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July 22nd, 2010 Categories: Real Estate News, San Diego County Community News, San Diego County Fixer of the Week, San Diego county Real Estate News, San Diego homes for sale
OPPORTUNITY AWAITS HOMEBUYERS IN SAN DIEGO COUNTY
SAN DIEGO- I have to admit to being wrong when I wrote in April that I did not feel the expiration of the tax credit was going to have much impact on the real estate market that makes up most of my business.
While I do not have data to back up my beliefs, I do not see the loss of the tax credit having much impact on the markets I serve. There was an article in today’s North
County Times titled ‘BUYING FRENZY; First-time home purchasers rush to take advantage of federal tax credit.” They quoted quite a few people who spoke of the impact on their markets and stated some positive data, but the article looked at the national picture where in many areas $8,000 is a nice chunk of a home purchase. In our area, because the incentive was 10% of the purchase price or $8,000 whichever is lesser, I would say the credit would have had a much greater impact if you could have received $25,000. This would have been more comparable to our market prices versus the $8000 on a national level.- Brian big dummy Long, 4/30/2010
It was approximately the middle of June that I began to feel the coming impact from the expiration of the tax credit and while it did not make much sense to me for reasons coming, the market has slowed tremendously.
At the beginning of this month I wrote a post and had a graph charting the difference between San Diego resale home sales in 2009 versus 2010. 2009 clearly showed the traditional pattern of increasing home sales as we move into the summer months. 2010 on the other hand showed a significant spike in closed transactions in May followed by an approximate 30% reduction in sales in June. Looking at home sales to date, 7/21/2010, that number looks like it is going to fall further with only 762 home closed in the same market area from the prior survey. At this pace of 38 closed transactions per day, we should expect a monthly total of 1190 closed real estate transaction for July.
THERE IS GOOD NEWS FOR THE SAN DIEGO HOMEBUYER
In my defense, there are a couple reasons, well one big one anyway, why the current real estate market presents a better opportunity for buyers than in May: MORTGAGE RATES!!
Yes, this week mortgage rates are establishing a new low, and contrary to belief it is not impossible to qualify.
Rates fell last week to 4.59% on an average 30-year fixed-rate mortgage, which is down from 4.69% one week ago and the lowest ever recorded by the trade group since its survey began in 1972. Other measures show that rates continued to fall this week: Zillow’s Mortgage Marketplace quoted an average of 4.37% on Tuesday.- blogs.wsj.com,2010/7/21
Two years ago I had clients willing to give blood to lock mortgage rates under 6%, so these rates represent an incredible opportunity and more so when combined with the fact that home prices are still significantly low.
The other reason is that the ‘tax’ credit in a way hasn’t gone anywhere. In fact credits to buyers, have been around for a long time. The best thing about this particular buyer credit is you can use 100% of it regardless of how much you pay in taxes.
With the tax credit, especially the state credit, if you did not actually have a tax bill(s) that totaled the credit amount, you were not going to realize the full credit. However, as a buyer you have always had the ability to ask for a seller’s credit that would be applied towards you closing costs thus either saving you money or providing you the extra money needed to close your escrow. There are individual guidelines to how much this credit can be and it is generally a percentage, say 3%, of the purchase price. This won’t give you your down payment, but it may preserve your cash so you then meet the lender’s guidelines for necessary reserves.
If you have been considering purchasing your first home or an investment property you have a trifecta in your favor. Low mortgage rates, depressed pricing and increased inventory. Give me a call or shoot over an email and let’s discuss your particular needs.
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How to buy a house on the cheap
July 1st, 2010 Categories: Real Estate News
SAN DIEGO-
“The era of record-low mortgage rates may be over.
The average rate on a 30-year loan has jumped from about 5% to more than 5.3% in just the past week. As mortgages get more expensive, more would-be homeowners are priced out of the market — a threat to the fragile recovery in the housing market.
"We are seeing some panic among potential buyers who have not found houses yet," said Craig Strent, co-founder of Apex Home Loans in Bethesda, Md. "They’re saying: Man, I should have found a house three weeks ago or last month when rates are lower."
It’s all about affordability. For every 1 percentage point rise in rates, 300,000 to 400,000
would-be buyers are priced out of the market in a given year, according to the National Association of Realtors.
The rule of thumb is that every 1 percentage point increase in mortgage rates reduces a buyer’s purchasing power by about 10%.”- Home mortgage interest rates jump, Associated Press, 4-7-2010
Well nothing could be further from the truth. Interest rates are surpassing historical lows and are charting new territory. The current quoted average 30 year mortgage rate is 4.62% with no points.
At a time when homes should be flying off the market, our local real estate market seems to have stalled. Looking at home sales for June, the Hwy 5 corridor market is down over 15% from July of 2009 and at a time when home sales trend up month over month, June sales are down OVER 25% from May!! I, and my fellow agents, just can’t believe that the expired tax credit would have had that type of impact on a broad market.
If the expiration of the credit really had that type of impact, here is the good news for both of us; ‘buyer’s credits’ have not gone anywhere, you just have to negotiate a seller’s credit towards buyer’s closing costs. You want $3000? $5000? $8000? It can be done as long as the credit does not exceed 3.5% of the purchase or other lender guidelines.
Let’s say you would like to buy a single family home for $430,000. You are going to go FHA, so you would need just over $15,000 for your down payment. In order to cover your closing costs, I successfully negotiated a seller’s credit towards buyer’s closing costs not to exceed $6500. Done. There is your credit.
At 5.65%, the interest rate a week after the quoted article was written, your payment on your $415,000 conforming loan would be approximately $2395.00 a month. At today’s San Diego interest rate of 4.62% your payment would $2127.00, saving over $268 a month. That’s over $3200 a year or almost $100,000 over the life of the loan. You could even ask for a larger credit and pay a point which could bring your payment under $2000.00 a month.
There are currently 774 3 bedroom 2 bath , or more, homes for sale in the Hwy 5 corridor that come in under $430K.
If you would like to discuss a home purchase, call me at 760.415.3329. I have closed numerous buyer side transactions this year.
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MORTGAGE RATES HITTING RECORD LOWS!!!
May 24th, 2010 Categories: Real Estate News, San Diego county Real Estate News, San Diego homes for sale
SAN DIEGO- In the last 6 to 8 weeks there had been quite a bit of talk regarding the potential rise of San Diego mortgage interest rates throughout this year. Most analyst predicted rates to rise with at or above 6% being the norm by the end of the year. But then the EU turmoil kicked in.
In what can be looked at as the silver lining from other’s misery, the financial crises in some EU countries is having a positive impact on our mortgage interest rates.
Europe’s debt crisis is behind the drop. Nervous investors are flocking to the security of US Treasurys, which pushes down their yield and influences a host of consumer interest rates—including those on mortgages.-cnbc.com
Just how much impact are these troubled times having on our mortgage interest rates? How about the LOWEST 15 year mortgage rates, 4.24%, since Freddie Mac began doing its rate survey which started in 1991.
The 30 year no point mortgage was quoted last Friday at 4.86% which is the lowest benchmark rate recorded by BANKRATE.com since they started 
tracking the data in 1985. For those willing to take the gamble, many in the mortgage industry predict that rates may bottom out in the mid 4% range this summer.
"It’s schizophrenic. We all had this expectation of higher interest rates and no more refinances." He says he helped a borrower lock in a 30-year loan with a 4.25% fixed rate last week, the lowest in his 24 years in the business.-Jeff Lazerson, chief executive of Mortgage Grader
Yes the federal tax credit has ended, but this is a great opportunity to secure financing that will benefit you for years to come. It is still a great time to be a buying real estate.
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Life after the home buyer’s tax credit
April 30th, 2010 Categories: Real Estate News, San Diego county Real Estate News, San Diego homes for sale
SAN DIEGO- Well I woke up this morning to sunshine and Dave my golden retriever wanting to go for a walk. Obliviously neither knew the opportunity to take advantage of the $8000 home buyer’s tax credit ended overnight. Maybe it was they knew the state of California’s home buyer tax credit of $10,000, or 5% which ever is lesser, was kicking in, but either way, the world did not end overnight and I do not expect it to as it relates to my business.
Firstly, if you have any plans of taking advantage of the $10,000 tax credit offered by the state of California you should hurry. Most everything I have read predicts the funds for this credit will be gone by the end of May. This is certainly no reason to buy a house, but if you are in escrow and can close early, you may give taking that action strong consideration. Closing the day after the funds run out would stink. If you are already in escrow, read the link above and send in your application now.
Taxpayers may apply for the tax credits if they have entered into a contract before May 1, 2010, as long as escrow closes on or after May 1, 2010.
Also, there is a military exemption to the federal home buyer’s tax credit that is often not mentioned and with numerous military installations here is certainly worth highlighting.
The one exception is for members of the military, foreign service, and intelligence communities, who have served on official extended duty outside of the U.S. for 90 days or more between January 1, 2009, and April 30, 2010. They have until April 30, 2011, to sign a sales contract, and until June 30, 2011 to close.
While I do not have data to back up my beliefs, I do not see the loss of the tax credit having much impact on the markets I serve. There was an article in today’s North County Times titled ‘BUYING FRENZY; First-time home purchasers rush to take advantage of federal tax credit.” They quoted quite a few people who spoke of the impact on their markets and stated some positive data, but the article looked at the national picture where in many areas $8,000 is a nice chunk of a home purchase. In our area, because the incentive was 10% of the purchase price or $8,000 
whichever is lesser, I would say the credit would have had a much greater impact if you could have received $25,000. This would have been more comparable to our market prices versus the $8000 on a national level.
Now there already are some indications that some softening in pricing is already occurring. The Case-Shiller index for February was recently released and the San Diego region was the only region to post pricing gains out of the entire index. So is this a national trend that will not impact us locally? That’s hard to say, but I am starting to see more ‘traditional’ listings coming on the market with reasonable expectations. With the summer buying season coming we may weather the next several months well. We’ll need the help of low mortgage rates, which I feel have always influenced our market more than the tax credits, and have a commitment from the FED to keep them low, but there will be some upward movement.
Lastly, what could be the start of a positive trend to drag us out of our real estate bottom is the increase in the San Diego county population. More bodies means more housing demand and whether it is in the rental sector or ownership this is statistic generally translate in to home price appreciation. The San Diego Union Tribune, which I subscribe to, reported a 1.2% gain from 2009 to 2010.
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California set to extend home buyer’s tax credit
March 24th, 2010 Categories: Real Estate News, San Diego County Community News
SAN DIEGO- Well California may have a budget shortfall of $20 billion dollars, when they actually get a budget done, but somewhere the legislature found $200 million to fund a first time home buyer’s tax credit.
Set to kick in the day after the Federal tax credit expires, it is also worth $10,000 versus $8,000 and unlike the last time the state had a home buyer’s tax credit, this is applicable for both new and resale homes.
When asked if the state could afford this, Mr. Schwarzenegger labeled it an investment. “You cannot bring the economy back if people don’t have jobs.”-blog.wsj.com
UPDATE 3/25:
Gov. Arnold Schwarzenegger on Thursday signed a bill aimed at selling California’s vacant homes and encouraging new construction by extending a $10,000 state tax credit for first-time homebuyers.
The governor signed a bill the state Legislature passed on a bipartisan vote earlier this week. It provides a state tax credit to first-time homebuyers who buy new or existing homes from May 1 until the end of 2010.
Homebuyers can claim 5 percent of the purchase price against their California taxes, or up to $10,000.
"I have been up and down the state pushing this important housing bill that will get people off the fence and into homes while creating jobs and stimulating our economy," Schwarzenegger said in a statement.-mercurynews.com
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California to add $10,000 to first time buyer’s tax credit?
January 7th, 2010 Categories: Real Estate News, San Diego County Community News, San Diego county Real Estate News, San Diego homes for sale
SAN DIEGO- It’s like deja vu all over again.Today Governor Arnold Schwarze
negger proposed and has sent to the state legislature a new round of state first time buyer tax credit. The tax credit as proposed would be for new or existing construction and would be paid out as a $3333.00 tax credit over a three year period. The state tax credit could be combined with the federal tax credit, but would be limited to 20,000 qualified purchase as it will be only funded with $200,000,000.
Schwarzenegger administration officials said conditions of their proposal would be similar to last year’s credit. That had no income limits, made all buyers eligible and required that buyers live in their homes. No dates have been set yet for eligibility. Buyers qualified last year by closing escrow after the credits became available on March 1.- www.sacbee.com/business
We’re still broke and as much as I wish this would be a good thing, it is just plain dumb.
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Will January deliver YOUR new home?
January 3rd, 2010 Categories: Client Testimonials, Real Estate News, San Diego County Community News, San Diego county Real Estate News, San Diego homes for sale
SAN DIEGO- Well another year is behind us and hopefully we continue to move closer to our economic recovery. While there is much to write about over the past couple years, I continue to look forward and concern myself with the present and presently, inventory is getting low in affordable/ median housing.
As the tax credits associated with economic stimulus package approach their end date, I doubt there will be a second extension, I have quite a few buyers that are trying hard to get into their new homes. Unfortunately, there has been a sense that not too many new listings coming on the market and the data supports that intuition.
Now this could be construed as a positive sign that the number of homes or homeowners in “distress” is slowing down or it could just be the banks just are not foreclosing on distressed properties. Some believe the banks are hoarding homes they have already foreclosed on anticipating listing them at some future date when the market is more favorable.Whatever the case the net effect is the reduction in new listings.
When looking at the past two years of the areas I primarily work in, the steady decline is quite evident with the exception of the “central” area consisting of University City, Clairemont, Linda Vista, etc, which has held up pretty well. North County coastal, essentially Oceanside to Carmel Valley, has really experienced a great impact on new listings. In 2008, with the exception of February because of the shorten month, January through July saw a least 1050 new listings a month. In 2009, the highest month was January with 949 new listings, which represents about a 20% reduction when compared to 2008. The lowest month was December with only 517 new listings.
If you are considering taking advantage of the tax credits being offered you have a little less than 4 months. With the clock running out, I strongly urge you to stay away from short sales, UNLESS they already have bank approval. If you do want to write an offer on a short sale you need to make certain you have the right to cancel that offer at any time in order to maintain your ability to write an offer should a better opportunity present itself.
In 2009 I closed numerous homes with first time buyers and would appreciate the opportunity to help you with your first home purchase!!
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First time buyers rise 16% in 2009
November 16th, 2009 Categories: Real Estate News
SAN DIEGO- While this should not be a surprise to anyone who reads some form of media with current economic content it’s good to hear none the less. First time home buyer’s accounted for 47% of US home sales up from 41% in the previous years survey.
The National Association of Realtors are wrapping up their annual conference today in San Diego and it was there that they announced the results of their survey which covered from July 2008 to June 2009.
The typical first time buyer had a median age of 30 with a reported median income of $61,600. Additionally, the typical first-time buyer paid $156,000 for their home, about $9,000 less than in the Realtors’ 2008 survey.
Another demographic increasing in home ownership numbers are single women who now represent about 22% of home buyers while single men represent about 10% of home buyers.
Factors leading to the increase include the following demographic trends: better education, more women working and seeking financial independence, and young women delaying marriage.
Also, women have significantly increased their purchasing power. They own and operate 38 percent of all businesses in America and make up nearly 40 percent of all business school graduates. More immediately, historically low interest rates, affordable home prices, ample housing supply and the first-time homebuyer tax credit are fueling the increase of single women homebuyers.- noozhawk.com
Hey ladies… NICE JOB!!! As a father of two daughters I think this is awesome.
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First time home buyer tax credit extension signed by the President
November 6th, 2009 Categories: Real Estate News, San Diego County Fixer of the Week, San Diego county Real Estate News
SAN DIEGO- It was just announced the President Obama has signed the bill that includes the 
extension and changes to the first time home buyer tax credit.
The first time home buyer tax credit extension allows a buyer to enter an agreement with a seller by April 30, 2010 and close on the house by the end of June 30, 2010. First time home buyers are defined as anyone who has not owned a home for the past 3 years. First time home buyers will get an $8,000 tax credit, similar to the tax credit for much of 2009. Other home buyers, who have owned their current home for at least five years, are eligible for a $6,500 tax credit.
Income limitations have been increased to $125,000 for single filers and $225,000 for joint filers. The purchase price of the home must be less than $800,000. The estimated loss in tax revenue to the government comes to $10.8 billion. – creditunionsonline.com
While there was some speculation over whether the first time home buyer’s tax credit would be extended or not, I never waivered in my belief that it was coming. With banks that have used or are still using stimulus money handing out huge bonuses, there was no way the American public was going to lose this. If so, there would have been a march on Congress with pitchforks and torches!!
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Could we lose the mortgage interest deduction?
September 3rd, 2009 Categories: Real Estate News, San Diego County Community News, San Diego county Real Estate News
SAN DIEGO- Back in March, I wrote a blog post about a proposed mortgage interest deduction change by the Obama administration. The proposed plan would limit the deductible amount of both mortgage interest and property taxes for those earning more than $250,000 a year. I wrote that in San Diego county the effect of this proposal would not be as damaging to our real estate market as the California Association of REALTORS was portraying. The overwhelming majority of San Diego homeowner’s make less than $250,000 a year.
Now there is a new proposal be presented to help raise much needed government revenue. Under this new proposal the impact would be felt by a much larger percentage of our county’s populous as this new proposal is based on the amount of debt associated with the property. The impact CAR feared with this first proposal would be much more justified with this new one.
Tops on the CBO’s hit list for housing: Slash deductions for homeowner mortgage interest from the present $1.1 million limit to $500,000, phased in with $100,000 annual reductions starting in 2013 and extending to 2019. Under current law, taxpayers can write off mortgage interest on their principal home debt up to $1 million, and on home equity debt up to $100,000.
Under the CBO’s option, that maximum mortgage debt amount would shrink yearly until it hit $500,000. Over a 10-year period, this change alone would boost federal tax collections by an estimated $41 billion.
The CBO offered up a second option if Congress wants to raise a lot more money: Replace the current mortgage interest deduction with a flat 15 percent tax credit for everybody with mortgage amounts below the declining limits in the first option. Rather than taking write-offs that are tied to your personal income tax bracket, every homeowner would get a credit worth 15 percent of mortgage interest paid. – San
Diego Union, 08/30/2009
So in the first proposal, only those with earnings over $250,000 would face reductions in their ability to write off interest. In this latest proposal, which would phase in starting in 2013, the impact would be almost universal as the average San Diego county home would most likely exceed $500,000 by 2019. This is when the full effect of the proposal would be in effect. Remember in November of 2005 the San Diego county median home price peeked at $517,500 according to Dataquick.
This type of change will directly impact home values as potential buyers will not be able to borrow as much knowing their is less of a tax incentive. Additionally, if implemented as written, the timing will most likely coincide with our markets climb out of the lows we are setting now thus prolonging a stagnation in home values many years beyond the predictions.
The good news here, yes there is a silver lining, is that this type of thing has been proposed in many different forms.
According to news reports, including The Los Angeles Times, the panel "tentatively agreed to recommend a substantial reduction in the limit on mortgage interest that homeowners can deduct from their taxes." Californians are concerned because the median home price in the state — where one out of nine Americans live — is already well over a half million dollars. Others are concerned that a cap on mortgage interest rate deduction could lead to an elimination of the benefit for all homeowners. – Blanche Evans,Realty Times, October 15, 2005*
Yes, the above was written about in 2005 after then President Bush formed a panel to "simplify Federal tax laws to reduce the costs and administrative burdens of compliance with such laws, among other purposes including recognizing the importance of homeownership and charity in American society."*
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