HOW MUCH WILL INTEREST RATES RISE BY LISA DOYLE AND MICHELLE ROBICHAUD WITH J. ROCKCLIFF REALTORS

Hi there, I’m Lisa Doyle with J. Rockcliff Realtors and welcome to our How is the Market segment. Today is Friday and we are the last day of the month, August 31st. and I have a special guest today to help us with some information about mortgages. I’m going to give you some data about how the market’s going.

 

But certainly, I have to tell you Michelle, the biggest question that I get probably on a daily basis is where are we with rates, and what’s going on with where rates will probably head to, where are we likely headed and a little bit about that. So introduce yourself real quick, this is Michelle Robichaud.

 

Hello, I’m Michelle Robichaud, a loan agent with Diversified Capital. So, right now we’re at an all time low with rates. A record low was about a month ago at 3.5% for 30 year fix, currently we are only at  around 3.625 for a 30 year fixed. That’s crazy. You know I’ve been in the business for 26 years, and so we’ve seen the changes in our interests rates over the years, and this is the lowest that I’ve ever seen in my career, these last few years.

 

I have a client who just recently, you mentioned that the lowest time right, and so I think that they ended up with an interest rate somewhere around the 3.6. That’s crazy low. So what I wanted to do is given that most of our clients want to know where do we feel the market may be headed?

 

And, a little bit about the fact that the rates are this low, in your opinion how much time do we have where this will still be the case? OK, this is just an opinion, based on what you know about the trends. Sure, what I believe is because the Federal Reserve came out and they made the statement that rates will be kept low until 2014.

 

I expect they’re going to stay somewhere in the 4 range, but I do think that right now where we’re at is unique? Right. And I wouldn’t expect this to stay for maybe more than the next several months. Okay. Before it starts creeping up. I agree with that. I think one of the things that we’ve been told, and I think you and I kind of confirmed this with our discussion earlier, is as the real estate market gets stronger, the pressure to raise rates will probably increase, wouldn’t you say?

 

Great, and we’re starting to feel a bit of a recovery which we’ll talk a little bit about what’s going on with our real estate market too. So I think for buyers we have falling prices for 7 years, all time lowest rate that I’ve seen in the last 26 years, and so it’s an opportunity to capitalize on that.

 

I agree. I think it’s a great time to buy right now. What exactly? So one of the things I wanted you to share is you and I were talking calculations a few minutes ago. Just to give the buyer in our area an idea of what does this change in rates. What could that mean to their pocket book and their ability to qualify even would effect.

 

OK. Because right now with our current rates, let’s say I had a borrower who was looking at a mortgage of about that $700,000 range, purchase price right around that $700,000 range, which is a middle of the road price for our market. Right. What would that mean for them as far as the payment at the current rate?

 

Okay, so basing that on that would be considered a high balanced conforming loan amount. Right. So you would be looking at a rate of about 3.875 right now. OK. No points. OK. And that payment I calculated out would be about $2,633. Right, exactly. And then what we also calculated, which is we all know that when rates go up, 6.5 percent or 6.25 percent, that’s a pretty realistic rate.

 

Very realistic of where we’re heading and that’s where we were just a few years ago. Right, and the average trend for the past 10 years. Right, it’s been in the 6 range and you said 15 years was more like 8 1/2? Yeah, 8 1/2.  Awesome. So what would our total payment be different at 6.5? Or 6.25 I think we said. Yeah, it’s a difference of almost $1,000. So it would be $3,448. Yeah, exactly. Huge difference.

 

What do I when we know that rates will change. So, a couple of things that I wanted to share, as far as our market conditions, as well is one of things that we watch very closely is our current inventory and the current pendings. And you know back in August, this was one year ago, in our county we had 2456 active listings and we have only 162, right around that number, pending.

 

Right. Right now, this morning, is the lowest active we’ve had in over a year. There were 784 active listings and I’m talking about a whole entire area. This is all of these days. Yeah, it’s impacting us as well. So much impact it’s gone from 2400 active listings in our area down to 784, and right now  pending we 1,840.

 

So it’s 1,840 homes in escrow right currently pending, so that’s a shift in our supply and demand. Right. So what that means is that prices have, we’ve seen a rise in prices in most categories. Yeah, I would agree. And a lot of the same thing. Greater demand. Multiple offers being made and the inventory being low, we’re experiencing that as well.

 

Yeah, and my advice I’m giving our clients is if you truly want to sell your home, capitalizing on this demand which the demand could shift to that if we see rates rise. So it’s a good thing to watch. So Michelle, tell them how they reach you if they have questions about their circumstances.

 

Okay, Michelle is fabulous by the way, she’s one of my very favorite mortgage brokers. Thank you. You’re so kind, thank you so much. I appreciate your support. You can reach me by email at mrobichaud@rockcliff.com  phone number 925-876-1213.

 

Great. Thank you so much. You’re so welcome. Thanks so much for helping us and helping the clients with information. And if you have questions about your personal circumstances, always know you can call me. My number is 925 890-7443 and I’ll see you soon.

 

Lisa Doyle, TheDoyleTeam.com, Greg Doyle, San Ramon Homes, Danville Homes, Bay Area Homes, Bay Area Short Sales, Short Sale in San Ramon, By Area Foreclosures, East Bay Real Estate Market, Hardship, Michelle Robichaud

TIME IS RUNNING OUT FOR THE TAX RELIEF ACT BY LISA DOYLE

Hi, there, I’m Lisa Doyle with J. Rockcliff Realtors, and welcome to our short sale update. I want to, of course, keep you posted on short sale changes, short sale strategies, how the market’s evolving, so that if you are anticipating or planning a short sale with your home, or if you know anyone who is, this will help you to make some plans and decisions about your strategy.

We know that the Tax Relief Act of 2010 is due to expire at the end of 2012. There has been rumor about the possibility of an extension, but probably because the market’s getting stronger, what we’re being told by economists is that there’s a good likelihood that that Relief Act will not be extended.

So if you are, I just want to make sure to reach out to you and share with you. If you are considering a short sale for yourself or you have questions, we’ve got about four and a half months to close the escrow for you not to have to pay the taxes on that relief. And, for some, you know, if you are $100,000 or $200,000 dollars under water in your home and you short sale your house this year?

You have no negative ratification. If you wait until next year, you’re looking at an enormous tax bill that would not be something that you would want to take on if you don’t have to. So, just remember: call us. The average short-sale takes between, right now, two to four months to close it. So, you do have time.

And if you have questions, call me right away. My name is Lisa Doyle. My telephone number direct is 925-890-7443, and the banks are all working with clients. Our clients are having such an easier time with the short-sale process right now. So, I just want you to know what used to take a year and was a complete nightmare to process, it takes a little patience, but the banks are wanting to do short sales and not foreclosures.
So give me a call. Talk to you soon.

Lisa Doyle, TheDoyleTeam.com, Greg Doyle, San Ramon Homes, Danville Homes, Bay Area Homes, Bay Area Short Sales, Short Sale in San Ramon, By Area Foreclosures, East Bay Real Estate Market, Hardship