There has been a lot of speculation as to what will happen in the real estate market as we head into a new year. Here is my take on real estate market resolutions for 2013:

Home prices will rise, slowly. Based on the current market and the rise in prices in 2012, especially toward the end of the year, I believe that prices will continue to rise, although at a very slow pace. People who are thinking they should wait to sell in order to make a big profit will be waiting a long time, but those who see the opportunities – demand, low inventory and continued historically low interest rates – have the chance to sell in what will slowly become (if it’s not already) a seller’s market. Those homes that show very well and are well-maintained will garner the most interest and could set trends for neighborhood comparables.

Interest rates will remain low. Because of continued uncertainty with the economy interest rates have to remain low. If the feds raise them at this volatile point, when Americans are just beginning to feel comfortable spending again, albeit cautiously, it would be devastating. I do not believe that such a risk is healthy and thus I think rates will stay low for some time.

Inventory will rise. This one is hopeful, but I truly believe that due to the fact that markets are becoming seller’s markets, more people will decide to list their homes in the coming year. 2012 was a difficult year for inventory in most areas, and San Diego county was no exception. Multiple offer situations on the first day properties listed were not uncommon, and many buyers ended this year without the new homes they so desired, feeling frustrated. I think savvy homeowners will see the silver lining in selling their homes as we head into the new year.

Distressed sales will slow. Many lending institutions and federal and state governments vamped up programs in 2012 to assist troubled homeowners, and the numbers from many of these programs indicate that they are working. There are still many more people who need assistance, but I believe that we will see fewer foreclosures. Most banks seem to have warmed to loan modifications and short sales, bypassing the rush to foreclose.

More underwater homeowners may be able to refinance in the future. There is finally a rumbling about extending refinancing programs to those non-equity homeowners who fall outside of the Fannie Mae/Freddie Mac loan requirements – this could be HUGE and prevent a slew of foreclosures and even short sales down the road…this will be the real estate story at the top of my watch list in 2013.

All in all, the housing market it improving. It is important to mention, as I always do, that every market is different. If you want specific information about your area/market, consult with a qualified local agent before making any decisions about buying or selling real estate. One more caveat – keep in mind that market improvement is relative. The above analysis is based on numbers that show improvement in the local San Diego market, as well as reports from trusted sources and personal experience working in the local market.

I think 2013 will be a great year for real estate. Please let me know if I can provide any information about your San Diego home sale or home search, and have a very happy New Year!

It’s one of the questions of the moment, and one that many real estate agents and mortgage brokers fear most at this time: what will happen to the housing market once the conforming loan limits drop at the end of September? How will buyers and sellers be affected, if at all?

Let’s start at the beginning: conforming loans are those that are eligible for guarantee by the government. Because of this, they tend to have lower interest rates. The cap on the amount that the government can guarantee used to be lower, but in 2008 Congress raised the cap to $729,750 in some markets (typically those with higher priced homes, like in California). This made lenders feel more secure in doling out loans, because they knew they would be covered by Fannie Mae or Freddie Mac if the homeowner defaulted on the loan, thus making them less risky.

Also potentially on the chopping block are FHA limits, and lowering them could impact 40 states and hundreds of counties, according to the National Association of Realtors (NAR). Since FHA backed loans are popular right now across a broad spectrum of buyers, this could also be a problem for those seeking to qualify for these types of loans. Many organizations, including NAR, have been making appeals to Congress to not allow limits to be reduced.

Come October 1 these higher limits are set to revert back to the old limits – $625,500 in some markets , such as pricier home markets like San Diego County. Many reports have predicted this will be a huge blow to buyers trying to qualify for loans, and some lenders are already starting to scrutinize current applications in light of the coming changes. How might this affect the borrower?

Interest rate increases: With loan limit decreases higher interest rates are likely. If a borrower needs a loan that exceeds the new caps she will need a jumbo loan, which has a higher rate. This may cause the buyer to look for homes that are smaller and cost less – or simply to hold off on buying. Either way this could effect housing market recovery.

Down payment increases: Buyers will need to make bigger down payments should they need loans that are over the lowered limits, in order to get jumbo loans. Again, this could lead to inventory stagnation in the middle part of the market, with buyers starting to focus on lower-priced homes or just opting to wait.

Price decreases: With the changes in loan limits and thus, buyers being able to qualify, comes the inevitable – sellers may have to reduce home prices to entice buyers to buy (so that they can qualify for a loan without having to get a jumbo loan).

Given the current state of the housing market and economy, this move to reduce loan limits doesn’t seem like a good one…however, there is a ray of hope in the scenario: if you are a buyer you could benefit immensely from prices going down. You may have to adjust your criteria a bit – maybe a smaller home or one that needs a little TLC, but all in all it could have a positive outcome for buyers. Sellers are the ones who will have a more difficult time with the changes.

Buyers still have time to research, find a home and lock in a rate. If you are a seller, you still have time to price your home WELL. This is certainly not the time for overpriced listings, so have a frank discussion with your agent and utilize the comparables to come up with a price that will get those buyers in the door.

Amidst all the news of double-dipping in the housing market, falling prices and an increase in lender-owned properties, there is one thing that may be a silver lining in the doom and gloom news these days: lenders will likely start to approve short sales much sooner and more often.

As housing prices drop across the nation lenders have realized that in order to prevent an inundation of foreclosures they will need to stop the delay of short sale acceptances. This I feel is necessary if we are ever going to improve the housing market.

The current state of the market indicates that with the depletion of home values there will be more homeowners finding themselves underwater with their mortgages. If you are planning on staying in your home for a long time this doesn’t mean you should run out and short sale your property. On the contrary, as long as you can pay your mortgage you should stay put. As with any market, things will eventually rebound and you will be happy you didn’t damage your credit and let your lower real estate taxes (in most cases, if you have owned for some time) go by the wayside.

It is also important to look at your hyper-local market when taking into consideration all the gloomy news. For example, here in North San Diego the default rate has been DOWN for the 17th consecutive month. According to ForeclosureRadar this computes to 1.7 per 1000 defaults, a low number compared to other parts of California and the nation.

Foreclosures are also down in North San Diego. ForeclosureRadar states that only 1 of 1000 homes were foreclosed upon in April.

But have lenders truly embraced the short sale option? Some seem to think so, and one economist was quoted as saying exactly this. However, as an agent currently waiting for approval on two short sales I will believe it when I see it. I must say that in general response time is quicker than it used to be, but we still are waiting long periods in most cases (a few months at least).

Another factor that comes into play with getting short sales approved more quickly is the skills of the listing agent or his/her negotiator. This can make a big difference in approval time, so if you are considering selling your home as a short sale, the most important question you need to ask your agent is how she plans to negotiate with the lender(s) once an offer(s) is received.

In case you haven’t heard, rumors that our housing market is going into a double-dip are once again alive and kicking. Several people have asked what I think of this in relation to North San Diego, and whether it really is true. My answer: yes and no (you didn’t think it would be simple, did you?)

The latest news, just released yesterday by Clear Capital, states that prices fell in March and April, compared to the same time last year and the prior low in March of 2009. They credit the bank owned inventory (REOs) as the main culprit, stating that there has not been a rate of decline this strong since 2008 – the rate was cited as 11.5% over the previous 9 month period. As more than one third of home sales nationwide are REO the company predicts that prices will continue to drop, since these properties typically sell for less than regular sales, thus bringing down comparable solds.

Although it is true that the Western states were cited as particularly effected by the above data and predictions, it is a misnomer to compare this data to the hyper-local North San Diego market. Let’s take a look at Carlsbad to compare:

1. Average median sales price: Although the average median sales price – $540,000 – dropped slightly from January to March (by an average of $35,000, or -0.6% decrease compared to last year), home sales were up 5.8% compared to last year. The median sales price appears to have remained steady over the last several months, with only slight drops. Comparing to the Clear Capital report for the nation, Carlsbad’s prices have fallen slightly less than the national number (.06% to .07%).

It appears that we are seeing prices drop slightly, but not quite as much as in some other areas, such as the midwest, where they have already entered into a true double dip market.

2. Lower number of REOs compared to other areas. Right now there are currently 31 REO properties on the market in all four zip codes that comprise Carlsbad. There are 695 total active properties listed, so REO listings comprise only .04% of total actives.

3. Lower number of short sale properties: There are currently 95 short sales in Carlsbad, or 0.14% of listed homes are considered short sales. This number is undoubtedly smaller than other areas across the country like Las Vegas or Phoenix. In this light I think Carlsbad and other north coastal areas are fairing quite well. In fact, Carlsbad 92011 in the past had been the zip code with the lowest number of foreclosures in the entire county (I am looking into whether this is still the case, but I assume if not is it surely still one of the lowest).

Even some areas in our own county have higher numbers, like Chula Vista for example. Of 769 active listings in Chula Vista, 98 (0.13%) are REOs and 350 (0.45%) are short sales. These numbers are three times as high as Carlsbad’s numbers. Areas with less distressed properties will not likely see drops in price quite as large as one may see in markets saturated with these types of properties.

The bottom line is that yes, prices have dropped slightly in North San Diego. But you really do need to focus on a specific areas rather than the big picture if you are a buyer or seller. Not doing so is a common mistake many people make, so if you are thinking of buying or selling consult a local, experienced agent in your specific area to provide a complete analysis of prices and sales.

If you would like live market data for North San Diego cities (like the chart above and with different categories to choose from), please visit my website at http://www.LaMarRealEstate.org. Click on the resources tab at the top right, and then Live Market Data. You can even sign up to receive weekly reports.

After months of planning and development I am excited to announce the new website of LaMar Real Estate is now fully functional! I created this site with the needs of the buyer and seller as my first priority.

The new home search links provide more detailed searches, and there are links to helpful tools and articles, localized live market data reports, real estate news, social media links and of course, my blog. In the coming months look for helpful vlogs to be added to the site, which will provide information about basic questions buyers and sellers ask, including information on how to sell distressed properties.

I wanted to capture the beauty of North Coastal San Diego with this new website, and I have highlighted some of the cities and areas in which I work on my Communities page. The great school information is still accessible, and you can enjoy the stunning photos that are displayed.

I am excited to offer this site to everyone interested in North San Diego coastal real estate, as well as those who already live here and want to keep up with local issues, news and trends. I welcome suggestions–if there is anything you would like me to highlight in my blog or something you feel would be helpful on the site, please let me know! If you are not there already you can visit the site at http://www.LaMarRealEstate.org. Enjoy!