The Perfect Real Estate Storm

There is a perfect storm brewing in real estate.  There have been hints of it's existence in the news and I can definitely feel it's rumbling.  Just as you can sense when it is about to rain I can sense this real estate storm churning just beneath the surface.  When this storm comes to fruition it will not bring destruction however, it is bringing opportunity.  What has started is the opportunity of a life time for those who are willing to seize it.

There are numerous factors contributing to this perfect real estate storm.  We are seeing historically low interest rates of under 4%.  This is historic!  We have never seen rates this low before and it is projected that the rates will stay low through 2013.  The second factor in the storm is that prices of homes have dropped by nearly half from the peak.  This means that home affordability is at a high.  Here in San Diego home affordability is at 62%.  These means that 62% of San Diegans can afford to buy a home.  In 2007 the home affordability level was a mere 10%.  This is a huge increase in the number of people who can afford to buy a home.

The economy appears to to be improving.  One of the biggest indicators is the unemployment rate.  The unemployment rate here is 8.2%, it has been decreasing for the last 2 years.  In 2011 25,000 new jobs were added.  This is a great indication that our economy is improving and will only add to the storm.

The next huge factor contributing to the perfect real estate storm is the inventory of homes for sale.  For the last few years the "shadow inventory" has been described as a black cloud hanging over real estate, preventing it's recovery and threatening a double dip.  It is not looking like all the doom and gloom was warranted.  Yes, the banks have a lot of inventory but they are not going to flood the market with new listings.  They are considering many options such as bulk sales to investors, principle write downs, shared equity programs, and renting the properties.  It is unlikely that all of the bank shadow inventory will hit the real estate market causing a flood.  The other factor effecting inventory is the lack of new homes that were recently built.  When the economy crashed the builders stopped building.  Last year in San Diego there were only 879 new homes built.  This does not nearly cover the new housing needed to compensate for the rise in our population.  It is estimated that 10,000 new homes are needed each year.  The biggest complaint I hear from fellow agents and buyers alike is that there are not enough houses on the market!

Another factor is the pent up demand of buyers.  For the last five years or so, buyers have been sitting on the fence.  Those that otherwise may have purchased were frozen with fear of the economy and the real estate market.  We basically have 5 years of buyers stored up and ready to buy.  Rents are going up.  In many cases now it is cheaper to own a home than to rent one!  The divorce rate goes down in a poor economy since people can not afford to divorce.  This is another group of pent up buyers.  They are not going to stay married for long once they can afford to get a divorce.  All these pent up buyers are beginning to come off the fence realizing now is the time to buy.  This trend is going to become stronger.

When we look at all the factors contributing to the perfect real estate storm, it is no wonder that the buyers are beginning to move.  I am currently working with investors who are already taking advantage of this.  They are buying multiple properties.  They are setting themselves up to be in a perfect position once the storm ends.  Remember at the height of the market when little track homes were selling at over $400,000 and you thought to yourself "I should have bought early" or maybe I "should have picked up a rental property"?  You were kicking yourself because you were thinking of the profit that you could have made or the money you could have saved.  Well, the forward thinking people have started buying again.  Ask yourself, do you want to be kicking yourself again in the future or do you want to take advantage of the opportunity created by this perfect real estate storm?

What Does "Contingent Status" Mean?

One of the most commonly asked questions I get from people just starting the home buying process is "What does contingent in the status of a listing mean?"  What buyers need to understand is that there is a difference between the active and contingent statuses.  When a listing is active the seller is actively looking for offers.  There are no accepted offers on the property and the property is still available. 

The contingent status is a relatively new status that was created in response to the increase in the number of short sales.  Short sales have an additional step in the negotiation process.  They require the short sale lender to approve the sale and the offer in order to move forward.  There is a period of time when the buyer and seller have agreed to terms and the file is sent to the short sale lender for their approval.  During this time the property moves into contingent status.  When you see contingent it means the seller has accepted an offer on the property and they are waiting for the bank to approve, counter or reject the offer.

The contingent status is meant to alert agents and buyers that there are offers on the property and one offer has been has been accepted by the seller and submitted to the short sale lender for review.  Before there was a contingent status, buyers and their agents were viewing and submitting offers on these short sales not knowing that there was already an accepted offer.  This was very frustrating. The property will stay in the contingent status until the short sale lender makes a decision.  If the lender accepts the offer, the property will then move into a pending status (in escrow).  If the short sale lender does not accept the offer or through negotiations an agreement can not be reached, the property will move back into the active status. 

I hope this helps.  Do you have any other questions?  Feel free to let me know if you do.  I am here to help.

Are You Ready For Your Super Bowl Party?

See us in the Big Game For the first time in the 40-year history of our brand, we will air a commercial during the most watched television event of the year. The Super Bowl has a unique place in American television: when the commercials air, viewers actually start paying more attention to the broadcast. Did you know that over 111 million people are expected to watch this year's Super Bowl, and I hope you will be watching and see CENTURY 21 Agents right in the middle of it! On February 5th, tune in to your local NBC station to watch as CENTURY 21 Real Estate takes a new place in history! We are sponsoring a full half-hour segment in pre-game, and we air 11 pre-game commercials during that day. And of course, as our finale, our special :30 Super Bowl commercial will air in the 3rd quarter of the game itself. Don't forget to watch and vote for us! You'll see exactly how to cast your vote for your favorite commercial on Super Bowl Sunday at century21.com. Sideline Starters (click link to find recipes) Every great party needs great food. Here are just a few highly rated recipes that would make a great addition to your Big Game Bash. Seven Layer Taco Dip Super Nachos Super Bread Bowls Super Sliders Hot Wings Recipes provided by foodnetwork.com and allrecipes.com. Bring The Games Home Here are a few games ideas from purpletrail.com. Pass the Lucky Cup Super Bowl Game: This is yet another classic game for a perfect Super Bowl party. It is simple and a great way to make some cash for both you and your guests. In this game the person who holds the cup makes the rules for the game. The owner of the cup says a word like “touch down”, “first Down” or “50-yard line”. Then the cup is passed and each guest is supposed to add a dollar to the cup. The next time there is a touch down in the Super Bowl game, the person holding the cup collects the money inside. Then the game starts all over again. The money collected through the game can also be donated to the local food bank or charity, of course with your guests consent. Drinking game – Take a Shot: This game for adults is a fun activity to a certain point. Being the host, you will need to be careful with this game though if you want you and your guests to see the end of the game. To be on the safe side, try picking light drinks for this game. For this game, you line up fans of each team and force them to drink for every turnover, sack, fumble or dropped pass. As a variation you can also try picking a favorite play or call and every time your team is called on, you have to take a drink. Another variation is that each time the commentator says, “Did you see that” everyone has to drink. Rate the Super Bowl Commercial Game: Each year the Super Bowl commercials get more wild and crazy. A terrific game is to pass out “commercial score cards,” and have your guests rate each of the big commercials on a 1-5 star scale. After the game, tally up the winners. Pop The Balloon Game: This is an easy to play game that would be great after the Super Bowl is over. You pick team colors for balloons, and in each balloon you put a slip of paper. On the slips you can write something like “penalty”, “Personal Foul” etc. and on one of the slips write the score of the winning team. Then ask your guests to pop the balloons and the guest who gets the “score slip” turns out to be the winner of the game. For prizes you can hand out silly gifts like a toy football or pom pom. your guests are sure to have a hearty laugh playing this kiddie game. Keep the Kids engaged: If kids are going to be a part of your celebration then it would be a good idea to make some arrangements for them as well. A good way would be to allot them their own “Kids zone”, away from the grown up crowd. You can arrange for some nice movies, maybe a foosball table, easy crafts or even puzzles. Here are some game ideas for the kids at your party. You can take help of an adult family member who is not interested in the Super Bowl game and can help your keep the kids engaged with the games listed below: Monkey in the Middle Game: This is the old time favorite Super Bowl party game for young party-goers and will keep them entertained during the game. Ask the kids to make a circle. Have one child stand in the middle of the circle and hand out a football to one of the kids making up the circle. The child standing in the middle of the circle is the designated “monkey”. Players in the circle toss the football around and across the circle, trying to keep it out of the hands of the “monkey in the middle”. If the “monkey” catches the ball, they swap places with the person who threw the ball. Super Bowl Laugh Game: This is a fun game that all your little guests will love. While sending out the invitations, you can mention a line stating that all kids are supposed to come with a football joke. Have 2 to 3 judges who can rate the football or Super bowl jokes. The one who gets the best rating is the winner and gets a football for a prize. Video game: The most easy to setup game for a Super Bowl party for little guests would be arranging for a video game station on a separate television. You can set up games like “Madden” or “NFL Blitz” for guests to play during the big game. A Super Bowl party is one of the most fun, laid back parties one can ever attend. But the most important game on Super Bowl Sunday is “Hide the Keys Game”. In this game you need to hide the keys from your drunk friends so they don’t get out on the road. This is very important if drinks are going to be a part of your Super Bowl celebration. Have a Great Super Bowl party!

Alpine Real Estate Market Report - January 2012

Here are the real estate statistics for Alpine for the month of January 2012.  I have included the active, pending and sold single family homes.  If you would like more information about condos or a different area, please feel free to give me a call. 

There are currently 65 active real estate listings in Alpine ranging fro $111,900 for 2 bedrooms, 1 bathroom, 768 square feet to $2,595,000 for 6 bedrooms, 7 bathrooms, 6444 square feet.

26 properties are pending (currently in escrow).

10 properties sold (closed escrow) in January, ranging from $260,000 for 3 bedroom, 2 bathroom, 1818 square feet to $659,000 for 4 bedroom, 3 bathroom, 3562 square feet.  The average time on the market was 64 days.

Want to see how this compared to last month?  Alpine Real Estate Monthly Comparison

El Cajon Real Estate Market Report - January 2012

Here are the real estate stats for El Cajon. I have included the active, pending and sold numbers for all 3 of the El Cajon zip codes.  This is for single family detached homes only.  If you would like information about condos or a different area, please feel free to give me a call.  These are good to know if you are considering buying or selling a home in El Cajon.

92019
There are currently 66 active listings in El Cajon zip 92019 ranging from $189,900 for 3 bedrooms, 1 bathrooms, 1084 square feet to $1,799,000 for 3 bedrooms, 4 bathrooms, 4702 square feet.

37 properties are pending (currently in escrow).

20 properties sold (closed escrow) in January. Ranging from $130,000 for 2 bedroom, 1 bathroom, 1096 square feet to $635,000 for 4 bedroom, 4 bathroom, 3706 square feet. The average time on the market was 93 days.

92020
There are currently 65 active listings in El Cajon zip code 92020 ranging from $165,000 for 2 bedrooms, 1 bathrooms, 792 square feet to $820,000 for 6 bedrooms, 4 bathrooms, 4966 square feet.

44 properties are pending (currently in escrow).

19 properties sold (closed escrow) in January. Ranging from $125,000 for 2 bedroom, 1 bathroom, 1051 square feet to $570,000 for 4 bedroom, 3 bathroom, 2800 square feet. The average time on the market was 75 days.

92021
There are currently 75 active listings in El Cajon zip code 92021 ranging from $128,500 for 2 bedrooms, 1 bathrooms, 728 square feet to $1,550,000 for 3 bedrooms, 3 bathrooms, 5500 square feet.

63 properties are pending (currently in escrow).

23 properties sold (closed escrow) in January. Ranging from $130,000 for 2 bedroom, 1 bathroom, 520 square feet to $500,000 for 4 bedroom, 4 bathroom, 3048 square feet. The average time on the market was 122 days.

Want to see how this compared to last month? El Cajon Real Estate Monthy Comparison

Jamul Real Estate Market Report - January 2012

Today is the first of February so you know what that means... it is time for the monthly real estate reoprts.  Here are the stats for Jamul.  I have included the active, pending and sold numbers.  These are good to know if you are considering buying or selling a home in Jamul.

There are currentlyonly 35 active active listings in Jamul ranging from $195,000 for 2 bedrooms, 2 bathrooms, 792 square feet to $1,250,000 for 2 bedrooms, 3 bathrooms, 4360 square feet.

15 properties are pending (currently in escrow).

5 properties sold (closed escrow) in January.  Ranging from $300,000 for 5 bedroom, 5 bathroom, 4052 square feet to $710,000 for 4 bedroom, 3 bathroom, 3362 square feet.  The average time on the market was 197 days.

Want to see how this compared to last month? Jamul Real Estate Monthly Comparison

Home Buying Reality

I recently worked with a buyer and it reminded me of a pattern that I so often see.  When people first decide to buy a home they are very excited and sometimes have unrealistic expectations.  I start them off by helping them get pre-approved with a lender.  This is very important since the lending requirements have changed so much in recent years.  It is important that they know how much they can afford and what their payments will be.  The buyers in this scenario are prequalified for up to $300,000 and they were comfortable with the associated payment.  We are good to go. 

I start to send them some active listings that are within their price range and meet their other requirements.  Pretty soon, they find a couple of properties they want to take a look at.  They are so excited to be on the hunt for their home and they are oozing with anticipation, dreaming of the great properties that await them.  They have heard how the rices have dropped so significantly and are ready to snatch up their gem.  I try to keep them in reality but at the same time not douse their excitement.  I schedule the appointments and off we go.

We are scheduled to see 5 properties and the buyer's know their dream home will be one of them. I have explained to them that the houses in their price range are going to need work.  They say they understand and do not mind a fixer but the area and square footage are the most important.  When we pull up to the first property the curb appeal is less than ideal but the buyers look past it thinking it would not be difficult to bring it back to all it's glory.  We go into the property and are hit with a musty, dirty carpet smell which is quickly written off to being closed up.  As we tour through the property their hopes are dashed as they find not only does the carpet need to go but the floors in the kitchen and bathrooms are vinyl not tile, the cabinets are knotty pine not sleek dark wood, the counters are tile with missing grout not granite, and there is a small wall heater not central heat and air.  You can see the disappointment on their faces.  They try and remain perky and assume the next properties will be better.  I remind them that homes in their price range in this area will all need work.  But they think I am crazy.  They have heard in the news how desperate people are to sell, how much prices have come down.

This story continues as we view the remaining homes.  All of the properties are in need of work and updating.  The chipper mood of the buyers has faded and they have decided the sellers of these properties are unrealistic and out of their minds.  They do not think the houses they saw would sell at the list price.  They consider putting in what they would consider a fair offer on one of the homes.  Because of the amount of work that they feel needs to be done to put it in the condition they want they want to submit an offer for $120,000 under the list price.  What the buyers do not understand is that these homes are priced for their condition and pretty much at market value.  Unfortunately market value is not determined by how much they can afford.

The end of the story is that the buyer's did submit a low offer on the property even after seeing the comps and what they were selling for.  They did not get the property because multiple offers came in at or above the list price.  It took the buyers awhile to get over the sting that their offer was unacceptable but eventually they did.  They became more realistic with what they would get for their $300,000 and made some changes to their search requirements.  It took awhile but we found it and they just closed on their new home.  It may not have been their dream home but it was a home that they could afford and would love.  It was their reality.

I Want To Buy A Home - Where Do I Start?

So you have been listening to the news and have heard all about the affordability of homes and the incredibly low interest rates.  You are thinking that the housing market is beginning to recover and you are beginning to realize there may not be a better time to buy a home than now.  If you are like 85 - 90 percent of home buyers, you have even started to search for and look at properties on the Internet.  You have used a mortgage calculator and you like the payments you are being shown and see that buying a home is a good financial move.  Now you are wondering how to start the process of actually finding and purchasing a home.

This is a scary point for many.  The idea of buying a home can be scary in and of itself.  The idea of the paperwork and process of buying a home can be downright terrifying.  You are not alone.  Many feel overwhelmed at this point.  Just remember, tons of people buy homes everyday and you can too!  Luckily for you there are professionals here to assist you through the entire process.

To start contact a real estate agent, (preferably Me!), to discuss what you are looking for in a home.  I will want to know what areas you are considering, how many bedrooms, bathrooms, approximate square footage and lot size, etc that you would like.  I also want to find out other specifics that appeal to you.  This will assist me in better understanding what you are looking for and help me tailor a search for you.  I will set up an automatic search that will email you as soon as new properties that meet your criteria come on the market.  Let's face it, the good ones go quickly!  This does not cost you anything!  You do not pay me out of your pocket.  See, when a homeowner decides to sell their home they will contact an agent (preferably me!) and "list" the home for sale.  At that time a contract is done and the seller agrees to pay a commission.  Typically half of the commission goes to the list agent and the other half goes to the buyer's agent (Me, your agent!) You do not pay me.

The second thing you need to do after calling me is to contact a lender.  I have a list of some I have worked with in the past, to help get you started.  You need to contact a lender and get prequalified.  The lender will take your information and run your credit.  They will then show you some different loan possibilities and tell you how much you qualify for.  This is imperative.  You need to know how much you can comfortably afford before you go out shopping for a home.  There is nothing worse than falling in love with a house that you can not afford.  Also, home sellers will not consider an offer without a pre-qualification from a lender.  They want to know you can afford the home.  You need to get this done before you start shopping otherwise you run the risk of finding you dream home and not being able to put an offer in on it and someone else getting the home.

Once we have the search parameters set and you have your pre-qualification letter then the fun begins.  You look at the listings I send you.  When you see one that interests you, you let me.  I will find out more information about the property and I schedule a time for you to see it.  We look at properties until we find one that you want to put an offer on.  See, not so hard, with my help you can do it.  I will answer all your questions and help you through the entire process of writing an offer and going through escrow.  You are not alone.  So, what are you waiting for?  Give me a call to get started!

4 Bedroom El Cajon Home For Sale

Are you looking for a 4 bedroom home to purchase in El Cajon?  Here is a good opportunity for you to get a jump on the competition.  This home is not yet in the MLS, I am giving you the first shot.  This is a 4 bedroom, 2 bathroom, 1650 square foot home, listed for an affordable $299,000.  It was built in 1981 and is located on  quarter acre.  This is a regular equity sale, no banks to deal with!!  Can close quickly. More pics and information

Call me today for all the details.  I will be entering the listing into the MLS later today.

San Diego Martin Luther King Jr Parade - 2012

Here is a good link that provides the details for this Satuday's Martin Luther King Parade in San Diego.  Get out there and enjoy!  Parade Link

Mortgage Debt Forgiveness Act

In 2007 the Mortgage Debt Forgiveness Act when into effect.  Before the enacting of this Act if you had mortgage forgiveness from your lender this amount that was forgiven was taxable.  If you did a short sale and your lender accepted a sales price of less than what was owed on your home, you were taxed on the amount you were short.  It was considered income.  The Mortgage Debt Forgiveness act changed this.  You no longer had to pay taxes on the amount you were short.  This applies to tax years 2007-2012.  It is scheduled to expire at the end of 2012.

What does this mean to you?  Well, if you are considering doing a short sale, you may want to do it sooner rather than later.  There is no way to tell if this act is going to be extended past the 2012 deadline.  If you do a short sale and close before the end of 2012 this debt may be excluded and not taxed.  If you wait and close after the end of this year the amount of debt forgiven may be taxable.  I know I would not want to pay tax on such a large sum of money!

Another thing to consider is that short sales are time consuming.  Do not wait to initiate the short sale until the end of the year.  The escrow must close before for the end of 2012 for the debt forgiveness to apply.  Let's look at a typical short sale to give you an idea of when you should start in order to close by the end of the year.  In El Cajon, the average time on the market is 80 days, short sale approval (the time you wait for the lender to review your financials and any offers) can take 3-6 months depending on the lender, how quickly you can compile documentation, how responsive the negotiator is and so on.  Once you get the short sale approval, a typical escrow is 30-45 days.  So, so you are looking at 10 months from start to finish on a short sale.  If you want to give yourself a realistic chance to be eligible for the debt forgiveness you need to get started by the end of February of this year.

If you would like more information about initiating a short sale please call me today.  Do not wait and risk not being eligible for the savings.  If you would like more information regarding the Mortgage Forgiveness Act, here is a link to the IRS website.

Real Estate 2011 Shape Up

Happy New Year everyone!  I am sure many of you heard that houses did not sell in 2011 but the reality is they did.  Maybe not as many as in previous years but homes were definately bought and sold.  Here are the numbers for some east county neighborhoods.  This is only for single family homes that sold through the MLS.  I did not include condos, land or commercial properties.

Alpine 91901, 180 properties sold, $149,900-$1,100,000

Jamul 91935, 89 properties sold, $105,000-$1,200,000

El Cajon 92019, 334 properties sold, $151,000-41,317,740
               92020, 316 properties sold, $125,000-$905,000
               92021, 344 properties sold, $80,000-$840,000

La Mesa 91941, 287 properties sold, $140,000-1,300,00
               91942, 257 properties sold, $160,000-$610,000

Spring Valley 91977, 540 properties sold, $115,000-$635,000
                       91978, 68 properties sold, $137,000-$529,000

Santee 92071, 422 proerties sold, $130,000-$820,000