Fannie and Freddie, together with the Federal Housing Administration, are guaranteeing more than 9 in 10 loans, a consequence of the government’s propping up of the housing market and the withering of the private securitization market. Fannie and Freddie own or guarantee a little over $5 trillion of the nation’s $10 trillion of mortgages.

Both agencies operated for 30 years as shareholder-owned corporations that financed home loans with the limited support of the federal government. When the housing market collapsed, so did Fannie and Freddie. They were taken over by the Treasury Department in September 2008. So far, the U.S. has spent $145 billion to keep the companies afloat.

For decades Fannie and Freddie have bought mortgages and bundled them into securities and sold them to investors. The mortgage backed securities market generates fresh cash that can be channeled back into additional affordable loans.

The question now at hand is whether to eliminate Fannie and Freddie altogether, and recreate a more dynamic system that can respond to today’s mortgage climate, or to seek a restructuring process in the existing system.

No matter where this ends, there are some changes coming for the American mortgage market!!  Keep in the loop by stopping back by the blog periodically.

Summer Fun Contest Winners!!!!!  JonRon Team

Top cash prize winners - Ami McGloon  $225,  William Anderson $150,  Celeste Gonzalez $105.

$20 In and Out Burger Gift Cards: 

Joanne Fitz, Rosie Flores, Lyle Radeleff, TJ Van Dusen and Carole Wood.

 Wasn’t that fun?  Enter our next contest soon - “Back to School” by mail or on our website - JonRonTeam.com.

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The Real Estate Market in Laguna Niguel continues to show signs of life over the past month.  We’ve seen strong sales and low inventory, both of which indicate a stability in the market which had previously been hard to feel.  This stability and price pressure has been accomplished in part due to the national measures like the homebuyer tax credit (which, incidentally expired on april 30th) as well as the added bonus of low interest rates, held down by the slow economy and low job growth.  This pattern of real estate change is helpful as we work through the remaining vestiges of the foreclosure crisis.  By the way, there are currently 599 possible foreclosures with filed notices of default (or worse) in the city of Laguna Niguel.

The market inventory is sitting at a very stable place right now -

ACTIVE LISTINGS - 337 of all prices (103 are short sales)

IN ESCROW LISTINGS - 217 of all prices (135 are short sales)

(Reuters) - Demand for loans to buy U.S. homes shriveled to a 13-year low last week, following the expiration of federal tax credits, while near-record low mortgage rates stoked refinancing, the Mortgage Bankers Association said on Wednesday.

Yes there was a rush to get into escrow before the April 30 deadline for the tax credit.  But while that was a great bonus, there are a lot of buyers still looking for the right home at the right price.  They are not going to rush.  We think it is a buyers’ market in the sense that rates are super low right now.  Remember that one percent increase in rate means you have to buy the house 10% less to have the equivalent payment.   However in the OC we continue to see low housing inventory.  The low inventory definitely favors the Sellers.  That is why we would characterize the market as a BALANCED MARKET overall.  Remember that the market is spotty.  Some price ranges are hot and some neighborhoods are hot.  Call the JonRon Real Estate Team for real world, boots on the ground expert advice.

Existing home sales strengthened in March to 5.35 million, up 6.5 percent from February and 16 percent from last March. This is the ninth consecutive month of year-over-year increases. According to Lawrence Yun, NAR chief economist, the “home-buyer tax credit has been a resounding success,” increasing demand and stabilizing the market. In March, 44 percent of sales were from first-time buyers.

YIPPEE ! GOOD NEWS!

Mortgage Rates

Although mortgage rates continue to hover close to 5 percent, experts anticipate rates will increase to between 6 and 6.5 percent by the end of the year, since the Federal Reserve will need to raise them as the recovery gains traction to prevent inflation.

Affordability

Affordability remains near record levels, supported by the lowest mortgage rates in decades, low home prices, and the first-time home buyer tax credit. The home price-to-income ratio continues to remain well below the historical average of 25 percent. The ratio now stands at 14.7 percent.

BUY YOUR DREAM HOME NOW, before the rates go up.  CALL THE JONRON TEAM.

Short?

Statistics for this week continue to show the trend in Laguna Niguel real estate is toward extended short sale escrows.  How can we tell? Here are the statistics on short sales, both active and in escrow, and how they compare to the regular sale market

ACTIVE:  312 of which 96 are short sales = 216 Active Listings

IN ESCROW:  245 of which 145 are short sales = 100 In Escrow Listings

If we take the number of active non short sale listings over the number of in escrow short sale listings, we are at roughly 2 and a half months of inventory of regular sales.

If we take the number of active short sales (96) over the number in escrow (145), we have a much lower inventory.  This number, however, is skewed because of the lengthy time of short sale escrows, making it impossible to tell the exact inventory. 

 So we check the number of closings - 83 from the 13th of April, 81 from the 13th of March, and 87 from the 13th of February - and we see that the approximate closings are equal to one third of the in escrow properties and one quarter of the active listings - averaged with the in escrow numbers, the inventory is sitting at just under 4 months. 

**This indicates a balanced Seller’s market at this time, making selling much easier than it has been for the past 3 years!**

DON’T BE FOOLED BY STATISTICS or by the advice of Friends.

Listening to the news will mislead you.  Talk to a local Realtor.  Listening to your friends will mislead you.  Talk to a local Realtor.  Time and time again I am amazed at just How Local the real estate market is.  I just visited my daughter in Mid-Town Manhattan.  Talk about a unique local market!!!  In Orange County each city is different and each price range is different as far as real estate sales go. 

Consumers are smart but inventory is fairly low.  If you look at homes in escrow compared to the number active for each city it appears to range from 2 weeks supply to 7 months supply along the coast.  One always has to take into account the number of short sales that are showing pending sale status.  They do not clear out each month but linger from 2 to 10 months so in Aliso Viejo we see 240 pending sales and only 159 active listings.  A bank owned REO property came on in Laguna Niguel on Saturday listed at $816,000 with a new kitchen and panoramic views and by Tuesday there were 8 offers on the property.  This is because inventory in that move up price range is very low and the REO property can close quickly. 

For those of my friends living in the subdivision of Rancho Niguel in the city of Laguna Niguel there are only 13 properties for sale out of about 1100 homes.  That is a very low inventory for this time of year.  Total active listings today in Laguna Niguel for all prices is 293 and total active listings in the city of Mission Viejo today is 348.  Those are low numbers.

For real time market knowledge call a Realtor.  Actually call Jon Buck or Ron Buck the father son team at Keller Williams Realty (third largest in the USA).

NO NOT OC HOME BUYERS.  SPECTRAL TARSIER PRIMATES!  They live in Indonesia and hunt bugs at night.  Kind of like taking a second job at night to make that payment.

Sorry I couldn’t resist.  They are cute but “their eyes are bigger than their brains” according the the LIFE series currently on TV.  Now home buyers who bought in 2005 and 2006 might be feeling that way themselves.  Just remember that there are only 5 Mediterranean climates in the world and Orange County CA is one of them.  People will always want to live here.  I do.

Try to hang on.  The OC Register today said that “In Orange County the median home price was up 12.2 percent as selling prices increased in three-fourths of the local ZIP codes last month.  Just six of O.C.’s 83 ZIP codes had price gains in March 2009.”  The numbers of home sales have also increased for 21 consecutive months.  A ray of hope for home owners.

We track housing inventory in the MLS for four local cities (Laguna Niguel, Aliso Viejo, Mission Viejo & Dana Pt.) and we have yet to see any appreciable increase in available home inventory in April.  Numbers of “Active” homes went up about 10% in March but seem to be holding steady now. In the ”old days” spring was the big listing time for sellers.   We see the short sales running about 55% of all actives under 600K, so you have a chance as an equity seller to get top dollar right now because many buyers don’t want to wait it out.  For more information call the JonRon Team at Keller Williams Realty.

THE BAD NEWS IS YOU ARE LATE ON YOUR TAXES IF YOU HAVEN’T FILED YET!

The GOOD NEWS is that you have two weeks to open escrow on a new home and get the $8000 tax credit toward this years taxes.  If you miss that date there is a new California Tax Credit which is $10,000 taken over three years.  Even if there were no tax credit remember that the real estate taxes and the interest on the loan are tax deductible.

Now Realtors are not supposed to practice law or accounting so check with your tax professional.  Meanwhile contact the JonRon Real Estate Team to get a great home in Orange County.

Congratulations to the winners !

1st Place Cash Prize - Norbert & Aileen Deogracias 
2nd Place Cash Prize - Chris Sleeth                            
3rd Place Cash Prize - Nicole & Cliff Steel                
4th Place In-N-Out Gift Certificate - Sheri Feinberg
                                                              - Pete and Diana Hayes
                                                              - John and Maureen McNamara
                                                              - Kathy Pawlina
                                                              - Maggie Schmitz