Santa Clara Valley Real Estate Report – October/November


– HARP being expanded.

– Foreclosure starts surge in August.

– Home and condo sales outpacing last year.

The Home Affordable Refinance Program, or HARP, is being revamped. It was originally aimed at a housing market that had an estimated 5 million struggling homeowners. Unfortunately, HARP’s original terms and limits were so restrictive that the program, to date, has reached fewer than 900,000 mortgage holders. The major restriction eliminated any homeowner whose existing mortgage represented more than 125% of the loan-to-value of their home.

The revamping of HARP will let borrowers whose mortgages are backed by Fannie Mae and Freddie Mac refinance those underwater mortgages, presumably no matter how far their home’s value has fallen. In fact, current loan-to-value ratio on the existing mortgage must be greater than 80 percent.

And, mortgage holders can’t double-dip; that is, if they already have an earlier HARP loan, they can’t get another at the even better rate of 4%. The new terms also eliminate the need for yet another property appraisal in calculating LTV, and the program’s end date has been extended.

The plan, announced last week still has certain eligibility limits. For example, your mortgage has to be a Fannie Mae or Freddie Mac instrument, owned or guaranteed by one agency or the other, and you must not have missed any payments in the last six months (since April 24, at present), or have more than one missed payment over the last year.

The FHFA, or Federal Housing Finance Agency, which currently controls Fannie, Freddie, and 12 other Federal Home Loan Banks – located in Atlanta, Boston, Chicago, Cincinnati, Dallas, Des Moines, Indianapolis, New York, Pittsburgh, San Francisco, Seattle and Topeka – is expected to announce the final program parameters by November 15.

This is a much needed expansion of the program. Unfortunately, there are over ten million homeowners underwater and this new HARP will only be available to 10% of them.


Sale of single-family, re-sale homes fell 4.9% in October from September, but were up 2.4% year- over-year. Year-to-date, home sales are up 0.5%.

Condo sales were up 3.8% from September and up 12.5% year-over-year. Year-to-date, condo sales are up 11.1%.

The median price for homes was down 13.9% year-over-year. This is the twelfth month in a row the median price for homes has been lower than the year before.

The median price for condos was off 4.1% compared to last October.

Inventory of both homes and condos continues to be weak. Home inventory was down 25% compared to last October: 2,014 homes actively listed. Condo inventory was down 44.2% year- over-year.

Go to my on-line site for the full report, plus a city-by-city breakdown.

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