Monday, July 18, 2005

E-Loan Launch Date Correction

A representative of E-Loan contacted me today to advise that the product is not slated to launch in August. The individual TIC loan product is still being finessed and may take 45 to 75 days to reach the market. News of the new products availablitity will be announced here.

Friday, July 15, 2005

E-Loan Individual TIC Interest Loans Announced

On July 13th, E-Loan announced that it will launch a new home financing product specifically targeted to the Tennancy In Common (TIC) niche.

The product, which is slated to launch August 2005, offers TIC partners individual financing for each separate interest in the property. This differs from the standard form of TIC financing, in which all partners must sign and be responsible for just one mortgage, and is met with both much excitement and many questions about how this will impact the San Francisco real estate market.

The excitement revolves in part around the fact that separate interest TIC loans will potentially lessen the risk involved in TIC ownership. TIC financing up to this point has been based on the collective financials of all parties combined, thus the risk has been that if one of the TIC partners’ financial situation changes, it would impact everyone involved in the partnership. Because TIC ownership has this high risk factor, in which some outside force may impact your ability to continue to finance and live in your home, TICs have typically sold at prices lower than other forms of housing.

Other excitement involves bypassing the strict and laborious process of the TIC-to-condominium conversion process. If the new individual loan option offered by E-Loan significantly reduces the risk factors involved in TIC ownership, then there will be little reason to bother with San Francisco’s condo conversion lottery (which allows only 200 TIC-to-condominium conversions per year). Additionally, with fewer buildings applying for the lottery, the pipeline for the condo conversion process, which at this point takes several years, could be reduced dramatically for those who still wish to convert.

There are concerns over the unknown, however. Tenant advocates are already worried about how this will impact the rental market. As the demand for housing continues to be stronger than supply, there are fears that large rental buildings will be sold for TIC conversion, forcing many tenants out of their homes but still unable to afford purchasing housing.

Concerns are also coming from interested homeowners, real estate professionals, and those in the mortgage market. Since Tenancys In Common by nature are interests in a percentage of a building, not a specific unit, many wonder how one partner’s failure to pay his or her individual mortgage will impact the remaining partners. Questions revolve around how E-Loan would handle foreclosing if one partner with individual financing were to default on a loan.

Obviously any person with interest in the San Francisco housing market will be watching with bated breath to see the new product’s impact. The entire City seems poised to take action in one direction or another based on how the first glimpse of individual TIC financing impacts the market. At Wednesday’s Homeownership Summit, sponsored by SFSOS, Plan C SF, Small Property Owner’s Association, the TIC Coalition and Coalition for Better Housing, Mayor Newsom and select members of the Board of Supervisors said they were watching developments with piqued interest.

Circle Bank has advised that it will have an individual interest TIC loan product, although it has not announced when the product will be available. A representative of Sterling Bank, present at Wednesday night’s Homeownership Summit, said the bank is weighing the option of individual TIC interest loans as well. We are sure to see other financial institutions working busily to present similar products.

Have more questions about trends in the housing market? Questions about selling or buying a home? Contact me today for honest, experienced answers.
Amy Blakeley, Realtor®
ablakeley at
(415) 296-2173 Direct

Saturday, July 09, 2005

Bubble Talk in the News

The following exerpts are provided by the National Association of Realtors®:

FDIC dismisses bubble fears
In its latest quarterly state banking profiles, the FDIC finds that worries about a housing bubble are mostly unfounded. In the 55 "boom" markets identified by the FDIC, housing prices are being sustained by strong growth in new jobs. Interest rates and mortgage delinquency rates are also both at historic lows, both of which are good signs. But the optimistic outlook also comes with some concerns: interest rates won't stay low forever, and affordability is becoming a problem as the gap between wages and home prices widens.

Bubble stories pop up on the newsstand
Bubble talk seems to be everywhere, at least as far as the newsstand goes. Housing prices have been the subject of cover stories in BusinessWeek, Money, The Economist, Time, and a host of other major publications in recent weeks. But with the housing market continuing to steam ahead, is the media going overboard on the topic? The Washington Post's Howard Kurtz explores the "cacophony of housing stories" in the July 4 edition.

What happens when interest rates go up?
Continuing the theme of housing prices vs. housing costs (see the previous entry, below), what might happen when mortgages rates inevitably go up? In a new report, Richard Rosen, senior economist with the Federal Reserve Bank of Chicago, takes a look at the numbers and finds that housing prices would probably decline if interest rates go up: "Even if mortgage rates rise to 7.5%, well above their 5.8% average for 2004, housing prices in most markets are likely to remain at or above their 2000 levels." But as Rosen explains, there are many factors that could change the potential impact of an increase in rates.

Have more questions about trends in the housing market? Questions about selling or buying a home? Contact me today for honest, experienced answers. Amy Blakeley, Realtor®
ablakeley at
(415) 296-2173 Direct

Tuesday, July 05, 2005

San Francisco Homeownership Summit July 13th

If you have been frustrated by the real estate market, I encourage your attendance at The Homeownership Summit*.

What: An informative evening about different homeownership issues
When: Wednesday, July 13th 6-8pm
Where: St. Mary's Cathedral (1111 Geary at Gough)

This free Summit should prove valuable to attendees. Brought to you by Plan C SF, SFSOS, The Association of Small Property Owners, The TIC Coalition and the Coalition for Better Housing, the Homeowner Summit looks to inform the public not only on what is happening politically to support homeownership in San Francisco, but also what tools can be provided by Realtors and financial experts to help you get yourself into a home.

You must RSVP to this event, which you can do by e-mailing your information to

Have more questions about trends in the housing market? Questions about selling or buying a home? Contact me today for honest, experienced answers. Amy Blakeley, Realtor®
ablakeley at
(415) 296-2173 Direct

* I am not directly involved with this seminar nor affiliated with any of the listed organizations.