Real Estate Update

Can you believe that it is already September!  When I reflect on the real estate market over this last year, I feel so fortunate to be selling on the peninsula. Our market continues to be strong, but it was slower over the summer. We are still experiencing multiple offers, however, especially in Palo Alto.  There was one home that was listed by another brokerage in Old Palo Alto that had 30 offers on it!  It was priced at 1.1 million dollars, which was considerably lower than the most recent sales in the area.  It ended up selling for close to 2 million!

On a national level, the sales numbers have been more inconsistent but are much better than last year.  In the West, pending home sales rose 3.6 % from June to July and are now 20.6% above July 2010. In the Midwest while sales slipped 0.8 % for that same period, overall sales were still 9.7% above July 2010. In the South: sales fell 4.8% but were still 9.5% higher than July 2010. In the Northeast sales fell 2% but were 9.7% above July 2010.

The underlying factors that usually signal an upswing in the real estate market include the following: rising rents, higher affordability and more investors buying real estate as a hedge against inflation. Also, improvement in lending standards has given more buyers the confidence to act.

Something to think about:

The recent reports of natural disasters have been making me wonder, “Do I have adequate homeowner’s insurance in case of an earthquake or flood?” According to the Insurance Information Institute , about 5,000 earthquakes occur in the U.S. every year. Yet even in earthquake-prone California, just 12 percent of homeowners have earthquake coverage. Four out of every five natural disasters involve flooding, yet less than one in five homes nationwide are covered by flood insurance.

The price tag for repairing flood damage to residential properties caused by Hurricane Irene could top $59 billion. An estimated 900,000 properties were damaged and many, if not most, are not covered by flood insurance according to CoreLogic. The average flood insurance policy in 2010 cost about $600 per year. The average claim over the past five years was about $34,000 according to the Federal Emergency Management Agency.

If you have questions, I suggest you read your policy or call your insurance agent. If you need some referrals, give me a call.

Mortgage News

Mortgage interest rates are at an all time low, and homeowners are taking advantage of this in both purchases and refinances.  Even though we no longer have the $729,750 temporary loan limit, we are still able to provide for a high balance conforming up to $625,500.  In addition, by coupling a line of credit with this high balance conforming loan, you would still be able to borrow up to $729,750 (or higher) without going into jumbo territory!  Speaking of jumbos, there happens to be a jumbo purchase promotion going on, resulting in unbelievable mortgage rates.