Archive for November, 2005

Refi activity slows

Kelly Zito writes in today’s Chronicle about the slowing mortgage refinance market. “The Mortgage Bankers Association’s weekly refinance index, which measures refinancing volume, dropped 17 percent between mid-October and the week ending Nov. 18. In addition, the volume of all mortgage applications — both refinancing and purchases — dipped 3.4 percent compared with the week before, the Washington, D.C., trade group said.”

“Since September, mortgage rates have risen steadily, taking a bite out of buyers’ spending power and making it more costly for owners to tap into their property’s equity. The average rate on the benchmark 30-year fixed-rate mortgage was 6.37 percent last week, up from 5.74 percent a year earlier, according to Freddie Mac.”

I chose to only quote the facts in this article as I don’t agree that asking people in D.C. and New Jersey, or asking nationally-based economists relates to what ultimately happens in San Francisco.

There’s no question that those of us (myself included) with adjustable rate mortgages are seeing our monthly payments change, but that’s part of the homeownership process. If you want a fixed rate, you might want to refinance now. Once we see things level off a bit in the mortgage world, we’ll likely see a stabilzation of rates. This will give folks the opportunity to set their expectations for their monthly payments.

I definitely don’t agree that the market will “all but shut down” with another half-point increase in interest rates. This guy is obviously out of touch with the fact that people still need a place to live. And they’re not building any more land in San Francisco.

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Supes defer condo-conversion ordinance decision

The Examiner is reporting today that on Tuesday “The Board of Supervisors put off a decision on a controversial plan to establish a seniority system for The City’s annual lottery to turn 200 tenancies-in-common into condominiums.”

There was no timeline given for when this issue will be brought back to the table.

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Plans for cycling race grind to halt

Ahhh… Our beloved Supervisors have done it again! Please add this one to your ‘why I won’t vote progressive in the next election’ list.

From today’s SF Gate, “The organizer of the annual San Francisco Grand Prix, a pro race that attracted some of the world’s best cyclists, said in a written statement Sunday that it will cancel next year’s race because of a raucous dispute with City Hall over who should pay for police and other city services required for the event.”

Basically, the city couldn’t resolve a billing miscommunication last year, causing the organizers to not be properly billed, then someone decided to report (in the press) that the organizers hadn’t paid their bills. Really bad form, guys.

A few ‘Supes also decided to make this a political issue (namely Daly and Peskin) in an effort to win back some of their fading approval ratings (from even their prized constituents).

“”Sadly, it’s a no-win situation, and we simply cannot go forward,” said David Chauner, director of San Francisco Cycling LLC, which founded and runs the annual race. The 108-mile race was regarded as one of the country’s most challenging because of its length and the city’s steep hills. It wound through the heart of the city and drew hundreds of thousands of spectators and more than 100 world-class athletes. Lance Armstrong, seven-time winner of the Tour de France, participated several times in the race before he retired.”

“Both San Francisco Cycling and Newsom’s office said the company shouldn’t be faulted for not paying sooner because the city’s Department of Public Works only mailed the 2004 bill this month. Supervisor Aaron Peskin contends race organizers should have paid a preliminary bill from the Police Department a year ago for the full cost of the 2004 security and then sought a partial refund from the city later.”

So, Peskin expects someone to pay for the city’s mistakes then ask for a ‘refund’? You’ve got to be kidding me.

I am a cyclist who has seen professional events all over Europe, this was the closest the USA has come to the energy and feel of a full-on European event. Even the Euros felt at home here. And just like that, Peskin and Daly throw a fit, scare potential sponsors away, and cause the organizers to cancel the event.

“Still, Peskin said he thought San Francisco Cycling scrubbed the event because it was having trouble lining up the necessary funding, not because of anything to do with City Hall. Even San Francisco Cycling said it had lost money on previous races. Peskin also said that San Francisco will host a new bike race in February — part of the 700-mile Tour of California. Tour organizer AEG has promised to reimburse the city for the entire cost of policing the event, Peskin said.”

“The net is that San Francisco will be just as well off,” he said.

I guess that’s because he never did his homework or never bothered to ask. He just ran around yelling to make himself heard. And no, San Francisco will not be just as well off. The Tour of California is a stage race that begins in San Francisco and finishes in Los Angeles, but will not attract nearly the crowds or the economic revenue for our city that the Grand Prix did.

It’s a damn shame.

For an enthusiast publication’s coverage of the cancellation, check out VeloNews.

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Oakland developers are bullish on residential towers

From today’s San Francisco Business Times, “Housing developers have a barely controlled mania for building skyscrapers in Oakland, despite showing no interest in such projects as recently as last year.”

“At least a dozen highrise condominium and apartment projects are in the works, and they have spread far from Lake Merritt, where the towers have traditionally clustered. They are now poised to pop up all along Broadway, starting in the Auto Row area well north of downtown, then dotting the street and its flanks along 30 blocks, through the city center, to Broadway’s southern terminus. At the Jack London Square waterfront, a proposed highrise is set to rise 20 stories or more.”

“Homebuilders have also been impressed with the Oakland city government’s unequivocal support for highrise housing development, at least in the urban core. In fact, city planners this past summer urged one company, Shorenstein Co., to pursue a denser, taller version of a housing project it is proposing near 12th and Jefferson streets, favoring a 25-story skyscraper over a cluster of eight-story buildings.”

What a concept… “city government’s unequivocal support for housing”… Just imagine what that might be like…

No. You’re right. Too much of a stretch for SF city government.

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Adjustable mortgages undergo big swings

From today’s SFGate, “After hovering near historic lows through much of the spring and summer, rates for both long-term and short-term mortgages have climbed markedly during the past two months, taking a bite out of buyers’ borrowing power and forcing Steach and others to re-evaluate their financial plans. In particular, those with adjustable mortgages — in which payments float up or down periodically depending on the direction of short-term interest rates — have seen big swings in the past 12 months or so.”

“The benchmark 30-year fixed mortgage, the preferred loan for generations, is not an option for many borrowers whose only chance to get into the high-flying real estate market these days is an adjustable loan. Around the Bay Area, about 80 percent of new home buyers are taking out adjustable loans as opposed to less risky fixed-rate loans — about double the rate of two years ago, according to market research firm DataQuick.”

As long as you have purchased your home smartly, and not paid a all-time high price (comparable to other properties in your neighborhood), even a negative amortization loan won’t be a death knell.

But it’s never a bad idea to call your mortgage broker to check in and see what they can tell you about your current and future situation…

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