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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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First time buyer’s tax credit to be extended?
August 23rd, 2009 Categories: Real Estate News, San Diego County Community News, San Diego County Fixer of the Week, San Diego county Real Estate News
SAN DIEGO- The constant chatter about low inventory in the first time buyer market has been 
overshadowed this last week by the realization that the first time homebuyer’s tax credit was approaching its expiration date. Now November 30th is still a ways off by the calendar, but in real estate ‘years’ it is appropriate to be concerned.
“an especially urgent matter if you’re a buyer just starting to shop and you see entry-level prices bottoming out or rebounding in many local markets and you want to take advantage of the credit, which is more generous than last year’s”- 08/22/2009, Washington Post*
Currently short sales are still the dominant transaction in the San Diego County real estate market and with the short sale process averaging 3-4 months, you can see why this topic has moved to the front of the line. Without an extension of the current expiration date, this is crunch time. In order to qualify for the tax credit you must have closed your transaction by 11-30-2009.
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San Diego’s housing affordability continues to climb
August 15th, 2009 Categories: Client Testimonials, Real Estate News, San Diego County Community News, San Diego county Real Estate News
SAN DIEGO- In December of 2008 I wrote a post stating that the San Diego housing affordability 
rate had gone up in excess of 800% climbing from a low of 3.7% in 2005 to over 31% in 2008. Fortunately for buyers and investors that trend has continued and it was reported today by the San Diego Union Tribune that our local affordability rate is approximately 59%. Stop renting!!
According to the California Association of Realtors the average monthly cost of a first time buyer’s home in San Diego county would be approximately $1750 a month. Add to this the fact that with this comes the ability to write off close to $18,000 a year and there are very few reasons to continue to rent.
“The realty group(California Association of Realtors) defines a first-time home as one priced at 85 percent of the median for all single-family resale houses. The affordability level is based on what percentage of households, earning the qualifying median income, can afford those houses.
For San Diego, the latest figures showed a median price of $295,000, qualifying income of $52,550 and monthly housing payment of $1,750, including principal, interest, taxes and insurance. Nearly 60 percent of local households have the income necessary to buy such a house”- San Diego Union Tribune 8/15/2009**
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Continued low interest rates plays well for San Diego real estate market
August 10th, 2009 Categories: Real Estate News, San Diego County Community News, San Diego county Real Estate News, What to do in San Diego
SAN DIEGO- There is speculation that the FED will not be raising interest rates at their meeting this week but will in fact keep them at current levels. I fell strongly that this is a very important ingredient to the recipe that is keeping our real estate market afloat. On July 16th, I wrote about the importance of current interest rate levels to the San Diego real estate market and to San Diego first time buyers.
My take on the market at this point is the market will remain flat from this point. In order to maintain this stability, knowing there is a boat load of distressed properties not yet on the market, will be the continuation of these historically low interest rates as well as incentives such as the tax credit. There is a continuing strong appetite for San Diego properties at these price points and it is high demand that is propping up our market.
If we lose the incentives for buyers that currently exist in our market we could easily see a pricing decline approaching or surpassing that $280,000 median price we saw in January.
The next ingredient being the tax incentives, while nice, is probably the least important of the two. Being able to lock into a 30 year fix mortgage of 5.5% will have long term benefits on homeownership. Additionally, as time passes the ability to convert this purchase into an income property becomes great and that is how wealth is built in real estate.
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San Diego home prices for first half 2008 vs. 2009
July 16th, 2009 Categories: Real Estate News, San Diego County Community News, San Diego county Real Estate News
SAN DIEGO- Today’s Union Tribune, which I am subscriber to, trumpeted the continued rise in San 
Diego county median home prices. This is the third month in a row that the median home price in San Diego county has increased. We are looking at an increase of approximately 12% from our January low of $280,000. The current median home price for San Diego county is now $314,250.
Now of late I have found myself a bit bitter to alot of the current financial news and negativity is not my nature. So while I wish I could be a cheerleader regarding this positive news, I still have to be honest with you and myself and my belief is this is still a market under the influence of the moratoriums and that continues to be skeleton in the closet.
However, on the positive side, the real good news is that this is still a great time for renters to stop buying real estate for their landlord and instead invest in themselves. With FHA 
requirements at only 3.5% down, the continuation of low interest rates and the tax credits, these combined with the affordable housing prices are the perfect storm.
Using the mortgage calculator from bankrate.com, we see that a $250,000 mortgage at 5.25% including property tax would set you back approximately $1630.00 a month. This also provides you with a $19,500 write off on your income tax which lessen the true value of your monthly obligation. Purchasing the median San Diego home would set you back just under $2000.00 a month. You would need approximately $16,000 to purchase the median San Diego home using FHA of which you would see $8,000.00 come back to you as a first time buyer. Stop renting!!!
A deeper look at the data released, comparing the first half of 20009 with 2008, shows us only one area of San Diego is actually in positive territory and that is San Carlos at 1.4% while the worst performing area is Logan Heights at 47.7%. However, I said I was going to try to turn my 
frown upside down, and the positive spin for Logan Heights home sales is that they have tripled from 56 homes in the first half of 2008 to 170 for 2009!!! Not bad at all.
The data also showed that our market, as illustrated by this chart and the one below, is being driven by the lower priced market and this is not just because, duh, home prices are lower. There definitely a relationship between median home price and increase in home sales.
Sean O’Toole, founder of ForeclosureRadar.com, said there now is a shortage of entry-level housing. There also is a growing perception among buyers that the slumping housing market has reached bottom and that prices won’t get lower, he added.
“That is having a positive impact on prices,” he said. “Pretty much everything that comes up at the bottom end sells immediately.” -www3.signonsandiego.com/stories/2009/jul/15
East county, which had the lowest median price at $245,000 had the second highest increase in number of home sold with a 43% increase. On the other end, North San Diego County coastal, which had the highest median price at $380,000 remained flat in home sales with only a 3% 
increase.
My take on the market at this point is the market will remain flat from this point. In order to maintain this stability, knowing there is a boat load of distressed properties not yet on the market, will be the continuation of these historically low interest rates as well as incentives such as the tax credit. There is a continuing strong appetite for San Diego properties at these price points and it is high demand that is propping up our market.
If we lose the incentives for buyers that currently exist in our market we could easily see a pricing decline approaching or surpassing that $280,000 median price we saw in January. As I wrote in this post, there are some artificial elements influencing our current market. If we lose the incentives, then the banks fight back on the moratoriums and they decide they need to clear these distressed properties, we could see this perfect storm working in the reverse.
But the improving market could be dealt a setback if the many homes now in the foreclosure pipeline end up being taken back by lenders. A voluntary moratorium by banks has temporarily slowed the foreclosure rate, but many borrowers remain behind on their mortgage payments.
“The banks could pull the plug at any time,” said Dave McDonald, government affairs chairman for the San Diego County chapter of the California Association of Mortgage Brokers.
“We know we are still in a deep recession,” LePage said. “We don’t know when we are pulling out of it. We know more foreclosures are coming.”-www3.signonsandiego.com/stories/2009/jul/16
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Low inventory levels causing buyer frustration
July 6th, 2009 Categories: Blogrolll, Real Estate News, San Diego County Community News, San Diego county Real Estate News
SAN DIEGO-
My last post here spoke of the need for buyers to exercise patience in the current real estate market climate and most importantly to not get discouraged. Here is chart I received in our Prudential newsletter that demonstrates how low our market inventory is unless you are in the $900K+ market. These numbers represent in months how long it would take to deplete inventory based on the current sales rate.
Six months is considered a balance market, so in any other economic climate, these numbers would represent a seller’s market and drive the market pricing up. Unfortunately, foreclosure moratoriums and slow bank processing are creating this fictitious market and instead of feeding buyer’s demand, they are only creating frustration and in some cases returning buyers to the rental market.
Additionally attached home inventory is low also, but consistent with market dynamics not as low as detached. The reason for this would be, that as detached homes become more affordable there is less demand for attached.
If you are currently in the market to purchase and have lost out to multiple offers and are failing to see a continuing selection of properties, focus on the positives. Those are the low interest rates, the affordability of housing and the tax credits available to some.
If you are considering a sale, while pricing remains depressed you can expect quite a bit of attention on a home priced appropriately.
Call me, 760.415.3329, if you have any questions or if you need help with your real estate goals.
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