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Department Chair Forum Feb. 4 th , 2004 Local Housing Trends & UC Mortgage Origination Program Inland Empire Trends IE is becoming a job center IE is no longer a bedroom community for Orange & LA Counties Houses in Inland Empire remain affordable because

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department chair forum feb 4 th 2004

Department Chair ForumFeb. 4th, 2004

Local Housing Trends &

UC Mortgage Origination Program

inland empire trends
Inland Empire Trends
  • IE is becoming a job center
  • IE is no longer a bedroom community for Orange & LA Counties
  • Houses in Inland Empire remain affordable because
    • Jobs are still being added in both Riverside/SB counties
    • Interest rates remain reasonably low
  • Expect home sales and prices in IE to remain solid at least through this spring and probably through the summer
first the good news nov 03 housing prices sales volume
First, the Good News: Nov ‘03 Housing Prices / Sales Volume
  • 5,093 homes sold in Riverside County
    • Year to Year Increase of 19.7%
  • $268,000 median price Riverside County
    • Year to Year Increase of 17.5%
    • Compare median prices:
      • Orange County - $437,000
      • San Diego County - $393,000
      • Los Angeles County - $339,000
  • Riverside/San Bernardino Counties sales = 30.8% of all So. Calif. homes sold

Source: California Association of Realtors (CAR)

uc mortgage payments by county assume 5 down use car nov 03 median sales prices
UC Mortgage Payments by County(Assume: 5% down)(Use CAR Nov. ’03 Median Sales Prices)
  • Riverside $1192/month
  • LA $1500/month
  • San Diego $1739/month
  • Orange County $1934/month
uc loan vs non uc loans 350 000 price 5 down
UC Loan vs. Non-UC Loans $350,000 Price (5% down)
  • Non-UC 80/15 loan
    • 80% Fixed 1st at 6.2% rate, 30 years
    • 15% Fixed 2nd at 7.0% rate, 15 years
    • $2368/month
      • Includes $182/month PMI
  • UC MOP 90/5 loan
    • 90% Variable MOP 1st at 3.8% rate, 30 years
    • 5% Fixed 2nd at 6.35% rate, 15 years
    • $1618/month
      • No PMI
    • $1428/month if 40 year MOP
the not so good news for local housing seller s market
The Not-So-Good News for Local Housing: Seller’s Market

A maturing market with patterns more typical of larger urban areas like LA or San Francisco—

  • Sales go quickly / scarce supply / top dollar prices
  • High Demand
    • LA & Orange County buyers are buying here due to price
    • Sometimes competing offers by buyers for one property
  • Buyers may renegotiate the price downward because
    • Inspection show many repairs are needed, or
    • Appraisal may not reach the sales price
      • Which can mean smaller loan & larger down payment
  • Realtors impose short deadlines for appraisal/loan approvals
3 8 uc mop rate variable how long will it last
3.8% UC MOP Rate (Variable) – How Long Will It Last?
  • We anticipate May rate adjustment to be lower than the current 3.8%
  • Rate will stabilize for rest of 2004
  • We’ll probably need several (3-4) years to get back to our usual 6.0% - 6.5% rate
  • Most Californians refinance every 5-7 years, so we expect the UC rate will be under 6% for at least 3 of those years
  • As commercial rates go up, fewer buyers will qualify for a loan, which means less competition for UC MOP buyers, who will qualify under a lower UC rate
other mop benefits
Other MOP Benefits
  • No points & no upfront fees
  • No mortgage insurance (PMI)
  • No penalties to pay down principal
  • No margin (but .25% admin fee built into 3.8%)
  • Easy to qualify for a loan
  • Flexible repayment of 10-40 years
  • Change loan terms anytime
  • New online application
faculty candidates
Faculty Candidates
  • I encourage all candidates to call me so that I can explain the benefits of the program
  • I can work through sample scenarios
  • I can pre-qualify people immediately if they have the official offer letter from the Chancellor / EVC
    • Helpful to new faculty who want to buy a house while visiting Riverside
    • UC name as a lender is prestigious
    • This pre-qualification can give the new faculty person an advantage over other competing buyers
faculty candidates10
Faculty Candidates
  • Can read about the MOP program on my website http://edres.ucr.edu/mort.html
    • Several non-UC lenders are listed
    • Comparison of UC vs. non-UC lender benefits
    • List of Riverside resources for new homebuyers
      • Utilities, realtors, school information, city directory
    • Background info on buying a house
handout quarterly mop loan volume loan rate trends
Handout – Quarterly MOP Loan Volume & Loan Rate Trends
  • I’ve included a chart which compares rates (Fixed, ARM, MOP) from 1984 - 2003
  • Chart also shows UC program demand
    • When MOP rate is within 1% of the current market fixed rate, UC loan demand is low
    • When the difference between the MOP rate and the current market fixed rate is more than 1%, then UC loan demand is high
    • Notice that UC rate changes over time are more gradual than either the fixed or ARM rate changes
call me anytime
Call me anytime..
  • Mike Wicke
  • 909-787-3323
  • mike.wicke@ucr.edu