REALTOR.com Launches Mobile Search Product

The NAR launched a new website called Housingmarketfacts.com to combat negative press about the housing market and encourage buyers to get into the market.

Frankly, I think the site is poorly designed as it has one of those talking ladies and the print is so tiny you can’t even see most of it with Firefox and a high resolution. There is an equity estimator but it does not seem real useful compared to this home equity growth calculator launched last year.

It also does not have very much information but what was interesting was the link to the new mobile search product.

I first heard about this at the Inman Real Estate Connect last year and this is the first live launch of the product that I’m aware of.

It's a program for consumers (and professionals) to download to their Windows enabled smartphones. If your phone has GPS it will automatically pull in listings within a 10 miles radius. If you don’t have GPS then you can enter zip code and search that way.

The idea is to give consumers access to listing information as they are standing in front of the home. This is really exciting but will only be useful if enough consumers use it.

Here is the link to download: http://m.realtor.com/ and here is the official site for more information.

I’ll download it tomorrow and play with it and give you a review but I’m sure the real estate blog-father Dustin will beat me to it.

In my opinion this is the first exciting product launched by REALTOR.com in a long time. It will be interesting to see how much use the product gets over time.

As for the housingmarketfacts.com site… you be the judge.

Payment Option ARM Mortgages Ready to Explode

Today, CNN covered the payment option arm situation that may be setting up people for diaster. According to the article they quote Christopher Cagan the director of research and analytics, First American Real Estate Solutions.

There may be a trigger ceiling, meaning when the balance reaches a certain level -- say 120 percent of the original balance -- the introductory terms will end and the rate will reset upward,

This is called the recast function of the payment option adjustable rate mortgages. Must people who have these loans are not even aware of this clause contained in the terms. We have developed a payment option arm mortgage calculator that calculates this recast amount and what to expect from the new mortgage payment.

What makes this particularly worrisome is the finding from Mr. Cagan's research:

homeowners took out 1.3 million ARMs with teaser rates below 2 percent... Of those, 21.5 percent have negative equity, where the market value of the home is less than the amount owed

If this situation creates many to go into foreclosure, these same foreclosure properties can further push down property values in those area's further compounding the affect of the real estate slow-down.

Additionally, what many home owners are not aware of is that the current "fully indexed mortgage rate" of these pick-a-payment or payment option arms is currently well north of 7.00% while a 30 year fixed mortgage is near 6%. Here is why...

Index + Margin = Fully Indexed Mortgage Rate
COFI Index = 4.277% + 3.5% = 7.777% Fully Index Rate

If borrower is making the minimum payment of 2% but the mortgage is collecting interest at 7.777%, there is an extra 5.777% of interest being added onto the loan every month.

If you currently have a negative amortized mortgage be sure to use our payment option arm mortgage calculator to fully understand what is in store and feel free to contact me with any questions you may have.

Will California Real Estate Escapes Median Home Price Drop?

Today the NAR released it's existing home sales data and nationally prices actually dropped 1.7% from the same month last year. Surprisingly California real estate actually was up a minor 1.6%. The biggest drop happened in the Northeast.

For August, California home sales have actually plunged 30.1% according the the California Assn. of REALTORS, which was the biggest year-over-year drop since August 1982.

As everyone already knows, California has lots of adjustable rate mortgages, many of which will be adjusting in the upcoming year. Will this have a significant effect and possibly cause an uptick in foreclosures which will drag down home prices?

Can the California continue to escape an actual down turn in actual prices or are we just setting up for a serious accident?

Continued Slowing In Southern California Real Estate Markets

Los Angeles ABC7.com reported that the southern California real estate markets are still slowing down. Here are some key highlights:

San Diego County Real Estate
- Home prices declined 2.2 percent

- 32 percent decline in sales compared to a year ago.

Los Angeles County Real Estate

- home prices rose in August at the lowest annual rate in six years (4%)

- 21 percent drop in total homes sold

According to the article, a San Diego professor thinks it may bottom out by 2007 and start to recover by 2008. What do you think?

160% Increase in California Real Estate Foreclosures

According to an article in CNN, foreclosures are spiking everywhere. Nationally they are up 53% over last year but for us in California, the article states that there was a 160% increase in July 2006 vs. July 2005.

Can this be an indicator of a famous "bubble" or just a hiccup?

Remember, the NAR's July Existing Home Sales Report had this to say about the West...

Existing-home sales in the West dropped 6.4 percent to an annual pace of 1.32 million in July, and were 18.0 percent lower than a year earlier. The median price in the West was $348,000, down 0.3 percent from July 2005.

Will the California real estate market weather the impending storm or will this be a repeat of 89-91?

Sign of the Times... Mass Foreclosed-Home Auction

Hudson & Marshall a real estate auction company is doing a large scale auction of 250 foreclosure homes in Michigan, which had a 25% spike in foreclosure rates.

Do you think this will happen in California?

Has the Real Estate Bubble Bell been Tolled?

Today, CNN had an article from one of the largest home builders Toll Brothers which did not point to good news on the real estate front. In fact this maybe the real signal that the real estate bubble has actually popped.

An interesting quote from the article worth noting:

is the first downturn in the forty years since we entered the business that was not precipitated by high interest rates, a weak economy, job losses or other macroeconomic factors

I give their point of view alot of weight considering the amount of experience they have (40 years), country wide view of markets and their apparent non "spin" which is so common with quotes coming from other real estate professionals.

Lastly, since Toll Brothers builds high-end luxury homes and is seeing this kind of downturn we may see a much broader impact in the future as studies have been made that indicate that high-end real estate is often the leading indicator or real estate price direction.

This comment appears to support what many real estate bubblers have been warning of. What do you think? Has the real estate bubble bell been tolled?