Sunday, December 20, 2009
With prices up 6.6% in San Diego County, the medium priced home now $325,000, and the number of homes sold up 18% compared to one year ago, it is fair to say that San Diego County is in a stabilizing market. Just last week appraiser, Leon Crowell, confirmed, "We can no longer say we are in a declining market. "
While some are cautiously optomistic about the unemployment rate improving from 10.7% in October, the highest rate since the Great Depression, to 10.3% in November. According to Chrisopher Thornberg, who was one of the first economists to forecast a major recession, said the recession has hit it peak. "All the data shows that the U.S. economy has more or less bottomed out. We should only be surprised if unemployment wasn't peaking. The bigger issue is how fast of a recovery we're going to see," said Thornberg, who works for Beacon Economics in Los Angeles.
Coupled with the news that foreclosures rates are dropping. According to the MDA DataQuick, San Diego County Foreclosures by all lenders totaled 11,393 from January to October was down from 15,414 for the same period last year. The reduction continues, the number of foreclosures in October 2009 numbered 1,346 dropping 4.7% to 1,283 in November. Some believe under government pressure and incentives, banks are delaying or canceling foreclosures while working with home owners to modify their loans or arrange for short sales.
In the short term, the reduction in foreclosures and the reduction in unemployment could help stabilize the economy and housing market, prompting homeowners with equity, not in distress, to sell and buy another home. Some believe that many owners will still hold back because of loss in value compared to a few years ago. Since 2006, prices tumbled as a result of many homes being lost to foreclosures. But as one of my wise sellers recently said, this is the time to sell and move up because "while my home value has fallen, I will get a better deal on my new home and 10 years from now, the home I am buying will be worth much more in proportion."
So while I agree with Thornberg, the question is how quickly the recovery will occur, it does seem there is hope on the horizon.
ABR®, CRS®, e-Pro®, GRI®
Coldwell Banker Residential Brokerage
Friday, December 11, 2009
While everyone is bustling around buying gifts and attending parties, there are still serious buyers out there making multiple offers on well maintained homes.
If you atticipate the need to sell your home, now is a great time to market it. The number of homes for sale are typically lower at this time of year due the holidays. With fewer serious buyers trampling through your home and the Christmas decorations adding a romantic ambience, make it the perfect time to sell.
If you need to sell, it definitely won't get sold unless you have it on the market. Worried about theft? Hiring a Realtor who uses computerized Sentri lockboxes, provides the ability to track agents and their clients entering the home.
Many sellers think waiting until spring is the best time to sell. However this year, with the Tax credit extension, buyers must have an accepted offer by April 30, 2010 and close by June 30,2010 leaving only a few more months. So if you are facing a possible foreclosure and want to sell your home before that, you need to consider that banks typically take several months to approve short pay sales.
If you are moving up, you may qualify for the $6500 tax credit. The tax credit does have income limits and the home-price cannot be above $800,000. Read more about it in Homebuyer Tax Credit Extension & Expansion . However, if you can afford to move up, this is the perfect time to sell and buy a bigger or better home.
Many move-up home buyers say they are waiting for home prices to go back up to regain the equity that they have lost in the last couple of years. For those who have lost all of their equity, there is no choice. They must wait for the equity to return. However, for those who have some equity and plan to wait until they regain what they have lost, may find themselves behind the curve.
Several years from now when home prices begin to rise again, as they historically do in San Diego County, the home equity growth will all be in proportion to the price of the home. For example, if you purchase a home of $350,000 versus a home of $700,000, in 10 years from now if the home value rises 10% then you will have gained $70,000 in the $700,000 versus $35,000 in the $350,000 home. During the downturn, if you have lost about 30% of your home equity, on your $350,000 house, then you will be down about $150,000 in equity. In comparison, the $700,000 house has lost about $300,000 in equity, twice as much. So in the long run when home prices go back up as they historically do, by moving up now, then you will be up $150,000 in equity.
Don't delay take advantage of Uncle Sam's Christmas Gift.