Friday, October 27, 2006

California Association of Realtors Reports Home Sales Are Down, But Prices Are Up!

LOS ANGELES (Oct. 25) – Home sales decreased 31.7 percent in September in California compared with the same period a year ago, while the median price of an existing home increased 1.8 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“We expected a fairly steep decline in sales last month compared with a year ago, when sales were near their all-time record,” said C.A.R. President Vince Malta. “Unsold inventory is holding steady, and is close to the long-term historic average typical of a more ‘normal’ market.”

Click hear to read more http://www.car.org/index.php?id=MzY3MjQ=

Friday, October 20, 2006

Association of Realtors Expects Cooling Home Sales, Modest Price Decrease Next Year


From the California Association of Realtors newsletter:

The rate of home price appreciation will post a modest decline next year following several years of steep increases, while the sales pace will decrease as the market stabilizes throughout 2007, according to C.A.R.'s "2007 California Housing Market Forecast," presented today during the California REALTOR® EXPO 2006, running from Oct. 17--19 at the Long Beach Convention Center. The median home price in California will decline 2 percent to $550,000 in 2007 compared with a projected median of $561,000 this year, while sales for 2007 are projected to decrease 7 percent to 447,500 units, compared with 481,200 units (projected) in 2006.

"Although the 2007 sales decline is not expected to be as steep as what we experienced this year, the psychology of the market -- matching the differing expectations of sellers and buyers -- will continue to be a factor as REALTORS® help consumers navigate their way through a changing market," said C.A.R. President Vince Malta. "While we're projecting a modest decline in the median price of a home, over the long term, residential real estate in California has been and will continue to be a solid investment. Since 1968, the long-term average price appreciation is 9.1 percent."

"While we recognized that the frenetic sales pace of the past four years could not continue indefinitely, the housing market in 2006 did not fare as well as we initially expected," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "The anticipated slowdown that began in October 2005 was heightened by dual natural disasters in the Gulf Coast, a significant drop in consumer confidence, rising energy and raw materials costs, and a series of Federal Reserve interest rate hikes that began in June 2004. Fixed-rate mortgages also hit and passed the psychological threshold of 6 percent, while adjustable-rate mortgages passed 5 percent, ultimately causing a decline in affordability. Affordability concerns also will continue to constrain sales for many households in California throughout 2007, especially for first-time home buyers."

Thursday, October 19, 2006

A Tax Law Change You Should Know About!


From the California Association of Realtors News Letter:

“Tax alternative to 3.33 percent California withholding: Effective Jan. 1, 2007, sellers required to have 3.33 percent of the sales price withheld for income tax purposes may elect an alternative withholding. The alternative withholding is an estimate of the seller's tax liability calculated by multiplying the recognized capital gain by the highest state tax rate for individual taxpayers (or the corporate tax rate for corporations), regardless of the taxpayer's actual tax bracket. Under existing California law, a buyer must withhold 3.33 percent of the sales price from the seller's proceeds unless an exemption applies, such as when the property is the seller's principal residence, the property is in a 1031 exchange, or the seller will not realize any capital gains. The new law applies to non-exempt sellers who may now elect to have less than 3.33 percent withheld. A seller opting for this tax alternative withholding must certify the amount to be withheld in writing under penalty of perjury.”

Wednesday, October 18, 2006

Halloween Safety


We hope you and your family will have a safe and fun Halloween. With that in mind we've put together this list of websites where you can find great safety tips.




Have a happy and safe holiday!

Friday, October 13, 2006

Protecting Your Credit During Divorce

By Shanne Sleder (The loan dude)

When a marriage ends in divorce, the lives of those involved are changed forever. During this time of upheaval, one thing that shouldn’t have to change is the credit status you’ve worked so hard to achieve.

Unfortunately, for many, the experience is the exact opposite. Unfulfilled promises to pay bills, the maxing out of credit cards, and a total breakdown in communication frequently lead to the annihilation of at least one spouse’s credit. Depending upon how finances are structured, it can sometimes have a negative impact on both parties.

The good news is it doesn’t have to be this way. By taking a proactive approach and creating a specific plan to maintain one’s credit status, anyone can ensure that “starting over” doesn’t have to mean rebuilding credit.

The first step for anyone going through a divorce is to obtain copies of your credit report from the 3 major agencies: Equifax, Experian®, and TransUnion®. It’s impossible to formulate a plan without having a complete understanding of the situation. (Once a year, you may obtain a free credit report by visiting www.AnnualCreditReport.com.)

Once you’ve gathered the facts, you can begin to address what’s most important. Create a spreadsheet, and list all of the accounts that are currently open. For each entry, fill in columns with the following information: creditor name, contact number, the account number, type of account (e.g. credit card, car loan, etc.), account status (e.g. current, past due), account balance, minimum monthly payment amount, and who is vested in the account (joint/individual/authorized signer).

Now that you have this information at your fingertips, it’s time to make a plan.

There are two types of credit accounts, and each is handled differently during a divorce. The first type is a secured account, meaning it’s attached to an asset. The most common securedaccounts are car loans and home mortgages. The second type is an unsecured account. These accounts are typically credit cards and charge cards, and they have no assets attached.

When it comes to a secured account, your best option is to sell the asset. This way the loan is paid off and your name is no longer attached. The next best option is to refinance the loan. In other words, one spouse buys out the other. This only works, however, if the purchasing spouse can qualify for a loan by themselves and can assume payments on their own. Your last option is to keep your name on the loan. This is the most risky option because if you’re not the one making the payment, your credit is truly vulnerable. If you decide to keep your name on the loan, make sure your name is also kept on the title. The worst case scenario is being stuck paying for something that you do not legally own.

In the case of a mortgage, enlisting the aid of a qualified mortgage professional is extremely important. This individual will review your existing home loan along with the equity you’ve built up and help you to determine the best course of action.

When it comes to unsecured accounts, you will need to act quickly. It’s important to know which spouse (if not both) is vested. If you are merely a signer on the account, have your name removed immediately. If you are the vested party and your spouse is a signer, have their name removed. Any joint accounts (both parties vested) that do not carry a balance should be closed immediately.

If there are jointly vested accounts which carry a balance, your best option is to have them frozen. This will ensure that no future charges can be made to the accounts. When an account is frozen, however, it is frozen for both parties. If you do not have any credit cards in your name, it is recommended you obtain one before freezing all of your jointly vested accounts. By having a card in your own name, you now have the option of transferring any joint balances into your account, guaranteeing they’ll get paid.

Ensuring payment on a debt which carries your name is paramount when it comes to preserving credit. Keep in mind that one 30-day late payment can drop your credit score as much as 75 points. It is also important to know that a divorce decree does not override any agreement you have with a creditor. So, regardless of which spouse is ordered to pay by the judge, not doing so will affect the credit score of both parties. The message here is to not only eliminate all joint accounts, but to do it quickly.

Divorce is difficult for everyone involved. By taking these steps, you can ensure that your credit remains intact.

Thursday, October 12, 2006

Landlords look out! 60-day notice to terminate revived

Flash! A news release from the California Association of Realtor.

Beginning Jan. 1, 2007, a residential landlord must generally give a 60-day notice to terminate a month-to-month tenant. However, a 30-day notice to terminate is permissible if any tenant or resident has lived in the property for less than one year, or if the landlord has sold the property in the manner specified by law. The 60-day notice does not apply to fixed-term leases (e.g., a one-year lease). It also does not apply if it is the tenant, not the landlord, who terminates a month-to-month agreement, in which case the tenant may give a 30-day notice. To comport with this new law, the California Association of Realtors will release a new standard form "60-day notice of termination", which will also set forth the requirements for the 30-day exception when landlords sell their properties. This law will sunset on Dec. 31, 2009.

Mortgage Applications Decrease in Latest Survey


WASHINGTON, D.C. (October 11, 2006) - The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending October 6. The Market Composite Index, a measure of mortgage loan application volume, was 599.1, a decrease of 5.5 percent on a seasonally adjusted basis from 633.9 one week earlier. On an unadjusted basis, the Index decreased 5.3 percent compared with the previous week and was down 13.3 percent compared with the same week one year earlier.

To read the entire story, click on the headline above...

National Foreclosures Remain Elevated in September


IRVINE, Calif. – Oct. 11, 2006 – RealtyTrac™ (http://www.realtytrac.com/), the leading online marketplace for foreclosure properties, today released its September 2006 U.S. Foreclosure Market Report, which shows 112,210 properties nationwide entered some stage of foreclosure during the month, a decrease of less than 1 percent from August, and a 63 percent increase from September 2005. The report also shows a national foreclosure rate of one new foreclosure filing for every 1,030 U.S. households, the third highest monthly foreclosure rate reported this year.

To read more click on the headline above...

Monday, October 09, 2006

The Real Estate Time Machine

By your real estate dude

Time has always fascinated me. One of my favorite movies when I was a kid was H.G. Wells “Time Machine”. If you’re old enough to remember it, you probably liked it too. It was full of adventure and, besides, there was just something cool about the idea of controlling time. Ah, the freedom I would have if I only had the chance to move through time and control the events that so often seem to have control over me. I think it’s a safe bet that most people feel that way. If we didn’t, there wouldn’t be so many movies about controlling time.

As you grow older, the reasons for wanting to control time change. When I was a kid, I wanted to slow time down so I could have more of it in which to get my homework done or speed it up so the school day would go by quicker. As an adult, I have dreamed of more time with my wife and kids and that sort of thing. But mostly, my desire to take a crack at the old time machine has applied to my business life where investments are concerned, which brings me to the subject of time where it applies to real estate.

In real estate, as in most other kinds of investing, time takes on new meaning and can be broken down into two basic parts: time and timing. Timing is easy to imagine. It’s simply a matter of being in the right place at the right time and taking the correct action in order to bring about the desired result. Like I said, it’s easy to imagine. Unfortunately, it’s a lot easier to imagine than it is to do, which explains why I’ve always wanted a time machine! Time, on the other hand, can be defined as how long you hold a property or other investment between the date on which you purchase it and the date on which you sell it, at least for the purpose of this discussion. So then, as my wife would say, timing is the “when” and time is the “how long”.

I had a client recently who bought a house when homes were selling faster than you could put the “For Sale” signs up. She, like many others, figured that prices would just keep climbing. A year or so later she wanted to sell, but by then, the market had softened and she couldn’t sell it for what she owed on it. You might say that she had been hoodwinked by “time & timing” simply because she didn’t quite understand how they worked.

Another client also purchased a home at a time when prices were high. He and his wife had just come to town and needed a place to live, so they bought a home even though prices were high and the timing was not the greatest. I just sold their home a couple of months ago. The current market had softened, but they still walked away with a serious profit on the sale of that house. Both these folks bought a house when prices were high. In both cases, the “timing” of the purchase was poor. The only difference was “time”. While one owner had lived in the home for a little over a year, the other had lived there well over a decade. “Well obviously,” you say. But there is a lesson in this. The hard fact is that “timing” leaves little room for error, but “time” is much more forgiving. Let’s explore why this is the case with real estate.

Taking a look at the pricing trends of real estate in San Diego County over the past 100 years, we find that prices have consistently increased over time. Certainly, the market has taken some dips along the way, even some serious ones. However, on balance, it can be said that if you had purchased property anywhere along that one hundred year track and held it long enough, its value would have increased significantly. Depending upon when you purchased the property, you might have had to hold it only a year or two to get the appreciation you desired. On the other hand, you might have purchased it at a time in that hundred year span which required you to hold the property for a period of five, seven or even ten years to see the appreciation. But, either way, if you held it long enough the value when up!

The moral of the story is this: when you’re investing your hard earned money in a home or rental property, it’s important to understand that in general, real estate investments perform best over the long term. So, take this tip from a fellow time traveler and remember the old adage: “He who has the time wins”. Set yourself up for the long haul just in case something unforeseen comes your way. That way, even if you plan to sell the property in the short term to make a quick buck, you’ll be prepared to hold it for the long term if the market changes and you won’t get stuck.

Friday, October 06, 2006

Mission Federal Sponsors FREE "dude" seminar for home buyers!

The next FREE “dude” seminar “7 Steps to successfully buying a home” will help home buyers achieve their goals in this changing market.

You’ll learn what’s involved in:

  • Deciding to buy
  • Choosing a realtor
  • Finding an area
  • Identifying prospective homes
  • Analyzing the purchase
  • Making an offer & putting the deal together
  • And managing the close

The seminar is sponsored by Mission Federal Credit Union.

Date: October 21, 2006
Time: 9:00am - 11:30am

Location:
Mission Federal Credit Union
5785 Oberlin Drive
San Diego, Ca 92121
(800) 500-6328

We'll have Coffee and stuff to munch on.

Remember, it’s FREE.

RSVP by clicking on “Ask the dude experts”.

See you there!

Tuesday, October 03, 2006

East County Newspaper Signs Your Real Estate Dude To Write Weekly Column!


FLASH! STOP THE PRESSES! EXTRA, EXTRA, READ ALL ABOUT IT!

This week, the East County Californian, a leading newspaper in San Diego’s beautiful East County has agreed to publish a weekly real estate column by your real estate dude.

If you live in East County, please take a look at the column and tell us what you think!

Monday, October 02, 2006

Should I stay or should I go?

By your real estate dude

This may sound like an old song from The Clash, but it truly is a dilemma for many when it comes time to decide whether to sell or buy a home. It’s quite common for this simple question to lock people in the limbo world of analysis paralysis. This occurs when too much information, conflicting opinions and fear leave the person completely absorbed in the information but unable to make any sense of it all.

The other day I had a client look at me over the top of his newspaper as I walked up to meet him for coffee. He had the most exasperated look on his face as he announced, “Every time I read the paper, I’m more confused than I was when I started.” In his case the conundrum is whether to sell his home now or hold.

I was at a church event recently when a fellow I’ve known for many years asked the age old question “so, how’s the market?” This gentleman has been asking me if he should buy a house for years. I keep saying yes and he keeps putting it off and asking me the same thing at the next available opportunity. So, I took a couple of minutes to explain the current “buyer’s” market, the low interest rates, the reduction in prices and the deals that many sellers are willing to make in order to sell their homes. He looked at me as if I had ten heads and said, yet again what he always says, “I’m going to wait to see if prices come down.”

Almost without exception the struggle over “should I stay or should I go” revolves around home prices. Let’s face it, if you have a job transfer and have to move, the question is moot. Likewise, if your finances are in disarray and you must sell or are forced to wait until things improve in order to buy, the “should I” question never comes up.

After years of witnessing this struggle to understand what to do when prices change, I have come to the conclusion that it all stems from a misunderstanding of an old, but tried and true rule “buy low and sell high”. I first heard of this rule when I was a kid. My grandfather was quite the real estate investor and rattled this rule off to me on a number of occasions when I was a small boy. One day he asked me to repeat it. When I did he said, “Now remember, the rule is buy low and sell high. It’s not, buy lowest and sell highest”. This meant nothing to me at the time, but much later it was quite a revelation. I came to understand that if I bought when prices were low and sold when prices were high, I made money. It didn’t matter that I never seemed to catch the absolute bottom or top of the market. This may seem so simple as to be hardly worth mentioning, but I have witnessed many an enterprising individual lose money trying to hit the absolute high or low. Does this remind you of the fellow I mentioned earlier who is always waiting for the bottom of the market? If he had purchased a home the first time he asked me, “so, how’s the market”, the home he would have purchased would now be worth a fortune and he would be much better off.

Given the current “buyer’s market, if you are thinking about buying, the “buy low” rule is in full effect and now is the time. Prices are lower, interest rates are still low, lots of properties are for sale and sellers are willing to make deals. On the other hand, if selling is on your mind, it may not be the best time unless you purchased the property some years ago and have significant equity. In that case, you bought low and even though the market has softened you can still sell high because of time. If the equity isn’t there, my advice is hold off for a while. Time will tell, but the chance to sell high may come your way sooner than you think.