Santa Cruz Property Sales Numbers Rise

The number of existing home sales climbed more than expected in March after three straight months of declines, as the home buyer tax credit incentives drew in real estate buyers and started a strong spring buying season.

The National Association of Realtors said Thursday that sales of previously occupied homes rose 6.8% to a seasonally adjusted annual rate of 5.35 million last month, the highest level since December. February's sales figures were revised downward slightly to 5.01 million.

Sales are up 18% from their low in the beginning of 2009, yet are still down 26% from their peak in the fall of 2005. March results had been expected to rise about 5% to 5.28 million, according to economists.

Sales rose in every region, including Santa Cruz County homes, surging more than 7% in the Midwest and South, 6.6% in the West and 6% in the Northeast.

For several months, home buyers have not felt rushed after the extension of the deadline to qualify for home buyer tax incentives. The government is offering a $8,000 credit for first-time buyers and $6,500 for current homeowners willing to buy and move into another property.

But now time is running out. Buyers must sign contract offers by April 30 to qualify.

10 days Left For Santa Cruz Real Estate Tax Credit

The deadline is quickly approaching for Santa Cruz property buyers interested in receiving the $8,000 and $6,500 first and second-time homebuyer tax credit. Purchase agreements must be signed by April 30, 2010.

First and second-time home buyers have to sign their purchase agreement by April 30, 2010 and close the escrow by June 30, 2010 in order to qualify for the real estate tax credits. Home buyers will get up to an $8,000 check in the mail for first-time home buyers, $6,500 for repeat home buyers.

This is the second phase of this credit. It was extended in November 2009, but most experts agree it is not likely to be extended again.

Those who sign a purchase agreement and close on a house in time can amend their 2009 tax returns and get their tax credit now.

If you need a Santa Cruz Realtor to assist you with finding a home to take advantage of the homebuyer tax credit I can help.

Santa Cruz Mortgage Rates Decreased Last Week

Santa Cruz Home mortgage rates decreased last week, returning to levels seen two weeks ago, according to Freddie Mac's weekly survey of conforming rates, released on Thursday.

The 30-year fixed-rate mortgage averaged 5.07% for the week ended April 15, down from 5.21% last week. A year ago, the mortgage averaged 4.82%. The 15-year fixed-rate mortgage averaged 4.40%, down from 4.52% last week and 4.48% a year ago.

The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.08%, down from 4.25% last week and 4.88% a year ago. And the one-year Treasury-indexed ARM averaged 4.13%, down from 4.14% last week and 4.91% a year ago.

"After rising for four consecutive weeks, mortgage rates eased back to where they were two weeks ago and still remain historically low," said Frank Nothaft, Freddie Mac vice president and chief economist, in a news release.

Most experts agree that California mortgage rates will likely increase, one of the factors is that the government has stopped purchasing mortgage backed securities.

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Santa Cruz Real Estate Median Price Increase

Santa Cruz Properties- The median price for a single-family home in Santa Cruz County climbed from $500,000 in February to $519,000 in March with an increase in the percentage of sales over $1 million, As reported by The Santa Cruz Sentinel.

The median, the mid-point of sales, is up dramatically from the market bottom a year ago, when it was $399,000, but down dramatically from the boom two years ago when it was $650,000.

Last month, 12 percent of the sales were for more than $1 million, compared to 5 percent in February. It was the first time since September that high-end sales were in the double digits.

If you are considering purchasing Santa Cruz Real Estate I can help.

Santa Cruz Properties Affected By New Legislation

Santa Cruz Real Estate- New real estate guidelines and incentives announced Friday by the Obama administration are designed to encourage banks and investors to reduce the principal balance owed for borrowers who owe more than what the house is worth.

The program is voluntary. About 10 percent of 3.4 million eligible borrowers are in a three-month trial real estate loan modification program, according to a database kept by watchdog organization Pro Publica; about 4.9 percent have obtained a permanent modification.

Santa Cruz Real estate agents predict the new federal guidelines will help some people who own property in Santa Cruz County but probably not many.

Some of those who get their loan modified may have trouble paying in another year or two. A report issued Last week by the two federal agencies, the Office of the Comptroller of the Currency and the Office of Thrift Supervision suggests this.

With the write down, the new mortgage cannot exceed 115 percent of the home's value.

That could be a sticking point.

California has 2.4 million underwater mortgages, the most of any state, according to First American CoreLogic, a real estate information company that operates nationwide.

The percentage of these upside down mortgages grew from 34.7 percent to 35.1 percent between Oct. 31 and Dec. 31, the company reported.

In Santa Cruz County, the percentage of upside down homeowners is smaller but the numbers are growing. 20.2 percent of Santa Cruz Homes were underwater Dec. 31, compared to 18.6 percent Oct. 31, with the numbers expanding from 10,106 to 10,962, according to First American CoreLogic.

Once negative equity reaches 25 percent, when the homeowner owes 25 percent more than what the home is worth, homeowners tend to default on payments at the same rate as investors, a First American CoreLogic analysis found.

"Negative equity is a significant drag on both the housing market and on economic growth," said Mark Fleming, chief economic with First American CoreLogic. "It is driving foreclosures."

So far this year, 421 default notices have been issued in Santa Cruz County, outpacing sales by 10 percent, which means in another five to 10 months many of these homes will be on the market at discounted prices.

"The supply pool is filling quicker than it's draining, and the mid-to-high end market continues to fall," according to real estate analyst who predicts California will see a "double dip" in prices.