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Monthly Archives: March 2011

Placerville Speedway – The Race Is On!

It looks like “The Race Is On” at the Placerville Fairgrounds this Saturday (April 2nd) featuring the 360 Sprints and Pure Stock Cars. Come on out and enjoy a fun night of speed and a little dirt!

Update – The race for today (April 2nd) has been postponed due to weather damage to the track. Check back for updates or visit the Placerville Speedway web site.

 

Take Me Out To The Ball Game

A call to all Baseball fans – the Sacramento Rivercats season opener is scheduled for Thursday, April 7th at 7:05 pm. The weather is supposed to cooperate and baseball is in the air! Come support your local team and cheer them on towards another great season! See the full schedule below or for more information; check out the official web site by clicking on the link/icon at the bottom of the page.

 
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Posted by on March 29, 2011 in Fun Things To See And Do

 

Real Estate – Supply and Demand is the Name of the Game

This chart shows the results of Bank Owned (REO) and Short Sale Activity since December of 2009 in all of El Dorado County. Take note that inventory levels have decreased since the totals peaked in September of 2010. In addition you can see that pending sales are dramatically higher. As we approach the summer months the demand will no doubt start to outpace the supply.

This chart reflects “Traditional” or non REO and non Short Sale properties in all of El Dorado County. The thing to notice here is that the inventory levels are also decreasing which indicates a move toward a normal to improved market. The other thing to notice is that pending sales are increasing which also indicates a move toward a healthy real estate market. We are a long way from a robust market but by the spring or summer of this year (2011) we should start to see more positive results and even better as we move towards 2012.

These charts provide a small picture of what is going on in the El Dorado Real Estate Market. For additional information about your specific local market/area; feel free to contact me (mikesouthwick@gmail.com).

 
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Posted by on March 25, 2011 in Real Estate News

 

Can a Home Equity Line of Credit Impact Your Credit Score?

If you own a home with a Home Equity Line of Credit (HELOC) it is possible that your credit score may be impacted in a negative way depending on how it is being reported on your credit report.

Most HELOC’s are reported by the three credit bureaus as revolving accounts because they are basically set up in the same way as a revolving account, even though they do not fall under the typical revolving terms. The unique difference between a HELOC and a typical revolving account is that the security for the Line of Credit is actually the home itself.

The confusion and typical unfair reporting for a HELOC is that it really is not a traditional revolving type account. The Fair Credit Reporting Act requires the reporting agencies to report true and accurate information and since a HELOC is secured by an asset then it simply needs to be reported differently.

What can be happening without a consumer even knowing about it is; should the HELOC be maxed out to the limit then it can drop your credit score significantly. In some cases it has been reported to drop the score by as much as 75 points which is pretty dramatic. Even if you have not maxed out your HELOC, it is still a good idea to check and see how it is being reported to the credit bureaus.

The first thing that you need to do is check your credit report to determine how your HELOC is being reported and if it is showing as a revolving account. If it is, then you can send a letter to the three credit bureaus and ask them to change the type of account from “Revolving” to “Line of Credit” or to “Other”. You should send it as a Certified Letter and enclose a copy of your HELOC agreement. It is possible that you may need to be persistent and send the letters more than once. Once this is corrected you should re-check your credit score to see if it has changed.

As always, should you have additional questions regarding buying or selling real estate or questions about financing, please contact me at mikesouthwick@gmail.com.

 

The information in this article was taken from information provided by Linda Ferrari who is the author of “The Big Score: Getting it and Keeping it, Buying Power for Life”. You can find additional information on her web site; http://lindaferrari.com.

 
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Posted by on March 21, 2011 in Real Estate News

 

Housing Market Starting to Show Signs of Improvement

I am seeing some real good signs of improvement in the major real estate markets in Northern California that I service. As I had previously written in some of my earlier blog postings; this up-tick in housing sales is being fueled by a decrease in unemployment (although there is still much room for improvement), a slowing down of foreclosure activity and relative low interest rates. These three factors alone are significant components in a healthy and long term real estate recovery. I would like to republish a portion of an article I wrote in October of 2010 and also posted in a February blog post:

Here is an interesting portion of an article that was published in Time Magazine back in 1992 which stated; “The US economy remains almost comatose. The slump already ranks as the longest period of sustained weakness since the Depression. The economy is staggering under many ‘structural’ burdens, as opposed to familiar cyclical problems. The structural faults represent once in a lifetime dislocations that will take years to work out. Among them: the job drought, the debt hangover, the banking collapse, the real estate depression, the health care cost explosion, and the runaway federal deficit”

It’s a little scary, but this picture of the state of the economy in 1992 mirrors what we are experiencing today in a lot of ways. The thing that I want to point out is that the years following 1992 witnessed an enormous amount of growth and opportunities in the economy, stock market and in housing. I would agree that history often repeats itself (sometimes over and over) and perhaps we should be looking ahead to a better future with some of the opportunities in the present. There are some good long term buying opportunities in today’s real estate market. You will find it more often than not, that the best investors buy during the most pessimistic times.

 I am seeing the housing supply decrease across the board but more so in the under 200,000 price range. What this means to me is that first time buyers and investors are realizing that any further downward shift in pricing is probably over. If the rate at which the supply of homes in this range continues to decrease at the levels they have in the past few months, then I think it stands to reason that the demand will start to outpace the supply. The reason that I use the 200,000 figure as a bench mark is that for most first time buyers the monthly mortgage payment on a home purchase in this range is equal or greater than what a typical rent payment would be. If you have been waiting for the bottom to drop further on pricing, perhaps you should jump back into the housing hunt and contact me right away (mikesouthwick@gmail.com). There are still some good real estate deals to be had but with our market improving you don’t want to miss the opportunity that is here now.

 
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Posted by on March 15, 2011 in Real Estate News

 

A Few of My Personal Thoughts

I just wanted to pause a moment and break from my usual real estate articles and just share a small personal note to those who read this blog:

We are facing some rather troublesome and unique world events that will clearly define the resilience of not just our country but the entire world. The immense devastation and loss of life in Japan will forever be etched in our minds as we mourn for those who have suffered such loss. In addition the political turmoil that exists in the other parts of the globe will also continue to produce additional heart ache and despair. These factors will impact all countries and all economies in one way or another from shortages to economic volatility. It is what we do while these types of challenges occur that has the potential to makes us better people and then it becomes how we learn and improve that sets a course for increased stability. There remains plenty to see and do, but in spite of these tremendous calamities; there remains hope that all of our efforts to provide help and relief will ultimately result in a better future for us all. Pray for peace and pray for the people of Japan.

 
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Posted by on March 15, 2011 in Other

 

A Basic Understanding of a Reverse Mortgage

A reverse mortgage is a loan for senior homeowners that use a portion of the home’s equity as collateral.  The loan generally does not have to be repaid until the last surviving homeowner permanently moves out of the property or passes away. At that time and in most cases, the estate has approximately 6 months to repay the balance of the reverse mortgage or sell the home to pay off the balance. All remaining equity is inherited by the estate. In most cases the estate is not personally liable if the home sells for less than the balance of the reverse mortgage. To be eligible for a reverse mortgage, the Federal Housing Administration (FHA) requires that all homeowners be at least age 62. The home must either be owned free and clear, or all existing liens must be able to be satisfied (paid off) with the reverse mortgage. If there is a mortgage balance, it can be paid off completely with the proceeds of the reverse mortgage loan at the closing. Generally, and in most cases, there are no income or credit score requirements for a reverse mortgage. The homeowner must remain in the home and stay current on all property taxes and insurance.

Basically a reverse mortgage makes it possible for older homeowners (62+) to convert part of the equity in their homes into tax-free cash without having to sell the home, give up title, or take on a new monthly mortgage payment. The reverse mortgage is aptly named because the payment stream is “reversed.” Instead of the homeowner making monthly payments to a lender, as with a regular mortgage, a lender makes payments to the homeowner. There are some restrictions and unique variables which is why it is important to discuss such a program with a professional who specializes in reverse mortgages.

 

Purchasing a Home with a Reverse Mortgage

If you meet the eligibility requirements for a reverse mortgage and the home qualifies, then you may be able to purchase a home using a reverse mortgage. I am finding that some older homeowners would like to make a move to one of the retirement communities (i.e. Del Webb in Roseville, Lincoln, Elk Grove or Manteca) but those communities may exceed their affordability. In other words the sale of their existing home may not provide enough cash to purchase a replacement home and the idea of taking on a new mortgage doesn’t seem appealing when facing retirement. This is where purchasing with a reverse mortgage come into to play. In most cases the required down payment on a reverse mortgage falls somewhere between 35-45%. On a 300,000 home this equals to 105,000 to 135,000 for the down payment. There are also fees involved and it is wise to consult a professional who specializes in reverse mortgages. If you would like to discuss whether you would qualify for a home purchase using a reverse mortgage and or how to evaluate the feasibility of selling your home and purchasing a replacement home using a reverse mortgage, then please contact me.

 
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Posted by on March 12, 2011 in Real Estate News