RWC Releases Draft Inner Harbor Specific Plan, Requests Public Input

Yesterday, Redwood City released to the public the Draft Inner Harbor Specific Plan (DIHSP) and the associated Draft Environmental Impact Report (DEIR).  These documents, and other information pertinent to the development of the Inner Harbor, can be viewed at www.redwoodcity.org/innerharbor.

The Inner Harbor is a 100-acre plot of land north of Highway 101, in-between Redwood Creek and Seaport Boulevard.  The Inner Harbor Specific Plan, just like the Downtown Precise Plan, is intended to provide guidance for the future development of the area.  Its general objective is to create a destination harbor center with areas for homes, recreation and employment.

In addition to studying the environmental impact of the land usage proposed in the DIHSP, the DEIR also includes impact reports for alternative land use possibilities.  It isn't common for the Draft Plan, Draft EIR, and Draft alternatives to be released all at once, but it was done deliberately to give the public and decision makers plenty of time to digest all of the information before the adoption process.  The released drafts cover the following topics: baseline conditions, vision framework, land use and zoning, design guidelines and standards, circulation and parking, utilities, community benefits, and implementation.

The community will have plenty of chances to voice their opinions/concerns about the plan.  The Draft EIR is under a 90-day review period, during which time the public is encouraged to send in written questions and comments.  In addition, the Planning Commission will be holding a public meeting on December 1st at 7pm in City Hall to receive further comments and questions.  All questions received at the meeting and in writing during the 90-day review period will ultimately be included and responded to in the final EIR.

Additional venues for community input will be established in the coming months - to stay updated, check in periodically to the Inner Harbor Website referenced above.

MBA Predicts Nationwide Surge in Housing Demand

As the real estate market has steadily climbed in the bay area, the question is always…how long with the expansion last?  As always, the job market in the local region continues to support our strong economy, but how is the rest of the country doing..and what is the countries overall future real estate prognosis?  I'm not an expert for this question, so I looked to an entity that is.

A recent report released by the Mortgage Bankers Association forecasts a huge surge in housing demand over the next 10 years, with somewhere between 13.9 and 15.9 million additional households expected to form by 2024.  If the projections made in the report were to play out, we would be looking at one of the strongest housing markets in U.S. history.

The MBA's report claims that the surge in new household formation - and the resulting spike in demand - will be driven primarily by Hispanics, baby boomers, and millennials.

"Household formation has been depressed in recent years by a long, jobless recovery and by a lull in the growth of the working age population," said Lynn Fisher, MBA's vice president of research and economics. "However, improving employment markets will build on major demographic trends - including maturing of Baby Boomers, Hispanics and Millennials - to create strong growth in both owner and rental housing markets over the next decade."

The millennial demographic has been slow to break into the housing market (as owners), as many have spent a lot of time in school, and have put off major life events like getting married and having children.  But as more and more millennials head into their 30's and onward, it is widely expected these trends will shift in favor of increased household formation.  The MBA report predicts that millennials - which they describe as ages 18-44 to account for 10 years of aging - will form 4.1 - 5.1 million new households over the next ten years.

What's interesting to note, is during the early 1970's, when a large portion of the Baby Boomers were in their mid-20's (prime renting years), we saw the biggest multi-family construction boom in the country's history.  In the late 70's - when that same demographic matured, started families, and began buying homes - we saw one of the country's biggest single-family construction booms.  So if history is any indicator, as the millennial generation matures, the resulting increase in single-family demand could lead to a similar construction boom.
   

Will the Fed Rate Increase Affect Bay Area Buyer Demand?

Since the beginning of the year, there has been endless speculation about when the Fed was going to increase interest rates. First it was mid-year, then it was September, and now some say it won’t be until next year. Sooner or later it is bound to happen, but the question is: how much will it affect the market here in the Bay Area?

When the Fed increases interest rates, banks tend to eventually increase their loan rates. Generally when this happens some amount of buyers are pushed out of the market - less demand equals lower prices. But in regions like the Bay Area, where the housing market is saturated with buyer demand, it would take a pretty large jump in rates to throw any sort of wet blanket over the market. And with the Bay Area nearing full employment (unemployment < 5%), and incomes generally on the rise, there is plenty of reason to believe that any effects on buyer demand resulting from a rate increase would be negligible.

What we may see is a slight spike in demand in the coming months, as borrowers try to lock in their rates in anticipation of the Fed increase. Either way, the effect of the Fed’s impending rate increase on the Bay Area’s housing market should be minimal.

If you have any questions regarding the impending Fed increase and what it may do to your purchasing power, feel free to give me a call.  I'd be happy to refer you to one of my trusted loan advisors.

Should You be Worried When Your Mortgage is Sold?

If you have taken out a mortgage, chances are you've received statements from companies other than your lender.  For some people this can be a little off-putting, but don't fret! Mortgages are regularly sold by lenders to investors like Freddie Mac, Fannie Mae, Hedge Fund companies, and the like.    Lenders do this as a way of generating the extra cash they need to be able to offer more loans.  On the investor’s side, purchasing mortgages is appealing because unlike many other investment opportunities, they are backed by a tangible asset - a house.  For the most part homes tends to increase in value, and if they don't, and the borrower defaults on the loan, the down payment is intended to cover the loss.  

While it may make you a little uncomfortable to think that your loan can change hands without your knowledge or consent, there is actually nothing to worry about.  When your loan is sold, its new owner has to adhere to the same terms and conditions that you agreed upon with the lender.  The Real Estate Settlement and Procedures Act, which is enforced by the CFPB, ensures that mortgages cannot be modified without the borrowers consent, even if they are sold to another company.

Also, the CFPB has laid out industry standards on how to collect on delinquent mortgages.  These standards are designed to protect the struggling borrower, and they apply even when a mortgage is sold.  They require the servicer to give the borrower options such as loan modification or a short sale before they pursue foreclosure.

So to sum things up - although your mortgage can be sold without your consent, it's terms and conditions cannot.  It may still seem a little bizarre, but there is no reason to be alarmed when you get a statement in the mail from a company with which you have never done business.