February Sales Update

Still the same trend: Sales volume decreases but sales price increases--compared to February 2006. According to the California Association of Realtors:

"The median price of an existing, single-family detached home in California during February 2007 was $564,700, a 5.7 percent increase over the revised $534,400 median for February 2006, C.A.R. reported. The February 2007 median price increased 1 percent compared with January’s revised $559,300 median price."

It appears that sellers are hanging in there with their asking prices and so are the qualified, motivated buyers. Los Angeles County was third in median price increase (5% over January 2007), with Santa Clara and Palm Springs/Desert areas being the 2nd and 1st, respectively.

Internet Home Searches

Trulia.com's March 2007 report about consumer online search behavior can sometimes be more about curiosity than serious looking:

According to Trulia's search data, consumers continue to search online for both "dream" and "deal" homes. Of the top 10 most viewed homes on Trulia.com, the most popular was a three-bedroom home in Rockingham, North Carolina listed at $18,590. Also on the list was a 15,000-square-foot Beverly Hills mansion listed at $24,950,000 - more than 1,300 times the price of the Rockingham home.

However, sellers should take note that industry data does substantiate that about 70% of homebuyers do start their search online, compared to about 10% just a few years ago. So that means the better presentation given on the the web whether through the online real estate multiple listing service or other listing services, the more you might find an actual buyer for your property. Not only does this reach a wider audience than print advertising, it also affords the prospective buyer a look around the property through multiple photos, but also the opportunity for instant mobility by e-mailing the listing to virtually anywhere.

Buying a Home at Auction

With more talk about foreclosures, there’s more awareness of buying a property at auction. But it’s important to do your research first if you think you want to buy a property this way. You need to get information about the property, i.e., amenities and square footage, how much is owed against it, and what is the expected opening bid, either required or suggested.

Have your financing already in place, and be prepared for the required deposit for an accepted bid. Your financing must be in place within a specified period of time.

Price at an auction is based on the loan amount owed plus fees and expenses that the foreclosure process has incurred. It may be less than market value, but realize that once the lender owns the property, it may sell with the help of a real estate broker or through auction.

You usually have to have the money in hand and your loan ready to fund. Each auction has different time requirements.

Most of the time, you don’t have the option of getting inspections and may not see what you’ve bought until you’ve bought it. Most homes are sold in “as is” condition without any warranties of any kind. There are no disclosures or guarantees. There are some auctions where you are allowed an advance preview which may afford an inspection.

Consider all your costs, including the auctioneer’s fee and taxes owed against the property. And during this time, all your research could be wasted (is any knowledge really wasted though?) as the borrower may be able to cure the loan at the last minute!

Last but not least, a property sold at auction may not have clear title, depending on how they are sold. There could be various liens and encumbrances which could require a lot of work to clear up.

Be prepared, if necessary, to walk away. If the deal is not right for you, it’s not a deal.

Information courtesy of eHow.com.

Long Beach

Foreclosure Auction

Median Home Price in Long Beach

Dataquick's city by city chart tells us the January, 2007 median. For Long Beach it's the combination of condos and single family homes (remember, condos usually sell less than houses overall and may sell at greater numbers) which in January sold 8.41% higher than January 2006 at $490,000. Then scroll further down the chart
and find Long Beach zip code 90810--that section next to Wilmington--included under Southwest Los Angeles to see the incredible rise in price there since 2006--over 15% to the current median price of $462,000.

It's important to understand that prices vary widely by area--to check areas within Long Beach by zip code, go here. Some examples:

Naples, Belmont Shore, Bluff Park, Belmont Heights = 90803.
Belmont Heights, Alamitos Heights = 90814
California Heights area = 90806
Wrigley = 90806
Westside = 90810
Downtown, Alamitos Beach, West of Belmont Heights = 90802
North Long Beach areas = 90807

Long Beach

Los Angeles Median Price Still Going Up

Sales are down 20% for six Southern California counties combined, but the median price for Los Angeles County was $528,000 in February (per Dataquick Information Systems), an increase of 7.8% from February 2006.

"Basically, the economy in L.A. County is much stronger than anyone imagines. You have that driving the bus," said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp.

The oft-predicted population growth factor was cited by Kyser as one feature of the current Los Angeles housing market, a factor which does and will likely continue the demand for housing now and and in the future, and is a driving force behind condo conversions and loft developments in commercial areas of local cities.

Sales volume fared a little better than other areas--in Los Angeles County, the sales volume was 11.1% below that of February 2006. See the Orange County Register's article on home prices hitting a new record.

Is It Worth It To Buy Now?

That's the big question for some people. With the higher prices in housing in recent years, some people feel they are saving money by renting. One way to look into this question is to figure your renting vs. buying costs over time. "Over time" is a key phrase here because how long you plan on staying in your new purchase will make a difference, as well the amount of money you put down. Another factor, among several, to consider is the rental market in your area and what it will do in the future: will rents appreciate, and by how much? To check current market rents, check classified ads in your local paper. Another way is going to the "Rentometer" link on the right column. Knowing your tax margin and current interest rates on any investments or savings accounts are other features. The longer you plan on staying in a property, i.e., 5 or 10 years, the more likely you are going to save money by buying. So try this rent vs. buy calculator now, and come back to the link on the right later as you try out different scenarios.

Long Beach, Renting

Basics of Your Loan

These days with so much in the news about subprime loans gone bad, it's also important to know that statistically, these represent a small percentage nationally.

"The truth is that 99% of all loans in the U.S. are not in
foreclosure. The remaining 1% that were foreclosed upon had the following breakdown:
* 80% were classified by federal lenders as Professional Thieves and were turned over to the FBI.
* 20% were classified by lenders as Fraud for Property that resulted in unethical lending practices.
* Ca. Defaults: Historical 32,762 - Low: 12,145- 3Q’04 High: 59,987 – 1Q’96 Current: 37,273
* For all of ‘06, foreclosures accounted for only 1.81% of all Orange County sales, with lenders reselling those homes at an average discount of only 3.8%!" Gary Watts, p. 4 of Real Estate Outlook 2007.

To avoid future dissatisfaction, find out now what to expect to see at your closing when you're faced with a stack of paper to sign. You want to know about three basic parts of your loan papers: The note, the deed of trust (or trust deed), and your HUD-1 statement.

The Note secured by a deed of trust includes the interest rate, payment terms and may include pre-payment penalty terms and other provisions. Make sure these are what you were told you were getting.

The trust deed will show the names of the trustor (borrower), trustee (usually the title company which holds title on behalf of beneficiary), and beneficiary (legal holder of the Note), and includes how the buyer will be taking title, and a legal description of the property and prepayment terms. You need to carefully check all of these before signing for any errors. Bring the legal description from your preliminary title report given you in escrow to refer to. (Even title companies can make mistakes: One time I was representing a buyer in escrow on a property and saw that the seller's name on the tax records had been replaced by the buyer's of the neighboring property because of an inaccuracy in recorded documents.)

The government HUD-1 statement is your final accounting of costs and disbursements for your property transaction. Save this form, as well as the rest of your transaction records, in your files. This document is included with your escrow closing package.

If you want assistance at the time of closing, ask your Realtor or loan officer to be there with you during your appointment, or ask them to be available by telephone in case you have questions when you sit down with the escrow officer.

And, last but not least, while I as a Realtor work with loan professionals I trust and may make a recommendation to you, you the buyer should search out your loan options with other professionals to satisfy yourself. This is also not the time in your life to assume your friend or relative who has been in the business 6 months is going to give you the assistance you need. Loans require extensive knowledge. I have been asked questions by buyers in escrow, who should have been asking these questions of their own Realtor, about lender services they are now unhappy with after their buyer contingencies have been removed and they may risk losing their deposit. Ask how long that loan officer has been in the business on a fulltime basis, if they can be reached when they are out of town, and who can you contact in their office if they are not available immediately, i.e., their loan processor. These questions are not a guaranty, but the answers may give some hints at the service and competence you will be receiving. There is much information on the internet, a lot of it negative, fear-driven, inaccurate or inapplicable to you, but there is no reason why you the buyer shouldn't be attempting to learn about your upcoming loan and home purchase as much as you can.

Home Loan, Mortgage

Transferring Your Property Taxes, California Prop. 90

There seem to be many inquiries about property taxes in California, so I hope you find this informative.

California voters approved Proposition 13 in the 1970's. Ordinarily, when the ownership of California real property changes, the property is reassessed at its current fair market value and the new owner pays property tax based on the reassessed value. However, the law provides certain exemptions from reassessment and, in certain instances, allows a taxpayer to transfer the base-year value of the property to a subsequent property without being reassessed. As a result of Proposition 13, a taxpayer's base-year value could be much lower than if based on the fair market value of the property. (Note: California tax code sections are Revenue and Taxation Code Sections 63.1 (dealing with transfers between parents and children, as well as grandparents and grandchildren), 62 (dealing with transfers into revocable trusts), 63 (dealing with interspousal transfers), 69.5 (dealing with transfers by persons over 55 years of age or severely and permanently disabled persons).)

Property which has had major renovations is normally subject to property tax reassessment. However, California law exempts certain property improvements from reassessment. Revenue and Taxation Code Sections 74.3 and 74.6 (dealing with improvements for disabled access), and 74.5 (dealing with seismic retrofitting improvements). Consult your tax advisor for advice.

Proposition 90.

Ordinarily under Proposition 13, the value of a home for property tax purposes is re-assessed to market level whenever a change in ownership takes place, which usually results in higher property taxes for the homebuyer.

In November 1988, the state's voters approved Proposition 90, which is designed to induce greater turnover of homes owned by senior citizens. The measure provides anyone over the age of 55 with relief from Proposition 13 by allowing them to move from one county to another without undergoing a change in their basic property taxes. (Note: there are currently a minority of counties that allow this transfer, Los Angeles and Orange Counties being two of them.)

Proposition 90 is a "local-option" law; each county has the option of participating. If a county has adopted a Proposition 90 ordinance, it accepts transfers of property tax base assessments from other California counties. If the county that the homeowner is moving from does not have a Proposition 90 ordinance, this does not affect the eligibility of the homeowner. Homeowners seeking to transfer their property tax base assessment must verify that the county to which they are moving has a Proposition 90 ordinance. Go to this list of California Counties to find information from your county tax assessor.

Proposition 60

Proposition 60 is a similar law passed by the state's voters two years prior to Proposition 90. It allows seniors to keep their property tax base assessment when they move within the same county. Proposition 60 does not require passage by a local municipality. It is state law.

Courtesy of Pacific West Association of Realtors

Baby Boomers, CA

Automated Property Searches

The Southern California MLS system -- Tempo -- has just completed a merger with the MLS system covering the San Fernando Valley, making the Southern California MLS one of the largest multiple listing services in the nation. That means an easier search for you when it comes to finding properties in Los Angeles and Orange Counties, and beyond, including Riverside and San Bernardino.

You may either go to the property search function on my website at www.juliahuntsman.com, or have automated property updates sent to your e-mail tailored to your specific search criteria, i.e., square footage, bedrooms, baths, zip code, city, Thomas Guide number, year built, and other factors. This includes condos and townhomes, houses, units, and commercial property. If you do your own search through my website, you will be receiving information that is current within a few hours as it is updated throughout the day. Do you want to know more? Just call me or e-mail me so I can help you as soon as possible.
Property Search,

Tax Time Concerns - Capital Gains

If you are not already aware, there are some exemptions available to your capital gains period if you come up against unforeseeable circumstances that require you to move. The Federal Tax Code provides ways a property owner can dispose of, exchange or sell an appreciated property and receive tax benefits. Some alternatives are described below.

IRC Section 121 enables a homeowner to exclude capital gain taxes (up to $250,000 if filing as a single, and $500,000 if married and filing jointly) if living in your principal residence as a primary residence for two of the last five years. Partial exemption is also available in certain unforeseen circumstances such as a move of more than 50 miles in employment, health or medical reasons, divorce or death. This can even include having multiple births which require a larger home! So if you were thinking of selling, and you may have one of these situations, contact your tax attorney or accountant to review your capital gains issues. If your home has appreciated little in the time that you have had it, your tax consequences may be very small, and your ultimate benefit may be very big by moving now. If you own units and live in one of them, you are still entitled to any applicalbe exemptions on your owner occupied portion.

Revenue Procedure 2004-51 also allows a property owner to convert a primary residence to a rental property, and later take advantage of both capital gain tax exclusion under §121 and tax deferral under §1031 by exchanging into a replacement property held for investment or for use in trade or business.


Long Beach, taxes

courtesy of Apiex.com