A new $10,000 housing tax credit for CA homebuyers!

Last March in California, a $10,000 tax credit was enacted for homebuyers who purchased new construction homes in an effort to stimulate the housing market and help developers that were stuck with a glut of inventory on their hands.  The state allocated $100,000,000 for the program.  It was a huge success.  It was too popular in fact, because 4 months later, the fund ran out.

A new bill has been introduced in the California State Senate that would reintroduce this tax credit incentive as early as May 1^st, coinciding with the end of the Federal first time homebuyers tax credit that ends April 30^th.

With resale homes getting absorbed at rapid rates, many buyers are turning to new home sales which can offer great incentives from the developers like credits for upgrades, waiving Home Owner Fees for a given amount of time, major price reductions, and more.  If the state tax credit gets a new lifeline, so will developers of new homes, and homebuyers alike.

Stay tuned for more information on the California State Senate’s $10,000 tax credit for new home sales.

Visit us online at HomeReach.com to view all San Diego homes for sale.

David Tal

HomeReach.com

Broker/REALTOR®/President

mobile: (619) 955-7706

efax: (619) 872-2471

www.HomeReach.com

Why You Should Always Use a Real Estate Agent

Like any business, there are people who specialize in real estate.  Many buyers and sellers out there think they can do this without the guidance of a professional real estate agent by their side.  Now I’m not saying that all agents are created equal, but having an expert can save you time, money, and help you avoid the pitfalls of the real estate game.

Buyers have so many tools at their fingertips these days.  They can search all the homes for sale, find recent sales, and do plenty of research on their own. Not everyone is so savvy, but even those who are should understand the basic rule of thumb.  Going straight to the listing agent will not benefit you.  The main reason is the listing agent is representing the seller, and is negotiating on the seller’s behalf.  His job is to get as much money from you.  Let me repeat that.  The listing agent is trying to get you to increase your offer as much as possible.  Where is the benefit in this?  Exactly.  An agent representing you as a buyer will do exactly that, and will work and negotiate on your behalf to try and get the seller to lower his price as much as possible and get you the best deal.  But negotiating aside, everyone needs a second eye, and a guide to help him or her with their decisions, especially big ones like buying real estate.  Experienced and knowledgeable agents are looking at deals and seeing transactions daily, giving them much more information than a buyer who just decides now that he’s interested. They can share neighborhood trends and information and help you get a clear picture of what’s going on in the market.  They also know of deals before they hit the market, giving you a competitive edge.

Home sellers feel they can save on commissions by trying to list their home by owner and forego the exposure of the Multiple Listing Service, known as the MLS.  They don’t feel they need agents to bring them a buyer.  But time and time again they are proven wrong.  Here’s the latest statistic from the National Association of REALTORS®.

88% of for sale by owners end up using a real estate agent to sell their home!

That’s right, 88%!!!!  What these home sellers lost was time and time is everything when you are trying to get your home sold for as much money as you can get.  Simply listing your home on Craigslist just won’t do it.  Even if you do get lucky and get an offer that way, it’s probably not the best offer you can get.  Exposing your listing to every buyer and agent out there using the MLS system will drive more buyers and offers your way.  The more offers, the better your chances of getting top dollar for your property.

When it comes time to buy or sell your next home, always speak to an experienced agent that specialized in your submarkets of interest.

Visit us online at HomeReach.com to view all San Diego homes for sale.

David Tal
HomeReach.com
Broker/REALTOR/President
mobile: (619) 955-7706
efax: (619) 872-2471
www.HomeReach.com

Lock in a 30 Year Mortgage under 5% While You Can!

Home mortgage rates are at an all time low, slipping to incredibly low rates in recent months.  Today, a buyer can get a loan under 5% with most lenders.  These are historically low mortgage rates that are fueling the housing recovery in San Diego.

Last spring, in an effort to keep mortgage rates stabilized, the Federal Reserve began buying back over $300 billion in Treasury notes.  Due to these low rates, people are buying homes and refinancing in large numbers.

It’s a great time to buy a home when home prices are low and especially when they are coupled with low mortgage rates that you can lock in for 30 years!  It’s no wonder mortgage applications soared 16% in recent weeks.

In dollars and sense, a 1% jump in the rate of a mortgage would mean paying about 10% more per month for the same home.  The government has also stepped up its shot in the arm for the housing market with the FHA, or government backed loan, aimed at helping people get into homes that qualify but with less of a down payment.  FHA loans allow buyers to purchase a home for as little as 3.5% down and with extremely competitive rates.  Banks are willing to give these loans because Uncle Sam is backing them up.

If you’re a buyer on the fence, you may want to consider that these rates won’t stay low forever, nor will home values.  Get out there and get some information.  You’ll be surprised.

Visit us online at HomeReach.com to view all San Diego homes for sale.

David Tal
HomeReach.com
Broker/REALTOR/President
mobile: (619) 955-7706
efax: (619) 872-2471
www.HomeReach.com

What on Earth is a Short Sale and why should I care?

If you’re house hunting these days, chances are you’ve run into dozens of short sale listings.  As a Broker, I’ve noticed quickly how little consumers really understand about the term.  The common misunderstanding is that a short sale is just like a foreclosure, but it’s not nearly the same.

Short Sales help people who are underwater on their homes with minimal financial loss.  For example, if homeowner Joe has a loan for $500,000 on his home, but his home is currently only worth $350,000, Joe is considered to be “underwater” on his property by $150,000.  Joe is most likely selling his home because he can’t afford the monthly payments, but how can he sell it when he owes more than it’s worth? Without a short sale, his only option is foreclosure or refinancing, if allowed to.

A common option for Joe is to just stop making the payments on his home, in which case the lender can step in and foreclose on his property.  Joe is kicked out and his credit will be affected for up to 7 years, making it harder for him to get credit cards, auto loans, mortgages, personal loans and even rentals.  Landlords check your credit too!

Joe has another option, in which he puts his home on the market and receives market offers for his property.  He then takes that fair market value offer to his lender, and he, with the help of his real estate agent will negotiate a “short sale” with the lender.  In this scenario, the homeowner and the agent will make the case to the bank that the owner can no longer continue to make the monthly payments.  In many cases, it may be far easier and cost the lender much less to “forgive” the $150,000 the home is “under” and let the sale take place.

For a lender, the short sale is becoming much more appealing these days.  The lender is strictly concerned with his bottom line.  If the homeowner is allowed to settle his debt or “short sale” with the lender, then he is very likely to leave the property in a good condition to ensure the sale takes place.  If, however, the lender decides to foreclose on the home instead, the lender will have to factor in extremely costly and time-consuming foreclosure proceedings, lawyers and other expenses, only to sell the property for fair market value anyways.  The other risk they take is that the homeowner, who may feel betrayed or taken advantage of, will destroy the property and cause major damage to the home upon vacating.  We see this all the time from angry homeowners who were kicked out.  This will in turn make it even harder for the lender to sell after foreclosing and the costs of repair are unpredictable.

The good news for a homeowner who completes a short sale is his credit will NOT be marked by a FORECLOSURE on his credit history, but rather a “debt settlement” flag.  Further, in most cases, this only affects their home buying power for 2 years.

If you find yourself in this position, consider short selling your home and renting for 2 years.  Prices will still be low, even if they rise a bit, prices will be very low compared to what they were in 2006’s peak, and you’ll find yourself owning another home sooner than you think.

Three Cash Flowing Neighborhoods in San Diego

by David Tal, HomeReach.com

It would have seemed unimaginable for the past few years.  More neighborhoods in San Diego are cash flowing, making them extremely appealing for homebuyers and investors alike.  On average, San Diegan’s are now only paying 16% more to own than they would to rent.  That is a small premium to pay to own your own home and gain from it’s appreciation, tax incentives, and vast benefits.  Compare that to 2006, when it cost 66% more to own than to rent and it’s easy to see why the attractiveness of owning a home back in 2006 came to a quick and strong halt.  The last time owning a home was only 16% more expensive on average in San Diego was in 1999.

Oceanside, CA – Oceanside is the 2^nd highest selling community in San Diego County, selling thousands of homes each and every month.  Values dropped 40-50% from their peaks but dropped only 7% for 2009 with an upward trend in the last 4 months of the year.  Strong rental demands from government military and naval bases, as well as thousands of young families moving slightly farther away from city centers find great values here for their money.  Investors have taken note too!!!  See the Best Deals in Oceanside!

Chula Vista, CA – Believe it or not, Chula Vista is selling more homes each month than any other neighborhood in the County.  There are really two completely different areas of Chula Vista, divided by the 805 Freeway, and spread over 5 zip codes.  The greater part of 3 of those zip codes were only built in the last decade and they are stunning.  For those who have visited, they know what I mean.  It’s clean, brand new, beautifully landscaped, wide streets, homes with some actual land, it’s safe, exciting and the values are on a league of their own.  New schools, parks, shopping centers, business districts and restaurant/nightlife line the avenues of the new Chula Vista, nestled just east of the 805 freeway and just south of Bonita.  Chula Vista was hit the hardest by foreclosures since most of it was built during the peaking years of the housing bubble.  Now, homes values have dropped 40-60% and rents have remained strong because of the schools and low housing costs we have today.  Come take a look for yourself.  Chula Vista is cash flowing!  View Foreclosure Deals in Chula Vista!

Imperial Beach, CA – Imperial Beach hasn’t been as popular as other coastal areas like Pacific Beach, La Jolla and Del Mar.  But those areas have weathered the storm better and have always been expensive.  Imperial Beach is now getting a 2^nd look, not just from homebuyers, but the city too, which has zoned coastal areas of Imperial Beach as a Redevelopment District.  The Imperial Beach in 10 years from now will be a very different place than it is now, but already we’re seeing major tenants moving into the neighborhood, and redevelopment along the coastline.   Dozens of home owners are taking time to upgrade and update their homes, realizing the future potential of their home.  Imperial Beach is San Diego’s most affordable coastal city for all that it has to offer, with direct access to Coronado Island and the 5 Freeway. Within a two block radius of the naval base, there are dozens of 1 and 2 bedroom foreclosures, completely upgraded, priced between $80,000 and $150,000 that can rent for $800 to $1,500 per month!  Cash flow baby!  View all Imperial Beach Bank Owned Homes!

Tips for Buying Foreclosures

By David Tal, HomeReach.com

February 11, 2010 – San Diego Foreclosures are at the top of every homebuyer’s wish list.  With distressed banks trying to unload their assets at record rates, they have drastically cut home prices and put them on the market to sell, and to sell fast!  The longer banks hold on to these assets, the more it costs them in upkeep, attorney fees, property taxes, insurance, utilities, etc.

Here are some helpful tips to buying foreclosures in San Diego’s recovering housing market.

1. Be patient!

With so many buyer’s competing for the best foreclosure bank owned bargains, many of these deals are getting bid up so high that they are no longer the bargain they appeared to be.  It’s best to stick to a price you feel comfortable with and don’t let your emotions carry you into uncomfortable territory.  There are more foreclosures on the way, and the right one for you may hit the market tomorrow or next week!

2. Get pre-approved with the same bank that owns the home

If you’re making an offer on a home owned by Wells Fargo, they may favor your offer over others if you pre-approve with them directly as well.  This is a way for the seller to minimize the risk that you’ll come across third party lender issues, and they may be able to make some gains working on your loan as well.  You can never be forced to use a certain lender so you can always change your mind and choose another lender.

3. Don’t be afraid of a fixer upper

Most banks sell their homes in “as-is” condition.  They rarely want to get into the business of making repairs and other accommodations, as it’s not in their best interest to do so.  That being said, they price the homes accordingly.  Since fixer upper homes usually take more imagination and capital, there are fewer buyers competing for them, so you also have a better chance of getting your offer accepted.  In most cases, the homes are priced far lower than it would take to bring them up to speed again.  Unfortunately, many homeowners who are foreclosed on leave their homes in less than good conditions, and sometimes they trash the home.  A buyer that can look beyond this can get a great deal by investing some time and effort in their new home.

4. Wait for the home to sit for a few days before making an offer

As I’m sure you’ve already noticed if you’re making offers in today’s market, foreclosures tend to have multiple offers within days of being listed.  This is because the buying frenzy has created an environment of desperation.  Some homebuyers have been trying for months to get their offers accepted, so now their strategy has turned to making offers on many more properties, many times without even looking at the homes in person yet.  Tell your agent to talk to the listing agent or seller and try to get a good read of what the other offers may be like.  By waiting a few days for the bulk of the offers to come in, you may get a competitive advantage by waiting for other buyers to show their cards first.

5. Preview homes with a contractor

Having a good contractor by your side when you’re touring properties can be very helpful.  A contractor can tell you how big or small a problem is.  Many times issues may appear more complex than they really are. Conversely, many times what may appear to be a minor issue may actually involve a lot more than expected.  A good agent can help you leverage this information when you’re writing offers.

6. Keep your offers simple and clean

With so many offers on the table, banks much rather go with a simpler contract that doesn’t ask for dozens of little items or ones with lengthy contingency periods, complex addendums, and inconsistent requests.  For the banks it’s all about the bottom line and a quick closing.  Having an agent that’s well versed and experienced in bank owned foreclosures, also known as REOs, is crucial when you’re putting your offer together. Good agents know what a clean offer looks like, while at the same time protecting your interests.

View Foreclosures in San Diego by Area.

Downtown San Diego’s East Village on the Rise

February 1, 2010 – Downtown San Diego is made up of 6 districts, or areas, each one with their own unique flavors, activities and ambiance.  They include the thriving East Village, Marina District, Little Italy, and Gaslamp districts.  In recent years, the East Village has grown tremendously in popularity.  In 2004, Petco Park, the new Padres stadium, was erected.  This drew a lot of traffic to the area, and small businesses have sprung up all over the place.  The culture and daily life in the East Village is a very “happy go lucky” one.  Everyone seems to be in a great mood all the time.  Since it’s not in the heavily trafficked business district, it’s quieter and more relaxed during the day and evening.  Just a few blocks away are rows of nightlife and bars that line the Gaslamp District, with all they have to offer.  There are now 2 major grocery chains within walking distance, including an Albertsons and a Ralphs.  East Village is a walkable community, with restaurants, services, coffee shops and small businesses at every block.  The East Village Tavern and Bowl has become a highly successful bowling venue combined with a hip lounge and bar.  A few wine bars have also sprung up in the area.  You can walk to movie theatres, the Horton Plaza shopping center, the convention center, Seaport Village and have access to many trolley lines which network to the rest of the County.

Recently there has been talk about a potential new Charger’s Stadium to be built right in the East Village, near the Padre’s Petco Park.  This would most certainly help local businesses even more and bring even greater incentives and attractions to residents and visitors.  There is a growing Business Improvement District (BID) for the area.  The idea is that local business owners all contribute to a fund that the city then invests in local improvements. The city is required to spend this money on attracting visitors and business to the area.

East Village boasts gorgeous medium and high-rise condominium towers.  Icon and Legend are two luxury residential towers with views right into Petco Park.  M2i and Fahrenheit are mid-rise complexes with many different floor plans, including trendy lofts.  There are many other chic and trendy towers and complexes to choose from.

Condo prices have remained strong in the East Village over the last year, though they are substantially lower than they were a few years ago.  But with prices at all time lows, many young couples and business professionals are flocking to San Diego’s East Village in search of something unique, a completely walkable neighborhood tucked next to San Diego’s blossoming and thriving downtown, and all that it has to offer.

I’ve worked, lived, and own property in Downtown San Diego.  As a Broker in the area, I feel very hopefully for the East Village and I think people who invest in this area now while the market is so depreciated will reap the rewards once the economy is back in full gear.

A few years ago it would have seemed unimaginable to find a great condo with a view, brand new with all the upgrades, right in the heart of Downtown for under $300,000, but now you can find 2 bedroom units in that range and even 1 bedroom units for under $200,000.  That’s amazing!  If you haven’t driven around Downtown lately, you owe it to yourself to do so.  It’s not the same downtown it was a few years ago.  It’s an exciting new hot spot that is sure to attract even more people with the years to come.

View All Downtown San Diego Condos For Sale.

by David Tal, HomeReach.com

2010: Where the San Diego Housing Market is Headed

As Broker of HomeReach.com, it is my job to keep my clients and agents well educated on the local real estate situation.  Having a clear and realistic picture of the market gives our clients a competitive advantage when it comes to making their home buying and selling decisions.

It is with great pleasure that HomeReach.com has now partnered with San Diego 6, The CW, to provide our weekly insight to all of their readers and viewers.  Anyone can contact us right from the website and ask us questions about the market. The better informed and educated everyone is on the housing market, the better the industry will do as a whole.

To get a clear understanding of where we’re going, it is important to identify where we’ve been.  2009 was a tough year for many.  Thousands of San Diegans lost their homes, we can’t ignore that.  Home values continued to drop in many areas throughout San Diego County and it was still difficult to get approved for a loan.  But with home values depreciated, many buyers and investors jumped back into the real estate market.  The US government also stepped in with the FHA loan, a government backed mortgage, making it much easier to get a loan, and with only 3.5% down.  Also, many banks started refinancing their clients to stem foreclosures.  In addition to all of those incentives, the government stepped in with an $8,000 Tax Credit for first time homebuyers, a smashing success that helped hundreds of thousands of people buy homes.

I’m sure many of you buyers out there agree with me when I say it’s harder than ever now to get your offers accepted.  It seems every desirable property has multiple offers on the table.

Nobody can predict the future, but all signs are indicating a recovery might be right around the corner.  Though I don’t expect home prices to increase much, if at all, in 2010, I do believe the inventory will continue to decrease and home values will stabilize.  Buyers may not be able to be as picky as they were before.  Government interest rates to banks and mortgages can’t stay low forever.  The truth is, a buyer who buys a $400,000 home today will likely pay less per month on his mortgage payment than a buyer who buys the same $400,000 home 2 years from now.  On top of that, many areas of San Diego are cash flowing already, bringing many new investors back into the market.

To search all homes for sale in San Diego, visit us at HomeReach.com.

What do you think 2010 will hold for the San Diego real estate market?

David Tal

HomeReach.com

CEO, Broker

(619) 869-7800

Fannie Mae’s Deed-For-Lease Program

Welcome back to San Diego’s only weekly real estate update, where we bring you the latest housing trends and real estate news.

This week brings great news to the housing market. Fannie Mae has just rolled out an unprecedented Deed-For-Lease program to help troubled borrowers stay in their homes. The program aims at borrowers who don’t qualify for a loan modification, thus, giving them another option to getting kicked out of their home.

Here’s how the Deed-For-Lease program works. Troubled borrowers who can’t qualify for a loan modification will now be able to transfer the deed back to the lender and then sign a lease with them to stay in their home. Borrowers under the program must live in the home as their primary residence.

Fannie Mae is under government control, with its purpose being to guarantee mortgages so lenders can more freely lend money to homebuyers, assuming less risk. The new program is mainly aimed at troubled borrowers with Fannie Mae owned or guaranteed mortgages. The idea is to drastically reduce the spread of abandoned properties that have been foreclosed. Abandoned properties are rarely maintained and affect home values throughout the neighborhood. It also keeps people in their homes, and assures a steady income from the property. Under the program, even tenants of troubled homeowners may qualify for leases.

Not all homeowners may qualify. They must show they can pay market rent, however, that payment can’t be more than 31% of the troubled borrower’s pre-tax income.

Stabilizing the housing market, neighborhoods, and keeping a roof over people’s heads is at the heart of this groundbreaking new program. Hopefully, people will find out about it before it’s too late for them. There are so many government programs now helping people avoid foreclosure and stay in their homes.

Last week we spoke about the possible extension and expansion of the $8,000 Tax Credit program for first time homebuyers. President Obama has now officially signed the bill to extend the program through the end of June and has expanded it to include current homeowners who want to trade up to larger homes.

Until next time, remember, at HomeReach.com, Sharing Is Caring.

David Tal

HomeReach.com

Broker/REALTOR®/President

From Renters to First-Time Homebuyers

Renters have jumped into the housing market, and in a big way. Home prices have come down over 30% from their peaks, and combined with historically low mortgage rates, have resulted in the highest housing affordability index we’ve seen in 30 years!

In other words, the math is starting to work again. For example, San Diego has hundreds of 2 bedroom condos under $200,000, even in areas like Hillcrest, Mission Hills, North Park, Mission Valley, and Imperial Beach. These are condos with granite counters, stainless steel appliances and upgraded bathrooms.

A typical mortgage payment (including taxes) for this kind of property would range between $1,000-1,300 per month, depending on the down payment. This makes it very affordable for someone to buy and even rent a room out. As a home owner, you can also write off your interest and property tax payments from your income tax, which you can’t do as a renter. Lending is getting easier and government backed mortgages, like FHA loans, allow buyers to get into a home for a little as 3.5% down payment, that’s only $7,000 on a $200,000 home.

cording to the latest industry report, 47% of all homes purchased this year were by homebuyers that hadn’t owned a home for at least the last 3 years. That number is up over 20% from a year ago.

The First-Time Homebuyer Tax Credit gives buyers up to an $8,000 tax refund. Even if the homebuyer owes no taxes, he can still receive an $8,000 refund check from Uncle Sam. In other words, it’s almost as good as money. On a $200,000 home purchase, that $8,000 tax credit translates to 4% of the purchase price!

It’s no wonder renters are leading the charge in our housing market’s recovery. They want to stop paying someone else’s mortgage as soon as they can pay themselves, and build equity.

Until next time, remember, at HomeReach.com, Sharing Is Caring.

David Tal

HomeReach.com

Broker/REALTOR/President