FHA makes it easier to buy after short sale or foreclosure

The Federal Housing Administration made it a lot easier this week for victims of foreclosure or short sale to buy a home again.

Now borrowers who meet certain requirements will only need to wait 1 year after bankruptcy, foreclosure or short sale before they may qualify for a FHA-backed loan.

The waiting period had been 2 years after the completion of a bankruptcy and 3 years after a foreclosure or short sale (For complete details on this story reported in the Chicago Tribune:  http://ow.ly/oeCa6).

The easing of requirements is great news for many in the Inland Empire who were hit hard by the recession, lost their jobs and then their homes.

Among the many stipulations, borrowers must be able to show their household income fell by 20 percent or more for at least six months and was tied to unemployment or another hardship beyond their control.  According to reports, they must also have completed at least one hour of approved housing counseling and can show they have had 12 months of on-time housing payments.

If you know someone who may qualify and wants more information, please have them contact us.  We'll help connect them with a local mortgage loan officer who can help them.

Free seminar for home buyers and sellers

Changing market conditions have many buyers and sellers wondering how they can time the market so they get the best value for their money.  We are proud to work with local real estate professionals including mortgage brokers, title, escrow and home warranty who share our goal to educate buyers and sellers in Redlands, Highland and Yucaipa.

RE cycle sees micro burst

Hosted a home seller seminar on August 7.  About 40 people attended. There were many questions about current market conditions. Mainly people want to know how long the sellers market will last. Conditions during the first four months of this year have been unusual.

In Orange County prices are up 30% home sales are skyrocketing. Normally we see a more gradual recovery but this year the trend went vertical. Now with more homes listed for sale buyers have more choices. Prices are moderating. The OC is in transition from strong sellers market to one that still favors sellers, but many homes are taking longer to sell.

In the Inland Empire homes are selling quickly.  Low listing volume has sellers in a strong position. Waiting to see more listings hit the market.

Will prices continue to rise? Some of that depends on the number of homes for sale and what happens with interest rates.

We're predicting home prices will increase more gradually for the rest of this year, probably more in the 10% range.  Sellers can wait to sell so they can get more money.  But if they are looking to sell and buy it may make more sense to act now to take advantage of the lower prices and interest rates.

A more gradual rise in prices is good news for buyers and sellers. Move-up buyers and empty-nesters can sell their home quickly and for more money then they could six months ago. First-time buyers can still get a good deal on a home and because of low interest rates have a relatively low monthly payment.

Of course, all of this is based on a continued improvement to employment and the economy. Let's hope for the best.

More new listings

The number of new listings in Redlands, Highland and Yucaipa was up sharply in July as more sellers decided to put their homes on the market.

That's good news for many home buyers who have found the pickings slim for most of this year.

The number of homes for sale still pales in comparison to 2011 when there were many more listings than there were buyers.

Here the market conditions still give great advantage to the seller.  Because of scarcity in many desirable neighborhoods many homes are selling quickly, for full price and without concessions.

However, nearby in Orange County the strong seller's market has already given way to a more balanced scenario.  A dramatic increase in homes listed for sale gives buyers more choices.  When that happens you can expect some price reductions, longer days to sell and buyers asking for help with closing costs.

Shortage of Short Sales

SoCal's Housing Recovery has made it hard for investors and savvy home buyers to find deals on Short Sales. 

Today in the East Valley (San Bernardino, Colton-Grand Terrace, Loma Linda, Highland, Redlands and Yucaipa) there are only 48 short sale listings compared to 449 standard listings.

Short sales often offer buyers the chance to buy homes below market value.  Often that's because the properties are distressed and need repairs or maintenance that may have been deferred.   

The inventory of short sales is back to normal levels even though there are many home owners who owe more than their home is worth.  One reason -- there are still many homes in some stage of foreclosure but the lenders are continuing to allow the owners to reside there even though they are in default.

With home prices up more than 30% since the first of the year many owners and lenders are waiting for home values to rise so that these homes have equity and eventually sold for more money. 

Also impacting the Short Sale Listing volume are bulk sales that lenders made during the past year to dump these "toxic" assets to companies that specialize in improving and selling them.

Buying or selling Short Sales is easier and less time consuming that it used to be.  Many lenders have streamlined the process so buyers can make offers, get them accepted and close in 60-90 days. Many lenders offer incentives to home owners who cooperatively participate in a Short Sale transaction. 

Let us know if you have questions about buying or selling Short Sales.

Timing the market

Timing is everything.  Buy low and sell high, right?

Let's look at Redlands where home prices jumped more than $30,000 or 10% in June.  And interest rates rose another 15%.  The time to buy is now.

But many buyers need to sell their home to move up, downsize or be closer to work.  Many sellers are watching home prices and are holding, anticipating continued increases. Waiting may make sense but its likely the cost of buying will go up too.

Inventories are improving and so are sales with 210 closed sales in Redlands in June.  There are similar success stories for Colton-Grand Terrace, Highland and Yucaipa.

  

Scarcity

Low inventories and high buyer demand have created scarcity in Southern California.

Besides the obvious - that sellers can expect more money for their homes - this imbalance has also made it easier to sell homes quickly and without much hassle.

Homes priced right will sell in almost any market condition.  But today and until scarcity ceases owners are able to sell homes that may not be in great condition or the best location.

The window of opportunity will close when more homes are listed for sale.  There are signs of that already happening.  The bump in interest rates and pent up demand for some owners to sell and buy their next home will cause more to list and sell.