Steepest Price Declines Fall in California Cities
According to the National Association of Realtors, the median price for homes in the United States dropped an average of nine percent from last year. In addition, a third of all home transactions involved homes with mortgages in default.  Unfortunately, three California cities took the spotlight as having the worst decline nationwide. San Bernardino, Sacramento, and San Diego all suffered losses greater than 35% in value.

Bargain Hunters Eyeing the Worst Hit Markets
With foreclosures and mortgage defaults taking its toll on U.S. home prices, bargain hunters have wasted no time. Particularly in the hardest hit markets, some realtors have started seeing multiple offers on such properties. Multiple offers would usually be an indication of market strength and give hope to a “bottoming” of the housing market. However, analysts agree that while mortgages have suffered because of toxic loans and risky lending, the problem of unemployment and the economic downturn will continue to take its toll on home prices.

For those who are curious about these bargain homes, buyers have been exploring the routes of short-sale properties, foreclosures, and REOs in an attempt to purchase below market valued properties. As for financing, FHA has recently filled the credit void, while some bargain hunters or investors save enough capital for larger down payments.

Mortgage Applications For Residential Home Loans Decrease
According to the Mortgage Bankers Association application index, home loan applications for purchase and refinances fell 6.2 percent. The individual gauge for purchases fell 13 percent, while their refinancing gauge rose 2.6 percent. This translates to a 49.9% of total applications seeking a refinance, compared to the last statistic of 45.5%.  Despite a decline in recent mortgage rates, most individuals are simply unsure of the housing markets right now. In addition to their studies, home builder’s confidence fell to a record low, while building permits fell to its lowest levels since 1981.

It looks like it’s going to be a pretty tough Christmas, but one thing worth pointing out is the popularity of these bargain homes. It’s no secret that prices have been falling here in California, and many are taking advantage instead of sitting on the sidelines. If you were in the market for a home, now could be the most affordable time to buy. Of course, once you decide to step foot in this market, you’ll see why people are going crazy trying to time this “bottom”. The best thing you can do is make sure your finances are in order so that you’ll be ready when that time does come.

(3 votes, average: 5 out of 5)

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How much do you think your home is worth? According to a survey performed by Zillow last month, over 62 percent of Americans mistakenly thought their home’s value increased or remained the same when in fact the opposite was true. Interestingly, the recent credit crunch has shown mortgage lenders are having just as much trouble placing a value on your home. In response, stronger appraisals are being required to ensure higher quality mortgages and more accurate home values.

Declining Home Values
In California, home values have been plunging across zip codes throughout the state. To help address this problem, lenders want stronger appraisals with more recent comparable sales. You can’t expect to qualify if you can’t prove your credibility; in this case, lenders want to see how mortgage worthy your home truly is.

3 Steps to A Stronger Appraisal
1. Realistic Comps. If you’re talking about a three bedroom-two bath 1600 SqFt home, lenders won’t care about the five bedroom-four bath 2300 SqFt home two blocks down. Lenders consider comparable sales of homes that are similar. If the homes aren’t similar, they’re not realistic and they’re not real “comps”.

2. Fresh Comps. Who cares if the house down the street sold for $X amount 11 months ago; this market is a financial roller coaster ride and lenders are just as scared as you. Foreclosures, short sales, and REOs have shown how sensitive home prices can be and today’s lenders cannot afford to make the same mistakes. Unfortunately, the same goes for homeowners. Before this mortgage crisis, lenders would sometimes accept appraisals with comps dating back as far as 12 months. Nowadays, you’d better tell your appraiser to include comps within 90 days.

3. Multiple Comps. Strength in Numbers. So you’ve got realistic comps and they’re fresh? Great! Now make sure you have more than just one. Lenders love stability and the more comps you provide, the more solid your appraisal appears. Your broker or loan agent can find out how many comps the lender would like to see, but it is ultimately your responsibility to press the appraiser to meet these requirements.

Realistically, most of these suggestions may seem out of your hands at first. I mean, you can’t magically create stronger comps and your appraiser is likely doing all he can to give you the strongest appraisal. But, keep these suggestions in mind because this is what mortgage lenders are keeping a close eye on nowadays. Home values are still shaky and lenders are just looking for some form of assurance - give them that assurance with stronger appraisals.

(1 votes, average: 4 out of 5)

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