Best Time To List A Home For Sale? Winter.

So you've begun thinking about selling your house and you figure: Let's wait until the spring or early summer before listing. The yard will look its best and potential buyers will be out in force. And everybody knows that winter is dead time for real estate.

Right? At least that's the widely held belief. But national statistical studies suggest it's not necessarily the case. Winter — officially Dec 21. through Match 20 for the upcoming season — can be a surprisingly advantageous time to list, shop, negotiate and buy. Consider some findings by researchers at Redfin, the online realty brokerage.

Real estate website Redfin has studied home listing, sale price and time-on-market data from 2010 through this past October from around the country, updating a two-year analysis it completed last year. It concluded that if you want to sell for more than your asking price, listing in December, January, February and March gives you a better chance on average than if you list any time from June through November. During the last three years, listing during those four months has produced higher percentages of above-asking-price sales than listing during any months other than April and May. In 2012, as the housing market rebounded, December listings produced the highest percentage of above-asking sales for the entire year — 17%.

If your goal is to sell relatively quickly, February "is historically the best month to list, with an average of 66% of homes listed then selling within 90 days," according to Redfin. In the two-year study completed last December, researchers found that in each of 19 major markets, including cold-weather cities such as Boston and Chicago, "home sellers were better off listing their homes in the winter than during any other season."

Researchers are quick to note that the advantages of listing in winter compared with other seasons are not huge. But the fact that winter produces at least competitive or better results by some measures should encourage some potential sellers to get into the game sooner rather than later.

Nela Richardson, chief economist for Redfin, said houses "that are priced right and show well can sell any time" of the year. What many potential sellers may not know, however, Richardson said, is that shoppers who are active during the winter months "are serious buyers. Most people are not window-shopping" in December and January, as many do in the spring months.

Also, some sellers pull their unsold houses off the market during the winter, hoping for better results in the spring. By doing so, they leave a smaller inventory of active listings — lessening the competition among sellers who list in January and February, ahead of the pack.

Winter-season buyers may find some sellers more flexible about negotiations over prices and terms than they would be during the middle of the spring. Mary Bayat, a broker active in the Washington, D.C., market and chairwoman-elect of the Northern Virginia Assn. of Realtors, said that in the last few weeks she has participated in three deals involving sellers who were far more open to negotiations than they had been months ago.

"People get more realistic at this time of the year," Bayat said, especially when their properties haven't attracted serious offers during the summer and fall. So it's a good time for smart shoppers as well.

Paul Stone, an agent in Redfin's Denver office, said many large corporations in his area transfer employees and hire new ones early in the year. That creates opportunities for wintertime listers who opt not to wait for the spring.

Bottom line: Real estate does not hibernate from December through March. More than 5 million homes typically are resold annually in the U.S., and many of them are listed and sold during the winter months. In strong local housing markets such as Los Angeles, San Diego, Phoenix, Seattle, Austin, Boston and Washington, D.C., the likelihood of selling your home within 180 days is highest when you list during the winter months compared with any other season, according to Redfin's 2013 study.

Winter is warmer for real estate than you might think.

  

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Should You Refinance Your Home? Homeowners Rush to Redo Loans

A freak drop in mortgage interest rates has fueled a “boomlet” in home loan refinancing in the past few weeks, lenders and mortgage brokers say.

The dip created an unexpected opportunity for borrowers who missed out on the last refinance boom, lowering monthly loan payments by $100 to $200 for some borrowers.

Some lenders say they’re seeing refinance activity jump anywhere from 20 percent to 60 percent.

Call center employees put in extra hours last week at Foothill Ranch-based loanDepot to keep up with the demand.

Oct. 15 was one of the biggest days in loanDepot’s history for refinance volume, company President and Chief Operating Officer David Norris said in an email to co-workers.

“Improvements in home equity and the drop in rates have opened refinance up to a whole new group of borrowers who can benefit from what’s going on now in the market,” Norris said.

Shabi Asghar, president of Commerce Mortgage Wholesale in Irvine, said last week’s dip in mortgage rates spiked demand by 20 percent to 33 percent at his company. Al Hensling, president and CEO of United American Mortgage in Irvine, said “refi” applications jumped 35 percent there in recent days.

California Mortgage Banker Association board member Brandon Haefele, who runs Sacramento-based Catalyst Mortgage, said the drop in rates can be a boon to people who bought homes earlier this year using Federal Housing Administration loans.

Those borrowers typically pay 1.35 percent on top of their interest rate for private mortgage insurance, creating an effective rate of almost 5.4 percent, he said. Many of them now can get conventional financing for up to 95 percent of their home’s value and shed the mortgage insurance.

“Their payments potentially can go down a couple hundred bucks,” Haefele said.

This was supposed to be the year that 30-year mortgage rates would rise above 5 percent, which would still be a bargain by historical standards. Instead, rates have been edging gradually downward since January.

This month’s rate drop is one positive effect of the stock market turmoil of the past few weeks, fueled by global economic jitters. Investors flocked to buy U.S. Treasury bonds, driving down rates.

Since home loans typically track the 10-year Treasuries, mortgage rates fell to their lowest level in 16 months.

Freddie Mac’s weekly survey pegged the average rate for a fixed, 30-year mortgage at 3.97 percent in the week ending Thursday – down from a monthly average of 4.4 percent in January. That translates into a $112 drop in monthly payments for a 30-year, fixed-rate loan of $417,000. Refinance application volume hit a four-month high last week, according to the Mortgage Bankers Association.

It was the first time in 16 months that the 30-year average was below 4 percent – an important psychological level, according to Mortgage Bankers Association Chief Economist Mike Fratantoni. People who don’t normally watch the markets day to day are likely to take notice and look into refinancing their loans, he said.

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House Prices Forecast to Rise Just 5.2%

Next year will be better for home buyers – especially for renters trying to purchase a home – as galloping house prices slow to a walk, the California Association of Realtors chief economist said. 

Delivering her annual housing forecast, Realtor economist Leslie Appleton-Young predicted that the median price of a California house will rise a modest 5.2 percent in 2015. 

Sales are expected to climb 5.8 percent, after a drop of 8.2 percent this year. 

Considering that the number able to afford the typical home has dropped to 36 percent of California households this year (and to 20 percent of Orange County households), the slowdown in home-price gains could create opportunities for entry-level buyers, Appleton-Young said. 

“You’ve got investors leaving (the market), you’ve got moderation in prices, you’ve got more inventory and you’ve got a little bit more hospitable lending environment,” Appleton-Young said in a telephone conference call with reporters. 

“It might be a good pause for all the people who got a little bit exhausted by all the multiple offers and competition in the last couple of years.” 

In other news, Irvine-based CoreLogic reported that Orange County home prices were up 5.8 percent in the year ending in August, the smallest appreciation rate since late 2012. 

Highlights of the Realtor forecast include: 

• Interest rates for the traditional 30-year fixed-rate mortgage will rise only slightly to 4.5 percent, compared to this year’s average of 4.3 percent. 

• Only half of California houses sold this year got multiple offers, compared to seven out of 10 in 2013. 

• Distressed sales (foreclosures and sales “short” of the amount needed to pay off the mortgage) are down to 10 percent of all California transactions, while normal “equity sales” accounted for 90 percent of all deals. In Orange County, equity sales account for 95 percent of all deals. 

• Investors account for 15 percent of all California sales this year, down from 19 percent in 2013. 

• The median price of an existing Orange County house was up 5.2 percent year-over-year as of August, to $699,430. That’s a 58 percent increase from house prices at the bottom of the recession in January 2009. 

• Orange County house sales were down 13.2 percent as of August. 

“We are transitioning, obviously, into a slower price appreciation environment,” Appleton-Young said. “I don’t think it’s out of the question that within two years or so we could actually see some declines, some retreats, in terms of prices.”

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Four Reasons to Buy Before Winter

It's that time of year, the seasons are changing and with them bring thoughts of the upcoming holidays, family get togethers, and planning for a new year. Those who are on the fence about whether now is the right time to buy don't have to look much farther to find four great reasons to consider buying a home now, instead of waiting.

1. Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report released recently projects appreciation in home values over the next five years to be between 11.2% (most pessimistic) and 27.8% (most optimistic).

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise later this year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison projecting that rates will be up almost a full percentage point by the end of next year.

An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

3. Either Way You are Paying a Mortgage

As a recent paper from the Joint Center for Housing Studies at Harvard University explains: “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.

Bottom Line

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

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Million Dollar Home Sales Hit Seven-Year High in California

The number of homes that sold for $1 million or more in California hit a seven-year high in the second quarter, and sales north of $2 million reached a new record.

That’s according to new figures from San Diego-based DataQuick, which tracks local housing markets in the state. They found million-dollar-plus sales grew at a 9.1% clip statewide compared with last year, while sales overall fell 7.4%.

Several factors are driving the high-end liftoff, market-watchers say.

One is the hot technology sector in the Bay Area and some affluent parts of Southern California, which is minting new millionaires who can afford seven-figure homes. Another is the 11.6% price growth in California over the last year, which means a house worth $925,000 last summer may be worth $1,032,300 today. And there’s the influx of international buyers, which is pushing up prices at the high end.

Then there’s that old saw that the rich are just different than you and me, especially in a time when credit is tight and the job market remains soft for many middle-income home buyers.

“It’s always fascinating to watch this part of the real estate market. It behaves differently, responds to its own set of criteria,” said DataQuick analyst Andrew LePage. “These buyers, especially those in the multi-million-dollar market, are less likely to agonize over credit scores, income and job security, down payments and mortgage interest rates.”

Of course, in the most desirable parts of coastal California, a million-dollar home is rather routine. Half of all homes sold in San Francisco County in June exceeded $1 million, according to DataQuick, and parts of Los Angeles and Orange counties regularly cross into seven figures.

The market for even higher-priced homes is even hotter. While there were more million-dollar homes being sold here in the mid-2000s than today, California in the second quarter set all-time records for the number of homes sold for more than $2 million, more than $3 million, more than $4 million and more than $5 million.

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Four Reasons to Buy a Home Now

If you're thinking about purchasing a home, sooner might be better than later when it comes to favorable conditions for buyers.

Buying a home is a major financial decision that you shouldn't rush into. But that doesn't mean you should take your sweet time either. The real estate market is volatile, and truth be told, this year might be your last chance to affordably buy a home for awhile.

"If you qualify for a mortgage and choose not to buy now, you will be kicking yourself in 12 months," says Anthony VanDyke, president of ALV Mortgage in Utah.

Thanks to a dearth of inventory, home prices are projected to increase by 6.3 percent nationwide from April 2014 to April 2015, according to a recent study by Corelogic, a leading global property information, analytics, and data-enabled services provider.

Just how much could that increase cost you? More than you might think.

"On a $300,000 house today, the same house will cost you $318,000 in one year," says Vandyke.

The difference isn't mere pocket change. So if you're in the market to buy a home, read on for more reasons why this year could be a prospective homeowner's last chance to buy an affordable home.

Reason to Buy Now #1: Low for-sale inventory means homes will become more expensive

A low inventory of homes for sale keeps house prices up, according to California-based mortgage banker, Michael Regan, of the Regan Team.

"It's simple supply and demand," says Regan. "The less you have of something, the more expensive it will become."

Just how did we get into this increasingly low-supply, high-price environment? According to Regan, there are a few causes.

"With the limited housing inventory in many markets, and with last year's home price increases, many people couldn't afford to buy a home and rented instead," he says. "Because of the Great Recession, the building of new homes and rental units was almost nonexistent for years and didn't keep up with population growth."

With a shortage of housing and rental units available, Regan says housing prices and rents have increased, leading to affordability issues. The good news is that this supply and demand issue will solve itself once more housing units are built to accommodate the population growth and young families looking for homes, says Regan. But the bad news is that it could take a while, and prices will climb until then. So now might be a good time to buy, before prices peak, he explains.

Reason to Buy Now #2: The Fed plans to taper off bond-buying program in October

With the economy improving and the unemployment rate dropping, the Federal Reserve tentatively plans to end their bond-buying program in October. The end of the program, which was aimed to keep interest rates low, is expected to result in higher interest rates, and any increase in interest rates could create even less favorable conditions for buyers, says Van Dyke.

According to the MBA Mortgage Finance Forecast, interest rates on 30-year fixed-rate mortgages are projected to jump half a percentage point in early 2015 from the year before.

On a 30-year conventional mortgage of $300,000, an increase from 4.4 to 4.9 percent means paying an extra $90 each month or more than $30,000 in interest over the life of the loan. So that half point difference can translate into a hefty chunk of cash for any home buyer.

"Rising rates can have just as big an impact on affordability as does rising prices due to low housing inventory," says Ellen Davis, a Maryland-based senior mortgage loan originator with Corridor Mortgage Group.

When mortgage rates increase, Davis says borrowers experience greater difficulty qualifying for a home loan.

"Higher interest rates increase a borrower's overall debt to income ratio, and depending on their current situation, they may end up no longer qualifying based on underwriting guidelines. Even if they do qualify, they may not be comfortable with the higher monthly debt payment and may choose to reduce the amount of home they are willing to purchase or put off the purchase indefinitely," says Davis.

So what's the take home here?

"While you've missed the bottom of the market with home prices, interest rates are still very low," according to Regan. Don't risk rates going up, he says, which can ultimately cost you big on your home's price tag.

Reason to Buy Now #3: The current economy's flat wages threaten to make homes less affordable

When was the last time you heard of companies giving out big bonuses and substantial salary raises? Save a few high-growth industries, flat wages have been the rule, not the exception. If home prices continue to increase, housing could in theory become less affordable if your take-home pay doesn't keep up with its growth.

"History has shown us that there is always the chance that home prices are pushed out of reach when wages are flat," says Davis. "Then at some point, some sort of correction in wages or housing occurs, and the correlation between the two sectors becomes more sustainable."

The question then becomes, when will this tipping point occur, and can you afford to wait?

According to Davis, homes will be more affordable once all areas of the market - stocks, bonds, home prices, wages, government spending and debt, etc. - are working together to create jobs. And better employment figures translate into more income, leading to wealth, economic growth, and ultimately consumer confidence, which in large part helps drive home purchases, she explains.

Sounds ideal, right? Well, don't hold your breath. It's impossible to predict when this synergy will take place, so now is as good a time as any to buy a home you can comfortably afford, says Davis.

Reason to Buy Now #4: Beat other home buyers to the punch before competition heats up

Maybe you've been renting and managed to save up a nice nest egg. Or maybe you've just outgrown your current space. Well, you might want to take the plunge and buy a home once you've found something that you can afford.

Why now? Because the housing market is about to get even more competitive. According to Davis, the pent-up demand of younger professionals, who moved back in with their parents during the recession, is about to explode. And as these young people move out and form new households of their own, they will drive up housing demand, she explains.

This eager subset of buyers will create some steep competition for homes, especially if they have been saving up to make larger down payments or high ticket offers, says Davis.

"If the current homes on the market have more potential buyers, bidding wars develop, and the purchase prices are driven up," says Davis. While the competition helps the overall home values in the area, it also inflates prices to the point where homes are no longer affordable for a large percentage of potential home buyers, she explains.

And it's only going to get worse as more and more young professionals feel ready to buy, so it's a smart move to buy now and avoid the potential price gouging altogether. Once you're officially a homeowner, you can welcome rising prices, because your home's value will shoot up, according to Davis. "This is good for the individual homeowner as well as for the broader economy," she says.

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