hoping star power will sell his home in a down market.

Win a Stay at the "Christmas Story" House on Ebay...Complete with a Leg Lamp!

Sign me up! This would be the Christmas present of a lifetime for a fan of the holiday movie The Christmas Story. On Ebay there was an auction to rent the home Christmas Eve and Christmas Day. And the owners will do everything they can to recreate the movie for you that day!

You even get your own Leg Lamp delivered in a wooden crate labeled FRAGILE! Other perks include:

- receive bars of Lifebuoy Soap

-Large FRA-GI-LE Major Award crate delivered to the front door of the house (yours to keep)Crow bar provided to open.

-Chinese Turkey Dinner at Pearl of the Orient

-Spend the night in A Christmas Story House sleeping in Ralphie and Randy’s bedroom!
Christmas presents include:

-2 BB guns (behind the desk)

-blue bowling ball

-and a bunny suit.

So yes, the auction has already been completed, but there is always next year! (The winning bid came in at over $5,250. Proceeds go to charity.)

WOW! Click here for the full list of perks and the complete story from the RealEstateBloggers.com.