Foreclosures in Fremont, California
30 Mar 2010
Significant Factors that can Influence the East Bay Real Estate in 2010
Split Housing Market is currently observed in The East Bay. There is an existing trend of two different sectors of the markets in the area. One market sector is currently dominated by short sales and foreclosure which is priced under $500K. The other market, the sector where more traditional aspects tend to affect buying and selling, is priced above $500K. This set up is very common to many other areas in California.
You can expect that most buyers look for properties which can give them more value for their money. They may even grow frustrated with the fast phased market segment at present times. Investors on the other hand make sure their properties can yield efficient and profitable cash flow. The scenario always go down to buyers who expect to purchasing greater value of homes at lower cost and investors aiming of higher profit amidst lower market value of the property.
Investors have the direct control in this situation of the real estate market. The first time home buyers with FHA and conventional loans with minimum down payment find it difficult to compete with the all cash investor. They need to make the best and highest offer first. In the East Bay, more than 50% of real estate transactions are multiple offers. This results in a large difference between the selling price and asking price. The selling price has relatively turned out to be higher than its asking price.
You can consider that a market segment is a normal market when it is priced between $500K and $900K. Most sellers expect prices to become stable in this particular market. In reality, most purchasers easily get exhausted with the situation since the evaluation process is not as favorable to them. Sellers are recommended to have their homes tagged in the bottom third of the existing price range to make their East Bay properties more marketable and appealing to the buyers.
Below are some of the significant factors that can affect the Fremont California Real Estate market in 2010.
1. Continuous Increasing Rate in Foreclosures
A roaring rate of 52% of homes that closed escrow in 2008 was identified to be foreclosures. It was determined by a recent C.A.R. survey that 21% of home buyers have no in-depth understanding of the terms of their financial loans. These clauses are usually the most important things you should read before affixing your signature to any document, official or not. This is why you need to hire a professional realtor so you won’t run the risk of missing out the important clauses in the documents and to avoid unforeseen contract problems to occur. Look for professional and reputable real estate agents you can comfortably work with.
A huge number of first time home buyers await turn key foreclosures. Acquiring these kinds of properties requires simple and easy equity. This is the fact. You can even consider these kinds of properties to give you most for your money’s worth. Locate the most reputable realtor that specializes in foreclosures in Fremont and ask for recommended properties which have recently been foreclosed. The level East Bay foreclosures will continue to elevate through 2010. It would continuously flow throughout the year.
2. Relative Increase in the Interest Rates by 2010
It is foreseen that interest rates will increase in 2010, as such is the normal trend of interest rates. The real estate sector is finding that interest rates and inflation rate are the biggest concerns they have to face in 2010. Not only is the increase in interest rate being foreseen, it is actually expected by everybody, no matter which business sector you belong. This is the typical trend of the economy in every country around the world. The Fed will discontinue the purchase of mortgages which are backed by securities in 2010. The mortgage interest rates will rise in the same year. Most people expect these to happen as early as March or April while others forecast that it won’t be the case until the 3rd quarter of the year. Whichever prediction may came to be, everyone agrees that the interest rates will mount in 2010.
It will take awhile for buyers to realize the end of the 5% interest rates in 2010. This situation in residential prices has already happened in 2007. You need to take action on your plan of purchasing unless you want to wait for another 5 to 10 years. The best thing to do when you are planning on buying or selling a real estate property is to work with a reputable and professional Fremont Realtor. This individual is the one who has expertise in real estate business and can fully explain to you the current situation of the market.
If you are planing to buy, you must act on it as soon as possible so you can still benefit of the 5% interest rate. On the other hand, sellers that are waiting until spring before putting their homes on sale need to change their business strategy. The increase in interest rates along with fewer buyers in the market can mean extended period for most home sellers to market their property.
3. Amendments in FHA Rule
This is the most risky time for financial institutions like the FHA, Freddie Mac and Fannie Mae. Increased foreclosure levels, the transforming economy and the extended recovery time are only some of the challenges they have to face. These financial agencies are continuing to change their financing rules and guidelines accordingly to cope with the actual status of the market where there is insufficient cash reserves and debt-to-equity ratio. It was found out that over 75% of first time home buyers were getting FHA loans. The succeeding year is foreseen by continually revising and modifying of FHA guidelines
4. Failure of the Homebuyer Tax Credit
The extended tax credit of 2010 will be outshined by the expected rising interest rates. The one time tax incentive will be less thought off than the interest rate when purchasing a home in the approaching year. It is very important for homebuyers to urgently get serious with their strategies immediately with purchasing a home.
5. Failure of Loan Modifications
The professionals who do loan modifications expect that roughly 80% of loan modifications will fail. But try to think these over. What might possibly encourage banks and the Federal Government to push through the loan modifications even if such is expected to fail? Is it possible that they are squeezing out all they can get from the homeowners? The U.S. Treasury has reported that 25% of loan modifications made by the Federal government programs are in trouble. This had happened in spite of the expected 40% reduction in mortgage payments after the loan modification was employed. This aspect of the real estate scenario is still shady. No matter what the reason why these things happen, it is recommended that homeowners have to work with their attorney, real estate professional and CPA to determine the right things to do.
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If you would like to get a list of homes for sale in Fremont California or foreclosures in the East Bay, please call Meena Gujral at 510-279-9580 or go to:
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