Here is a breakdown of today’s best rate:

The conforming 417K:

1) 30 year fixed 3.5 (APR 3.5%)

2) 15 year fixed 2.875% (APR 2.875%)

3) 5 year ARM, 2.625
4) 7 year ARM, 2.75

 
High-balance (super conforming):
1) 30 year fixed 3.75 (APR 3.75%)

2) 15 year fixed 3.125% (APR 3.125%)
3) 5 year ARM, 2.675

 Jumbo Loan

7 Year ARM 3.25%

For ready to lock loans, with no point, no prepay penalty. Primary home. LTV<60% Lock period is 15 days.

For ARM loans, if prepaid interest is zero (closing at end of month), the APR = 1 year libor index + 2.25

Rate subject to market change as well as lender’s approval and qualification

Is it a seasonal effect? Many buyers who are caught in this sudden bidding war asked and hoped so. Unfortunately, it’s not. It’s a fundamental change of the market. It happens not only in Silicon Valley, it goes nationwide.

Bloomberg recently reported that the home prices rise in half of the U.S. cities with the median sales price increased from a year earlier in 74 of 146 metropolian areas.

Sales of previously owned homes rose 5.3 percent in the first quarter from a year earlier, according to the report. Purchases climbed 11.7 percent in the Midwest, 6.6 percent in the Northeast, 4.1 percent in the South, and 1.4 percent in the West.

The best-performing metro area was Cape Coral, Florida, where prices increased 28.1 percent from a year earlier. Prices rose 19 percent in Grand Rapids, Michigan.

• 795 ENCINA GRANDE DRIVE, Palo Alto 94306 - listed April 10, offer due date April 17.  Listing price: 1,595,000

About 100 people came through our Sat and Sun open house.
5 offers.  1 was all cash at 1.7m
Two offers with financing over 1.8m

• 5148 MCCOY AVENUE, San Jose 95130 – listed April 10, offer due date April 18. Listing price is 585,000.

10 offers, sold close to $630K

• 1188 QUEEN ANN DRIVE, Sunnyvale 94087 – listed April 11. offer due date April 18. Listing price is 1,199,000

12 offers. sold over 1,400,000.

• 1029 HUNTINGDON DRIVE, San Jose 95129 -  listed April 11.  Listing price is  $899,000

28 offers. sold over 1,050,000, 600k down payment

Palo Alto, Cupertino, Sunnyvale 94087 area and west San Jose 95129 area are what most buyers know the area with good schools. However, most of houses in these areas are old and very expensive.

If you want newer houses, good schools and yet a more friendly pricing, look for them in Milpitas.  I have an open house this coming Sunday. Here are the details:

Open house time: 1-4 pm Sunday April 22

Address: 1220 Ridgemont Dr

• 4 Bedrooms, 2.5 bathrooms.  1987 sf living area, 4356 sf lot.
• Outstanding Schools: John Sinnott Elemetary (API 900), Rancho Milpitas Middle (API 870) and Milpitas High (API 812)
• Brand new floor throughout downstairs. Gourmet Kitchen with Granite Countertops and Stainless Steel Appliances that will be all included in the purchase. Large Master Suite with Vaulted Ceiling
• Walking Distance to Park and Community Pool. Enjoy Peacefulness of Foothills
• Beautiful Shapell Home in Highly Desirable Hillcrest Villas
• Offered at $669,950

I will see you there.

Below is a snapshot of  the Best Rates on 4/13/2012

The conforming 417K:

1) 30 year fixed 3.75 (APR 3.775%)

2) 15 year fixed 3% (APR 3%)

3) 5 year ARM, 2.5
4) 7 year ARM, 2.75

High-balance (super conforming):
1) 30 year fixed 3.99 (APR 3.99%)

2) 15 year fixed 3.25% (APR 3.25%)
3) 5 year ARM, 2.875

Jumbo Loan

7 Year ARM 3.25%

For ready to lock loans, with no point, no prepay penalty. Primary home.

For ARM loans, if prepaid interest is zero (closing at end of month), the APR = 1 year libor index + 2.25

 Rate subject to change as well as lender’s approval and qualification

A good piece of news to share with people who are in short sale or look to buy or sell a short sale. Bank of America says it will now be able to provide a decision on a short sale offer in 20 days.

Bank of America is making changes to its short sale procedures and introducing an improved task flow within the short sale technology module from Equator, BofA’s short sale management platform of choice. The goal: to reduce the timeframe for a short sale decision to less than three weeks, according to an artile published by DSnews.com today.

Starting Saturday, April 14, real estate professionals working with BofA will be required to submit five documents for short sales initiated with an offer:

• Purchase Contract including Buyer’s Acknowledgment and Disclosure
• HUD-1
• IRS Form 4506-T
• Bank of America Short Sale Addendum, which includes the Agent Certification form
• Bank of America Third-Party Authorization Form

The acknowledgement and disclosure form, short sale addendum, and the form for third-party authorization are available through the company’s online Agent Resource Center.

The third-party authorization form is a new standardized document developed specifically for BofA. Previously, the lender accepted third-party authorization forms in differing formats and from a variety of sources when transacting a short sale.

Bank of America says it recognized a need for greater compliance and consistency with this important document and has now created its own form to standardize the third-party authorization process. The two-page document requires signed acknowledgments from all borrowers and designated representatives in a short sale. Beginning April 14, BofA will accept only the official Bank of America Third-Party Authorization Form for short sales.

San Jose metro area
2011- down 2.5%
2012 forecast – up 1.6 %

San Francisco metro area
2011 – down 4.7%
2012 forecast – up 0.1%

 Below is the complete article: 

Bay Area home prices expected to stabilize in 2012

After years of decline, housing prices are expected to stabilize or even increase in some parts of the Bay Area this year, according to a new forecast.

Stabilizing prices are a sign of a healthier market, even though homebuyers still face challenges — tight credit, not many homes for sale and competition from investors paying cash.

In a report to be released Monday, Clear Capital, a real estate valuations company in Truckee, predicts that prices will remain almost flat this year — compared with a 4.7 percent drop in 2011 — in the San Francisco-Oakland-Fremont metropolitan area, including Contra Costa County. Silicon Valley should see a 1.6 percent increase in home prices, compared with a 2.5 percent drop last year, the company said.

“This region overall is doing pretty well,” said Clear Capital research director Alex Villacorta.

In three of the past four years, Bay Area home prices have declined from the previous year, including a dramatic 35 percent drop for the San Francisco metro area in 2008 and a 28 percent drop in Silicon Valley that year. Only in 2010 were there slight increases, followed by last year’s drop.

“We haven’t seen any stretches of normal activity for the last 20 years or so” in the Bay Area, he said, noting that prices had rocketed upward in the years before the decline. “It’s really been a roller coaster, with exception of now, when things are settling and leveling off.”

Nationally, the company sees a 0.2 percent gain in home prices in 2012, compared to a 2.1 percent drop in 2011. The San Jose area’s expected performance was in the top third and San Francisco was in the top half of 50 major metropolitan areas analyzed.

Across the country, housing could help repair the economy, said economist Sung Won Sohn at Cal State Channel Islands. Sohn, who recently released his own economic forecast, is predicting a housing-led recovery for the U.S. this year based partly on low interest rates and renewed multifamily home construction, which usually brings gains in the overall housing market. And prices, he said, are about as low as they can go.

“No one is expecting a dramatic fall in house prices,” Sohn said. “That gets people buying houses.”

The Bay Area, especially Silicon Valley, is already doing better, he said, “because the underlying economy seems to be doing better. I think we will see a somewhat faster recovery in the Bay Area.”

In the past two years, home prices bobbed up and down in response to government programs to encourage sales, as well as fluctuations in the number of foreclosures and short sales, in which homes are sold for less than is owed on them.

But agents say too few homes are on the market, and buyers still face tight credit.

“People are in escrow forever, and they finally give up,” said Richard Calhoun of Creekside Realty. “That is what I see as the biggest hindrance on the market.”

Investors paying cash for lower-priced houses remain a big obstacle for people like Nicole Collison, 25, a San Jose schoolteacher trying to buy her first home.

Motivated by the high rent she’s paying and the market’s current low interest rates and prices, Collison has looked at nearly 50 houses since October and bid on half a dozen of them, only to lose out every time to cash buyers.

“We’re always outbid,” she said. “It has been quite a challenge.”

But she hasn’t given up.

“We’re going to keep at it. We’re hopeful after the beginning of the year more things will come on to the market.”

In the East Bay, about 20 percent of the homes are selling rapidly, said Unhei Kang with Grubb Co. in Berkeley. A nicely presented home in a desirable area will draw multiple bids, she said.

“I don’t know what the future will hold, but to me it seems like it is stable. There are definitely buyers out there. Maybe it has to do with the low interest rates. A lot of buyers are feeling it’s not going to get any better than this,” Kang said.

The housing market is “spotty” in Contra Costa County, with some areas doing well and others not, said Barbara Safran, president of the Contra Costa Association of Realtors. “I think we’ve dropped about as low as it can get, unless some crazy thing happens in the economy and the world.”

The median price for single-family homes dropped about 4 percent last year, Safran said, with condos dropping about 4.6 percent.

“We’re predicting that it’s probably going to stay the way it is for a while. I think we’re going to continue to see a lot of short sales. The foreclosure market is still iffy. It’s a question of how quickly banks are going to put out those foreclosures.”

Bay Area home prices

San Jose metro area
2011- down 2.5%
2012 forecast – up 1.6 %
San Francisco metro area
2011 – down 4.7%
2012 forecast – up 0.1%
source: Clear Capital.

Lender started to implement the price increase on rate lock for 45 days and 60 days already. 30 day pricing will be impacted starting from late January and 15 day pricing will be impacted starting from mid-Febuary. The impact will be around 50 to 80 BPS. 50 BPS for a 400,000 loan is $2000, which means you could see your rate worsen by about 0.125%.

So hurry up and call me asap if you are planning to refinance and have not locked your rate yet.  As of today, I still have 3.875% for 30 year fixed loan if lock for 30 days.

The increase of the guarantee fee is used to bankroll the payroll tax cut extension signed by President Obama late in December last year. (Click here for the complete story).

On Dec. 23, 2011, President Obama signed into law the Temporary Payroll Tax Cut Continuation Act of 2011. Among its provisions, this new law directs the Federal Housing Finance Agency (FHFA) to increase guarantee fees charged by Fannie Mae and Freddie Mac (the Enterprises) by no less than 10 basis points from the average guarantee fees charged by these companies in 2011 on single-family mortgage-backed securities. This requirement is effective immediately, meaning that the average guarantee fees charged in 2012 need be at least 10 basis points greater than the average guarantee fees charged in 2011 and that this increase be remitted to the U.S. Treasury, rather than retained as reserves by the Enterprises. The law also requires FHFA to determine a schedule for guarantee fee increases over a two-year period that must satisfy other requirements of the law.

It’s important that you work with a loan agent who knows well each bank’s processing time and requirements so that he or she can give you instructions on how to prepare for that and advise you which lender to use based on comprehensive evaluation of your parcicular case and each lender’s way of work and their program strength.

Here are a few things you can do to speed up your refinance process:

1. Have all the documents ready according to the check list I provde you.

2. For bank statements, avoid giving lender the statements with large deposit. (Any deposit $1000 or more counts as a large deposit). If you cannot avoid it, provide paper trail for any deposit $1000 or more because lender will ask you for that.

3. If you have rental property, provide lease agreement, property tax bill, insurance evidence for each rental property you owns. Review your tax return you filed over the past two years and make sure that they are matching what’s reported on your Schedule E

4. When appraiser calls you to set up inspection time, get on the earliest one available. If appraiser can not come to your home for inspetion within a couple days,  call me (or whoever is your loan agent) to request another appraiser who can be available earlier.

We are at year 2000 level. Check here for the chart of price-to-rent ratio from 1983 to now: http://www.crgraphs.com/2011/10/house-price-graphs.html This gives you good persective of where we are in terms of housing price.  For price-to-income ratio, the most personal and relevant way is to calculator your own price-to-income ratio. The price should the price of houses in the area you are interested in buying and the income is your own income change over the past 10 year or whatever the period you are evaluating.

I have written about rent increases a lot in Silicon Valley.  With rent expected to rise further,  it makes more sense to buy a house.  A two-bed room condo in north valley San Jose  could cost you $2000/month for the rent. A single family house with three-bed room, two and half baths with only ten years new in the same are in north valley is priced around 530K.  With 20% down payment, the current low interst rate of only 3.875% for 30 year fixed rate, your monthly mortgage payment is ony $1994 which also include over $600 principle payment. This means you acutal expense is only $1400.

You may ask, what about the property tax and insurance? These are ususally offset by the tax credit you get as a home owner.

Needless to say, if you are paying over $1400 rent now, you should explore the option of buying.

For those who may not have saved 20% for the down payment, there are plenty of loans out there for a down payment as alow as 3.5%.