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GAVAR chief: 'It's a good time to buy a home' |
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AV Press |
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Oct 10, 07 - 5:36 AM |
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tforde@avpress.com |
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Antelope Valley |
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VALLEY REAL ESTATE GURU - Sam Hare, president of the Greater Antelope Valley Association of Realtors and owner-broker of Suburban Realty in Palmdale, says it's a better and better time to buy a home.
TINA FORDE/Valley Press
GAVAR chief: 'It's a good time to buy a home'
This story appeared in the Antelope Valley Press on Sunday, October 7, 2007.
By TINA FORDE
Valley Press Business Editor
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It's all about balance. Yin and yang. Glasses half empty, glasses half full.
The downside of the current market for home sellers - high inventory, receding prices - is the upside of the market for home buyers - lots of houses from which to choose, prices dropping into a more affordable range.
"It's a better and better time to buy houses," said Sam Hare, president of the Greater Antelope Valley Association of Realtors and owner-broker of Suburban Realty in Palmdale.
He said that the Antelope Valley Multiple Listing Service for resale homes showed that 225 escrows closed in August, "and at least that many new homes closed."
Buyers at the beginning of September found average list price of resale homes to be $359,953 for residential units. Had they been shopping a year before, they would have found the average list price to be $407,297.
Hare said it is impossible to tell the exact number of new homes that closed because developers do not report the sales to a common database.
"Builders don't belong to the MLS and they refuse to join GAVAR," Hare said.
He said that according to the California Association of Realtors, "Eighty percent of the people who got into houses on subprimes will keep them. Twenty percent will probably lose them.
"Subprimes represent 4% to 5% of all loans made in the last three or four years. In the majority of interest-only loans, if the lenders had not pushed to the limit, the buyers would not have had a house. They kept the American dream alive."
That type of lending, he said, stopped abruptly in mid-January. People in the real estate industry, while shoehorning clients into homes, he said, were aware that something was seriously out of whack with subprime loans (low to zero teaser rates, no income verification). "Everybody, everybody, buyers, sellers, lenders, agents, all knew 'We can't do this.' "
To further hasten the looming real estate train wreck, Hare said, "Thousands of people were using their houses as a piggy bank. I saw them refinance two and three times over a four-year period. Their house may be worth $350,000 now and they owe $450,000. There was a lot of bait and switch stuff going on."
Borrowers still request subprime-type loans, according to Hare.
"People are still coming in who want no down. We can't do that any more."
There are loan programs for people of modest means, however, through the FHA, VA and Fannie Mae, Hare said. When the market was hot, he said, the banks took away the business and nobody used those programs, which are now experiencing a revival.
"If you show money in the bank, about 3%; show some way to make the payments; and credit 650, bottom - over 700 is better - there are programs out there. It is hard to get across to buyers there is money available to low income buyers."
One of the biggest problems for a Realtor, he said, is the lack of a good clearing house for low-income loan programs.
"It's a maze."
Along with reasonable loans, he said, "There are houses sitting all over town for under $200,000."
Today's mortgage loan industry lacks uniformity in its rules, he said.
"It's frustrating," Hare said. "Fifteen years ago there were a tremendous number of short pays. The loans were all VA, FHA, Freddie Mac, Washington Mutual - they all had short pay rules."
The government-dictated procedures "were cut and dried."
Today, Hare said, "Countrywide and banks, they all have their own rules. There aren't any standard rules."
Hare said that people misunderstand the rules for another aspect of the real estate picture in the Antelope Valley - those governing Section 8 rentals. Until four or five years ago, he said, a landlord could charge the maximum amount allowed in a voucher (based on number of people and bedrooms) even if rents in the neighborhood were uniformly lower. Now, he said, a landlord can charge the maximum "only if the rents in the neighborhood support it. If you can't prove the neighborhood houses rent for $1,880, they (Section 8 administrators) will approve just $1,500."
"They should have been doing that all along."
Hare said he wanted to commend the Valley cities for working with GAVAR to design a rental home inspection procedure. Under the new regulations, an inspector has the right to go inside the dwelling to check for code violations and health standards.
Hare said the police do not have a system in place to notify the landlord when they are called to the property.
"I have a property where the police were there eight times," Hare said. "Had I known the cops had been there eight times, I would have done something."
HUD, he said, has the right to do annual inspections that tends to alert any wrongdoers.
"They call and inform the landlord they will be there two weeks from Tuesday. When they walk through, they never find any parole violators there."
Hare said that even in the midst of the slow market, he encourages his agents to keep taking listings.
"I tell my agents they shouldn't give up taking listings. If you have something to sell, you can sell it. You need inventory, otherwise nobody is going to call you."
He also cautions sellers to re-think why they want to sell.
"If a seller does not have a valuable reason to be selling, don't put it on the market," Hare said.
He said that home inventory in the Antelope Valley has flattened. "For three months now, there has not been a lot of new houses come on the market."
He predicts that the real estate market will turn at the end of January.
"With a little positive publicity - the interest rate down, jobs up, economy good - we're seeing a little better traffic from buyers. Not terrific, but better."
Buyers are becoming educated about the stiffer loan requirements, he said.
"Four years ago, you didn't have to have any money down. Now no one can come in with no money. I think the tide is turning. I've been told by enough lenders and agents (that people are learning) you've got to have a little bit of money."
And why do people still have a hard time putting together a down payment?
"It isn't that they are out of work. It's that they didn't save anything."
tforde@avpress.com |
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