I’ve gotten no less than 4 calls in the last week from friends and clients asking why their lender has notified them that their home equity line of credit has been “frozen”. In other words, it no longer is available to the borrower. Ouch!  

Freezing home equity loans in areas of declining property values makes sense. Why would a lender loan on a property where the equity has shrunk or disappeared altogether? That’s understandable. However, Marin County is not yet designated as having declining property values. That’s not to say it won’t happen, just that it hasn’t yet happened. Lenders use sales and price statistics to determine whether a county is “in decline” and from the lenders and appraisers I’ve spoken with Marin prices are, generally speaking, still stable.

If you have an equity line that you think you’ll use in the future my advice is to take the money now. Deposit it in a CD or somewhere you can get 3-4% return. If you’re paying 6% for the home equity loan it might be worth the 2-3% cost to keep those funds available to you.

If your equity line has already been frozen it might make sense to talk to a mortgage broker  about a getting a 2^nd loan on your home for the amount you want.

Memorial Day Weekend! Boy, it’s arrived early this year, making the “where’s the year going” affect even more intense. At my age the saying “time flies” applies more than ever before and, unlike the other part of the saying, it’s flying whether or not a good time is involved All kidding aside, have a fun, relaxed and safe Memorial Day weekend.

In the market to buy a condominium? It’s certainly something to think about if you’re a renter or an investor. The demand for rentals is increasing and rents are going up. With condo prices decreasing there are some great deals to be had. Typically when a real estate market is in decline condominiums are the first to lose value, and as you can see from the information below, almost every town has seen a decrease in the average price per square foot:

                                $/sq. ft.                   $/sq. ft.
Town                       2007                  2008 (thru 5/22)      % Change

Corte Madera         $474.75                         $405.52                       - 14.5
Greenbrae               497.71                           472.97                       -   5.0
Larkspur                  513.54                           587.21                       - 12.6
Mill Valley                592.26                           604.25                       +  2.0
Novato                    359.08                           295.17                       - 17.8
San Rafael               422.18                           343.35                       - 18.7
Sausalito                  553.07                           570.11                      +  3.1
Tiburon                    725.80                           693.07                       -  4.5

The 2008 square foot prices listed above very closely reflect 2003-2004 values. These “rolled-back” values coupled with the still incredibly low mortgage interest rates make condominiums a very appealing purchase.

The Marin Associates of Realtors strongly opposes the proposed spraying for the apple moth. If you are opposed to the spraying please participate and make your voice heard.

Market Update May 21, 2008
Reports of “touching bottom” seem to be increasing
among media analysts in their comments about the housing
slump and credit crisis. The San Francisco Chronicle is
reporting an increase in properties being bought… citing
April sales in the Bay Area increasing by the largest
percentage in 20 years, a 30% from March. A group of 52
professional forecasters agreed that the worst of the credit
and housing crisis is over. I’m seeing loan options increasing
again. Some new lenders have sprung up in spite of
the market and I can again offer stated income jumbo
loans with decent rates. The new “conforming jumbo”
loans have come down in rate too, to the 6% range.

Locally we’re seeing a shift that signals better times are
just ahead. In January of 2008 my parent brokerage, First
Priority Financial, charted 35% of all loans being closed as
purchase money (as opposed to refi’s). This percentage
has increased to 60% in the months since. The number of
FHA loans being originated also rose dramatically. Both of
these trends seem to support hopes that some of the new
loan programs recently born from Congress’s intervention
are actually having a positive impact on the larger real estate
market. When these trends are added to others we’re
seeing on Wall Street, and among financial analysts, the
picture takes on a decidedly rosy glow… especially given
the rough ride we’ve had lately. It may not be time to dust
off that hammock yet… because your summer as a realtor
may be busier than you thought!

It’s “local heart felt service on transactions that counts,
not call center sweat shops”, wrote Tim Kearns, CEO of
First Priority Financial. He certainly has a point! The great
thing about real estate as a career is that you can literally
create the quality of business you want. Sure, we need to
follow impeccable ethics and have excellent training, but
in the end it’s your presence, demeanor, and unique ways
of conducting your business that makes you stand out…
and in these areas there is lots of room for creativity. If you
haven’t given your past clients a call recently to see how
they’re faring this is a terrific time to reach out with a heart
that genuinely cares. One thing may lead to another and
gain you valuable referrals. As you find unique ways to
reach out to others, you open doors for more business to
come your way. Enjoy the ride as your business grows!

In the current real estate market, proper pricing is the most effective marketing strategy. Here is an example of how effective pricing minimizes days on the market (the Multiple Listing Service defines “Days on Market” as the time it takes for a home to be free of buyer contingencies and ready to close escrow). As of May 15, Marin County had 899 active single family homes for sale. During the month of April there were 147 single family home sales. If you take a “snapshot” of that data you’ll see there is about 6.1 months of inventory available. (To determine the amount of inventory take the current inventory and divide that number by the previous month’s sales volume - Total Available Homes/Previous Month’s Number of Sales —899/147 = 6.1.) 

The reason for sluggish sales and rising home inventory is that many homes available are priced too high for today’s market.  David Lionhardt wrote a great article in the New York Times about home pricing. Check it out. In this market you need to attract buyers “right out of the gate”.  Homes on the market for longer than 30 days are considered “stale” and are passed over for the new inventory coming on the market daily. Once determined stale by the market the only way you can attempt to re-interest buyers in your property is to reduce the price. Unfortunately that sets you up for selling your property for less than you would have had it come on the market priced correctly.

Here’s an example of days on the market and how it affects sales price.

Since January 1, 2008 in Marin homes that were on the market for:

1 - 30 days saw 100.41% of listing price
31 - 120 days saw 95.14% of listing price
121 and over days saw 91.81% of listing price

Generally, the longer a home stays on the market the less it sells for.

If you’re going to sell your home in today’s real estate market, do yourself a favor - let the facts and figures guide you, not what your best friend says your house is worth or what your neighbor sold their home for last year, etc. If you price intelligently you will find that this isn’t such a bad market after all. Unfortunately most of the pain is self-inflicted and avoidable in many cases.

Did you know that as of May 12, 2008 your cell phone can be contacted by telemarketers and other sales calls. Register  here to avoid sales calls to your cell phone.

Tired of all those unwanted catalogs jamming your mailbox? Check out catalog choice #1  OR catalog choice #2.

Rates are lower this week! News Tuesday from Fannie
Mae of losses brought concerns and lower indexes initially
on Wall Street… however this news was offset by
a positive development. Regulators responded to this,
plus related news that Fannie would bring in $6 billion in
new capital to offset the losses, and responded by lowering
Fannie’s surplus capital requirements (reserves). This
caused Fannie’s stock to bounce back from it’s low earlier
today and gain ground by 8.9%, welcome news to shareholders.
But the best part of all this is that it’s likely to
increase Fannie’s strength and ability to help the housing
market to recover. Lowered reserves means that Fannie
can make more loans… good news for us all.

“We don’t expect a recession in the U.S.” and the financial
crisis stemming from the collapse of the U.S. subprime
market may be nearing an end, said Deutsche Bank AG
Chief Executive Officer Josef Ackermann in Frankfurt
today. Conversely, Harvard University economist Martin
Feldstein, a high ranking republican economist, said the
U.S. economy is “sliding into a recession.” Who will be
right? This will depend on whether lenders heed the advice
of our Fed Chairman. Ben Bernanke spoke with banks
and mortgage lenders yesterday and echoed his recent
statements, urging them to work harder to reduce foreclosures.
Will they listen? It seems that banks and lenders
continue to turn a deaf ear to pleas for sane restructuring
of homeowner debt and continue to focus protecting their
bottom line and investor profits. Perhaps the federal government
will have to step in and impose stronger regulation
of the banking industry.

What does this mean for you? If you have credit card debt
this is a fine time to pay it off (if you can) to avoid interest
rate increases. Creditors are trying to turn a profit by raising
rates without warning. HELOCs are also being frozen
without warning, so if you think you may need cash in the
near future my advice is to borrow now and stash the cash
in an interest earning investment to offset the loan interest
until you need the money. Increased buyer interest at
open houses recently seems to indicate that more folks
are getting ready to snatch up great deals on properties.
We’re also hearing that some analysts believe we’re at the
bottom of the market cycle right now. If the current trends
continue there’ll be more positive news next week.

How’s the market? I get asked that all the time and only wish I had a pat answer for it. In fact, there are many different markets within our Marin real estate market. There is the entry-level market, the step-up market, the luxury market, the condo market, the muti-unit market, the southern Marin market, etc. You get the point. It would be unfair and misleading to lump all of those components into one sound bite answer. I can tell you that all of the very negative and pessimistic news you’re reading about real estate in general down not really apply to Marin County. Loan defaults and foreclosures are the big news items. Look at Marin’s figures. Sure there has been an increase in Notice of Defaults and foreclosures but the amount, objectively speaking, is miniscule in relations to other parts of California and the country.

Now (Spring, 2008) is the time of the year we in real estate call “the season”. This is the time we historically sell the bulk of properties in Marin. It is an especially important time to see how our real estate market will perform in 2008. We’ve all been reading negative reports about our market. Quite frankly, it’s a matter of reporting whether the “glass is half filled or half empty”. There are very positive aspects to our current market. Also, we are also seeing some necessary price corrections, this market is weeding out “buyers” who really don’t financially qualify (no more 100% financing, thank goodness). Let me give you a few examples of positive news relating to our market: the number of Single Family Homes sold has increased 44.5% from January ‘08 to April ‘8.

Here is a sampling of price performance for single family homes since January 1, 2008:

56% of Corte Madera sales have been overbids
29% of Greenbrae sales have been overbids
14% of Kentfield sales have been overbids
20% of Larkspur sales have been overbids
21% of Mill Valley sales have been overbids
9% of San Anselmo sales have been overbids
15% of San Rafael sales have been overbids
33% of Tiburon sales have been overbids

You may very well ask yourself why this news isn’t being reported.

Sometimes it may seem like it but life does not entirely revolve around real estate. I recently had lunch with a friend and client of mine named Rita Lakin. Rita wrote for television in the Golden Years of Television and is an accomplished author. She is currently writing the “Getting Old…” series of fun murder mysteries. The books are fun to read, witty and playful. They’re perfect summer reading and make getting older fun (so you know its fiction) and that alone is worth their price. Be sure to check Rita’s web site.

Another friend and client, Jeromy Zajonc, just produced a new movie based and shot in Marin and starring the very excellent actor, Ed Harris. Word from people who work in “the biz” is that Mr. Harris turned in one of the best performances of his career. Wow! The story was written by Logan and Noah Miller (the Miller Bros.) and is based on their father who lived in Marin but did so quite unlike the typical Marinite. The film was chosen to premier at this year’s San Francisco International Film Festival and we are thrilled to have tickets for the premier. So keep on the lookout and make sure to see it out when you can. Check out the Miller brothers and Ed Harris interview on YouTube.

Rita and Jeromy are just two of the many talented and fascinating people who live in Marin. Just one more reason why Marin is such an interesting, exciting and beautiful place to live.

Last but not least a big thanks and congratulations to all the talented performers who contributed their time and talent for the incredible performance of ‘Carmina Burana’ at the Marin Center. Bravo!