My New Blog

With the recent current events of increased inflation of goods and services, new real estate mortgages as of 6/2022 are also on the rise. National News shows a slowing of listings of homes for sale, yet home prices continue to rise.

 Location is everything as not all real estate markets react the same as others to the number of buyers or sellers in a market area.

Here is Central California, there is a shortage of homes and an over supply of buyers to the market. In looking at the current condition, I as a working Real Estate Professional can compare back to the 1970's when the same conditions existed with construction companies working 24 hours with several crews building new home communities as the need for homes was the same senario as today.

Home Interest rates were 22.5 % for an FHA Loan with a 20 Year mortgage in 1974 and a lot of interest was applied with little principal to the mortgage.

This time was after the Oil Embargo where lines of cars were stopped at gas stations and the ration of gas. Your license plate determined by odd or even numbers if you could purchase gasoline at a gas station on a particular day.

As for current real estate mortgage rates. if you can buy now, then you should go for it. Down the road in a few years mortgage interest rates will return to lower rates and you can always refinance or, do like I did in the 1970's by paying two mortgage payments at a time or more to offset mortgage interest rates. 

I have always made a mortgage payment, followed by a separate check labeled "Principal Only" to pay off as quick as possible higher interest mortgage loans. 

So essentially, by paying additional sums each month toward your mortgage you are effectively paying off sooner a loan and significantly reducing the mortgage interest.

This is not Rocket Science or Fuzzy Math. It works and many of my real estate customers over the years thanked me again and again as to suggesting this simple method to build equity in their home faster with a plan of action.

My former mentor always told me to "Plan your Work and Work your Plan, or Else Some one else has a Plan for you."

If you have any real estate questions or concerns, give me to discuss your thoughts or concerns? 

Tom Melville
Aptos, Ca

Licensed as a California Real Estate Professional since 1980 to the present.

Recent mortgage banker news is that more mortgage applications were again coming in as this is summer now.

 After the July 4th holiday, I expect the market activity to increase again with more real estate listings of homes for purchase with loans and more refinance loans. I am still seeing properties with older mortgages at 7% that are now getting around to refinance to lower rates.

 It is very important to know your current interest rate and how much you can save with a refinance. Additionally, more listing and properties will be added in July, August and September. This market will continue all the way into December with present activity.

Looking Back at my own first house purchase in a runaway real estate market Circa 1974. San Diego properties were increasing in value very fast. Purchase Price $29,500 with a 20 year mortgage FHA at 22.5% loan rate. My Payment was $500 per month. Same house today is in the $450K value range.

 When I bought my first house in 1974 as a single guy at the tender of 20 years old, my FHA interest rate was 22.5%. My monthly payment was $1 dollar toward principal loan each month and $499 dollars eaten up into interest on a house that only cost $29,500. 

I made double payments with one principal and interest and the second payment principal only. Eventually mortgage rates returned to lower levels back then but many people did not understand the higher interest rates were eating up and equity.

Some people made their on time monthly payments on home loans but still lost homes due to the higher interest rates or market conditions eating up any equity in the 22.5 % FHA Home Loans like the one I had.

Today these low rates are amazing, but back in 1977 my PHD college teachers in Real Estate were forecasting residential homes would be in the million dollar range and it was difficult to comprehend back then, but they were right. 

It you have any questions or thoughts about Real Estate and would like free advise then give me a call. I am a Broker Owner of my own Real Estate Firm and a Certified Residential Appraiser.  

Melville Appraisal 
Tom Melville Properties
Dre 00774101
Broker Owner 
831-883-0406

 

Prior to 2020 in November/December of 2019, I was looking at the several different market indicators that would tell me where my business and the real market would be in the next 6 months from Nov 2019.

Here is what I knew in Nov 2019.

1. The interest rates for mortgage lending were low.
2. Foreclosures were not an issue and were minimal in number.
3. There continued to be shortage of homes available for purchase.
4. There was an over supply of buyers to the markets
5. New home communities were now being built on land purchased years ago.
6. Interest rates on mortgages would drop again as it does 1st quarter of year.
7. Competition for homes with multiple bids.
8. Lenders were looking to hire and offer bonus pay for mortgage loan originators.
9. Lender were looking to hire support office staff for next surge in lending.

Yet when Covid 19 was effecting real estate, so many real estate professionals, including appraisers claimed there would be doom and gloom in the market place. Over 50 real estate appraisers in nearby counties forecast the market was going to go down or be flat for a long time. None of that is what i saw in my research and my forecast of 2020. 

Looking at the above market metrics i updated office equipment and told the appraisers i knew the market would be on steroids and an upward market. Still many appraisers thought i was nuts. 

Having seen and been involved every different California market in real estate since 1980 to the present allowed me to clearly see the present moment in 12/2019. 

Only recently I was asked to explain my forecast in 2019 on a Zoom Meeting to 50 appraisers who called the 2020 forecast wrong.

 I listed and explained the simple real estate metrics above. To me it was a no brainer as it was all clear to myself the forecast of 2020. 

If you have thoughts or questions about current real estate matters call me to discuss your thoughts or concerns. 

Tom Melville 
Broker, Certified Residential Appraisal
Dre 00774101 
831-883-0406

Licensed Real Estate Professional in California since 1980 to the present.

04/12/2020

Real Estate Appraisal has always been an Essential Service to the Financial Sector.

 During the present California Shelter in Place rules for the public, it takes a minimum of Twenty Percent of all Essential Business to remain open to keep the economy of a city  moving forward. 

Real Estate Appraisers are presently making home inspections using Personal Protection Equipment at a minimum of mask, gloves and booties if requested by the home owner. 

There are several guidelines on the present Shelter in Place that are followed by Appraisal Associations, Realtor Associations both National Association of Realtors and the California Association of Realtors and Real Estate Property Management Companies as to proceed and inspect a home. 

Lenders are required to have a full interior appraisal inspection to assist home owners with cash out refinance. It is possible to have an exterior only appraisal of your home, yet the lenders prefer interior inspections to insure the value of the property being appraised.

 Even during the California 1989 Earthquakes and other large brush fires in summer, appraisers were ordered out to the field to inspect homes to see the extent of damage.

 This current Shelter in Place time is busy for appraisers as with the low refinance interest rates, many home owners are using equity in their homes to get through this period of time.

If you need a real estate professional to appraise your property, then give me a call. Or if you need to consider listing or consultation as to listing a property on the MLS, I cover that service as well.

Tom Melville, MRA, MNAA
Real Estate Appraiser, California Real Estate Broker/ Owner
Melville Appraisal, Tom Melville Properties
AR012768, DRE# 00774101
831-883-0406