Market Trends Report

Silicon Valley Real Estate Market Trend Report: July 2017

Santa Clara County (SCC): Mortgages Easier to Get

Two major changes in the mortgage market go into effect this month, and both could help millions more borrowers qualify for a home loan.

First, the three major credit reporting agencies will drop tax liens and civil judgments from consumer profiles if the data is not complete. Specifically, the data must include the person’s name, address, and either date of birth or social security number. It seems many profiles do not have all this data. This alone could raise FICO scores by as much as 20 points for affected consumers.

Second, mortgage giants Fannie Mae and Freddie Mac are allowing borrowers to have higher levels of debt and still qualify for a home loan. The two are raising their debt-to-income ratio limit to 50 percent of pretax income from 45 percent.

Inventory Keeps Tightening

Realtor.com reports that “there were 11 percent fewer homes on the market (nationally) in June 2017 than during the same time last year, marking 24 consecutive months of year-over-year inventory declines.”

Down Payment Assistance

Home Buyers using the C.A.R.’s Down Payment Assistance could be eligible for a $50,000 award! Find out which programs you qualify for with the C.A.R.’s FREE Down Payment Resource Directory!
http://www.car.org/tools/downpaymentresource/

June 2017 Sales Statistics

* Total inventory is active listings plus pending     listings. Active listings do not include pending.

More information is available in our on-line report at http://avi.rereport.com/market_reports

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VISIT http://avi.rereport.com/ for a free on-line market analysis of your property.
You can also perform your own personal search of properties for sale.

Though Down, Rates To Rebound (SCC & SMC)

Jun. 30, 2017 A little over four years ago, then-Fed Chairman Ben Bernanke famously inferred that the Fed might, if appropriate, soon begin the process of winding down the extraordinary stimulus it was using to power the economy. At the time, global markets were shaky enough to take this to mean a fairly imminent end to easy monetary policy, and reacted by selling off bonds over a period of eight weeks in the so-called “taper tantrum”, lifting 30-year fixed mortgage rates by a full percentage point over that time.

This week, heads of three central banks — the European Central Bank, Bank of England and the Bank of Canada — all expressed sentiments that economic growth and inflation are moving in the right direction, and that at some point they would also begin to curtail large-scale asset purchases of bonds and even start to lift their key policy rates at some point.

Global bond investors of course took this change in rhetoric to mean that monetary policy would start to be tightened before long, and so sold off holdings of bonds in response, or at least enough to lift market interest rates to levels last seen a month ago or more. Not exactly a taper tantrum (which occurred over a period of months) but certainly the raising of a wary investor eyebrow at the change. As well, the potential for imminent change was later talked down, but to little immediate effect. Mortgage rates had been stable to slightly falling as this week progressed, but abruptly reversed course, and look to move measurably higher when the next national tally becomes available.

The distant early warning about potential policy changes by other central banks is the rough equivalent of a long-range weather forecast. The probability for a change may have increased slightly, but there are a lot of unknown and unusual forces at work that will shape when and where a weather event will eventually come. It will rain again; it always has in the past, but when still remains an open question.

Moves in the required net yields that approximate thirty-year fixed rate mortgage rates were a little better behaved than were their influential Treasury counterparts, but indications are that we’ll see bump of a tenth of a percentage point or perhaps a bit more when Freddie Mac reports next week.

Call or email me if you have any questions.

For further details and a city-by-city breakdown statistics, go to http://avi.rereport.com/market_reports.

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Real estate related Articles

San Jose Mercury
Feb. 28. 2017
Bay Area home sales lose steam, but prices climb — a little
San Jose Mercury
Feb. 26. 2017
Sunnyvale: Tristar buys Apple leased offices for $290.7 million
Michael RepkaReal Estate Matters. Representing both buyers and sellers: A conflict of interest? Read more Dual Agency
Avi UrbanHow to reduce your home loan interest payments. Read more

Helpful resource for home owners
Many new home owners or owners who consider remodeling or rebuilding their homes should take advantage of their county Tax Assessor web site. These web site and their respective city building departments web site typically have vest information regarding the process for applying for permits, the impact on their taxes and many other resources that home owners should be aware are available for them.
For the San Mateo County Tax Assessor office visit http://www.smcare.org/default.asp
For Santa Clara County Tax Assessor visit https://www.sccassessor.org/index.php

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The Silicon Valley 150 Index Corner

The Silicon Valley’s Real estate market is a derivative of the local economy–it prospers and withers depending on how well the local innovation-based sector performs. The San Jose Mercury News tracks the performances of the largest 150 publicly traded companies headquartered in Silicon Valley through an index called the SV150, which may be found at www.mercurynews.com. Stocks are valued based on several criteria, but one of the more important criteria is a company’s future earnings. Therefore, I see the SV150 as a leading indicator for Silicon Valley’s real estate market.

Investors Corner

THE S&P CORELOGIC CASE-SHILLER NATIONAL HOME PRICE NSA INDEX SETS RECORD FOR FIVE CONSECUTIVE MONTHS

NEW YORK, June 27, 2017 – S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for April 2017 shows that home prices continued their rise across the country over the last 12 months. More than 27 years of history for these data series is available, and can be accessed in full by going to http://bit.ly/2sW3Zjt

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San Mateo County (SMC): Mortgages Easier to Get

Two major changes in the mortgage market go into effect this month, and both could help millions more borrowers qualify for a home loan.

First, the three major credit reporting agencies will drop tax liens and civil judgments from consumer profiles if the data is not complete. Specifically, the data must include the person’s name, address, and either date of birth or social security number. It seems many profiles do not have all this data. This alone could raise FICO scores by as much as 20 points for affected consumers.

Second, mortgage giants Fannie Mae and Freddie Mac are allowing borrowers to have higher levels of debt and still qualify for a home loan. The two are raising their debt-to-income ratio limit to 50 percent of pretax income from 45 percent.

Inventory Keeps Tightening

Realtor.com reports that “there were 11 percent fewer homes on the market (nationally) in June 2017 than during the same time last year, marking 24 consecutive months of year-over-year inventory declines.”

Down Payment Assistance

Home Buyers using the C.A.R.’s Down Payment Assistance could be eligible for a $50,000 award! Find out which programs you qualify for with the C.A.R.’s FREE Down Payment Resource Directory!

http://www.car.org/tools/downpaymentresource/

June 2017 Sales Statistics

* Total inventory is active listings plus pending listings. Active listings do not include pending.

You can get more information at: http://avi.rereport.com/market_reports

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Call or email me if you have any questions.

For further details and a city-by-city breakdown statistics, go to http://avi.rereport.com/market_reports.

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Looking to Downsize?

Keep Your Property Tax Base

Under Proposition 60, California homeowners 55 and older get a one-time chance to sell their primary residence and transfer its property-tax assessment to a new one, but the market value of the new home generally must be equal to or less than the market value of the old home.

Prop. 60 was designed to help longtime California homeowners who want to downsize but don’t want to give up the low property-tax assessment they enjoy in their existing home.

Under Proposition 13, homes are reassessed for property-tax purposes when there is a change in ownership or new construction. In between ownership changes, the assessed value can go up by an inflation rate not to exceed 2% a year. (Homeowners can get temporary reductions when property values go down.)

Prop. 60 lets homeowners 55 or older transfer their base-year value from an existing primary residence to a new primary residence, but there are restrictions.

The new home must be in the same county as the old one or, as Proposition 90 added, in one of eleven counties that accept transfers of base-year value from other counties. The eleven counties are: Alameda, El Dorado, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne and Ventura.

Also, the new home must be purchased or built within two years – before or after – the sale of the original property.

If the new house is purchased before the old house is sold, the market value of the new house on its purchase date cannot exceed 100% of the old home’s market value on the date it is sold.

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