Nationwide, there are currently about 3.48 million homes for sale, but as we enter the autumn and winter seasons, available housing inventory will typically decrease and real estate activity will slow. The National Association of Realtors predicts that this number will probably drop to less than 3 million over the next few months. Meanwhile, would-be buyers will shift their focus towards the holidays, waiting for the boost in available properties that usually comes in the spring.

On a local level, our inventory is also low but unlike the national statistics, we have many buyers who are eager to purchase a home, despite the approaching holidays!

Looking forward, there are good indicators that some areas will see significant changes in the market next year:

• New residential construction surged 15% in September - the best performance in 17 months.
• Mortgage applications increased 1.3% for the week ending October 7, 2011, according to the Mortgage Bankers Association.
• Pending home sales this past September were 6.4% higher than in September of 2010.

SOMETHING TO THINK ABOUT:

Is this a good time to buy a rental property?

Lower home prices in some areas combined with low interest rates make this the best time in years to become a real estate investor. News sources like MSNBC have been reporting a strong rental market since summer, calling it a “landlord’s market” in many cities and anticipating rising rents.

If you’re considering purchasing a property to rent, location is of prime importance. Safe neighborhoods that are near good schools and public amenities like parks, public transportation, and shopping districts are especially attractive to renters. What type of property are you interested in buying? Condominiums can be a good choice for first-time investors. But they appreciate more slowly and command smaller rents. Single-family homes tend to attract longer term renters. Also, don’t forget duplexes, triplexes and fourplexes which are great investment opportunities.

Now is a great time to buy an investment property. Let’s talk about your options.

IS YOUR HOUSE READY FOR WINTER?

The following tips will help you save money on your heating bills in the upcoming colder months.

Add insulation in your attic – Do you have enough insulation in your attic? The US Department of Energy has some helpful recommendations on insulation levels at their website. They even have a calculator that will tell you based on your zip code how much you should have in your home. When adding new insulation atop old insulation, don’t use the kind with paper backing. It forms a vapor barrier that can cause moisture problems in the existing insulation.

Maintain your ducts – You can lose up to 60% of your heat through ducts. If you’ve had your system for awhile, consider hiring a professional heating and cooling contractor to locate and seal areas where you may be losing warm air. If you’re in an especially cold climate and your ducts pass through unheated spaces like a basement, insulate them.

Reverse your fans – If your ceiling fans have reverse settings, run them in cold months; they’ll push warm air downward, circulating it throughout the room.

Block drafts – Cold air coming from beneath doors can waste up to 30% of your energy bill. Stuff a necktie or a scrap of fabric sewn into the shape of a tube with sand or kitty litter (or just roll up a towel) and lay it at the base of the door.

Lower the thermostat – For every degree you lower your thermostat, you can save up to 3% on your monthly heating bill.

Replace filters – Clogged air filters restrict airflow and add to your energy bill. Replace them once a month during the winter. Better yet, with reports suggesting that disposable filters trap as little as 10-40% of debris, consider replacing yours with a HEPA filter. HEPA filters can remove up to 99.97% of airborne particles.

Buy an energy monitor – There are two kinds of energy monitors. Smart Plugs plug into an individual outlet and calculate the amount of energy being used by a single appliance. Energy (or power) monitors for the whole house track energy usage at your breaker panel. You can find out in real time how much energy you’re using, how much it’s costing you, and how much you’ll save just by turning off an extra light or any appliances like laptops and televisions that have standby modes. Research has shown that people who use power monitors naturally become more aware of - and reduce - their usage. Shop your local home appliance store for an energy monitor and save on your overall power bill this winter.

FINANCIAL UPDATE:

September and October saw home refinance activities reach an all time high.  With interest rates so low, it is also a great time for homebuyers as well as investors to purchase real estate properties.  Non-conforming (otherwise known as jumbo) loan rates, are at an all time low.  In fact, for many buyers who qualify, they are seeing jumbo rates on par with standard conforming rates.  Remember, with the change in the conforming level, any loan that is above $625,500 is considered a jumbo loan.  Below are rates for purchase transactions:

CONFORMING (up to $417,000)

30 year fixed: 4.0%

15 year fixed: 3.25%

7/1 ARM: 2.625%

HIGH BALANCE CONFORMING (up to $625,500)

30 year fixed: 4.0%

15 year fixed: 3.25%

7/1 ARM: 2.75%

NON-CONFORMING (over $625,500)

30 year fixed: 4.25%

15 year fixed: 3.75%

7/1 ARM: 3.25%

- From the Desk of Christine Kani, Private Mortgage Advisors christine@christinekani.com

NMLSR ID 235418

Calif. median home price: May 2011: $$291,760 (Source: C.A.R.)

Calif. highest median home price by region/county May  2011: San Mateo: $810,000 (Source: C.A.R.)

Calif. lowest median home price by region/county May 2011: Merced $113,000 (Source: C.A.R.)

Calif. Pending Home Sales Index: June 2011: 119, an increase of 1.9 percent compared with prior month. (Source: C.A.R.)

Calif. First-time Buyer Affordability Index: First quarter 2011: 53 percent (Source: C.A.R.)

Mortgage rates: Week ending 7/14/2011 30-yr. fixed: 4.51 fees/points: 0.7% 15-yr. fixed: 3.65 fees/points: 0.6% 1-yr. adjustable: 2.95% Fees/points: 0.5% (Source: Freddie Mac)

It is difficult to accurately assess the bay area real estate market because of the many micro markets that exist within its boundaries.  For example, Palo Alto continues to be the shining star with almost every listing generating multiple offers.  The surrounding cities of Los Altos, Mountain View, Menlo Park and the rest of the Mid Peninsula are also experiencing an increase in activity.  But there are some markets that continue to struggle, especially in the South and East Bay.  Also, low inventory continues to be a problem in all areas, with not enough housing to satisfy the many buyers coming through our open houses.

Last month was a very successful month for our office with 75 sales and over $118,000,000 in gross sales volume.  This is almost double what we posted last year and the third month in a row that we have exceeded $100,000,000 in sales.  We are very much aware that these numbers are not just the result of our hard work and effort- but the uniqueness of the market place which we serve.

Something to Think About

Today’s buyers seem to be more attracted to a new or remodeled home as oppose to a fixer-upper.  In existing homes, newly remodeled kitchens, bathrooms and family rooms are high on everyone’s wish list.  If you are selling, it’s important to have as many updated amenities as possible in order to get you the highest price.

This trend is reflected in the National Association of Home Builders’ Remodeling Market Index (RMI), which measures the amount of remodeling activity in the market.  The RMI rose to 46.5 in Q1 of 2011, compared to 41.5 in Q4 of 2010.  This marks the highest level for the RMI since Q4 of 2006.

Mortgage News

Given the fluxuations in the financial market over the past week, interest rates took a turn for the better.  This is great timing as it may be the last time to get locked into a high balance conforming loan program for a low interest rate.  While these loans have been mostly utilized by homeowners for their primary residence, they are in fact also applicable for investment properties as well.  If you are thinking of purchasing investment property, this is great time to get an investment property loan for up to $729,750, with as little as 35% down payment.

Current Interest Rates

CONFORMING (up to $417,000)

30 year fixed: 4. 5%

15 year fixed: 4.0%

7/1 ARM: 3.375%

5/1 ARM: 3.0 %

HIGH BALANCE CONFORMING (up to $729,750)

30 year fixed:  4.625%

15 year fixed: 4.125%

7/1 ARM:  3.625%

5/1 ARM: 3.25%

NON-CONFORMING (over $729,750)

30 year fixed: 5.0%

5/1 ARM: 3.625%

Situated in the coveted community of Ladera, this Leonard Lincoln designed redwood home offers the ideal living environment to enjoy the surrounding area’s natural beauty. The open floor plan with expansive decks and floor-to-ceiling windows is highlighted by breath-taking views of San Francisco Bay, the Stanford Foothills and eastern hills from Mt. Diablo to Mt. Hamilton.  Additionally, this home is ideally located to take advantage of Portola Valley's open spaces while remaining in close proximity to the many amenities of the Ladera shopping center and several commute routes. Enjoy tennis, swimming, and family activities at the Ladera Recreation Center at affordable resident rates.

The home will be open this Tuesday, May 31st from 9:30am to 1:00pm, as well as this Saturday and Sunday, June 4th & 5th from 1:30 to 4:30pm.

More details and photos can be found HERE.