Real Estate Information

Location Inc., a Rhode Island company that specializes in analyzing neighborhoods in America, recognized the area around Poway Road and Highway 67 as San Diego’s “best-value” neighborhood.  In other words, they are saying that this neighborhood, also known as the Garden Road-Sycamore Creek area, has the best quality of living for the money in San Diego.  Location Inc. looked at 20 of the nation’s largest metropolitan areas and identified the neighborhood that was the “best-value” in each.  Andrew Schiller, the founder of Location Inc., said, “These aren't the least expensive neighborhoods.  They're premium-quality neighborhoods that happen to be substantially less expensive than comparable premium-quality neighborhoods in the same metropolitan area."   When determining the “best-value” neighborhood, Location Inc. took into account crime statistics, the number of residents who hold at least four-year college degrees, the percentage of residents who own their homes, the number of large homes, access to quality public schools, and home prices.  Here in San Diego, the Garden Road-Sycamore Creek area was found to have an average home price of $480,231, which is 36% below the $746,688 average home price found in other San Diego neighborhoods that are comparable to the Garden Road-Sycamore Creek area.
 
To read more, check out this article in the North County Times

On April 26, the Standard & Poor’s/Case-Shiller Home Price Index was released, reporting that San Diego County’s housing market was the strongest in the nation in February.  Out of the 20 market areas surveyed nationally, San Diego was the only one whose price index went up.  From January, the price index was up 0.6 percent.   It's not just this year that San Diego has shown improvement.  Since February 2009, San Diego’s index locally was up 7.6%, second only to San Francisco.  Even though this increase is positive news, there are some who are surprised at San Diego’s increase in home prices.  Alan Gin, an economist at the University of San Diego, said that it was unusual for San Diego to be showing an increase, especially when every other market is down and San Diego has an 11% unemployment rate, worse than the national average.  Leslie Appleton-Young, chief economist at the California Association of Realtors, was also surprised, but said that “the one-month increase, in contrast to dips elsewhere, may not signal any trend.”  However, she does think the state market is improving.  The San Diego Union Tribune quotes her as saying, “We’ve got a pretty positive market; it’s very robust.”
 
For further information, check out this article from the San Diego Union Tribune:
http://www.signonsandiego.com/news/2010/apr/27/san-diego-county-leads-home-index/

On April 28^th, RISMedia reported that, after a four-month slump, the sales price for new homes increased by 26.9% over February.  In addition to this, previously owned homes went up 6.8% in March.  The San Diego Union Tribune reported that the supply of new homes for sale here in San Diego has decreased as homebuyers rushed to purchase homes before the tax credit expired.  According to Russ Valone, the president of MarketPointe Realty Advisors, “Right now, the market is in balance in actively selling projects.”  Although new homes make up a smaller percentage of home-buying activity than previously owned homes, an increase in new home sales could indicate the beginnings of recovery for the construction industry, which would create jobs.  According to analysts, job creation is crucial for these increases in home sales to continue.  Something to keep in mind is that February had the lowest new home sales recorded since the government began taking statistics in 1963, so it was not hard for March to show a huge increase in sales.  However, the fact that home sales, especially new home sales, increased is still positive news.  Another positive aspect is that about one third of new homes bought in March had not begun construction.  This means these buyers, who are unlikely to be able to take advantage of the tax credits, were influenced to buy because of factors like low prices and low interest rates.

Check out this article from RISMedia for further info

For further information about new home sales here in San Diego, check out this article from the San Diego Union Tribune.

In my April 16th blog, I talked about how the Home Affordable Modification Program (HAMP) can help struggling homeowners.  Well, a government watchdog found that, while HAMP is helping some homeowners, it’s not helping enough.  According to the Congressional Oversight Panel, "For every borrower who avoided foreclosure through HAMP last year, another 10 families lost their homes."  While Obama had planned on helping up to 4 million of the 6 million homeowners who are behind on their loans, it looks like HAMP will only help 1 million homeowners.  The Congressional Oversight Panel is not the only group to criticize HAMP.  Just last month, two other government watchdog groups have also condemned the program, claiming it has been implemented poorly and doubting whether it will really help 4 million people.  In response to the criticism, the Treasury Department is saying their efforts will indeed prevent foreclosures, but the program is not meant to help every homeowner.  In a report released earlier this month, the Treasury Department shows how they have helped over 230,000 homeowners.   Unfortunately, California has one of the highest foreclosure rates, and even though the foreclosure rates in San Diego have been declining, Realty Trac reports that one in every 163 housing units still received a foreclosure notice in March. 
 
For further information, check out this article from CNN: 10 foreclosures for every home saved

Technically, the $10,000 California tax credit for homebuyers can be claimed through December 31, but there’s $100 million cap on the credit.  The California Association of Realtors is predicting that the credit will be used up by May 20^th.  In an interview, Robert Kleinhenz, the deputy economist for CAR (California Association of Realtors), said that, “$100 million of $10,000 tax credits allows for 10,000 new homebuyers. The CAR projects 64,000 sales statewide in May, a modest drop from the previous year, but still about 9.5 percent of the anticipated total sales for the year.”  This prediction does not take into account homebuyers who are delaying their April closings so they can take advantage of both the Federal tax credit and the California tax credit.  For those of you planning on taking advantage of the California tax credit, remember that the credit is given out on a first-come, first-served basis, and you have to send your paperwork to the Franchise Tax Board within two weeks after you close on a house. 

For further information, check out this article

In my April 7th blog, I talked about how Governor Schwarzenegger vetoed a bill that would have kept California homeowners from being taxed by California on their forgiven mortgage debt.  Governor Schwarzenegger did, however, call for a new bill that would forgive the mortgage debt, bringing California’s tax code into alignment with the Fed’s tax code.  Just before the filing deadline, the governor signed a bill that will allow Californians to exclude forgiven mortgage debt from their income.  John Chiang, the state controller and chairman of the Franchise Tax Board said, “This is a critical tax change that will help people in our state who already are suffering the loss of their homes.”  If you meet the requirements, this legislation applies to forgiven debts between 2009 and 2012.  For those of you who have already filed your 2009 taxes, you can still claim the exemption by filing a Form 540X amendment (although you should consult your accountant to be sure and for more details).

  
For more info, check out this article: Tax law change excludes mortgage forgiveness

Last month, the Fed finished buying $1.25 trillion of mortgage bonds.  There has been some concern that this could mark the end of the cheap mortgages we’ve been seeing, but it doesn’t look like this will be the case.  The U.S. home loan rates aren’t expected to rise much as investors come in and replace the Fed.  According to Christopher Sebald, the chief investment officer from Advantus Capital Management in St. Paul, Minnesota, “What we are seeing is an effective handoff occurring between the Fed and industry buyers such as banks and pension funds.”  According to estimates by Fannie Mae and Freddie Mac, fixed mortgage rates are expected to rise less than a quarter of a percentage point over the next several months.  This would be the smallest increase for the second quarter since a drop in 2005.  This slight increase would come out to about an additional $30 a month to the monthly payment for a $250,000 mortgage.
 
For more info and to read the full article, click here.

On March 26, The Obama administration announced adjustments to the Home Affordable Modification Program (HAMP) and to the Federal Housing Administration (FHA) program to help homeowners struggling to meet their mortgage obligations.  The adjustments are designed to help three groups: unemployed homeowners who can’t make their mortgage payments; underwater homeowners; and homeowners behind on their payments and looking for loan modifications.

If you are unemployed, these new adjustments can help you get three to six months of reduced payments while you’re looking for a new job.  During this time, your payments will be reduced to 31% of your current gross monthly income. 

If you owe more on your home than it’s worth (you’re an underwater homeowner), as long as you’re current on your mortgage payments, you may be eligible for a new FHA refinance option that will let you refinance your mortgage into a new FHA- insured loan.  The loan would be no more than 115 percent of your home’s current value, and the difference between the original loan balance and the new balance will slowly be forgiven if you stay current on your payments for three years.

If you’re behind on your payments and looking for a mortgage modification, you may be eligible for mortgage principal reductions.  Traditionally, lenders have simply offered lower interest rates, but under the new guidelines, lenders who reduce mortgage principal balances may receive higher financial incentives.

These program changes are expected to go into effect in the fall. 

For more info, check out http://makinghomeaffordable.gov/pr_03262010.html

Great news!  For VA buyers who have served Active Duty outside the US for at least 90 days between Dec 31, 2008 and May 1, 2010, the first-time homebuyer tax credit of up to $8,000 has been extended until June 30, 2011!!  Amazing!  The $6,500 buy-up credit for those same individuals has also been extended another year. 

For more info click http://www.irs.gov/newsroom/article/0,,id=215594,00.html.

According to NAR’s Pending Home Sales Index (PHSI), pending home sales went up in February.  The PHSI is “a forward-looking indicator based on contracts signed.”   In February, the PHSI rose 8.2% to 97.6 from 90.2 in January, and this number is 17.3% above the February 2009 number of 83.2.  This data reflects contracts, not closings, which usually have a lag time of one or two months. The increase in the PHSI could be an indicator that the home sales are about to increase due to the home buyer tax credit.  An increase in home purchases will likely decrease the number of homes on the market and stabilize prices.  Lawrence Yun, the chief economist for NAR said, “We’re hearing about a rise of activity in recent weeks with ongoing reports of multiple offers in more markets, so the March data could demonstrate additional improvement from buyers responding to the tax credit.”
 
For more info, check out this article