1642 N Beverly Drive

Many potential homebuyers don’t realize they don’t need a big down payment

On average, consumers believe they need 11 to 15 percent in equity to buy a home, Boyle said, citing figures from a Zelman & Associates survey of renters and people who live in the homes of oth“It’s a wakeup call to the housing industry that we have more to do to let the next generation know they can get a conforming, conventional mortgage with a down payment of as little as 5 percent (sometimes with as little as 3 percent coming out of their own pockets),” Boyle wrotAbout 4 in 10 respondents estimated the minimum down payment required was at least 15 percent of the purchase price, including those in the prime “first-time buyer” 

Many potential homebuyers overestimate the size of the down payment required to finance a home purchase, according to Fannie Mae exec Christina Boyle.

On average, consumers believe they need 11 to 15 percent in equity to buy a home, Boyle said, citing figures from a Zelman & Associates survey of renters and people who live in the homes of others.

“It’s a wakeup call to the housing industry that we have more to do to let the next generation know they can get a conforming, conventional mortgage with a down payment of as little as 5 percent (sometimes with as little as 3 percent coming out of their own pockets),” Boyle wrote.

About 4 in 10 respondents estimated the minimum down payment required was at least 15 percent of the purchase price, including those in the prime “first-time buyer” demographics between 25 and 34.

Freddie Mac’s purchase of mortgages with down payments under 10 percent more than quadrupled between 2009 and 2013, Boyle noted, and the latest stats for 2014 show that more than 1 in 5 borrowers who took out conforming, conventional mortgages this year put down 10 percent or less.

Share of equity home sales rises to highest level in more than six years as higher home prices buoy more underwater homes

Recent home price gains have lifted more underwater homes into positive territory, pushing the share of equity home sales to their highest level since late 2007.  At the same time, pending home sales were essentially unchanged in April, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. 

Distressed housing market data:

• The share of equity sales – or non-distressed property sales – continued to increase in April, rising to 88.4 percent in April, up from 87.6 percent in March.  After a slight decline at the end of 2013, equity sales have been rising steadily again since the beginning of this year.  April marks the 10th straight month that equity sales have been more than 80 percent of total sales. Equity sales made up 75.4 percent of sales in April 2013.

• The combined share of all distressed property sales continued to decline in April, thanks to a drop in short sales.  The share of distressed property sales was down from 12.4 percent in March to 11.6 percent in April.  Distressed sales continued to be down by more than 50 percent from a year ago, when the share was 24.6 percent.

• Twenty-six of the 41 reported counties showed a month-to-month decrease in the share of distressed sales, with 13 of the counties recording in the single-digits, including Alameda, Marin, San Benito, San Diego, San Luis Obispo, San Mateo, and Santa Clara counties — all of which registered a share of five percent or less.

• Of the distressed properties, the share of short sales dropped to levels last observed in April 2008 at 5.9 percent, down from 6.6 percent in March.  April’s figure was nearly a third of the 14.7 percent recorded in April 2013.

• The share of REO sales only dipped slightly in April to 5.3 percent, down from 5.4 percent in March.  REO sales are now nearly half of what they were a year ago, when REOs made up 9.4 percent of all sales in April 2013. 

• A drop in active listings of equity and REO properties tightened the housing supply in April, causing a decline in unsold inventory across all property types.  The Unsold Inventory Index for equity sales dropped from 4 months in March to 3.6 months in April.  The supply of REOs slipped from 2.8 months in March to 2.3 months in April, and the supply of short sales declined from 4.7 months in March to 4.4 months in April.

Pending home sales data:

• California pending home sales were essentially unchanged from March, with the Pending Home Sales Index (PHSI)* dipping 0.5 percent from 114.4 in March to 113.8 in April, based on signed contracts.  The month-to-month change was substantially lower than the 6.5 percent drop from March to April observed in the last three years.

• Pending sales were down 6 percent from the revised 121.1 index recorded in April 2013.  The year-over-year decline in the PHSI has been tapering over the past few months and should level off in the coming months.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

Zillow now allowing pocket listings

HOUSTON – Zillow doesn’t want to cultivate the growth of pocket listings as we know them; it wants to “co-opt” them, according to Errol Samuelson, chief industry development officer at Zillow.The goal of Zillow’s new “coming soon” feature is to “change the notion of ‘pocket listing’ to something that’s more transparent and egalitarian in the sense that the listing is available for everyone to see,” and not just a “cloistered group,” said Samuelson, speaking on a panel on the future of online real estate.

“Coming soon” allows agents, brokers and multiple listing services to market homes on its site up to 30 days before listing them on the MLS. The feature is restricted to agents who advertise with the portal and the brokerages and MLSs who provide Zillow their listings in a direct feed.

Along with inventory shortages, new technologies such as social media, listing sites and internal communication platforms like Yapmo are fueling the growth of pocket listings. Bob Hale, CEO of the Houston Association of Realtors, suggested that the expanding social media network Nextdoor could “easily become a way for neighbors” to sell homes off the MLS.

All of this “could lead to the demise of the industry as we know it today,” he said. Zillow’s coming soon feature, he added, “has dramatic implications for the industry.”

Because agents can restrict who they tell about their pocket listings, it’s easier for brokerages to keep such deals in-house, with the buyer and seller represented by different agents at the same company (a practice regulated as “designated agency” in many states). Of more concern to critics are “dual agency” deals, in which the agent represents both the buyer and seller. Critics say that the reduced exposure a pocket listing receives may result in a lower sale price.

A number of agents have taken issue with Zillow’s “coming soon” feature because they believe that it facilitates dual-agency transactions, just like other off-MLS marketing methods.

“It will foster dual agency and make the MLS services even more irrelevant than they already are,” an associate broker at Pinetop, Arizona-based Aspen Properties. “Who needs an MLS if we are just going to sell our own listings anyway?”

But Samuelson argued that “coming soon” is a desirable alternative to the sort of off-MLS marketing that has traditionally incubated dual-agency transactions because it exposes off-MLs listings to the public, not just a “closed club where only a privileged few agents get to see the listing.”

In fact, the feature even places “coming soon” listings above conventional listings on search results pages, he said.

“The goal is to help agents test prices” and “give a head start on marketing a listing before it goes into the MLS,” he said.

Southern California home sales and prices high in December

As end-of-the-year housing market reports begin to emerge, DataQuick reportedan increase in closed transactions on homes for sale in Los Angeles County and a notable gain in home prices in December.

Data from the report found that the final month of 2012 saw the highest number of homes sold in three years, as 20,274 new and resale homes and condos were sold in the six counties that make up Southern California. This is 5.1 percent higher than the 19,285 homes sold the previous month and also up 5.3 percent from December last year when 19,247 properties were purchased.

"The housing market had more to offer in 2012 than many anticipated," said John Walsh, president of the data firm.

Additionally, the median price paid for a home was $323,000 up 0.6 percent from November and a 19.6 percent leap forward from December 2011 when the median price was $270,000. A large percentage, 24.7 percent, of all home sales were for properties priced for $500,000 or more, as transactions of luxury properties continue to boost the median price significantly. DataQuick notes this is the highest figure seen since July 2008.

Programmable thermostats enter the mobile age

It certainly comes as no big surprise to anyone that the heating and cooling systems in our homes consume huge amounts of power, and typically account for the lion's share of our utility bills. So anything we can do to conserve on the amount of power these systems use will help lower those bills each month.

Programmable thermostats are one of the best ways to do that. Using internal computer circuits that raise and lower the thermostat set points at various times during the day in accordance with our occupancy and habits, they help keep the furnace or air conditioner from running when it doesn't need to.

Programmable thermostats have been around for decades, but it's only been recently that they've caught up with the Internet and smartphone age. Now they're more intelligent than ever, and, used correctly, that can translate into even more energy savings.

Nest Learning Thermostat

One of the most talked about thermostats on the market today is the Nest Learning Thermostat. You probably don't think of "attractive" when you think of thermostats, but this one definitely is, with a small round shape that glows blue when it's in cooling mode and orange when it's in heating mode.

Beyond its appearance, there's the lack of buttons. Adjustments are done with the outer ring, and you see programmed settings on a screen in the center of the thermostat. As you make the various adjustments throughout the day, the Nest "learns" your habits, and programs those habits into its circuitry. Soon, it's set up a temperature schedule that meets your specific lifestyle.

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The Nest also has sensors in it that detect when no one is home. It switches into Auto-Away mode, automatically turning itself down to save even more energy. In that mode, the face switches to black. As additional motivation, there's even a leaf symbol that appears periodically to show you when you're saving more energy than what you'd originally programmed it for.

There are currently two generations of Nests. The first generation retails for around $198, and works with about 75 percent of the heating and cooling systems. The second generation retails for $250, is 20 percent thinner, and is compatible with an estimated 95 percent of systems. Both generations offer Wi-Fi remote control so you can control your thermostat remotely from your smartphone, laptop or tablet.

Beverly Hills | Luxury Real Estate | Selling | Buying

Beverly Hills | Luxury Real Estate | Selling | Buying