President Obama's Economic Stimulus Plan

It seems that our new president is off to a great start by moving forward and taking action to help the economy. He’s even working on a plan to help those homeowners that are currently not in foreclosure, but are upside down on their mortgages, owing more than their homes are currently worth.

Even though our market is in a state of flux, the housing market is pretty busy with so many foreclosed properties eventually being sold to those looking for a deal. The California Association of Realtors reported that affordability soared to 59 percent in the fourth quarter of 2008, compared with just 33 percent a year earlier. We’re seeing folks come out of the woodworks who can finally afford to buy a home. This is great news.

Another segment of the market that we didn’t see too many of in the past were renters. Many renters are out and about looking to score a deal. You can’t blame them, since home monthly mortgage prices have come down to that similar of what renters are used to paying. Mortgage payments are in the range of $1,200 to $1,600 per month and that is what is catching their attention.

Another reason for many of the lower priced homes moving is that there are more loan options available to the buyer. Currently we’re funding many more FHA and government loans than conventional bank loans. So it seems there might be something to the government’s efforts in attempting to fix the economy and housing market. Don’t get me wrong. It’s not a “Walk in the park” by no means! It’s much tougher and the standards are much higher when trying to get approved for a home loan. Even though this is so, folks are giving it their best shot and qualifying for that loan the old fashion way.

If the stream of foreclosures slow with the government’s actions and the existing inventory sells, then things will begin to stabilize. We’re already seeing that occur in several areas here in California.

If you’re looking at buying, get in while you can because it won’t be this low for too long. In the midst of chaos, there’s opportunity and this opportunity will be gone in the blink of an eye, like all others.

If you have questions about any of this or if you have a property you’d like to discuss, I would be happy to answer any questions that you may have.

Selwyn Jamurath is president of Selwyn & Associates, LLC / GC Financial Services, Inc. www.selwynassociates.com and is a licensed Realtor. Selwyn can be contacted at 200 Broadway, Suite 84 King City, (831) 385-7848 X119 and Emailed at sjamurath@sbcglobal.net sbcglobal.net. FHA products provided by Lupe Jamurath - MSC-Advantage (831) 261-3873.

Coming out the other side

If you subscribe to the theory, as many real estate professionals I know do, that real estate took us into this mess and real estate will take us out; folks, there is finally daylight ahead of us and the dark tunnel is in our rear view mirror. Yes, we really think so.

In the summer of 2005 – July to be precise – my partner and I at the time were selling a new home subdivision in Soledad. All of a sudden – and it was really quite sudden – we were not seeing the record applications for our homes. People who had been on the sizeable waiting list, (500 applications for 65 homes), were pulling out, confidence in the ever inclining prices started to wane. We were right at the end of our project, but the change was marked. “It’s turning,” we said quietly to one another, having no idea obviously at the time that the “turning” in the market would lead the avalanche of swift decline down to a full blown recession. That was nearly four years ago; so we’ve been in this particular arena of uncertainty for some time now.

It’s turned
Well, I am here to tell you that things have certainly “turned” again, but this time on the upswing. Regardless of the fact that people are still losing homes to foreclosure – some who fear they will never be able to recapture what they owe on their properties and would rather walk away, some who simply cannot make their payments and have not been able yet to get a modification on their loan – the marked change is that homes are selling and they are selling quickly.

People are getting qualified to buy property and properties are exchanging at record levels. Most real estate professionals have not seen this kind of pace since the buying frenzy of 2004-05. So who exactly are buying, I hear you ask? The investors are out, that is a for sure. If you have 25% down, you are in super shape to be able to pick up an investment property where the return on your investment is a sure thing. You can make your house payments with your rental income and still have cash in your pocket. One investor I work with – and he is no spring chicken – told me that this buying climate is unprecedented. He has never, in his lifetime, seen such a positive cash flow in California property.

Now’s the time
“But I don’t have the down payment!” I hear you grumble. And, of course, many do not. Beg, borrow – anything short of stealing a down payment – would be a really good idea right now. Join up with a relative and buy something together. When the buying
opportunities present gifts like a reasonable 3 bedroom, 2 bath home for under $100,000, which you can still find in our communities, it makes no sense at all to hide any cash you might have in a CD which can give you a safe but really boring 2% yield, if you are really lucky. Look at the long term prospect. Will property values go up again? Of course they will. Will they go back up to where they were before? Probably not in my
lifetime! But real estate still has to be the best investment money can buy. Looking at that big hole where my 401K retirement used to be makes me even more confident that bricks and mortar is where it is at for the long term, if I ever want to have any hope of retiring.

Try the feds
Never bought before? Not much to put down? There are products for you, too. The Federal Housing Administration has a wonderful program whereby the buyer contributes a meager 3.5% down payment and we can put you in your first home in around 40 days. Their appraisers are also really picky when they come around and very often will require that the bank who owns the home makes health and safety repairs for you, or even of late, new carpet! If you figure out that 3.5% on $100,000 purchase is only a $3500 investment, you really can’t go wrong. Don’t have that but still want to buy your first home? God bless the Feds! The United States Department of Agriculture has a wonderful program for home buyers in certain designated areas and with certain income levels. That program requires no money down – yes, trust me, there is still a program there whereby you can come in with just the clothes on your back. They’ll even consider helping you out with the closing costs for your purchase!

Future nest egg
As you can see, the powers that be are conspiring to help any American, who so wishes, to be able to buy a home in this difficult climate. Unless you bought at the peak of the market, real estate is always going to be the greatest investment you can make for your own peace of mind and center of your universe, not to mention nest egg for the future. With all we have learned over the past several months about cautious planning and the importance of saving for a rainy day, now is not the time to hide your head under the covers and be afraid to step forward and invest in property. This is a calculated risk you should not shy away from. As my investor so duly noted, there has never been a better buying climate than there is right now. The rates are extremely good, the inventory levels are still inviting and the programs are out there to help you towards your accomplishment.

If you are a potential buyer and have questions about this interesting time in our marketplace, feel free to give me a call. I am a full-time local Realtor with Legacy Real Estate group (831) 229-0663. Lumajen1@aol.com.

Up to your neck in debt?

Are you afraid to open your bills? Do you juggle bills, paying Paul one month and Peter the next? Do you make only the required minimum payment? Do you have to pay for basic necessities like food, rent, or gasoline on credit because you’re out of cash? If some or all of these apply to you, it’s a good bet you’ve taken on too much debt.

Initial Steps: Many of us have to deal with a financial crisis at some point in our lives. Whatever the cause, there are ways to overcome these financial problems. Often the first step is to recognize that there is a problem. Then you can begin to take action to solve it.
Create a budget: One key step is to create a realistic budget, a cold, hard look at both your income and your necessary living expenses. Are there ways to increase income, as well as reducing expenses?
Talk with your creditors: Contacting your creditors and explaining why you’re having trouble paying your bills on time may lead to a reduced payment plan. Setting up an automatic payment plan from your checking or savings account can help establish how serious you are about paying your bills.
Check for mistakes: Your bills or credit report could contain errors that, once corrected, could provide some partial relief. Lowering the cost of debt is another way to improve the situation.
Refinance High-Cost Loans: Lower interest rates may allow you to refinance an existing loan and lower your payment.
Consolidate Loans: Taking a number of high interest rate debts (often credit card debt) and replacing them with a single loan, often secured by the borrower’s home or auto. Reposition Assets: Using existing assets such as cash, jewelry, or securities to pay down or pay off debt. Loans with the highest interest rates should be paid off first.

Outside help
Many credit counseling agencies are available to help consumers who find themselves in financial trouble. Not all of these agencies work in a consumer’s best interest. A reputable credit counseling agency has counselors trained in budgeting, credit, and debt management. A good counselor works closely with you to develop a personalized plan to resolve your individual debt problems.

A last resort
If your debts are truly overwhelming, personal bankruptcy is a drastic option of last resort. Bankruptcy is a court-supervised process in which a debtor either has his debts eliminated (Chapter 7) or a plan is arranged which allows debt repayment under the supervision of the bankruptcy court (Chapter 13). Certain debts, such as most taxes, child support, and alimony, cannot be “discharged” through bankruptcy. Federal law requires a debtor to undergo credit counseling before filing bankruptcy then to complete debtor education before bankruptcy can be finalized.

Robert Cullen, insurance license # 0F10041, is a Farmers Insurance and Financial Services Agent and owner of Robert Cullen Insurance Agency located at 121 N Vanderhurst Ave King City, CA 93930, (831) 385-4831. www.farmersagent.com/rcullen or rcullen@farmersagent.com. Robert Cullen is a Registered Representative with, and securities are offered through Farmers Financial Solutions, LLC located at 30801 Agoura Rd, Bldg. 1, Agoura Hills, CA 91301 818-584-0200. Member FINRA & SIPC.

Investments discussed are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so you may lose money. Tax issues involving investments can be complex. FFS Farmers Insurance Financial Services Representatives do not provide tax advice. Please consult your CPA or Tax Preparer.