Mortgage Update - May 17th 2008

Per a Lender at Union Trust:

Agency Jumbo Loans are finally priced nicely. Agency Jumbo loans are between 417k and 729k. We've been waiting for this for a long time. For example, 30 year fixed mortgages for jumbo loans today are floating around 7.125%, however if your loan is at 729k, but above 417k then the loan can qualify for better jumbo financing at 5.875%, 30 year. The difference is 1.25% in rate but $731 per month for a jumbo loan. That is an annual savings of almost 9k.

Fannie Mae as of June 1st, 2008 will no longer require larger down payments for 'declining markets'. This is GREAT news. It means that banks will start to follow suit and mortgage underwriting guidelines should be easing up for all conventional financing in markets that have seen downturns. It's a huge statement by the government that they feel the 'worst' has hit and now things can normalize. Realizing SF has been protected from the downturns, some of you may have family and friends or rental properties in other markets that were effected by the 'declining market' underwriting limitations.


So if you've been thinking about Buying... start with your lender first... here's a recap of articles and steps to get started:

#1 - pick up the book "Mortgage Rip Offs & Money Savers" - here is my review of the book.
#2 - know your credit score - fix your credit - read this article
#3 - start getting property listings matching your criteria - sign up at www.Automated-HomeFinder.com. Or sign up at CleanOffer.com - the best MLS tool on the market - but you must know and agent with pre-paid access... if you don't have a Realtor, feel free to sign up under my account - free for you. Visit here to get the invite link.
#4 - get educated with the help of a Buyers Agent like myself - read this for what I mean about education.

With the above, you can start a confident house hunting search, ideally with the help of a Buyer's Agent. Start all 4 of the above today! Feel free to call or email me for assistance with any of the above. I provide a free copy of the Mortgage book to each of my new Buyer clients, and can refer you to 2 to 3 brokers and banks until you find one you like. Visit www.SFisHome.com for my contact info


TIC's continue to grow in sales

Comfort with TIC's is clearly growing.... sales of TIC's have gone up every year.

2002 154 TIC sales
2003 269
2004 395
2005 539
2006 652
2007 722

In 2007 there were 5394 total individual unit sales (Single Family Homes, Condos, Coops, Lofts and TIC's) so the 722 number is 13.4% of all sales. As more and more TIC home owners share what I expect to be largely positive experiences with their friends, colleagues, families and neighbors.... comfort with TIC's, and therefore demand, should grow.

Yet, there continues to be a LOT of risk aversion to TIC's, especially in buildings with 3 or more units. This risk aversion means there's a big gap in prices between TIC's in 3+ unit buildings vs. Condos or even TIC's in 2-unit buildings. But if comfort with TIC's grow, demand should grow, and the price gap should dimish. In other words, if you're an "early adopter" of TIC's (ie you buy now) and you sell when the "laggards" catch on, you should see far greater price appreciation vs. any other segment of the market.

Of course there's an ulterior motive to this report.... my team and I, the SFisHome.com Group... have 2 current listings in a 3-unit building, and we've got 3 more TIC listings in two more buildings coming onto the market soon. Scroll down a bit, or click here, for the current listings, 357 3rd Ave and 355 3rd Ave.


BMR "Below Market Rate" update

The below is from sfhousing.info@sfgov.org

Before pasting the email.... a "BMR", a Below Market Rate unit isn't something I necessarily recommend... you get cheap home ownership, but you have no idea if you'll get any appreciation in price when you sell. Not that anyone else has that guarantee, but with an unregulated (normal) property you leave it up to the market (ie Buyers) to determine what the real value of your property is when you sell. With BMR's you leave it up to regulations and the City.

But... if you're interested in buying a property that is far less than market value... here's the email from the city:

Update on Currently Posted BMR Units:

-The deadline for 8-18 Colonial Way has been extended. See
http://www.sfgov.org/site/moh_page.asp?id=17815 for more information.

Upcoming BMR Units:

-SOMA Grand will be marketing 29 BMR ownership units within the next
2-3 weeks. It is important to take your first time homebuyer workshop
before you apply. Please see our first time homebuyer page for a list of
approved homebuyer education agencies.

-125 Mason St. will be marketing 81 BMR rental units within the next
2-3 weeks (22 one-bedrooms; 34 two bedrooms; 20 three bedrooms; and 5
four bedroom units). It is a good time to begin collecting your 2007 tax
and w-2 forms, your paystubs, and your statements from all cash accounts
in order to apply!

Other Upcoming BMR Units:

BMR Ownership Units

4343 3rd Street, 4343 03rd Street, 94124, Ownership Units: 2
three-bdrms units at 100% median income

Financial District:
74 New Montgomery Street, 94105, Ownership Units: 4 studios, 5
one-bdrms, 2 two-bdrms units at 100% median income

Mission District:
-Mission Mosaica, 18th & Alabama, 94110, Ownership Units: 5 two-bdrm,
16 three-bdrm units at 80%, 100% and 120% median income
-Chelsea Park, 3620 19th Street, 94110, Ownership Units: 2 one-bdrm, 3
two-bdrm units at 100% median income

SOMA Grand, 1160 Mission Street, 94103, Ownership Units: 17 one-bdrm,
10 two-bdrm, 1 three-bdrm unit at 100% median income

Yerba Buena:
410 Jessie Street, 94103, Ownership Units: 2 one-bdrm units at 100%
median income

BMR Rental Units

Hayes Valley:
The Hayes: 55 Page, 94102, Rental Units: 17 units - unknown bdrm sizes
at 60% median income

Pacific Heights:
2000 Post III: 2161 Sutter Street (2000 Post), 94115, Rental Units: 2
studio, 1 one-bdrm unit at 60% median income

8 McLea Court: 8 McLea Court, 94103, Rental Units: 3 studio units at
60% median income

2545 Judah, 94122, Rental Units: 2 two-bdrm units at 60% median income

125 Mason 94102, Rental Units: One, two, three and four bdrm units at
60% median income (81 units total)

Yerba Buena:
418-20 Jessie Street, 94103, Rental Units: 1 one-bdrm, 2 two-bdrms at
60% median income

Please call our office at (415) 701-5500 with any questions or visit
http://www.sfgov.org/site/moh_page.asp?id=48003. Thank you.

end of email

If you're interested in purchasing any of these properties, please contact me, and visit the city site for more information. There are several hurdles you have to go through, and then it's often a lottery process to win your bid (you can't try to out-bid anyone - prices are set in stone).

Thanks for Visiting the SFisHOME Blog courtesty of Rob Regan. If you're ready to Buy or Sell a San Francisco Property start with the best online tools for finding San Francisco properties: Condos, Houses, TIC's, Income properties, Co-ops, High Rises, 2-Unit Buildings and more:

San Francisco Email Search --- or --- Live SF MLS Search Service

Automated-HomeFinder.comFree Access to invite-only CleanOffer MLS Service

Click any image button to get started with your favorite San Francisco home search service, or get your Home's Value here:

Lender Update

As a Realtor I send virtually all loan questions directly to lenders I like... today that's more important than ever because the loan environment seems to be changing on an almost daily basis. Here's an update I received via email from a lender I trust to work hard on the behalf of Buyers:

From Raffi Soghomonian, BIX Equity Management, Inc.

"The mortgage landscape continues to change with new guidelines coming out weekly. The guidelines change so fast it is difficult to keep up with it all. We have to check each transaction to make sure the loan we are working on is still available. Having said that, there are still some great loan products including higher loan to value loans.

You probably already know about the FHA product which allows up to 97% financing. Make no mistake with this loan, it is a paper intensive process and can take 3 weeks to get an underwriting approval. So if by chance you have an FHA potential transaction, get the approval process started prior to the contract phase.

The new conforming-jumbo loans will now go up to 90% financing, and up to $729,000. Loans over 80% will require MI. The rates are actually very good for these loans. Only thing here is that these are Full Doc, Owner Occupied, and 1 unit properties. Both purchases and refinances are allowed.

There are conforming loans (<$417,000) with attractive rates, that go up to 90% financing with a first and second loan. The bigger challenge is in Jumbo loans. The secondary market for this paper is still conservative which makes it harder for wholesale lenders to sell that paper. 5/1 and 7/1 Jumbo Arms are right around the 6% range, but anything longer term can get a bit pricey."

This is from
Raffi Soghomonian
BIX Equity Management, Inc.
650-591-8830 raffi@bixx.com

Getting pre-approved with a Lender is CRITICAL before you start a serious home search. It's taking longer to "underwrite" virtually all loans today, and you could lose out on the home of your dreams if you don't start the process early, and you don't have a Lender who will work diligently to push the process along. This is no time to rely on a "friend" who is new to the business. You need an expert.

Interest rates are PHENOMENAL right now.... and while "perfect" properties are selling immediately, less than perfect properties are sitting longer and you have a chance to negotiate a great deal. Great rates, great buying opportunities.... it's time to Buy!!!!!


Price Trend Comparisons

The biggest question on everyone's minds are how are prices trending.... my mantra is that you MUST ask this in a very specific way. Even a neighborhood comparison from year to year isn't specific enough. You need to pick a segment of a neighborhood because (2 bedroom condos vs. 2 bedroom condos for example).

But to get those answers, you need to ask me or another Realtor what you want to know... in the meantime, using a tool like Trulia's very general neighborhood tool is far better than reading something in the Chronicle, and certainly better than a national or regional news source.

Here's one example.... and look along the left hand column for a few more (be sure to mouse over the lines to see the prices by date):

San Francisco Real Estate - Trulia