By Samantha Rohn

Much like in the rest of California, the Sacramento real estate market is continuing to feel the effects of the current economy. The Sacramento Bee reports that according to a report published by market researcher MDA DataQuick, 83,261 default notices were issued in California, with 8,341 of those being served to homeowners in the greater Sacramento area.

Default notices are the first step in any foreclosure process, and the third quarter foreclosure rates are higher than in the previous cycle. This doesn’t necessarily mean that the housing market is dipping, as the reasons for the rise in default notices are unclear. However, this does mean that now could be a great time to perform a Sacramento real estate search to find bank-owned homes or distressed homes available at huge discounts over their market value.

There are many properties available that are now banked-owned thanks to the epic collapse of the housing market in recent years. Banks don’t consider these homes to be houses but assets that need to be sold in order to recoup losses, giving potential homeowners the possibility of finding great discounts when shopping West Sacramento homes for sale. Banks will either hire real estate agents in the market to sell homes or put them up for auction in an attempt to recover some of the unpaid balance of the loan.

While the number of default notices were up from the previous quarter, 2010 Q3 numbers weren’t nearly as bad as during the same time last year. Many experts believe that next quarter is a “wild card” which is fairly unpredictable in terms of the housing market, especially in determining if the refinancing options that many homeowners undertook to help them save their homes have worked.

With a view to help distressed home owners all over the country, including California and its capital city of Sacramento, the federal government has been introducing various beneficial programs. Sacramento region like elsewhere is filled with many home owners in distress, finding their property values below the mortgage loan outstanding in the status of “underwater”. The Federal Housing Administration from now on will permit mortgage lenders to refinance their loans afresh, wherein at least 10% of the original mortgage amount will be forgiven.

The federal government expects somewhere between 500,000 to 1.5 million borrowers to be helped by this new program. A Sacramento Realtor can throw more light on this program and its full details if you approach for guidance. However, here are the broad details as published in the Department of Housing and Urban Development (HUD) site:

As regards eligibility, borrowers can participate voluntarily with the consent of lien holders on their mortgage with the eligibility criteria of – homeowner must be in a negative equity position, that is their home value is less than the mortgage dues; existing mortgage to be refinanced must be current and should not be delinquent; the property is owner occupied as principal residence; standard FHA underwriting requirements will apply; the credit rating FICO based is greater than or equal to 500; the existing loan to be refinanced must not be a FHA-insured loan; and the existing first lien holder must write off at least 10 percent of the unpaid principal of the mortgage loan.

There are other elaborate conditions prescribed such as – the loan-to-mortgage ratio and monthly repayment criteria limit etc. – which can be explained by a Sacramento Realtor.

The Federal Housing Administration is a preferred source of financing, towards buying a selected Sacramento Home for sale from out of Sacramento listings by prospective home buyers. Earlier it was the common belief that only low income and median income group of people will be benefited through FHA-backed loans, since the value of the proposed home was limited.

But thanks to the Economic Stimulus Act of 2008, the position has changed – now the maximum limit for a housing loan has become $729,750. This enables people desirous of buying Sacramento properties from the high-end neighborhoods also to turn to FHA-backed housing loans.

The national statistics go to show that FHA-sponsored home loans have been attractive as evident from the number of applicants has gone up from 2 percent of total home loan applications in the year 2006 to nearly 30 percent in 2010.

What is more you can get assistance for down payment and closing costs as well from non-profit organizations, under the guidance of a Sacramento Realtor.

Sacramento Real Estate business or for that matter any real estate in U.S. is interlinked with economy – local as well as national. You will remember that the economic downturn from the year 2006 caused all the woes for the entire nation and its people, particularly home owners. Financial Experts and analysts say that the remedy from the present gloom lies only if the economy is put back on its original track, where from it derailed bringing untold miseries to all the people.

For the last few years the economic recovery was elusive and only from the start of this year, and from the second quarter onwards, there are good signs appearing on the economic horizon. The national unemployment rate stood at 9.5 percent – somewhat high of course – in both June and July 2010. California more or less followed the same pattern and turned out similar figures.

Now the latest news from the economic field and employment factor are encouraging, which alleys the fear of the economy getting a double dip and we can burst out a sigh of relief. What are those good signs? See below:

Exports from California are increasing – in July the state fared well in exports and cut down imports whereby the trade deficit – a bad thing for a healthy economy – is shrinking. In July it is reported by U.S. Commerce Department that goods worth of $11.86 billion were exported to other countries – from $9.77 billion in July 2009 showing an increase of 21.4 percent. This is the ninth month in succession that California exports show year-over-year increase in exports. And this is the highest level of exports reported in the last two years.

California being the most-populated state of the country, its economic activities has a strong bearing on the national economy. So the figures of exports get importance – export of manufactured goods increased to 20.1 percent from same period last year; agricultural products as also non-manufactured products increased by 10.6 percent; and items previously imported were re-exported showing an increase of 32.1 percent.

Overall, the merchandise export of California in July represented 11.4 percent. Arising out of the increased exports activity, the trade deficit – that is difference between imports and exports – shrank by 42.8 million; a very good sign indeed.

On the unemployment front, it is reported that last week people signing for unemployment benefits were fewer by 27,000 numbers to reach the lowest level of 451,000 in the last two months.

All these put together will do immense good to real estate markets, including the capital city’s Sacramento Real Estate, where the activity of buying and selling Sacramento homes for sale will progress towards normalcy.

Experiences from home sellers in distress, opting for a short sale of a Sacramento home or elsewhere are not sweet, what with frustrations and delays from the lenders’ side, for the last few years. Unlike the traditional sales, where only the buyer and seller are the parties to a contract and if both of them agree on the deal and its terms, it finishes in no time. But in a short sale, inevitably the consent has to come from the mortgage lender and there are other parties as well, like those who assisted in financing the home equity loan on the property after a first mortgage or lending the down payment needed upfront at the time of purchase.

Because a short sale is oftentimes done for a price less than home loan balance, these people want a cut – as much as possible from the sale proceeds – at times even off the record. The California Association of Realtors as well as Sacramento Association of Realtors are categorical in saying that every real estate transaction must be transparent and it is illegal to withhold any information from the public.

These secondary lenders can put obstacles on a short sale, by refusing to release the lien or at least delay the process to the frustration of the home seller and the interested buyer. This puts more strain on the shoulders of the Sacramento Realtor you choose as your buying agent in clearing all these headaches tactfully.

Lending banks drag their feet in forthcoming to give their consent, largely because of their overload of short sale requests. Their loss mitigation department has to work overtime in clearing the backlogs and the easy way for them, to frustrate the applicant is to say the concerned file is “missing” after a delay of several months. Here again the Sacramento Realtor bears the responsibility of seeing all the documents related to a short sale request are in order and intact, before filing them with the department of the concerned lending bank.

Yet the benefits of a short sale are attractive namely – the borrower-home seller is released from the mortgage debt totally, escaping from the foreclosure tragedy, and scraping through with minimum damage to the credit ratings; the lending bank is saved of the expenses, delays and headaches of a foreclosure process and gets back the invested capital faster; and the buyer gets a selected home from the Sacramento homes for sale from the Sacramento listings at a best price and meeting their needs squarely and fully in good condition. So these benefits out-weigh all the difficulties involved in a short sale.

The statistics support the point that short sales have come to stay – one in four Sacramento homes are sold through short sale; most of them coming from neighborhoods of Sacramento hard-hit by foreclosure; and nearly half of the distress Sacramento properties sold through Sacramento Realtors.

People are accustomed to reading in the media nowadays about the devastation brought forth by the mortgage crisis in the entire country, California and its capital city Sacramento. The most important one is dropped down home values in the markets inclusive of Sacramento Real Estate market.

As a coin has two sides, the factor of home values coming down has two perspectives to look into – positive and negative. On the negative side thousands of home owners, who bought homes in Sacramento and other regions of California, with great hope of their equity increasing over years and make money by selling the Sacramento properties at times of crisis are disappointed.

This lot includes those who bought their homes prior to the real estate boom, at reasonable prices in the best location of California; and those who vied with others in the competition of home buying, during the boom when home prices were inflated without rhyme or reason and with easy availability of home loans, right left and center.

While the first category of people have not much to lose by the drop down of prices, as the plummeted market value is almost equal to the prior-boom prices, the second category will see the higher value they paid got eroded.

On the positive side – the affordability of Sacramento homes to more number of Californians, from the low and medium group of home buyers has increased manifold. Once the home prices are leveling, the presently prevailing uncertainty in Sacramento Real Estate will vanish and it will be geared back to its normal functioning as before.

Customer confidence will be revived that way in more people landing into Sacramento Real Estate for buying and selling of properties, shedding their hesitation. And this will greatly help the revival of economic condition to healthy status in California in general and Sacramento in particular.

Now the news is California state tax authorities have come up with their statistics for the fiscal of 2009-2010, where property values collectively came down from $270 billion in 2009 to $260 billion now. The home values were assessed for property tax purposes in the counties of Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba for the fiscal year beginning July 1, 2010.
The range of decline in annual property values is reported to be – 1.8 percent in Sacramento County, the lowest of them, and 7.2 percent as highest in Nevada County.

Commenting upon the news, experts in University of California in Los Angeles said – low interest rates, affordable prices and investor purchase trends go to show the downside of the residential cycle has run its course largely and in all probability next year will be brighter for Sacramento Real Estate.

Are you one of those aspiring to buy a Sacramento home for the first time and yet hesitating with skepticism over market conditions? You are the one that should read on to get clear of all your hesitations and apprehensions, over embarking on home buying activity with finance from California Housing Finance Agency (CalHFA) offered to you on an unimaginable rate of interest and favorable conditions.

You see Sacramento Real Estate market is suffering from all the woes of the mortgage crisis and the consequential damages of it like any other housing market has been facing over the last few years. Most importantly, issuance of home loans has become tighter because of the bitter experience by traditional lenders during the years of foreclosure gloom, whereby even those with good credit rating have been denied financial assistance from them. But the brightest point is prices of all Sacramento homes have come down within your reach.

The Federal Housing Administration has been trying very hard to help these unfortunate people over the years, through many assistance programs and CalHFA has joined hands with them in releasing their latest announcement that first-time home buyers, meeting the guidelines stipulated for low and moderate income groups, will be able to avail their new brand of home loans. These will be less expensive compared to other traditional lending with 30-year fixed mortgage rate at 4% which will vary according to the California Counties.

While more details can be had from the Sacramento Realtor, whom you should contact as a first step to get clarifications and finalize your Sacramento home purchase deal, broadly the outlines of the new scheme are as follows:

1) A first-time home buyer is defined under federal law as one who has not owned and occupied a home for the past three years. Qualified veterans under the relative Acts are also eligible.

2) The income limits stipulated by CalHFA should be met – please note this varies from County to County and your Realtor will be able to clarify whether you come under this bracket

3) You can available mortgage loans within the price limits of FHA and CalHFA sale price limits – broadly the limit of mortgage loan in this program is $417,000.

4) You should meet the minimum credit score requirements with maximum debt-to-income ratio – your Realtor will explain this aspect further.

5) You should be aware of the HUD-approved home buyer education program – which again your Realtor will render all necessary help to complete this.

This latest program also includes – upfront mortgage insurance; eligibility to use the improved California Homebuyers Downpayment Assistance Program, which will provide up to three percent of the purchase price of Sacramento home for down payment or closing cost assistance.

Now the ball is in your court – to immediately get in touch with your Sacramento Realtor.

Home buyers and sellers are keenly watching the market reports, to get the crux of the conditions prevailing in Sacramento Real Estate as elsewhere. Although these reports are not identical and may vary according to the perception of the individuals making it, these go a long way in creating a general opinion in the minds of consumers – positive or negative. After sending continuous signals of disturbing nature for quite some time in the last few years, here are some positive signs about market conditions.

Customer confidence is key for the ups and downs of any market – purely psychological in nature though – and it plays an important role in real estate activity of buying and selling properties, worth thousands of dollars. Fluctuating market conditions, because of the housing bubble, were frustrating and were causing negative impacts so far. But the latest survey conducted by University of Michigan is assuaging in reporting that after months of declines, there is significant jump in consumer confidence overall.

Consumer spending was shrinking due to cash-crunch; depleted household income; unemployment; saving for the future etc. which were not the typical life-styles of Americans ordinarily. The repercussions of this attitude were wide and far-reaching, as reflected in the markets from shopping to real estate. Here again the Commerce Department reports bright and positive news that consumer spending is going up, judging from the way it is for the last four months.

Industrial manufacturing sector is an important indicator of the gross domestic product growth, which can put the economy back on its track from the derailment. Employment opportunities grow along with GDP growth as well. The manufacturing Index provided by the The Institute of Supply Management every month, also shows gain for the month of July.

Apart from these general ones, there is good news from the home market front also. Freddie Mac tendered its home value index showing 3.1 percent gain on an average from the first quarter to the second quarter of this year. And remember, the mortgage rates have touched the lowest bottom in the last few months starting from May – hovering around 4 points plus as never before. Experts say this will continue to remain subdued in the months to come.

The National Association of Realtors reported the number of pending sales of properties including Sacramento properties, where a sale contract has been signed by the seller and buyer has increased by 5.2 percent recently, after showing a decline earlier.

California holds a prominent place in the Standard and Poor’s/Case-Shiller index of home prices, with price rises recorded in San Francisco by 14 percent; San Diego by 11 percent and the overall gain of 4.2 percent year-over-year in 20 of the major metropolitan areas. Big gains in home prices have been reported in California housing market and surely this is positive sign towards rebound from the gloom for all the markets, inclusive of Sacramento housing market.

Mortgage Interest rates play a pivotal role in your home buying decisions through Sacramento Real Estate. Most of the home buyers are not from the wealthy group to go it alone from their own resources, to pay off the price of Sacramento homes for sale, without seeking financial assistance through a mortgage loan. So a mortgage loan is an indispensable part of home buying and therefore the type of mortgage and the interest charged over years has definitely a bearing, to say yes or no in decision making.

That said looking back in the history of mortgage interests being tracked by authentic institutions like Freddie Mac, the oldest one is 30-year fixed-rate mortgage interest, which is being tracked through the Primary Mortgage Market Survey from the year 1971. Only after 20 years later it started tracking the 15-year fixed-rate mortgage and the 5 year adjustable mortgage came into the picture from 2005. There are also other types of mortgages like 1-year Treasury-indexed hybrid adjustable rate mortgage etc. which are not in use in respect of housing purchases.

Out of the above varieties, the 30 year-fixed rate mortgage is the most preferred one by the consumers traditionally, as you will know beforehand what would be the outgo each month, by way of repayment installment of that mortgage. In a healthy economy like the one prevailed in U.S. for decades, this helped the housing markets to do business without any problem whatsoever. Only when people were lured by the adjustable rate mortgages, fluctuating according to the economic conditions, all the troubles started to descend on U.S. real estate business.

The word “inflation” – among other things in the economic field – causes the ups and downs in mortgage rates. A comparison from last year will make things easy to understand. The economic conditions reached their worst-peak in 2008, which continued to be so in 2009 as well. So during last year this time, the 30-year fixed-rate mortgage was 5.08 percent on an average; 15 year fixed-rate stood at 4.54 percent; and a 5 year adjustable rate mortgage was at 4.59 percent.

Remember the reduction in the mortgage rate of a home loan of say $400,000 over 30 years by a whisker would amount to thousands of dollars and impact the monthly payment significantly. Now with the economic condition improving – at least by the fact that inflation is contained from going up during the last 12 months, see how the mortgage rates have been reduced:

30-year FRM as at the close of week ending 2nd September came down to 4.32 percent; 15 year FRM at 3.83 percent; and 5 year ARM 3.54 percent – all of them setting a new record lowest.

You can have your own calculations how these lowest mortgage rates will impact your home loans, for buying a Sacramento home for sale from the Sacramento listings, and how much of money you can save.

If you are relocating to Sacramento and wish to settle down there buying a home, you have ample choices before you. First of all Sacramento Real Estate market is traveling fast towards recovery from the gloom, as the worst has already been over by reaching the peak in 2008. Now all the housing markets are turning out good signs for home buyers and Sacramento as the most-sought after location for decades, can offer best homes at best prices in the present scenario.

Talking of Sacramento homes for sale, you must be aware how the American life-style has changed over decades due to population growth. The demographics are not the same as they were in the commencement of the 20th century. The U.S. Census Bureau shows impressive figures, as to how the shift from the rural areas to urban dwellings has taken place. It is reported that in the year 1900, the urban dwellings were just 39 percent and has dramatically grown to 73 percent in the year 2000. It should have grown by now in 2010 much more.

Sacramento is no exception to this pattern, with tremendous growth as the capital city of California. But all said and done, living in a rural area or for that matter in a suburban area close to the major metropolitan like Sacramento are still the preferred choice of many people. Although people have to earn their living by working inside a congested city in a government sector or private sector jobs, at the end of the day invariably they like to retreat to the peace and amity of their own homes, for recuperation of energy for the next day.

Suburban areas provide all these in abundant measures, including Sacramento city. For example there are beautiful suburban neighborhoods in places like Davis, Granite Bay, and El Dorado Hills etc. where you can get upscale homes of comfort because of the increasing demands. Best part is the present market conditions laden with foreclosure properties have brought down the prices of Sacramento properties, not to speak of other suburban areas, where even prior to the mortgage crisis there were a lot of affordable properties for any budget.

The Sacramento Realtor you get as your buying agent can select for you an ideal suburban neighborhood, not far off from your workplace, if you discuss with them all your needs and requirements of a Sacramento home for sale. There are multiple choices offered from Sacramento properties listings with regard to – square footage, ground plans, amenities and perks provided and of course the price – to select from. Foreclosure properties with bargain prices are added advantage now.

Somebody called the present economic conditions of the country like Great Recession No.2 – first one being that of the 1930s. Seems it is an exaggeration to the core, if the results of the latest survey conducted by Bankrate Inc. are any indication. Or else how will you describe majority home owners, including those Sacramento home owners in California and elsewhere, responding that they do not regret buying their present homes? Surely 90 percent cannot be said as mere majority – it is more or less the completely overwhelming response.

The timing is important more than anything. See you get discouraging headlines about housing markets not in the brighter side nowadays, and should it not reflect in the perception of people, regretting they bought their homes at a time when mortgage rates did not hover in the bottom-side as they are now? Fortunately no. This means, in spite of millions of homeowners forfeited their equity to foreclosure, the bottom line remains the same – reassuring that people are not perturbed by bad news about Sacramento Real Estate and others.

Another interesting fact comes to the fore by the above survey is – most of the people are well aware of the mortgage types available and the one they already have. This is brought out by the fact – some two years back as much as 26 percent of home owners did not know much about mortgages, their types and preferences etc., whereas just 8 percent of the 1001 randomly selected adults for taking part in the survey fall into this category.

As regards the question of preference in mortgages – more than two thirds – 79 percent of home owners preferred Fixed Rate Mortgages, if they are given the option to choose – and said they already have this type of mortgage only for the homes they own now. So it is a sure shot that you must be the one in the majority and would not like to be in the other wavering side of 21 percent while buying.

Those who fall in the segment of Wealthy Americans – as many as 90 percent of them – responded to the survey that they would like to go in for Fixed Rate Mortgage only. While on the subject it is pertinent to point out here that for those who want to make use of Fixed Rate Mortgage loan, for buying Sacramento homes for sale from Sacramento listings – as on date a new record-level low rate of 4.565% is indicated – coming down from the last week’s figure of 4.576%.

Is buying a home a safe investment? Here again is the latest report from Fannie Mae, which says the majority – 70 percent of common consumers in the country find it as one of the safest investments to make. And overwhelmingly 64 percent of them agree that now is the best time for buying a home – from Sacramento Real Estate or elsewhere.