Each month Prudential California Realty publishes Market Trend Reports for San Diego. We find that both people considering the purchase of a home and likewise those considering listing their home for sale, want information that they can use to help make the buying or selling decisions. This is a good source of information regarding trends in the Real Estate market. This report is also provided for the upscale market.
Are we finaly in a 'Real Estate Martket' where it makes sense to just 'DIVE IN'?
For what has now become at least a 5 year period of waiting for some people, it may be that perfect time to just go ahead and buy that home you have been waiting for. In this video, Stan Humphries, Zillow Chief Enonomist, predicts that prices will continue to decline very modestly through out 2012 and then stabilize in 2013. Looking forward, the prediction is that in 2014 and 2015 the prices will remain flat or possibly tick up slightly. And then in 2016 we will begin to see a normal but somewhat modest rate of increase in the 3% to 5% range.
Depending upon what you believe to be the situation with home loan interest rates, this may be the year to buy......
<div></div>
Should you Rent or Buy?
A few minutes ago I sent this Rent vs. Buy presentation to a client who is relocating to North San Diego County. I think that this is a presentation that bears consideration. I certainly welcome different points of view, so please tear this thing apart. Remember, I already said that “Cash Flow” in not a factor in this presentation.
A few weeks ago I was holding an open house at which I met a couple of Physicians. They were coming to this area and were going to be here for only three years. When I asked why they were not going to just rent their reply really made me think. The said that they could rent for about $3000/month or buy a similar home for about $500,000.00. In the three years that they were going to be in the area they figured that they would pay out $108,000.00 in rent. The way they looked at is was that if they bought for $500,000.00 they would put $100,000.00 down and have a monthly payment of around $2600.00. At the end of the three year period they would sell and probably get most of their initial purchase price back. (We have to remember that CASH flow is not a factor in their argument).
The formula that they used for the return of their initial purchase price went something like this. If they were able to sell for the same price that they paid, then after paying all of the costs to sell they would wind up with about $462,500.00. They used 7.5% as an estimate of what their costs to sell would be. Then if they applied the savings in income tax, things like the interest deduction, property tax deduction, depreciation of the portion of the home used for business, etc. Their cost of owner ship would be even less. When I presented the argument that interest is a tax deduction vs. tax credit and that their tax savings would be their effective tax rate as it applies to their interest expense their response was that if they pay 4.0% interest their total expense would be around $42,000.00 over the three years, maybe less. Their effective tax rate is 35% so they save $14,700.00 on Federal Income Tax plus what they save on their state taxes. The same theory would apply to the Property Tax expense.
Anyhow to make a long story short, these folks figured that if they sell the home for exactly what they paid ($500,000.00) they would loose $37,500.00 in sales costs, $27,300.00 in interest after the federal tax formula is applies, and $10,725 in property tax (again after application of the federal tax formula). There for they feel that after adding up all of the after tax expenses they would spend about $75,525 as a true cost of ownership versus $108,000 actual cost of renting. They also figured that if the prices were to drop an additional 5% during the time that they own the home they would loose an additional $25,000.00 and still they would break even.
The 2011 HomeDex Annual Report was just released this week. We always look forward to this annual edition as it reflects the entire year as opposed to the month over month reports. Because the entire year's sales volume is used, there is a more accurate portrayal of what took place in the Real Estate market during the past year.
It is pretty easy to be a 'Monday morning quarterback' when we read this sort of report, the real challenge is to firgure out what will happen to the market in the months or even the years to come. The fun thing about all of this is that even when we are in the middle of the heat of the market we usually do not know what really happened until about three months have passed.
Here are a couple of high lights from this years annual report:
The median price for a North San Diego County single-family detached homes sold in 2011 was $430,000. The represents a 6.52% decline from the 2010 price, which was $460,000. The 2010 price of $460,000 was up $50,000 from the 2009 price of $410,000. And, the 2009 price was down 9.69% from the 2008 price of $454,000.
Even more interesting is that Fallbrook (92028 zip code), Oceanside (92054 zip code), Rancho Santa Fe (92067 zip code), Solana Beach (92075 zip code), and Carmel Valley (92130 zip code); all showed an increase in the median price over 2010.
The median priced single-family attached home in North San Diego County dropped 4.13% to $232,000 from $242,000 in 2010.
HomeDex is provided by the North San Diego County Association of Realtors
Click on this link to view the entire report. 2011 HomeDex Annual Report
December 27, 2011 | 8:11 am
Home prices in the nation’s largest cities fell in October for the second straight month, continuing to dash hopes that the sluggish housing market is headed for an upturn.
The Standard & Poor's/Case-Shiller index, a measure closely followed by economists, showed price drops in 19 of 20 cities since September. Overall, prices slipped 1.2% month-over-month and fell 3.4% compared with October 2010.
The decline is typical of the season, when home buyers back off after the busy summer period. But coming off of five straight months of increases, the retreating prices in the fall suggest that weakness in the market may stretch into 2012.
Atlanta was on particularly shaky ground, according to the index. Prices there declined 5% in October after falling 5.9% in September and were down 11.7% over the last 12 months. Atlanta, along with Cleveland, Detroit and Las Vegas, had average prices that were lower than they were in January 2000.
In Los Angeles prices were down 1.5% in October after sliding 0.8% the month before. Year over year, L.A. prices are down 4.9%.
The Case-Shiller data cast a pall on recent, more promising market feedback. Last week, the Commerce Department said construction of new homes and apartments was up 9.3% last month from October and up 20.1% compared wikth November 2010.
Sales in California were up 4% last month compared with the same period a year earlier, though they fell 4.2% from October, according to real estate research firm DataQuick. The median home price in the state was $244,000, down 4.3% from a year earlier but up 1.7% from October, the report found.
original link: http://latimesblogs.latimes.com/money_co/2011/12/home-prices-fall-in-october-says-case-shiller-report.html
Home prices are falling again, but some analysts see a silver lining because the prices of homes that aren’t selling out of foreclosure have been holding steady.
CoreLogic reported that home prices in October declined by 1.3% from September and by 3.9% from one year ago. A separate index released Monday by LPS Applied Analytics showed that home prices in September had dropped by 1.2% from August.
“Many housing statistics are basically moving sideways,” said Mark Fleming, chief economist at CoreLogic.
Still, the CoreLogic index shows an important emerging trend where home prices are stabilizing after excluding distressed sales.
What’s the difference between distressed sales and non-distressed sales?
Unlike traditional owners, banks are often faster to cut prices in order to unload properties quickly—or what are called “distressed” sales. The upshot is that, the more homes being sold by lenders in any given month the faster prices tend to fall.
This was clear throughout the initial years of the housing bust. Prices declined most sharply in 2008 as banks dumped foreclosed properties at fire-sale prices. Owner-occupants are less likely to list their homes for sale in the winter months, too, which means that each winter there are also drops in prices because distressed sales account for a growing share of sales.
Are prices of distressed homes falling at the same rate as non-distressed homes?
That’s been the case up until recently. While total home prices were down by 3.9% from one year ago, prices were down by just 0.5% from one year ago when excluding distressed sales. In September, total prices were down by 3.8% from one year ago, but non-distressed prices were down by 2.1%.
This shows that while price declines are resuming, they are not yet falling from one-year ago for non-distressed homes. In fact, during the first nine months of 2011, prices of non-distressed homes remained relatively stable, with year-over-year declines between 2% and 3%.
Analysts at Barclays Capital called this “the most important trend in the housing industry right now,” in a report published on Monday.
Why would any stabilization of non-distressed prices matter?
If it’s true that prices of non-distressed homes are stabilizing, even as distressed homes continue to fall in price, it would mean that a distressed home is “increasingly being seen as a poor substitute for a non-distressed home,” writes Stephen Kim, the Barclays housing analyst. He says it’s possible that the “bifurcation between distressed and non-distressed homes will only widen with the passage of time.”
Won’t the overhang of foreclosures put pressure on non-distressed prices anyway?
That’s all too possible. There are more than two million loans in some stage of foreclosure, and it may be too early to argue that those won’t in some way impact the sales prices of non-distressed homes. For one, homes that sell out of foreclosure at significantly lower prices could be used by appraisers as “comparable” sales that may make banks less willing to lend at an agreed sales price for a non-distressed home.
In certain markets where many homes are selling out of foreclosure, it’s hard to simply set aside distressed homes. “You can’t deny the fact that if half of homes that sold in San Diego in a given year were distressed, that is the trend,” said Kyle Lundstedt, managing director at LPS.
What could happen if this trend holds up, with distressed prices falling and non-distressed prices staying flat?
It could stabilize something else: home-buyer confidence. “There is nothing that strikes fear in a homeowner’s heart than to hear that his home value has declined,” writes Mr. Kim of Barclays. “But if it was home price trends that got us into this funk, it stands to reason that a recovery in sentiment will be similarly ushered in once price declines have abated—which is precisely what the CoreLogic price data shows us.”
Original Link: http://blogs.wsj.com/developments/2011/12/06/why-home-prices-are-and-arent-stabilizing/
The investor was a victim of two Oceanside men who were both sentenced to prison today.
Before you read this article. One of the top spots is California. However, do not expect to buy a home as the picture shows next to the ocean for under $300,000. Very misleading. The good news is you can buy a home that size for $300,000 +/-. Southern California is experiencing some tremendous buys for $300,000 or less for first time home owners and investors. Homes in the $1M+ range in certain areas are experiencing out of state and international buyers taking advantage of the buys. Don't wait, give us a call to help with your real estate needs.
By Inman News
Inman News™
Six of the 10 U.S. areas with the smallest homes are in the Midwest, based on the median square footage of homes for sale on Realtor.com in September.
Realtor.com reported that the median size of homes for sale in Washington, D.C., was the smallest in the country that month, at 1,000 square feet. The nation's capital was also the only area to post a median two bedrooms for the typical home -- every state in the top 10 posted a median three bedrooms.
The six Midwestern states among the top 10 with the smallest homes are: Michigan, Iowa, Ohio, Illinois, Missouri and Wisconsin. Two of the states are in the West: Hawaii and California. One Northeast state is on the top 10 list: Maine. Washington, D.C., is the only area in the South to make the list.
The two areas at the top of the list -- Washington, D.C., and Hawaii -- also had the highest median list prices of the bunch: at $432,500 and $575,000, respectively.
The two areas varied widely in lot sizes. While Washington, D.C., had the smallest median lot size among the top 10, at 2,375 square feet, Hawaii's median lot size in September was 21,778 square feet. Maine had the biggest lot size among the top 10, at 44,431 square feet, followed by Wisconsin at 30,000 square feet.
Michigan had the lowest median list price among the 10, at $118,900. The median price data reflects all for-sale property listings on Realtor.com, including land, single-family homes, condos and co-ops. (View the full list of median house sizes for all 50 states and Washington, D.C.)
| Median house size (sq. ft.) | 1,625 |
| Median lot size (sq. ft.) | 7,200 |
| Median price | $299,900 |
| Median beds/baths | 3/2 |
Beach house along California's coast. Sahani Photography/Shutterstock
Original URL: http://lowes.inman.com/newsletter/2011/11/10/news/160671
PRESS RELEASE
Nov. 9, 2011, 6:04 a.m. EST
NEW YORK, Nov. 9, 2011 /PRNewswire via COMTEX/ -- Excluding their current state, if Americans had to say where they would most like to live, the top three mentions are states typically associated with sunshine and the beach: Hawaii (1), California (2) and Florida (3). These states have consistently been in the top 3 the last 8 times this question has been asked. However, this year marks the first time since 2001 that California has not been the top mention.
These are some of the results of The Harris Poll of 2,463 adults surveyed online between October 10 and 17, 2011 by Harris Interactive.
Rounding out the top 5 this year is Texas (4) and Colorado (5). Texas saw a nice jump this year, up to 4 from 8 last year, while Colorado dropped from 4 last year, to 5 this year.
The remaining 10 states on the list cover every geographic region of the country:
In the Pacific Northwest Oregon (7) and Washington (9) are Top 10 mentions;
The Southwest is represented with Arizona (8);
Nevada (14) makes the Top 15 for the West;
Montana represents the Midwest (13);
New York does so for the Northeast (11); and,
Virginia, Tennessee and South Carolina all come through for the South (10, 12 and 15, respectively).
Favorite Cities
In terms of cities Americans would most like to live in, the Top 15 mentions cover a wide range of geographical areas and climates this year as well. Unchanged since 1999, New York is the most frequently mentioned city that Americans would like to live in, followed by San Diego, which remains in the 2nd position, consistent with last year. The third top mention this year is Seattle, which seems to be steadily climbing, up from 4 last year and 5 the previous year. Similarly to the jump Texas made as a desirable state to live in this year (to 4 from 8 last year), its city of Dallas also made an impressive showing this year, coming in as the 4th most popular city. This is particularly notable because Dallas was not in the Top 15 last year at all, and only at number 10 the prior year. The countless entertainment and culinary options may be what appeals to some about Las Vegas, which is the 5th top city mentioned this year, followed on the list by San Francisco (=6) and Boston (=6), Chicago (8), Honolulu (9) and Denver (10). The Top 15 this year are rounded out with Nashville (11), Orlando (12), Los Angeles and Portland (tied for 13) and then two southern cities--on opposite sides of the country--are tied for 15: Atlanta and Phoenix .
Least Favorite Cities
While fantasizing about where you would most like to live can be fun, it can be equally fun to think about where you might least like to live. Thinking about these places can make a harsh Northeast winter or a sweltering Southern summer seem not as bad, depending on your geographic woes. Although New York has been the top favorite city for some time, it's also an extremely unappealing place for many people and it comes in, similarly to last year, as the least favorite city to live in. Despite reports of a rebirth, comeback and major gentrification efforts, Detroit remains as the 2nd least popular city, followed by Los Angeles (3), Washington D.C. (4) and Chicago (5). While some people are feeling excited about Texas, many are not as Dallas and Houston come in at 6 and 7 on the least favorite city list respectively. Further down the least favorite city list is New Orleans (8) and Miami (9), followed by four polarizing cities, which appear on both the favorite and least favorite lists: San Francisco (=10 least favorite), Last Vegas (=10), Atlanta (12) and Phoenix (13). Tied for 14 on the least favorite list are Cleveland, OH and Newark, NJ.
So What?
While sun-belt states have traditionally dominated the Favorite State list, this year with the inclusion of Washington, Oregon, Montana and New York in the Top 15, the list seems more diverse. And, looking at the Least Favorite City list, where 8 of the top 15 also appear on the most Favorite City list, it's clear what appeals to some definitely does not appeal to all.
ActivCare® at Bressi Ranch Serves Individuals with Alzheimer's and Related Dementia
http://www.sacbee.com/2011/11/01/4021965/residential-community-exclusively.html
Let The Taylors know if we may be of help selling your loved ones homes. This new facility will most likely fill up fast. Located in a wonderful community of Bressi Ranch, Carlsbad, CA 92009.
