"Does a Seller need to pay income tax on the difference between what they owe and what the Seller sells

The property for?" PLEASE consult your CPA or Tax Attorney. "Not disclosing it to the seller or the wrong answer could cause you a Law suite."

 

Here is an explanation of the two forms that escrow holder will send out to the sellers to have them complete and return.    One is the Certifications of No Information Reporting and the other is the 1099-S form.  The seller is to review both forms and complete the one that applies to him.  Here is an example of both forms and a brief explanation for them.  In the case of a shortpay transaction, escrow holder will only be reporting a 1099-S if it applies to the seller in the below situations.  Escrow holder is only reporting what the actual sales price of the property was not how much the seller received as proceeds or how much debt was forgiven; however, the lender on the property may file their own 1099 for the shortage on the loan against the seller.  It would be in any realtor's best interest to always advise their sellers in a shortpay situation, to contact their CPA or tax attorney to find out what tax consequences they may face.

 

1. Certification for No Information Reporting

 

 

 

Proceeds from real estate transactions must be reported to the IRS on the Form 1099-S.

Real Estate transactions include the sale or exchange of residential, commercial, agricultural, vacant land, multi-family, etc. We have in the past issued 1099-S on all sales/exchanges.

The laws pertaining to 1099-S reporting proceeds from real estate transactions were amended 1998. The Internal Revenue Service now allows for the use of a capital gains Certification in connection with the sale or exchange of certain residential property. Use of such a Certification eliminates the requirements that Form 1099-S be completed and filed with the IRS. This Certification now falls under "exceptions" in the 1099-S Reporting Regulations. The "exceptions" for "volume transferor" have not changed.

The IRS has set out specific guidelines for the use of the certification. Attached for your use is the Certification for No Information Reporting which conforms to the IRS requirements.


 

The Certification may be used as an alternative to Form 1099-S reporting for sales or exchanges of a principal residence where the sale price is $250,000 or less for a single person or $500,000 or less for a married person. The Certification must be in writing and signed by each seller, including spouses, under penalties of perjury. Each spouse must execute a separate Certification. If a seller answers false to any of the assurances listed in Part II of the Certification you must file a 1099-S.

In the Certification, the seller makes the following assurances:

  • The seller has owned and used the principal residence for two of the last five years
  • The seller has not owned or exchanged another principal residence during this two year period
  • No portion of the residence has been used for business or rental purposes
  • Stated sale price limitations have not been exceeded and/or capital gain and marital status requirements have been met
  • They did not acquire the property within the last 5 years in a 1031 exchange
  • The property was not acquired by gift and by 1031 exchange within the last 5 years

You should have either an appropriately completed and signed Certification or a 1099-S in your file.

Please remember never to offer advice as to which Form the seller/exchangor should complete. If they have questions, please refer them to seek the advice of their CPA and/or attorney and provide them with a copy of the 1099-S IRS Reporting Regulations. They can be easily obtained from the internet at http://www.irs.gov/.


2. 1099-S Form

Unless we receive certification that the particular transaction is exempt from reporting, the transferor must complete Substitute Form 1099-S.

The top portion of the form contains basic information about the transaction, including the Branch Address, Escrow Number, Locate Number, Date of Closing, and the Property Address and Assessors Parcel Number.

In situations where the transferor is an estate or trust, the name of the estate or trust should be entered on line 1. Optionally, the name of one executor or trustee may be entered on line 2. In all cases, however, the TIN of the estate or trust named on line 1 must be reported.

A deceased person's Social Security Number cannot be reported on a 1099-S form. In the event that one or more of the owners is deceased, the executor of the estate must obtain a Taxpayer Identification Number on behalf of the estate prior to closing. TINs for estates and trusts can be applied for at the IRS, either on the phone or through its web site at http://www.irs.gov/.

When the transferor is a Partnership or Limited Liability Company, the entity's Employee Identification Number should be used.


The PROCEEDS Section is used to report the total consideration and the gross proceeds allocated to this transferor.

If there is more than one transferor and they are not spouses, a separate form must be completed for each transferor. In this situation, you should request an allocation of proceeds at or before the closing. You can rely on the response of any of the transferors provided it is not contested.

If for whatever reason you cannot obtain an allocation, file a separate 1099-S for each transferor and report the total proceeds on each form.

 

MARKET COMMENT

The most important data releases last week, the producer price and consumer price indexes, turned out to be nonevents. The producer price index showed that prices paid to U.S. producers unexpectedly fell by 0.2% in June after rising 0.9% in May. This good news was counterbalanced by a 0.3% rise in the core PPI, which excludes more volatile food and energy prices.

On the consumer end, the consumer price index rose 0.2% in June, down from May's 0.7% rise. The core CPI, which also excludes food and energy prices, advanced 0.2%, up from the previous month's 0.1% increase. The numbers were broadly in line with most expectations.

Meanwhile, housing continues on what seems like its unending Bataan Death March. Home construction unexpectedly rose in June, after two straight months of declines, but a plunge in building permits suggests the upturn will be short-lived. Additional signs of weakness were reflected in the N AHB/Wells Fargo Housing Market Index, which fell four points to 24. Any reading below 50 is considered pessimistic.

Mortgage rates held firm for most of the week, with the 30-year fixed-rate mortgage averaging 6.73%; the 15-year, fixed-rate mortgage averaging 6.38%, the five-year Treasury-indexed hybrid adjustable-rate mortgage averaging 6.35%; and the one-year Treasury-indexed adjustable-rate mortgage averaging 5.72%, according to Freddie Mac's weekly survey. Points averaged 0.4 to 0.6. Rates are about where they were this time last year.

Economic
Indicator
Release
Date and Time
Consensus
Estimate
Analysis

MBA Mortgage Applications

Wed. July 25,
7:00 am, et

None

Important. Both purchase and refinance application trends suggest increasing activity.

Existing Home
Sales
(June)

Wed. July 25,
10:00 am, et

5.83 Million (Annual Rate)

Important. Current estimates suggest a further slowdown in home sales.

Beige Book

Wed. July 25,
2:00 pm, et

None

Important. The Federal Reserve is expected to expound its stance on housing and inflation.

Durable Goods
Orders
(June)

Thurs. July 26,
8:30 am, et

1.8%
(Increase)

Important. Market participants are looking for signs of continued economic growth.

New Home Sales
(June)

Thurs. July 26,
10:00 am, et

890,000
(Annual rate)

Important. Current estimates suggest little chance for an immediate recovery in new-home sales.

Gross Domestic Product
(2nd Quarter 2007)

Fri. July 27,
8:30 am, et

3.1% (Annualized)

Very Important. Current predictions suggest normal, non-inflationary economic growth.

Consumer Sentiment
(July)

Fri. July 27,
10:00 am, et

91
Index

Moderately Important. Confident consumers should continue to sustain the economy.

MORE OF THE SAME

Anyone associated with the housing sector - builders, mortgage brokers, Realtors - would love to see improved sales in both new and existing homes this week. Unfortunately, that's unlikely to happen, so attention should be deflected to the secondary data releases; namely, the beige book and gross domestic product. Both will have direct bearing on interest rates.

Credit markets are resigned to the fact the Federal Reserve is unlikely to lower its influential fed funds rate this year, but they want additional insight on the Fed's stance on inflation and future economic growth. The beige book will supply that, while the gross domestic product will supply hard data on actual growth.

Given current expectations surrounding both data releases, which foresees no surprises, odds favor mortgage rates again holding steady for the week.

 

MARKET COMMENT

The most important data releases last week, the producer price and consumer price indexes, turned out to be nonevents. The producer price index showed that prices paid to U.S. producers unexpectedly fell by 0.2% in June after rising 0.9% in May. This good news was counterbalanced by a 0.3% rise in the core PPI, which excludes more volatile food and energy prices.

On the consumer end, the consumer price index rose 0.2% in June, down from May's 0.7% rise. The core CPI, which also excludes food and energy prices, advanced 0.2%, up from the previous month's 0.1% increase. The numbers were broadly in line with most expectations.

Meanwhile, housing continues on what seems like its unending Bataan Death March. Home construction unexpectedly rose in June, after two straight months of declines, but a plunge in building permits suggests the upturn will be short-lived. Additional signs of weakness were reflected in the N AHB/Wells Fargo Housing Market Index, which fell four points to 24. Any reading below 50 is considered pessimistic.

Mortgage rates held firm for most of the week, with the 30-year fixed-rate mortgage averaging 6.73%; the 15-year, fixed-rate mortgage averaging 6.38%, the five-year Treasury-indexed hybrid adjustable-rate mortgage averaging 6.35%; and the one-year Treasury-indexed adjustable-rate mortgage averaging 5.72%, according to Freddie Mac's weekly survey. Points averaged 0.4 to 0.6. Rates are about where they were this time last year.

Economic
Indicator
Release
Date and Time
Consensus
Estimate
Analysis

MBA Mortgage Applications

Wed. July 25,
7:00 am, et

None

Important. Both purchase and refinance application trends suggest increasing activity.

Existing Home
Sales
(June)

Wed. July 25,
10:00 am, et

5.83 Million (Annual Rate)

Important. Current estimates suggest a further slowdown in home sales.

Beige Book

Wed. July 25,
2:00 pm, et

None

Important. The Federal Reserve is expected to expound its stance on housing and inflation.

Durable Goods
Orders
(June)

Thurs. July 26,
8:30 am, et

1.8%
(Increase)

Important. Market participants are looking for signs of continued economic growth.

New Home Sales
(June)

Thurs. July 26,
10:00 am, et

890,000
(Annual rate)

Important. Current estimates suggest little chance for an immediate recovery in new-home sales.

Gross Domestic Product
(2nd Quarter 2007)

Fri. July 27,
8:30 am, et

3.1% (Annualized)

Very Important. Current predictions suggest normal, non-inflationary economic growth.

Consumer Sentiment
(July)

Fri. July 27,
10:00 am, et

91
Index

Moderately Important. Confident consumers should continue to sustain the economy.

MORE OF THE SAME

Anyone associated with the housing sector - builders, mortgage brokers, Realtors - would love to see improved sales in both new and existing homes this week. Unfortunately, that's unlikely to happen, so attention should be deflected to the secondary data releases; namely, the beige book and gross domestic product. Both will have direct bearing on interest rates.

Credit markets are resigned to the fact the Federal Reserve is unlikely to lower its influential fed funds rate this year, but they want additional insight on the Fed's stance on inflation and future economic growth. The beige book will supply that, while the gross domestic product will supply hard data on actual growth.

Given current expectations surrounding both data releases, which foresees no surprises, odds favor mortgage rates again holding steady for the week.

 

The 258 fastest growing U.S. cities

Here's the stats on all 258 cities listed by the Census Bureau

June 29 2007: 4:26 PM EDT

Fastest-growing cities

Rank

City

State

Population
July 1, 2006

Population
July 1, 2005

Numerical Change

Percent Change

1

North Las Vegas city

Nevada

197,567

176,527

21,040

11.9

2

McKinney city

Texas

107,530

96,805

10,725

11.1

3

Port St. Lucie city

Florida

143,868

130,959

12,909

9.9

4

Cape Coral city

Florida

151,389

139,986

11,403

8.1

5

Gilbert town

Arizona

191,517

177,653

13,864

7.8

6

Grand Prairie city

Texas

153,812

144,352

9,460

6.6

7

Peoria city

Arizona

142,024

134,259

7,765

5.8

8

Cary town

North Carolina

112,414

106,963

5,451

5.1

9

Denton city

Texas

109,561

104,264

5,297

5.1

10

Lancaster city

California

140,804

134,106

6,698

5.0

11

Fort Worth city

Texas

653,320

623,119

30,201

4.8

12

Joliet city

Illinois

142,702

136,159

6,543

4.8

13

Miami city

Florida

404,048

386,619

17,429

4.5

14

Bakersfield city

California

308,392

295,769

12,623

4.3

15

Raleigh city

North Carolina

356,321

342,812

13,509

3.9

16

Chandler city

Arizona

240,595

231,728

8,867

3.8

17

Baton Rouge city

Louisiana

229,553

221,148

8,405

3.8

18

Henderson city

Nevada

240,614

232,014

8,600

3.7

19

Visalia city

California

113,487

109,433

4,054

3.7

20

Irvine city

California

193,956

187,457

6,499

3.5

21

Fontana city

California

170,099

164,468

5,631

3.4

22

Orlando city

Florida

220,186

213,250

6,936

3.3

23

Laredo city

Texas

215,484

208,935

6,549

3.1

24

Elk Grove city

California

129,184

125,293

3,891

3.1

25

Palmdale city

California

138,790

134,650

4,140

3.1

26

Olathe city

Kansas

114,662

111,278

3,384

3.0

27

Thornton city

Colorado

109,155

105,962

3,193

3.0

28

Elgin city

Illinois

101,903

98,932

2,971

3.0

29

Moreno Valley city

California

183,571

178,272

5,299

3.0

30

Phoenix city

Arizona

1,512,986

1,469,794

43,192

2.9

31

Brownsville city

Texas

172,437

167,731

4,706

2.8

32

Austin city

Texas

709,893

691,263

18,630

2.7

33

San Antonio city

Texas

1,296,682

1,263,598

33,084

2.6

34

Santa Clara city

California

108,518

105,778

2,740

2.6

35

Midland city

Texas

102,073

99,623

2,450

2.5

36

Charlotte city

North Carolina

630,478

616,075

14,403

2.3

37

Aurora city

Colorado

303,582

296,861

6,721

2.3

38

McAllen city

Texas

126,411

123,678

2,733

2.2

39

Simi Valley city

California

121,288

118,671

2,617

2.2

40

Carrollton city

Texas

121,604

118,998

2,606

2.2

41

Tampa city

Florida

332,888

325,800

7,088

2.2

42

Reno city

Nevada

210,255

205,794

4,461

2.2

43

Salem city

Oregon

152,239

149,024

3,215

2.2

44

Albuquerque city

New Mexico

504,949

494,477

10,472

2.1

45

Durham city

North Carolina

209,009

204,680

4,329

2.1

46

Atlanta city

Georgia

486,411

476,483

9,928

2.1

47

Sioux Falls city

South Dakota

142,396

139,494

2,902

2.1

48

Lafayette city

Louisiana

114,214

111,944

2,270

2.0

49

Killeen city

Texas

102,003

100,084

1,919

1.9

50

El Paso city

Texas

609,415

598,240

11,175

1.9

51

Tempe city

Arizona

169,712

166,625

3,087

1.9

52

Pasadena city

Texas

144,793

142,297

2,496

1.8

53

Plano city

Texas

255,009

250,654

4,355

1.7

54

Winston-Salem city

North Carolina

196,990

193,826

3,164

1.6

55

Portsmouth city

Virginia

101,377

99,772

1,605

1.6

56

San Jose city

California

929,936

915,668

14,268

1.6

57

Scottsdale city

Arizona

231,127

227,584

3,543

1.6

58

Columbus city

Georgia

188,660

185,799

2,861

1.5

59

Norman city

Oklahoma

102,827

101,274

1,553

1.5

60

Billings city

Montana

100,148

98,666

1,482

1.5

61

Denver city

Colorado

566,974

558,663

8,311

1.5

62

Jacksonville city

Florida

794,555

783,043

11,512

1.5

63

Greensboro city

North Carolina

236,865

233,459

3,406

1.5

64

Eugene city

Oregon

146,356

144,317

2,039

1.4

65

Glendale city

Arizona

246,531

243,144

3,387

1.4

66

Las Vegas city

Nevada

552,539

544,958

7,581

1.4

67

Charleston city

South Carolina

107,845

106,366

1,479

1.4

68

Miramar city

Florida

108,072

106,590

1,482

1.4

69

Dallas city

Texas

1,232,940

1,216,264

16,676

1.4

70

Montgomery city

Alabama

201,998

199,350

2,648

1.3

71

Amarillo city

Texas

185,525

183,106

2,419

1.3

72

Arlington city

Texas

367,197

362,530

4,667

1.3

73

Oklahoma City city

Oklahoma

537,734

530,992

6,742

1.3

74

Houston city

Texas

2,144,491

2,117,937

26,554

1.3

75

Overland Park city

Kansas

166,722

164,681

2,041

1.2

76

Omaha city

Nebraska

419,545

414,447

5,098

1.2

77

Anchorage municipality

Alaska

278,700

275,474

3,226

1.2

78

Mesa city

Arizona

447,541

442,381

5,160

1.2

79

Riverside city

California

293,761

290,417

3,344

1.2

80

Tallahassee city

Florida

159,012

157,203

1,809

1.2

81

Arvada city

Colorado

104,830

103,643

1,187

1.1

82

Roseville city

California

107,158

105,946

1,212

1.1

83

Seattle city

Washington

582,454

575,884

6,570

1.1

84

Fresno city

California

466,714

461,454

5,260

1.1

85

Irving city

Texas

196,084

193,877

2,207

1.1

86

Aurora city

Illinois

170,617

168,701

1,916

1.1

87

Fort Collins city

Colorado

129,467

128,017

1,450

1.1

88

Mesquite city

Texas

131,447

129,995

1,452

1.1

89

Huntsville city

Alabama

168,132

166,314

1,818

1.1

90

Chesapeake city

Virginia

220,560

218,219

2,341

1.1

91

Stockton city

California

290,141

287,069

3,072

1.1

92

Lexington-Fayette

Kentucky

270,789

267,929

2,860

1.1

93

Mobile city

Alabama

192,830

190,802

2,028

1.1

94

Lubbock city

Texas

212,169

209,946

2,223

1.1

95

Cambridge city

Massachusetts

101,365

100,318

1,047

1.0

96

Chula Vista city

California

212,756

210,563

2,193

1.0

97

Athens-Clarke County (balance)

Georgia

111,580

110,461

1,119

1.0

98

Jersey City city

New Jersey

241,789

239,395

2,394

1.0

99

Shreveport city

Louisiana

200,199

198,236

1,963

1.0

100

Rockford city

Illinois

155,138

153,628

1,510

1.0

101

Knoxville city

Tennessee

182,337

180,576

1,761

1.0

102

Bellevue city

Washington

118,186

117,137

1,049

0.9

103

Colorado Springs city

Colorado

372,437

369,156

3,281

0.9

104

Waco city

Texas

121,496

120,426

1,070

0.9

105

Sunnyvale city

California

130,519

129,371

1,148

0.9

106

Fairfield city

California

104,897

104,003

894

0.9

107

Naperville city

Illinois

142,901

141,707

1,194

0.8

108

Madison city

Wisconsin

223,389

221,545

1,844

0.8

109

Lincoln city

Nebraska

241,167

239,196

1,971

0.8

110

Rancho Cucamonga city

California

170,714

169,330

1,384

0.8

111

Corpus Christi city

Texas

285,267

282,972

2,295

0.8

112

Vancouver city

Washington

158,855

157,603

1,252

0.8

113

West Valley City city

Utah

119,841

118,917

924

0.8

114

Wichita city

Kansas

357,698

355,029

2,669

0.8

115

Nashville-Davidson (balance)

Tennessee

552,120

548,286

3,834

0.7

116

Springfield city

Illinois

116,482

115,676

806

0.7

117

Garland city

Texas

217,963

216,478

1,485

0.7

118

Portland city

Oregon

537,081

533,467

3,614

0.7

119

Kansas City city

Missouri

447,306

444,314

2,992

0.7

120

Fort Wayne city

Indiana

248,637

247,000

1,637

0.7

121

Berkeley city

California

101,555

100,888

667

0.7

122

Cedar Rapids city

Iowa

124,417

123,600

817

0.7

123

Tucson city

Arizona

518,956

515,610

3,346

0.6

124

Corona city

California

150,253

149,427

826

0.6

125

Fort Lauderdale city

Florida

185,804

184,842

962

0.5

126

Newark city

New Jersey

281,402

280,007

1,395

0.5

127

Columbus city

Ohio

733,203

729,748

3,455

0.5

128

Gainesville city

Florida

108,655

108,143

512

0.5

129

El Monte city

California

123,162

122,584

578

0.5

130

Oxnard city

California

184,463

183,602

861

0.5

131

Clarksville city

Tennessee

113,175

112,658

517

0.5

132

Fremont city

California

201,691

200,770

921

0.5

133

Springfield city

Missouri

150,797

150,118

679

0.5

134

Sacramento city

California

453,781

451,743

2,038

0.5

135

Pueblo city

Colorado

103,730

103,269

461

0.4

136

Elizabeth city

New Jersey

126,179

125,634

545

0.4

137

Daly City city

California

101,005

100,569

436

0.4

138

Santa Rosa city

California

154,212

153,548

664

0.4

139

Salt Lake City city

Utah

178,858

178,099

759

0.4

140

San Francisco city

California

744,041

741,025

3,016

0.4

141

Peoria city

Illinois

113,107

112,651

456

0.4

142

Tacoma city

Washington

196,532

195,740

792

0.4

143

Ontario city

California

173,351

172,656

695

0.4

144

Westminster city

Colorado

105,753

105,338

415

0.4

145

Allentown city

Pennsylvania

107,294

106,877

417

0.4

146

Tulsa city

Oklahoma

382,872

381,479

1,393

0.4

147

Anaheim city

California

334,425

333,229

1,196

0.4

148

Indianapolis city (balance)

Indiana

785,597

782,871

2,726

0.3

149

Inglewood city

California

114,914

114,534

380

0.3

150

Topeka city

Kansas

122,113

121,725

388

0.3

151

Oakland city

California

397,067

395,864

1,203

0.3

152

Columbia city

South Carolina

119,961

119,614

347

0.3

153

Cincinnati city

Ohio

332,252

331,310

942

0.3

154

Little Rock city

Arkansas

184,422

183,921

501

0.3

155

Pomona city

California

154,271

153,876

395

0.3

156

Chattanooga city

Tennessee

155,190

154,823

367

0.2

157

San Bernardino city

California

198,985

198,524

461

0.2

158

Pasadena city

California

144,133

143,804

329

0.2

159

Des Moines city

Iowa

193,886

193,576

310

0.2

160

Memphis city

Tennessee

670,902

669,864

1,038

0.2

161

Burbank city

California

104,317

104,169

148

0.1

162

Hartford city

Connecticut

124,512

124,354

158

0.1

163

Honolulu CDP

Hawaii

377,357

376,879

478

0.1

164

Augusta-Richmond County (balance)

Georgia

189,366

189,166

200

0.1

165

San Buenaventura ( Ventura ) city

California

104,092

104,002

90

0.1

166

Evansville city

Indiana

115,738

115,642

96

0.1

167

Hayward city

California

140,606

140,503

103

0.1

168

Los Angeles city

California

3,849,378

3,847,059

2,319

0.1

169

Spokane city

Washington

198,081

197,969

112

0.1

170

Pompano Beach city

Florida

104,402

104,355

47

-

171

Minneapolis city

Minnesota

372,833

372,674

159

-

172

Yonkers city

New York

197,852

197,778

74

-

173

Manchester city

New Hampshire

109,497

109,460

37

-

174

Sterling Heights city

Michigan

127,991

127,956

35

-

175

Arlington CDP

Virginia

199,776

199,761

15

-

176

New York city

New York

8,214,426

8,213,839

587

-

177

Abilene city

Texas

114,797

114,805

-8

-

178

Garden Grove city

California

166,296

166,316

-20

-

179

San Diego city

California

1,256,951

1,257,328

-377

-

180

Antioch city

California

100,586

100,622

-36

-

181

Fullerton city

California

132,918

132,977

-59

-

182

Richmond city

California

102,120

102,177

-57

-0.1

183

Hollywood city

Florida

145,794

145,879

-85

-0.1

184

Worcester city

Massachusetts

175,454

175,559

-105

-0.1

185

Erie city

Pennsylvania

102,036

102,099

-63

-0.1

186

Torrance city

California

142,350

142,467

-117

-0.1

187

Washington city

District of Columbia

581,530

582,049

-519

-0.1

188

Hampton city

Virginia

145,017

145,154

-137

-0.1

189

St. Petersburg city

Florida

248,098

248,365

-267

-0.1

190

Lakewood city

Colorado

140,024

140,175

-151

-0.1

191

Thousand Oaks city

California

124,207

124,342

-135

-0.1

192

Ann Arbor city

Michigan

113,206

113,364

-158

-0.1

193

Richmond city

Virginia

192,913

193,186

-273

-0.1

194

Lowell city

Massachusetts

103,229

103,383

-154

-0.1

195

Orange city

California

135,070

135,276

-206

-0.2

196

Huntington Beach city

California

194,436

194,741

-305

-0.2

197

Costa Mesa city

California

109,809

109,987

-178

-0.2

198

Springfield city

Massachusetts

151,176

151,483

-307

-0.2

199

Santa Clarita city

California

168,008

168,357

-349

-0.2

200

Oceanside city

California

165,803

166,163

-360

-0.2

201

Jackson city

Mississippi

176,614

177,026

-412

-0.2

202

Santa Ana city

California

340,024

340,865

-841

-0.2

203

Grand Rapids city

Michigan

193,083

193,563

-480

-0.2

204

Louisville/Jefferson County (balance)

Kentucky

554,496

555,899

-1,403

-0.3

205

Kansas City city

Kansas

143,801

144,167

-366

-0.3

206

Waterbury city

Connecticut

107,251

107,549

-298

-0.3

207

South Bend city

Indiana

104,905

105,207

-302

-0.3

208

Green Bay city

Wisconsin

100,353

100,651

-298

-0.3

209

Virginia Beach city

Virginia

435,619

437,021

-1,402

-0.3

210

Boise City city

Idaho

198,638

199,285

-647

-0.3

211

Newport News city

Virginia

178,281

178,869

-588

-0.3

212

Chicago city

Illinois

2,833,321

2,842,753

-9,432

-0.3

213

Paterson city

New Jersey

148,708

149,222

-514

-0.3

214

Glendale city

California

199,463

200,181

-718

-0.4

215

New Haven city

Connecticut

124,001

124,451

-450

-0.4

216

Downey city

California

109,376

109,782

-406

-0.4

217

Long Beach city

California

472,494

474,307

-1,813

-0.4

218

Savannah city

Georgia

127,889

128,404

-515

-0.4

219

Coral Springs city

Florida

129,805

130,348

-543

-0.4

220

Stamford city

Connecticut

119,261

119,760

-499

-0.4

221

Vallejo city

California

116,844

117,351

-507

-0.4

222

Pembroke Pines city

Florida

150,064

150,741

-677

-0.4

223

Alexandria city

Virginia

136,974

137,602

-628

-0.5

224

Escondido city

California

133,510

134,131

-621

-0.5

225

West Covina city

California

107,745

108,248

-503

-0.5

226

Warren city

Michigan

134,589

135,230

-641

-0.5

227

Akron city

Ohio

209,704

210,771

-1,067

-0.5

228

Milwaukee city

Wisconsin

573,358

576,336

-2,978

-0.5

229

Philadelphia city

Pennsylvania

1,448,394

1,456,350

-7,956

-0.5

230

Modesto city

California

205,721

206,885

-1,164

-0.6

231

St. Paul city

Minnesota

273,535

275,084

-1,549

-0.6

232

Birmingham city

Alabama

229,424

230,726

-1,302

-0.6

233

Independence city

Missouri

109,400

110,039

-639

-0.6

234

Bridgeport city

Connecticut

137,912

138,763

-851

-0.6

235

Norwalk city

California

105,240

105,895

-655

-0.6

236

Syracuse city

New York

140,658

141,657

-999

-0.7

237

Clearwater city

Florida

107,742

108,520

-778

-0.7

238

Norfolk city

Virginia

229,112

230,775

-1,663

-0.7

239

Rochester city

New York

208,123

209,662

-1,539

-0.7

240

Providence city

Rhode Island

175,255

176,614

-1,359

-0.8

241

Baltimore city

Maryland

631,366

636,377

-5,011

-0.8

242

Fayetteville city

North Carolina

168,033

169,400

-1,367

-0.8

243

Concord city

California

122,204

123,241

-1,037

-0.8

244

Lansing city

Michigan

114,276

115,312

-1,036

-0.9

245

Dayton city

Ohio

156,771

158,203

-1,432

-0.9

246

Boston city

Massachusetts

590,763

596,638

-5,875

-1.0

247

Flint city

Michigan

117,068

118,247

-1,179

-1.0

248

Provo city

Utah

113,984

115,135

-1,151

-1.0

249

Salinas city

California

145,032

146,518

-1,486

-1.0

250

Toledo city

Ohio

298,446

301,728

-3,282

-1.1

251

Pittsburgh city

Pennsylvania

312,819

316,299

-3,480

-1.1

252

Buffalo city

New York

276,059

279,138

-3,079

-1.1

253

Cleveland city

Ohio

444,313

450,560

-6,247

-1.4

254

Detroit city

Michigan

871,121

883,465

-12,344

-1.4

255

Beaumont city

Texas

109,856

111,493

-1,637

-1.5

256

St. Louis city

Missouri

347,181

352,572

-5,391

-1.5

257

Hialeah city

Florida

217,141

220,611

-3,470

-1.6

258

New Orleans city

Louisiana

223,388

452,170

-228,782

-50.6

Source: U.S. Census Bureau

 

TURN YOUR LISTING INTO YOUR OFFICE!

If any of you agents are like me, then you work out of home most of the time. Working from home is fine but to me is no different than working out of an office because you can get distracted at either place. At home my angels/devils may make alot of noise and at the office other agents make alot of noise which is fine sometimes because you may come across an agent who may have a buyer for your listing or vice versa but working out your listing especially if it's vacant is great because you can meet clients or potential clients. While you're there be sure to put your open house signs out that way you get the right distractions plus you're giving the listings more exposure especially if you're working on a Tues, Wed or whatever but if you're going to be at a desk anyway then turn it into a open house. You can get a small folding chair and table and keep those in you vehical at all times so you're ready to go to work you have what you need and if you're wireless it's perfect. So for those who have no listings I'll be more than happy to let you sit on mine and If I'm out of your area ask your colleagues I'm sure they will have no problem letting you hold an open house for them.

 

 PLEASE READ, complete overview of California Real Estate.Population loss: The cost of housing is so high that people are leaving in droves, moving inland. This is great news for us. The Antelope Valley is the inland there talking about. Just look around and see the massive Commercial and Industrial growth were seeing here in the Antelope Valley . Great news! Lot 's of jobs and I mean lots of jobs! Just about any home under $300,000 is moving and seeing in many cases multiple offers. Please remember Frank & Fidelity Title, were here to serve you with great serviceJ

 

Sick and tired of inaccurate housing reports, Schahrzad Berkland started The Berkland Group, a consulting firm which provides straight talk about the Southern California housing market. You can see Schahrzad's housing forecasts on californiahousingforecast.com.

Thank you for taking time to complete this interview, Schahrzad. We are very excited to share your views and data on housing with our readers. Can you let everyone know how long you have followed the housing market in Southern California ?

 

Since October of 2005.

In your opinion, what are the biggest problems in the So Cal housing market right now?

 

  • Excess prices and risky loans: CA's prices are far removed from their fundamentals of wage and rent multiples. A large percentage of the population lives in California , and the banks are very exposed to CA real estate--so there is a lot of paper profits and risky bank loans, whose collapse will ripple through the entire country.
  • Wages: Salaries here are not high enough to truly afford the homes, so in CA we resorted to risky financing. In San Diego , 68 percent of all mortgages in 2005 and 2006 were IO or ARMs. People cannot afford their homes, so they are renting them from the bank, thinking they own them. This is happening in California more than anywhere else, which means the dollar amounts involved in overpriced homes and loans-about-to-go-bad is so much higher. For this reason, California is where you'll find the most risky loans, the highest mortgage equity withdrawal, and the greatest impact of all that consumer spending from the housing ATM.
  • Population loss: The cost of housing is so high that people are leaving in droves, moving inland or to cheaper states. (See #1 below.)
  • Job growth: Employment growth is too dependent on real estate.
  • Looming foreclosure crisis: With no skin in the game, people in foreclosure now are not even listing their homes for sale. They don't even have 6 percent equity to hire a realtor. So they live rent free for 7 - 9 months until evicted after auction. Foreclosures will go through 2 waves through 2012. For more info, see the chart on my homepage: californiahousingforecast.com

Some recently published news stories have lead readers to believe that wealthier neighborhoods in California are not experiencing the same housing market issues as other nighborhoods. Are the problems really limited to a specific group of people, i.e. the poor to middle class?

 

Even the wealthy are in over their heads, with rising property tax liens, cash-out refinancing, and foreclosures. I'll just give you one example of each. In Maderas golf course community, where some of the Padres players live, we've got a half dozen 2004 tax liens on $2 - $3 million homes. A guy on the water in Encinitas took out a $1 mil HELOC last year...

I go through hundreds of listings through the MLS, foreclosure.com, and ForeclosureRadar.com. One thing is clear: the more expensive the home, the more cash was taken out. It is rare to see anyone who abstained from the housing ATM. Last, foreclosures are rising all over the city. While they are highest in new subdivisions (because you had entire communities who got 100 percent financing at the peak of the market with short-term teaser rate loans that are resetting), they are rising in middle and upper income areas too.

Is there anyone in particular to blame for these problems?

 

The Federal Reserve created and nurtured the housing bubble. They ignored all the Homeowner Relief Acts and other banking legislation, all predatory lending guidelines. They wanted the stimulus of cash-out refinancing, to avoid a recession in 2001 from getting worse. So who knows what they have in store for an encore. Just like the housing bubble covered up the stock bubble collapse, what is the next bubble? The Fed is printing money at 10 percent per year, creating high inflation is anything that is not imported from Asia . So consumer goods are cheap, but prices are rising for US services like education, healthcare, oil, and food. What's next?

Do you think what we are seeing now is normal bubble behavior? For example, do you think the current bubble in California is similar to the housing bubble that occurred in Japan ?

 

I have not studied Japan , but Dr. John Talbott discusses this in his book Sell Now. Their prices kept going up, but then reached a maximum when their elderly population reached 12 percent of the total. Also, Japan 's Ministry of Finance didn't want the banks to write off all their bad mortgage loans, so they kept it covered up, letting the losses be offset by income over a 10 year period. With all those losses to cover, banks had to be more conservative, and lending really dried up. Too much saving means low consumer spending.

Do you see the same thing happening in California ?

 

CA economy will stall as cash out refis dry up, property tax and sales tax falls. House prices will fall further once reality sets in after the recession is realized. We are already in a recession, but it is not yet reported in the media. Q1 GDP growth for US was 0.6 percent. This quarter could be well negative already.

Can the Fed balance everything out?

 

The Fed will panic and lower interest rates. They will do the wrong thing. They don't want to learn anything or make a long-term solution. I am sure they are terrified of a banking crisis and credit crunch, as our entire economy is addicted to ever rising access to credit. If you take away credit cards from Americans, our economy will melt down immediately. People just don't have money from their productivity or savings to even pay their basic living expenses. So the Fed is worried, but they won't learn a thing. They will just keep printing money at 10 percent a year and create another asset bubble.

Remember, the Fed is not a government agency, but a consortium of private banks. This would be a good research project for a media organization: who are the shareholders of the private banks making up the Fed, and what is their mission? The Fed is operating outside the Constitution. Our Founding Fathers explicitly stated that only gold and silver could be legal tender, because they had used paper money before and it caused such severe depressions that they did not want us to go through that again. So the interests of the shareholders of these huge banks, which by the way is secret (nobody knows who they are), are not aligned with the interests of the American citizen...so they will do what makes them richer.

So the right thing to do is...?

 

The right thing to do is stop printing so much money, and only spend what we earn. We have to pay down our debt and stop making entitlement promises that cannot be kept.

There are optimists who think Southern California will defy the housing downturn because the area is such a desirable place to live. What do you think of this view?

 

Two things:

One: CA has always been desirable, but just because people want something doesn't mean they can afford it. After all, if it's so desirable, why are people leaving in droves? CA houses now cost over twice as much as they used to compared to salaries. Despite all that exotic financing, people are simply priced out. Wages have not kept up. So people are voting with their feet, and walking away from 'desirable CA'. So they are leaving high-priced cities in CA in droves. Last year, per the US Census Dept, 40,000 people left San Diego , 229,000 left LA, 42,000 left San Francisco , 6,800 people left Santa Barbara , and 8,400 left Ventura County . In contrast, 63,000 moved to the Inland Empire last year.

I have a good one for you: whiskey is so desirable among alcoholics, that grocers can charge whatever they want...people will pay it. Guess what! Alcoholics switch to wine or tequila or beer. So people only pay what they can afford or are willing to pay, and then they switch products. In the case of housing, they buy a house in Kansas . My realtor friend was showing 5 houses one weekend, and every seller was planning to leave and buy a mansion with his CA sale proceeds, in a cheaper place.

Two: Stricter lending puts a cap on what people can pay. That forces prices down. People are getting turned away by lenders, so they can't buy, even if they want to. Now we have lower demand as buyers are priced out, turned away by lenders, or leaving the area. So sales are way down. To make matters worse, sellers keep adding more homes for sale. Foreclosures are projected through 2012, so we're going to have lots of homes for sale for many years to come.

If half of all buyers could get $600,000 loans with no money down, but now half of all buyers can only get $250,000 loans because they need a down payment, anyone who wants to sell must lower their price down to that $250,000 level. So prices will need to drop to the point where a teacher can buy a small single family home on 2.5x her income.

Exactly how far do you think prices will drop in each of the following counties: Los Angeles , Orange , San Diego , and San Bernardino ?

 

Prices will fall in half. We'll go back to 1999 prices. It could be worse. Don't be surprised by my statement. Let's just look at what happened in the 1980s and 1990's downturns. It's easy enough to look up at the County Recorder Office, or on the MLS, but neither the County Recorder , nor the realtors, wants to advertise the ugly truth: CA has 15 year housing cycles and prices fall 30 percent to 50 percent in a downturn.

I have many examples. I'm talking about homes in Laguna Niguel, Encinitas , Del Mar, La Jolla, Poway, Pacific Palisades .....the most desirable properties, which are still rising now by the way, fell 40 percent in the last downturn. The media needs to start asking realtors this tough question: 'How much did superior properties fall in the last housing downturn?' When I posed this question on a Carlsbad realtor's blog, he blocked my internet address.

So it's not a question of what I think will happen to prices. It's a matter of fact what actually does happen to prices. History tells us.

Your estimates probably aren't far off from what many people think, but they are quite a bit different than the estimates presented in the media. Is there something they're not telling us?

 

Nobody is going to give you the straight scoop on CA's housing bubbles. Realtors and mortgage brokers need their commissions; journalists are English majors and don't even have access to the MLS so they rely on realtor salesspeak; economists are paid by governments or investment banks so they have to keep quiet; and local municipalities try to promote growth of their region.

Gregory Smith, the San Diego County Assessor, is promoting real estate purchases...he's encouraging more fools to enter the pyramid scheme. This housing market is in a bubble, and no public official should be encouraging anybody to buy homes right now. Of course, he might be worried about falling property tax revenue, but the rising tax default rates are worse in the long run. In the 1990's, our property tax default rate was near 5 percent. This time housing prices climbed much higher.

There has been talk of a recession caused by housing, but for the most part, the mainstream media has been quoting economists who don't think there will be a recession. Is this another case of not getting the straight scoop or are economists optimistic for the most part?

 

Economist Dr. Dean Baker wrote that economists never predict a recession, saying 'I happened to get a copy of the Blue Chip top 50 forecasters' projections for 2001, dated Sept. 2000. Not one forecaster in this group projected a recession. In fact, the lowest growth projected by any of them for 2001 was 2.4 percent. Keep in mind, the stock market had already begun to unravel at that point, so it shouldn't have been too hard to imagine that there would be some economic impact.'

What about median home price tracking-a method most media outlets use to report the market? You mention on your website, californiahousingforecast.com, that median prices, average prices, and $/sq ft measurements are useless indicators of what is really going on in the market. Can you tell us why?

 

The median, average, and $/sq ft measure the prices of homes which sold that particular month. First time buyers are priced out, or they can't qualify for a loan, so now we have fewer cheap homes selling. The snapshot of sold homes has really changed. How can we measure the median or average price of a basket of produce when one month people are buying mainly apples, and the next month they are buying mainly mangoes and blueberries? We can't! The high end homes are 50 percent more of the market, so they are skewing the data up. They used to be around 6 percent of sales, and are now around 9 percent of sales.

The $/sq ft is falling for the same reason that the median is going up. I know that sounds backwards, but it's correct as written. Remember, our sales mix has a smaller portion of starter homes now. The low end is priced out and can't get loans. The rich are still buying, so they are skewing all the data.

Big homes cost a lot less per square foot, because land is a fixed cost and due to economies of scale. A 1000 sq ft house is $400/sq ft, while a 3000 sq ft house is $300/sq ft. See what happens when you have more homes at $300/sq ft? The $/sq ft goes down when you sell more big homes. So we are measuring the distribution mix again. Some people think they are analysts, because they see a number go down and jump to the conclusion they finally found a way to measure the price drops. This is why I scolded Rich Toscano publicly. You may know, or not, that I emailed him privately several times before going public. But anyway, it's a distribution number.

Here's another problem: any method which uses sold homes to measure the prices of all homes, will always be wrong. You cannot know the price of a house that didn't sell, because it has not sold yet. And in this market the homes that didn't sell will have to be severely discounted. So you can't know the price of homes not on the market, or those languishing on the market, based on those that sold. The homes that sold are the cream of the crop.

How can you know the price of the 2000 sq ft house on the highway that ain't gonna sell in this market where buyers have a ton of choices, based on the price of the 2000 sq ft house with a stunning kitchen, next to a park in the beautiful subdivision down the street? They are both 2000 sq ft homes, on the same size lot. The buyers are going for the good one, and leaving the bad one behind. The spreads between good and bad are getting bigger. Mr. Highway has to take a huge deduction if he wants to sell.

In a hot market, everything sold, so the sales prices accurately reflected the value of the entire market. But in a weak market like we have now, only the good homes sell. So by measuring only the sold homes, now we've shifted our data collection to the good homes. We don't know the value of the bad homes, because they are not selling. If you want to improve the median, then make every homeowner lower his price to the place that his house would sell, and then see how much the median drops.

What about the Office of Federal Housing Enterprise Oversight? They claim that their house price index provides more information and is more accurate than other indices.

 

The OFHEO index has problems too, which I explained on my site. Just one: it does not measure the huge amount of remodels. Every one of my friends tore out her kitchen or put in a backyard barbeque with those nice Viking outdoor barbeques and refrigerator. Of course the house will sell for more now than 5 years ago! But it's not because housing prices are rising! The OFHEO and Case-Shiller indices are not adjusting for that at all, they can't. They're just using county sales records. So again, the house with the $60,000 kitchen upgrade will sell, but the one next door with original 1980 kitchen will not. So it seems like the housing price is going up, but really you are paying more for that kitchen.

All housing metrics use data from sold homes...so that is a lot cheaper than hiring appraisers to do walk-throughs on thousands of homes. I doubt anyone is going to devise an appraisal methodology. Where is the incentive? Who would pay for it?

The ONLY way to measure housing prices is an appraisal method. Someone needs to design a sample set of homes and appraise them every quarter. The appraiser must do a walk-through appraisal, so he can adjust for remodeling. This would be expensive.

What indicators should investors and the everyday homebuyer be using? Where can they get reliable info?

 

What people need to do is watch the number of homes listed and sold in their neighborhood. As long as listings are increasing and sales are falling, prices will come down. Only 10 percent of homes are selling, so people who want to sell, have to lower their price, and inevitably, will set the new price for the area.

You can get home sale and listing info from your realtor. Don't let them sweet talk you into buying a home. Insist on knowing this data:

  1. How low did housing prices fall in the last downturn? You have to see samples of homes which sold in two specific time periods: 1989-1990 and again 1995. There will be some. You need to see those.
  2. Figure out months supply. Ask your realtor for sales and inventory data for that area. Sales/inventory = months supply. As long as that is above 4, prices have to come down.
  3. Wait to see how badly the foreclosure wave pummels the market. Do not buy any real estate until the ARM resets are behind us. The bulk of ARM resets ends in 2008, so a one year lag means the highest REOs will be at the end of 2009. You might get a great buy then. But the foreclosure wave will continue, as the prime borrowers hit their resets on their 7 year IO loans in 2011. I am waiting to see how much prices get pummeled after my friends in their $1.5 - $2 million homes have their loans reset. So wait to buy until after the REO wave is over.

When do you think the market in So Cal will finally bottom out?

 

Not before 2012. CA real estate cycles are 15 years long: 5 - 7 years up, 5 - 7 years down.

There is not one clear month for the top of the housing bubble, since the top happens in waves, starting with the lowest end and working up, over 3 years. Condos peaked in the spring of 2004, single family homes peaked in the spring of 2005, and the prime properties in Carlsbad and on the water are still rising.

How can people watch for the bottom? Or more precisely, how will they know when to buy?

 

People should keep reading blogs and my forecast. Watch for the foreclosure wave to end, and when panic is high and nobody wants anything to do with real estate, then go in and buy. I bet all the people reading this, who are waiting for prices to drop, won't want to buy once prices have dropped. The people reading blogs are priced out...they are not market timers like me. Some sold and are renting, like me. Many are first time buyers, who are waiting for prices to come down to their comfort level. But those same people will be scared to death to buy after prices have gone in half...foreclosures are everywhere, as they will be afraid of further price drops.

When I see sales pick up after the foreclosure wave is finished, then it' time to buy. Look for the market to completely wither and die, and then start showing signs of life.

On the other side of the coin, what can sellers do to avoid losing their shirts?

 

Sellers are hurting themselves with false pride. They really need to look at the comps and go look at other homes in their price range. They'll find they are overpriced, and their home won't sell. When they are overpriced, they won't even get anybody to come through the door to look at the home. So no traffic means no sale. If you can't get traffic, how can you sell? If every seller would lower their price by 10 percent to get to where they need to be, they could have a chance at selling their homes.

Thanks for the info Frank!!!

 

 

Southern California
Changes In Existing Home Market Conditions


When we analyze and forecast new home market conditions, we first examine changes in recent sales volume for existing homes, as it is resale volume that supplies the equity rollover that supports many new home sales. Our Existing Home Sales Report offered at RealEstateEconomics.com compares current market statistics to those of the same period 12 and 24 months previous, and provides our clients an accurate interpretation of the direction of overall market conditions. The new home market is especially sensitive to changes in the resale market, as resale homes not only provide equity rollover that potentially flows to a new home purchase, but resale listings may also represent increased competition during times when the number of listings balloon. This report highlights various existing home market changes, lending insight to the overall near-term health and direction of the new home market in Southern California .

The chart below presents year-to-year changes in the existing home price and price-per-square foot averages for all of Southern California, defined as Ventura , Los Angeles , Orange , San Diego , Riverside and San Bernardino Counties :

As shown above, a 6.0% increase in the average price of existing homes has been observed during the past 12 months, which is far below the gains seen 12 to 24 months previous, but is unjustified, given the current market disruption. The average price per square foot (a better indicator of appreciation) has increased by only 1.5% during the past 12 months, reflecting almost no upward price pressure.

Even these modest price gains should have occurred. Current price levels are perceived as overstated, and the impact of overstated pricing has been a dramatic reduction in existing home sales volume, as shown below:

The serious decline in sales volume shown above has not been due to an economic downturn. Rather, it originated from the ‘artificial' price inflation caused by far too many speculative purchases during the past 24 months. Once speculative buyers left the market, prices were left at a level beyond where they can be supported by the economy. Even though speculative buying has ceased, the continued increase in prices (albeit modest increases) will likely need to reverse before sales volume stabilizes. Existing home prices have reacted to the drop in sales volume far more slowly than the new home market, and both the new and existing home prices will need to recede further in order to stabilize sales volume.

Based on our measure of supportable prices (in the table below), the housing market is still over priced by about 4.5%:

As prices recede to levels that are supported by the regional economy, existing home sales volume will stabilize and lead to improvements in the new home market. This stabilization in existing home sales volume is becoming apparent in select Southern California markets (mainly coastal markets), and given continued stable economic growth, market stabilization should become apparent throughout Southern California during the next few quarters.

Our existing home market database is updated each month. A review of existing home market conditions and our near-term new home market forecasts for Southern California are presented in The Residential Economic Report, and can be accessed at http://www.swiftpage5.com/SpeClicks.aspx?Acc=REE.Mike&SPCED=C070530184300&LNK=3&UId=122.

 
Recent national reports about the slow housing market have raised many questions for concerned homeowners: “Is now the time to sell?” “Should I buy that vacation home in Miami?” In order to really discover the answer to nagging real estate market questions, homeowners must collaborate with their mortgage and real estate professional to explore the real estate situation on a local level.

Should I Buy?
Tips for Buyers:
The market is in your favor, interest rates are low, more housing is available in select markets and sellers are offering great buyer incentives. Below are a few tips to help you successfully shop for new real estate.

· Take your time, but not too much time Yes, home prices are lower, but continuing to wait in hopes that the price will decline may backfire on buyers. If you find a property that you can't live without, make an offer and negotiate. Work with your real estate professional and suggest a price that reflects the local market and sales' price of the homes nearby.


· Watch out for competition The National Association of Realtors is expecting more than 6 million home sales in 2007, so don't think you are the only one out there shopping. People are constantly moving due to new job opportunities, marriage, divorces and more, so be prepared to make counter offers.


· Know your loan According to bankrate.com, interest rates are still very low. The average national interest rate on a 30-year fixed mortgage is about 5.79 percent. But, before you sign, be sure you fully understand your loan products. Work with your real estate and mortgage professionals to find the best option that will fit your financial situation.


Should I Sell?
Tips for Sellers:
The National Association of Mortgage Brokers predict a big selling boom this year, so be prepared for lots of competition. Below are a few tips that will help you successfully sell your real estate.

· Set a realistic asking price Over the past few years, home sellers have been able to get away with asking extremely high prices for their property in select markets. Now that the market has cooled, sellers may feel that they are getting the short end of the stick. According to Jim Gillespie, president and CEO of Coldwell Banker, sellers “need to realize that a home is where you live. It's not a lottery ticket,” it is a long term investment.


Work with your real estate professional and investigate the local real estate market and what the sellers within your community are asking for their property. Setting a proper asking price will obtain more offers.

· Fix up your home Making a great first impression is crucial. A few minor improvements and a fresh coat of neutral colored paint to visible exterior and interior parts of your home will help catch buyers' attention.

 
 

This story appeared in the Antelope Valley Press on Wednesday, February 21, 2007.


LOS ANGELES - The Los Angeles County Economic Development Corporation, says the Southern California economy looks pretty good and the Antelope Valley - unlike other regions of Los Angeles County - still has lots of land available for development.

The organization's 2007-2008 Forecast and Industry Outlook, released today, says land availability and a business-friendly environment place the Antelope Valley in a unique position in heavily developed Los Angeles County .

"All areas of Southern California are in a growth mode. In the Antelope Valley , the key issue is the land that is available for industrial and logistics development in the urban core of Southern California ," said Jack Kyser, the organization's senior vice president and chief economist. "It would be a mistake for (local leaders) not to crank up the volume of the message up there - 'Hey, there's space up here and good workers available.' "

The report is a precursor to the more detailed LAEDC report due in July that breaks out data specific to 13 regions of Los Angeles County .

The report said total building permits were down by 14% for the year 2006 in the five Southern California counties: Los Angeles , Orange , Riverside , San Bernardino and Ventura . But in Los Angeles County alone, it said, construction "inched up in 2006, a mere 2.7% growth; with more than 61% of the units permitted being multi-family (condos and apartments).

"This reflects the lack of land available for new housing development in Los Angeles County except in the Antelope and Santa Clarita valleys."

Housing acts as brake

Overall, the report said, Los Angeles County "had a decent year economically in 2006. However, it will see slightly slower growth through 2007-2008, with housing acting as a brake."

The report added: "One segment to watch is the for-sale condo market where there has been a burst of development that seems to have out-run market demand. However, there will be positive trends in key industries, such a aerospace, business and professional services, international trade, technology and travel and tourism. The latter industry has come back strongly, and the 30 large conventions booked for 2007 will keep the momentum going."

An array of major projects in the county will keep the economy rolling along in 2007 and 2008, the report said, including the 7,100-seat Nokia Theater and the $2 billion Grand Avenue project in downtown Los Angeles . Also coming are light-rail lines from downtown to East Los Angeles and to Culver City , plus other transportation projects funded by the November 2006 state bond package.

Worker contract renewals

The forecast report said "there will also be drama on several fronts in both 2007 and 2008" - a possible strike by grocery workers when their contract expires in March; the expiration of the Writer's Guild contract in October; and the expiration of Directors and Screen Actors guilds contracts in June 2008.

A major risk, the report said, "is labor unrest in the motion picture-TV production industry. That 'de facto' strike in 2001 caused significant pain in the areas of the county with heavy exposure to entertainment. If there is a worker interruption in the industry, it would not be pleasant."

Other dramas include the battle for leadership of the Los Angeles Unified School District , "pushing and shoving over legislation requiring hotels along Century Boulevard at LAX to pay a 'living wage' " and local governments feeling the pinch of lower property taxes.

Flights to San Francisco

Kyser said the twice-a-day United Express service scheduled to start June 7 between L.A./Palmdale Regional Airport and San Francisco will be a business bonus, "providing more access for a lot of people."

The Antelope Valley , he said, has much to offer.

"Look at the area," he said. "It has a growing population, a growing business base and very positive attitudes. Business is the friend and not the enemy like in other areas."

Defense spending not over

Defense Department spending, a vital part of the Antelope Valley economy, is going through changes, Kyser said.

"We expected defense spending to taper off, but it may not happen."

The Antelope Valley , he said, reportedly has a number of secret defense programs - called "black programs" - that aren't known to the public.

"There are a lot of black programs going on in the Antelope Valley ," Kyser said. "At night scan the skies."

The report noted that the fate of the C-17 military cargo plane, assembled in Long Beach , is uncertain.

"More orders from the Department of Defense will be required by year-end 2007 to prevent the 'shutdown' process from starting again," the report said.

Office space shortage

The report said the shortage of office and industrial space is another pressing problem for the county.

Office vacancy rates in the county at year-end 2006 were at 9.7% and headed down.

"The situation was much more serious in the industrial sector where the year-end vacancy rate was just 1.5%, again with a modest amount of new space in development. Worse yet, residential developers are trying to scoop up industrial sites for construction of housing with no thought given to possible job losses," the report said.

The irony, the report said, is that the decline in manufacturing employment in the county looks like it is getting close to bottoming out. Because defense and "quick-turn" manufacturing work cannot be sent overseas, Kyser said, Southern California job losses are coming to an end.

The report said, "There is a shortage of developable land in the urban core of Los Angeles County , so there will be more disputes over how sites are redeveloped. Complicating the situation is the jump in land costs."

New businesses in county

Newcomers to the Los Angeles business scene, the report said, will be Wachovia Bank, UK retailer Tesco with its smaller food stores similar to Trader Joe's and apparel retailers H & M and Zara.

Nonfarm employment in the county will grow by 1.1% or by 43,700 jobs in 2007, and by 1.3% or 51,800 jobs in 2008, the report said. Personal income will increase 4.9% in 2007 and 5.3% in 2008, outpacing the cost of living, which will be up in 2007 in the five-county Southern California area by 2.5% and in 2008 by 2.6%.

The county's travel and tourism industry will continue to perform well, the report said, with a 0.4% increase to 25.3 million overnight visitors in 2007.

International trade also will continue to be a reliable engine of growth, with an 11.3% increase in the value of two-way international trade at the local customs district to a new record level of $365 billion.

Housing industry risky

The county's real estate industry, the report said, "will have a split personality over the next few years. After an increase in the number of housing units permitted in 2006 (up by 2.7%, thanks to the multi-family sector), the permit count will drop by 23.3% in 2007 and by a further 3.0% in 2008. Partially offsetting this decline will be modest gains in nonresidential building permit values of 2.5% in 2007 and of 3.2% in 2008."

The report calls the housing industry risky, "but especially the for-sale condo market which has gotten a little ahead of itself. Some developers will be at risk."

On the state level, the report said that trends in the housing market "will continue to be a drag on the economy."

"The state's budget will be in a deficit situation again," the report said, "while there are ambitious environmental, social and infrastructure programs being discussed in Sacramento . Who will pay for them?"

The slowdown in property tax revenues, it said, could cause government agencies to tighten their budgets, and "most government agencies will have to start accounting for their obligations for retiree pensions and health care."

Immigration, trade policy

The report anticipates that with Californian Nancy Pelosi serving as speaker of the house, attention will be paid to a guest worker program to cope with undocumented immigration.

"The latter could help the state's labor-starved farming industry," the report said.

Another item will be trade policy, the report said, "with the Democrats concerned about the movement of jobs offshore. The state has lost manufacturing jobs, yet the business of international trade has been a significant engine of job growth."

In the agriculture sector, the report points out that the severe freeze that damaged the fruit did not damage the trees themselves. Income from the state's farm sector, it said, was little changed from 2005 to 2006, but the job count will decline in 2007 due to freeze-related disruptions.

In international trade, the Transportation Worker Identification Credential will be implemented some time during the year. "There are concerns many of the port truckers won't be able to obtain a TWIC due to their immigration status."

Greenhouse gas legislation

Professional, scientific and technical services will continue to expand, the report said, but "an emerging driver will be compliance with AB 32, the greenhouse gas legislation. Many industries will need to determine their requirements and how to best meet them."

Technology should see decent growth, the report said, as will tourism, as the weaker U.S. dollar attracts international travelers.

On the risk side, the report said the housing downturn "could be more severe than currently forecast."

And, the report said, the already high operating costs for businesses in the state "will go up due to tight office and industrial real estate markets, which will translate into higher lease rates. Longer range, a significant investment will have to be made in the state's electric distribution system, and higher power rates will result."

The 2007-2008 Economic Forecast and Industry Outlook for California and Southern California was written by Chief Economist Jack Kyser and economists Nancy D. Sidhu, Eduardo J. Martinez, George Huang and Candice Flor.

 

East side to get huge new plaza

1,000 jobs expected at new center AV Press on Thursday, February 8, 2007. PALMDALE - With earth-moving equipment grinding away in the distance, city officials and builders ceremoniously broke ground for what will be the largest shopping center on the city's rapidly growing east side.The 47-acre Palm dale Gateway center, on the northwest corner of 47th Street East and Avenue R, will be larger than the east side's first major center: a 33-acre plaza containing 11 businesses, including Wal-Mart and Lowe's, on the southeast corner of 47th Street East and Avenue S. The Palm dale Gateway plaza on Avenue R will be a hub for 18 businesses, including the Antelope Valley 's first SuperTarget, which will offer groceries in addition to other goods. The SuperTarget will be the Gateway plaza's largest anchor, spanning 172,815 square feet, said Brian Hopkins, vice president and development manager of the Hopkins Real Estate Group.

The SuperTarget should be open by mid-October, Hopkins said Wednesday.All told, the Gateway plaza will provide 522,766 square feet of new commercial business space, Hopkins said.About 140,000 square feet will be taken by a new Home Depot outlet, he said. "In addition to that, PetsMart and Staples will be joining us, and numerous pad shops and restaurants" Hopkins said. The SuperTarget will be one of the first structures to be completed, while the Home Depot will not be finished until about March 2008, he said. His company will be investing about $70 million in the project, for which grading was initiated in January, Hopkins said. Government approvals for the project were pushed through in about half the normal time, Hopkins said, extending his appreciation to many individual staff members in various departments at City Hall. Construction of the center will bring improvements to both Avenue R and 47th Street East , which is part of state Route 138, Hopkins said. "The sales tax that will be generated by the center is going to be incredible," Hopkins continued. The new businesses are expected to provide employment for about 1,048 people, city documents show. Mayor Jim Ledford said he was pleased with the business community's interest in serving east side residents. "It's great to see this blueprint unfolding on the east side of our city," said Ledford, who was joined at the groundbreaking by Mayor Pro Tem Mike Dispenza and Councilman Steve Knight.

 

 

 
 
Rainmaker_large

Steven Anthony Harris

Lancaster, CA

More about me…

STEVEN A. HARRIS REAL ESTATE

Office Phone: (661) 270-6565

Email Me

Real Estate News and Entertainment


Links

Archives

RSS 2.0 Feed for this blog

Find CA real estate agents and Lancaster real estate on ActiveRain.