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WOW! I ran a few calculations of the real estate activity so far since Thanksgiving Day and I was a little surprised.

110 Properties went pending collectively in the 11 days since Thanksgiving 2011 in the cities of Livermore, Pleasanton, Dublin, San Ramon and Danville.

In the same period after the Thanksgiving Day holiday in 2010, 83 properties had gone pending.

This year we’ve seen 27  more homes than last year go pending in the first 11 days, which equates to a 32% increase in PENDING SALES over 2010’s numbers. That’s a large number and is difficult to ignore.

Why has this happened?

There can be various reasons as to why this is happening. Among them would be :

People are feeling better about their financial condition

People feel we’re getting closer to the bottom of the real estate market.

People may feel like we have hit the bottom of this tough real estate market.

Investors are finding good value.

Sellers are willing to discount their asking prices to make a sale happen.

You might be wondering what is the break down of these pending sales. How many are the old fashion regular sale and how many are not.

Type of Transaction   2010      2011

Regular Sale                36%        36%

Short Sale                    35%        43%

Bank Owned                29%        21%

Ironically, the regular sales are pending at the same pace as in 2010, but you can see that the number of homes that are classified as a “Short Sale”, or where the home seller owes more than the offer, has increased, while the Bank Owned properties has decreased. Overall, it is some good news for home owners and their single largest asset.

Where do we go from here?

Now this is great news, but will they turn into closed transactions.? That’s the bar that all things in real estate are compared to. All of them will not close, of course, but a foundation for 2012 may be forming with buyers making offers. Like I’ve mentioned before, the holiday months are not the best time to be a seller, but there are still buyers out there, and they’re  making offers. And, from these numbers, there are more serious buyers this year than last year! This should be good news as we go into the spring buying season of 2012.

If you would like some additional information about homes available in the area, email me or give me a call.

Barclays Capital (BCS: 11.92 +0.51%) analyst Stephen Kim predicts a housing recovery buoyed by improving jobs numbers and the fact prices for nondistressed homes will have stabilized without government support.

“In the absence of a government homebuyer incentives, prices for non-distressed home sales have stabilized for almost a year,” Kim said. “This is the most important trend in the housing industry right now, and we are amazed at how little attention it has been getting from the media and the street. This stability on the part of nondistressed prices has occurred despite a very high share of distressed activity and continued declines in overall prices.”

Barclays said recent economic data — including higher job creation in November, housing starts and improved homebuyer traffic — point to some improvement potential in the sector.

In mid-2010, the federal homebuyer tax credit expired, leaving the housing market without training wheels for the first time since the 2008 economic meltdown. Yet, prices in some housing markets remained stable on the back end.

With its new outlook in the market, Barclays upgraded D.R. Horton’s (DHI: 12.61 +6.06%) stock to buy and raised price targets for D.R. Horton, Lennar (LEN: 19.28+4.73%), Toll Brothers (TOL: 20.74 +2.52%) andMeritage Homes (MTH: 22.69 +3.04%).

At the same time, the investment bank raised its 2012 earnings-per-share estimates for D.R. Horton, Lennar, Meritage Homes, Pulte (PHM: 6.39 +3.73%) and Toll Brothers, while lowering its estimates for KB Home (KBH: 7.89 -0.63%).

“Thus, the key to timing housing’s recovery depends primarily on when these first-time buyers decide it is safe to buy a house,” Kim concluded.

Pending home sales soared more than 10% in October and remain above year-ago levels, in a hopeful sign for the nation’s housing market, according to the National Association of Realtors.

The rest of the story… NAR Pending home sales surge in October

Take a look at the video and let me know what you think.

Remember, this is a great time to be a buyer. Sellers that currently have their home on the market during this time of the year are selling because they really need to sell. There are deals to be made. Let me know if you need some help identifying those deals either as an owner occpied home or as an investment property that creates great cash flow.

Have a great day,

JIM

Speaking at a press conference following the most recent monetary policy decision from the Federal Open Market Committee, Bernanke said the Fed has taken the aggressive actions necessary to try and stimulate growth.

The central bank began buying longer-term Treasurys in early October to supplement the reinvesting of principal payments from mortgage-backed securities back into agency MBS that began in late 2010.

Bernanke said the FOMC noticed growth so far in the second half of 2011 has been “less strong” than committee members projected a few months ago.

He said the market volatility created by the European debt crisis continues to drag on any economic recovery stateside, and shrinking consumer confidence also bodes poorly for the struggling U.S. economy.

In late September, Republicans lawmakers sent Bernanke a letter asking him to persuade the FOMC to not initiate another economic stimulus package similar to other quantitative easing efforts.

The Fed chairman said “politics is politics” and the central bank tries to stay non-partisian and out of the debate, as it’s important it stay free from political pressures to meet its dual mandate.

He also questioned the validity of some criticisms of the actions the central bank has taken since the American financial crisis began.

Bernanke said he’s sympathetic with some of the sentiment of the Occupy Wall Street protest, as he, too, is “dissatisfied with the state of the economy.” But he wonders if some of the concerns about the Fed’s role in the recession and lagging recovery is “based on misperceptions.”

The Fed “had to step in and help stabilize the financial system in 2008″ as large banks and investment firms crumbled, he said.

In conjunction with Bernanke’s speech, the Fed released economic projections for gross domestic product growth, unemployment and personal consumption expenditures. FOMC members now project 2011 real GDP growth of 1.6% to 1.7% for 2011, down from prior estimates of 2.7% to 2.9%. The economy expanded at an annual rate of 2.5% for the third quarter, which was up from growth of 1.3% in the second quarter.

The committee predicts GDP growth of 2.5% to 2.9% next year, with growth of 3% to 3.5% in 2013 and between 3% and 3.9% the following year. The estimates for 2012 and 2013 are down from previous projections.

Bernanke said the Fed expects the unemployment rate to decline to between 8.5% and 8.7% for the fourth quarter from 9.1% currently. On Friday, the Labor Department announces nonfarm payroll data for October and most analysts expect the rate to hover near 9% as it has for most of 2011.

The FOMC now forecasts an unemployment rate of 8.5% to 8.7% for 2012 and 7.8% to 8.2% for 2013, higher than prior estimates of 7.8% to 8.2% for next year and 7% to 7.5% the following year.

Bernanke said unemployment may drop to between 6.8% and 7.7% by the fourth quarter of 2014, although that will still be “too high.”

If you know someone who is considering buying or selling a home, please give me a call. I will provide professional & courteous service along with knowledgeable guidance through the process

This can occur while shopping for that perfect mortgage with multiple mortgage lenders or mortgage brokers over the span of a few weeks or even months.

But while mortgage inquiries can certainly add up, they won’t necessarily lower your credit score or affect your ability to obtain financing.

It’s Okay to Shop Around!

The developers of the Fico score know how mortgage shopping works, and have adjusted their super secret algorithm to count multiple credit inquiries in a certain time span as a single inquiry.

This time period can range from 15-45 days, depending on which scoring formula is being used; the latest allows a 45 day shopping period, the oldest just 15 days.

If your mortgage shopping spans a few months, it will look back at older inquiries grouped together in a typical shopping period and treat them as a single inquiry.

Even so, an additional credit inquiry will likely only lower your credit score by five points or less, so it may not even be a concern if you have solid credit.

Of course, credit inquiries can and will affect consumers differently based on their credit profile.

For those with limited and blemished credit history, an inquiry will probably have a larger, negative impact, while doing very little to affect a consumer with years of solid credit history.

If you find yourself just below a certain credit score threshold, you may be able to use an older credit report if all the information is the same other than the inquiries; or you can ask for an exception.

Keep in mind that keeping balances low and paying bills on time is far more important than worrying about credit inquiries.

And your main concern should be securing the best possible mortgage, not fretting about a few points on your credit score.

One final note: Do not apply for other forms of credit (credit cards, auto loans, etc) before or during the mortgage shopping process; these can definitely drag your credit score lower, potentially knocking you out of the running for that mortgage.

And check your credit score long before shopping for a mortgage to avoid any last-minute surprises (doing so will not lower your score as you’re not applying for new credit).

If you have any questions about credit (click here), or anything related to real estate please, send me an email. I’ll be happy to give you an answer.

Jim Hitcher

Why? Well, banks and mortgage lenders use your credit score(s) to evaluate your creditworthiness, which translates to a higher or lower mortgage rate, or even outright eligibility.

Lower Credit Score Equals Higher Mortgage Rate

Put simply, a lower credit score will lead to a higher mortgage rate, and vice versa. And if your credit score is too low, you probably won’t even get approved for a mortgage.

Lately, banks and lenders have become even more stringent, requiring higher credit scores than they have in the past.

FHA Minimum Credit Score

For example, there is now a minimum credit score of 500 on FHA loans. In the past, there was no minimum.

Now, a 500 credit score is pretty dismal, but many individual banks require higher-than-minimum credit score for FHA financing that better suit their own risk appetite, such as a 600 credit score.

Though Wells Fargo recently lowered its credit score requirement on FHA loans after some public pressure.

But if you want to qualify for the FHA’s flagship 3.5 percent down program, you need at least a 580 credit score, otherwise you’ll be stuck putting at least 10 percent down.

Below 620 Credit Score Considered Subprime

As far as conventional mortgage loans go, a credit score below 620 is typically considered subprime, meaning you’ll have a difficult time qualifying, and if you do, you’ll receive a subprime mortgage rate.

In general, you want a credit score above 720 to avoid any negative pricing adjustments, but a 760 credit score might be the new rule if you want the best possible terms.

If you’ve got excellent credit, you can even get a reduced mortgage rate, so it’s always recommended to strive for the best.

And though credit scoring is just one of the many criteria used to judge your borrowing capacity, it’s impacts how much you can borrow, your max loan-to-value ratio, and what you can do (cash-out refinance vs rate and term refinance).

Know Your Credit Scores Long Before Applying for a Mortgage

So if you’re in the market to get a mortgage, it’s good practice to view your credit scores long before you apply. I’m talking months because any necessary changes/improvements take time.

Also, be sure to go with a service that allows you to see all 3 credit scores, as mortgage lenders typically pull a tri-merge credit report, which includes credit scores from all three bureaus.

They then take the mid-score, so it’s imperative that all 3 scores are in top shape.

If you have additional questions about credit (click here) and anything related to real estate, send me an email and i’ll be happy to answer you.

Jim

Still, fixed rates hovered near their 60-year lows. Freddie’s Primary Mortgage Market Survey showed the 30-year, fixed-rate mortgage averaging 4.11%, down from 4.12% a week earlier and 4.21% a year ago.

See below in Red. This is commonly missed by most people that there are points associated with the average rate in this survey.

In addition, the 15-year, FRM hit 3.38%, up slightly from 3.37% a week ago and down from 3.54% last year.

From Freddie Mac’s website:

October 20, 2011

Data shows that since mid-spring, national rolling quarter-over-quarter prices gained 3.5% through September, compared to a 4% change reported through August. Although prices are still up, the tide appears to be turning, Clear Capital said.

The company forecasts a small skid in prices for the fourth quarter of 2011, and a continued slide through the end of the first quarter of 2012.

Year-over-year price changes remain down 3.8%, the company said.

At the regional level, the Midwest continues to lead the nation with a quarterly home price gain of 7.2%, followed by the Northeast at 3.5%, South at 3.2% and West at 0.3%.

Clear Capital predicts U.S. home prices will drop 1.6% during the last three months of 2011, and 3.2% by the end of 1Q 2012.

The projected drop through the first quarter of 2012 moves prices closer to where prices were during the first quarter of 2011  — the lowest since the downturn began, the company said.

The third quarter home price data “show continued slowing of the price gains we’ve seen this year, especially across the spring and summer months,” said Alex Villacorta, director of research and analytics at Clear Capital.

“The housing market has yet to demonstrate the fundamentals necessary to overcome a seasonal slowdown over the next six months, which drives our projected 3.2% drop in national home prices through the first quarter of 2012,” he said.

REO saturation improved across the country with only slightly more than 25% selling as distressed, down 9.2 percentage points since May and down 15.6 percentage points since the it peaked in the first quarter of 2009. (Click on chart to expand.)