MONDAY, December 14th Recent economic data point to better than expected consumer spending gains in October and November. Revitalized spending is critical to an economic turnaround as it accounts for nearly two-thirds of total economic activity. While the near term outlook for spending is generally positive, long term gains need support from job and income growth. Household wealth, inflation and credit conditions also have an impact. Recovery will not be complete until the economy starts producing jobs.

TUESDAY, December 15th The producer price index jumped 1.8% in November led by a 6.9% surge in energy prices. Food prices were also higher. Over the past year, producer prices have climbed 2.7%; despite this, weak demand will soften near-term producer inflation going forward. Excluding food and energy prices from the index, the core PPI gained 0.5% on the month and was up a mild 1.2% on the year. The monthly surge in core prices was attributable to higher vehicle prices related to the new model year. Industrial production increased 0.8% in November led by a rebound in factory activity. Expansion in manufacturing activity is expected to continue going forward as firms work to rebuild lean inventories. In another encouraging sign, the capacity utilization rate jumped to 71.3% last month, its highest level of the year, from 70.6% previously. Homebuilders were more pessimistic in December. The NAHB housing market index fell to a level of 16 this month from a reading of 17 last month. Builders downgraded current single family sales as well as projections of sales six month from now. Despite the decline in the overall index, builder sentiment did improve in the West and Northeast during the month.

WEDNESDAY, December 16th The MBA mortgage applications index rose 0.3% to 667.3% for the week ending December 11. Although mortgage activity is still 20.7% below its year ago level, there has been little net change in overall mortgage activity in the past 5 months. The consumer price index increased 0.4% in November, matching expectations. The CPI is now up 1.9% on the year. Gains were modest in the headline number even with a surge in energy prices. Excluding food and energy prices, the core CPI was unchanged on the month and up 1.7% on the year. Consumer prices are expected to remain soft in coming months as the economy finds its footing. Housing starts jumped 8.9% in November to an annualized pace of 574k, roughly in line with market expectations. November starts rebounded from a 10% decline in October. Housing starts have been climbing irregularly higher since touching a record low annual rate of 479k in April. As widely expected the FOMC voted to keep rates in an exceptionally low range of 0% to 0.25% in order to support ongoing recovery in the economy. The Committee acknowledged improvement in the economy with very subdued inflation. Policymakers maintained their commitment to buying up to $1.25 trillion of agency mortgage backed securities and up to $175 billion of agency debt. In addition the Fed anticipates that most of their special liquidity programs will expire on February 1, 2010. The Fed and fiscal and market forces have generated the beginnings of an economic recovery and resolved much of the distress in financial markets. With their mission largely being accomplished, details of the exit strategy are emerging.

THURSDAY, December 17th Jobless claims rose 7k to 480k for the week ending December 12. Initial jobless claims have maintained a level below 500k for the fourth week in a row. The labor situation is improving slowly; however unemployment claims at still at elevated levels. The index of leading economic indicators rose 0.9% in November compared to market expectations for a 0.7% gain. The increase was led by a steeper yield curve, decline in jobless claims, an increase in building permits and longer factory hours. The LEI has now increased for 8 consecutive months for the first time since 2004. Moreover, the index is up by an annual rate of 9.6% over the last six months which indicates continued expansion in economic activity over the next six to nine months.

Obama's New Plan

Obama’s standardized short-sale plan could help troubled homeowners
The U.S. Dept. of the Treasury recently announced the Home Affordable Foreclosure Alternatives Program (HAFA), which provides instructions for lenders and servicers participating in the Making Home Affordable Program and Home Affordable Modification Program (HAMP). The purpose of HAFA is to create an alternative to foreclosures for homeowners unable to successfully modify their troubled mortgage under HAMP, and to streamline the short-sale process.

MAKING SENSE OF THE STORY FOR CONSUMERS

• A short sale is when the lender agrees to accept less than the amount owed on the mortgage instead of foreclosing. Many homeowners and REALTORS® have expressed their frustrations in the short-sale process, criticizing lenders for the amount of time it takes to process and approve a short sale. The CALIFORNIA ASSOCIATION OF REALTORS® listened to members’ concerns, worked with other industry groups, and responded by helping to create provisions to streamline the short-sale process.
  
  
• The HAFA program simplifies and encourages short sales and deeds in lieu of foreclosure. It will permit pre-approved short sale terms before a property is listed; release borrowers from future liability for the debt; provide financial incentives to borrowers, servicers, and investors; and prevent servicers from attempting to reduce real estate commissions established in the listing agreement as a condition for short sale approval.
  
  
• Under terms of the program, the borrower and/or listing broker have three business days to submit an executed purchase offer and related documents to the servicer on a short sale, and the servicer has 10 business days to respond to an executed purchase offer.
  
  
• The servicer also will determine the minimum net proceeds for a short sale. If an offer presented to the servicer by the borrower or listing broker meets the net proceeds requirement, then the servicer must accept it.
  
  
• The program currently is available only for non-Fannie Mae- or Freddie Mac-owned loans up to $729,750 and is scheduled to take effect April 5, 2010. However, C.A.R. expects that many lenders will choose to implement it before the deadline.

CNN Money for November 19, 2009

CNN Money

Make money in 2010: Your home

Following three years of declining home prices, the end of the nationwide housing slump may be in sight. Home sales consistently have been rising, the surplus of houses is shrinking, and most economists believe home values nationwide will hit bottom in the second half of 2010—but not before declining an additional five to 10 percent. That’s good news for homeowners hoping to sell or rebuild lost equity.

MAKING SENSE OF THE STORY FOR CONSUMERS

• Mortgage rates currently are below 5 percent, and should remain low for the next few months, partially due to the Federal Reserve’s ongoing purchase of mortgage-backed securities. However, if the economy quickly turns around and inflation fears resurface, rates could rise to as high as 6.5 percent, slowing demand and pushing down home values.
  
• According to one analyst, the market will remain tilted in favor of buyers over the next year, but that power gradually will be reduced as conditions in the housing market continue to improve.

• Buyers hoping to purchase or invest in a lower-priced, entry-level home should expect some competition from investors and other buyers. To remain competitive, buyers are advised to put down as much cash as possible, as many investors are offering to make all-cash deals. Another factor to keep in mind is that offers below listing price often are outbid by others.

• Some home sellers are postponing listing their homes until the market recovers. However, timing the market is difficult, so homeowners thinking of selling should carefully weigh their options. Congress recently expanded the federal tax credit to include some existing homeowners, but they must close before June 30, 2010 to qualify. Although existing homeowners are not required to sell their current home to qualify for the credit, those who plan to rent out their current residences should be aware that many lenders require borrowers to show they are financially capable of paying two mortgages, or show rental income for at least six months. Discretionary sellers should discuss their options with a REALTOR® before making a decision.

As a side note to this article, I would like to stress the BOLD paragraph. As we hover around the absolute bottom of this market, investors are coming out with all cash offers on homes that would be ideal for first time home buyers. Unfortunately, I have seen this happen with putting in offers of 3 1/2% down and watching them get tossed to the side due to "stronger" offers. My suggestion is get pre-qualified now! Once we have that approval letter in hand we can act fast and put in our offer BEFORE these investors have a chance to make a move.

Please give me a call or email if you have any questions and I look forward to serving you!

Tax credit extended!!!

More good news for consumers, our members, and the housing market recovery. Following the Senate’s favorable vote yesterday, the U.S. House of Representatives just voted 403 to 12 to extend the home buyer tax credit, expanding the parameters to include existing homeowners and not just first-time buyers. As you may know, C.A.R. and our partners at NAR have worked for months urging Congress and the Senate to extend and expand this crucial piece of legislation. We expect President Obama to sign the legislation in short order.

As it now stands, the federal tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. First-time home buyers will continue to be eligible for a tax credit of up to $8,000, while existing homeowners will be eligible for a reduced credit of up to $6,500. To qualify for the $6,500 credit, existing homeowners must have lived in their current residences for at least five years. The bill also increases the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000 in both instances.

Under additional provisions included in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The legislation maintains the provision that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

Nationwide, more than 1.4 million first-time home buyers were given the opportunity to become homeowners as a result of the Federal Tax Credit for First-time Home Buyers. We expect that number to increase dramatically in the months ahead with this new legislation in place. Thank you to our members who called, wrote, and e-mailed their congressional representatives and voiced their support for the home buyer tax credit. Your voices were heard – today’s vote is a direct result of your actions and involvement.

Shrinking Real Estate 57% fewer homes in OC

The number of homes listed for sale continues to drop, decreasing by 174 listings over the past two weeks (down 2%). That brings the new total to 7,749 listings as of Thursday, according to Aliso Viejo broker Steve Thomas.

• The last time the Orange County housing market was this small: January 2006, when the slump was just getting started.
• Last week’s listings are down 39% from a year ago, when there were 12,790 homes for sale; and it’s down 57% from the peak (17,898 listings in September 2007).
• In addition, 3,166 new deals were signed in October, Thomas reported. That reflects a seasonal dip from this year’s selling peak of more than 3,600 new deals a month last spring.

Said Thomas:

“There is very little fresh, new inventory. The lower the range, the “spookier” it gets. Properties that are priced right and in great condition are flying off of the market with multiple offers and tremendous activity. Buyers new to the market are dumbfounded by all of the competition. Their expectations are of doom and gloom and the ability to “cherry pick” whatever home they are interested in AND at a discount. Yet, just about every agent has pockets filled with buyers who want to buy but have been unable to purchase after losing out on property after property.”

Thomas also calculates a “market time” benchmark tracking how many months it theoretically takes to sell all the inventory in the local MLS at the current pace of deal making. By Thomas’ logic:

• It would take 2.45 months for buyers to gobble up all homes for sale at the current pace, little changed from 2.43 months two weeks ago. But that’s a lot less than 5.19 months a year ago and 14.06 months two years ago.
• Homes listed for under a million bucks have a market time of 1.89 months (57 days) vs. 9.27 months for homes listed for more than $1 million.

Here’s the data, as of last Thursday, for listings; deals pending; market time in months; (note: k=thousand; m=million) last Thursday vs. 2 weeks ago, a year ago and 2 years ago …

Categories	Listed	Deals	Time (mo.)	2 wks. Ago	1 yr. ago	2 yr. ago
• $0-$250k	1,072	669	1.60	1.72	3.72	12.78
• $250-500k	1,994	1,357	1.47	1.42	3.72	12.78
• $500-750k	1,589	679	2.34	2.32	5.39	15.11
• $750-$1m	909	246	3.70	3.76	9.74	12.74
• $1-1.5m	784	132	5.94	6.46	12.40	15.02
• $1.5-2m	440	64	6.88	8.67	24.96	18.20
• $2m-4m	662	38	17.42	19.39	27.85	17.76
• $4m+	377	10	37.70	31.67	49.86	17.50
All O.C.	7,749	3,166	2.45	2.48	5.19	14.06

Ponder inventory trends:

• South County houses sell the quickest
• Shrinking real estate: 57% fewer O.C. homes to buy
• 15% price cuts move million-dollar O.C. homes
• Hardest O.C. city to find a home? Aliso Viejo!
• O.C. homes for sale drop 33% this year
• Portola Hills homes hot, Corona del Mar not
• Homeselling: Portola Hills hot; Corona del Mar cold
• Where do homes sell in less than a month?
• Fewest O.C. homes for sale since early 2006

$699,000 at the beach!! Click "Media" to see the pictures

San Clemente Southwest (SW)		Zip 92672-4336		TGNO 993A6
Orange County (OR)		XSTS Between El Presidente and S Ola Vista
S578119	Media: 8	Builder Tract Other (OTHR)
Bed 4		Model (Z)
Baths 3	Style Traditional	Stories One Level		Floor
View No View				HOA Dues $ 0 + $0	Land Lse/Yr $
ASqFt 1,448 Assessor		YrBlt 1975 Assessor		Land Fee
ALotSize 3,900		Assessor	Dim 40x97	Acres 0.09
Prkng Driveway - Concrete, Garage Attached, On Street Parking
Garage, # cars 2 A	Rem	# Uncovered Spaces	Cprt	# Garages	RV Acc	Range $: No
Range Price Listing: No

Seaside San Clemente Home offering the Coastal Residential Buyer or the Savvy Income Property Investor (In-law Apartment) an uncharacteristic opportunity to own property in the prized Southwest Area of San Clemente. A Private Courtyard accented with Stacked Stone leads you to the front entrance. The living area of the home flows well in a circular pattern from the Living Room, through the Dining Room, Family Room and Kitchen. Amenities include, light-tone laminated flooring, Picture Windows, Large Dining Room, open-on-two-sides floor-to-ceiling Natural Stone Fireplace between Living Room and Family Room, Granite Counter Tops in Kitchen. Master Bedroom with Master Bath are at the rear of the home, Secondary Bedrooms are of Ample Size, Secondary Bath sparkles with Tasteful Tile accents. Plentiful Parking with Two-car Attached Garage and Large Driveway. Emerald Green Grass Backyard is a colorful finish to this desirable property.

Special Conditions: Standard Sale/None

Rooms

Bedrooms Main Floor Master Bedroom			Living Rm
Kitchen Granite Counters			Dining Formal Dining Rm
Total Baths 3 Full Baths 2 3/4 Baths 1 1/2 Baths 0 1/4 Baths 0
Baths Desc
Other In-Law Apartment

Amenities

Pool No Pool		Spa No Spa	TV	Firepl Dining Room, Family Room, Living Room / See Through, Stone / Uses Gas Only
Appliances Cooktop - Gas, Dishwasher, Garbage Disposal, Gas Oven			Water Heater	Other
High or Mid-Rise Amenities			Security

Interior

Heating Forced Air	Cooling Whole House Fan	Floors Laminate, Wall-to-Wall Carpet
Interior Misc
Disability Access None

Exterior/Structural

	Entry Location Ground Level - no steps	Common Walls
Roof Composition/Shingle	Plumbing	Patio Enclosed Patio
Cond	Sprinklers	Doors/Windows
Structures, Other
Exterior Construction Stone, Stucco/Wood

Lot Description

APNO 692-185-02		Zoning	Lot/Block/Tract 73/8/852
Lot		Legal
Sewer In, Connected & Paid	Water District/Public	Water District	Yard Back
Distance to Beach (miles)

Community/Association

HS Dist Capistrano Unified School District		Elemen Concordia	Junior Shore Cliffs		High Sch San Clemente High School
Amenities
Units		HOA Dues $0 + $0				Mello Roos No
Land Fee		Land Lse/Yr $
City Inspection Required No	Builder's Name

Listing Activity

LP/SqFt $482.73

Orig Price $814,000

Prev Price $749,000

Current Price $699,000

Contact Information

	Display Name: Chelsea Schilling DRE License: 01853696 Preferred Phone: 949-310-6404 Preferred Phone Ext: Agent Direct Phone Number: 949-310-6404 Agent Toll Free Phone Number: Preferred Fax: 949-492-3291 Mobile Phone: 949-310-6404 Pager: Voicemail: Blog: Office Phone: 949-492-7653 Primary e-mail address: Schilling7@gmail.com Website address:

3 Homes in San Clemente that you might like

Please click on the link(s) below to view property information.

Client Full Report + Photos

August 2009 Month in Review- Gotta Watch!

http://kwconnect.kw.com/connect/user/share.jsp?p=2679&sh=787

Extend the Homebuyer tax credit!

I've included a sample letter that Realtors are being urged to write and send to our congressmen. As a future home buyer, I see no harm in writing a letter on any of your behalves also.

Send a letter to the following decision maker(s):
Your Congressperson
Your Senators

Below is the sample letter:

Subject: Homebuyer Tax Credit: Extend and Expand

Dear [decision maker name automatically inserted here],

As a Realtor and a constituent, I can assure you that the $8,000 first-time homebuyer tax credit has definitely been a success. Homebuyer interest and housing sales increased almost as soon as the ink was dry on the tax credit legislation. Today's lower prices and interest rates appeal to consumers, but it's been the tax credit that has attracted people to open houses and to homeownership.

That progress could grind to a halt sooner than you think. Congress must act NOW to extend the credit through 2010. Otherwise, uncertainty will return and the market might again be frozen -- possibly as soon as October.

A homebuyer is eligible for the tax credit only if the home is "purchased" before December 1, 2009. That means that buyers have to find a house, complete a contract, satisfy any contingencies, secure financing and go to closing by November 30. Accomplishing those tasks by November 30 will become more difficult with every passing day. In today's market, it generally takes between 45 and 60 days to go from contract to closing.

The market has improved, but it has not yet fully corrected itself. The credit needs to be extended for an additional period of time and expanded in order to build upon the progress that's been made. Uncertainty about the future of the credit will dampen consumer demand. The best way to assure continued housing activity is to extend and expand the credit and to do that NOW.

We can't wait until late in the year to see what happens. Consumers will drop out soon if they can't predict what's in their future. Please act NOW to extend and expand the credit through 2010.

Sincerely,

Chelsea Schilling

This week’s C.A.R. Mortgage Update contains information about down payments; the Obama
administration’s Making Home Affordable program; concerns about the viability of the Federal Housing
Administration; and low interest rates keeping homes affordable
A Down Payment Anomaly
Despite home buyers being advised to issue down payments of at least 20 percent, many home buyers are
finding that smaller down payments result in better interest rates—but also higher payments.
Rules put in place in late 2008 by Fannie Mae and similar rules adopted by Freddie Mac are less favorable
to borrowers who put down 20 percent to 25 percent--partially because the GSEs consider these borrowers
to be more of a credit risk since they are not required to purchase private mortgage insurance.
According to Fannie Mae, borrowers benefit from this industry practice because they are able to leave
themselves a financial cushion by not issuing larger down payments, and can instead save the extra money
for emergencies.
It is important to note though that smaller down payments mean higher monthly payments because the loan
itself will be larger.
To read the full story, please click here:
http://www.nytimes.com/2009/09/06/realestate/06mort.html?ref=realestate
To view additional articles please visit the following:
Obama’s mortgage relief program growing
The Obama administration’s $50 billion mortgage relief program is finally picking up speed after a sluggish
and disappointing start: Nearly one in five eligible homeowners has been offered help so far, the Treasury
Dept. said Wednesday.
To read the full story, please click here:
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/09/09/financial/f073010D13.DTL&type=business
Behind FHA Strains, a Push to Lift Housing
As it tried to help shore up the ailing housing market during the past year, the Federal Housing
Administration increased its exposure, particularly to mortgages in high-cost states that have also seen
some of the sharpest price declines.
To read the full story, please click here:
http://online.wsj.com/article/SB125211204270688031.html
Low rates keeping homes affordable
Falling interest rates are fueling a rise in home mortgage applications and refinancings in the Inland region,
though experts aren’t yet ready to declare the beleaguered local housing market on the road to full recovery.
To read the full story, please click here:

http://www.pe.com/business/local/stories/PE_Biz_S_mortgages04.38b40b4.html

Homes in San Clemente under $475,000 (NO Mello Roos!)

Hello everyone,

I just thought I would update everyone here in gorgeous Southern California. Happy Labor Day! Summer is officially coming to a close, and with kids back in school and the beaches a little less crowded, we are going to be finding people looking more at houses again as the weather cools. Homes under $500K are still selling like hot cakes.

I will be having a new listing hitting the market in a few weeks and thought I would let everyone know about it before it hits the MLS. It is located in Capistrano Beach of Dana Point and is a 3 bedroom, 2 bath home in the front and there is a separate casita (1 bed, 1 bath) in the back of the house with a private entrance and yard. Cute house with an amazing floor plan that also included ocean views! Currently, this house is being used as a rental property (rented at $2500 for the front unit and $1100 for the back unit) Rent paid to owner is $3600. Now, this short sale listing will be listed around $485,000 and it is highly likely that the bank will accept offers at that price based on recent comps.

I worked out the payment schedule and assuming you put down 20% (perhaps gifted from a relative or funded by savings, and based on current interest rates, your payments, WITH taxes (no HOAs on this property) will be under $2500 a month. This is a net profit investment that would make a great home for a family as well. You could rent out the back section (already tenants there that will want to stay) and your mortgage payment will be roughly $1,400 a month. That is cheaper than any rent you can find in the area.

I call this a "Pocket Listing" until it hits the MLS and would love to answer any questions about the property.

Also, as promised, here are my "Top buys of homes that are under $475,000 that include at least 3 bedrooms, and NO Mello Roos. Enjoy viewing the listings below:

Please click on the link(s) below to view property information.

Client Full Page

The link(s) sent with this email will expire in 30 days on 10/9/2009.

Shhhh....

P.S. Today's agent meeting leaked some information that the first time home buyer's tax credit may be extending.. and may be even going up some.
I cannot be quoted on this however, just wanted to share my insight.

Things are perking up everywhere! Weekly Market Report

Name just about any housing market or economic indicator you can think of, and the odds are good that last week it was much better than the preceding week or month.

Start with resales of existing homes. They were up by 7.2 percent in July over June, according to the National Association of Realtors. That was the fourth consecutive -- and by far the largest -- monthly increase so far this year.

And check out new home sales. They were up by nearly 10 percent in the latest report from the Commerce Department. The gain was the biggest monthly change in sales since February of 2005. It pushed inventories of unsold new houses to their lowest point in 16 years.

Consumer confidence also was sharply higher, according to the Conference Board's widely watched index, up seven points in August over July. Lynn Franco, director of the Conference Board's consumer research center, said "consumers (are) more upbeat in their short-term outlooks for both the economy (as a whole) and the job market."

The latest Case-Shiller home price index even turned positive! Case-Shiller's national composite was up 2.9 percent comparing the first quarter of 2009 with the second quarter. That was the first quarter to quarter price improvement in more than three years, and we all know how spooky and bearish Case-Shiller has been throughout the housing downcycle.

Fully 18 of the 20 major markets tracked by Case-Shiller were positive for the quarter, even though on a year-to-year comparison basis, prices in the second quarter of 2009 were still 15 percent below the second quarter of 2008.

Mortgage applications and interest rates continued to be favorable as well. Total applications jumped by seven and a half percent last week, according to the Mortgage Bankers Association.

Rates remained low and stable: 5.2 percent for 30 year fixed rate loans, and 4.6 percent for 15 year mortgages.

Equally significant, some prominent analysts are saying the recession either officially ended sometime during the month of August, or will do so shortly, maybe in September.

The Mortgage Bankers Association's top forecaster, Orawin Velz, said the national gross domestic product or GDP likely will RISE in the third quarter -- ringing down the curtain on the deepest recession in decades.

Now, does this all mean that happy days are here again and the housing market can only go up as the recession comes to an end? Not with unemployment still above 9 percent and three million foreclosures forecast for the year.

Look for a slow-mending recovery, but one that looks like it will be led by housing. Until next time, Make it a Great Week!

Chelsea's "Hot Buys" for San Clemente under $600K

As promised, I have included some of the "Best Buys" for coastal San Clemente under the $600,000 mark. These homes are not only cute as a button, but close to great schools, shopping, parks and local beaches. With less homes entering the market place in South Orange County, these homes will not be on the market long. We have noticed a serious demand for homes in this price range.

Enjoy viewing:

Please click on the link(s) below to view property information.

Client Brief Report + Photos

$8,000 First Time Home Buyer Tax Credit

Act fast! Homebuyer tax credit ends soon

There's barely three months left before the $8,000 tax credit for first-time buyers ends -- and it can take that long to close on your new home.

By Les Christie, CNNMoney.com staff writer

Last Updated: August 27, 2009: 3:38 PM ET

Mortgage Rates

30 yr fixed mtg	5.29%
15 yr fixed mtg	4.72%
30 yr fixed jumbo mtg	6.21%
5/1 ARM	4.58%
5/1 jumbo ARM	4.98%

NEW YORK (CNNMoney.com) -- Use any metaphor you want: the ticking clock, sands running through the hourglass or pages falling away from the calendar. The fact is, time is running out to claim the $8,000 first-time homebuyers tax credit.

Passed earlier this year as part of the economic stimulus package, the credit is good for up to $8,000, or 10% of the purchase price, and applies to people who have not owned a home in the previous three years. (There are some income restrictions.) The best part: Unlike a similar program from 2008, the credit does not have to be repaid.

The bad part: It ends on Dec. 1.

Because it usually takes around 90 days to close on a house after a contract is signed, buyers have very little time left to act. As of Thurs., Aug. 27, there were only 96 days left before the credit ends.

"Buyers have to get a home under contract very, very soon," said Tom Kunz, CEO of Century 21. "They probably should get out looking."

Sense of urgency

What they will find may surprise them: Many of the prime properties have already been snapped up. Home sales have been on the upswing, and inventories are so depleted in hot markets that first-time buyers are struggling to find homes in their price range. (Check prices in your city.)

In Whittier, Calif., for example, there are few repossessed homes for sale. Those are easy to buy because there isn't a lot of red tape and the bank wants to get rid of them as quickly as possible. Instead, most of the properties are short sales, where the sellers have to convince their lender to let them sell the house for less than they owe.

"That's why there's such a sense of urgency now," said Irma Tapper, a Century 21 real estate agent in Whittier. "The banks have to approve short sales, and they're taking three to six months to do that."

That means a first timer putting a bid on a short-sale might not get an answer form the bank until well after the Dec. 1 deadline for the tax credit. So when an actual repossession listing hits the markets, it creates a feeding frenzy.

Chuck Whitehead, who runs the Coldwell Banker agency in Temecula, Calif., said one recent listing hit the market on a Friday and by Monday there were 57 bids.

The National Association of Realtors attributes much of this activity to the first-time buyer tax credit. It estimates that 1.8 million buyers will file for the credit, and 350,000 of them wouldn't have been able to buy without it.

"It makes a big difference because most of these clients are in a lower price range," said Michelle Edmunds, an agent with Coldwell Banker in Temecula, Calf., who has closed sales for six first-time buyers. "The houses they buy need work and normally they wouldn't want to move in because of the [less than perfect] conditions the homes are in."

That is true for Wesley Forsythe. This June, the 30-year-old computer consultant and his girlfriend bought a row house in the Fishtown section of Philadelphia. Since he paid just $80,000 for the three-bedroom, two-bath place, the credit acted like a 10% discount.

"It allowed us to expand our price range and plan additional renovations," he said. "My mortgage is several hundred dollars less than what my new rent would have been."

Forsythe applied for the credit immediately after closing, filing an amended 2008 tax return. The IRS cut him a check in less than seven weeks. He's spending it now on new hardwood floors, repainting most of the interior and renovating a bathroom. He's stretching the cash by doing much of the work himself.

Homes still affordable - really affordable

The bright side of the housing bust: Homebuying has not been this affordable in a generation.

By Les Christie, CNNMoney.com staff writer

Last Updated: August 19, 2009: 2:19 PM ET

Mortgage Rates

30 yr fixed mtg	5.29%
15 yr fixed mtg	4.72%
30 yr fixed jumbo mtg	6.21%
5/1 ARM	4.58%
5/1 jumbo ARM	4.98%

NEW YORK (CNNMoney.com) -- Homes continue to be more affordable than they have been in nearly two decades.

The typical American family, making the nation's median income of $64,000 a year, could afford to buy 72.3% of all homes sold in the United States during the second quarter, according a quarterly report from the National Association of Home Builders (NAHB) and Wells Fargo (WFC, Fortune 500).

That's off just a tad from the record 72.5% reached during the first three months of 2009, but up substantially from the second quarter of 2008 when only 55% of homes sold were affordable.

"The increase in affordability -- along with the $8,000 federal tax credit for home buyers -- is stimulating demand, particularly among young, first-time buyers," said NAHB Chairman Joe Robson, a homebuilder from Tulsa, Okla., in a prepared statement.

The NAHB judges a home to be affordable if a family making the metro area's median income could devote no more than 28% of their take-home pay toward housing costs.

The vast improvement this year is due to plunging prices and rock-bottom interest rates. The average U.S. home price has dropped more than 32% from its peak, which was set during the summer of 2006, according to the S&P/Case-Shiller Home Price index. And, for most of the three months mortgage rates were historically low, under 5% for a 30-year fixed-rate loan.

Long suffering sellers

The improved affordability comes, of course, at the expense of sellers. Real estate Web site Zillow reported that more than 30% of all homes sold during the three months ended June 30 went for less than what the sellers originally paid.

The longer they owned the home, the more likely they were to profit from the resale, but virtually anyone who bought within the past five years and sold during the quarter lost money on the deal, according to Stan Humphries, Zillow's vice president in charge of data and analytics.

Foreclosure factor

The heartbreak among home sellers is compounded by the foreclosure problem. Many of the homes on the market got there because families lost their homes to foreclosure.

Part of the reason that home prices have become so reasonable is the volume of REOs -- real estate speak for homes repossessed by banks -- has spiked. There were more than 87,000 repossessions in July, about triple the number of July 2007.

Foreclosed homes are often listed and sold at steep discounts to produce quick sales, according to Brad Geisen, founder of Foreclosure.com, which markets such properties.

"The big banks are finally pricing their properties to what people will pay for them," he said. "Foreclosure inventory is now selling at about the same rate it's coming in."

Most affordable cities

The older, industrial Midwest cities generally offer the best bargains. Indianapolis has led the NAHB's Housing Opportunity Index for 16 straight quarters. Nearly 95% of all homes sold there were affordable to those earning the area's median income of $68,100.

Other leaders were the Youngstown, Ohio, metro area, Detroit, Dayton, Ohio, and Grand Rapids, Mich.

The least affordable large metro areas were New York, where only 21% of homes sold were affordable, Honolulu, San Francisco,Los Angeles and Santa Ana, Calif.

Market Update for Week of August 25th, 2009

Orange County continues along a familiar path since May where fewer active listings are entering the market and the number of new homes entering the market are dropping too. At the under $500,000 home prices, approximately 54% of the listed homes category are distressed properties. Meaning either a short sale or foreclosure. It is my opinion that we have hit a bottom at this lower range and I also believe that we now have a sellers market in this category. Buyers out there are experiencing a lot of competition (especially when homes are priced right to sell). It has not been unusual to see multiple offers and buyers in this category are consistently dumbfounded to see this.

Mortgage Delinquency Rises to an All-Time High

According to TransUnion, mortgage delinquency rate - percentage of mortgage holders who are 60 days or more behind on their payments - rose for the tenth straight quarter to 5.81%, in the second quarter of 2009; that is an increase of 65% from the corresponding quarter last year. For the second quarter, Nevada, Florida, Arizona, and California remained the 4 states with the highest delinquency rates; these are the states where foreclosures are the highest. North Dakota, South Dakota, and Alaska had the lowest rates. Delinquency of 60 days is typically a precursor to foreclosure, since homeowners may find it difficult to get current on mortgage payments after two back payments.

While the delinquency rate hit a new high, the increase from the first quarter to the second was 11.3%; in the two prior quarters, the rate rose nearly 16%. "For the first time since the recession began at the end of 2007, the quarter-to-quarter growth rate for national mortgage delinquency shows a decrease," said FJ Guarrera, vice president of TransUnion's financial services division. "I believe this is a precursor to recovery. We see this as a really good sign." However, Guarrera says it will take time for the national delinquency rate to return to its historic level between 1.5% and 2%. "Forecasts are telling us that the recovery will be slow," said Guarrera.

22562 Genova, Laguna Hills CA.

Beautiful Home in Laguna Hills! Close to shopping, golf courses and just miles from the beach. This home features 3 bedrooms, 2 baths, a separate laundry room and a large living room area with vaulted ceilings. This remodeled home has been done impeccably well including new flooring, granite counters, stainless steel appliances, new windows, new lighting and all new fixtures in the bathrooms! With a large front yard and generous backyard equipped with trellis and spa, this is the perfect entertainer's haven! Located in a cul-de-sac with very friendly neighbors, you will want to live here forever! No short sale or REO hassles.
Listing Price: $ 520,000