Those of you who remember the last 5 years, should recall that back in the fall of 2006, mortgage lenders stopped granting subprime mortgages, so most of the lending that followed had very conservative lending standards. Fast forward through the next 5 years where many loans have adjusted and that brings us up to last year, 2011 which took us into a sea full of distressed property; the loans that had adjusted to higher rates and forced borrowers to default were getting behind us. Not that all the distressed property would disappear, but there is a lot less of it on the market than there was last year at this time.

If you've been looking at homes lately, you will notice a shortage of inventory from what you saw last year, at least in San Diego county. As usual, in the more desirable areas you will continue to see less inventory and higher prices because the demand is just higher. More buyers making offers on the homes that are located in the sought-after areas has always made buying more difficult for anyone not prepared to compete. If you are approaching this market thinking that it's still a buyer's market, you need to realize that there has been a lot of pent up demand and there are other buyers that have been saving their cash, too. Today's sellers will be forced to choose the buyer who is most prepared with their preapproval letter and willing to submit the best offer and has the most cash down, to finish the escrow with them. If you were a seller you would do the same.

One might feel that a "traditional" sale is the best kind of seller to be dealing with, because not dealing with a short sale lender or a long process would be ideal, but the difference between them and a distressed seller, is their motivation to sell. If a traditional seller doesn't get the price they want, then they have the option to rent out their home, and since rents have gone higher, they win either way.

As if all that is not enough, we have 4 other factors that are making 2012 the year to move in San Diego. Everyone keeps talking about how low the rates are, but we have truly seen historic lows this past quarter; it is unheard of, but the Federal Reserve is pledging to keep rates low through 2014! They know that if they can't get this housing market to recover, the rest of the country's economy doesn't move either. The funds rate is at zero, what more can the Fed do? Will they keep that rate at zero for 2 years? Your guess is as good as mine.

It's already been predicted that prices will be going up with the inventory shortages, as some of the more commutable areas have already stabilized and their values are higher than they were 2 years ago. Equally amazing are the employment numbers we are seeing in the county. Almost 25,000 jobs have been added to our local economy in the last year, by comparison there were only 1800 the previous year and the 3 years before that we had negative numbers. Remember when businesses were leaving in droves 2 years ago? Well, they are coming back now, because San Diego is "affordable" again. Unemployment is down to 8.8%. Last year we were at 10%; what does all this mean? Lower rates, higher jobs numbers, higher rents, lower inventory, prices stabilizing are all signs of an economy that is recovering. What more evidence do we need to commit ourselves to our future? 

As REALTORS we probably answer hundreds of questions when working with our clients, before their home buying or home selling experience closes escrow. Some people have a list of criteria for what they want; most people are pretty sure of where they need to be, but the aspects that are going to affect your resale value will be found in these characteristics:

1. Location, obviously, a certain area for most people is desirable; whether they choose to live in a newer area in a townhome vs. living in an established area in a detached home, is clearly a personal choice for everyone. Once you can decide where you want to live, you will find yourself, having a preference as to how the home is situated in relation to noises, such as air traffic, road noise, freeway noise, and even after that's done, there is more to consider. Some people also want to know if the home is facing in a certain direction or that the "feng shui" situation is going to fit into their life. 

2. Safety, crime statistics are another concern; how safe a resident feels in their home is paramount, especially if someone wants to be close to a school or shopping center, they want to know they can walk there without being accosted. For this, we refer them to a crime map. In the maps, you can put in an address to see what the local crime activity is and get an idea of what's close by.

3. Schools, for some this may not be an important consideration, but for resale value, it will decide how marketable your home will be in the future. To research the accountability of local schools we refer clients to another website that grades schools; look for great schools here.

4. Commute, again this will be a personal choice, but it's more important to choose an area accessible to a lot of different employers in your industry vs. where you currently work. It sounds a little odd not to want to live close to work, but not all jobs last forever, so if a home is centrally located, there is a higher chance, that the home will sell reasonably faster than if it's located on the outskirts of a county vs. being more easily accessible to major businesses.

5. Everything else, services such as hospitals, shopping, restaurants, libraries and what is available for your extra-curricular activities; other considerations include walking trails, beaches, hiking and parks. All the other things we do and need to do in our lives, and how accessible is it to us? What's your priority in your life? Everyone is different. If you like being active, you might want to be near a gym or if you want easy access to transportation, if you don't own a car, being near a bus stop might be most important.

Wherever you decide to live, it will take a lot of decision-making on your part. Hope this list helps for your future move, because no matter where you live, if you don't make your own decisions to decide your future, those decisions will be made for you, one way or another. 

Well, here we are in January 2012, and in this first quarter of the year we are looking at a lot of attached inventory available in Rancho Bernardo for one reason or another. There are currently 146 attached properties that are active, 43 of them priced at $200,000 and below. The lowest priced condo on the market is in the 92127 zip code and is priced at only $139,998, most likely a short sale, but still in a very desirable community. Mixed in the inventory there is about 17% age-restricted properties, which means you need to be at least 55 to live in these areas.About 39 properties are townhomes or twinhomes and range from $214,900 all way up to $479,000.

In contingent status we have 5 properties, one being a twinhome that has been on the market for over 136 days so far. In pending status, we have 60 properties ranging from a one bedroom priced at $120,000 to twinhome that has had over 134 days on the market priced "ranged up" to $449,888.

In the sold category, good news, we have 24 sold properties in the last 30 days. That's a good sign that deals are still closing although it seems like a snail's pace, some properties still have some short escrows when there is no lender involved. For example, 6 of those that closed escrow, spent less than 30 days on the market. That's encouraging to say the least. So, there you have it, your Rancho Bernardo attached market update for 92127, 92128 January 2012.

Antiques and the Chinese people, what do they have in common? My answer would have to be, a very interesting history, and a very rich culture, indeed.  But what do they both have in common in San Diego? Well, they both have festivals coming up!

Del Mar Antique Show and Sale 

The Del Mar fairgrounds is hosting San Diego county’s annual Antique Show and Sale this coming weekend.  It’s always interesting to me because I used to work part-time in an antique store and there is a wealth of history wrapped up in all the different items found there. There will be people available to appraise what you may have and there will also be people who restore and repair antiques present that could help you as well. It's located at the Via de la Valle exit off interstate 5, go west.

The Antique show runs from Friday through Sunday, January 20^th to January 22^nd, 2012.  The admission is $8 and there’s also a 50% internet discount coupon at their website. It’s on the left side. So, that’s what’s happening this coming weekend…

San Diego Chinese New Year Food and Cultural Fair 

And NEXT WEEKEND is another annual event, the San Diego Chinese New Year Food and Cultural Fair! On Saturday, there will be a lion dance that opens the ceremony at 10am and there’s also going to be a parade at 12:30pm. They usually have food booths and vendors to shop and browse, too. For a complete list of the day’s happening visit their website and check out the “Entertainment” section. 

The event is located downtown on 3^rd Avenue and J street. It will run on Saturday and Sunday from 10am to 5pm. It doesn’t hurt to arrive a little early to find parking, especially if you want to see the opening lion dance. The drums are sure to wake you up and scare the evil spirits away. But if you miss that, there is another lion dance scheduled at 4pm. I have been told that the year of the Dragon is the luckiest for those born in these years, as I have read that they are symbols of luck, peace, virtue and long life. 

The Cafasso Meatball Company is this fantastic meatball restaurant we had been waiting to try since before Christmas. Well, we finally got a chance to drop by there on our way home last night and boy, was it worth the wait! Located in the same shopping center as the Home Depot in Carmel Mountain Ranch, it’s so convenient to pick up dinner there and take it home. The prices are reasonable and the menu is kid friendly. The meatballs are gigantic and rarely does it happen, but they actually had something for everyone in my family! You see, in my family, I have one daughter that can’t eat beef, and presto, Cafasso makes turkey meatballs, she said they were yummy too, and she loved the spaghetti, too! I have another daughter that needs to eat gluten free. Well, they also have a gluten free meatball, too. So, for all you gluten free eaters, this is an item they will keep on their menu just for you, but you really need to get in there and try them to keep them on the menu!

“Like” them on Facebook

I tried the beef and bacon meatball myself, very delicious! I even had a chance to talk to one of the owners, and found out that the roots and recipes of the restaurant come from a restaurant that was opened for 30 years in Huntington Beach. The owner sold that business and retired, but he is teaching his grandson to cook his recipes in the Cafasso kitchen, so his legacy will live on. Whatever you decide, whether you dine in or take out, one of your favorite stops for lunch and dinner will be the Cafasso Meatball Company.  

Should a buyer wait for that short sale to get approved? Well, in San Diego county this year, well over 800 new homes have been built. The other part of that equation is that 30,000 people move to San Diego annually. No doubt, there will be a shortage of inventory going forward.

Now, that’s not to say that everyone who moves to San Diego can afford to purchase a home, but looking at percentages, even if only 50% of the 30,000 new residents that move here annually needed to rent, they would still drive up the rental market prices, which is likely to displace current renters if they are not able to keep up with their rising rental rates, as landlords continue to see demand grow.

So, where are those current residents being displaced? Well, there have been many renters sitting on the fence for years, waiting and saving for the opportunity to purchase a home and put more financial stability on their side. This is the year they have been waiting for! Prices are manageable at the entry level, mortgage rates are at record lows, and there are a fair amount of choices in the resale market. 

The current buying environment is filled with “short sales” and opportunity, and although it is tempting for a buyer to make offers on multiple homes, banks have been monitoring identifiable numbers (parts of social security numbers) from buyers into online systems that allow them to see any overlapping information and to track fraud if it is taking place.

We are now in the third year of short sales being processed by major banks since the market began its decline, and their tracking systems are in place, so it is common, almost routine for a short sale to take about 120 days before a decision can be made for approval. If all the steps it normally goes through have been dealt with efficiently and everyone involved has done their job, including the seller and the buyer, then there should be no reason why a decision can’t be made in a timely manner.

The banks aren’t the only ones who have a system; listing agents have collected several back up offers, too. So, experience has taught us all lessons of patience and in some instances, having insurance.  As the English once said, “Good things come to those who wait.” Knowing the process now, what do you think? If a homebuyer is in contract with a short sale seller, should a buyer wait for that short sale approval? 

Carmel Mountain Ranch Market Update December 2011

There are currently only 16 active listings in Carmel Mountain Ranch, where the listing with the highest days on the market belongs to a detached home that has been for sale 243 days so far and is priced at $400,000. It happens to be a short sale, located on a corner on a well- traveled road. The remarks only talk about the “cosmetic repairs” that it needs, I guess sometimes it’s tough for agents to focus on the positive side.

Just for comparison sake, the average home in this neighborhood has seasonally adjusted to $384,844 with an average of 1527 square feet in the area statistically, including distressed factors, is showing an average market time of 157 days. Unfortunately, when a home is in distress and is also sitting on the market in the off-season, it tends to  smoke screen the real market value.

On the brighter side, 9 homes in Carmel Mountain are in pending status. All in all, the pending transactions outweigh the contingent properties, which is a good sign that short sales are moving along faster and more efficiently than last year.

As for the lower end of the market (homes under $150,000), statistically speaking, there are not that many left in the area up for grabs, but the one that sold came in at 100% of its listed price, no doubt, most first time buyers know they are fortunate to live in the area at these entry level prices.  

In summary, the housing inventory for sought after areas will always have more buyer competition, therefore their prices will also be driven higher by the local demand in the market. Since Carmel Mountain Ranch has always been in higher demand, it’s still a great place to live and a very strategic investment going forward.

Carmel Mountain Ranch Market Update December 2011

Besides helping you buy or sell a home, here are 20 more things your REALTOR can do for you:

 1. Look up sales statistics, gather recent comparables for you

 2. Recommend reliable contractors, vendors, direct you to county services

3.Preview property for you, attend broker caravan meetings

 4. Direct you to afterschool programs and daycare providers 

5. Give you staging ideas to make your home presentable

 6. Direct you to senior housing, or adult daycare facilities

 7. Tell you where the local schools are located

 8. Make you aware of new construction in the area

 9. Find a copy of a floor plan for you

10. Let you know the local favorite places to shop and eat

11. Tell you where local amusement parks, lakes, and beaches are located

12. Help you find local golf courses and driving ranges

13. Keep you up on the area events, activities, farmer markets, swap meets, etc.

14. Estimate what the property taxes will be or presently are on a property

15. Give you tips on home safety, or where to find crime statistics

16. Go to the signing of the closing loan papers with you to answer questions

17. Give you directions to the closest dog park

18. Tell you about environmental issues in local areas

19. Access public records, investigate maps, and see local tax assessments

20. Vacuum your vacant home if you’re selling, when you live out of the area

I’ll admit that last one was a stretch, but I have done it and I’m sure other great REALTORS have, too. I have to admit not all REALTORS will do everything on this list, but can help you do more than you know. Can you think of 20 more things your REALTOR can do for you?    

Many current homeowners have gone through an adjustment to their home equity since the real estate market began its decline 5 years ago. The recession has found more homeowners unemployed and/or unable to make their mortgage payments.

Good news! There is a website established by HUD (Housing and Urban Development) that provide some eligibility questions that homeowners can answer to see if they qualify for a loan modification.

They also have a “Payment Reduction Estimator” calculator that can help a homeowner see what their monthly payment may be reduced to if they qualify for a loan modification.

They list some modification programs that lower mortgage payments more than $500 each month.  It’s worth exploring if there is a chance that one can stay in their home.  

If after one works through this preliminary process to see if they qualify for a home loan modification and find out for some reason they are not eligible for a government loan modification, they should still contact their lender to see if there is any other help. Proceeding with a short sale would then be the next step, and as a last resort, if a short sale is not approved, then and only then, is a foreclosure the first step to starting over and re-establishing credit for the future.

Hopefully, more homeowners can instead, find a way to stay in their home with government loan modifications.   

Bank of America has recently developed instructional videos for listing agents that are working with short sale sellers. The title of the videos are below: 

Initiating a Short Sale

This is the step where the agent creates an account in the Equator system, (online processing system used by banks). This is also where one can determine if the homeowner can use the HAFA (Home Affordable Foreclosure Alternatives Program) program.

Uploading Documents

This step seems obvious, but for agents that are not used to doing their own transaction work, there are extra steps that should be taken before submitting the homeowner’s hardship paperwork, purchase contract to the system. This is a more crucial step than most realize since if it’s not categorized correctly could really hold up the process.

The Valuation Process

This is where the value is determined, but if you get this far, then it’s a good sign, since it means the first 2 steps were done correctly. Who would think that submitting paperwork could be so involved?

Offer Analysis and the Investor decision

This is usually the most important step because there is almost always more than one party that needs to approve and negotiate the homeowner’s situation. This is also the most frustrating part, because an agent could only summarize the terms to make this step easier, and it is otherwise, totally out of our hands, how it is dealt with when it comes to all the parties weighing the numbers on how the outcome affects their position.

Closing a Short Sale

This part is the best part if you’ve made it this far, but it does involve more time saving steps for the listing agent to eliminate closing delays.

For some agents, it’s easier to hire a “short sale negotiator” to work through these steps of processing the short sale. Two years ago, this instruction was not available, so hopefully with a more educated industry, we can help homeowners avoid foreclosure and get through the steps in a short sale with Bank of America.