Typical Investor Profile Starting to Shift

Big investors are gradually stepping away from many housing markets, as distressed homes start to dry up. But another type of investor is stepping in to fill their shoes. The number of home sales to investors rose in October, but a closer look at many markets shows a different investor picture forming.

Impact of Investors

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• Field Opens for Buyers
  
• 5 Markets to Watch for Investors in 2015
  

"We've seen buying activity slowing down among the largest institutional investors, and some of this activity [is being] replaced by mid-sized companies and individuals looking to buy and rent out single-family homes," Rick Sharga, executive vice president of Auction.com, told CNBC. "The asset class seems likely to continue to grow, but the share of inventory purchased by the largest funds appears to be shrinking."
Big institutional investors have a large backlog of homes already on their books to renovate and rent, which is eating away at their profits until they can get these homes onto the market. As such, smaller investors are stepping in to buy some of these properties from the bigger investors to manage in their own portfolios, CNBC reports.

Freddie Mac: Buy Sooner Rather than Later

In a recent video update on the housing market, Frank Nothaft, Freddie Mac’s chief economist, stated that with both mortgage interest rates and home prices projected to increase in 2015 buying now makes sense.

“If you are planning to buy a home in the next year, it’s better to do it sooner rather than later.”

Here are the latest mortgage interest rate projections from four major housing entities: Fannie Mae, Freddie Mac, the Mortgage Bankers Association (MBA) and the National Association of Realtors (NAR):

Thinking of Selling & Moving Up?

This advice isn’t limited to just the first-time buyer. If you are considering moving up to the home your family has always wanted, waiting also makes no sense.

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Apartment Rent Surge Expected into 2015

Renters need to brace themselves: Apartment rent is expected to continue to outpace inflation next year. It’s a landlord’s market, which means strong demand continues to give landlords justification to hike rents.

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Rising Rents, Falling Wages Leave More Cash-Strapped

Rent growth will likely reach 3.9 percent in 2015, only a slight dip from 4 percent this year, according to a recent forecast released by the National Association of REALTORS®. For at least two more years, vacancy rates for rental apartments are expected to remain low.  
“Low housing inventory and the sizable demand for rentals will continue to spur multifamily construction as well as keep rents rising above inflation through next year,” says Lawrence Yun, NAR’s chief economist.
The Bureau of Labor Statistics shows that annual rental inflation is nearly double the price of overall inflation.
Builders are increasing the construction of multifamily units but are struggling to keep pace with demand.
The following metros saw the lowest vacancy rates for rental apartments in the fourth quarter, according to NAR:

• Orange County, Calif.: 2.2%
• Sacramento, Calif.: 2.2%
• Providence, R.I.: 2.3%
• New Haven, Conn.: 2.3%
• Hartford, Conn.: 2.4%

5 Safety Tips When Decorating the Exterior for the Holidays

It’s that time of year where home owners are busy decorating their exteriors with holiday lights and making them for festival for the holidays. Many landscape and lawn care companies support their clients year-round by providing snow removal and holiday lighting in the winter. There are many safety concerns that home owners should take into consideration when putting up their own holiday lights, such as:

1. Inspect the lights and wires.
Inspect all lights, decorations and extension cords before using. Wires can become brittle.Throw lights away if there is exposed copper or broken sockets.

2. Don’t overload circuits and watch for electrical concerns.
Avoid connecting five or more strands end to end, otherwise the circuit can be overloaded. However, for many LEDs you can add more than five strands. Also, do not pull the strands too tight so they can reach an outlet. Other electrical concerns to watch for:

• Tears in the wiring surface could result in electrocution.
• When creating a lighting configuration on a lawn, make sure to keep connections out of depressions that could collect ground water.
• Be sure to tape down extension cords if they cross walkways.

3. Read the labels carefully for outdoor use.
LED lights re more energy efficient and require less wattage than incandescent bulbs. But make sure the lights and extension cords are rated for indoor and outdoor use or specifically for outdoor use. Outdoor lights should be plugged into circuits protected by ground fault circuit interrupters (GFCIs.). Also, don’t replace light bulbs without unplugging the light strand or decoration.

4. Take caution on rooftops or elevated areas.
Ladders should be inspected – look for lose or missing screws, hinges, bolts and nuts before using and be sure they are stable and in good condition. Be sure to ground the ladder on a solid, even surface with no risk of sliding.
Don’t overreach when on ladders. When stringing lights, climb down and move the ladder often. Also, keep ladders as far as possible from electrical lines. 
Finally, if the roof is too steep or too high, don’t risk scaling it and endangering yourself. Hire a trained landscape professional that has the training to offer unique installation methods and premium quality products with the latest trends in decoration and technology.

5. Remove lights at the end of the holiday season.
Over a period of time, lights exposed to the weather can have damage to the wires, lights, and sockets. Watch for any weather damage before you tow the lights away for next year.

Holiday Tradition in San Carlos

It's that time of year again! Time for the glorious decorations on Eucalyptus Ave. between Orange and Tamarack in San Carlos to shine like the stars for Christmas. If you haven't experienced driving down this street at night during the holidays - don't miss out! It is truly breathtaking and a lot of fun.

Check out some of the homes at:
http://www.lightsofthevalley.com/Properties/San_Carlos.asp

American Dream homes: Prices in 10 cities

How much does the American Dream home cost? From $2 million in Los Altos, Calif., to $65,000 in Cleveland, here's what you'll pay for a 4-bedroom, 2-bath house, according to Coldwell Banker's annual survey.

Go to this link to see:
http://money.cnn.com/gallery/real_estate/2014/11/18/american-dream-homes/index.html?section=money_realestate&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_realestate+%28Real+Estate%29

Fannie And Freddie Set To Make Mortgaging Easier

Representations and warranties for existing but underutilized Fannie Mae and Freddie Mac guidelines came online Monday that will make it easier to get a mortgage to buy a home. The mortgage giants have a minimum credit score floor of 620 but most lenders have been reluctant to incorporate that standard in underwriting guidelines.  As well, consideration is being given to lowering the minimum down payment from 5% to 3%, but no decision or announcement has been made.  Obviously this would be great news for prospective homebuyers that do not have a lot of money to put down or may have some challenging credit history. This will of course add homebuyer candidates to the buyer pool and should create increased demand in the housing markets.

These expanded guidelines, if prudently applied, could add a layer to the mortgage and home buyer consumer market that is presently underserved.

That being said, if these new guidelines speak to your borrower profile, do not expect to just head over to your local mortgage lender and pick up a briefcase full of house buying cash.

How easy it will be to get conventional loans with 3% down payments and 620 credit scores is another issue. Mortgage lenders live in the cocoon of Qualified Mortgage protection and while this easing may in fact expand Ability-To-Repay parameters, a price will be paid to fortify these riskier loans. That price will take the form of higher risk based interest rates, more expensive PMI (mortgage insurance), increased reserve asset requirements, even tougher debt ratio standards. Easier is not a synonym for expanded and expanded is what is really happening to Fannie and Freddie guidelines.

The real bonus with these expanded guidelines is how conventional financing will be positioned for direct competition with FHA loans. FHA, HUD and the deficit black hole that is the Mutual Mortgage Insurance Fund are about to see demand for overpriced Mortgage Insurance Premiums plummet. FHA MIP has increased five times over the last three years and is now priced beyond the point where anybody at HUD can reasonably explain why. Add to this Cadillac mortgage insurance pricing the fact that there is no way to get rid of FHA MIP regardless of equity, and conventional financing becomes the ipso facto clearly more attractive alternative.

The math is pretty simple: FHA requires upfront MIP and conventional PMI does not. FHA MIP is more expensive than conventional PMI, and oh yeah, FHA MIP stays with the loan for the life of the loan regardless of equity, while conventional PMI allows for current appraisal supported equity of 22% to eliminate PMI. The choice is simple; no possibility of parole or parole.

Conventional loans are tougher on things like debt ratios (comparing monthly income to mortgage payments and recurring debts), but every FHA mortgage consumer should have their mortgage rep take a long and hard look at whether a conventional loan with a 3% down payment or a 620 credit score is a viable option.
I have been notoriously hard on HUD, the FHA, even Commissioner Galante about the consumer gouging nature of ever increasing FHA mortgage insurance premiums and the interestingly managed runaway deficit MMI Fund. Free market economics have a way of correcting and creating balance even in engineered market sectors. With expanded conventional mortgage financing in one corner and positioned directly against FHA mortgage financing, the current and only game in town in the opposing corner, FHA MIP may be market forced to competitive pricing. Otherwise, FHA mortgage business will fall victim to accelerating conventional originations and that MMI Fund deficit will collapse on itself. Watch.

Market Insider: San Carlos

See how your San Carlos real estate market is doing @:

 http://www.sancarloshomefinder.com/mimarket/zip/94070/

Your New (and Noisy) Neighborhood at Night

If the first night you spend in your new neighborhood is the night you move in, you might be in for some tough surprises. Popular Mechanic listed sounds you might not be expecting.

1. Highway Noise: It can carry further when it’s humid, so you should check the neighborhood in the early morning, when the air is at its dewiest.
2. Industrial Noise: Check the neighborhood for industrial activity, especially where they use big, metal, roll-up doors. The workers might keep the doors closed in the winter but open in the summer, exposing you to unexpected sounds from within the factory.
3. Rail Yards: Idling trains can be very loud, especially late at night or during humid days.
4. Junkyards: These might use large machinery such as large-terrain forklifts and wheel loaders, which can be very noisy.
5. Water-Tower Pumps: These pumps charge overnight, sometimes causing a steady, throbbing sound. Then again, it might be too quiet to notice.

Check the neighborhood out yourself to make sure: Go for a nighttime drive or look on maps to see what you’re up against.

Blue States See Higher Home Value Appreciation, Study Finds

Homeowners in blue states saw more value appreciation since the last election than than those in red states, according to a Zillow study published on Monday.

Home values in liberal-leaning states have risen 17.8 percent since the last election, while those in conservative-led states have risen a more modest 8.9 percent.

So can you turn your home value around in the next vote? Not likely. The cause of the appreciation is not liberal leanings but location — most blue states are large, coastal and host to the nation’s largest cities.

Zillow blogger Emily Heffter also pointed out that home values in blue states have more ground to make up.

“Red states avoided the worst of the housing market crash,” Heffter said. “That meant that [blue states] had a bigger bounce back up.”

What if you live in a swing state? Your home value appreciation likely falls somewhere in between: Zillow found an average of 14 percent for “purple” states.