Sunday, November 28, 2010

San Diego Home Affordability Index Improved


When someone says to me, "that house just isn't worth what they are asking for" and the house is well below the comparable home prices, my first question is, where are you from originally? Not meaning this in a bad way, but when I hear that comment I know they are from a different part of the United States.

Yes home prices in San Diego County seem outrageous to people relocating from Michigan, Florida, and even from people as close as El Centro, where the home prices are up to a 1/4th of the price. However, I quickly remind them that the prices in San Francisco and New York are a lot more and it rains twice as much." I also remind them that they are paying for the weather here in Sunny Southern California.

According to the Union Tribune San Diego's housing affordability has actually improved in the third quarter. Data showed that 51.5% percent of households making a median income of $75,500 can now afford to buy a $325,000 median priced home. The affordability index has improved since May, when San Diego ranked 11th with only 46.6% able to buy.

Looking at the history of the National Association of Home Builders Housing Opportunity index in San Diego, we have come a long way from the fourth quarter in 2005, when San Diego ranked 7th with only 3.6% able to afford the $500,000 medium priced home and to the other extreme last year when San Diego ranked 25th with home prices at $270,000.

While San Diego County is now ranked the 12th least affordable market in the United States, we are still considerably more affordable than New York, who ranked the least affordable with only 22.6% able to buy a $435,000 median priced home, and San Francisco ranking second with only 28% able to afford the $600,000 median priced home.

With California having 7 of the top 10 least affordable cities, you are probably wondering where is the most affordable housing. Drum roll please.....Kokomo, Indiana was the most affordable with 96.1% able to afford the median price home $83,000 with a median household income of $61,400. However, remember while San Diego has an average rainfall of 7" compared to Kokomo with an average 40" and not to mention the average snow fall of around 22".

With low interest rates and the risk of prices falling behind us, economist, David Crowe, fears that San Diego may grow less affordable in the future; however, he also sees rising prices ironically representing a sign of a better housing market to come.

--Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
VirginiaHall.com
Direct (619)258-8585


Saturday, September 18, 2010

First-time Home Buyer Tips


The following suggestions will help the First-time Home Buyer to make the most of the market:

Find a Real Estate Consultant. The First thing to do is seek out the free advice of a Realtor. You will want to find just one Realtor that can advise you and represent your best interests. You will want a Realtor who is willing to answer questions and educate you on the process. It is not uncommon to sign a Buyer Broker Agreement with an experienced committed Realtor. The agreement outlines the agents' responsibilities, as well as the buyers'. Figure out what is the best way to communicate--be it email, phone, or text.

Discuss Affordability. One of the first people you should talk to is a lender or mortgage broker. They can help you see where you are and where you need to be. How much have you saved for a down payment? How much can you budget to spend each month? Will you need to factor mortgage insurance into their monthly payments? What can you expect to pay in property taxes? Working through questions up front can help you get a better handle on what you can truly afford. Also do not make any large purchases on credit until after the close of escrow to avoid changes in your credit scores.

Discuss Home Ownership Goals. What are your goals and why do you want to buy? How long do you plan on staying in the home? What are your needs in the future? When you first start it is easy to look for your dream home and when you are first entering the market you may need to lower your expectations. Remember that you need to just get on the bus and work your way up as your income improves and you grow your equity.

Match Your Expectations to Your Price Range. Many first-timer home buyers live in small apartments, but when buying will not settle for anything but a house. Understanding that you are at an entry point in the marketplace, and that you are not likely to get all the bells and whistles with your first home in a price range that you can comfortably afford.

Familiarize Yourself with Starter Home Inventory. Begin looking at your market with a fresh eye toward affordable entry-level homes, including properties that may not have been considered before. Falling prices have opened up some areas that have been out of reach to first-time buyers for years. Knowing the inventory inside out will help your expectations as to the type and condition of homes that fit your price range. Once you have a good feel for the homes in your price range, then you are ready to buy.

These are the keys to a successful First Time Home Buyer purchase.

--Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
VirginiaHall.com
Direct (619)258-8585

Monday, August 30, 2010

To Remodel? Or Not to Remodel? That is the Question


I am often asked "What should I do to prepare my home?"

1. Clean & Declutter. While most people have cluttered closets and dishes in the sink, now is the time to show the home at its best. The number one thing that I tell people is to thoroughly clean and declutter your home. Everything should shine. This is the cheapest most effective way to prepare your home.

If you are uncertain at what level to thin out your belongings, you can visit some open houses to get an idea. All counter tops should be cleared and closets should be organized.

If your rooms are crowded, you may want to remove over-sized furniture,opening up the room giving it a more open feel. Some people rent storage containers or storage units that they can move many of the items that you are not ready to part with.

Clean out the closets. When people look in your closets, they will be looking for space. If you are squeezing in your clothes, like most of us, it is time for thinning out the closets and making a run to the Salvation Army.

Don't forget to clean the carpet, windows, and the blinds. Buyers get distracted by personal photos, so best to pack them up.

2. Curb Appeal. While you are decluttering the inside, look at the outside and see if there isn't a bush that needs some pruning. Pull up the weeds and throw down some decorative bark in between bushes to give the yard a fresh look.

Right before the For Sale sign goes up. Add some color near the front door. Plant a hardy colorful plant that will make it through the next couple of months.

3. Got Pets? This can be a challenge. You will want to have all dogs outside, if possible or take them for a walk while the home is being shown. If your house has a pet or a cigarette odor, and you do not have the money to replace the carpet, then you will want to keep windows open and try a plug in deodorizer. I found some spray deodorizers that can help including Smell Be gone (http://www.smellsbegone.com/) and Fabreeze. Also if you have litter boxes, they must be cleaned out daily.

4. Paint. If it has been a few years since you have painted, it may be time for a fresh coat of paint or touch up. Definitely, patch up any holes and go with a neutral color. For those of you have been watching HGTV, beware of bold colors. When you prepare a home to sell, you should be thinking gentle colors with your furnishings and decor being the contrast.

5. Remodeling. Many people talk about remodeling their kitchens and bathrooms before listing. If you are not planning to move for a couple of years, this is fine. However, if you are doing in hopes of getting more money for the home, you may be disappointed. While remodeling kitchens and bathrooms definitely helps a home to sell faster, you may not recoup the money you put into it. According to most Cost to Value Reports, the average return on the investment for a minor kitchen remodel(average $25,000) is 83 percent and for an average bathroom remodel (average cost $18,000)is 78.1 percent. A lot of hassle and money to invest, when you may not recoup the full cost.

So when preparing to sell your home, it is best to keep it simple with these tips.

--Virginia Hall
Coldwell Banker Residential Brokerage
DRE #01409760

Saturday, June 5, 2010

Relocation Costs


Considering a move to a new city? Before you pack your bags and hire a moving company, be sure to research the potential price tag of relocating. It may cost more than you think.

Cost of living can vary greatly from town to town, so be sure to do some research before taking the plunge. Better Homes and Gardens recommends browsing the local newspaper for grocery promotions, ads, and other local news to track costs so you can put those figures into a worksheet and determine the income you might need. While several cost-of-living calculators are available on the Internet, they provide only general figures and don’t take into account specific housing needs.

Be sure to ask a Certified Residential Specialist in your target area about “hidden” homeownership costs, such as recreation fees, trash collection and community services. Try to obtain a one-year sampling of utility bills for the type of home you’re considering. What can you expect to pay for telephone, cable TV and Internet services? Will you have your own septic tank and water pump, or will the community provide water service?

There are a host of other expenses to consider. What taxes will you pay? Higher taxes may mean better schools, libraries, trash collection and other community services, while lower taxes could mean higher expenses for these services. But it pays to have all the facts before you make a move.

Likewise, transportation and parking costs often are higher in larger cities, while a small-town commute can mean a short walk or bike ride. Also, gas prices can be more costly in some areas than in others.

Leisure time costs can add up as well. How much more will you have to pay for tennis or health club memberships, adult education classes and golf course fees?

Moving away from family and friends can mean more frequent phone calls and trips back home, so be sure to allow for those additional costs as well.

Provided by CRS--Your Home June 2010

Friday, May 14, 2010

So What in the World is HAFA?
A New Foreclosure Alternative


By now, everyone knows someone who has lost their home to a foreclosure or undergone a “Short Sale” that seem to take forever. In an effort to help homeowners avoid foreclosures and streamline the short sale process, on April 5, 2010 the Treasury Department enacted the Home Affordable Foreclosure Alternatives program, better known as HAFA. The program was developed to provide a viable alternative for struggling homeowners who are unable to keep their homes even after qualifying for the existing Home Affordable Modification Program (HAMP).

The program includes simplifying the “Short Sale” process by allowing homeowners to seek the lender’s pre-approval of the short sale price and terms prior to listing the property. The homeowner will be able to use the financial and hardship information already collected during the loan modification process to qualify for this program. It requires lenders to fully release homeowners from future liability for the first mortgage debt, and to provide homeowners with up to $3,000 in relocation money. The program also offers financial incentives for lenders to encourage their cooperation.

While it seems these guidelines may be flexible, the general qualifying criteria for the HAFA program are:

1. The property is the borrower’s principal residence;
2. The mortgage loan is a first lien mortgage originated on or before January 1, 2009;
3. The mortgage is delinquent or default is reasonably foreseeable;
4. The current unpaid principal balance is equal to or less than
$729,7501; and
5. The borrower’s total monthly mortgage payment exceeds 31 percent of the
borrower’s gross income.


For more details, visit the Making Homes Affordable Website. The program ends on December 31, 2012.

So help is on the way for struggling homeowners and soon short sales may actually close in less than 45 days. Struggling homeowners are encouraged to contact their local Realtor® today to
discuss alternatives to foreclosure.

--Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
Direct (619)258-8585
DRE#01409760

Wednesday, May 5, 2010

California First Time Home Buyer Tax Credit--First Come First Serve


The Federal tax credit is gone. However, California enacted a new first time (FTB) and "Brand New" Home Buyer Tax credit 5 percent of the purchase price or a maximum of $10,000 that began on May 1, 2010 that requires you to act now because the credit will only be available on a first come first serve basis. $100 million was allocated to FTB's and $100 million was allocated for buyers of New, never lived in, home buyers.

While these credit are available for taxpayers who purchase a qualified principal residence until the end of the year, the California Association Realtors® expects "the money will be used up very quickly".

Besides the limited funds, another issue that has come to light is the refunds are divided over 3 years and applied towards what the home buyers owe in state taxes. So many taxpayers may not be able to utilize the entire credit, if they don't owe as much as the credit. Taxpayers should consult their tax accountants to see how to take full advantage of the tax credit.

Please see the State of California Franchise Tax Board website for more detailed information.

So if are wondering if now is the time to buy a home and take advantage of the tax credit. Now is definitely the time, before the money runs out.

--Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
Direct (619)258-8585

Sunday, May 2, 2010

Three FHA Loan Changes


In 1934, the FHA was created with the intent of helping those with low and moderate incomes to buy homes. In the past, FHA increased its market share during housing market slumps and played an important role in stabilizing the market. While a 10% share is optimal, FHA insured nearly 30% of all home loans in the past year. Even government officials believe this may be way too large.

So the FHA has made some more stringent changes to reduce their risk:

1. This month, the 3.5 percent down-payment requirements on loans insured by the FHA have increased to 10 percent for borrowers with credit scores below 580. Borrowers with credit scores of 580 or above still will be able to put down the traditional 3.5percent down.
2. The upfront mortgage insurance premium increased from 1.75 percent to 2.25 percent
3. The closing cost concessions that sellers could give buyers has been reduced from 6 percent of the loan amount to 3 percent.

However, these changes are encouraging some home buyers to return to Private-Mortgage-Insurance (PMI), who have also made changes to their policies. In the recent past, PMI was not available in an area with a declining market, such as California. Although, according to Lew Sichelman of The Los Angeles Times,"one private mortgage insurance company now will insure five-percent down-payment loans to borrowers nationwide."

Buyers need to remember that premiums for both private mortgage insurance and government-insured FHA loans may be tax deductible. Also, after gaining 20% equity in the home, with an appraisal, the mortgage insurance can typically be canceled.

--Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
"2010 Five Star Real Estate Agent"
Coldwell Banker Residential Brokerage
Direct (619)258-8585
DRE#01409760