Fremont Real Estate Blog

ResMae is the 3rd major Subprime lender to go bankrupt in the last 2 months. Not only will it's investors lose a lot of money, but its impact on communities I believe will be concentracted to poorer communities, outlying communities, hispanic and african-american communities, non-english speaking communities. Places like: Stockton, Fresno, Tracy, San Leandro, certain neighborhoods of Hayward, Union City and Newark. Fremont should generally see little impact in its neighborhoods with high performing school, but some areas around poorer performing schools may be impacted. Some of the vicitms will be little old ladies or retires, as well as first time home buyers. Often times I see people put in subprime loans even though they would qualify for an "A-Paper Loan" simply because the loan officer put them into a product they made the most money from. A loan officer can make 4-5 points on a subprime loan. And surprisingly, many times its a relative that the borrower relied upon

Whenever a property reaches a new high the buyer will most likely end up getting an appraisal whose value is less than the purchase price. This doesn't necessarily mean the buyer is overpaying, it does mean based on recent closed sales he's paying more than anyone else before him. An appraiser in determining value has to base their estimates based on closed transactions. If prices are rising, it becomes harder to bring in the purchase price the buyer has stated in the contract. The bank always limits the total loans on the property to the lower of appraised value or purchase price. So if you were buying for $1,000,000 and the appraisal came in at $975,000. The buyer would have to pay the difference - $25,000 in addition to their planned down payment and closing costs. However if this result was unanticipated (which it never should be), than the buyer may choose to renegotiate or drop the contract (assuming the appraisal contingency is still in place). This sort of situation was

I read an article in yesterday's WSJ about how vacancy rates in the housing supply reached an all time high recently at 2.9% normally around 2.0% and how this could portend a futher erosion in home prices. I don't see it. Here in the bay area, we can't find enough homes to sell that are located in good neighborhoods, with good schools and preferably in good condition. Home prices for these homes are slightly up from last year. I've been looking for a home priced between $600K-$800K in southern Fremont and only 3 have come on the market since Dec. 31, with only 1 that met my definition above. I've mentioned it in my January newsletter but I'll mention it again here now, that the buyers are back. In Fremont, which everyone buys for it's school's the buyer's are typically first time buyer's with pre-school kids or expecting parents. We're seeing less buyer's with kids already in school, primarily because most seats in the good elementary sch