The following is from the California Association of Realtors. To read the news release in full, click on the link above.
C.A.R. REPORTS MEDIAN HOME PRICE INCREASED 17.2 PERCENT IN OCTOBER
The median price of an existing, single-family detached home in California during October 2005 was $538,770, a 17.2 percent increase over the revised $459,530 median for October 2004, C.A.R. reported. The October 2005 median price decreased 1 percent compared with September's $543,980 median price.
"While California is still experiencing year-over-year double-digit price appreciation, prices are starting to level off compared with the statewide peak reached in August 2005," said C.A.R. President Vince Malta. "Regionally, the median price continues to post strong gains, with the High Desert, Riverside/San Bernardino, and San Luis Obispo regions hitting record highs last month."
Closed escrow sales of existing, single-family detached homes in California totaled 621,530 in October at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity decreased 2.8 percent from the 639,570 sales pace recorded in October 2004.
Thursday, December 01, 2005
Mortgage shopping: what you should know before you begin
When they enter the mortgage market, in contrast, where their financial commitment may be 10 times larger, many consumers don't have a clue as to what they want. They look to the loan provider to guide them through the maze. This dependency is one major reason they often end up with a mortgage that is over-priced and, even worse, does not meet their needs.
This article poses eight questions that prospective borrowers should ask themselves before entering the market.
What type of mortgage should I select?
The major decision is between fixed-rate mortgages (FRMs) and adjustable-rate mortgages (ARMs). ARMs have lower payments in the early years than FRMs but expose borrowers to the risk of higher payments in later years. ARMs with the lowest early-year payments have the greatest risk of future rate and payment increases.
Which mortgage options should I select?
The major options are to waive the obligation to maintain an escrow account for taxes and insurance payments, which will cost you a little; an interest-only payment option, which also costs little; and a prepayment penalty, in exchange for which the lender will usually pay you.
How long of a term should I take?
The term of a mortgage is the period used to calculate the mortgage payment. The longer the term, the lower the mortgage payment but the slower you pay down the balance. Term selection is an issue primarily on FRMs, which are available at terms ranging from 10 years to 40 years. While 15-year and 40-year ARMs exist, most lenders offer only 30-year ARMs.
How many points should I pay?
Points are fees you pay the lender at the time the loan is closed, expressed as a percent of the loan. On a $100,000 loan, two points means a payment of $2,000. The more points you pay, the lower the interest rate. Hence, points should be viewed as an investment on which the return is higher the longer you have the mortgage.
How large a down payment should I make?
The down payment is the difference between the loan amount and the lower of the sale price or appraised value. If you have discretion over how much to put down, the down payment, like points, is best viewed as an investment. Investment in a larger down payment can yield a high return if it flips the loan into a lower mortgage insurance or interest rate category.
If I put less than 20 percent down, what type of mortgage insurance should I select?
Borrowers who put down less than 20 percent are charged for the risk they impose on lenders. However, borrowers often can choose how to pay. One option is to pay a premium to a private mortgage insurance company (PMI) selected by the lender. A second option is to pay the lender a higher interest rate, which is called lender-provided mortgage insurance (LPMI). In this case, the lender purchases insurance from a PMI, though not always. The third option is a "piggyback" arrangement, where the borrower takes out a first mortgage for 80 percent of property value, and a higher-rate second mortgage for the balance of the funds needed.
How long a lock period do I need and when should I lock?
The lock period is the period during which the lender guarantees the rate and points: the longer the lock period, the higher the price. Borrowers must choose when to lock and for how long.
What documentation requirements should I seek?
A lender's "documentation requirements" stipulate the information about the borrower's finances that must be provided and how this information will be verified, and then used by the lender. Lenders offer choices ranging from "full documentation" to "no-docs." Because the risk to the lender rises as documentation requirements become less stringent, the price of the mortgage rises correspondingly. Borrowers may or may not have any leeway, depending on what documentation they can provide.
Copyrighted 2005 Inman News
This article poses eight questions that prospective borrowers should ask themselves before entering the market.
What type of mortgage should I select?
The major decision is between fixed-rate mortgages (FRMs) and adjustable-rate mortgages (ARMs). ARMs have lower payments in the early years than FRMs but expose borrowers to the risk of higher payments in later years. ARMs with the lowest early-year payments have the greatest risk of future rate and payment increases.
Which mortgage options should I select?
The major options are to waive the obligation to maintain an escrow account for taxes and insurance payments, which will cost you a little; an interest-only payment option, which also costs little; and a prepayment penalty, in exchange for which the lender will usually pay you.
How long of a term should I take?
The term of a mortgage is the period used to calculate the mortgage payment. The longer the term, the lower the mortgage payment but the slower you pay down the balance. Term selection is an issue primarily on FRMs, which are available at terms ranging from 10 years to 40 years. While 15-year and 40-year ARMs exist, most lenders offer only 30-year ARMs.
How many points should I pay?
Points are fees you pay the lender at the time the loan is closed, expressed as a percent of the loan. On a $100,000 loan, two points means a payment of $2,000. The more points you pay, the lower the interest rate. Hence, points should be viewed as an investment on which the return is higher the longer you have the mortgage.
How large a down payment should I make?
The down payment is the difference between the loan amount and the lower of the sale price or appraised value. If you have discretion over how much to put down, the down payment, like points, is best viewed as an investment. Investment in a larger down payment can yield a high return if it flips the loan into a lower mortgage insurance or interest rate category.
If I put less than 20 percent down, what type of mortgage insurance should I select?
Borrowers who put down less than 20 percent are charged for the risk they impose on lenders. However, borrowers often can choose how to pay. One option is to pay a premium to a private mortgage insurance company (PMI) selected by the lender. A second option is to pay the lender a higher interest rate, which is called lender-provided mortgage insurance (LPMI). In this case, the lender purchases insurance from a PMI, though not always. The third option is a "piggyback" arrangement, where the borrower takes out a first mortgage for 80 percent of property value, and a higher-rate second mortgage for the balance of the funds needed.
How long a lock period do I need and when should I lock?
The lock period is the period during which the lender guarantees the rate and points: the longer the lock period, the higher the price. Borrowers must choose when to lock and for how long.
What documentation requirements should I seek?
A lender's "documentation requirements" stipulate the information about the borrower's finances that must be provided and how this information will be verified, and then used by the lender. Lenders offer choices ranging from "full documentation" to "no-docs." Because the risk to the lender rises as documentation requirements become less stringent, the price of the mortgage rises correspondingly. Borrowers may or may not have any leeway, depending on what documentation they can provide.
Copyrighted 2005 Inman News
What type of real estate makes the best investment?
By Dian Hymer
During the economic downturn of the early 1990s, a home in the Crocker Highlands area of Oakland, Calif., sold twice in two years. The house did not change substantially during this time, nor did its price. But, average prices in the neighborhood dropped about 15 percent during the same time.
Some homes hold their value better than others. It makes sense to pay particular attention to what you buy and where if you're worried that the housing market is overdue for a correction.
What did the Crocker Highlands home have that caused it to be more desirable than other listings? It had a good floor plan. There were four bedrooms on one level. The master bedroom had its own bathroom, and there were two additional bathrooms.
The house was an older home, built in the 1920s, but it had been extensively renovated with quality, high-end finishes. There was no deferred maintenance. It had a spacious eat-in kitchen/family room that opened directly out to a level, private and sunny backyard. It was a house that was easy to live in and it required no work.
The house was also located on one of the best streets in neighborhood. What made it such a desirable street? It was not a thoroughfare, so the traffic was minimal. It was quiet. Yet, it was within walking distance of the local school. The street was virtually level so children could ride bikes and it was easy for homeowners to get in and out of their driveways. There was plenty of street parking for guests.
This is not to say that you shouldn't buy a home unless it includes all the desirable qualities of this particular Crocker Highlands home. However, it does make sense to keep resale value in mind when you're considering a home purchase, particularly if you don't intend to stay there forever.
Other attributes that tend to add to resale value are good storage space, a garage, a bathroom on each level and a convenient location. Good views tend to add value, and so does easy access in and out of the house.
One-level homes are usually in high demand, especially with older home buyers. Two-story homes are often preferred by younger buyers. Homes that are on three or more levels tend to sell for less than a similar sized home with only one or two levels.
It can be difficult to find a home with a good floor plan, good indoor-outdoor living and the right number of bedrooms and baths that is also in top condition. If you're up for the challenge, consider buying a home that you can improve over time. But, first make sure that the basic structure is sound and the floor plan is good.
Also, get a handle on how much you'll need to invest in the property before you start negotiating with the seller. Don't pay an inflated price for a house that needs work.Location is one of the most important indicators of value in residential real estate.
Neighborhoods with good public schools tend to have higher property values than areas where schools are a problem. Close proximity to a major metropolitan area has a positive effect on home values, particularly if there's good transportation.
Neighborhoods where the residents are predominantly owner-occupants tend to be more desirable than neighborhoods where most of the homes are owned by absentee landlords.
THE CLOSING: The local economy directly affects home values, and so does supply and demand. Areas with a lot of building can end up with a glut of homes for sale when there is a correction in the housing market. This can depress local property values.
Copyright 2005 Inman News
During the economic downturn of the early 1990s, a home in the Crocker Highlands area of Oakland, Calif., sold twice in two years. The house did not change substantially during this time, nor did its price. But, average prices in the neighborhood dropped about 15 percent during the same time.Some homes hold their value better than others. It makes sense to pay particular attention to what you buy and where if you're worried that the housing market is overdue for a correction.
What did the Crocker Highlands home have that caused it to be more desirable than other listings? It had a good floor plan. There were four bedrooms on one level. The master bedroom had its own bathroom, and there were two additional bathrooms.
The house was an older home, built in the 1920s, but it had been extensively renovated with quality, high-end finishes. There was no deferred maintenance. It had a spacious eat-in kitchen/family room that opened directly out to a level, private and sunny backyard. It was a house that was easy to live in and it required no work.
The house was also located on one of the best streets in neighborhood. What made it such a desirable street? It was not a thoroughfare, so the traffic was minimal. It was quiet. Yet, it was within walking distance of the local school. The street was virtually level so children could ride bikes and it was easy for homeowners to get in and out of their driveways. There was plenty of street parking for guests.
This is not to say that you shouldn't buy a home unless it includes all the desirable qualities of this particular Crocker Highlands home. However, it does make sense to keep resale value in mind when you're considering a home purchase, particularly if you don't intend to stay there forever.
Other attributes that tend to add to resale value are good storage space, a garage, a bathroom on each level and a convenient location. Good views tend to add value, and so does easy access in and out of the house.
One-level homes are usually in high demand, especially with older home buyers. Two-story homes are often preferred by younger buyers. Homes that are on three or more levels tend to sell for less than a similar sized home with only one or two levels.
It can be difficult to find a home with a good floor plan, good indoor-outdoor living and the right number of bedrooms and baths that is also in top condition. If you're up for the challenge, consider buying a home that you can improve over time. But, first make sure that the basic structure is sound and the floor plan is good.
Also, get a handle on how much you'll need to invest in the property before you start negotiating with the seller. Don't pay an inflated price for a house that needs work.Location is one of the most important indicators of value in residential real estate.
Neighborhoods with good public schools tend to have higher property values than areas where schools are a problem. Close proximity to a major metropolitan area has a positive effect on home values, particularly if there's good transportation.
Neighborhoods where the residents are predominantly owner-occupants tend to be more desirable than neighborhoods where most of the homes are owned by absentee landlords.
THE CLOSING: The local economy directly affects home values, and so does supply and demand. Areas with a lot of building can end up with a glut of homes for sale when there is a correction in the housing market. This can depress local property values.
Copyright 2005 Inman News
Wednesday, November 02, 2005
C.A.R. SAYS PROPOSED CHANGE TO DEDUCTIBILITY OF MORTGAGE INTEREST "DOA"
The following is from an article in todays California Association of Realtors newsletter:
The proposed tax reform affecting the deductibility of mortgage interest will be "dead on arrival in Congress," says C.A.R. President Vince Malta. The proposal, submitted yesterday to the U.S. Treasury by the President's Advisory Panel on Federal Tax Reform, recommends converting the mortgage interest deduction to a tax credit equal to 15 percent of interest paid on mortgages, with the mortgage interest cap set to the average regional home price, ranging from $227,000 to $412,000. Currently, homeowners can deduct all the interest on mortgage loans up to $1 million on their primary residence.
"With the median price of a home in California at $543,980 and the average mortgage at least $435,180, the proposed ceiling would limit the tax break for the majority of new mortgagees in the state," said Malta.
Other changes that would negatively impact Californians are the proposed elimination of deductions for the interest paid on second home loans and home equity loans, as well as the elimination of the deduction for state and local taxes. According to NAR, second homes accounted for 36 percent of all home sales last year nationwide.
The proposed tax reform affecting the deductibility of mortgage interest will be "dead on arrival in Congress," says C.A.R. President Vince Malta. The proposal, submitted yesterday to the U.S. Treasury by the President's Advisory Panel on Federal Tax Reform, recommends converting the mortgage interest deduction to a tax credit equal to 15 percent of interest paid on mortgages, with the mortgage interest cap set to the average regional home price, ranging from $227,000 to $412,000. Currently, homeowners can deduct all the interest on mortgage loans up to $1 million on their primary residence.
"With the median price of a home in California at $543,980 and the average mortgage at least $435,180, the proposed ceiling would limit the tax break for the majority of new mortgagees in the state," said Malta.
Other changes that would negatively impact Californians are the proposed elimination of deductions for the interest paid on second home loans and home equity loans, as well as the elimination of the deduction for state and local taxes. According to NAR, second homes accounted for 36 percent of all home sales last year nationwide.
Thursday, September 29, 2005
C.A.R. REPORTS MEDIAN HOME PRICE INCREASED 20.1 PERCENT IN AUGUST
The year over year increase in sales price of a median priced home in San Diego County may be in single digit percentages, but according to the California Association of Realtors, the prices of California homes over all continue to rise at a higher rate and more homes are selling than ever before.
"The median price of an existing, single-family detached home in California during August 2005 was $568,890, a 20.1 percent increase over the revised $473,520 median for August 2004, C.A.R. reported. The August 2005 median price increased 5.2 percent compared with July's $540,900 median price.
"While fixed mortgage interest rates have not increased, adjustable rates have risen in reaction to the Federal Reserve and a more general increase in short-term rates," said C.A.R. President Jim Hamilton. "Since more buyers are relying on adjustable-rate mortgages to finance the purchase of their homes, buyers may be moving more quickly to make the home purchase decision in anticipation of future rate increases. This is adding more pressure to the price of a home.
"Closed escrow sales of existing, single-family detached homes in California totaled 632,240 in August at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 7 percent from the 591,150 sales pace recorded in August 2004."
"The median price of an existing, single-family detached home in California during August 2005 was $568,890, a 20.1 percent increase over the revised $473,520 median for August 2004, C.A.R. reported. The August 2005 median price increased 5.2 percent compared with July's $540,900 median price.
"While fixed mortgage interest rates have not increased, adjustable rates have risen in reaction to the Federal Reserve and a more general increase in short-term rates," said C.A.R. President Jim Hamilton. "Since more buyers are relying on adjustable-rate mortgages to finance the purchase of their homes, buyers may be moving more quickly to make the home purchase decision in anticipation of future rate increases. This is adding more pressure to the price of a home.
"Closed escrow sales of existing, single-family detached homes in California totaled 632,240 in August at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 7 percent from the 591,150 sales pace recorded in August 2004."
Tuesday, September 27, 2005
Why the Real Estate Bubble is not Real - Interview with Gregory Smith
The following interview was provided by First American Title Company
County Tax Assessor Gregory Smith Talks about the Strength of San Diego’s Real Estate market Now, Compared to the Bubble That Burst In the 1990’s.
San Diego has been a key player in California’s latest gold rush. In the past five years, plummeting interest rates have pushed real estate prices upward, transforming moderately priced homes into million dollar estates.
Now, as bargain basement interest rates inch upward, analysts say the real estate market in San Diego is a bubble on the verge of bursting. Other experts disagree.
County Tax Assessor Gregory Smith is one observer who believes San Diego’s real estate market is healthy; current prices are sustainable; and more growth is on the way. His explanation, bolstered by more than 22 years of assessing local property values, is well-founded.
“This isn’t Buffalo,” Smith said. “This is San Diego. First time home buyers, mover buyers, out-of-town buyers; everyone wants to live in San Diego.”
The view from Smith’s office underpins his assertion. Sailboats dot the bay, joggers run along the Embarcadero and a bride and groom exchange vows on the lawn. San Diego’s intrinsic appeal is evident, but that appeal was insufficient in staving off a steep decline in real estate prices during the 1990s. What makes the current situation different?
According to Smith, it’s Economics 101. Supply is limited. Demand is strong, and 5.5 to 6 percent interest rates are still historically low.
“That’s why I still think today is the best of times. You have a buyer’s market, and you have low interest rates,” Smith said. “This is the time to buy.”
“If all of a sudden, interest rates go up to 8 or 9 percent, everything I said is a moot point,” he said. “But that’s not going to happen. They’re going to go p gradually and I think a year from now, we’ll look at interest rates in the 6 to 6.5 percent range. Historically still great, still wonderful.”
When the real estate market collapsed in the 1990s, interest rates were between 8.5 and 9 percent, and San Diego was feeling the drastic effects of the savings and loan crisis. A decrease in military population due to massive deployments to the Gulf War and a loss of jobs from the departures of General Dynamics and Convair exacerbated the financial situation. These factors left developers who had speculatively built hundreds of houses at once to cut costs with large amounts of unsold inventory.
This time, San Diego is better prepared. The area has a steady flow of newcomers; jobs are being created, not cut; the local economy is more diversified; and developers are pre-selling units, then building tracts in small phases to prevent a bubble of unsold inventory.
“For years, we had tremendous population increases but we never produced enough housing for our population,” Smith said. “So now we’re in a position where too many people are chasing too few homes.”
“People want to buy a home” he said. “And that’s the first step, and the best investment you can make.”
County Tax Assessor Gregory Smith Talks about the Strength of San Diego’s Real Estate market Now, Compared to the Bubble That Burst In the 1990’s.
San Diego has been a key player in California’s latest gold rush. In the past five years, plummeting interest rates have pushed real estate prices upward, transforming moderately priced homes into million dollar estates.
Now, as bargain basement interest rates inch upward, analysts say the real estate market in San Diego is a bubble on the verge of bursting. Other experts disagree.
County Tax Assessor Gregory Smith is one observer who believes San Diego’s real estate market is healthy; current prices are sustainable; and more growth is on the way. His explanation, bolstered by more than 22 years of assessing local property values, is well-founded.
“This isn’t Buffalo,” Smith said. “This is San Diego. First time home buyers, mover buyers, out-of-town buyers; everyone wants to live in San Diego.”
The view from Smith’s office underpins his assertion. Sailboats dot the bay, joggers run along the Embarcadero and a bride and groom exchange vows on the lawn. San Diego’s intrinsic appeal is evident, but that appeal was insufficient in staving off a steep decline in real estate prices during the 1990s. What makes the current situation different?
According to Smith, it’s Economics 101. Supply is limited. Demand is strong, and 5.5 to 6 percent interest rates are still historically low.
“That’s why I still think today is the best of times. You have a buyer’s market, and you have low interest rates,” Smith said. “This is the time to buy.”
“If all of a sudden, interest rates go up to 8 or 9 percent, everything I said is a moot point,” he said. “But that’s not going to happen. They’re going to go p gradually and I think a year from now, we’ll look at interest rates in the 6 to 6.5 percent range. Historically still great, still wonderful.”
When the real estate market collapsed in the 1990s, interest rates were between 8.5 and 9 percent, and San Diego was feeling the drastic effects of the savings and loan crisis. A decrease in military population due to massive deployments to the Gulf War and a loss of jobs from the departures of General Dynamics and Convair exacerbated the financial situation. These factors left developers who had speculatively built hundreds of houses at once to cut costs with large amounts of unsold inventory.
This time, San Diego is better prepared. The area has a steady flow of newcomers; jobs are being created, not cut; the local economy is more diversified; and developers are pre-selling units, then building tracts in small phases to prevent a bubble of unsold inventory.
“For years, we had tremendous population increases but we never produced enough housing for our population,” Smith said. “So now we’re in a position where too many people are chasing too few homes.”
“People want to buy a home” he said. “And that’s the first step, and the best investment you can make.”
Thursday, September 22, 2005
Real Estate Is Having A Sale!
By your real estate dude
I like to keep up with the news as much as the next person. But when you think about it, most news outlets exist in order to make money by selling advertising. So, if the news folks write stories that shock, amaze or simply frighten the %$@#* out of us, more people watch, read or listen and more money is made on the price of advertising. My college journalism professor once told me that “journalism exists to serve the people, because the people have the right to know”. I’m sure he believed that and when I was attending his class at the ripe old age of nineteen, I believed it too. Now, I’m pushing fifty and I know better.
While there are many in journalism who take service to the public quite seriously and work very hard to keep us informed, the fact remains that journalism is a business and sensationalism sells! Knowing this, we would be wise at times to take the news with a grain of salt. News about real estate is no exception. In a time of moderate downturn, such as we have now, just about every media outlet begins featuring talking heads and "experts" screaming “the sky is falling”. They think it will get us all to buy a magazine, read a newspaper or stay glued to the business news on our favorite TV network, and they’re right. It’s all about bumping up the ratings or increasing the readership so the sales folks can use those new demographic numbers to sell more advertising for higher prices.
This practice of sensationalism for hire can be very detrimental for those who don’t see it for what it is. Let me give you an example. Have you ever noticed that when a major department store has a sale dropping its prices by 50% everybody goes and buys something? On the other hand, if the same store raises prices by 50% nobody shows up. However, with real estate the opposite is true. When prices drop significantly (or even slightly) the media talking heads start screaming “the sky is falling” and people stop buying. But, when prices go up those same “experts” loudly proclaim that “prices will be out of reach soon so you better buy now” and everyone can’t seem to buy property fast enough! My Grandpa Charlie taught me about this lunacy when I was a small child and drilled it into my head as I grew up. He always said, “Joel, if you want to get it right sometimes you just have to look at what everyone else is doing and do the opposite”.
Grandpa Charlie was an old time real estate broker and investor. When I was about seven, he folded the real estate section of the newspaper he was reading while resting in his giant leather recliner, looked down his nose at me over his spectacles and said “Let’s go for a ride, Joel”. I asked, “Where are we going, grandpa?” He got that big smile he always got when he was ready to teach me something and said, “We’re going to look at some properties today. Real estate is having a sale!” My Grandpa figured out what most everyone else hadn’t. Just like the department store, when prices of homes go down, real estate is having a sale. The difference is that in the case of real estate, not very many people take advantage of it.
So, I ask myself ... why is this still the case some 40 years later? Why, in a time of low unemployment, a strong economy, low interest rates, lots of homes to choose from and sellers who are willing to deal, are buyers staying home instead of taking advantage of the fact that real estate is having a sale? The simple answer is this: human nature hasn’t changed. Most of us take what we read or see on television as gospel and feel much safer doing something if we see that everyone else is doing it. The problem with that kind of thinking is that sometimes to get it right, you just have to look at what everyone else is doing and do the opposite. Just so you know, everyone else is staying home and waiting for people to start buying again. So, as you sit there reading this article, imagine that I am looking at you over my spectacles and inviting you to go for a ride and look at some properties because, believe it or not, real estate is having a sale!
I like to keep up with the news as much as the next person. But when you think about it, most news outlets exist in order to make money by selling advertising. So, if the news folks write stories that shock, amaze or simply frighten the %$@#* out of us, more people watch, read or listen and more money is made on the price of advertising. My college journalism professor once told me that “journalism exists to serve the people, because the people have the right to know”. I’m sure he believed that and when I was attending his class at the ripe old age of nineteen, I believed it too. Now, I’m pushing fifty and I know better.While there are many in journalism who take service to the public quite seriously and work very hard to keep us informed, the fact remains that journalism is a business and sensationalism sells! Knowing this, we would be wise at times to take the news with a grain of salt. News about real estate is no exception. In a time of moderate downturn, such as we have now, just about every media outlet begins featuring talking heads and "experts" screaming “the sky is falling”. They think it will get us all to buy a magazine, read a newspaper or stay glued to the business news on our favorite TV network, and they’re right. It’s all about bumping up the ratings or increasing the readership so the sales folks can use those new demographic numbers to sell more advertising for higher prices.
This practice of sensationalism for hire can be very detrimental for those who don’t see it for what it is. Let me give you an example. Have you ever noticed that when a major department store has a sale dropping its prices by 50% everybody goes and buys something? On the other hand, if the same store raises prices by 50% nobody shows up. However, with real estate the opposite is true. When prices drop significantly (or even slightly) the media talking heads start screaming “the sky is falling” and people stop buying. But, when prices go up those same “experts” loudly proclaim that “prices will be out of reach soon so you better buy now” and everyone can’t seem to buy property fast enough! My Grandpa Charlie taught me about this lunacy when I was a small child and drilled it into my head as I grew up. He always said, “Joel, if you want to get it right sometimes you just have to look at what everyone else is doing and do the opposite”.
Grandpa Charlie was an old time real estate broker and investor. When I was about seven, he folded the real estate section of the newspaper he was reading while resting in his giant leather recliner, looked down his nose at me over his spectacles and said “Let’s go for a ride, Joel”. I asked, “Where are we going, grandpa?” He got that big smile he always got when he was ready to teach me something and said, “We’re going to look at some properties today. Real estate is having a sale!” My Grandpa figured out what most everyone else hadn’t. Just like the department store, when prices of homes go down, real estate is having a sale. The difference is that in the case of real estate, not very many people take advantage of it.
So, I ask myself ... why is this still the case some 40 years later? Why, in a time of low unemployment, a strong economy, low interest rates, lots of homes to choose from and sellers who are willing to deal, are buyers staying home instead of taking advantage of the fact that real estate is having a sale? The simple answer is this: human nature hasn’t changed. Most of us take what we read or see on television as gospel and feel much safer doing something if we see that everyone else is doing it. The problem with that kind of thinking is that sometimes to get it right, you just have to look at what everyone else is doing and do the opposite. Just so you know, everyone else is staying home and waiting for people to start buying again. So, as you sit there reading this article, imagine that I am looking at you over my spectacles and inviting you to go for a ride and look at some properties because, believe it or not, real estate is having a sale!
Friday, September 16, 2005
California's Housing Affordability Index Fell Three Points in July
Another story from the California Association of Realtors Newsletter:
"The percentage of households in California able to afford a median-priced home stood at 16 percent in July, a 3 percentage-point decrease compared with the same period a year ago when the Index was at 19 percent, according to a recent C.A.R. report. The July Housing Affordability Index (HAI) was unchanged from June, when it also stood at 16 percent."
"The percentage of households in California able to afford a median-priced home stood at 16 percent in July, a 3 percentage-point decrease compared with the same period a year ago when the Index was at 19 percent, according to a recent C.A.R. report. The July Housing Affordability Index (HAI) was unchanged from June, when it also stood at 16 percent."
California Assoc of Realtors Donates Additional $310,000 To Hurricane Relief Efforts
This story is from the California Association of Realtors Newsletter:
"The California Association of Realtors donated an additional $300,000 to the hurricane relief efforts in Alabama, Louisiana and Mississippi, the Association reported last week. A minimum of 50 percent of the dollars contributed were earmarked for REALTORS® and REALTOR® association staff, with the remainder to be used as the respective state funds see fit. C.A.R.'s Real Estate Business Services Inc. (REBS) subsidiary also announced a $10,000 donation to the NAR REALTOR® Relief Fund. Both donations follow an initial contribution of $10,000 to each of the three affected state REALTOR® associations through C.A.R.'s Disaster Relief Fund, bringing C.A.R.'s total contribution to $340,000."
"The California Association of Realtors donated an additional $300,000 to the hurricane relief efforts in Alabama, Louisiana and Mississippi, the Association reported last week. A minimum of 50 percent of the dollars contributed were earmarked for REALTORS® and REALTOR® association staff, with the remainder to be used as the respective state funds see fit. C.A.R.'s Real Estate Business Services Inc. (REBS) subsidiary also announced a $10,000 donation to the NAR REALTOR® Relief Fund. Both donations follow an initial contribution of $10,000 to each of the three affected state REALTOR® associations through C.A.R.'s Disaster Relief Fund, bringing C.A.R.'s total contribution to $340,000."
Wednesday, September 14, 2005
"Median Price Dips Slightly" - Is the sky falling?
By your real estate dude
According to an article from rereport.com, "The median price for a single family home in San Diego County dipped 0.7% to $586,000 in August from the month before, a year-over-year gain of 6.5%. This is the fifth month in a row year-over-year appreciation has been in the single- digits. The average home price gained 8.2% to $732,378. Condo prices continued setting new highs in August with the median price up 5.1% to $389,000. Annual price gains have been in the single-digits five of the Last six months. Sales of single-family homes continue below last year's record-setting pace. Home sales fell 5%. Condo sales were off 8.3%. The sales price to list price ratio for single-family homes gained 0.1 of a point to 96.1%. The ratio for condos is at 97.2%."
Wow! That’s a bunch of numbers that look pretty frightening to me. But, what does all this mean? Well truthfully, it’s not as terrifying as it looks. The bottom line is that while fewer homes are selling than before and taking longer to do it, the prices are still going up. They're just not going up in double digit percentages because the market has softened. This may be concerning to some folks, but not to those of us who know how to do the numbers. That’s because when homes increase in value by single digits most people have had a double digit return. What?
Unlike stocks, most people do not purchase homes with cash. In fact, the vast majority of homes are purchased with a lender's money. When you take out a loan to buy something, it's called leverage. In grade school I learned about the use of the fulcrum and the lever. By using a lever and fulcrum I could move a big object easily that I could never move otherwise. We've probably all seen the picture of the strong man with the lever and fulcrum about ready to move the earth. That's how leverage works with money. With leverage you can buy more than you could buy without it. When leverage is applied to investments you have the chance to make more money than you would otherwise. With stocks, using leverage can be very risky and only some folks with lots of “green” are aloud to do it. On the other hand, using leverage with real estate works out well most of the time.
Let's look at the 6.5% year-over-year gain for the median priced single family home that’s listed in the article above and apply some leverage. If I had purchased a $500,000 home last year with cash and the home increased in value by 6.5% over the year, my home would now be worth $532,500. Since my original investment in the property was $500,000 I would have made 6.5% on my investment. But what if I had purchased the same home with a 20% down payment and took out a loan for the rest? My original investment would have been $100,000 not $500,000. The increase in the value of the property would still have been $32,500 in one year but the percentage of return on my investment of $100,000 would be 32.5%. Boy… that beats 6.5% any day! "But" you ask, "what about the house payment?" Well... if I purchased the house with $100,000 down and a loan of $400,000 at 5% or even 6% interest, I would still have made more money in appreciation over the last year than the total of that year's loan payments would have been. For example: At 5% interest, my total loan payments for the year would have been $25,764. At 6% interest my total loan payments for the year would have been $28,776. In both cases, my value increase of $32,500 would have been greater than the total of 12 months of loan payments. And let's not forget about taxes. With amortized loans (like home loans), the first five years of payments are mostly interest. You don't really start paying down the principle until after 5 years. That means that the majority of my payments for this past year would have consisted of mortgage interest with very little being applied to principle. As I’m sure you already know, mortgage interest is deductible! That means that in addition to making more money on the value of my house than I would have spent in payments to buy it, I would have had a $20,000 tax deduction for mortgage interest. I would not have had that deduction had I paid cash. So, as you can see, since most people buy homes using leverage the 6.5% growth figure is misleading. That figure only relates to the value of the home, it does not related to the amount of the original investment.
According to an article from rereport.com, "The median price for a single family home in San Diego County dipped 0.7% to $586,000 in August from the month before, a year-over-year gain of 6.5%. This is the fifth month in a row year-over-year appreciation has been in the single- digits. The average home price gained 8.2% to $732,378. Condo prices continued setting new highs in August with the median price up 5.1% to $389,000. Annual price gains have been in the single-digits five of the Last six months. Sales of single-family homes continue below last year's record-setting pace. Home sales fell 5%. Condo sales were off 8.3%. The sales price to list price ratio for single-family homes gained 0.1 of a point to 96.1%. The ratio for condos is at 97.2%."
Wow! That’s a bunch of numbers that look pretty frightening to me. But, what does all this mean? Well truthfully, it’s not as terrifying as it looks. The bottom line is that while fewer homes are selling than before and taking longer to do it, the prices are still going up. They're just not going up in double digit percentages because the market has softened. This may be concerning to some folks, but not to those of us who know how to do the numbers. That’s because when homes increase in value by single digits most people have had a double digit return. What?
Unlike stocks, most people do not purchase homes with cash. In fact, the vast majority of homes are purchased with a lender's money. When you take out a loan to buy something, it's called leverage. In grade school I learned about the use of the fulcrum and the lever. By using a lever and fulcrum I could move a big object easily that I could never move otherwise. We've probably all seen the picture of the strong man with the lever and fulcrum about ready to move the earth. That's how leverage works with money. With leverage you can buy more than you could buy without it. When leverage is applied to investments you have the chance to make more money than you would otherwise. With stocks, using leverage can be very risky and only some folks with lots of “green” are aloud to do it. On the other hand, using leverage with real estate works out well most of the time.
Let's look at the 6.5% year-over-year gain for the median priced single family home that’s listed in the article above and apply some leverage. If I had purchased a $500,000 home last year with cash and the home increased in value by 6.5% over the year, my home would now be worth $532,500. Since my original investment in the property was $500,000 I would have made 6.5% on my investment. But what if I had purchased the same home with a 20% down payment and took out a loan for the rest? My original investment would have been $100,000 not $500,000. The increase in the value of the property would still have been $32,500 in one year but the percentage of return on my investment of $100,000 would be 32.5%. Boy… that beats 6.5% any day! "But" you ask, "what about the house payment?" Well... if I purchased the house with $100,000 down and a loan of $400,000 at 5% or even 6% interest, I would still have made more money in appreciation over the last year than the total of that year's loan payments would have been. For example: At 5% interest, my total loan payments for the year would have been $25,764. At 6% interest my total loan payments for the year would have been $28,776. In both cases, my value increase of $32,500 would have been greater than the total of 12 months of loan payments. And let's not forget about taxes. With amortized loans (like home loans), the first five years of payments are mostly interest. You don't really start paying down the principle until after 5 years. That means that the majority of my payments for this past year would have consisted of mortgage interest with very little being applied to principle. As I’m sure you already know, mortgage interest is deductible! That means that in addition to making more money on the value of my house than I would have spent in payments to buy it, I would have had a $20,000 tax deduction for mortgage interest. I would not have had that deduction had I paid cash. So, as you can see, since most people buy homes using leverage the 6.5% growth figure is misleading. That figure only relates to the value of the home, it does not related to the amount of the original investment.
Tuesday, September 13, 2005
San Diego Market Slow Down - What does it mean?
By your real estate dude
It’s clear to the most casual of observers that the San Diego real estate market has slowed down. You don’t need a PHD in Statistics to figure out that there are a lot more “for sale” signs on the street than there use to be. But, let’s take a look at the numbers for San Diego County just the same.
In August of this year, 2189 single family homes sold in an average of 52 days. In August of last year 2395 single family homes sold in an average of 38 days. So, this year 206 fewer homes sold in August and took 14 days longer on average in order to do it. Similarly, 1070 condos sold in August of this year in an average of 49 days, while one year ago 1225 condos sold in August in an average of 23 days. So, 155 fewer condos sold this year and took more than twice as long on average in order to sell. The bottom line is this. More homes are for sale this year than in 2004. Fewer homes are selling and they take longer in order to sell.
If we boil this down to what it means to you if you’re selling or buying a home, we come down to simple facts. Sellers must come to grips with the change in the market. This means that the average home will probably not have multiple offers competing in a bidding war as we had in the earlier market. It also means that sellers must be more realistic in the pricing of their homes. In the market we have today, pricing a home competitively is the key to getting it to sell in a reasonable period of time. Buyers have more choices and more time. Since they aren’t in the position of having to make offers quickly in order to have a chance at the purchase, they can take their time and look for the home that best fits there needs. Buyers also have some negotiating leverage that they didn’t have before.
So, here’s the answer to the crystal ball question that I know you’re dieing to ask. It’s the “should I hold off before I (buy, sell or whatever)” question. The answer is, “it depends”. Each situation is different. That’s why advice is generally useless when given as a general “rule”. Although the general rule might dictate that you hold rather than selling, your individual situation may require you to sell. The same is true regarding a decision to buy or hold off a while. The best advice I can give you is to talk with your real estate advisor about your specific situation.
In the meantime, I'll leave you with this just in case you’re concerned about the change in the real estate market. The market has slowed down and I know that many are playing the “prophets of doom”. But take it from me, your friendly neighborhood real estate dude, the “chicken littles” of the world are wrong, the sky is not falling.
It’s clear to the most casual of observers that the San Diego real estate market has slowed down. You don’t need a PHD in Statistics to figure out that there are a lot more “for sale” signs on the street than there use to be. But, let’s take a look at the numbers for San Diego County just the same.
In August of this year, 2189 single family homes sold in an average of 52 days. In August of last year 2395 single family homes sold in an average of 38 days. So, this year 206 fewer homes sold in August and took 14 days longer on average in order to do it. Similarly, 1070 condos sold in August of this year in an average of 49 days, while one year ago 1225 condos sold in August in an average of 23 days. So, 155 fewer condos sold this year and took more than twice as long on average in order to sell. The bottom line is this. More homes are for sale this year than in 2004. Fewer homes are selling and they take longer in order to sell.
If we boil this down to what it means to you if you’re selling or buying a home, we come down to simple facts. Sellers must come to grips with the change in the market. This means that the average home will probably not have multiple offers competing in a bidding war as we had in the earlier market. It also means that sellers must be more realistic in the pricing of their homes. In the market we have today, pricing a home competitively is the key to getting it to sell in a reasonable period of time. Buyers have more choices and more time. Since they aren’t in the position of having to make offers quickly in order to have a chance at the purchase, they can take their time and look for the home that best fits there needs. Buyers also have some negotiating leverage that they didn’t have before.
So, here’s the answer to the crystal ball question that I know you’re dieing to ask. It’s the “should I hold off before I (buy, sell or whatever)” question. The answer is, “it depends”. Each situation is different. That’s why advice is generally useless when given as a general “rule”. Although the general rule might dictate that you hold rather than selling, your individual situation may require you to sell. The same is true regarding a decision to buy or hold off a while. The best advice I can give you is to talk with your real estate advisor about your specific situation.
In the meantime, I'll leave you with this just in case you’re concerned about the change in the real estate market. The market has slowed down and I know that many are playing the “prophets of doom”. But take it from me, your friendly neighborhood real estate dude, the “chicken littles” of the world are wrong, the sky is not falling.
Monday, September 12, 2005
Your real estate dude interviewed by Inman News
This past month I was flown to San Francisco to be interviewed by InmanStories.com as part of a story on a marketing company called HouseValues.com. Click on the title of this post to see the interview. Pretty cool!
Friday, September 09, 2005
San Diego Association of Realtors supports Jerry Sanders for Mayor
(Reprinted from the SDAR Newsletter)
At the Friday, August 5th Board of Directors meeting, SDAR voted to endorse, with support, Jerry Sanders for Mayor of the City of San Diego. The recommendation for the endorsement came through the Association’s Government Affairs committee. The committee interviewed Sanders and several other mayoral candidates prior to the July 26th election.
The Government Affairs Committee and the Board of Directors strongly believe that as mayor, Sanders will be a proponent for increased housing opportunities. He has been a strong advocate for the City of the Villages concept (urban infill and the revitalization of San Diego’s older neighborhoods) and believes that quality of life may be enhanced, rather than diminished, with smart growth principles and urban planning.
At the Friday, August 5th Board of Directors meeting, SDAR voted to endorse, with support, Jerry Sanders for Mayor of the City of San Diego. The recommendation for the endorsement came through the Association’s Government Affairs committee. The committee interviewed Sanders and several other mayoral candidates prior to the July 26th election.
The Government Affairs Committee and the Board of Directors strongly believe that as mayor, Sanders will be a proponent for increased housing opportunities. He has been a strong advocate for the City of the Villages concept (urban infill and the revitalization of San Diego’s older neighborhoods) and believes that quality of life may be enhanced, rather than diminished, with smart growth principles and urban planning.
A Balancing San Diego Market
A Realty Times article by Carla L. Davis paints a changing picture for the San Diego real estate market. Here are excerps from the article...
San Diego realtors report that the market is leveling “The market today has swung into balance with cautious buyers and many choices of homes in the San Diego, California, area,” comments one local Realtor. "Currently there are over 13,000 homes on the market in San Diego. This is a huge increase over the all-time low of 2,301 homes in March 2004. To put this all in perspective, the record high inventory of 19,000 homes was reached in July 1995 when massive layoffs and a laborious recession forced 1000's workers to exit San Diego."
He continues, "A majority of homes in San Diego that were once $300,000 a few years ago, now sell close to $500,000 (about a 15 percent per year increase). However, there are definitely less offers than before -- no longer 20 offers per property. We see many more 100 percent financing offers than ever. Residential properties above $1,000,000 are more negotiable than those under $600,000. As to be expected, there are several pockets where homes are hard to find while in other areas it seems to be more difficult to find buyers."
"In San Diego the talk between the Realtors I come into contact with is that the market appears to be changing into a more balanced market which is the market the Realtors that I have come into contact seem to be hoping for. The locale news has said a few times that the market appears to be changing to a buyer's market," relates another San Diego Realtor.
He adds, "In my opinion the market seems strong, though home prices do not seem to be escalating at the pace they were, a pace I never dreamed of but prices seem to be tapering off a bit. I do not think prices are lowering they are just adjusting some from their already extremely escalated levels. We still have the supply and demand issue in the county but it is mainly a problem for the first time home buyer, we just have more of a demand then supply of affordable housing. This should fuel the lower priced home market for a while."
Yet another Realtor notes the same leveling effect, "Unit sales volume (demand) has decreased by 12.7 percent. When you just look at single family homes the average price for July was $641,895 which was a 9.1 percent increase from last July. However, again unit sales declined by 11.8 percent period to period."
"Overall demand for the year still looks good for around 40,000 homes sold, very respectful," he notes "The average inventory days are 125 days, but in the $500k range you are at 86 days, the lowest of all price ranges. Other segments of the market explode over 200 days, there will be serious pricing problems here for the sellers that have to sell."
San Diego realtors report that the market is leveling “The market today has swung into balance with cautious buyers and many choices of homes in the San Diego, California, area,” comments one local Realtor. "Currently there are over 13,000 homes on the market in San Diego. This is a huge increase over the all-time low of 2,301 homes in March 2004. To put this all in perspective, the record high inventory of 19,000 homes was reached in July 1995 when massive layoffs and a laborious recession forced 1000's workers to exit San Diego."
He continues, "A majority of homes in San Diego that were once $300,000 a few years ago, now sell close to $500,000 (about a 15 percent per year increase). However, there are definitely less offers than before -- no longer 20 offers per property. We see many more 100 percent financing offers than ever. Residential properties above $1,000,000 are more negotiable than those under $600,000. As to be expected, there are several pockets where homes are hard to find while in other areas it seems to be more difficult to find buyers."
"In San Diego the talk between the Realtors I come into contact with is that the market appears to be changing into a more balanced market which is the market the Realtors that I have come into contact seem to be hoping for. The locale news has said a few times that the market appears to be changing to a buyer's market," relates another San Diego Realtor.
He adds, "In my opinion the market seems strong, though home prices do not seem to be escalating at the pace they were, a pace I never dreamed of but prices seem to be tapering off a bit. I do not think prices are lowering they are just adjusting some from their already extremely escalated levels. We still have the supply and demand issue in the county but it is mainly a problem for the first time home buyer, we just have more of a demand then supply of affordable housing. This should fuel the lower priced home market for a while."
Yet another Realtor notes the same leveling effect, "Unit sales volume (demand) has decreased by 12.7 percent. When you just look at single family homes the average price for July was $641,895 which was a 9.1 percent increase from last July. However, again unit sales declined by 11.8 percent period to period."
"Overall demand for the year still looks good for around 40,000 homes sold, very respectful," he notes "The average inventory days are 125 days, but in the $500k range you are at 86 days, the lowest of all price ranges. Other segments of the market explode over 200 days, there will be serious pricing problems here for the sellers that have to sell."
Real estate construction spending keeps $1 trillion pace
According to a recent article in the California Association of Realtors newsletter there’s still a ton of money being spent on the construction of residential property in the state. Here’s a quote from the article…
“Construction spending was at a seasonally adjusted annual rate of $1,099.3 billion in July 2005, nearly unchanged from the revised June estimate of $1,099.7 billion, according to a recent report released by the U.S. Census Bureau. July was the 13th consecutive month where the projected rate of construction spending topped $1 trillion. Construction spending totaled $617.9 billion during the first seven months of the year, a 9.3 percent increase over construction spending for the same period in 2004.
Spending on residential construction in July 2005 increased 8.3 percent over the previous year to reach a rate of $622.2 billion. The value of nonresidential construction put into place in July rose 3.1 percent to a rate of $477.1 billion, according to the report.”
“Construction spending was at a seasonally adjusted annual rate of $1,099.3 billion in July 2005, nearly unchanged from the revised June estimate of $1,099.7 billion, according to a recent report released by the U.S. Census Bureau. July was the 13th consecutive month where the projected rate of construction spending topped $1 trillion. Construction spending totaled $617.9 billion during the first seven months of the year, a 9.3 percent increase over construction spending for the same period in 2004.
Spending on residential construction in July 2005 increased 8.3 percent over the previous year to reach a rate of $622.2 billion. The value of nonresidential construction put into place in July rose 3.1 percent to a rate of $477.1 billion, according to the report.”
Is there a real estate “bubble”?
By your real estate dude
One of the questions I am asked most often is “do you think there’s a real estate bubble?” followed by “when is the bubble going to pop?”. As a matter of fact, I was asked that very series of questions this morning while standing in line for breakfast at the San Diego East County Chamber of Commerce Meeting.
The answer is not all that simple. If you line up any 10 real estate professionals and asked them if there is a real estate bubble you would probably get an evenly split group of 5 “yes” and 5 “no”. The problem seems to be that no one has really defined a “bubble”.
That being said, what is a “bubble” anyway? In my humble opinion (and keep in mind I do not have a PHD in economics) a “bubble” refers to the phenomenon of having unrealistic growth in an industry or investment based upon nothing. In other words, a rapid increase in the value of something caused mainly by perception rather than reality. My grandfather use to say that perception is 90% of reality for most folks and I have discovered that he was right.
Take the internet explosion for example. I was involved in that “bubble”. And it truly was value based upon nothing but perception in most cases. For example: I was hired as a Business Development Director for an internet startup that produced nothing, sold nothing and generated not one dime of revenue in the seven months I was there. In fact, I was never tasked with the goal of generating revenue. It took only a few months before it became clear that the only reason the company existed was for the purpose of creating the impression that it was worth something so that it might be sold at a profit for the investors. The vast majority of internet companies that I know of were of that ilk. They had the appearance of value without any substance to justify it.
While that was the case with internet companies, it surely is not the case with real estate. Just as houses are built on foundations, the real estate market has a strong footing that supports its value as an investment. I am almost 50 and real estate in southern California has a trend of increasing in value that goes back many decades before I was born. Indeed, my grandfather was investing in southern California real estate in the 1930s for that very reason. There have always been ups and downs in the market, but there has never been a “bubble” that I am aware of and I do not believe there is one now. The market has slowed down recently, but that is simply a normal cycle in the market. Prices may even go down temporarily. But, if history is any indicator, San Diego real estate, when measured over years, will continue to increase in value as it always has.
One of the questions I am asked most often is “do you think there’s a real estate bubble?” followed by “when is the bubble going to pop?”. As a matter of fact, I was asked that very series of questions this morning while standing in line for breakfast at the San Diego East County Chamber of Commerce Meeting.
The answer is not all that simple. If you line up any 10 real estate professionals and asked them if there is a real estate bubble you would probably get an evenly split group of 5 “yes” and 5 “no”. The problem seems to be that no one has really defined a “bubble”.
That being said, what is a “bubble” anyway? In my humble opinion (and keep in mind I do not have a PHD in economics) a “bubble” refers to the phenomenon of having unrealistic growth in an industry or investment based upon nothing. In other words, a rapid increase in the value of something caused mainly by perception rather than reality. My grandfather use to say that perception is 90% of reality for most folks and I have discovered that he was right.
Take the internet explosion for example. I was involved in that “bubble”. And it truly was value based upon nothing but perception in most cases. For example: I was hired as a Business Development Director for an internet startup that produced nothing, sold nothing and generated not one dime of revenue in the seven months I was there. In fact, I was never tasked with the goal of generating revenue. It took only a few months before it became clear that the only reason the company existed was for the purpose of creating the impression that it was worth something so that it might be sold at a profit for the investors. The vast majority of internet companies that I know of were of that ilk. They had the appearance of value without any substance to justify it.
While that was the case with internet companies, it surely is not the case with real estate. Just as houses are built on foundations, the real estate market has a strong footing that supports its value as an investment. I am almost 50 and real estate in southern California has a trend of increasing in value that goes back many decades before I was born. Indeed, my grandfather was investing in southern California real estate in the 1930s for that very reason. There have always been ups and downs in the market, but there has never been a “bubble” that I am aware of and I do not believe there is one now. The market has slowed down recently, but that is simply a normal cycle in the market. Prices may even go down temporarily. But, if history is any indicator, San Diego real estate, when measured over years, will continue to increase in value as it always has.
How Realtors are helping the victims of Katrina
There are several ways REALTORS® can contribute to the hurricane relief efforts underway in the states hit by Hurricane Katrina last week. To make a tax-deductible contribution through the C.A.R. Disaster Relief Fund, make checks payable to the California Community Foundation, and write "C.A.R. Disaster Relief Fund" on the "memo" line. Send checks to the California Community Foundation, 445 S. Figueroa St., #3400, Los Angeles, CA 90071-1638.
Contributions also can be sent to NAR's REALTORS® Relief Foundation through www.realtor.org/relief. To donate by mail, send checks to REALTORS® Relief Foundation, Attn: NAR Finance Division, 430 N. Michigan Ave., Chicago IL 60611.
To make donations directly to the impacted states, checks made payable to the state disaster relief funds can be sent to the following addresses: Alabama REALTOR® Disaster Relief Fund, P.O. Box 4070, Montgomery, AL 36103; Louisiana REALTORS® Relief Fund, P.O. Box 14780, Baton Rouge, LA, 70898; Mississippi REALTOR® Hurricane Relief Fund, P. O. Box 321000, Jackson, MS 39232.
Major airlines also have announced that individuals can donate their frequent flyer miles to many aid organizations, including the American Red Cross, Habitat for Humanity and the Salvation Army. Such groups use the donated miles to send relief workers and supplies to the affected areas. For more information on how to donate your miles, contact individual airlines directly.
In response to the devastation caused by Hurricane Katrina, C.A.R. last week donated $10,000 to each of the three affected state REALTOR® associations through C.A.R.'s Disaster Relief Fund. Initially created to help REALTORS® and local Association staff who had been affected by the Southern California wildfires in 2003, the Fund has since been used to mitigate the effects of other disasters impacting the REALTOR® community nationwide.
Contributions also can be sent to NAR's REALTORS® Relief Foundation through www.realtor.org/relief. To donate by mail, send checks to REALTORS® Relief Foundation, Attn: NAR Finance Division, 430 N. Michigan Ave., Chicago IL 60611.
To make donations directly to the impacted states, checks made payable to the state disaster relief funds can be sent to the following addresses: Alabama REALTOR® Disaster Relief Fund, P.O. Box 4070, Montgomery, AL 36103; Louisiana REALTORS® Relief Fund, P.O. Box 14780, Baton Rouge, LA, 70898; Mississippi REALTOR® Hurricane Relief Fund, P. O. Box 321000, Jackson, MS 39232.
Major airlines also have announced that individuals can donate their frequent flyer miles to many aid organizations, including the American Red Cross, Habitat for Humanity and the Salvation Army. Such groups use the donated miles to send relief workers and supplies to the affected areas. For more information on how to donate your miles, contact individual airlines directly.
In response to the devastation caused by Hurricane Katrina, C.A.R. last week donated $10,000 to each of the three affected state REALTOR® associations through C.A.R.'s Disaster Relief Fund. Initially created to help REALTORS® and local Association staff who had been affected by the Southern California wildfires in 2003, the Fund has since been used to mitigate the effects of other disasters impacting the REALTOR® community nationwide.
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