What's the 2013 Prediction for California Home Prices?

Assumptions:

The PITI is based on the prevailing median price in the

2nd Quarter 2012. The PITI is calculated based on an

 underlying effective FRM interest rate of 3.92%,

 a 20% downpayment,

and corresponding loan amount.

The monthly rent is derived from

RealFacts Q2 2012 estimates for a

3bd 2ba average asking rent.

The California Association of Realtors annual conference was held earlier this month in Anaheim.  The 2013 Forecast extensively covered all phases of the residential market, with a total of 136 PowerPoint slides as part of CAR economist Leslie Appleton-Young's annual presentation. 

At the closing section, Market Opportunities for 2013, four points were made:  1) Home prices are rising, but still very attractive; 2) Look for return on interest for investment opportunities; 3) interest rates are at historic lows; and finally, 4) first-time buyers: rent v. buy?  Do The Math!.

The current story for many buyers and sellers has twists and turns all along the road, but it's still a time to not be passed up!

For California, the median price of a single family home is projected to rise in 2013 from $317,000 at the end of 2012 up to $335,000 in 2013.  At this point, buyers are more optimistic than sellers about future home prices:  49% of sellers think prices will go down in one year, and 9% of sellers think they will go up.  But while 49% of buyers think prices will stay flat, 25% of buyers think prices will go up.  And those buyers are probably going to be right--last year the projected price increase for 2012 was for a 1.7% increase, but the current projected actual increase by the end of 2012 is 10.9% increase.

Median home price for So Cal Counties

The median home price in Los Angeles County went up over 10% from August 2011 to August 2012, with REO sales making up only 12% and short sales making up 24% of the total sales in August 2012.

The Mortgage Debt Relief Act Is Hanging in the Balance For Long Beach Area Owners

In 2007, the Mortgage Debt Relief Act was passed in an attempt to help the millions of homeowners who, due to the housing crisis and economic crash, suddenly found themselves in danger of losing their home to foreclosure.

The act has helped many California distressed homeowners find solutions to avoid foreclosure and opened up options to them that were previously unavailable.  This Act removed the tax responsibility on forgiven mortgage debt and allowed short sale sellers and owners of foreclosed homes to recover more quickly from selling their principal residence as a distressed property.  

 

Although there is less coverage in the media about homeowners who owe more than their home is worth, those owners make up about 22% of the nation's homeowners.

The Mortgage Debt Relief Act, however, was only intended to be a temporary solution and is now set to expire at the end of 2012.  This law has already been extended twice.  There is a bill in Congress that would extend it again, but it is unclear if it will pass. For distressed homeowners, this means that time is limited to take advantage of this program.

Time is running out. But there is still a chance to change your financial direction and avoid foreclosure.  Call today to find out the current process for listing and selling your property as a short sale--the banks have streamlined their process greatly compared to the past, and limited inventory has made buyers more willing to wait for the short sale process.

Just one more thing: please don't think that if this law is not extended, that a short sale is not possible because that is not true.  What it means is that the tax forgiveness period will be over, which will impact both short sales and foreclosed properties.  Please remember that with a short sale, with the vast majority of properties, there is less of a loss for the bank to accept than when it is not sold and goes straight into foreclosure. Either way, the homeowner will be responsible for this difference between the bank's loss and the mortgage amount, if the MDRA is not extended.

 

Contact me, Julia Huntsman, CDPE, at 562-896-2609 and see more short sale information at www.juliahuntsman.com - Help for Homeowners.

Los Angeles and Orange Counties Home Price Snapshot

Orange County's median single family home price was Orange County $567,710 in August 2012, up from $551,160 in July 2012, and up from $508,910 in August 2011.

Median price of a single family home in Los Angeles County was $344,770 in August 2012, up from $334,190 in July 2012, and up from $312,900 in August 2011.

Home Improvement Tips--Cost vs. Value Report

There's a lot of information available about getting a new look for your home, or getting it prepared for marketing, or just getting it fixed.  But how do you know the best areas to invest your time and effort?  Every year Remodeling Magazine publishes its online report -- it's a great resource to consult with to find out what your best choices might be, both from a popularity standpoint and a financial one.  If you're thinking about or considering selling, why spend tons of money or time on a big improvement that may be your best personal choice (if you're going to live there indefinitely), but not one that the majority of buyers may deem significant, or vice-versa? Find out what the trends may be in your region. The improvement picks are not necessarily the same each year.  The annual "Cost vs Value" report for 2012 is not out yet, but should be soon, but here is the link to the Los Angeles area version from 2011.

Also, If you go to www.juliahuntsman.com and scroll down to "Houselogic", you can click and go to their main website for more home improvement tips and maintenance.  This is a really useful resource as you can save items to make your own collection.  Houselogic is another great resource from the National Association of Realtors.

Frankly, when it comes to home colors, I go to a store like Dunn-Edwards and get their paint color chips--they also have very nice brochures putting together a coordinated palette of colors for interiors and exteriors--as well as colors that could be used for various architectural styles and periods. Historical colors can be important, especially if you're located in a historic district where there may be local rules or guidance on period color selection.

If you use Facebook, "like" my page at www.facebook.com/longbeachhomesandcondos while you're there and you can follow my blog posts where I put out information for both buyers and sellers, or just look at my blog at www.longbeachrealestate.blogspot.com from time to time!