San Diego Real Estate Blog

San Diego Housing Market Fares Better Than Most Other Markets In The US

Mon, 30 Aug 2010 12:58:00 GMT

There have been a lot of negative predictions about the housing market recently. Whether or not these predictions will come true is something that remains to be seen. While these predictions may be unsettling for some, the good news is that the San Diego County housing market is doing better than the rest of the nation as a whole. According to the National Association of REALTORS, in the United States in the month of July, home sales decreased by 25.5% from where they were in July 2009. Here in San Diego, however, home sales have only dropped 15.2% from a year ago. Nationally, home sale prices only increased by 0.7% from last year, but home sale prices in San Diego County went up 4.6% from July 2009. In addition to this, San Diego County is also doing better than the rest of the nation in regards to foreclosure activity. According to RealtyTrac, foreclosures increased nationally by 4% in the month of July but were down 10% from July 2009. In comparison, foreclosures in San Diego County went up just over 1% in the month of July but decreased by more than 37% from July 2009.

5 Reasons to Purchase A Home Even Though The Tax Credits Are Gone

Fri, 27 Aug 2010 12:34:00 GMT

Now that the federal and California state tax credits are gone, home sales have been decreasing. Even though the tax credit incentives are gone, there are still reasons to buy a home now.

1.       Low Prices
Everyone knows that after the housing bubble burst, home prices plummeted. These low prices won’t be here forever. Even though the tax credits are gone, if you’re able to, it’s a good idea to take advantage of these low prices before they’re gone. Or before mortgage rates increase.

2.       Investment Purposes & Low Interest Rates
As previously stated, home sale prices are low, and everyone knows a good investment is made on the "buy side." If you buy now and hang on to the home for a few years, it is very likely you’ll be able to make a decent return on your investment. Not to mention that borrowing money right now is ridiculously cheap! Five to ten years from now, we're all going to be talking about how great interest rates *used* to be and how we wish we had taken advantage of them. Don't miss that boat!

3.       Other Tax Benefits
Even without the tax credits, there are a lot of tax benefits that come with owning a home.   You can deduct your annual property taxes and mortgage interest paid. When you sell the home, you won’t be taxed on the capital gain unless it is over $250,000 (if you're single) and $500,000 (if you're married) and you make a certain income. (Check out this blog for a breakdown of how this will work after the Medicare taxes go into effect.)

4.       Home Equity
By owning your own home, you can build home equity. Home equity can give you a line of credit that you can use to make home improvements, send your kids to college, start a business, etc.

5.       Other Home buyer Assistance Programs
Just because the tax credits are gone, it doesn’t mean there is no longer help for home buyers. Here in San Diego, there are several home buyer assistance programs which are listed on the San Diego County website.

SD Sellers Experience Price Reductions

Mon, 23 Aug 2010 16:54:00 GMT

According to Trulia.com, as of August 1^st, 23% of all the homes for sale in San Diego County had experienced a price reduction. Back in July, only 20% of homes for sale had a price cut. On average, list prices were reduced by 8%. While it seem like negative news that San Diego home sellers had to reduce the list prices on their homes, San Diego did better than many other cities when it came to price cuts. Out of the top 50 cities for the number of homes with price cuts, San Diego was 42^nd. ZipRealty conducted a national survey in 26 major markets which found that over 45% of home listings had at least one price reduction.

For the further information, check out this article from the San Diego Union Tribune.

Apply For The California Tax Credit Before It’s Too Late

Fri, 13 Aug 2010 00:00:00 GMT

On August 6, the Franchise Tax Board announced that they will cease accepting applications for the California Home Buyer Tax Credit at midnight on Sunday, August 15. The Tax Board estimates they will be able to give the $100 million of tax credit to 14,500 – 20,000 people. However, the Tax Board is accepting more applications than that to make sure they will be able to compensate for invalid or duplicate applications. As of the 12th of August, the tax board had received 33,760 applications. The tax credit is given out on a first come first serve basis, and once the $100 million is gone, any remaining applications will be denied.

If you’re eligible for the tax credit, complete a FTB Form 3549-A application and fax it with the final settlement statement to the California Franchise Tax Board. If your application is accepted, you will receive a certificate of allocation from the Franchise Tax Board, which you must have to claim your tax credit. The tax board expects to send out these certificates over the next few months.

To see if you meet the criteria and for more information on how to apply, visit the California Franchise Tax Board website.

New Tax On Home Sales?

Wed, 11 Aug 2010 12:27:00 GMT

I’ve heard rumors about how Obama will be implementing a sales tax on all home sales as part of the new taxes written into the Healthcare Bill. However, this is not exactly true. While there is a tax that has the potential to affect real estate sales, there is no real estate “sales tax” or a real estate transfer tax in the bill. This tax, commonly referred to as one of the “Medicare” taxes, is a 3.8% tax on “unearned income” for “High Income” tax payers. This would apply to someone filing as “single” if their Adjusted Gross Income (AGI) is over $200,000. For those who are married and filing a joint return, this tax would apply if their AGI was over $250,000.

Here is how this tax would apply to a home sale. For single filers, if the gain on a home sale is less than $250,000, that gain is excluded from the income tax and the 3.8% tax does not apply. If the seller is filing a joint return, for gains less than $500,000, the 3.8% tax does not apply. The only time a seller will have to pay the 3.8% tax is if he has a gain of more than $250,000 (for single filers) or $500,000 (for joint filers) AND if he has AGI above the $200,000 (single filer) or $250,000 (joint filer) AGI thresholds, as explained above. The new Medicare tax on unearned income goes into effect January 1, 2013.

For further information, check out these FAQs from the National Association of Realtors.

Additional Housing Aid To Come For California Homeowners

Wed, 30 Jun 2010 12:26:00 GMT

Last week, The Obama-administration approved plans to help five different states, California, Arizona, Florida, Michigan, and Nevada, who have been hit particularly hard by the housing bust. These five states were selected because they have experienced a 20% or more decrease in home prices. State agencies have individually worked on designing the plans, so they vary from state to state, but the plans are all aimed at: helping borrowers who have lost their jobs continue to make their mortgage payments; canceling second mortgages that are preventing struggling homeowners from receiving loan modifications; and helping homeowners pay overdue mortgage bills. According to proposals from state housing finance agencies, California will be the largest recipient of the funding and will receive nearly $700 million, which will help an estimated 46,000 struggling homeowners.

For more information, check out this article from the LA Times.

CA State Attorney General Warns Homeowners of Short Sale Fraud

Mon, 28 Jun 2010 12:38:00 GMT

The California State Attorney General, Edmund G. Brown Jr., has joined the California Department of Real Estate (DRE) and the State Bar of California in warning California homeowners about the sharp increase in short sale fraud. There are so many homeowners struggling to make their mortgage payments that a whole new industry of “short-sale negotiation" has been created. While short sales can help underwater homeowners, they have also created an area for scammers to take advantage of people in financial distress. Only three months ago, there were almost no complaints of short sale fraud filed with the DRE. Now, over forty complaints are being investigated by that same department. Before working with or paying a short sale negotiator, homeowners should be aware of the following red flags: the individual holds no real estate license; the individual is charging upfront fees and/or surcharges; the individual plans on submitting a "straw buyer" offer to the short sale lender(s). Note that any consumer can look up an individual's real estate license and its status on the DRE website.

Short sales can provide a way for struggling homeowners to avoid foreclosure and save their credit. Real Estate Commissioner Jeff Davi says, “Short sale fraud appears to be the fraud of the moment, and it is proliferating statewide. Consumers, licensees and lenders must all arm themselves with the tools necessary to avoid such scams.” (In an effort to better serve my clients and help them avoid these scams, I am a Certified Distressed Property Expert.)

For further information, check out this article, and check out these Tips On How To Avoid Being Scammed.

If Home Prices Are Increasing, How Is It That I Can Afford a Nicer House?

Wed, 23 Jun 2010 14:09:00 GMT

I was recently asked, “If home prices are increasing, why are the houses in my price range nicer than they were a few months ago?” The answer to this question comes down to the difference between sales price and list price. When we talk about an increase in home prices, we’re talking about the sales price, which is what a buyer actually pays for a home. A seller can select a list price for their home, but the price the home sells at will depend on what a willing and able buyer is willing to pay for it. A seller may *think* her home is worth $400,000, but if the highest and best offers received are at $375,000 and multiple buyers just won't go any higher than that, then $375,000 is what that home is worth. Of course, we always rely on a professional appraisal to confirm value while we are in escrow.

If you are now seeing homes in your price range that seem nicer than they did a few months ago, it could simply reflect more realistic list prices on the part of sellers. It could also be a coincidence that several homes in good condition came on the market at the same time. In either case, consider yourself fortunate that there is good inventory to choose from and get in line to purchase! With interest rates and prices this low, how could you not buy a home in one of the most desirable cities in the country?

Check out Truilia.com for graphs and statistics on both list prices and sales prices.

San Diego Named #1 For House Flipping By The Financial Edge

Mon, 21 Jun 2010 12:31:00 GMT

In my April 9^th blog, I talked about house flipping, how it is increasing in today's market, and what it is. Some might think that house flipping is a trend that ended when the real estate bubble burst. However, there are opportunities to make money during a real estate downturn by purchasing cheap homes, fixing them up, and then reselling them for a profit. On June 9^th, the Financial Edge released an article naming the top three cities for house flipping. San Diego came in first in front of San Francisco and Los Angeles. They cited the Case-Schiller Index, saying that San Diego has seen 11 consecutive months of home price increases. Even though home prices have been rising for almost a year, there are still opportunities to make a profit by taking advantage of the deals on foreclosure homes. The Financial edge also cited RealtyTrac, saying that their data for April of this year shows that the areas in zip codes 92122 and 92104, which include neighborhoods like University City, La Jolla Colony, and the area northwest of the Zoo and Balboa Park (North Park), have foreclosure savings of up to 46%.

If you’re interested in purchasing a foreclosure home, check out the Free Foreclosure Search on my home page and let me know how I can help!

For more information, check out this article

Homebuyer Tax Credit Extended For Those Already Under Contract

Wed, 16 Jun 2010 15:50:00 GMT

Today, the Senate approved a plan that will give homebuyers an extra three months to complete their transactions and qualify for the $8,000 federal tax credit. This extension only applies to people who were under contract by the April 30 deadline. Originally, homebuyers needed to complete their transactions by June 30, but many homebuyers were struggling to meet that deadline due to the extreme delays experienced with short sales. Many buyers have been waiting patiently for months and months for banks to get around to issuing short sale approvals. With this extension, an estimated 180,000 homebuyers who would have missed the deadline will now be able to take advantage of the tax credit. These homebuyers now have until September 30, 2010 to complete their transactions.

For further information, check out this article from the Associated Press.

Missing the Tax Credit? Make Up For It With Mortgage Rates at 50-Year Lows

Mon, 14 Jun 2010 00:00:00 GMT

According to a lender at City Wide Financial, within the past month, mortgage rates have drastically plummeted. He is saying that, because the mortgage rates have dropped so much, buyers who missed out on the $8,000 tax credit will be able to save more money now than what they would have saved if they’d gotten the credit when mortgage rates were higher. Right now, rates are about -.376 - .5% lower than they were about a month ago, putting them at 50-year lows. If you missed the tax credit and have a long-term loan at 4.625%, this lender claims you will more than make up for missing out on the $8,000 tax credit that would have been accompanied by a loan at 5%. According to this lender, economists are saying that the sudden decrease in mortgage rates is due to the “European debt crisis and new concerns about the global economy, which unleashed a massive wave of cash into U.S. bonds from investors around the world.”

Most Americans Can Afford To Buy Homes In Their Areas

Wed, 09 Jun 2010 15:29:00 GMT

According to CNN, “It's prime time for house hunters.” They are saying that, if you have a decent job and a good credit score, you should be able to buy a home in your area. The National Association of Home Builders (NAHB) and Wells Fargo issued a report saying that nearly 75% of American families make the $63,800 annual national median income and could afford to buy a home during the first three months of this year. For the first quarter, the national median home price was $175,000. Trulia reported the median home sales price in San Diego to be $315,000 from February to April of this year. The National Association of Home Builders says a home is “affordable” if a family that is making their metro area’s median income could put a maximum of 28% of their take-home pay toward their housing costs. NAHB chairman Bob Jones said, “With interest rates still hovering at low levels, companies starting to hire new employees and the economy beginning to rebound, this should encourage more home buyers to enter the market and help further stabilize housing and the economy.”

For further information, check out this article: Nearly 75% Of Homes Are Affordable

Consumer Attitudes Toward Foreclosures

Wed, 26 May 2010 16:59:00 GMT

On May 20^th, Trulia.com and RealtyTrac released the results of an ongoing study that tracks homebuyers’ attitudes toward foreclosures. Trulia and RealtyTrac conducted the online survey through Harris Interactive® from May 10-12, 2010. The results indicate that, compared to a year ago, there is a decrease in consumers’ willingness to buy foreclosure properties. Last year, 55% of U.S. adults age 18 and up would consider buying a foreclosed home. This year, 45% of U.S. adults age 18 and up said they would consider buying a foreclosed home. The survey also indicates that many homeowners are unwilling to walk away from their home if their mortgage is underwater. Only 1% said walking way from an underwater mortgage would be their first choice, while 59% of homeowners said they would not consider walking away, no matter how underwater their mortgage is. 41% said they would consider walking away. Pete Flint, Trulia’s co-founder and CEO said, “For every borrower who avoided foreclosure through HAMP last year, another 10 families lost their homes. It now seems clear that government programs will not reach the overwhelming majority of homeowners in trouble. Combined with decreased consumer interest around purchasing a foreclosure it may take even longer than anticipated to see true health return to the real estate market.”

For further information, check out this article

California Tax Credit Update – Nearly 2,500 Homebuyers Have Applied

Fri, 21 May 2010 11:57:00 GMT

In my April 23^rd blog, I talked about how CAR was predicting that the $10,000 California homebuyer tax credit wouldn’t last long. Officials are saying it appears the credit, which caps at $13.3 million, will run out as soon as next month, right in line with the original estimates. The state is predicting that, “17,500 first-time homebuyers will receive tax breaks averaging about $5,700 apiece over three years. An additional 14,000 buyers of new homes will get three-year tax breaks totaling about $7,000 each.” Since May 1^st, nearly 2,500 people have applied for the tax credit. Just last week there were 2,040 applications. In fact, the pending sales of existing homes are running about 20% ahead of what is was this time last year. Leslie Appleton-Young, chief economist for the California Association of Realtors, referred to the tax credit saying, "People respond to financial incentives. Absolutely, it's going fast."

For more information, visit: http://www.sacbee.com/2010/05/18/2757562/homebuyers-rush-to-claim-state.html#ixzz0oaaPyie8

San Diego Experiences a Decrease in Foreclosures

Wed, 19 May 2010 00:00:00 GMT

In 2009, San Diego experienced a record-setting number of defaults and foreclosures. The steps of the foreclosure process in California include: 1) a notice of default, 2) a notice of auction, and 3) a foreclosure auction. The middle step, notice of auction, has been used more recently, especially by Bank of America, as banks attempt to put pressure on their borrowers. According to Leonard Baron, a professor of real estate at San Diego State University, a “notice of auction” does not mean the bank is going to foreclose; it’s merely a precaution so the bank can foreclose if they need to. Last month, in North County, the number of borrowers receiving notices of default decreased by 2.8% from March of this year and 37% from April 2009. Homes sold last month by foreclosure auction decreased by 47% from March of this year and 70% from April 2009. Southwest County experienced similar trends in the foreclosure process. Baron believes this is because "banks are trying to modify loans a lot because of pressure from the administration (of President Barack Obama), or short-sale them. It's a lot less costly."

For further information, check out this article

San Diego’s “Best Value” Neighborhood

Wed, 12 May 2010 12:33:00 GMT

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

San Diego Home Prices Increase – One of the Few Areas in the Nation to Do So

Mon, 10 May 2010 00:00:00 GMT

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/

Massive Increase In New Home Sales for March!

Wed, 05 May 2010 00:00:00 GMT

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.

Is HAMP Working?

Fri, 30 Apr 2010 10:51:00 GMT

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

California Tax Credit Update – CAR Says It Won’t Last Through May

Fri, 23 Apr 2010 11:35:00 GMT

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