Cathy Dean
eXp Realty of CA

 Jan. 19, 2012


With media coverage of the real estate market and REALTORS®' role in the transaction under heightened scrutiny, Market Matters offers proactive solutions to help you make sense of the often conflicting  and confusing data, market studies, and news reports about your industry and profession.  Through C.A.R.'s efforts on the front lines, you'll be armed and ready to position yourself as the market expert with your clients, while demonstrating the knowledge, experience, and expertise a REALTOR® brings to the transaction.

The rates quoted are averages drawn from a variety of financial institutions, and lenders
use varied approaches to set them. Consumers who want to try for the lowest rates
available need to consider basic factors, such as credit score, points, property type,
down payment, and length of the loan.
 Credit score: The ideal borrower has a FICO score of 740 or higher, which puts the
individual in the best place for pricing.
 Points: The lowest rates usually are decreased by paying a fee called a point, or 1
percent of the loan amount. Borrowers may buy points in order to get the best rates at
many banks. Points might make sense depending on the borrower’s financial situation
and how long they expect to stay in the home.
 Property type: Borrowers planning to buy a duplex or a four-unit build likely will have a higher interest rate. Condominiums also may have a rate premium rate, especially if
they are newer or the down payment is less than 25 percent. Lenders also may charge
more if the borrower is not planning to live in the home.
 Down payment: Borrowers who put down at least 25 percent are more likely to obtain
the best interest rates. Lenders offer different breaks on rates if equity in the property is
higher, so borrowers should ask what is available.
 Length of loan: Borrowers who are likely to move in a few years may want to look into an
adjustable-rate loan with a low interest rate fixed for a few years, and adjusted afterword.

Welcome to C.A.R.’s Market Matters, your weekly market response guide. 

Sept. 15, 2011 









The Wall Street Journal

Mistakes housing investors make 
With traditional investments delivering low returns, some are considering buying rental housing. 
However, potential investors should do their homework and avoid the following common 

Making sense of the story

 Investing in real estate right now can be profitable, if everything goes as planned. Rents 
are increasing in many areas, and more properties may be coming on the market.

 Last month, the Obama administration asked for proposals on how to convert at least 
some of Fannie Mae’s and Freddie Mac’s inventories of foreclosed homes into 
affordable rentals.

 Traditionally, investors rented out properties for 1 percent of the purchase price per 
month. However, according to one property management firm, today, some investors 
are receiving as much as 2 percent of the purchase price.

 While it may be true that in some areas home prices are relatively low, that doesn’t 
mean the property can be rented out. Homes in deserted subdivisions aren’t any more 
appealing to renters than they are to buyers. The same is true for less-attractive 
properties or those in less-desirable school districts.

 Prior to purchasing a property, investors should also factor in closing costs of 3 percent 
to 6 percent, the costs to fix up the place and maintain it, and the holding costs. 
 Investors become landlords, and as such, need to keep in mind that, just like 
homeowners, tenants may not always be able to pay rent. Evicting tenants can take 
several weeks.

 It’s also important to remember that owning a rental is not the same as owning a home. 
An owner may put up with flaws in a home that a renter wouldn’t tolerate. Additionally, 
many states and communities have strict laws for landlords, even for those who own 
only one property. 
Read the full story

WSJ_RealEstate_LeftTopNewsSept. 15, 2011

The New York Times 
When real estate agents make referrals 
Home buyers have a right to be informed of any business relationship between the real estate 
agent and the mortgage broker. 
Read the full story

The Wall Street Journal 
New ways to use less energy at home 
The share of homes being built in the U.S. with environmentally friendly features jumped to 16 
percent of single-family starts last year from 2 percent in 2006, says McGraw-Hill Construction. 
Read the full story


The Los Angeles Times 
Many underwater homeowners hampered by high interest rates 
A total of 10.9 million homes with a mortgage were in a negative equity position at the end of the 
second quarter, constituting 22.5 percent of all residential properties with a mortgage, according 
to CoreLogic. 
Read the full story

When will home prices spring back? 
Nationwide, the U.S. housing market remains deep in the doldrums and economists expect
prices to fall another 5 percent to 10 percent in many places. Yet, some sellers are seeing 
signs of a turnaround.

Read the full story Sept. 15, 2011

U.S. consumers have miserable outlook on housing and growth, with good reason 
Fannie Mae’s August survey on the housing market found that more than three quarters of 
Americans (78 percent) say the economy is on the wrong track, and 22 percent expect their own 
financial footing to worsen over the next year.

Read the full story

The Mercury News 
Home buyers find themselves aced out by investors 
In the Bay Area, about one-fifth of all homes sold in July were purchased by absentee buyers, 
mostly investors looking for rentals of properties to fix up and then sell, according to DataQuick.

Read the full story

USA Today

Tight standards make mortgages tough to get 
Following the greatest housing decline since the Great Depression, home lending standards 
have tightened to their strictest levels in decades, economists say.

Read the full story 
1Sept. 15, 2011

 Closed escrow sales of existing, single-family detached homes in California rose to a 
seasonally adjusted 497,390 units in August, up 8.6 percent from a revised 457,930 in 
July, according to information collected by the CALIFORNIA ASSOCIATION OF 
REALTORS® (C.A.R.). August home sales were up 10.2 percent from the revised 
451,520 units sold during the like period a year ago.

 The August statewide median price of an existing, single-family detached home sold in 
California was $297,060, up 1 percent from a revised $294,050 in July, but down 7.4 
percent from the $320,860 median price recorded for August 2010.

 The Unsold Inventory Index for existing, single-family detached homes was 5 months in 
August, down from 5.5 months in July and down from a revised 5.8 months in August 
2010. The index indicates the number of months needed to deplete the supply of homes 
on the market at the current sales rate


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eXp Realty of CA