Mortgage market alive and well

An Inman News article today quoted Damien Weldon, vice-president of collateral and prepayment analytics at LoanPerformance in San Francisco as saying "There is no credit crisis in mortgages for the average borrower." The key is the "average borrower". The subprime market are below average borrowers... so if you have good credit, a decent income, and 10% down or more, you're going to get just about any mortgage you want.

The article also references a research report from the Wharton School as saying that 30 year fixed rate mortgaged survived the "so-called mortgage meltdown"... in fact fixed rate mortgages have risen 30% during the past 12 months.

Inman News is a subscription service so this article is likely to be locked if you don't read it today... but here's the link if you do get to this post in time.

By the way, if you are thinking of Buying sometime soon, and need a loan, it's best to start now BEFORE you find your dream home. Step #1 is to buy the book "Mortgage Rip Offs and Money Savers" that I reviewed in an earlier post and can be found on the left side of this site. Step #2 is to get all three of your current Credit Reports and scores... see the myFico ad on your left. Step #3 is to follow the advice in the Mortgage Rip Off book by getting pre-qualified with 3 lenders, than choosing the one with the best rates and fees who you trust the most and get "pre-approved".

And at any time during this first state, call me to discuss your wants and needs in a home, and start searching for properties online at www.SF-MLS-Search.com


Things to do in San Francisco

We're an interesting town... but how do you find out about what's available to do and see when you're not in the "know"? Well, there are two places to get almost anything you need online... Google and Craigslist. In this case, check out Craigslist's "events" calendar.

This is the link for Sunday September 30th

From there you can click on the "next day" or "previous day" links, or re-write the date within the URL... "20070930" stands for the year 2007, the month of September, and the 30th day of the month. So if you're reading this on October 1st replace 20070930 with 20071001 (got it? 2007 then 10 then 01)

Some interesting things to do this Sunday include:
The Improv Alliance's list of comdedy and improv events found here
The Fort Mason Blue's Festival found here
The World Vegetarian Festival in Golden Gate Park found here
A post from the prisoners at San Quentin who have a Flag Football team - and they are looking for non-prisoner competition. Don't laugh, I've played baseball there against the prisoners... they are incredibly friendly and nice to you because they want you to come back. Here's that link.

And for those really not familiar with San Francisco, watch out tomorrow (Friday) during the evening commute for "Critical Mass". The unruly hooligan bicyclists who block traffic for several hours in and around downtown, North Beach, the Financial District, etc. Avoid the area at all costs if you have any hope of getting home to your children and loved ones after a long week at work. These folks don't care about you, because most don't appear to have jobs or kids. Critical Mass happens the last Friday of every month, so don't have a medical emergency or a pressing need then in the downtown area. You won't get out for a while, and if you try you're likely to be attacked as one woman with a car full of children recently was. We're a liberal town... but this is one that too often goes too far... so you're best bet is to stay away.

On a lighter note.... next weekend is Fleet Week. On Saturday there is a parade of ships followed by the Blue Angels air show, and a fuller air show on Sunday. Marina Blvd, Chrissy Field, and just about every roof top in the city will be packed for this annual event.

Subprime effect on San Francisco market?

I get at least one call or email a week from an interested Buyer asking about buying when the market "gets better" or assuming that it is already "better" here in the city of San Francisco. Yesterday the California Association of Realtors published an article (found here) about a 27.8 percent drop in sales (not prices) of existing homes, and a drop in prices for entry level homes of 5.1%. Of course, these are State-wide figures. And interestingly, overall, the price of the overall market is still up 2% from last August.

Here in San Francisco I had the mis-fortune of coming in 2nd place against 8 other offers when we bid $101,000 over the asking price of a small 2 bedroom Condo. My Buyer was going to skip getting a loan and pay all cash. Apparently the buyer who beat us out with the "best offer" offered about the same price, but had "non-contingent" financing which meant they were going to get a loan, but would be happy to pay whatever terms they got from the lender... and also "knew" they could get a loan... so obviously they were well qualified... certainly not any where near being a subprime borrower. The winning buyer also did not have any other contingencies... the key one is that they did not request an Inspection contingency... so they were accepting the home "as-is". We were going to inspect, but promised to get our due dilligence done within 5 days... so in 5 days the Seller could be confident we were going to go through with the Sale. Apparently that was too long to wait when he had 8 other offers to choose from.

So... is this going on in the rest of the State? Probably in some areas yes, but clearly NOT in the "entry-level" homes cited by the C.A.R. report since "entry-level" is the majority of the subprime market. Here in San Francisco, with a plethora of "all cash" buyers as well as "non-contingent financing" buyers, no one is worrying about the state of the mortgage market. With no one worrying about mortgages... there can be NO SUBPRIME MELTDOWN IN SAN FRANCISCO!!!

There are probably two reasons for this... one is that there are a lot of people with a lot of money in San Francisco... either their own, or a parent or relative helping them purchase the home. The second reason the subprime market is having little to no effect on San Francisco is that we continue to have far less inventory of homes for sale (supply) than we do Buyers (demand), including Buyers paying all cash.

Now, that's not to say that some segments of our market aren't down... there definitely are certain neighborhoods where homes are sitting on the market, and prices have gone down, but these are not the "quality" neighborhoods and homes that my all cash buyers are even bothering to visit. They want what they want, and they are willing to pay for it. The more expensive the neighborhood... the higher the prices have gone this year. The less expensive the neighborhood, the cheaper it's gotten. It's not weird when you think about it!!!

So.... if you want a "bargain" a "deal" or a "foreclosure" here in San Francisco, you will have to be open to ALL neighborhoods, not just your favorite ones. You can buy a cheap home in the cheapest neighborhoods. Or, better yet, I can direct you to places like Antioch where I just heard of one block where there are 7 foreclosures in a row.... so 1, if not all 7, will be great bargains... but then you have to live in Antioch... or fix and flip in an area where buyers have plenty of homes to choose from, and where apparently the tightening in the mortgage market is having a big effect on "demand".

I love your calls and emails... so please keep them coming... but I'm beginning to sound like a broken record when it comes to the "I'll wait for the market to get better" or "I'd like a foreclosure or a deal". I don't expect the market to go down, and I can only help you with a "deal" if you're very open to what and where you buy.


San Francisco listings up

Real Estate agents in San Francisco often vacation during our foggy summers and warn Seller's that they are better off selling in September when Buyers return to house hunt. Sure enough a lot of new listings began coming on the market on Tuesday after Labor Day, and this past Thursday and Friday the listings really shot up. City wide 110 new listings came on this past Thursday, and 73 more on Friday (single dwelling homes, TIC's, Condos, Lofts - doesn't include 2-unit buildings or more).

In the high end northern neighborhoods that I track the most (Presidio Heights, Pac Heights, Marina, Cow Hollow, Russian Hill and Telegraph Hill) 12 new listings were posted on Thursday and 14 more on Friday.

If you're considering Buying, check out www.SF-MLS-Search.com/welcome.html to find homes matching your criteria - or let me know your interests. But this is definitely a good time to buy since you will have more options. Of course if you are a Seller, it's also a good time for you since the Buyers are out in force this time of year after being pretty inactive for 2 months. So when you do list, while you'll have more competition, there is also pent up demand.

I just ran a "CMA" (Comparative Market Analysis) for a client for Condos with over 2500 SqFt (very large for San Francisco) and found that during 2007, in the northern neighborhoods, it's been a very hot and fast moving market. Average days on market is 3 weeks or less, and on average they are selling for 6% to 10% over the Listed price. That is very hot... so while there is a "bubble" debate elsewhere, the "luxury" part of the San Francisco market is going strong.

Listings are up... there are some great homes to look at... so check out my MLS site to begin your search.