Not what it appears to be

The best financing program for first time home buyers is through the California Housing Finance Association (CAHFA). The loan program is not available to every first time home buyer but most who do meet the guidelines can obtain a fixed rate loan at 5.75 percent for 35 years.
Think a “first time home buyer” is someone who has never owned a home? Nope, the federal definition of a first time home buyer is anyone who has not owned a home in the last three years. That logic by the federal and state governments escapes me. If I owned a home and sold it in 2003 and made a million bucks on the sale I could still qualify for a tax-payer subsidized interest rate loan. In fact, if I had spent all my proceeds from my house sale in 2003 and didn’t have any funds for a down-payment or my closing costs the state of California will loan me both at a below market rate.
Yesterday I had some folks who have owned a mobile home for several years. They wanted to sell their mobile in the mobile home park and buy a home more attached to real estate. They obviously were not first time home buyers since they currently own a home right? Or, maybe they were. Is a mobile home considered a home by the federal or state housing agencies?
Nope, it is considered personal property. The mobile home is not attached to real estate. It is registered by DMV and mobile home owners do not pay property taxes to the county but space rent. Subsequently, they qualify for this low interest first time buyer program.
Finding the right loan program to fit a buyer’s specific requirements requires the skills of a detective. Finding the very best loan program is an art form requiring knowledge and patience. Most borrowers and several mortgage brokers have no idea of the number of loans available and their many variations. A good detective will constantly ask questions until he is satisfied with the answers, so will a good broker. When dealing with the federal and state housing agencies all is not what it may appear to be.

Good news for remodeling industry

When it comes to remodeling, the Baby Boom generation will keep on booming. And they'll be followed by spendthrifts known as GenXers.
While the new construction market is slowin', the remodeling sector will keep on growin', according to experts at the National Association of Home Builders' convention in Orlando last month.
"Boomers aren't done in terms of remodeling activity," said William Apgar, a former federal housing official who is now senior scholar at Harvard's Joint Center for Housing Studies. Normally, spending on remodeling tends to fall off when home owners reach age 50. And by age 70, they're down to "doing only basic stuff," Apgar told a press briefing.
But the huge Baby Boom generation, members of which begin turning 60 this year, have been spending twice as much as the 50 to 70-year olds that have come before them, he pointed out. And there's no reason to indicate they are likely to stop.
Boomers "are outspending their predecessors, and that's likely to continue," the former FHA Commissioner said. "And when that generation finally does begin to tail off, pretty active GenXrs are coming right behind them. So there's not going to be any substantial fall off in remodeling activity far into the future."
According to the Joint Center, total remodeling activity reached $233 billion in 2005, representing about 40 percent of the giant construction market. But growth in the sector should tail off from some 20 percent as recently as 2003 to about 4 percent annually this year. Even at the lower rate, the remodeling portion of the market will be stronger than new construction. Home improvement spending by home owners grew by 4.5 percent last year, with owner-occupants investing $149.5 billion in their homes.
Despite the recent refi booms, owners still have $10 trillion in equity left in their homes, and they'll spend lots of it on their houses in an attempt to keep up with the Joneses. As home prices rise, owners want to improve the value of their real estate, They'll want larger homes and better features as they try to keep up with the new houses that are being built bigger and better every year.
It’s called “selective luxury,'" Even though people are facing higher housing costs when they do buy and renovate, they are more likely to buy expensive items.

Confidence

Despite a slower housing market consumer confidence continued to rebound in January and is now at its highest level since June 2002, according to The Conference Board's Consumer Confidence Index. The Index rose 2.5 points last month and now stands at 106.3 (1985=100). The Present Situation Index also increased, climbing to 128.4 from 120.7, while the Expectations Index declined to 91.5 from December's reading of 92.6.

A more positive view of the job market continues to boost consumers' confidence, though there is a disparity between consumers' assessment of current conditions and their expectations for the future, according to The Conference Board's report. While the proportion of consumers claiming jobs are "plentiful" increased in January, their outlook for the labor market in the coming months was less optimistic.
Naturally, with all this confidence the stock market fell. Too many jobs for too few people may cause inflation creep. Investors prefer a more pessimistic attitude.
We put too much emphasis on this monthly confidence survey. Questioning people about how they generally feel about things at a moment in time has about as much scientific relevance to the economy as asking them if they had a good night’s sleep or did they have a nice day at the office. A confidence feeling is too subjective and personalized.
My level of confidence about the economy can change within a few minutes. Last night I received a call from the seller of a home in Folsom saying they decided to accept my buyer’s offer. Great, fantastic, my confidence level on my economic future was high. If I had received a call from a “confidence surveyor” at that time my outlook on the economy would have been rosy. I then called my client to say congratulations! His offer was accepted. My buyer, however, had changed his mind, about buying the new home. He had decided to “wait and see” where the market was headed. This quickly changed my confidence level about where I was headed financially. Maybe if I e-mail him a this confidence level survey he will reconsider.

Lilly the llama

Some folks think selling real estate is a glamorous business. From the outside looking in it appears so. It’s easy to imagine that we agents spend all our time driving the rich and famous around the county in our expensive late model SUVs, showing designer million dollar homes and taking wheel barrels full of cash to the bank. That isn’t exactly correct for most of us.

The most recent survey by the National Association of Realtors found that the average full time agent earns about $60,000 a year working 60 hours a week. Out of that the agent will pay all of their own taxes, social security, business expenses, health insurance and retirement planning. In California the money is better but the expenses higher and there are too many agents chasing too few deals.

In California there are 150,000 agents selling 600,000 homes for an average of 4 yearly sales each. The El Dorado Country Board of Realtors has about 1,200 Realtor members and reported 2,800 homes sold in the county last year. Assuming no agents from Sacramento or Placer County sold any real estate in the county, the average is less than 3 home sales for every Board member. This probably explains why according to the Department of Real Estate half of all new agents don’t renew their license after their first four years in business.

For most agents the money is just average and this business isn’t all that glamorous either. Yesterday I started work before sunrise, in front of my computer, trying to find another property to fit into my already scheduled showings. I had spent most of the week previewing homes for a couple from San Jose who thought they wanted to raise grapes, horses and kids in the county. Since “their valuable time” was limited, I had previewed and set up appointments for nearly a dozen homes. By 9 they had called to cancel. It was raining and they didn’t want to get wet. Maybe they would wait until spring when the weather was nicer. “No problem” I said, while chocking the phone. I spent the next hour canceling my scheduled appointments.

The day wasn’t wasted however. Smelly Mel, who operates a septic tank pumping service (I am not making this up) called about 10 to say that he could pump and inspect the septic system on a small ranch I had in escrow. The owner was working in Sacramento and I needed to let Mel in and out of the locked gate. There were a few horses, goats and a llama by the name of Lilly running loose around the fenced acreage. It took us an hour to find and pump the septic but it took another hour to catch the goat that had escaped when his pumper truck pulled through the gate. Did I mention it was raining?

While rounding-up a wet goat, my cell phone rang. It was Reid with Bug Biz who owns a Termite Company. He had a cancellation and wanted to do a pre-listing Pest Inspection on an Old Victorian in Placerville. We spent two hours climbing over and crawling under this 100 year old grand lady with a drainage problem. In the process, we found a few bats, a dead rat and several subterrain termites.

On the way back to my home office, I stopped off to check in with Charlie, a local builder who has a spec house under construction in Shingle Springs. Charlie was in a foul mood. The cement truck had arrived to pour the driveway but Charlie’s helper had not. Charlie was working franticly by himself to move and form six yards of cement into a driveway before the big storm. I found a pair of rubber boots and spent two hours helping Charlie who questioned me about smelling like a goat that had fallen into a septic tank.

Around seven o’clock I had finished dinner and was working on my second glass of an excellent El Dorado County Merlot. The wind was really blowing and I was thankful to be home, warm and dry after a frustrating day. The phone rang. When my phone rings during a storm it isn’t usually good news. It was my client with the horses, goats and Lilly the llama who was missing. She figured “Lilly” had escaped while Mel and I were going in and out of her property and thought I should be responsible for finding her. In my next life I think I will be an accountant.