To Buy or Not To Buy?

Most Americans considering owning their own home as part of the American dream, however, with so much in uproars today from the economy to ObamaCare, no one knows what tomorrow may hold, so many are still waiting or rethinking that part of the dream. Rental properties are still on the rise in areas all across San Diego so more people are leasing homes instead of buying.

A few years ago, home ownership was in fact a positive impact on finances and renting was like throwing your money away.

The truth is that you have to look at the disadvantages and advantages of renting versus buying to find the right conclusion. Purchasing a home creates a way to build equity and provides stability while renting allows more mobility. The gap between purchasing and renting costs is very close in some areas of the nation, which make both options equally affordable.

In the majority of cases, whether you buy or rent will be dependent on your personal circumstances. You may want to look at what both actions will have on your credit score.

While you look at the advantages and disadvantages or buying or renting, these facts should be considered.

According to the United States Census Bureau, rental vacancies are falling while the cost to rent has risen.

Home prices are beginning to increase in San Diego.

According to a study by Experian in 2011, 25% of Americans are paying their mortgages late by 60 days or more.

When you look at the overall debt of owning a home, you may not be in the position to purchase a home. On the other hand, if you are paying the same amount in rent as you would to purchase a home and you are paying your rent on time, and then you may be in the position to purchase a new home. Remember, though, when you purchase a home, there will be other expenses such as maintenance to the home, taxes, and insurance that you may not be paying to rent a home.

The first thing to do is take a good look at your credit. The better your credit the better interest rate you will be able to obtain. Most property owners will also look at your credit, so you should at least get a copy of your credit report and be sure that you know what is there before moving at all.

To buy or not to buy, is a question you will have to answer on your own. However, it would be a good idea to talk with Realtor that can provide you with information on homes for sale in the area so you can get a better idea of the cost of buying a home instead of renting. Contact a professional real estate agent today at 888-865-5055; you may be surprised at the homes you can actually afford.

January San Diego Real Estate Market

The HomeDex Report for January 2013 was released recently.

The median price for attached and detached homes in North County home sales declined to $410,000 in the month of January 2013 when compared to $425,000 in December of 2012.

Detached homes declined 5.01% in January to $465,000 in North County when compared to $489,500 in December 2012.

In the county, the median SFD price declined 6.01$ to $360,000 in January of 2013 when compared to $383,000 in December 2012.

The number of SFD active and contingent listings in North San Diego County decreased 0.24% in the month of January 2013 when compared to December 2012.

The number of sold SFD units in North San Diego County declined 20.38% in January of 2013 when compared to December 2012. However. The year over sold SFD units rose 22.57% when compared to the January of 2012.

The average days on the market for detached single family homes sold in San Diego North County declined to 36 days in January of 2012 while in December of 2012 the days on the market was 48 days.

The HomeDex affordability percentage for all types of homes in North San Diego County rose to 44% in January of 2012, while in December of 2012 it was 41%.

For anyone looking for that perfect dream home in San Diego or the surrounding areas, you will need a professional Realtor by your side to help you find the home that fits your needs as well as fits your budget.

Contact a San Diego real estate agent today at 888-865-5055.

Competing for your Dream Home

In the San Diego area, as reported by a real estate agent, it is becoming more and more difficult for home buyers due to the amount of cash buyers on the market. There are a few ways you can get your offer seen and even chosen by home sellers.

Some homebuyers have noticed when they put an offer on a home in the San Diego area, there are in some cases between and 40 other offers. It can be difficult to have your offer even seen if you do not know how to get it in front of the homebuyers eyes.

What you should do:

1. Hire a professional real estate agent

The main reason to hire an expert is that they have been in the business and know what home buyers are looking for in the way of offers. Along with this, they can also help you with creating your offer.

2. Cover Letter

With your offer, always include a direct cover letter. Of course, your real estate agent will be able to help you create a dramatic cover letter that will catch the eyes of the home seller. You have to make a connection with the home seller and one that will hopefully, give you an emotional edge.

3. Things to add to the Offer

If you can add a video, this will help the home owner put a face with the offer, which is a great edge.

You should also include things like your pre-approval letter as well as information ensuring you will be able to close on time. The home buyer needs to feel as comfortable as possible with you as a person instead of an impersonal letter that makes them feel like they are talking with a robot or a company.

4. Grab attention

Just as with a resume and cover letter for employment, you are going to have to grab the home seller’s attention and get yourself noticed among the other offers.

If you are looking for help finding your dream home or making offers, contact a professional Realtor today at 888-865-5055.

Housing Market is Recovering

The home prices in San Diego are up again which is bring on more optimism for the real estate market.

Prices rose .9% from October to November and are up 8% from the figure seen last year based on the latest Case-Shiller Home Price Index report. November was the 10th month in row that home prices saw a gain for the San Diego area. Case-Shiller trackers 20 major metro areas with San Diego included. This report showed that is was also the 5th month for year over year increases.

When comparing prices from October to November are compared, 9 other major cities also saw price gains. When you look at the prices one year ago, the only major city showing a drop in home prices was New York with a 1.2% drop. Phoenix, being one of the hardest hit in the nation during the downturn showed the highest year over year increase. Prices in Phoenix increased 22.8% when compared to the same time one year ago.

The report stated that regional patterns are shifting in the right direction as well. The Southwest, which includes Phoenix and Las Vegas, are getting ready for a strong comeback and the southeast including Tampa and Miami are not far behind. The sunbelt region, which had the most problems during the housing collapse, are now back in a position of leadership. California is doing well while the Midwest and northeast are a bit behind.

When you look at the 20 cities tracked, the prices were pretty much flat at 0.1% from October to November. However, when you compare the figures to the same time period last year they are up 5.5%. Case-Shiller analysts state that our current home prices are back to prices seen in autumn of 2003 around two years before the peak in the real estate market.

As found on the housing report. "Prices are rising as are both new and existing home sales. Existing home sales in November were 5.0 million, highest since November 2009. New home sales at 398,000 were the highest since June 2010. These figures confirm that housing is contributing to economic growth." This is a sign that the market is recovering.

Looking for a home in the San Diego area? Contact one of our by professional Realtors today at 888-865-5055.

Homes for Sale in Encinitas is at 80

The year over year median price of homes in North San Diego County rose 18.25%.

At this time, there are 80 single family detached homes active on the market in Encinitas with nine of these home listed at under $700,000.

In the month of December, Encinitas had 44 homes sell with an average sales price of $975,907

The least expensive home that sold was located at 1743 Old Mills Rd for $380,000. This figure was quite a bit below market value. The highest prices home to sell in Encinitas was located at 503 Ocean Bluff Way at for $2.1 million.

The average time a home stays on the market is 59 days.

Other figures reported by HomeDex:

In North County, detached home prices in December of 2012 rose 1.03% to $489,500 when compared to $484,500 in November of 2012. The year over year median price of homes in North San Diego County rose 18.25% when compared to the figure seen in December of 2011. This is the 5th month in a row that we have seen year over year price increases.

Home Prices Increase in County

The median price reached the highest point seen since July of 2008.

The median home price increased 13.7% from November of 2011 to November 2012 in San Diego County. Sales are on the increase and as a matter of fact were the best seen since seven years ago in the same month reported DataQuick.

In November the median price was $358,000 which is the highest median price seen since July of 2008. This was the time when the market starting sliding downhill. In March of 2003 the prices had were on their way up at $357,000.

President of DataQuick John Walsh stated, "Investor activity and cash and more buyers feel confident about their jobs, the economy and the likelihood housing prices have bottomed and are likely to rise. We’re also seeing non-distressed sales, where people sell at a profit and buy another house, triggering more move-up activity."

In general, prices have not hit the peak of November 2005 being 30.8% of the mark but did rise 27.9% from the low seen in January of 2009 at $280,000.
In November of 2012, the number of homes on the market in San Diego County was 3,371, which was a 22.4% increase over the same time a year ago.

Michael Lea, San Diego State University economist Michael Lea, explained that the decline of distressed property in the market is a factor along with other housing. "All signals are pretty favorable for next year to continue the recent pace," Lea said.

The 19 communities found in Riverside County close to the San Diego line, the median price was at $243,000, up 3.6% from October and 10.5% from November 2011. The number of homes sales was 1,139, up 12.7% from the same time a year ago.

DataQuick credited the increases in both prices and sales to a larger demand for higher-priced homes and a decline in low-cost foreclosure properties.

The San Diego Association of Realtors explained one of the reasons for the increase in sales, which is the decline in inventory.

In San Diego County on December 5, there were 4,636 homes for sale on the local multiple-listing service. This figure was 50.2% down from the figure seen a year ago with an average listing of 9,303. This low inventory level is close to what was seen in the spring of 2004, explained the San Diego Association of Realtors.

"We’re seeing multiple offers on homes across the county and median prices are being driven up as a result," said the association’s president, Donna Sanfilippo.

Willis-Allen agent Vincent Crudo in La Jolla stated that is giving offers to home owners from his clients that are interested in the home that are not on the market.

La Jolla agent, Maxine Gellens, stated 33 homes selling for $3 million or more closed in 2011 and 59 are expected to close this year in the 92037 ZIP code area. "Once the upper end starts moving, I think everything else starts moving," she stated.

Chula Vista real estate agent, Richard Wyllie, stated at this time there is only 1.3 months of inventory available in the Eastlake area, due to the decline in bank-foreclosed properties. "It’s about the lowest it’s been for a while," he said.

The number of non-distressed properties is rising. Wyllie stated that of the 29 properties that are for sale, around 19 are standard homes that did not go through the foreclosure process.

"The market hasn’t gone up that much, but it’s enough for some people to see a little bit of profit in the sale," he said.

The trend all around Southern California is close to what is being seen in San Diego County with sales up 14.2% to 19,285 and median prices up 16.7% to $321,000 in the region.

Other findings in the report for Southern California include:

• Foreclosure sales: 15.3% of all transactions involving properties foreclosed in the previous 12 months — compared with 16.3% in October and 31.6% in November of 2011.
• Short-sales: Homes that sold for less than their mortgage balance made up 26.6% of transactions, up from 25.4% seen a year ago. In San Diego County, short sales were 28.7% of the sales, compared with 28% a year ago.
• Mortgages: 5.7% of all loans were adjustable, which is down from 6% in October and 6.2% in November of 2011. FHA-insured loans were 15.9% of the mortgages, down from 21.7% seen a year ago. The average mortgage payment was $1,146, which is up from $1,049 a year ago.

If San Diego sounds like a community, you would like to call home, contact a San Diego Realtor at 888-865-5055.

Five Worst Remodeling Projects

Five remodeling projects that may not pay off at closing!

When you are getting your house ready for sale you may want to do a bit of remodeling to help add more value to your home. The problem is some remodeling projects may not pay off well and may not raise the value of your home enough to compensate for the money and time spent in the process. Some upgrades are not worth the time and expenditure; keep reading to see the top five bad remodeling items.

Luxurious bathrooms and kitchens may seem like a great idea to help add more value to your home. a spokesperson for the National Association of Realtors, Stephanie Singer stated, "People should be careful about over-improving for their neighborhood" and went on to say, "If you’re in a neighborhood with traditional kitchens, and you put in a Viking stove and granite countertops, that’s fine. But keep in mind that buyers probably aren’t going to value that to the extent that you do." It is best to check out other homes in your neighborhood, you want to stay with what is standard without going over the top to help sell your home.

Inventing a home/office sounds great for those that work out of their home. However, making your bedroom or other room smaller to invent a home/office will not pay off in the end. Using space from other rooms will not give you a big boost at closing. In most cases, this project will only give you back around half the cost of inventing the room in the first place.

If you do not already have a swimming pool in your back yard, do not add one. Not everyone loves the idea of the time and expense of caring for a pool and those with small children may turn away even faster. This is kind of a coin toss upgrade. Some people will love the idea while others will want to find a home without a pool. Just remember the cost of the swimming pool and if you really think it is worth the risk.

A new roof may seem appealing especially with all the new materials that can make your home stand out. On the other hand, most homebuyers only look at a roof as a necessity and not something they want to add to the price they wish to pay for a home. Of course, if the roof needs repaired, fix it, but do not go all out and add cedar shakes or other expensive roof materials.

Dramatic renovations are not always a draw for homebuyers. There are all kinds of things you can add to your home that will provide you with comfort such as converting your attic to a game room, your basement to a wine cellar, or even an elevator to the second floor. These may be great for your family, but not everyone wants these extras. Some projects may help with the value and selling points of your home, while others may seem a bit extravagant.

Singer stated, "Remodeling a home is a personal decision anyway, so sometimes there are projects you just want to do for yourself" and went on to say, "You do have to live in the home; you’re not always thinking about resale. Is it a worthwhile project for you? Is it going to increase your enjoyment of the house?"

If the remodeling project will make you more comfortable and you are not considering selling your home, then do the project. On the other hand, if you are only considering remodeling to add value, then forget the idea.

And call one of our San Diego Homes experts at (888) 865-5055 to give you some helpful suggestions on how to prep your home for selling in today’s market.

Real Estate Taxes

In the majority of cases, real estate taxes on your personal residence are only allowable for the property owner listed as owner on the title, which is the same with mortgage interest.

On the other hand, you may be able to deduct the real taxes and mortgage interest paid if you are the "equitable and beneficial owner", even if you are not the titled owner. This is an individual that has the "burden and benefit" of said property and occupies the property, is responsible for maintaining the property, and pays the mortgage payments.

Example Tax Scenario

Let’s look at an example. Tim and Joan were just married and cannot qualify for a mortgage loan to purchase a new San Diego home. Tim’s parents decide to help the young couple and purchase the home for them.

Tim’s parents do not live in the home purchased for Tim and Joan. Tim and Joan are responsible for the mortgage payments and pay them to the lending company; they are also responsible for the real estate taxes, which are placed in an escrow account. The young couple pays all the maintenance needs, insurance, utility and other bills associated with the home.

Tim’s parents may be listed at the titled owner of the home; however, Tim and Joan are the "equitable and beneficial" owners of the home, which allows them to deduct the real estate taxes along with the mortgage interest that was paid on the home. When filling out the tax form, this couple will need to use Schedule A.

Home Sales up in September

In the month of September, homes sales in California were up 6.7 percent. Those looking for bargains were purchasing foreclosures while the median home price fell. In September, the median home price was $249,000.

Homebuyers were buying up foreclosures making sales go up 6.7 percent. Sales figures on the other hand, were still below average for the month of September for the Bay Area and southern California. DataQuick, a real estate information service home in San Diego revealed that home sales were lower than the figure seen in August, which is down 6.2 percent with a total of homes sold at 35,404 in September.

The median home price in September for September was $249,000, which is down 6 percent from what was seen in 2010 and the same as was seen in August of 2011. This is the 12th continuous year over year decrease in the median price. This means that many of the homes sold for half or less than what the home was worth.

DataQuick president, John Walsh stated the number of potential home buyers was growing but the demand is not seen in the numbers yet.

He stated, “Empty-nesters want something smaller, growing families want something bigger,” and went on to say, “People still die, they get married, retire — all of this generates demand. And only a fraction of that demand is being met in today’s market.”

A large amount of the homes that sold in September were foreclosures along with short sales in which the bank sold the home for less than the mortgage. The figures show that more than half of the homes that sold in California in the month of September were foreclosures or short sales.

The figures showed around 33.8 percent were foreclosures down from the 34.3 percent seen in August and 35.6 percent seen in September 2010. Reports showed 18.7 percent were short sales, which is up from the figure seen in August of 17.5 percent and 15.6 seen in September of 2010.

Home sales in southern California were up 0.3 percent from September 2010 but were down from the 7.7 percent seen in August of 2011 bringing the figure to 18,149. The median price for southern California fell 5.2 percent from 201o to $280,000 and only up 0.4 percent over the August figures.

The Bay Area saw home sales increase 6.6 percent from 2010 but down from the figure seen in August to 6,749. The median price for the area decreased 7.6 percent from 2010 and was also down from the month of August to 365,000.

 

Short Sales Growing in Popularity

Short Sales can save borrowers that are underwater as long as everyone agrees. Short sales are for homeowners that want to avoid foreclosure or for those looking for a great bargain, if all goes to plan.

Short sales are transactions in which borrowers owe more on their mortgages than their homes are worth, known as underwater, where the lending company agrees to a discounted payoff. In San Diego County 18.7% of the home resale market for the month in June was short sales, which is up from 2% we saw five years ago, states local real estate tracker DataQuick.

Short sales are growing, however, the process of the closing take time, is uncertain, and changes all the time, which can hinder interested parties.

Kurt Wannebo, a San Diego broker that has over 6 years of experience in short sales stated, “Short sales are changing all the time,” and went on to say, “The banks change their processes all the time … and there are new laws and new short-sale government programs.”

A new state law that was signed in July is meant to help protect short sellers may make the process even longer, more uncertain, and cost the seller more.

Who should use a short sell?

In most cases, those that opt for a short sell are ones that can no longer afford their mortgage and want to walk away as their investment is no longer there.

Shelia Brady and her husband purchased a condo in Rolando for $285,000 in 2004; the condo is now in escrow being sold as a short sale for $120,000. The couple not only lost value but also was behind on their house payment due to surgery that stopped her from working for 2 ½ months while her husband has been unemployed for 2 years.

Why would this couple use a short sell instead of letting the foreclosure process take over?

“You have such a strong moral obligation toward your mortgage,” Brady said. “You sign a document saying, ‘I will do this.’ ”

Greg Ives, 33, purchased a downtown San Diego condo at the Hard Rock Hotel to be used as a rental investment for $405,000. The value on the property depreciated and the amount he could charge for rent depreciated. Once he paid his mortgage, he found he was $1,000 under for several months. He filed for a secure loan modification but was denied, he then decided on a short sale. After five long months, the deal closed. He still owes the lending company and will have to pay $340 per month for the next ten years. He stated that his best option was a short sale. “I’m grateful to be done with it,” Ives said.

For any questions regarding selling your property via a short sale or if you are interested in a buying a short sale property, contact one of our expert real estate agents in the San Diego area.

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