This is good news!

MARKET UPDATE

Two great pieces of news came out this week.
1) Conforming Jumbo loans are now available on 2 unit properties. Depending on the median home prices in your local market, a buyer could be eligible for up to $934,200 at a great rate (this is up from the $533,850 for conventional conforming 2 unit loans). Awesome!
2) Owning and renting have now become comparable in cost in many hard hit areas of California like Vallejo, Fairfield, and Sacramento. This has brought out lots of first time home buyers and investors who can do the math and see what deals are available when this phenomenon occurs in California. This is further indication that we may be at or near the bottom of the current downturn in some markets. (Even some newspapers are starting to get this.)

Jefferson knew about sub-prime loans

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
– Thomas Jefferson, Letter to Treasury Secretary Albert Gallatin (1802)

New Townhouse For Sale

Click this link to see a virtural tour of a very nice property: http://tours.tourfactory.com/429034

5 new rules for home buyers

There's no guarantee that prices have hit bottom yet - but that doesn't mean that you can't get a great deal now.
By Amanda Gengler, Money Magazine
Last Updated: May 12, 2008: 1:06 PM EDT

(Money Magazine) -- There's no telling how long the housing crisis will drag on. Here's what you need to know before you start shopping in a rocky market.
Rule 1: You can't time the bottom
Face it: The house you buy today will more than likely be worth less next year. That could get you thinking about trying to time the bottom. Resist. It's harder to do than you think, and this is the best buyers have had it in two decades, with inventories up and mortgage rates low.
Pace yourself, find the perfect place and drive a hard bargain: Ignore the seller's asking price and bid 10% below what comparable homes are selling for. If the seller balks, move on. Remember that if you're trading up, your home could sit. So sell before you buy.
Rule 2: One reason to buy now - mortgage rates
Homes are plentiful and will remain so, but financing will be getting more expensive. True, the Federal Reserve has slashed interest rates, but fixed mortgages don't directly follow the Fed. They reflect the bond market's expectations about inflation, which remains a concern. The 30-year, now at 6.1%, will likely reach mid-6% by December and 7% in 2009, says Celia Chen of Moody's Economy.com.
That means there could be a penalty for waiting to buy even if prices fall more. Today a $250,000 loan would set you back $1,500 a month. At 7%, a $1,500 payment gets you only a $225,000 mortgage. As for variable-rate loans, the spread between conforming ARMs and fixed loans is too narrow to do you much good.
Rule 3: Another reason to buy - rates on big mortgages
Mortgages in amounts greater than $417,000 - the limit for buying by federally sponsored mortgage agencies - usually run a fifth of a percentage point above conventional products. But investors are shunning jumbos, which now average 7.2% and are unlikely to drop much this year, according to HSH Associates.
Certain jumbo borrowers could get relief, however. A new law allows Freddie Mac and Fannie Mae to buy loans as large as $729,750 in 71 high-priced areas. So far "jumbo conforming" loans average 6.6%. The program has gotten off to a slow start; you'll need to shop around. And unless Congress acts, this bargain will disappear at year-end.
Rule 4: Don't buy cheap; buy good schools
By now you've heard from somebody who knows somebody who got a great deal on a foreclosed property. But when you buy a house, you're also buying into a neighborhood. And foreclosures tend to be bunched in areas where residents and speculators alike took out exotic mortgages to get into homes they subsequently found they couldn't afford. That's not a recipe for stability. Prices and quality of life could both decline further.
Similarly, avoid developments that popped up in the past few years. They too likely have a lot of owners with risky loans and little equity, says Mike Larson of Weiss Research. Instead, go for areas with highly rated schools. They generally fare better during downturns, and that pattern is holding today, according to a recent study by real estate site Trulia.com.
Rule 5: Make sure your agent has your interest at heart
The real estate game has a built-in conflict of interest, since the listing agent and your agent both get paid by the seller. And these days more sellers are offering extra cash to buyer's agents.
So make sure you're not being steered to a house that's better for your agent than for you. Agree up front on his commission (typically 3%) and that any extra payments will go to you, says Jon Boyd, past president of a buyer's agent trade group.First Published: May 12, 2008: 5:41 AM EDT

NOW is the time to buy!

The Memorial Holiday has shortened the week for real estate activity. Prices seem to be holding their own and in some market places there are still multiple offers and over asking sale prices. However, this is the exception and not the rule.

Fortunately for Redwood City in San Mateo County price are going sideways to a slight upward movement (1%). I see this as a trend through the rest of the year.

Oil prices have definitely had an impact on people. This past weekend I went to Hollywood for the release of my youngest son’s new album. Traveling down 5 and driving around the streets of Hollywood there was not the traffic there was a year ago. Even in the Bay Area I see less and less cars on the road when I am out there.

All this has a direct impact on homes selling and at what price. (This too will pass.) We still have the smartest men and woman around here and where else in the world can you find paradise like the Bay Area? You can’t.

Prices will go up again! Now is your opportunity to buy. Utilize this market to your advantage.

An Educated Person

John Taylor Gatto: What Is An Education?
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Schooling Is One Thing, Education Is AnotherBy John Taylor Gatto
The question "What Is An Education?" has so many interlocking parts that no short essay can possibly be comprehensive, yet everyone would agree that both an education and a schooling have to have goals. You can't get anywhere unless you have a destination in mind!
Let me offer you 11 personal observations based on living a long time and living a long time as a schoolteacher. If kids get a sense there is no firm hand on the tiller, they have an unfortunate tendency to eat you alive! Also, they aren't very forgiving where what they consider "wasting their time" is concerned, and as you've probably already learned, the various goals of "the future" or "getting into a college" don't have much staying power with kids.
No matter who I taught or where I taught I always set out to let the kids know that I had definite goals in mind which would take years to achieve but which, I was determined, nobody could disregard without hurting themselves. Whatever "subject" I taught, I would relate the classroom abstraction to one of 11 principles I felt constituted the core of an educated human being.
In the hope you might find some use for a list, which took me years to compile, here they are:
1. An educated person writes his own script through life. He is not a character in a government play, nor does he mouth the words of any intellectual's utopian fantasy. He is self-determined.
2. An educated person know the ways of the human heart; he is hard to cheat or fool.
3. An educated person knows his rights and knows how to defend them.
4. Time does not hang heavily on an educated person's hands. She can be alone. She is not at a loss for what to do with time.
5. An educated person possesses useful knowledge: how to build a house, how to make clothing, how to build a boat, how to grow food, how to ride, dance, hunt, how to be physically masterful. Why would you want your daughter to know the name of the president of Iraq until she knew the name of the tree outside her window? Why would you want your son to understand Mogadishu until he understood how to scramble an egg? How were you ever sold such a bill of goods? Don't answer that, we both know - in school.
6. An educated person possesses a blueprint of personal value, a philosophy. This philosophy tends toward the absolute, it is not plastically relative (*altering to suit circumstances). An educated person clarifies his own values without advice from agents of the state. An educated person knows at all times who she is, what she will tolerate, where to find peace. But at the same time an educated person is aware of and respects community values and strange values.
7. An educated person can form healthy attachments wherever he is because he understands the dynamics of relationships.
8. An educated person accepts and understands his own mortality and its seasons. He understands that without death and aging nothing would have any meaning. An educated person learns from all his ages, even from the last minute of his life.
9. An educated person can discover truth for himself; he has intense "awareness" of the profound significance of being and the profound significance of being here.
10. An educated person can figure out how to be useful to others, and in trading time, insight and service to meet the needs of others he can earn the material things he needs to sustain a wholesome life.
11. An educated person has the capacity to create new things, new experiences, new ideas.
Everything you teach should be directly related to this package, I think. If it is, and it is clear that it is, you will have no trouble with kids - and you will discover surprisingly that you are learning as much as you teach.
© John Taylor Gatto
Editor's Note: Mr. Gatto's generosity with permission to reprint his work is legendary. However, he has specifically requested that Homefires inform readers that this particular piece is copyrighted and is not to be further reproduced. Contact the author for more information.

Redwood City Market Snapshot

Redwood City Market Snapshot:
7-Day Intervals:
3/23 3/30
Listings: 8 18
Price Increase: 0 0
Price Decrease: 10 7
Sold: 8 11
Expired: 0 0
Cancelled: 1 5
Withdrawn: 2 1
Pending: 16 12

My interpretation of this data: Spring has sprung and the real estate market in Redwood City is starting up!

Fannie Mae and Freddie Mac Announce Requirements for Jumbo Conforming Mortgages

Fannie Mae and Freddie Mac (the government sponsored enterprises or GSEs) have each announced special requirements for the origination, underwriting, delivery, and servicing of jumbo conforming mortgages loans (loans above $417,000 up to $729,750). Both Fannie and Freddie are taking a conservative underwriting approach to the new jumbo conforming mortgages. It was announced earlier this month that the conforming loan limit for San Mateo and Santa Clara Counties will be the new maximum of $729,750.

Under Fannie's requirements, the maximum loan-to-value ratio (LTV) is 90 percent for fixed rate mortgages (FRMs) and 80 percent for adjustable rate mortgages (ARMs). The minimum FICO score for a primary residence purchase loan is 700 for loans with LTVs of more than 80 percent and 660 for LTVs of 80 percent or less.

Under Freddie's requirements, the maximum LTV is 90 percent for both FRMs and ARMs. The minimum FICO score for a primary residence purchase loan is 700 for LTVs of more than 75 percent and 660 for LTVs of 75 percent or less.

Both GSEs limit jumbo conforming mortgages to one-unit attached or detached dwellings (including condos but excluding manufactured homes). There are many other requirements that apply to these newly eligible jumbo conforming mortgages. Contact your favorite lender for more details.

Ron Paul may make a difference!

Quotes to Live By...sic

"A home is where the bad investment is."
– San Francisco Examiner. 1996
"Financial planners agree that houses will continue to be a poor investment."
– Kiplinger’s Personal Financial Magazine, 1993
"We’re starting to go back to the time when you bought a home not for its potential money-making abilities, but rather as a nesting spot."
– Los Angeles Times, 1993 (Note: 1993 was the absolute low-point for real estate values in Los Angeles. Priced have sky-rocketed since.)
"Most economists agree...a home will become little more than a roof and a tax deduction, certainly not the lucrative investment it was...."
– Money Magazine, 1986
"If you are looking to buy, be careful. Rising home values are not a sure thing anymore."
– Miami Herald, 1985
"The era of easy profits in real estate may be drawing to a close." (Average price at the time: $28,000) – Money Magazine, 1981
"The goal of owning a home seems to be getting beyond the reach of more and more Americans." (Average price at the time: $28,000) – Business Week, 1969
"The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline."
– Time Magazine, 1947

You'll Find A Wealth Of Information On Family Law At FindLaw:

If you need more help, you'll find links to state laws and even forms. There are many decisions that we make in our day-to-day family life that have potential legal issues and ramifications that we should understand. http://family.findlaw.com

You Can Find Instructions For Almost Anything

FYI: On The Internet, You Can Find Instructions For Almost Anything: No matter what you want to do, somebody's probably already done it and posted instructions online! But what about when you want a new project, but you're not sure what it is yet? You'll find much more than you bargained for. Some of the projects are ingenious. Others are useful. Some are downright odd. http://www.instructables.com/


"Life is ten percent what happens to you and ninety percent how you respond to it."
- Lou Holtz

What do YOU think?

Consumers Show Confidence in the Value of Their Homes
Americans are confident their homes are retaining, even gaining value, according to a nationwide telephone survey of 1,007 adult Americans conducted May 31-June 3, 2007. Here are a few stats from the survey’s findings:
55% say their home would sell for more money now than it would have a year ago.
74% of homeowners say they’re confident they could sell their home within the next six months at a price they think it’s worth.
85% believe their house will be worth more five years from now than it is today.
27% say they’re likely to purchase a better home over the next five years.
“Americans Express Confidence in the Value of Their Homes, Despite Softening Housing Market,” Business Wire, press release by Boston Consulting Group, June 21, 2007.
Consumers Show Confidencein the High-End Market
A 2007 Coldwell Banker Previews International® Luxury Survey of people living in homes valued at more than $1 million (or $2 million in California) found that homeowners are fairly confident in the future.

· 58% said they believe increases [in the value of their home] will continue over the next five years, and 36% said those increases would be significant.

· 40% said they felt comfortable enough with the housing market that they were considering buying a second home.

Excerpt from “Upscale Homeowners Confident in Future,” Real Estate Intelligence Report, Vol. 13, No. 27, July 2, 2007.