Happy Birthday USA, 238 yrs. Young.

 

With the World Cup focus and among all of the flag showings, I still think Old Glory is the most awesome: bold, balanced, and beautiful.

 

On 9/12/2001 I posted our flag in front of my home.  I had always posted it on Flag Day, the 4th of Jul, Memorial Day and Pearl Harbor Day.  But I vowed to leave my flag up until the 9/11 bad guys were brought to justice. That time has long past and she’s still out there.  Actually, we’re on our 4th or 5th flag.  It has just become part of our home.

Aside from the shear beauty of our flag I love all of it’s symbolism and the ideals it represents.  Yes, the USA is not perfect.  We’re reminded of that all too often.  But you do have to ask yourself – ‘self, if the US is all that bad, why are so many people sacrificing so much to get here, often at the peril of their very lives?’

True, I do love travelling.  It seems that wherever we go we find something to like about that place: the beaches, the water, the native foods, the weather…But as awesome as these places are, “there’s no place like home“.  We’ve got it all AND, it’s for everyone, which is the greatest attribute our USofA offers: “…ONE nation, under God, indivisible, with liberty and justice for all“.

And of all of the renditions of our National Anthem, Whitney Houston’s is hands down the best.  Give it a listen here.

What does our flag mean to you?

Hollister Homes Highest Value Gain

Hollister, CA

Of the 3 cities which make up ‘ South County‘, the City of Hollister, CA single family residences saw the highest appreciation from 1st quarter 2013 to 1st quarter 2014.

The average Hollister single family residence (SFR) value rose 23.1% whereas Morgan Hill, CA experienced 21.9% and the City of Gilroy, CA saw their SFR rise by 11.2% from 1Q13 to 1Q14.

However, Hollister’s typical SFR value dropped 43% from 1Q07 (when many say the bubble burst) to 1Q13. Morgan Hill dropped 32.5% and Gilroy 30.6% during this same period.  Hollister’s ave.  SFR value in 1Q07  was $302,383, down to $240,798 in 2013 and up to $274,309 1Q14.

Another indicator of Hollister’s recovery is the time it takes homes to sell.  The average days on the market in 2007’s 1st quarter was a whopping 148 days.  In 1Q13 the time dropped to 124 days on the market.  That is a 69% improvement!  Then, this year we watched the average days on the market drop even further to 24.

Finally, the average Sales to List price ratio was 99.5% in the 1st 3 months this year compared to slightly over 96% in both ‘o7 and ’13 first quarter.  They are selling faster and virtually at their asking price.

What do you think this trend will do?

(data source: MLSListings)

Home Prices in Gilroy, CA

City Gilroy

Gilroy, CA is not only known as the “Garlic Capital of the World” but it is also known for its robust housing market.

Using the first quarter of 2007 (1Q07) as a high point in,  and the beginning of decline of market values, there are some interesting changes which point to a strong recovery:

The average number of days it took for homes to sell in 1Q07 was 141. Then, in 1Q13 it had dropped to just 36 days, and, 1Q14 days on market slipped up to an average of 45 days. Obviously, homes are again, selling much faster but the pace is slowing.

Gilroy CA’s average sales price for single family residences (SFR) in 1Q07 was an amazing $785,763!  By 1Q13 prices dropped to $544,965. In the year since, the average prices continued to increase: 1Q14, the average was $605,845.

Another indicator of a recovered market is the ratio of sales price to listed price. In 1Q07 the average was 97.7%; in the first quarter of 2013 it was 98.7% and in the 1st 3 months of this year it averaged 96.2%.  Again, 2014 is still improving but it seems at a slower pace.

Relatively speaking, Gilroy had the least significant drop in prices of the other South County neighbors: Morgan Hill and Hollister. Gilroy’s drop 1Q07 to 1Q13 was 30.6% while Morgan Hill’s was 32.5% and Hollister saw a 43% drop in that time frame.

So, what do you think values are going to do here in South County in the near future?

(data: MLSListings)

Smart Home Purchase = Good Investment

home's appreciationAfter nearly 8 years Americans are once again considering the purchase of a home as an investment.

As in all good investments you want to “buy low and sell high” with regard to your home.  As this article points out there are 4 key considerations when buying a home with “investment” in mind:  Don’t buy the nicest home in the neighborhood; look for a home which needs a little T.L.C.,; of course location is very important and plan on living in the home at least 5 years,.  10 years is even better.  Regarding location, look for a home in a nearby suburb of a job-rich metropolitan area and, off the main thorough fairs.  Morgan Hill, Gilroy and Hollister, CA for example, are ideal communities near the San Jose and Silicone Valleys.

The other side of the home buying equation is the financing of it.  With the goal of living there at least 5 years it actually pays to buy down the interest rate of your home loan.  If you pay 1.5 to 2.0 points (percent of the loan amount) you should be able to lower your rate by .25% for the term of the loan.   This little tax deductible investment will repay itself within 3 – 4 years through the savings in house payments and will save 10s of thousands of dollars in interest over the life of the loan.

Lastly, design your budget to allow an extra payment toward the principle loan amount.  Just an extra $100 or two paid with your regular payment each month will reduce the number of years you will pay on the loan and builds equity much faster.

Buying smart imitates the investment growth and the extra payments on points and principal will quickly grow your equity.  When time comes to move up or, out, you should have a sizable profit from your home’s investment.

What’s your ‘buy low sell high” success story?

 

 

Rent vs. Buy: Cheapest?

We know what the acronym A.S.S.U.M.E. really means, right?  Here is a good example: “Renting is cheaper than buying“. Simply assuming that paying rent costs less than making a house payment is ignoring many factors: the interest portion of the principle & interest and, the property tax portion of a house payment are tax deductible.  Appreciation also needs to be placed in the equation: rent payments will go up; home values (typically) go up while the house payment remains unchanged.

Would you believe this holds true even in San Francisco, Oakland and San Jose, CA?  As the attached article demonstrates, these and other cities have home purchase costs lower than paying rent.  In San Jose, CA for example, the difference is 9%.

If the rent vs. house payment debate wins in these large, metropolitan cities, we can assume (oops, here we go again) that the more affordable cities like Morgan Hill, Gilroy and Hollister, CA will have an even bigger difference favoring the purchase of a home vs. renting someone else’s.

Why not take a challenge?  Text or email me your city and the amount of rent you pay.  I will give your own comparison.

Another “Home of The Week” Beauty

When the members of the realtor association for the county vote for “Home of The Week”, that is a real compliment for the chosen home.  2441 Fairhaven Ct., Hollister, CA was given that title this week.  This 4 bd. 2 bth home is tastefully decorated and sits in a quiet, cul-de-sac with just 8 other homes.

Come by for the Open House on 2/1/14 from 1-4 PM.  Chocolate-chip cookies and a comfortable home wait your visit.

Nice 4 bdrm. Under $400k

frnt

Here is a clean, nicely appointed, 4 bedroom, 2 bath home on a quiet cul-de-sac with only 8 other homes.  

A nice park with playground equipment is a convenient stroll away. Likewise, the much sought after, Cerra Vista Elementary School is within walking distance from this home.  The newest shopping facilities are near by and the Hwy. 25 Bypass makes for an easy commute to the San Jose area.

There will be an Open House on 2/1/2014 from 1 to 4 PM.  Stop by to see this comfortable home and enjoy some warm chocolate-chip cookies.   This home is priced to sell and won’t be available very long. For your own personal tour of 2441 Fairhaven Court, Hollister just text, email or call me.

Drop PMI from Your House Payment


paymentsREDUCE YOUR HOUSE PAYMENT BY $220/mth*

Since home values have risen over the last 18 months we are often asked: “How do I drop that Private Mortgage Insurance (PMI) from our house payment?”

So here is the Good News and the Bad News:

Good:  “The Homeowner’s Protection Act of 1998“: home lenders MUST drop the PMI when the loan balance reaches 78% of the original value.

Bad: “78% of ORIGINAL VALUE” means the price you paid for the home, NOT today’s appreciated value. Additionally, most lenders require that you have a 2-5 year payment history with them before they will consider your request.

Additional ‘Bad’: Even if you have paid extra toward your loan balance the lenders look to the original amortization schedule to determine when you reach 78% in order to drop the PMI.   That typically takes 9 – 10 years.

Once you have 80% equity you can ask the lender to cancel your PMI however, there is no guaranty they will.

While the Federal Housing Administration (FHA) is not governed by the same law they do have a similar ‘78%’ rule with the added proviso that the payment needs to have been made for at least 5 years or your balance is 78% of the original value – whichever comes later.   FHA’s insurance for loans originated after 7/1/2013 however, is permanent.

Good:  You don’t have to wait for the magical date on your amortization table…you can refinance your current loan.  In the South County (Morgan Hill, Gilroy, Hollister, San Juan Bautista) home values rose over 36% in 2013 from 2012.  With at least 20% (new equity) your new loan will not need PMI.  On a $300,000 purchase where you put originally put 5% down to a $285,000 loan, the PMI would cost roughly $220 every month*. Even if you include the closing costs in your refinance loan you will still have a lower payment due to no PMI; probably a savings of $150 or more per month.

In a 5 minute visit I can tell you what YOUR particular numbers will look like.  Text, email or call me.  Let’s get rid of that PMI before another month rolls by.

 

Hollister, CA Home Values Up 36%

home's appreciationThe average home value in Hollister, CA rose 36% over the last 6 months as compared to the same period last year (June to the end of Nov.)  Homes sold for an average of $421,798 this year vs. $316,894 for the same time last year in Hollister.

There are 3 indicators which provide some measurable reasons for this significant increase:

  1. The number of home for sale dropped from 323 in ’12 to 283 during the same 6 months this year.
  2. The average number of days on the market dropped from 54 last year to 44 days this year. That 19% decrease suggests a robust demand.
  3. Finally, the actual sale price was 102% of the asking price in the last 6 month where last year’s relationship of “asking and actual” was 99%.

Gilroy, CA has experienced similar appreciation.  The South County (Morgan Hill, Gilroy, Hollister and San Juan Bautista, CA) is a favorite ‘bedroom’ community for Bay Area employees.  Gilroy & Morgan Hill home values were just as impressive.

What does this mean for home values in 2014?  Probably more of the same.  Do you think we’ll see the same pace?  Are we headed for another bubble?  Watch the home loan interest rates.  Their direction will have an inverse affect on the rate of appreciation: if they go up significantly or, quickly, all 3 factors above should head in their opposite direction.  The rate of appreciation will slow or stop – depending on the severity of the rate changes.  Stay tuned.  It’s going to be exciting!

(data from MLSListings)

 

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