Prices Continue Up for June in Many Cities, But Sales Volume Way Down

Average single family home prices in June, 2014, and the increase or decrease compared directly to June of one year ago (prices may differ from overall annualized price), plus stats on closed sales and days on market (DOM).  Actual number and percentage of sales are down (see red column), a lot; properties are usually spending more time on the market before going into escrow (last column); and the average house price, on a citywide basis, is higher than one year ago.  The percentage increase in price, however, is lower compared to May's increases, in many areas. (P.S. See my new Metro Summary page for Long Beach region info for July).
     

Cerritos	$739,333	+10.8%	Closed Sales	-40%	DOM +27.8%
Lakewood	$463,096	+7%	Closed Sales	-32%	DOM +8%
Long Beach	$555,496	+17%	Closed Sales	-28.4%	DOM +58%
Los Alamitos	$726,667	+9%	Closed Sales	-57%	DOM +72%
Seal Beach	$1,021,223	+14%	Closed Sales	-20%	DOM -33.3%
Signal Hill	$655,000	+7%	Closed Sales	-75%	DOM +87%
Huntington Beach	$920,396	+19%	Closed Sales	-21%	DOM +68%
Norwalk	$340,943	+9%	Closed Sales	-8%	DOM +5%
Downey	$444,903	+8%	Closed Sales	-24%	DOM +59%
Garden Grove	$503,922	+15%	Closed Sales	-58%	DOM -9%

Thinking of Taking Money Out of Your California 1031 Exchange? Do It The Right Way

A basic feature/requirements of 1031 exchanges is that the taxpayer doing the exchange cannot have access to their funds--that's why there's an accommodator, or "qualified intermediary" (QI).  In real estate, 1031 exchanges are allowed where the property owner has not lived in the property as a principal residence, but has owned it usually as some form of income or investment property. There are certain exceptions to this, but they will not be covered here.  Just know that the rules surrounding IRS 1031 exchanges are specific and detailed, and must be complied with to the letter.  A principal 1031 exchange benefit is in deferring capital gains taxes on the sale of property by shifting funds into a new purchase, also a non-owner occupied property.  For a property owner who bought in a low market, and is selling in a much higher market, the tax savings can be significant. Simply, in this type of transaction, the taxpayer is not allowed access to funds which are handled through the QI, unless there is an agreement that the taxpayer is taking money out of the first sale, known as "boot", which will not be used in the acquisition of the next property.

As previously covered in other posts, the State of California wants all of the money it's entitled to, so recently a tax audit of an exchange failed because the State said the taxpayer didn't follow the 1031 exchange agreement.  So that means the taxpayer is now probably paying a lot of taxes which otherwise would not have been the case.  The State didn't like the taxpayer giving the escrow officer, not the QI, instructions to exclude $150,000 from the purchase of the next property and send it over to the taxpayer.  The Franchise Tax Board said the taxpayer thus really had access to the funds, which he/she was not supposed to have, and so the exchange was violated.

Moral of this story:  If you're doing a 1031 exchange transaction and you want to take out money from it, make sure it's included in the actual written agreement with the QI, because the QI is who is responsible for handling all funds in the exchange, not the escrow officer. Make sure you are using an experienced and known professional accommodator, are following the advice of an experienced tax professional, and are working with an experienced REALTOR as well.  It could make a huge difference to your bottom line.  Read more at Asset Preservation.

New Listing: Long Beach, 7027 E Keynote St., Carson Park, Large Single Family House!

7027 E Keynote, Long Beach CA

Just Listed -

Here is a spacious 4 bedroom home in East Long Beach with 2 baths and a large family room at 7027 E Keynote St, Long Beach 90808.

With two bedrooms and one bath downstairs, this could be ideal for an extended family or one with older children staying at home.

Low maintenance rear area is great for a spa addition, and side yard could easily be fully enclosed for a pet area.

This home shows as 2402 sq.ft per the tax assessor, features forced air heating, wet bar and large brick fireplace in the family room, an inside storage area, and a remodeled kitchen enlarged from the original 1953 floor plan; it also includes cable TV and FiOS wiring. The inside laundry room includes the washer and dryer.

The quieter interior block location is off the busy streets, yet not too far from freeway access.  Two schools are just a few blocks away and within walking distance.  A great neighborhood for walking and bicycling.  See more at www.juliahuntsman.com "Featured Properties".  Lic #01188996

As of July 15, 2014, offer price is $575,000. Sold 10/30/2014

Maternity Leave is NOT a Reason to Not Get Your Mortgage

#120906801 / gettyimages.com

Every day we are hearing that many buyers are having a tough time getting a mortgage, and there are real reasons lenders are not giving out loans to certain buyers. But one thing that's not supposed to be happening is discrimination:

Several banks, including Bank of America, PNC Mortgage, Cornerstone Mortgage, and at least one insurer, MGIC, have been found guilty have been penalized for delaying or denying applicants because of pregnancy and/or upcoming maternity leave. We thought such discrimination was behind us, but apparently not.

Lenders see a time of reduced income, and assuming this, have been denying mortgage approvals.  Apparently quite a few women have complained, because the insurer MGIC was guilty of denials for at least 70 women.  Mountain America Credit Union, based in Utah, was also found guilty, in addition to other mortgage insurers.

In spite of the numbers of working mothers in this country, some lenders still believe that a woman's commitment to the workplace diminishes after having a child.  According to MomsRising, a  national advocacy group, three quarters of all mothers are working women.

However, federal law assures an applicant: “Any denial or delay of a mortgage application, according to fair lending regulations, violates the federal Fair Housing Act, which prohibits any form of unequal treatment based on gender or familial status”. 

HUD and the Department of Justice have levied monetary penalties against the offenders, even though they say they are following underwriting guidelines and have done nothing wrong.

Ironically, lenders DO NOT accept the birth of a child as a reason for reduced income or any other financial impact when a distressed borrower applies for a short sale from a lender , so why is it being given as a reason for denial of loan approval?

See this article by Ken Harney: http://www.latimes.com/business/realestate/la-fi-harney-20140706-story.html