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Newsletter - April 30, 2020 market update
How is COVID-19 affecting real estate?
- So far values are remaining stable and even increasing in high-demand markets such as ours. Time will see if the trend continues. (same as last report)
- Listing marketing has been affected by the Shelter-in-Place order. The MLS and most local real estate associations have stopped all open houses and broker tours for clients and agents. The MLS has suspended accrual of Days on Market during the order. (same as last report)
- Home showings have picked up! Vacant homes and homes where agents are doing or assisting sellers in doing virtual showings and homes are being SOLD! (NEW info)
- New and current transactions are still able to close, although escrow companies are now using 100% mobile notaries, as their offices are mostly closed and officers and staff are working from home or in office isolation. (mostly the same as before)
- The California Association of Realtors has developed several new addenda that can be used with new or existing contracts that specifically addresses COVID-19 concerns. (added information)
- For those with current loans who may be experiencing financial hardship due to loss of income or other issues your lender may be able to set up as much as a 12 month forebearance program to delay or reduce your current payment. Currently this applies to Fannie Mae and Freddie Mac programs. Contact your lender to see if this applies to you. You must make the call, nothing with these programs is automatic. (same as last report)
- Also with Fannie Mae and Freddie Mac loans foreclosures and evictions have been suspended for 60 days. (check with lenders for updates)
- Remember that with most loan forebearance or rent suspension programs this doesn't mean that you won't eventually owe the accruing interest or rent. So, if you're able to keep current on payments I would suggest you do, but it is always worth the phone call to see what are your options. (same as before)
Mortage lending rates are at their lowest in history. So low that many homeowners are refinancing to these deals. For a bit they refinancing created sort of a workload bubble for lenders, but it appears to be settling down.
Great news for veterans, active military, and reservists out there! For 2020 the VA loans no longer has a loan limit. Previously VA loans were capped at the FHA level. Here in the high cost part of California that meant you couldn't borrow at 0% down more than $726,525. If you wanted to borrow more you had to provide 20% on amounts above the limit. That limit is now gone, you do however still need to qualify for the loan. Contact me for futher details*.
FHA loans have raised their cap for 2020 to $765,500 from $726,650 in most of our high cost areas. FHA require as little as 3.5% down. These are great loans for first time home buyers. Also, did you know you can use FHA loans to finance owner occupied duplex, tri-plex, and four-plex homes? Caps for those loans are even higher. Start your rental investment program easily with little down payment. Again, contact me for more details on these great opportunities*.
CalHFA (the California Housing Finance Agency) also offers additional programs to assist first time buyers with down payments and closing costs. This could mean it is possible to buy with 0% down. Yes, again, contact me for further details*.
Interest rates remain low and there has been more activity in the unconventional loan market. These loans include limited and alternative documentation often necessary for the self-employed. It is now easier for self-employed individuals to get home financing than post recession almost a decade ago.
For those looking to buy or refinance 30 year fixed interest rates are averaging 3.53% on 30 year fixed mortgages according to bankrate.com on April 30th, the lowest at 2.875%.