For home buyers or refinancers, borrowing costs for home ownership just got a little cheaper as mortgage rates took another dip to new all-time record lows this week, Freddie Mac reports in its weekly mortgage market survey.

“Signs of slowing economic growth and inflation remaining subdued allowed yields on Treasury bonds to ease somewhat and brought most mortgage rates to new all-time record lows this week,” says Frank Nothaft, Freddie Mac’s chief economist.

Here’s a closer look at average rates for the week ending May 3:

• 30-year fixed-rate mortgages: averaged 3.84 percent, with an average 0.8 point, reaching a new historical low. The previous record for 30-year rates was 3.87 percent, which was set on Feb. 9 of this year. A year ago at this time, rates averaged 4.71 percent.
• 15-year fixed-rate mortgages: averaged 3.07 percent, with an average 0.7 point, another historical low. The previous record for 15-year rates was 3.11 percent set on April 12 this year. A year ago at this time, 15-year rates had averaged 3.89 percent.

According to the Mercury News dated 4/19/12, San Francisco and Bay Area home sales had their strongest March in five years.   Sales of all types of homes in the Bay Area in March were up 35 percent, to 7,694 homes from February and up 9 percent since March 2011.

More affordable condos were a hot item, with a 21 percent gain in sales in Contra Costa County and a 14.5 percent gain in the median sales price to $177,000 in March.  Alameda County saw condo sales boom by 19 percent, while prices rose 9 percent to $217,000.

Single-family home sales were strongest at the top end of the market in Santa Clara County, where sales of homes priced over $800,000 were up nearly 8 percent in Santa Clara County, and accounted for 22 percent of the market in March.

Agents are reporting multiple offers on both sides of the bay. One home in Cupertino received 50 offers before the seller accepted a bid of slightly more than $1 million.  In San Francisco, a bidding war broke out for a small Noe Valley home.  The property received 22 offers, with buyers competing from the heavy hitting tech giants such as Facebook, Zynga, Google, & Pixar.  The final winning offer on this 2 bed, 1,810 sq ft, 1 car garage, 1970’s decorated home: A whopping $1.5 million – 40% over the $1.1 million listing price!

Here are a few recent examples I have been involved with myself:

1. 6 Deodar Ln., Alamo – Listed at $619,900 Fixer – 13 cash offers and counting
2. 262 Hamilton St., San Francisco – Listed at $399,000 Fixer – 25 cash offers
3. 374 Prominade Cir., Suisun City – Listed at $115,000 – 75 offers.
4. 829 53^rd St., Oakland – Listed at $485,000 – 7 offers, sold at $565k
5. 1054 65^th St., Oakland – Purchased prior to going to market.  Proposed listing price $495,000 – sold at $570,000 (got my buyer the home before it went to market).
6. 1139 San Anselmo Ave., Millbrae – Listed at $449,000 – 9 offers.
7. 735 Watson Canyon Ct., San Ramon – Listed at $266,500 – 5 offers.
8. 1820 View Dr., Milpitas – Listed at $390,000 – 20 offers, sold at $425,000
9. 2615 Meadow Glen Dr., San Ramon – Listed at $299,000 Fixer – 7 offers

In part, the housing inventory remains extremely low.  According to Inman News, available property is down as much as 51.91% in areas like Oakland.  I also see a very low inventory in areas that I actively work in such as; San Ramon, Walnut Creek, Danville, and Millbrae, to name a few.

For home buyers who still think they have a chance of getting lucky with a low-ball offer, you be the judge.  I think many buyers are finding in many Bay Area markets that their offers are more often being rejected or countered in a multi-counter situation.

In this market, your agent has to be creative and quick on his/her feet.  So, if you’re looking for an educated realtor® with great negotiating skills and a current heartbeat of the real estate market, then let’s chat!  I’m dedicated to you & your goals, whether you are selling or buying, even in this market.

I also had the pleasure of meeting Poker Pro Phil Hellmuth.  True to form, Mr. Hellmuth added great commentary and entertainment to the charity event.  His skills in poker got him to a 3^rd place finish!  No wonder he has won so many bracelets.  Well played Mr. Hellmuth!

The Lazarex Cancer Foundation is a local organization based in Danville, CA with a mission to provide resources for cancer patients who’ve been told they have no other options, but who are not yet done with their journey in life and refuse to give up now.  The company and their members build a bridge to hope, dignity and life for cancer patients and their families. They provide financial assistance to defray the costs associated with patient participation in FDA clinical trials. Additionally, we help patients navigate their clinical trial options and provide community education and outreach services.  Want to know more:  http://www.lazarex.org/ ©

“You can’t time the market”- How many times have you heard that? The reason this adage is so enduring is because it is so true. Every time there is a change in the real estate market it seems to take buyers, sellers and even REALTORS® by surprise. It seems we all assume that the market will be the same tomorrow as it is today, yet we all know that’s just not how things work. There are few better examples of a cyclical market than real estate.

Every indicator that we’re seeing is telling us that the tides have already changed. For the first time since we entered the gloom of the downturn we are beginning to hear buyers say they think they may have “missed the bottom.” This is usually an utterance heard only after the bottom of a market has come and gone.

What is there to suggest that the market has already changed?

First, sales activity throughout the Bay Area is dramatically up. Although activity has been improving in San Francisco for some time now, the rest of our metropolitan area has not experienced the same comeback (until the last couple of months). Over the last thirty to sixty days, real estate offices are reporting multiple offers and over asking sales prices affecting all of our surrounding neighbors. In spite of the fact that many national and even state locations have yet to experience a rebound, the Bay Area is definitely coming alive!

Second, rising median sales prices. San Francisco prices have been flat to rising over the past two years (depending on the neighborhood). However, the uptick in prices for February alone was 6.5 percent citywide. Third, if you haven’t heard already, we are experiencing a four year low in “month’s supply of inventory,” which is a measure of how many months might be needed to sell out the current inventory at the current rate of sale. The supply side of this basic supply and demand statistic is illustrated in the graph below. It tracks the steady, substantial decrease in inventory over the last 18 months.

What’s causing these changes in the Bay area and particularly in San Francisco?

At least part of the answer has to do with the incredible boom in technology development and the resulting strong employment environment that we enjoy. Have you experienced the lines outside of the restaurants serving lunch South of Market or the wait behind a Genentech bus as it picks up or drops off employees? Our housing market is host to a wave of new employees that are working for everybody from Facebook to Zynga to YouTube.

What’s it all mean?

With national economic indicators showing some very healthy signs and local economic factors creating a long-term foundation for a strong housing market, anyone who is “waiting for the market to improve” before they sell may be missing one of the most exciting seller’s markets in years. We currently have buyers who are wishing they had purchased a year ago. Will sellers be looking back at today’s sales environment a year from now and asking why they sat on the sidelines and watched a fabulous seller’s market pass them by? Good question!

We are a few months into the New Year and I’m already seeing the real estate market pick up, both from a buyer’s and seller’s perspective.  If the property is prepared properly for the market, and priced accordingly, I have seen as much as 18 offers on several properties.  In the higher end markets, I have seen a lot of qualified buyers frequenting the open houses.

With mortgage rates remaining at historic lows, and a decrease in the housing inventory, 2012 is starting to look good for everyone.  On February 17^th of this year, Warren Buffett was quoted on CNBC as stating, “I’d buy up a couple hundred thousand single-family homes if I could.”

As your friend and Realtor®, I have the expertise and knowledge to help you sell or find that special home.  Whether you are looking to retire in your home or find a rental investment property, I am here to help.  And it doesn’t stop there.  If you need a recommendation for a handyman, contractor, or locating materials, I’m your go to man.  For my investor client’s, I also do tenant placement: Find, screen and place tenants in newly purchased investment properties.

Of course, referrals are the bedrock of my business and they are always welcomed.  I take care of all my clients and assure you any referrals will be well taken care of.

For more up to date real estate information, please go to my website: www.discoversfhomes.com.

Thank you and I look forward to hearing from you,

Richard Sarro, GRI

Realtor®

Home buyers with mortgages backed by the Federal Housing Administration will soon see a rise in fees, the agency announced Monday.

The agency is raising its fees in an effort to try to recoup some of its depleted reserves*, which suffered from the rising number of home owners who defaulted on their mortgages. The agency also says it’s raising fees to try to encourage the return of more private capital to the market.

FHA loans allow for smaller down payments, as low as 3.5 percent compared to traditional loans, and they often have less stringent credit requirements, which have made them soar in popularity in recent years. (The agency insures loans but doesn’t issue them.) About 40 percent of all new mortgages for home purchases in 2010 were FHA-backed mortgages.

In particular, FHA will increase two fees that borrowers pay. Starting April 1, it will increase its annual mortgage insurance premium for loans under $625,500,  bringing the total cost from 1.15 percent of the loan amount to 1.25 percent. Starting June 1, larger loan premiums will see an increase of 0.35 percent of a percentage point, bringing the total premium costs up to 1.5 percent of the loan amount, The New York Times reports.

FHA also announced it will raise a fee for the upfront mortgage premium by 0.75 of a percentage point, which will now total 1.75 percent of the loan amount.

The New York Times illustrates the impact of the increase in a recent article: For example, a borrower with a 3.5 percent down payment with a mortgage of $193,000 can expect to pay an upfront mortgage premium alone of $3,377, compared to the prior $1,930. That can be rolled into the mortgage.

The new fees will also apply to home owners who want to refinance their mortgages, the agency announced.

The raise in fees is expected to bring in $1.25 billion in additional revenue to the agency through September 2013.

And with that in mind, here are the top 12 home improvements for sellers identified in a HomeGain survey, with highest returns on investment:

1. Clean and de-clutter

• Clean the house from top to bottom and make sure no unpleasant odors linger inside the property.
• Remove excess furniture and appliances that may make the space appear smaller.
• Declutter and empty out the garage.

2. Home staging

• Showcase features that add value to a home such as the fireplace, upgraded kitchen countertops and built-in shelving units.
• Depersonalize as much as possible and clear out your personal items. You are showcasing the home for sale, thus it is essential for the buyer to imagine themselves, and their stuff, in the home you’re selling.

3. Lighten and brighten

• General lighting accented with mood lamps or spotlights dramatically improve the ambiance of the home.

4. Landscaping

• Address both the front and back yard, making sure that they set a great backdrop for the home.
• Check, unclog and clean your gutters, downspouts, drainage and rainwater pipes to remove debris that can provide shelter for termites.
• Prune bushes and trim the trees, remove dead plants, and keep the lawn mowed.
• Check the wooden structures outside the house for signs of termite activity or damage. Run checks on the wooden fences, garden furniture, the patio, deck or veranda.
• Reduce sources of shelter that store excess moisture and makes the house attractive to termites.

5. Repair plumbing
6. Update Electrical

• Replace old light fixtures, switches and faulty outlets.

7. Replace or shampoo carpets

• Clean windows and draperies too.
• Placing area rugs can highlight and add warmth to a space.

8. Paint interior walls
9. Repair damaged floors
10. Update kitchen
11. Paint outside of home
12. Update bathroom

• This cannot be overemphasized. A super clean, pleasant-smelling, well-lit bathroom is always a great selling point. Do not let this space be the last on your priority list.
• Get a professional cleaner to rid the bathroom of molds and age-old grime.
• Replace broken fixtures.
• A neutral master bathroom that appeals to both sexes is recommended.

• $500-$1,000 contribution to the Officer James Capoot Family Trust upon the completion of selling or buying a home with me, Richard Sarro.

• Search MLS and our exclusively listed properties to find the right home.

Terms and Conditions:

• Offer expires May 31st, 2012, unless extended or modified by Richard Sarro.
• Offer applies to buyers or sellers only, who close escrow on a home sale or purchase by May 31st, 2012, and wish that a contribution be made by me and to the Officer James Capoot Family Trust.
• A $500 contribution to the Capoot Trust, paid by Richard Sarro, from a home sold or purchased from $150,000 to $299,999.
• A $1,000 contribution to the Capoot Trust, paid by Richard Sarro, from a home sold or purchased over $300,000.
• This contribution and/or rebate can only be utilized towards the Officer James Capoot Family Trust.
• Limit 1 contribution per closed transaction.
• This offer does not apply to past closed transactions.
• This offer is not intended to solicit listings currently under contract with other real estate professionals or buyers currently represented by other real estate professionals.
• I, Richard Sarro of Zephyr Real Estate, must represent the seller(s) and/or buyer(s) to sell or find and close escrow on a home purchase.
• Contributions apply only to those who use my services to successfully sell and/or purchase and close escrow on a home.
• This offer does not apply to any real estate licensed salesperson, agent or broker.
• These rules apply unless the fine print states or law requires otherwise.
• This offer/contribution/rebate cannot be combined with any other offer.

Please contact me for further details.  I look forward to helping the Capoot Family and working with you to achieve your goals of selling or owning a home!

On the evening of November 18th, Congress voted to restore loan limits and the maximum cap for Federal Housing Administrative (FHA) loans.  As a result, their action reinstates the loan limit at 125% of area medium priced homes up to $729,750 for two years.

What does this mean to you and I?

For starters, it will make mortgages more accessible for hard-working middle-class families throughout the country.  In fact, nearly two-thirds of buyers who will be helped by the loan limits extension have incomes below $100,000.   In 2010, FHA was used by 56 percent of all first-time homebuyers, and 85 percent of borrowers obtaining homes at the higher loan limits had incomes below $150,000. In addition, 60 percent of all African-American and Hispanic homebuyers used FHA (source NAR).

Coupled with this FHA news is the historically low interests rates, currently hoovering around 4%.

If you’ve been contemplating homeownership, now is the time to take a serious look at renting vs. owning.

Here are some short reasons to own a home:

1.  Equity.  If you pay rent, it goes directly to the landlord and you will never see it again.  And you may not know if you have a home to stay in the following year or if your monthly rent will go up.  Paying a mortgage is like having your own retirement package.  The payments you make buy down the mortgage over the term of the loan: say 15 or 30 years.  So, when you reach retirement age, your home is paid off.  And historically speaking, owning a home appreciates 4-6% a year, giving you a gain on your paid investment.

2.  Pride of ownership. Yes, owning a home comes with a lot of responsibilities and costs.  But you “own it!”  You can renovate it, paint it, decorate it for the holidays, and make improvements as you wish (unless there are HOA restrictions).  The bottom line is all your hard earned cash is going to something you own for your future benefit and not for that someone else.  It’s fun to get something new and tweak it to express yourself.  And it’s even more rewarding to share it with family and friends!

3.  Tax Breaks. Unlike renting, there are tax breaks, such as mortgage interest deductions, property tax deductions, potential tax-free capital gains, and other homeownership associated write-offs.  And as such, you may see a greater return of your money at years end.  You will want to consult your tax adviser to understand what tax benefits your property may bring you.

4.  Let’s talk dollars and cents: Below is an example of an FHA or conventional mortgage with today’s interest rates:

FHA Home Purchase:

Conventional Home Purchase:

If you’d like to know more about homeownership vs. renting, don’t hesitate to call or email me and I will follow-up with you promptly.