Have we hit bottom yet?

Have we hit bottom in Santa Cruz…or will the 90 day state moratorium bring on a new onslaught of properties in default?

Well, according to the stats from March – the median sales price for a single family home in Santa Cruz County edged up a bit to $420K, in April from $399K, but remains far below the median of 661K just one year ago.  Overall sales rose and inventory dropped compared to a year ago.
(Reference – median means the midpoint of sales for the month.)

Sales in Watsonville, hit harder by foreclosures than the rest of the county, comprised 26 percent of overall sales, down from 33 percent in February. In addition, Watsonville has 104 pending sales, leaving only 41 listings when there had been over 200.

That could warn of a market that is perking after being in the doldrums last year.

Having said that – some analyst feel were not a the bottom yet:

Mark Hanson of the Field Check Group in Menlo Park sees a “false bottom” in the housing market.

“If the market was truly on the mend, sales would be much higher,” he said.

He attributes falling prices to the elimination of exotic loans such as adjustable-rate mortgages with low teaser rates and interest-only payment plans, combined with government and bank moratoria on foreclosures advertisement for the past nine months that artificially depress the availability of homes.

He sees prices stabilizing and edging higher as more expensive properties are foreclosed and sold.

“You have a shortage of bank-owned homes,” said Schahrzad Berkland of CaliforniaHousingForecast.com, after seeing the Santa Cruz County statistics. “In California, they make up about 30 percent to 50 percent of sales, but in your area, they are only 10 percent of the listings.”

Bank-owned properties are attracting buyers in Santa Cruz, with 71 bank-owned listings and 59 of them in pending sales.

“My guess is pendings would be much higher if there was more inventory of affordable homes,” Berkland added. “My guess is there is a huge surplus of high-end homes.”

In Santa Cruz County, lenders have issued 883 default notices to borrowers, up from 867 a year ago, while the pace has slowed in neighboring Monterey and San Benito counties, according to the Santa Cruz Record.


Good News- Bad News on New Credit Card Laws!!

Which news is usually easier?

Good or bad first – ok I’ll start with the good;

Good: The Federal Reserve Board and two other organizations recently issued new rules changing some of the less consumer-friendly practices.

Bad: The rules don’t go into effect until July 2010.

Here is a rundown of what is changing:

Interest Rates:

Now:  Banks can increase your rate on the entire balance at any time, for any reason with 15 day’s written notice.
As of July 2010, Cannot increase rate on existing balance of you pay on time.
Must give 45 day’s written notice to increase rate.

Late Payments:
Now:  Can hit you with a fee if you’re even 5 minutes late or got the statement yesterday.
As of July 2010: Cannot assess a late fee unless you’ve had at least 21 days to make a payment.

Allocating Payments:
Now:  Typically payments are applied to your balance with the lowest interest, even if you pay more.
As of July 2010:  If you pay more than required, it must be applied to the balance with the highest interest rate, or spread proportionally.

Two-Cycle Billing:

Now:  Use paid-off balances from prior months to determine your current finance charge.
As of July 2010:  Practice banned!

Sub prime Credit Cards:
Now:  Security and opening fees for people with low credit scores can be as much as the credit limit on the account.
As of July 2010:  Security and opening fees for people with low credit scores cannot exceed half of the initial credit limit.

To find competing offers for your cards with lower rates go to CreditCards.com or CardRatings.com or Bankrate.com

Deb Whitney