Hello Neighbors,

This week's updates include the good, the bad, and the ugly.  While C.A.R. reports September home sales increased 2.1 percent; median home price declined 7.3 percent.

The market’s momentum continued in September, as many home buyer's took advantage of the federal tax credit for first-time home buyers. It's pretty clear the home buyers tax credit was a big incentive.

Even with the tax credit Customer satisfaction with lenders declines Overall satisfaction among mortgage customers declined 18 index points to 739 in 2009 from 757 in 2008, according to the J.D. Power and Associates 2009 Primary Mortgage Origination Satisfaction StudySM.

The average time required to approve and close a loan increased to nearly 47 days in 2009, compared with approximately 30 days in 2008, primarily due to increased scrutiny of loan applications and higher origination volumes driven by increases in refinancing, according to the study. read more

You've heard the phrase "It's cool to stay in school". Apparently not only is it cool to stay in school, it's affordable to live near one as well. Well, at least schools of higher education. College towns affordable, stable markets
An index comparing similarly sized 2,200 square foot, four-bedroom, two-and-a-half bathroom homes in college markets revealed that in addition to the economic stability associated with higher education, homes in these areas also are affordable.  The Coldwell Banker College Home Price Comparison Index (HPCI) revealed that home buyers can find a typical four-bedroom home for less than $250,000 in 62 percent of the 72 college markets surveyed. read more

According to the report, empty nesters and families are attracted to these markets because of the health care systems, culture, and overall quality of life offered in college towns.

There's good news for all you first time home buyers. Entry-level housing affordability reaches 64 percent. The percentage of households that could afford to buy an entry-level home in California stood at 64 percent in the third quarter of 2009, compared with 55 percent for the same period a year ago, according to a report released last week by C.A.R.  The Index is the most fundamental measure of housing well-being for first-time buyers in the state.

The minimum household income needed to purchase an entry-level home at $247,150 in California in the third quarter of 2009 was $43,500, based on an adjustable interest rate of 4.79 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $1,450 for the third quarter of 2009.

At 85 percent, the High Desert region was the most affordable area in the state. The San Luis Obispo County region was the least affordable in the state at 47 percent, followed by the San Francisco Bay region at 49 percent. read more


To add to the good news for first time home buyers. The California Assoc. of Realtors says that FHA Commissioner to work with REALTORS®

Members of C.A.R.’s 2009 and 2010 Leadership Teams recently met with Federal Housing Agency (FHA) Commissioner David Stevens to discuss the challenges many home buyers using FHA loans are facing.  Specifically, the leadership addressed concerns about the lack of housing inventory available to FHA buyers due to the agency’s 90-day anti-flipping rule, and the need for this rule to be revised in light of current market conditions.  This issue was passed as an action item during C.A.R.'s board of directors meetings in October.

During last week’s meeting with C.A.R. Leadership, Commissioner Stevens said he understands the difficulties faced by FHA first-time buyers, many of whom are unable to purchase foreclosed properties when competing with investors. Stevens stated his and the FHA’s commitment to working with C.A.R. and NAR to address this issue. read more

If you are an investor or thinking of investing, you're not the only one. A new survey found that Consumer interest in investing has doubled , 12.1 percent (one out of eight) of today’s home buyers plan to purchase a home as an investment property, compared with 5.6 percent in March 2009, according to the Move.com Homeownership Survey.  Of those interested in buying a home as an investment, 15.8 percent were men and 8.1 percent were women.  The survey also found that buyers who plan to purchase foreclosures expect to profit both from deeply discounted purchase prices, as well as healthy appreciation rates over the next five years.  Most Foreclosure buyers (58.2 percent) expect to pay 20 percent or less than market price for a foreclosure, while 38.5 percent expect a discount of 25 percent or greater.  While, 73 percent expect their properties to appreciate ten percent or more in five years, 28 percent expect their purchases to appreciate 20 percent or more during that same investment horizon. 

All and all, if Federal Reserve chairman Ben Bernanke is correct and housing in the coming year is going to improve and help the national economic growth, the outlook is good. read more

Enjoy the rest of your week, and Happy Holidays!