What is a "Targeted Area" and what does it mean to me?  Federally designated "Targeted Areas" were identified by the US Census Bureau in the 2000 Census as areas in California where 70 percent of the families who live there earn an income that is 80 percent or less than the statewide median income.  Thirty-three of California's 58 counties have Targeted Areas and through the CalFHA program homebuyers may find greater flexibility when buying a home in one of these areas.

Advantages to purchasing a home in one of these Targeted Areas include:

1. No first-time homebuyer requirement - Most of CalHFA's programs require that the borrower be a first-time homebuyer.  However, when the home being purchased is located in a Targeted Area, that requirement does not apply.  Though, the first-time homebuyer requirement still applies for CalHFA's down payment assistance programs.
2. Income limits are higher - The maximum alowable income is higher in Targeted Areas to expand homeownership opportunities to more borrowers. (Higher income limits will apply with some CalHFA's mortgage products and down payment assistance programs.) 
3. Sales price limits are higher - In Targeted Areas, the limit on the price you pay for the home is raised to create a larger pool of available properties.

To find Targeted Areas in Sacramento County or any of the other 32 counties please visit the CalHFA web site. 

BORROWER EDUCATION 101

It has been remarked that one of the most frightening sentences in the English language is, "Hi, I am from the government and I'm here to help."  Of course, that is not always the case.  Take for example the Federal Reserve Board.  It was created by Congress nearly 95 years ago to provide our nation with a safer, more flexible and more stable monetary system. 

Because of Federal Reserve's role as the central bank for the United States the Fed has some incredible information resources for homebuyers or people looking to refinance a home.  And, with the internet the information is available 24/7.  The Fed can provide you a wealth of information about loan types and it even has an easy to use calculator that allows you to compare loan types before you commit to one with your bank or mortgage lender. 

Whether you are contemplating the latest exotic loan de jour or a more basic 30 year fixed rate you can go to the Federal Reserve's Mortgage Comparison Calculator and see which would be best for your needs. 

NEW CA MLS - REAL ESTATE ON STEROIDS!

This week a new alliance of real estate agents and brokers throughout much of California launched the new "California MLSAlliance" providing over 150,000 CA REALTORS® with access to more than 2.5 million active listings and off-market properties around the state.  The alliance enables California REALTORS® to deliver more information to their clients in this time of changing market conditions. Now, that's real estate on steroids!

The MLSAlliance provides a technological gateway for a single point of access for real estate listing information.  While it is always best to operate within the markets one knows, for agents and brokers who conduct business in various locations around the state this new portal provides a one stop search vehicle.

This alliance of ten MLSs who came together with Metrolist Services, Inc. to make this happen were East Bay Regional Data, Inc. (EBRDI), Bay Area Real Estate Information Services, Inc. (BAREIS), Combined L.A./Westside MLS (CLAW), CRISNet Regional MLS, Greater South Bay Regional MLS, iTech MLS, Multi-Regional MLS (MRMLS), San Francisco Association of REALTORS®, and Southern California MLS. 

With the MLSAlliance agent and broker subcribers are able to locate listings in the following 22 major California counties: Alameda, Contra Costa, San Francisco, Napa, Solano, Mendocino, Sonoma, Lake, Marin, San Mateo, Sacramento, Yolo, Placer, El Dorado, San Joaquin, Stanislaus, Merced, Los Angeles, Orange, San Bernardino, Riverside and Ventura.

If there is power in numbers then this new alliance will offer REALTORS® more power to service the needs of an every increasing demand for professionalism and technical know how.  

Sesame Street's Kermit the Frog often said, "It isn't easy being green."  But times are changing and green is "in."  For a variety of reasons from altruism to good old self-interest Americans are becoming more "green" in their habits and lifestyles, including the homes they purchase.

Defining "green" is sometimes a challenge.  For some it is concerns over indoor air quality that motivates them.  For others it may using sustainable wood products such as bamboo which are highly renewable.  For still others it may mean photovoltaic panels on their roof to utilize the suns incredible energy.  And so on.

But for purposes of today's topic I am going to give you a quick overview of some "green" vocabulary.  No, there will not be a test later, but you may want to bookmark this because these terms quickly will become part of the real estate lexicon. 

Sustainable - Involves the use or re-use of natural resources with the express purpose of preserving these resources for use by future generations.  By using or reusing resources without harming the our natural environment. 

Native Landscaping - Refers to using local, native plants in landscaping.  Indigenous plants are naturally better suited to the climate, water needs, pests and provide a natural food source for the native wildlife.

Runoff - Runoff is the excess water from watering lawns, gardens, car washing, rinsing sidewalks and driveway that ends up in our storm drains and ultimately in our waterways and oceans.  Not only is runoff wasteful it puts pesticides, fertilizers and other chemicals in the streams, lakes and aquafers which can cause problems for humans and animals downstream.  Reducing runoff is fairly simple.  Don't overwater lawns, use a broom rather than the hose to clean driveway and sidewalks.  In addition, the use of stone pavers rather than poured concrete for driveways allows excess water to seep into the ground rather than runoff into gutters and storm drains.

FSC Certified Wood - The Forest Stewardship Council (FSC) developed and maintains standards for certifying woods for sustainability.  Using sustainable wood products is a cornerstone of green building.  When selecting hardwoods it is important to look for woods that are grown and harvested using sustainable practices.  Woods such as bamboo are strong, renewable and very sustainable.

LEED - The U.S. Green Building Council has developed standards for design, construction and the operation of "green" buildings.  The USGBC created a rating system called Leadership in Energy and Environmental Design or LEED for short.  LEED was initially used in the commercial construction and a similar rating is under development for the residential construction market.  Architects and builders who have taken specific educational steps and passed the LEED exam are said to be a LEED Accredited Professional.

Photovoltaic - PV is the abbreviation for photovoltaic which is a series of panels usually on a roof that generate electricity from the sun.  These systems take the sun's natural energy and convert it to usuable electrical energy which can be used for the residence or sold back to the grid (local power provider).

Solar Water Heater - Different from solar photovoltaic, solar water heating is done by heating water through a simple system of panels installed on a roof.  The sun heats the panels and the heat is "collected".  Then the water is run through a series of pipes in the collector where the water is heated and stored for use by the home.  Solar heating have been around for a long time and are much less expensive than the newer technologies of the photovoltaic systems. 

EcoBroker - This is a newer certification available for REALTORS®.  EcoBrokers have met a standard of education in environmental and green building education from EcoBroker International.  EcoBroker's education program is designed to instill REALTORS® with knowledge about green features for clients interested in energy efficiency, air quality, orientation, and other areas related to the green housing market. 

So, while Kermit may have been correct and it isn't easy being green, it is becoming easier to be green! 

Well, it is a good news/bad news situation for home buyers and sellers in our local housing market.  The good news is Sacramento County is one of the most affordable areas of the 58 counties in the state for first-time homebuyers.  The California Association of Realtors reported yesterday that 38% of potential home buyers locally can afford to buy a home.

Sacramento County's 38% compares very favorably to just 24% statewide, 25% in the SF Bay Area, and just 14% in Santa Barbara County.  The same survey said that 35% of first-time buyers in the state were able to afford condos.

CAR's "affordability index" assumes a 10% down payment with adjustable rate financing at 6.58%.  Using that formula in Sacramento  County means that it takes a household income of $65,910 and monthly payments of $2,200 (including taxes and insurance) to buy the median-priced home of $319,060.

Even better for buyers is the amount of inventory currently on the market.  With the flood of homes out there homes are staying on the market three to four times longer than just nine months to a year ago causing sellers to become more realistic in order to sell their homes. 

So, where's the bad news?  The bad news is for the sellers who are still holding onto to expectations based on the hot go-go market of the past few years.  That just is not happening.  The key for sellers to price their home to sell today - not trying to get what they might have gotten had they tried to sell a year or more ago. 

Again, this does provide some upside for sellers assuming they are going to purchase another home.  Why?  Well, because the home they are buying will likely be priced lower as well.  In fact, it is conceivable that someone selling today can get more home for less money than they could have a year ago. 

My take on this is the market is transitioning back to equilbrium and will ultimately benefit both buyers and sellers.  Though for the time being it appears that buyers are in the driver's seat.

Just how important is choosing the right REALTOR®.  Well, ask yourself.  Would you invest your entire retirement savings with a stockbroker who just got his or her license?  If you were undergoing open heart surgery would you want it to be your doctor's first operation?  Of course you wouldn't.  Likewise, would you use an inexperienced real estate agent to represent you in one of your most important investments - your home?  Nope.

As of January 25, 2006 there were over 479,789 licensed real estate agents in California.  The California Department of Real Estate projects there will be over 500,000 licensees by June of 2006.   So this many licensees it means that quite literally every Californian knows someone "in" real estate.  

Think about how many people you know who might have a license.  Maybe your child's teacher.  Maybe the waiter at your favorite restaurant.  The person who sold you a new computer.  Maybe a relative of yours.  Many of them are people who decided to cash in on the real estate boom.  But for whose benefit?  Yours or theirs?

In fact, did you know that 90% of real estate transactions are handled by 10% of the licensees?  That's right.  Those who really know real estate are the men and women who work it as professionals.  Another interesting figure is that 90% of real estate licensees leave the field within two years of receiving their license. 

True real estate professionals are REALTORS®, members of the National Association of Realtors®.  They adhere to a code of ethics and are continuously learning and developing their skills to provide the best service possible to their clients.  REALTORS® work with clients on a daily basis to market and price properties to sell.  Good REALTORS®, successful REALTORS® are closing deals on a regular basis.  If not, they are merely dabbling in real estate. 

When you decide to purchase or sell a home don't take a chance on your niece April who's only been licensed since March and doesn't know a prelimenary title report from transfer disclosure statement.  Helping her learn how to list and sell your home could cost you.

Experience makes a difference.  Don't use a dabbler to represent you in one of your most important financial decisions.  Choose your representation wisely.  Choose a California REALTOR®.  In addition, you many want to look for signs of an agent's commitment to continuing education.  These are signified by important professional designations such as e-PRO® (certified internet professional), Accredited Buyer Representative®, Seniors Real Estate Specialist®, GRI (Graduate Realtor Institure), or CRS (Certified Residential Specialist).  

Choose an experienced REALTOR®.  You will be glad you did.

Change is the one constant in the universe.  And with that said, the real estate market has changed a lot in the past year.  It certainly is not as robust as it was last year at this time.  But is this good or bad?

With interest rates creeping up to their highest level since July 2002 (though still at very affordable levels) and consumer confidence faltering a bit the housing market is no longer enjoying the rapid run up in prices that we saw just nine to twelve months ago.

According to the Mortgage Bankers Association both refinance and purchase money loans are down from the same period last year.  For more on the MBA's Mortgage Application Survey click on MBA Weekly Survey. 

For the glass half full crowd the market is quickly becoming a buyer's market due to the still relatively low cost of funds and the near record high number of homes on the market.   Gone are the days of scrambling to be the first in the door and trying to beat out the multiple offers.  Now is the time when buyers can take a little extra time to find their dream home. 

Personally, I am finding it a great time to work with buyers because together we can find them a home that fits their needs and desires as well as negotiating better prices and terms.  I would encourage anyone interested in buying a home this Spring to begin the process now.   It is a lot of fun and looks to be a great season for house hunting.

Today marks the beginning of the California Housing Finance Agency's 40-year mortgage featuring a 5.75% interest rate.  This loan is targeted at California home buyers who face the highest home prices in the nation.

The new CalHFA loan provides low and moderate income residents who are first time buyers with the ability to reduce their payments by up to $150 per month on an average Sacramento area home.  While many low and moderate income residents are effectively priced out of the market due to the incredible escalation of home prices in California, a family of three or more with an annual income below $89,740 can qualify for a home as high as $429,620. 

Though extending the loan period does add to the final costs of the home, the new 40-year fixed interest rate loan puts the American Dream of home ownership well within reach for many more Californians.

Great news for California home buyers!  This spring the California Housing Finance Agency will make it possible for first time home buyers to qualify for a 40-year loan without even needing a down payment when they meet the CalHFA's first time buyer criteria.

CalHFA's 40-year loan minimizes risky financing for first time buyers such as adjustable rate mortgages and interest only loans.  CalHFA's 40-year loan maintains the same payment for the life of the loan.

The new CalHFA 40-year also provides buyers with a terrific option to qualify with less income.  For example: to qualify for a 30-year CalHFA loan for $355,000 buyers would need household income of $72,500 per year.  However, with a 40-year loan for the same $355,000 purchase price it would only take an annual income of $68,400 to qualify. 

With housing prices continuing to rise (the countywide median home price in Sacramento County in January '06 was $352,000) around the state this will enable many potential buyers the opportunity to enjoy the benefits and pleasures of owning a home.

For more information on the CalHFA 40-year loan and their other buyer assistance programs please click on CalHFA and learn more. 

One item often overlooked by new home owners is changing locks or re-keying existing lock sets.  Upon close of escrow and taking possession of one's new home the first order of business is to make sure the home is secure and your family is safe. 

As anyone can imagine it is unlikely to know just how many of the prior owners keys are unaccounted for.  Keys left with workers, stashed under the doormats or over door jams, "hidden" around the house, etc.  While some might say that locks will only keep the honest people honest.  It is always better to be safe than sorry.  The safety of loved ones is surely priceless and protecting your family is simple and inexpensive.

For anyone in the greater Sacramento area I would suggest contacting Carl Woodard (aka - The Key Man) to have your changed or re-keyed when you move.  Carl and his team are specialists at re-keying residential lock sets. 

In writing this I found several interesting links to sites with the history of locks.  The first locks were made by the Egyptians approximately 4,000 years ago.  For more on the history of locks go to:  Schlage's History of Locks, History of Locks on About.com,  or Encyclopaedia of Locks and Builders Hardware.

Be safe!