SDblog

But you won't see this headline in the newspapers or on TV.  Besides network news being enamored of bad news, we are also in an election year and with President Bush being so out of favor with the mainstream media, they don't want ANYTHING GOOD to happen on his watch.

However, the truth is that the buyers market will soon be in the not-to-distant past.  It reminds me of 2003 and 2004, where we had to jump on every new listing the minute it hit the MLS.  That is what is happening, and I am finding this on both ends of my business, with buyers and with sellers, even short sale listings.  Our most current listing never even made it to a brokers open or a buyer's open house!  It was pending in 14 days after receiving 11 offers.  And it is a short sale listing!

With our buyers, we are making offers immediately, but usually end up being one of eight or more offers. 

So, this is all a recipe for higher prices, and prices are being driven up above the list price significantly.  If you thought you could wait around any longer and wait for prices to drop more, that train left the station with 2007 (good ridance, I say!).

Don't get me wrong, price are still WONDERFULLY LOW, but on the rise.  By all estimates, we still have a long way to go to get stabilization in the market - bank failures such as IndyMac just make securing your financing that much more difficult.  But you should beg, borrower, or steal that 3% down payment FHA requires to get in the house, maybe not of your dreams, but on the way to your dreams.

Jan Farley

This is a question I hear in many forms often.  It can be worded, "is it better to buy a house or a condo" or lots of other ways as well.  The answer to this question depends on each individual buyer's needs and desires.

Its not always better to buy a house.  If you are a person who doesn't have a lot of handyman skills, or time, a house might be a big headache for you.  Here are the major differences between buying a house and a condo:

1.  With a house, you own the land and any and all buildings on the land.  You have complete responsibility for the expense of all upkeep on the buildings and keeping the land "sightly" and free of fire-endangering growth and debris.  So if you spring a leak in the roof, you have to pay to fix it.  If an errant baseball comes through your window, you (with perhaps help from homeowners insurance) have to pay to have it replaced.  If your house needs exterior paint, that is your gig as well.

With a condo, essentially you own the interior "air space" and have responsibility for the maintenance and upkeep of the interior of your unit.  So if you want new cabinets, you pay for it.  You want to change the color of your living room, you pay for it.  But if there is exterior damage or maintenance, or the roof needs replacing, the homeowner's association pays the bill.  The homeowners association owns the entirety of the LAND and really to a major extent, the exterior of your unit.  So you give up the right to make changes to the outside without HOA permission, but you also give up the right to make major exterior repairs out of pocket. 

2.  Insurance is another major difference.  With a house, you shop for and pay for homeowner's insurance that covers the interior, exterior, contents, and liabilities such as someone slipping and falling on your property.  You have the right to choose the company you like best, and the coverage/premium that meets your needs.  If you don't keep your insurance paid current, your mortgage holder can order "forced placed" insurance to protect their investment in your home in case of fire - this is very very expensive.  You can control this cost to some extent by choosing a larger or smaller deductible.

With a condo, there is a master insurance policy covering the exterior of the units, liability, fidelity bonds for the HOA officers and board members, etc.  A portion of this cost is passed on to the home owner in the monthly HOA fee.  You should get your own contents insurance, because this master insurance doesn't cover your beloved possessions.   You don't have to worry about making the monthly payments to the insurance company, this is done for you.

3.  Monthly expenses are another issue to consider.  Typically the monthly HOA fee will include not only insurance, but will also cover a range of the following: water, hot water, sewer, trash pickup, cable TV, gas, electricity, fitness facilities, tennis courts, pool/spa maintenance, and grounds maintenance.  With a house, you are responsible to pay ALL OF THE ABOVE, and these can add up. 

I hear people "railing" about the expense of the HOA fee all the time, but by the time you add up all the things you pay monthly when you own a house, you might actually be ahead with the HOA fee!

In summary, if you don't have the time or talent to do repairs, don't want to hassle with insurance and other monthly bills, don't want to do yard upkeep, and don't mind giving up a small level of your privacy in exchange for added security, a condo may be the best bet for you.  If you are fiercely individualistic and love to work in the garden and tinker around in the garage, then a house is probably best for you.

Jan Farley

Hi Everyone - we had to deactivate the blog from our site for a while.  I don't know how, but somehow comments regarding a certain drug for, shall we say, "male enhancement" were spamming us and so the site host recommended we deactivate for a while.  They are working on some measures to stop that, so we shall see.

So we will be posting again as often as possible.

THanks! Jan Farley

Now in escrow for our buyers, 4740 34th Street, Unit 9, San Diego, CA  92116.  MLS #086035181. 

This is a really nice condo 2BR/2BA with a private balcony about one block north of Adams Avenue.  It sold in 3 days!  Take a look at some of the photos:

We had been showing clients bank-owned homes in Riverside for quite a while.  Most of them were overpriced and in horrible condition.  Most didn't even have working kitchens.  It would be tough to finance them, even if they WEREN'T overpriced.

We waited a couple of week and went out again.  The first house we went to was very reasonable priced.  It was bank owned, but apparently it had been in such wretched condition that the bank had gone in and painted, re-carpeted, put in new tile flooring, new kitchen appliances, and redone the bathrooms.  We were really liking this house, when we all went to the back yard to check it out and the swimming pool.

While we were looking at all the good and bad features, I happened for some unknown reason to look down at my feet (I was standing on grass) and I saw a little plastic GI Joe.  I thought it was interesting because the client has a son named Joey and he is a G I.   The clients got this kind of shocked look on their faces and they said, "oh my gosh!  we found a G I Joe just like this one in the yard of the first house we bought when we first got married!"  And they still had the first one!  When we got back to their apartment, the Mrs. brought out the other GI Joe, and they were identical except in size.

We made the offer on that house, and we had to fight for it and go up above asking price because it was such a good deal, but we are in escrow.

G I Joe, and other things like him, often have a LOT to do with buying a home.  Buying a home to live in is quite an emotional experience, and very personal.  I love it that these lovely sweet clients found G I Joe again, and a home they love.

Jan Farley

OUR LISTING AT 8798 Wahl Street, Santee CA 92071 has been reduced to $189k!  This is the lowest priced 3Bedroom/2Bath townhouse in Santee, and it is the best location in the complex!  Only one attached wall on one side, and Mission Trails Park on the other side!  This is a short sale - act quickly!  It will move fast at this price!  Call or email for a private showing!  858-699-7480  jan@coastline-realestate.com .   

With all the hoopla of raising the FHA limits that was supposed to help people refinance out of their high rate, adjustable rate sub-prime mortgages, I bet you are wondering how that is going?

Well, it is going about how I thought it would - it is making a difference in some cases where people have sufficient income they can document and a little bit of equity, 3% equity to be exact.

There are some problems that are causing this to not work so well in most cases in San Diego County.  The number 1 problem is, our shrinking home values.  All of these loans require an appraisal, and that is where the problem is coming in.  With all the bank-owned foreclosures being dumped on the market, it is causing the appraised value of homes to be lower and in a large percentage of the cases, the appraised value is too low to be able to refinance.

This is not a new problem - that's the problem we were having all along.  If the values had stayed up more, we wouldn't have needed FHA limits increased to bail people out.  Full docs loans with a little equity have always been available.  So how do we fix THIS problem? 

Congress has some ideas, but the mostly involved the taxpayer taking it in the pocketbook, and I'm not sure that is a great idea.  We are already taking it in the pocketbook at the gas pump, for electricity and natural gas prices, and increased costs of goods also associated with the gas prices (think how much it costs truckers to fill up now - yikes!).  Generally when it comes to mortgages and real estate, congress gets it all screwed up anyway - they really don't understand real estate and mortgages, being the elites they are. 

So should we do ANYTHING?  Yes - a better law would be to compell lenders to approved short sales in a very timely manner.  Set up some federal guidelines and time frames and make them stick to it.  Short sales are just so hard and time consuming to get approved, many buyers and their agents shy away from making an offer.  So the bank ends up with the property and dumps it, and loses more than they would have if they would have just taken the first offer that came in several months earlier.  This would stop the super-fast errosion of people's equity, help them with their future credit issues, and make life a little easier for everyone. 

What do you think?

Thanks, Jan Farley

                                       

DARN!  I COULD HAVE BOUGHT A HOME!

WHY ARE YOU STILL PAYING RENT???

There are 17 one and two bedroom homes and condos in La Mesa available today from $125k - $199k.  And this same scenario is true in most areas throughout San Diego County.  This means that buying that first home in San Diego County is now not just a possibility, but a strong opportunity!  Your total monthly payment on a $199k purchase price, including taxes and any HOA fees (for a condo) could be in the neighborhood of $1,695 per month!  Of course there are variables, such as how much the HOA fee is, what interest rate you are able to lock, whether higher or lower.  With the tax savings you will have writing off your mortgage interest and the property taxes, you could actually be paying less than rent for the same property!

People, for most of us, this is a once in a lifetime opportunity to buy a home or condo in San Diego County at an affordable price with interest rates near historic lows, and with the stimulus package increasing FHA and conforming loan sizes to make it all happen for you.  Don't let the opportunity pass you by! 

Wow we have been waiting a while for this headline!  And very timely as well, don't you think, since I last week posted that I thought the buyer's market was quietly taking an exit stage left.  Being on the front lines, we real estate folk are always way ahead of those who think they are "in the know" and the media.  Of course, they had to follow the headline with the decline in prices.  But the decline in prices will itself begin to decline as buyers hit the market.  We are seeing multiple offers OVER the asking price - just like 2003 all over again (and with similar prices).  We still have bad issues with lending guidelines really making a harsh impact, but the temporary increase in conforming and FHA limits are really going to fuel the market this year.  We will need those increases to be extended for at least another year, if not permanently.

Get out there and buy a rental unit, people, while they still pencil out to have the rent actually cover your monthly PITI!  You will be sorry if you miss this market.

Jan Farley

Watch this video from CNBC regarding the new liquidity moves made to give Fannie and Freddie the ability to fund the new loan sizes up to $697k.  This is really going to be a shot in the arm for people to refinance out of adjustable rate mortages and to buy a home. 

http://www.cnbc.com/id/15840232?video=689319687

Thanks, Jan Farley