Coldwell Banker Weekly Market Watch

August 19, 2007

Larry Klapow, Coldwell Banker Northern California President says:

This will be a brief report due to a holiday week and the fact that I was on vacation.

Media reports regarding the condition of the mortgage industry continue to have a confounding effect on buyers. Some potential buyers aren’t even attempting to qualify for loans for fear of rejection, or because they are simply confused by what the media is reporting and think that loans don’t exist any more.

The reality is that credit tightening has only affected a very, very small percentage of buyers. The fact is that they could be missing a good buying opportunity by waiting, or not trying to qualify.

Savvy buyers are recognizing that working with a solid, well-capitalized multi-source lender, such as our partner Princeton Capital, allows them to remain educated and helps them to enjoy a successful real estate transaction. This remains a great time to buy a home, and working under the guidance and expertise of a top-notch lender provides the buyer with the chance to leverage the many opportunities now available.

In areas of the East Bay and North Bay, sellers are beginning to lower their listing prices meaning that there are bargains to be had. In other areas, multiple offer situations and tighter inventory render it absolutely crucial for buyers to be working with a strong, solid lender.

Traditionally, this is vacation time. The kids are getting ready to go back to school, and things slow down a bit in the housing market. While our offices witnessed a slight dip in activity overall, many were surprised to see that our more than 500 open homes were well attended by potential buyers.

San Francisco and much of the Peninsula continue to enjoy multiple offer situations and homes that are selling for as much as 20 and 30 percent over asking. Inventory levels do continue to impact both areas, however an influx of fresh homes after the Labor Day weekend should help mitigate their tight inventory situation.

Buyers have more leverage right now than they have in years. Armed with good credit, a Coldwell Banker sales associate, and an expert multi-source lender like Princeton Capital, right now is the ideal time to consult with the experts, and buy that dream home.

Have a great week!

From the Mouth of the Money Man: Interview Part 2

"...guidelines have been changing daily, and banks have been closing weekly."

How does it affect current sellers?

"If a seller is reviewing an offer with a buyer’s pre-approval, it is a good idea to get a second opinion from not only the realtor, but also a loan consultant. As for the buyers, they should call me (chuckles) to get a pre-approval. Sellers should always have the offers with a pre-approval double checked, especially if the offer is less than 10% down.”

Why is that?

“Because many programs that require less than 10% down payment that are no-income qualifying have disappeared in the last month.”

And what is a no income qualifier?

“A no income qualifier is when the lender doesn’t require income verifications such as w2’s, pay stubs or full tax returns.”

Why is it important for buyers to be pre-approved prior to writing an offer?

“Lender approval means a true pre-approval, not a “pre-qualification”. “Pre-qualified” means nothing has been verified, “lender approved” means income and assets have been verified and the loan is pre-approved, the only condition is to find the house and have it appraised.”

Should buyers be afraid to be buying in a market like this?

“Absolutely not. Conforming loans (under $417K) are aggressively priced, and current values are perfect for buyers."