Mortgage Rates Rise, But Keep Calm!

Mortgage Rates Rise Again
But don't panic, don't hide, and don't give up!

Would-be buyers, in case you hadn't noticed, your buying power just went on a diet.  Again.  But before you throw up your hands in frustration, kick yourself for whatever excuses you may have given for not entering the real estate market and go pouting off into a corner, remember you can still mitigate the loss and capture the remains of the day.  Yes you will need some expertise and strong plays in your playbook, but the game isn't over yet.  There is still enough of an economic window to seize the moment and capture an amazing home purchase.  On the flip side, don't be lulled into thinking mortgage interest rates will come back down in any significant way, what with the Federal Reserve not backing down and being highly unlikely to reverse the announcement that it would begin tapering off on the purchase of mortgage backed securities toward the end of the year.  This is a game changer which was bound to have the effect of well, what rates have done over the last three weeks and in particular the day after Independence Day last week.

Sellers, this means you, too

Yes, your buyer pool may have shrank.  A little.  But you are still an advantageous position, no need for you to throw in the towel, either.  Inventory is still lower today than it will be a year from now (when rates will likely be somewhat, if not significantly, higher), and multiple qualified offers are still the norm provided you have an experienced professional marketing and networking your home.  Keep at it, from your vantage point, ultimately, the mortgage interest rate increase means very little to you.

A little less home may be a good thing

As we lumber our way into some semblance of a historically "normal" real estate market, with normal levels of inventory, normal price appreciation and yes, normal interest rates, smaller homes increase in appeal as "starter" homes.  Add to this (again, historically normal) market phenomenon is the more unique phenomenon of the "boomerang buyer" in various stages of individual recovery.  The boomerang buyer, as I've mentioned in previous blogs, is shaking off the economic and financial downturn dust and re-entering the real estate game for which they were knocked out of years ago.  These boomerang buyers will be on the return swing for many years to come, and, you guessed, may need to take your smaller-than-you-had-originally-hoped home off of your hands at a stable price allowing you just enough equity to take the home size step you may have missed from the recent mortgage rate jump.

The worst of real estate market correction seems to be behind us; not too late to move forward!

Sylvia Harsin

714-612-5373

Sylvia@sylviaharsin.com

Mortgage Basics Often Overlooked

What Every Buyer Should Know About Mortgage
But (especially with panic over rate hikes) may be too distracted to ask


The dire warnings of myself and most real estate and mortgage professionals have come to pass, but that's no excuse to allow the natural panic and change of strategy from an interest rate spike to distract a buyer from their due diligence.   Sure, residential mortgage interest rates have ratcheted rather quickly upward, enough to significantly change one's buying strategy.  Not only are buyers looking at roughly 10% less home buying power from a roughly 1% jump in rates (meaning a 10% lower home price), the buyer may have been  "shocked" suddenly into the market having hoped in vain for rates to remain in the mid 3% for 30 year fixed loans long enough for the summer market to cool.  The feeling of being unprepared as well as disappointed can be overwhelming and discouraging; I understand.  But there is no excuse for cutting corners on the now even more important fundamental questions a buyer must ask a lender when considering mortgage loan options.

Don't Panic, You Can Still Avoid Future Surprises

A mortgage is a potentially very long commitment with many subtle details, and so as to avoid any further "surprises" a buyer must know what to expect.  Buyers, do not succumb to the understandable panic and miss the details.  Stay on top of what is happening with your mortgage and avoid looking at the loan as merely a means to an end.  Pre qualification may be a critical first step before you can effectively "shop" but it is not even close to being actually prepared for what happens next in a lightning fast market like the one we currently have. Do yourself the courtesy of surprise avoidance.  Absolutely do not forget to ask your lender or potential lender most, if not all, of the following key questions:

Comprehensive Questions Which Keep You Out of the Dark

1.  Which type of mortgage loan best fits us, and why?

2.  Are your rates, terms, fees and closing costs negotiable?

3.  If I am required to have Private Mortgage Insurance added to the payment (usually the case when less than 20% of the sale price is available to use for a down payment), how much will it cost and how long will I be required to pay it?

4.  Who will service the loan, your institution or another company (mortgage servicer)?

5.  What escrow requirements (taxes and insurance set aside for part of the monthly payment) do you have?

6.  How long is the loan lock-in period (the time that the rate will be honored, a very critical question of late) and will I be able to obtain a lower rate if the market allows for it during the rate lock period?

7.  Knowing there are many different things which can effect the process, what is a good estimate for the time it will take to approve and subsequently close the loan?

8.  Are there any prepayment penalties on the loan (very unlikely these days but worth asking)?

Keep these questions "close to your chest" as the cliche goes, especially if you've just been rocked into the real estate game.  There is still enough time to get something very good out of this market, as long as you keep asking enough questions and pledge to yourself to stay informed.

1.       Sylvia Harsin

2.       714-612-5373

3.       Sylvia@sylviaharsin.com

The All American Beach City

The All American Beach City
Prepares for Independence Day

Thomas Jefferson composed the Declaration of Independence after the Continental Congress unanimously voted on July 2nd, 1776 to declare independence from Great Britain, with whom the colonies had been at war with already over a year.  Thomas Jefferson's document, designed to explain the reasons behind the decision for independence, was ratified on July 4th, 1776 by Congress and launched a celebration of American Independence which the now 50 United States enjoy 227 years later.  Independence Day celebrations erupt all over the United States in and around July 4th, and my town of Huntington Beach plays host to arguably the most amazing Independence Day celebration in Orange County.

Imagine all of the iconic images surrounding Independence Day, real-life Norman Rockwell paintings, mom-and-apple-pie personified, town squares and fireworks displays, sparklers and barbecue and now transport it to an already exciting and vibrant, international surf mecca, Southern California beach community.  This is the 4th of July in Huntington Beach, which saw the first Independence Day celebration in 1904 in conjunction with the first electric passenger train linking the city to Long Beach and Los Angeles, with 50,000 people in attendance.  The festivities have only increased in size and scope over the last 109 years, and have become ever more reflective of American personality.  The delicate balance between individual liberty and community safety, personified by the American experience itself, is revealed in Huntington Beach's Independence Day revelry: without having to maintain an ordinance-heavy "iron fist", Surf City has welcomed tens of thousands of guests who enjoy long hours of celebration without any significant damage to person or property.  In other words, residents and guests of all ages can expect to have an incredibly fun time without much worry over things getting out of hand; Huntington Beach has over time struck learned to this delicate balance to the benefit of all who enjoy a beach side Independence Day.  Events in Huntington Beach begin well before and continue after the actual calendar day of July 4th, and are cataloged here http://www.hb4thofjuly.org/ for your strategic holiday planning.

Huntington Beach residents (and their guests) take note, the American Legion Huntington Beach is selling city-approved "safe and sane" fireworks, look for them at the Wal Mart at Beach and Talbert from noon to 10 July 1st through July 3rd, and from 10 am to 8 pm on July 4th.  The American Legion has been a part of Huntington Beach Independence Day celebrations since the beginning, in 1904.  Buying fireworks from the Huntington Beach American Legion is a rich local tradition, one the whole family can enjoy, and pass on.

Join me at my open house TODAY at 12:30!  526 7th Street in Huntington Beach; I'd love to meet you in person and talk about the extra-fast-paced real estate market in full swing this summer.

Sylvia Harsin

714-612-5373

Sylvia@sylviaharsin.com

Home Prep Refresher, Part Two

Summer Heats Up (The Market)
Sellers Prepare For Maximum Results


More on my refresher for home sellers, get ready for comparatively lightning-fast results for listing your home, especially if you keep in mind these very important fundamentals for home sale presentation.  In my previous blog, I mentioned five home prep basics which can be done almost, if not entirely by the homeowner.  I have five more equally important steps for which the homeowner may consider delegating or at least getting a second opinion.  As I mentioned previously, even in a market with an influx of qualified buyers eager to capture mortgage interest rates before they climb steadily higher and with little inventory to choose from, a seller must still take the fundamental presentation steps to insure buyers don't make the ever-present choice to not make a choice.  Consider it a courtesy to the potential buying public, to make your home sale ready with these steps 6-10:

6.  Make minor repairs which can create a bad impression, such as sticky doors, torn screens, cracked caulking, dripping faucets or any other noticeable flaw.  These "cosmetic" changes can make or break a buyer's interest even in a market where you have a relative advantage as a seller.  Buyers in a market with limited inventory are already under the impression that they may not be looking at a home in good condition and always have the option of taking a pass at the market altogether if they get the impression the limited amount of homes they've seen are all less than well maintained.

7.  Make your yard as presentable as possible.  This can involve a simple cutting of the grass and raking of the leaves, or it may involve something a little more extensive such as adding some landscaping or at the very least, adding some bright potted flowers at your doorstep.

8.  Patch holes in your driveway, and reapply sealant, if applicable.  A clean driveway goes a very long way to inviting potential buyers.

9.  Clean out your gutters.  Yes, it may be a completely rain-free summer here in and around Southern California, but the image of a cluttered gutter again leaves the impression of a home that is less than well-maintained.

10.  Polish your front doorknob and door numbers.  It's a pride of ownership thing, and it something you want to convey to potential buyers.

Some or all of my last five steps are worth not only doing, but some may be worth seeking some help to accomplish well.  Sellers have not seen a market opportunity like this in six years, and already (certainly by the end of summer) market forces are closing on this unique window and by this time next year the seller will not be in as advantageous of a position.  The cliche about striking while the iron is hot comes to mind, but making the best strike one can make is even better.

Sylvia Harsin

714-612-5373

Sylvia@sylviaharsin.com

Home Prep Refresher, Part One

Sellers Enjoying Lighting Fast Market

(but you still have to do the basics)

The arrival of summer has increased the traction to an already fast real estate market, and sellers may be tempted to skimp on some important details.  Even with recent mortgage interest rate up-ticking (or perhaps because of it), buyers are pushing hard for the still-limited available inventory, and sellers almost anywhere are all but guaranteed an offer quickly.   What sellers need to remember, even with a relatively advantageous position in the current marketplace, is that buyers still have a choice to not make a choice.  In other words, the fundamentals for home selling are not to be overlooked.   Here are my first five out of ten subtle but important things to remember to increase the marketability of your home:

1.  Get rid of clutter; throw out stacks of newspapers and magazines, pack away most small decorative items, make your closets appear roomier by storing out-of-season clothing, and clean out/organize your garage.  The process I'm describing is often called 'purging' and it is a form of therapy as well: if it is a piece of paper and you can't get rid of it, file it accordingly but otherwise cleanse your house of needless paper.  There is a recycling center somewhere with your clutter's name on it.

2.  Nobody likes to do it, but have it done nonetheless: clean your windows to bring in more light to your home's interior.  If you need to delegate or pay to have this done, it will be money well spent.

3.  Get your clean freak on! Selling time is the time to keep everything extra clean; wash fingerprints from light switch plates, mop and wax floors, and don't forget to clean the stove and refrigerator (yes, even the tops and sides).  Bright lighting (see suggestion number 5) will help "illuminate" problem areas; don't be ashamed of markings along walls, carpets and floors you've never noticed, just deal with them appropriately and with an even pace.

4.  Get rid of smells, this is a challenging one since over time people can become dulled to the smells of their house to where they don't even notice (pet owners take note).  If you clean carpet and drapes, and open windows regularly, the smells which are immune to your notice will be almost completely eliminated anyway.

5.  Here's an idea: light bulb!  Place higher wattage bulbs in rooms to maximize brightness (making the rooms as inviting as possible), which is particularly important in rooms which are naturally dark.  Obviously, you will want to replace any burnt out bulbs.

I've got five more tips to share which are a little more likely to involve some professional assistance if home improvement and landscaping don't really suit you, and I'll get into those in my next blog.  In the meantime, sellers, there hasn't been a market like this in years, get your home prepared and get yourself prepared.  A careful strategy planned with a seasoned real estate expert such as yours truly can insure you get the most out of this incredible market!

Sylvia Harsin

714-612-5373

Sylvia@sylviaharsin.com

Ideal Buying, But For How Long?

Special Note to Buyers

We have a narrow window where you can get the most home for your buck, and it's closing.  Every instinct in everyone's gut who has been paying attention at all to the market knows the historical all-time-low mortgage interest rates are not staying low much longer: in fact, the 3-4% range for a 30 year fixed mortgage phenomenon has lasted far longer than most experts predicted.  Prices, and rates, are going up across all measurable metrics both locally and nationally in almost all major markets.  While price increases may slow down eventually as new inventory becomes available, rate increases will surely not slow down but rather ratchet upward.

Sellers already know the time is ideal: dramatic increase in prices from previous years of decline and more buyers for less available inventory generating multiple offers immediately after hitting the market.  Investors with cash offers are still pervasive; another powerful incentive for sellers, and a source of urgency for buyers.  Buyers need to get in now and expect to be aggressive, but for those up for the challenge the rewards will be great; nothing short of the best bang for the monthly mortgage payment buck that history has ever seen.  Make no mistake, buyers, the stakes are high and well worth the effort while this narrow window is even now on the verge of closing.

My own current experience speaks of the urgency: I put a downtown Huntington Beach home on the market recently and within 48 hours I had multiple offers.  The cascade of qualified offers resulted in my sale of the home at a full $100,00 above asking price; a scenario almost unheard of even a year ago and unthinkable in the prior four years.   The message is clear, in most of the country and certainly in Huntington Beach: buyers, it is time to get in the game before mortgage interest rates increase with home prices!


Sylvia Harsin

(714) 612-5373
sylvia@sylviaharsin.com

More Homes Coming to Huntington Beach

The Engine of Home Building is Running Again
Inventory Scarcity On Its Way Out in Huntington Beach

The residential real estate 'inventory crunch' is coming to an end in Huntington Beach, as revealed by the Acting Manager of the Huntington Beach Planning Department Jane James.  Building permit issuance has reached a five year high nationwide, and there are many different local examples indicated by the Acting Manager.  While this means a narrowing of an ideal seller window, it further adds urgency to sellers who wish to take part in more of a buyer's market free from inventory pressures as more inventory is both literally built and pressure is added to release 'shadow inventory' (a semi-mythological set of homes held on to by investors and/or banks attempting to further mitigate their losses by hypothetically waiting for a more ideal market, worthy of discussion in a later blog).  Buyers will only continue to make further gains as more homes are built and released.  Huntington Beach's home development projects already in process are shaping up to create a residential real estate 'perfect storm' for buyer's and sellers.  In Huntington Beach, now is definitely time to get back in to the real estate game.

Among the many projects in the works, enough to cover through the summer, I'd like to point out some of the more interesting ones (to me) first.  One of the few genuinely tall buildings in the whole of Huntington Beach, the tall office building at the (Southwest) corner of Beach and Warner is a distinctly noticeable part of the Surf City landscape.  Freeway close and yet close enough to the beach, the centrally located office building and neighboring gym and restaurants have weathered the many recent economic storms relatively well, with more positive changes coming as plans have been submitted to expand the property to include 272 apartments and more commercial space included.  The expansion of this property is an exciting real estate 'booster shot' for the surrounding Huntington Beach community.


Two former school sites are currently in litigation with neighboring communities for development into single family residences.  The former Lamb School located north of Yorktown and between Brookhurst & Ward, plans have been submitted for 81 single family homes.  The former Wardlow School site located east of Magnolia between Adams and Yorktown, plans have been submitted for 49 single family homes.  New homes, new buyers, inspired sellers, all coalescing into a symphony of residential opportunity.

Find out what this can mean for you as a Huntington Beach homeowner, or future Huntington Beach homeowner, contact me and find your place in the emerging and unique market ahead!

Sylvia Harsin

714-612-5373

Sylvia@sylviaharsin.com