Spring has arrived early this year and I am not just referring to the beautiful weather!  The local real estate market is showing signs of a typical spring market, with a big increase in activity. Sales in our office were up about 20% in January. Just last week it was reported that one of our listings in San Carlos, listed at $800,000, had 12 offers on it!  Also, we just sold a new home in Redwood City for $1,300,000, a new home in Menlo Park for over $4,000,000 and three homes in Palo Alto in the $1.2 to $1.500,000 range. All of these homes had multiple offers and the sales prices exceeded the list prices. So…… if you are thinking of selling in the future, we suggest you move your time frame forward and take advantage of this wonderful “spring time” market.
Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), credits this upswing to affordability, favorable mortgage rates and an improving economy. Yun predicts, “The positive trend is likely to continue in 2011. Current activity suggests a sustainable, healthy volume of home sales for this year.”

Mortgage News from Christine Kani of Private Mortgage Advisors

A recent change in lending makes it harder to qualify for a loan if a borrower is not selling their current home. As of February 12, 2011 rental income may not be used to offset the current mortgage payment on a departure residence unless the borrower can prove 2 years of property management experience as evidenced by their most current 2 years of tax returns. This is a significant change as borrowers can no longer just rent out their current property when purchasing a new one and use the rental income to qualify.

This change has been mandated by the government agencies Freddie Mac and Fannie Mae and does not affect FHA loans.

Current Rates:

Conforming Loans (up to $417,000)
30 year fixed           5.00%
15 year fixed            4.25%
5/1 year fixed           3.375%

High Balance Conforming  (Over $417,000 up to $729,750)
30 year fixed           5.125%
15 year fixed            4.250%
5/1 year fixed           3.750%

Jumbo Loans (over $729,750 up to $1.5 million)
30 year fixed           5.625%
15 year fixed rate      4.875%
5/1 year fixed rate     4.125%

Is a Condominium Better than a Single Family Home?

The answer is it depends on your needs. But, with condominiums, one must do research and understand what is being bought to determine if it is really better.

So, what’s important to look at when it comes to a condominium? First and foremost is to make sure that the Home Owners Association (HOA) is strong financially and has proper management. The key is to read the HOA documents and Covenants, Conditions and Restrictions (CC&R’s). You may also want to have an attorney that specializes in this field review the documents. Also, a call to the property management company would be wise to find out what they do and if there are any issues that may affect the value of the property. Lastly, make sure the condominium has adequate insurance including liability, workman’s compensation, earthquake, etc.

From first time homebuyers attracted to the affordability of a condo to the empty nester that is looking for hassle free living, a condominium could be exactly the right answer. Just make sure you do your homework.