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California home sales rise to highest level in more than three years!

by Christian Cervantes on 06/27/12




California housing market continues to post strong gains in May,
home sales rise to highest level in more than three years; low inventory a critical issue


LOS ANGELES (June 15) – California’s housing market continued to improve in May, with home prices posting solid gains for the third straight month and home sales well above last year’s pace, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today.

“California home sales were strong in May, continuing the gradual recovery of the California housing market,” said C.A.R. President LeFrancis Arnold. “First-time buyers are recognizing that the housing market has hit bottom and are now seeing a sense of urgency to take advantage of ultra-low interest rates and advantageous home prices. Additionally, trade-up buyers are returning to the market after sitting it out for the past few years to get in on favorable home prices.”

Closed escrow sales of existing, single-family detached homes in California climbed 3.4 percent from April’s revised 553,670 to a seasonally adjusted annualized rate of 572,260 in May, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. May sales surged 21.5 percent from May 2011’s revised 470,910 pace, marking the highest year-over-year sales increase since May 2009. The statewide sales figure represents what would be the total number of homes sold during 2012 if sales maintained the May pace throughout the year and is adjusted to account for seasonal factors that typically influence home sales.

The May 2012 sales pace was the highest since February 2009, when 598,770 homes were sold at a seasonally adjusted annualized rate.

Home prices appear to be stabilizing, with the median home price posting both month-over-month and year-over-year gains for the third consecutive month. The statewide median price of an existing, single-family detached home was $312,110 in May, the highest since September 2010.

May’s price was up 1 percent from a revised $309,050 in April and 6.6 percent from a revised $292,850 recorded in May 2011. The May 2012 figure was 27.3 percent higher than the cyclical bottom of $245,230 reached in February 2009. The median price has posted above the $300,000 level for the second straight month after remaining below that mark for 15 months.

The increase in the median price can be attributed to the strong sales increase in the higher-priced coastal regions, particularly in the San Francisco Bay Area, where job growth is strong and the economy is growing faster than other areas of the state.

California’s housing inventory sank lower in May, with the Unsold Inventory Index for existing, single-family detached homes dropping to 3.5 months in May, down from 4.2 months in April. May’s housing inventory was down from a revised 5.7 months in May 2011. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate. A 7-month supply is considered normal.

“Low housing inventory continues to be the critical issue in the California market,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Inventory levels have not been this low since December 2005, when the supply matched the current level. The Bay Area has the greatest shortage of homes for sale, with inventory levels in the two- to three-month range for Santa Clara, San Mateo, Alameda, and Contra Costa counties.”

Interest rates continued their downward trend in May, with 30-year fixed-mortgage interest rates averaging 3.80 percent, down from 3.91 percent in April and 4.64 percent in May 2011, according to Freddie Mac. Adjustable-mortgage interest rates averaged 2.74 percent in May, down from 2.78 in April and 3.13 percent in May 2011.

Homes are moving faster on the market with the median number of days it takes to sell a single-family home dropping to 46.6 days in May, down from a revised 48.9 days in April and 52.0 days in May 2011.

It's unanimous! It's better to own a home than to rent.

by Christian Cervantes on 06/15/12

The Scoop on Closing Costs Involved in Buying a Home

by Christian Cervantes on 06/07/12

The Scoop on Closing Costs

Are you a buyer preparing to close on a house? Now is a good time to refresh yourself on the most common closing costs.

There are more expenses to buying a house than just the monthly mortgage payment. More than likely you'll need to come up with some cold, hard cash in order to finalize the deal.

Here's some common closing costs to consider:

 

  • Down Payment: In today's economic climate, most buyers are putting in between 3.5% down to 20% down.

     

  • Loan Origination: This is what the lender charges you to underwrite the loan, meaning what they charge for their time and all the paperwork they need to do.

     

  • Points: You'll often see that different lenders have different "rates" and different "points" they charge. Buy paying points you can receive a lower interest rate, but this means more cash at closing.

     

  • Credit Score: You can access your credit report for free at annualcreditreport.com, however, in order to see your credit "score" -- the magic number that lenders use to determine your interest rate -- you'll need to pay a small fee.

     

  • Home Inspection: You want to be sure, no matter if the house is new or old, that you get a home inspection by a qualified inspector. You may love the house and the price, but if you find out that a big ticket item needs replaced you will be able to renegotiate the price or decide to change your tune on buying the home. A typical inspection will run you from around $300 to $500.

     

  • Private Mortgage Insurance (PMI): This is what a lender charges if you are putting less than 20 percent down on the cost of the home. It usually runs about 1 percent of the total cost of the loan and is simply a safeguard to protect the lender should you default.

     

  • Other One Time Fees: Insurance escrow, property tax escrow, notary fees, land surveys, deed recording, etc. Be sure to ask your real estate agent which will apply to your contract and what the expected costs will be.

    Congratulations on the decision to buy. Owning a home can be a wonderfully fulfilling experience. Just be sure you're ready for the closing costs coming your way!

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