Posts Tagged ‘Real Estate news’
Saturday, May 3rd, 2014
There is a lot of news out there in the real estate world, so let’s cover some important items you should know.
Property tax reassessment deadline extended in San Diego County: If you are trying to get your property taxes reassessed you are in luck. The county assessor has extended the deadline for filing reassessment paperwork to May 16. If you are interested you can apply by clicking here.
Price appreciation in San Diego County led nation in February: San Diego officially led the nation with the highest price appreciation in February. and fall behind only San Francisco and Las Vegas in annual appreciation. Prices of resale single family homes increased almost 20% from February of 2013 to February of 2014 here in San Diego. The reason for the increase? Increased demand for housing and low inventory levels. Most industry experts predict that prices will slow and we will see normal growth patterns in appreciation, circa 3-3.5% annually. Signs of slowing are already apparent.
Luxury home sales hit all time high in U.S.: Home valued at a million dollars and over are selling at two times their historical average right now, having risen 7.8% in March since the same time last year. Compare that to a 12% plunge during the same period for homes valued at $250,000 and below…or 2/3 of the homes that sold across the country. An improving economy and strong stock market are building confidence in wealthy home buyers, while at the same time putting homeownership out of reach for a large majority of Americans; tighter credit standards, escalating prices and slow wage growth effect the decision to buy for a large majority of would-be homeowners.
FHA makes it easier for some people to buy homes: Those who have a recent foreclosure, short sale or economic hardship may now be able to qualify for home loans sooner, according to the FHA. The newly created category “economic event” will now be acceptable to allow borrowers to obtain loans in as little as 12 months after the event. Economic event is defined as an uncontrollable event (such as job loss or pay cuts) that led to loss of employment or income for at least 6 months, creating a total household income decrease of at least 20%. Of course, there are requirements and documentation, and each case is individually evaluated. If you have more questions you can contact your mortgage professional for more information.
Saturday, October 27th, 2012
HARP is helping more borrowers to refinance: HARP, the Home Affordable Refinance Program, has recently been restructured, and this has allowed more homeowners to be able to take advantage and refinance to lower rates. The new guidelines allow those who are underwater with their mortgages to take avail of the program – a big welcome to homeowners struggling with mortgage payments. This also effects the foreclosure and short sale rates, which are good for the housing market and economy. As of July, approximately 75,000 homeowners have refinanced under HARP, up 50,000 from before the program was extended to help underwater homeowners. This is great news and hopefully it will continue to help people. Now if only they would apply these programs to non-Freddie Mac and Fannie Mae loans!
New home sales hit two year high: It’s official: builders are back in business. New home sales have reached the highest numbers in over two years. Here in North San Diego several new communities have popped up over the last 1-2 years, and they are all selling well. This is another great sign for the housing market recovery.
Pending home sales numbers increase: Pending home sales have been increasing lately, and September numbers, although slightly up from the previous month, held steady. The increase has been in effect for 17 consecutive months, according to the National Association of Realtors (NAR). NAR’s chief economist believes that this upward trend should continue into 2013. This coming Spring should be a great time for sellers and buyers.
Number of low priced homes shrink in California: Although inventory is scarce everywhere and in most price ranges, properties around $300,000 and under are suffering worse. According to Zillow, there has been a 40% reduction in inventory under $313,000 in California in the last year. This explains the multiple offer situation in these categories – there simply is not enough supply to meet the demand. Hopefully after the holidays we will see more properties on the market.
Big banks being sued:Wells Fargo is being sued over alleged fraud in a mortgage lending program administered by the Federal Housing Administration. Bank of America is also being sued, by the Justice Department, for mortgage fraud to the tune of over $1 billion. The B of A cases involve loans created through Countrywide, before Countrywide was acquired by B of A in 2008…gee, maybe borrowers will see some of the fruits of the penalties if B of A is found liable – but of course that it doubtful (one can hope). Many of the claims involved in both suits go back over the course of 10 years. Well, I would wish these banks good luck in their suits, but as I have no sympathy I hope they get what they deserve.
Thursday, September 13th, 2012
The decline in the real estate market these last several years led many California homeowners to seek reductions in their property taxes. All they had to do was show the decline in market value of their homes, via a comparative market analysis, and local tax assessors were generous in granting annual reductions. BUT… now that prices are increasing, homeowners must realize that so too can their property taxes.
Normally property taxes do not increase more than 2% annually, thanks to the voter-approved Proposition 13 (also passed by voters in 1978). However, just as assessors have the authority to temporarily reduce taxes when property values go down, so can they increase taxes, even more than 2%, when the values come back up (Proposition 8, 1978).
The 2% limit outlined in Proposition 13 only takes effect when the value of the property reaches the level it would have reached had the market never dropped. There are areas in California that have already been subject to tax increases.
If you live in an area that has seen market value increases, and you have had a property tax reduction, be prepared for possible property tax increases soon. It may not be welcome news to you, but it is good news for your county and the economy to see these improvements in the housing sector.
Friday, July 6th, 2012
Housing Affordability is Up: The National Association of Realtors has reported that housing affordability is at it’s highest level since the 1970s, when such record-keeping started. The Housing Affordability Index measures the relationship between median home price, median family income, and average mortgage interest rates. As the index climbs higher, household purchasing power grows. An index of 100 is the place at which a household with median income is able to qualify for a purchase of a median-priced home; the index in January scored 206. Great news for buyers.
Vacation and Investor Purchases Grow: Rising to the highest level since 2005, vacation home and investor purchases are heating up the market. The National Association of Realtors (NAR) reports that investment purchases rose over 64% last year from 2010 levels. Vacation home purchases rose 7% from 2010. I have definitely felt this to be true, as the majority of my sales in 2011 and again this year have been to investors and those purchasing second/third homes – it’s a great time to negotiate for these buyers.
Fixed Mortgage Rates Keep Falling: Fixed rates have continued to drop, according to a Freddie Mac survey, with a fall again this week for 30 year fixed rates, to 3.62% (compared to 4.60% this time last year). Similarly, 15 year fixed rates and 1 year ARMs also dropped. For more details click here.
California Homeowner Bill of Rights Closer to Approval: The California Homeowner Bill of Rights -which actually encompass two bills – passed by the State Assembly and Senate on Monday, and now go to the Governor for final approval.
The bills will address two main issues: (1) protection from foreclosure of homes while homeowners are working with their lenders on modifications (allowing them to stay in their homes), and (2) establishing a single point of contact with lenders for homeowners in their communications (so they are not passed around to numerous people while trying to work out their modifications – an act that would have a big impact on getting these modifications approved).
The bills will also prevent robo-signing by imposing fines on the lenders for filing any unverified documents, and will allow homeowners to sue before a foreclosure. Lenders of course have been fighting these laws and are against passage. The laws are expected to be passed and would take effect January 1.
California Officials to Use Eminent Domain to Help Restructure Underwater Mortgages: Eminent domain, the process by which the state can take your property for public use, is being considered in a new light in an attempt to help underwater borrowers. The plan would allow seizure of underwater mortgages at a low price, based on fair market value, and would then refinance them (to the homeowner) at a slightly higher amount. The venture capital firm that is financing the seizures would make a profit on the new mortgages, and homeowners would be allowed to participate if they were current on their mortgages. Homeowners would stay in their homes and have new mortgages based on current market values. It will be interesting to follow the path of this clever but controversial plan.
Photo courtesy of Dreamstime
Tuesday, June 12th, 2012
There is a strange phenomenon occurring in San Diego this Spring season – there are less homes for sale than anticipated. It is not uncommon for buyers to find themselves in multiple offer situations, being outbid and outshone by others, including cash investors. Will we see more inventory as we head into summer, and what is keeping sellers from selling? Let’s take a look at some of the possibilities.
1. Negative Equity Rising. According to an article in the Wall Street Journal, economists believe that as negative equity rises, people are less likely to list their homes because more foreclosures become a possibility, meaning property values go down. If sellers cannot get more for their homes, they will be unable to have the money needed for downpayments to purchase new homes, and to pay all the fees associated with selling. Thus, many are waiting for the market to go up before selling. Some of those who have to sell end up short selling their homes, which does not help neighborhood market values.
2. Fear. Many people are still afraid that the economy has not healed, and that the housing market has still not hit the “bottom.” To this I reiterate how important it is to focus on your own specific housing market, not the national reports. For instance, here in San Diego many communities are currently “seller’s markets” (for the first time in a long time) when it comes to condos, townhomes and attached homes. Multiple offer situations are common, and prices are rising. Many buyers are frustrated – they are making offers and are qualified for loans, but they are outbid. So, it is important to speak with a knowledgeable area agent to understand your specific market.
3. Election? Being an election year, many people feel that there will be changes within the economy and housing market if a new administration is elected, and those changes create fear and uncertainty. Some sellers choose to wait and see the results, so they can try to analyze where the market may go from that point. Again, it is imperative to really understand your local market, and not simply wait to see what might happen in the future. If you are in a market that has risen, and there is great demand there, you may be in the driver’s seat as a seller.
4. Investors in the market. There are many investors out there snatching up properties, especially those in the under-$300,000 price range. A large percentage of these investors pay cash, and their offers outshine those from buyers who need to get a loan, as they are easier to close. It is not uncommon to see buyers being outbid by these investors, and there is a lot of frustration amongst many buyers today. The only thing a buyer can do is be as well qualified as possible, and appeal to the sellers via a handwritten letter, making the sale feel more personal. This won’t always help, but I have my buyers write them, as it makes things more personal.
Most importantly, buyers and sellers need to understand the following: if somehow we knew that the market was going to improve from here on out, that improvement will be gradual – not a crazy spike like in the early 2000’s. Annual price increases of several percentage points a year will be likely. Sellers need to figure out the difference in waiting to make a few thousand dollars, compared to paying the mortgage, insurance, taxes and maintenance over that period of time. Buyers need to consider that when the market starts to correct, it is likely that interest rates will rise as well – so they could potentially be hit with higher prices and rates. There are buyers out there ready and waiting for homes to be listed, so speak with a qualified agent about your options if you are thinking of selling your home.
Photos courtesy of Dreamstime
Tuesday, June 5th, 2012
If you are a buyer in California, especially in the San Diego area, you likely have noticed that many properties are going quickly once they are listed, oftentimes with multiple offers. It is a great time to buy, and and also can be a terrific time to sell if you have an experienced real estate agent on your side. Check out this interesting infographic from the California Association of Realtors:
Thursday, March 29th, 2012
Home prices are rising and have been doing so for the last three months.Â According to Standard and Poor’s newest Case-Shiller index report, prices have actually showed a decline, but that fact has been disputed by other reports. In North San Diego, I agree that prices seem to be rising and market times, not including short sales, are decreasing.
The discrepancy between the Case-Shiller report and other reports that have studied markets across the country is that the other reports focus on when contracts are signed – it uses the prices agreed upon at that time, even though it could be months until the properties close escrow.Â Case-Shiller uses the prices reflected at the close of escrow, so there is quite a bit of lag time, up to several months, which skews the results.
Market Trends: The general consensus is that if you focus on what is trending, rather than waiting until close of escrow down the road, you get a clearer picture of price increase. Of course, there is the possibility that some of these sales may not close escrow, or may not appraise at the agreed price, but there is still a valid argument that focusing on what people are WILLING to pay and do get into contract for is a more accurate measure of hyper-local market analyses.
North San Diego: From a personal standpoint, I agree that prices seem to be increasing in the North San Diego market. We are seeing a lot of multiple offer situations, especially in the lower price ranges (under $400,000) across the county. Also apparent is that that the days on market time seems to be decreasing. In Carlsbad alone the average market time (for all four zip codes combined) for detached homes is 76 days, but if you scroll through all the pending listings you will notice many that sold in under a week. For attached homes in all four Carlsbad zip codes the average market time is 84 days, but again, you will notice a handful of properties that went into pending status quickly.
Sales Time Trends and Short Sales: Another trend I am seeing is that short sales contracts are being presented and accepted faster, especially in the under-$400,000 price range, with both attached and detached homes. These sales go into contingent status (meaning an offer has been signed and accepted by the seller pending approval by the short sale lender(s)) much quicker these days, but the market times are longer because the parties await short sale lender approval. The wait time, which can take months, throws off the market time numbers and makes them longer, so that has to be considered when looking at the sale times.
All in all the news is positive that the market here in San Diego is improving,which is great news for homeowners and buyers alike. According to Altos Research, the statistics indicate that the tables have turned slightly in the condo market, making it a seller’s market for the first time in a long time; the detached home market is still a buyer’s market. Hopefully the road ahead will continue to bring us closer to a more “normal” market.
Please feel free to contact me if you would like any detailed market reports and statistics sent to you, and I will be happy to do so. Send your request to Rachel@LaMarRealEstate.org.
Friday, March 23rd, 2012
There has been a great deal of real estate news making headlines lately, so if you want the latest scoop here you go:
1.Â Bank of America is about to launch deed for lease program. After much controversy over this type of program, it seems B of A is going to jump into the deed for lease program arena. The program will target underwater homeowners, who are in danger of foreclosure, and will provide an alternative that allows them to stay in their homes: the homeowner turns over the deed to the property, and in turn gets to rent the property back as a tenant, at current market rates. The former homeowners would be given one year leases with options to renew. There are many questions as to whether this program will work, and whether it is good for the housing market. We will just have to wait and see. Stay tuned for more on this topic.
2.Â Bank of America is offering principal reductions up to $100,000. Sound too good to be true? It may well be – the requirements are very specific and do not apply to Fannie and Freddie loans. Your loan has to have originated with Countrywide AND you have to have been 60 days delinquent as of January 31, 2012. For more information click here.
3.Â New study finds buying is cheaper than renting in 98/100 major U.S. cities. According to a study by Trulia, it is more cost-effective to buy rather than rent in many places. This is due mostly in part to the rising rental rates and the flat housing prices – combine that with the extremely low interest rates which make now a great time to buy. Buying rather than renting can also avoid other potential headaches, such as finding properties to rent (a big problem in my area), or the surprise of a landlord facing foreclosure. For more details on the report click here.
4.Â Best February for home sales in 5 years. Yes, last month was the best February for resale homes of the last 5, according to the National Association of Realtors. Combined with a nice sale number in January, the year seems to be off to the best start since 2007. Hopefully this good news will continue.
5. Assets of 5 California mortgage companies are frozen by federal court. This came after investigations were opened against five California mortgage companies for fraud in scamming homeowners facing foreclosure. All the companies were owned by Sameer Lakhany, who apparently charged customers up to $10,000 for legal advice and forensic audits, encouraging them to join lawsuits against their lenders for fraud.
6.Â The blame game – are you surprised? The FHFA (Federal Housing Finance Agency) is claiming that the lengthy foreclosure timelines are the fault of state laws. These laws have been enacted by different states in order to protect homeowners, but the FHFA claims they are instead delaying foreclosures, which hurts neighborhoods and the homeowners in the long run. What do you think?
Monday, February 27th, 2012
There has been a great deal of conflicting news in the real estate industry as of late: it’s a great time to buy, we haven’t hit bottom, the market is on the way to recovery, we are heading for another dip, distressed property sales are at an all-time low, there is a load of shadow inventory and another wave of foreclosures coming, prices are going up, prices are dropping…it’s enough to drive anyone crazy. So what are you supposed to believe?
First of all, it is important to provide one major caveat, and the premise for which you should base all opinions when focusing on the latest housing news: FOCUS ON THE HYPER-LOCAL MARKET. What is going on in the Cincinnati, Ohio housing market really has no relationship to what is going on in San Diego’s housing market. If we keep this premise in mind, it will be much easier to decipher all the jumbled reports and understand whether buying or selling in your specific area is a smart move or not.
Recent statistics released by the National Association of Realtors (NAR) demonstrate the confusion and the need to focus on your local market. NAR reported that while existing home sales increased in January, national median existing home prices were down in January compared to the previous January. Many people believe that the reports indicate prices are going down, but this is not necessarily true in all markets – in fact, it is to the contrary in many areas.
What the reports fail to explain are twofold:
1.Â Focusing on median price is not realistic. The median price is not a valid way to measure sales, especially between different areas. If we focus on median price across the country we will never get a true sense of what is going on in our own markets – the median price on one city can be completely different from another. What we need to focus on in our individual markets is the sold price per square foot, which is a better indication of comparable values.
This is evident even within counties, such as San Diego. There is no comparison between, say, Rancho Santa Fe and Chula Vista median sales prices. Certain areas like Del Mar have not been hit hard and we are seeing increased prices and demand there, whereas some other parts of the county have not been so lucky. If you are selling a home in Del Mar it doesn’t make a difference to you what the median sales price in the county is – the only important information is what is selling in Del Mar.
My general rule of thumb is to not even pay attention to national median home price analyses, other than to get an idea how the housing market might be effecting the national economy. But if you are selling or buying a home, your agent is not going to take those statistics into consideration.
2.Â The report focuses on a traditionally slow sales month in the housing market. With the Spring months ahead – which usually mean more inventory and more sales, focusing on January as any indication of what is to come is not realistic. January is not typically one of the busier times of year in housing, since holidays just ended, it is winter, people are getting back into a routine. It is understandable to compare market data from one year to another, but those numbers are not likely going to influence a buyer’s decision to buy, nor a seller’s decision to sell if they need to do so.
The best advice I can give is to take all the conflicting news you hear with a grain of salt. If you really want to understand what is going on in your market, you need to connect with a local, experienced agent who truly understands that market. He or she can provide you with detailed information that will truly impact your buying and selling decisions.
Monday, February 20th, 2012
In case you haven’t been following the news lately, there is a lot of real estate-related news making headlines right now. Here are some of the big stories:
1.Â Underwater homeowner refinancing to include non-Fannie and Freddie backed loans? Many people are aware that the new version of HARP will reach out to help homeowners who are underwater (see the previous blog), but still many more have been asking whether they will be able to seek similar refinancing possibilities if they do NOT have a loan backed by Fannie and Freddie. There have been rumblings about this, and last week I saw a few articles on this topic. HARP2, which is expected to roll out in a few weeks, is expected to open up the refinancing option to many homeowners who are underwater. Once that ball gets rolling, look for more information on applying similar relief to those who are underwater but do not have loans backed by Fannie and Freddie. This could change the housing situation and prevent many future foreclosures.
2. Home purchasing is the most affordable in decades. According to an article published last week by CNN, the National Association of Home Builders/Wells Fargo Housing Opportunity Index, housing price declines and low mortgage rates have created a rare opportunity for those who earn national median salaries – 75.9% of all new and existing homes for sale fell within that affordability range during the last quarter of 2011. The number has not been this high in the 20 year history of the index. Of course, whether one can afford a home versus whether one can actually buy one are not one and the same – obtaining loans are still tricky for many borrowers.
3. Distressed inventory is keeping California home prices low. Despite the increase in housing inventory last month, prices in California remain low due to the number of distressed inventory on the market, according to the California Association of Realtors. The Association reported that the median price of a single family detached home dropped 6.7% in January from December, and that compared to January of 2011, the median dropped 3.9%. With inventory rising and heading into the Spring sales season, it will be interesting to see what happens to prices, as some areas seem to be on the upswing.
4. Delinquency rate is dropping (but is that telling?). The rate of delinquencies has been dropping, as reported by the Mortgage Bankers Association, and is currently at only 7.6% of all mortgages. Still, about 44% of all homes in the U.S. are currently in foreclosure proceedings, which doesn’t really make the first figure sound too promising. Although California is ahead in clearing it’s backlog of distressed inventory quicker than many other states, now that the robo signing lawsuits have been settled we may see more properties go into foreclosure – a large percentage of these were waiting in the wings while the settlements were being negotiated. Also, we need to factor in HARP2, which will come into play in a few weeks – this could also have a big effect on preventing foreclosures, especially if the administration extends it to non-Fannie and Freddie backed loans, as planned. So, stay tuned – it will be an interesting year for distressed inventory.
5.Â Property valuation fraud increases. The recently released Mortgage Fraud Risk Report indicated that property valuation fraud increased 8% in the fourth quarter of 2011. Arizona was ranked the riskiest state for fraud, with Nevada in close second. California ranked fourth. The report studies four specific types of fraud risk: property valuation, occupancy, identity and employment/income.