The following is a guest post from Rikk Miller. Rikk is a professional financial writer and Market analyst

San Diego boasts of being ranked the most money-spinning real estate markets in 2013 

Which place would you pick if you had to choose one place to live in the world? Wouldn’t a 9,000 square foot oceanfront mansion in La Jolla be a good idea? Currently this property is being listed at $20,950,000 and is just waiting for the right homebuyer to set his hands on it. If you’re wealthy enough to put down 2 million without a blink and if you could afford to pay off a mortgage monthly payment of $100,000 excluding insurance and taxes, this might be the right property for you. Yes, when it comes to San Diego, some of the world’s richest people live here but so do others who go to work every day to earn their daily living. The real estate market in San Diego runs the extent of small homes that sell for less than $100,000 to prime luxurious properties that cost about millions of dollars. No matter how much you can afford on mortgage loans, there are some things that you need to know about the beautiful real estate market in San Diego.

A constant recovery in median home price – Signs of positive recovery

Studies reveal that the median home prices in San Diego hit record low levels of approximately $286,000 in 2010. Although the San Diego economy bottomed out in 2010 and soon started recovering after that. According to reports by Data Quick, the median home price in San Diego County in 2013 was $360,000 in the month of February. While this staggering increase is excellent, the home prices are close to 30% below their November, 2012 level. Data released by Trulia shows that there was an increase of 27% in the median home prices at which the homes were sold in 2013 than in 2012. By the end of April, 2013, the average listing price was $657,908 and this figure too saw an increase of 1.7% from the previous month.

San Diego boasts of being one of the most profitable markets for flipping houses

Did you know that with the present market condition, flipping houses still continue to be one of the hottest and most profitable trends as the county starts emerging from the housing crisis? In fact there are some portions of the country that witness exponential growth and the people who are eager to invest in San Diego real estate would rather be happy to know that this remains one of the most profitable markets with regards to flipping houses. Even though things are getting better, there still remain a large number of discounted real estate property opportunities around the US. If you wonder where the most profitable real estate markets are, San Diego will certainly be counted one among them.

Is it the perfect time to purchase a real estate property in San Diego?

Even though the real estate prices have gone up steadily, it is still a good time to invest your dollars in buying a house in San Diego. Mortgage loans are still hovering around their record low levels and buyers are being able to snag great deals, especially if they’re interested in buying bank owned properties. However, qualifying for mortgage loans is not as easy as it was 5 years ago but with a stellar credit rating and a low DTI ratio, it is pretty possible to grab a mortgage loan within your means. Renting a home in San Diego will cost you more than paying off a mortgage. As the real estate market is rising, building equity will become easier and effortless.

The job picture in San Diego is getting better day by day and homebuilders are also building homes here. You’ll love the weather, beach and there are excellent schools for young children. Unless the Fed and Ben Bernanke put a halt to their QE policy and allow interest rates to shoot up, the mortgage rates will remain low and you can well afford a home in San Diego.

Deciding whether to purchase or sell a home is possibly one of the most important and expensive financial/emotional decisions you will make during your lifetime. It is one that has not only financial consequences, but also legal ramifications. If done correctly it can be the catalyst for your future – during your lifetime, for your retirement, and to take care of your family after you are gone. That is why choosing the right real estate agent is so important. So how do you do that?

I was inspired to write this article after an ad I saw in my local paper by a real estate agent. The ad focused on the quantity of sales he has completed this year, inferring that the quantity makes him a great agent with whom to work. I realized immediately that this is the mindset of the average buyer or seller – let’s find the agent who has the most sales, because s/he must be very experienced. Personally, I think there is a big gap here so I thought I’d break it down.

Sure, there are agents out there who sell a LOT of properties, many of whom are very skilled at what they do, and likely have many happy customers. Personally, I have had MANY calls from buyers and sellers who have worked with mass-production agents (2 just this month), and I hear a very different side of the story. Many of these people tell me they were treated like a number, that they rarely (if ever) got to speak with the agent after initial contact, and that they were not satisfied with the overall handling of their purchase or sale…these people wanted QUALITY treatment and did not feel they received it.

When choosing an agent to work with, here are some things you may want to investigate:

1.  Contact person: Will you be dealing directly with the agent throughout your purchase or sale, or will there be others involved? Make sure you know who will be your contact person, and if it is not the agent then make sure you meet that person(s) before you start working with the agent (assuming you are ok with not being able to deal directly with the agent).

2.  Workload: Ask the agent how many clients s/he is currently working with; if the agent has a multitude of clients you can follow up with setting your expectations throughout the course of the transaction, and finding out how the agent will be able to dedicate time to you and your needs.

3.  Referrals: Get the names/contact information for at least 3 past clients, and find out how they rate the agent on communication, availability and overall quality of service

I do not have a personal goal to be a mass producer. My theory is to provide excellent service, so that my clients keep coming back and send all their friends, relatives and neighbors to me. This quality of service is more important to me than selling a higher quantity of homes. But there are agents out there who handle a multitude of clients at a time and are successful. It really comes down to what makes you feel comfortable, and finding the right agent to meet your needs.

Some people may like the quantity agents, and for them that is great (and you may even be able to find one who provides both quality and quantity). I believe the most important characteristics in a real estate agent are not only their experience, knowledge and ethical standards, but also the quality of their work and the way they treat their clients.

It feels great to be blogging again, and I am sorry I have not posted for over a week! I do have an excuse: the spring home sale season is well underway! I can’t remember being this busy in a long time – not since the early 2000s; it has been incredible! If you are wondering what is going on out there in the North San Diego real estate market here is an overview:

Slight rise in inventory. Although we still do not have a surge in inventory there have been increases, enough so that local agents are able to show several properties to buyers in most cases, rather than just one! According to Housing Tracker, inventory has increased on a national level 13.5% so far this year. In San Diego county there were about 7540 homes listed on the MLS as of the start of this week, which is about 100 more homes listed than the same time last month. The lowest inventory level we hit here in San Diego county was in February of 2013, and the last time we had inventory levels higher than right now was in December 2012…so although inventory is still low from a historical perspective, there is some comfort in knowing that it is rising slightly.

Multiple offers/quick market times still dominate. Yes, we are still seeing many new sales with multiple offers, and usually within days of listing. Buyers have to present their strongest offers in order to stand out from the rest of the crowd. Cash buyers are still in the game and often outbid those requiring lender approval. It can be frustrating, but there are always things that can be done to present the strongest offer possible, even in multiple offer situations (for more on this click here)

Prices are still rising, especially in some areas or neighborhoods. Prices continue to rise in most areas, and San Diego is no exception. The challenge with area appraisers to find higher values in pending property sales finally seems to be getting easier, as many appraisers are now applying the faster growing values into their analyses. For those who are afraid we are approaching another bubble, you can rest assured that will not happen so long as prices stop rising drastically at some point and level out. My guess is that this will happen by the end of the year. For more of my perspectives on the bubble possibility, click here.

Distressed inventory declines. According to market research firm Core Logic, the number of seriously delinquent mortgages has fallen about 33% since the peak (3.7 million) in January 2010. This is good news for buyers who are not finding as many short sales out there. But I must say that they are still out there, and that they are as painful as ever. I am personally awaiting for lender approval on two short sales that have been contingent for a long time – one since December of 2012. Lenders’ promises that short sales were going to get quicker never came to fruition and I don’t believe they ever will (but that is the subject for another blog…stay tuned!) More good news: foreclosure filings also fell to a 74 month low in April, according to RealtyTrac.

Loans may be a tad easier to obtain. There is growing demand for home loans, and application levels continue to rise. In order for banks to improve mortgage assets they will need to address the demands. Also, the Federal Reserve recently discovered that 8% of banks loosened mortgage credit conditions in the past 3 months (ending in April) – now you may laugh and say that 8% is not a big number, but it is a start. Also, according to Realty Times “27 percent of banks plan to up residential mortgage assets over the next year and know they can’t do that without taking on a little more risk.” Good news for borrowers.

All in all the market seems to be shaping up and we are well on the road to recovery. Luckily spring time came along right when the market started climbing out of the doldrums, and it seems we will have a strong spring and summer sales season.

Just listed! If you are looking for a beautiful coastal home with a phenomenal backyard, you have found it! This 5 bedroom home is beautifully maintained and offers custom paint and flooring throughout, lots of light, and a backyard that will make your home the place to hang out – for quiet relaxation or with friends and family…all in the wonderful coastal gated hilltop community of Mar Brisa.

Features Include:

• 5 bedrooms, 2336  square feet

• Full bedroom and bathroom downstairs

• Popular floorplan with downstairs bedroom

• Located in the gated hilltop community of Mar Brisa

• Bright and open

• Spacious kitchen with butcher block center island

• Cathedral ceilings

• Custom tile downstairs and upgraded carpeting upstairs

• Custom paint throughout

• Open family room with fireplace, adjoining kitchen

• 3 car garage with epoxy flooring and overhead storage

• Ceiling fans, recessed lighting

• Built in desk and shelving in downstairs home office

• Built in entertainment center

• French doors with disappearing screen in kitchen

• Wood blinds

• Master walk in closet

• Peek-a-boo ocean view from upstairs northeast bedroom

• Community park across the street

• Resort-like community pool, spa, tot lot and exercise lot

• Carlsbad schools

• Low HOAs and no mello roos taxes

• Close to shopping, dining, beaches, transportation and highways

The backyard is truly special and offers the following features:

• Built in BBQ

• Spa

• Built in seating area

• Custom built in eating area and bar

• Wine refrigerator

• Firepit

• Custom fountain

• Outdoor shower

• Outdoor speakers

• Bamboo privacy fencing

To view this home please contact me at 760-310-9466 or Rachel@LaMarRealEstate.org. MLS #130022121

Hi and happy May! What a wonderful time to be in San Diego – warmer weather, blooming flowers…enjoy all the wonderful outdoor events this month!

May 4 – 5 Escondido Renaissance Faire The age of chivalry will be recreated among the wonders of nature in an idyllic setting. Activities include several of Will Shakespeare’s plays, battle pageants, music in the streets, jugglers and hundreds of costumed re-enactors performing in this giant outdoor play. Refer to website for admission information. Time: 10:00 am – 6:00 pm Location: Felicita Park, 742 Clarence Lane, Escondido For more information visit www.goldcoastfestivals.com/escondido_home.html

May 4 – 5 30th Annual Old Town Cinco de Mayo Old Town comes alive with a celebration of art, culture, and history of the 1800’s. Ride in a horse drawn stagecoach, enjoy music, carnival rides and games, a car show, and many other activities. This is a free event. Time: Sat: 11:00 am – 10:00 pm, Sun: 11:00 am – 5:00 pm Location: Old Town State Historical Park, San Diego Ave., San Diego For more information visit www.fiestaoldtown.com

May 4 – 5 4th Annual Ramona Bluegrass & Old West Festival This event will include top performers and bands, day and night jam sessions, fireside storytelling, and overnight camping. Refer to website for admission information. Time: Refer to website for specific times Location: Ramona Rodeo Grounds, 421 Aqua Lane, Ramona For more information visit www.ramonabluegrassfest.com

May 10 – 12 12th Annual Gator by the Bay Enjoy a Zydeco, Blues and Crawfish Festival! This is a family event featuring Zydeco and Cajun bands, Blues bands and community musical groups performing on multiple stages. Enjoy Cajun and Creole food, cooking demonstrations, strolling entertainers, dance lessons, and more. See website for admission. Time: Refer to website for specific times Location: Spanish Landing Park at Harbor Island, Harbor Dr., San Diego For more information visit www.gatorbythebay.com

May 11 Miracle Babies 5k Run/Walk for Hope Proceeds from this Miracle Babies event support families in need who have a newborn in the neonatal intensive care unit. Following the race will be a red rose ceremony and a champagne toast celebrating mothers. In addition, the day will be full of activities for kids, health and wellness expo, local food, and more! Refer to website for registration information. Time: 7:00 am – 2:00 pm Location: Embarcadero Marina Park South, San Diego For more information visit www.miraclebabies.org

May 11 Ridiculous Obstacle Challenge This challenging, military-style obstacle course features wild and crazy game show-inspired obstacles creating the most fun 5K race in Southern California. The common theme is ridiculous and challenging fun! See website for registration information. Time: 9:00 am – 1:00 pm Location: Del Mar Fairgrounds, 2260 Jimmy Durante Blvd., Del Mar For more information visit www.rocrace.com

May 11 20th Annual Letter Carriers “Stamp Out Hunger” Food Drive This is the nation’s largest food drive to combat hunger. Letter carriers will collect non-perishable donations from homes as they deliver mail along their postal routes. Help stamp out hunger by leaving a bag of non-perishable food donations next to your mailbox before your mail delivery arrives. The letter carriers will do the rest. Time: Refer to website Location: All over San Diego For more information visit www.helpstampouthunger.com

May 12 5th Annual Mother’s Day Fancy Dress Swim This is a fundraiser for World Swims Against Malaria. Mothers will “dip” in the ocean wearing their Mother’s Day finest. A five dollar donation is all that is needed for World Swim Against Malaria to purchase an insecticide treated bed net and save a child’s life. Time: 10:00 am – 11:00 am Location: Oceanside Pier, Oceanside For more information visit www.onesandiego.org

May 17 – 18 Annual Allied Gardens Spring Fest 2013 Take the whole family to this festival for guaranteed fun. A music fest with popular local bands, mechanical rides, food and beer, a car show and parade, craft merchandise, mechanical rides, and even inflatable bounce houses. Time: Fri: 5:00 pm – 11:00 pm, Sat: 9:00 am – 11:00 pm Location: Allied Gardens Community Park, 5155 Greenbrier Ave., San Diego For more information visit www.navajoevents.com

May 18 Annual North Park Festival of the Arts This is an explosion of art, culture and entertainment. There will be arts and crafts booths, a food court, beer garden, Kid’s Art Beat, and tons more stuff! Refer to website for admission information. Time: 11:00 am – 9:00 pm Location: North Park, University Ave. & 30th, San Diego For more information visit www.northparkfestivalofarts.com

May 19 Annual Navy’s Original Bay Bridge Run/Walk A running and walking event across the Coronado Bay Bridge is a rare opportunity. The route begins in downtown San Diego then across the bridge to Coronado Island concluding at Tidelands Park with fun festivities. Refer to website for registration information. Time: 8:00 am – 12:00 pm Location: Bayfront Hilton parking lot, One Park Blvd., San Diego For more information visit www.navylifesw.com/bridgerun

May 19 La Mesa Village Antique Street Faire Once a year, antique dealers from far and wide set out their wares in La Mesa. The event generally features more than 125 booths with genuine antiques and collectibles, plus appraisal and restoration booths. Reminiscent of an old fashioned Midwest flea market, there’s live music and entertainment. Time: 9:00 am – 4:00 pm Location: La Mesa Village, La Mesa Blvd., La Mesa For more information visit www.lmvma.com

May 25 Santee Street Fair This event includes live bands, rides, entertainment, food, arts and craft vendor booths and a beer garden. In just three years the Santee Street Fair has become one of the best events in town! There will be more than 300 food and vendor booths, 3 stages of live music and entertainment, and fun rides. The beer garden will feature the Manzanita Brewing Company label. This is a free event. Time: 10:00 am – 7:00 pm Location: Santee Town Center, Mission Gorge Rd., Santee For more information visit www.santeestreetfair.com

May 24 – 26 Annual Valley Center Western Days Be sure to invite all your friends and family and go prepared to eat local food, shop local vendor booths, play with your kids, and see the rodeo and most of all have fun! Time: Refer to website for specific times Location: Valley Center Community Center, 28246 Lilac Rd., Valley Center For more information visit www.westerndays.org

May 26 2013 Vista Strawberry Festival The Vista Chamber of Commerce and the Vista Village Business Association are hosting the Annual Vista Strawberry Festival. Strawberries will be the main event along with a 5K Fun Run and a Kids Run, as well as 200+ vendors at the street fair, a strawberry pie eating contest and much more. This is a free event. Time: 8:00 am – 6:00 pm Location: Downtown Vista, 127 Main St., Vista For more information visit www.vvba.org

May 31 The Jewels of San Diego – All That Jazz This is the Arc of San Diego’s annual gala benefiting children and adults with disabilities. The evening begins with a cocktail reception and silent auction, followed by dinner, dancing, and entertainment. The Arc of San Diego currently serves over 2,500 children and adults with disabilities and greatly depends on the generous spirit of the community to assist with the continuation of vital services. Refer to website for admission information. Time: 6:00 pm – 11:00 pm Location: US Grant Hotel, 326 Broadway, San Diego For more information visit www.arc-sd.com/jewels

If you haven’t noticed, flippers are back in full force. It seems everyone wants to get into property flipping these days, even those who have never done so or may not have a good sense of what they are doing. If you are a buyer or know someone looking for property – whether a home, second home or investment property, you need to be careful when you come across flipped properties.

Let’s start with defining a “flip.” This is a property that has been recently purchased and then remodeled, oftentimes very quickly, in order to put back on the market and make a profit. There are all kinds of flippers – from experienced to do-it-yourselfers, and many different levels and degrees of remodeling. As a buyer you need to be very careful when considering writing an offer on these properties. There are several different types of flips, and I have categorized them to make it easier to understand:

Types of Flips:

1. Quick Flip or “Eye Candy” Flip: This is the most common type of flip that I see when showing property, and it is very easy to do and the cost is minimal. This type of flip often involves new paint inside and usually outside, a major cleanup, new (usually inexpensive) carpet in carpeted areas, new hardware to freshen up cabinetry, new light fixtures, and often new kitchen appliances. It gives the illusion of newness, but usually upon deeper inspection one finds that there are many items that need attention – furnaces and water heaters that need to be replaced, electrical issues, landscaping, and many others. If the home is older oftentimes the flipper does not replace the windows, which is an expensive job. Each home obviously differs in what is needed to make it look great to a buyer, and these quick flips often get the “oohs” and “ahhs” from buyers, but they may still need a lot of work.

2. Full Flip: These types of properties address replacement, or partial replacement, of most appliances and other issues, along with a remodel. They typically involve more than just painting and putting in baseboards and new kitchen appliances. Many flippers these days do not do this type of flip, because it is not cost effective. but for a buyer this is obviously the best kind of flip property to buy, because it is not just eye candy and things have been properly attended to. These flippers often address issues that quick flippers do not, like replacing old windows, flooring, cabinetry and sinks, appliances, landscaping, and any other issues that a quick flipper might pass over.

How to Avoid Making a Mistake in Buying a Flip that is a Lemon:

1. Get a home inspection: Keeping in mind that not all home inspectors are alike, it is a good idea to do your research – most real estate agents know inspectors who do a thorough job. If not, contact a few and get names of people who have used them. Talk to those people and see how well the inspector did. Also, check their credentials and make sure they are certified by either CREIA (California Real Estate Inspection Association) or ASHI (American Society of Home Inspectors); if you live in another state you can check with that state’s licensing board. My favorite inspector is a licensed civil engineer and a licensed general contractor as well, so I feel very confident my clients are getting the best inspection possible.

2. Get a home warranty plan. Home warranties are great for the first year, in case any appliances break or you have other issues that are covered under your policy. You can write this into your purchase contract and ask the seller to pay for it. You may want to ask the seller to include upgrades to the policy, like roof, pool (if relevant), air conditioner, etc. That way you are covered, and you can extend the policy at the end of the first year should you desire. Discuss this with your real estate professional.

In order to avoid having to waste time on a home that is a low quality quick flip, you should look beyond the “eye candy” that paint and fresh baseboards and appliances may present. Look inside cabinets, check the furnace and air conditioner (if there is one), as well as the water heater. Look for any signs of prior leaks (although paint usually does a good job of covering these up for a short time). Really take a good look at the home to see if there are other potential issues that may need to be addressed, either immediately or in the future. Have your agent ask questions of the listing agent if you need. If you feel comfortable in making an offer than you will find out more when you have your home inspection.

The bottom line is to hold off on getting excited about a flipped property until you have all the facts and can verify that the home will not end up in need of a lot of work soon after purchase. As always, if you do your homework you will likely avoid making mistakes…buying a flip home can be wonderful if you are careful. Happy home hunting!

This year much has changed in the real estate investment world, but where does that leave investors, and is it still a good time to purchase investment property? The answer really depends on the goals of the investor. Let’s look at a few different possibilities.

Buy and hold investors. Like the majority of my investor clients, many investors purchase with the notion that down the road the property will have gained equity, and at some point in time, a sale will net a nice profit. Most of these investors look for properties that are in good to excellent condition, and need very little work (such as paint and new appliances or possibly flooring), but they tend to stay away from major fixer properties. The goal is to purchase for a good price in a home that will command a good rent.

Most of these types of buyers have stepped back this year and are no longer looking for properties to add to their portfolios. This is because of the increase in prices due to increased demand and very low inventory. These types of buyers are not interested in getting into bidding wars and definitely do not want to pay prices that are above comparable market sale prices – like many purchasers today who are buying homes for their primary residences. For these folks the decision is not emotional, so they have or are no longer active in this market, at least until inventory levels rise and demand cools off.

Flippers. Flippers are still looking in today’s market, but it is harder to find the “gems” out there. Flippers come in many shapes and sizes…some do minor – what I call “bandaid” – work, and then sell. They are good at doing a minimal amount of work on the property to make it feel like a remodel. But if you look deeper you will see that they don’t tackle a lot of the things that the “heavy” flippers (my term) don’t. Heavy flippers don’t just slap on a coat of paint and throw in new appliances, they replace lighting and fixtures, surfaces and bathrooms, and repair other issues that need addressing (like installing new water heaters and HVAC units, etc.) It is really very property-specific, and obviously some properties need more work than others.

In today’s market it has become more difficult for the heavy flippers, as they usually need to purchase homes for low prices in order to make a decent profit. But I have definitely seen more and more bandaid flippers – some are willing to pay contract price, and then go in and do a minimal amount of work before putting the property back on the market. Many of these flippers likely make $10-15 in profits and are happy with that. So if you are a flipper or are thinking about becoming one, whether the market is ripe for doing so will depend on the specific area market, on your competition, and on what you plan to do to rehabilitate the property.

For many investors it is a difficult time to acquire property that is priced well without getting into a bidding war. And since paying over comparable sales is usually not a good business goal for an investment, it has become a difficult time for many buy and hold investors. Similarly, flippers are faced with challenges in finding properties they can buy for prices that are low enough for them to make a profit on the flip side.

It is important to keep in mind that every real estate market can be very different from the next, even neighboring complexes or cities may be different in terms of value and comparable sales. So before you venture out there to buy investment property, make sure to do your homework and work with an experienced local area agent. Have no fear – when inventory increases once again there will be more opportunities for investors.

Someone called me the other day with a question about short sales and HOA fees. She wanted to know whether a homeowner should continue to pay HOA fees if they are involved in short selling their home, and are awaiting lender approval. The answer is YES.

Unlike other fees which short sale lenders typically agree to pay (such as county transfer fees and certain document fees, escrow and title fees, etc.), lenders normally will NOT pay late HOA fees. In most situations where the homeowner is behind on these fees, the buyer will end up having to pay for them. This obviously could be an issue if the balance is hefty.

The even bigger problem is that the HOA could file a lien on the property for the late fees. This could hold up the closing of the short sale, or even worse: cause the parties to miss the closing deadline that was specified in the lender approval letter.

The best advice to give short sellers (and I always do so right from the start)  is to stay current with HOA payments, even when they are no longer current with their loan(s). This will assure a much smoother transfer of title and avoid any problems that could lead to a bungled short sale and a foreclosure.

If you have any other questions regarding short sales or questions related to legal ramifications of selling your home, please feel free to contact me at Rachel@LaMarRealEstate.org.