Happy Holidays! Thank you for a wonderful 2017. May you have a happy and healthy 2018! Looking to sell your San Diego home? Get a free home value report
Today, I just want to take a minute and wish you happy holidays and a happy New Year! I hope you have the chance to spend some time with your friends and family. Thank you for working with us in 2017, and we look forward to seeing you in 2018.
Today, I’d like to talk to you about accessory dwelling units, which are more commonly known as “granny flats” or “in-law suites.”
Last year, a law was passed in California to help address the housing shortage. This law allows for the construction of a second home on a lot only zoned for a single-family property.
This way, you can either rent the space out or use it to house grandparents, in-laws, or your adult children.
However, actually following through on what this law allows has been somewhat difficult. Right now it takes about $26,000 to get the permits and plans approved by the city of San Diego. This is before anything has even been done toward the construction of the home. Additionally, it can take weeks or months to even get started.
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Last year, California passed a law allowing accessory dwelling units to be built as a second home on a single-family lot.
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Thankfully, a proposal has been made to help streamline this process by reducing the associated fees and having templates available for the units. If templates became available for people wanting to build this second property, the unit would already be pre-approved.
There is a stipulation relating to size, though. You can build up to 1,200 square feet for an accessory dwelling unit.
If you are interested in accessory dwelling units, get in touch with us so that we can include you in an upcoming seminar my team and I are hosting on the subject. For more information on these accessory dwelling units, click here.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
Today I want to talk about the proposed tax reform that’s currently on the table. Specifically, I’d like to talk about three aspects of it that could affect the housing market.
1. They may be capping the mortgage interest rate deductions. Currently, you’re able to write off all of your mortgage interest on a loan up to $1 million. They are thinking of reducing this cap to $500,000. Let’s say you’ve got a 4% interest rate on a $1 million mortgage. Right now, you would be able to write off $40,000. If this tax reform goes through, you would only be able to write off $20,000. They are also looking into entirely eliminating the mortgage interest rate on second homes and home equity lines up to $100,000.
2. There is a proposal by the Senate to eliminate state, local, and property tax deductions. Here in San Diego where your property tax rate is about 1.2%, this could be a big blow to your write-offs. The House’s proposed plan would instead cap property tax deduction at $10,000.
3. They want to adjust the tax break for sellers. Currently, if you are an owner of a primary residence and have lived there for two of the last five years, you can write off up to $250,000 if you are single and up to $500,000 as a couple. These write-offs are currently tax-free. If this proposed tax reform goes through, you will need to have lived in your home for five out of the last eight years instead of two out of the last five. Instead of being able to move up every two years and taking your gains tax-free, you would need to stay in your home for at least five years.
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On a long term scale, this proposed tax reform could decrease seller motivation.
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Overall, there is a lot of discussion about how these changes are really going to affect housing. In the short term we may not see a big impact, since interest rates and inventory are still both low. But as time goes on, this proposed tax reform will create less motivation for people to sell. Also, by basically tying people to their homes for longer periods of time, we’ll likely see some tightening inventory.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
As we wrap up the summer, many of you are likely wondering where our market is headed now. The numbers for August are in, and they point to a trend you may have already noticed.
Things in the market have been a little sluggish lately. The number of sales is down about 12% year over year. This seems to be more due to lack of inventory as opposed to a lack of interest from buyers.
The number of multiple offers has also gone down, but 60% of all homes sold still received them. Also, 31% of homes are selling above list price. We’ve seen a year over year appreciation of 7.4% in San Diego County. So, where do we go from here? Pulsenomics recently released its home expectation survey for the third quarter. Pulsenomics makes these predictions for our market by going out and interviewing over 100 different economists, finance specialists, and Realtors nationwide.
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Due to lack of inventory, our market is a little sluggish lately.
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Using the information they gathered, they expected about a 5% appreciation overall for 2017. However, they expect the appreciation rate to steadily decline until about 2020. In 2020 and 2021, they expect the appreciation rate to stay level at about 3%.
Even with this decline in percentage, the prediction remains that our market will continue to appreciate for the next five years.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
If you think you have to save a lot for your down payment, think again. I have two down payment assistance programs to share with you that will allow you to buy a home sooner than you think.
It’s getting late in the summer, and we’re seeing the same slump in sales activity we usually do this time of year. This slump, though, provides a great opportunity for buyers—especially if you’ve been frustrated throughout the year by multiple offer situations. There isn’t as much competition in the market right now, but inventory is growing.
If you’re a buyer and you’re saving up for a down payment because you think you currently can’t afford one, I have a couple great down payment programs to tell you about.
The first is an equity share program. There’s a company that will match up to 14.5% of your down payment in exchange for an equity share in your home. You need to put down at least 10% for an equity share program, and it’s capped at a $638,000 mortgage.
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These are two great down payment options.
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The second is the California Homebuyer’s Downpayment Assistance Program. This option is great for first-time homebuyers because it contributes up to 3% of the purchase price. This is primarily geared toward FHA buyers, and it allows you to put as little as 0.5% down. Since this program is a grant, it’s completely forgivable. This program does require you to take a class on homeownership, and there are income requirements, as well. You must also own the property for a certain amount of time.
Lastly, I want to share with you an app we agents use called Homesnap. This app offers real-time information about properties for sale (and even properties that aren’t for sale). All you have to do is take a picture of the house with your phone and it will provide you the information you need. It also lets you communicate with us if you want more specific information or would like to schedule a showing.
If you have any questions about down payment options, the Homesnap app, you’re thinking of selling your home, don’t hesitate to give me a call or send me an email. I’d be happy to assist you.
June has just begun, so I wanted to stop in with a quick market update.
The big news is that we finally did it. We have set the new high in San Diego County for the median house price. Right now, the median house price is at $525,000. Believe it or not, the last peak we had was way back in 2005 at the top of the housing bubble.
If you adjust for inflation, we’re still not quite up to the $644,000 that would signify a new high but essentially, we have done that at $525,000.
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June and July should be strong months for our real estate market.
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If you look at the historical trends of 3% to 4% appreciation that we’ve seen in real estate for the last 80 years, then we are still a ways below that trend line, which leads many people to believe that we still have room to grow.
Now, inventory and low interest rates are still driving appreciation, and we won’t see a fundamental shift there anytime soon. June and July should be strong months for our market before things start to cool down in late summer and early fall.
Meanwhile, our office is under construction. We’ll let you all know about our grand opening as soon as we are officially moved into 4112 Napier Street in the heart of Bay Park.
In the meantime, if you have any questions about our current market, give me a call or send me an email. I would be happy to help you!
According to a recent survey, not being able to save up enough money for a down payment comes in at the top of the list. 55% of prospective homebuyers cited this as their main stumbling block to achieving homeownership.
With the continuing growth of home prices, things aren't getting any easier for them. In fact, homeownership rates reached a 20-year low last November.
It might be hard to imagine, but just a decade ago many lenders offered easy, no-money-down mortgages. Anyone with a pulse could qualify for one. However, after the financial crisis, mortgage standards have become more restrictive. A typical mortgage now requires a 20% down payment.
If you have decent credit and a steady income, you might also qualify for a number of specialized programs that require little or no down payment.
First, there's the USDA loan, which is valid for homes in certain regions, such as rural and suburban areas. With zero money down and lenient credit requirements, the USDA loan can be a great choice..
Second, there’s the VA loan, which you can apply for if you or your spouse served in a branch of the military. It's possibly the most generous zero-money-down mortgage because of low interest rates and low closing costs.
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55% cited the lack of a down payment as their main stumbling block.
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Third, there's the FHA loan. It does require a 3.5% down payment, but that is much more achievable than the 20% required for a conventional mortgage. There are also a number of credit unions and first-time homebuyer programs that might apply to your particular situation.
There’s one more important thing you should know. If you decide to get one of these no-money-down mortgages, chances are good you will have to pay private mortgage insurance, which can drive up your monthly payments. Private mortgage insurance will disappear after your mortgage balance is under 80%, and the money you do pay will be tax deductible in most cases.
As you can see, there are lots of options to make owning a home a reality for you, even if you haven't saved up tens of thousands of dollars.
If you need any advice on getting a no-money-down loan, give me a call at 619-977-8364. I can put you in touch with some experienced area lenders who can answer your questions and help get you started. I look forward to hearing from you soon.
I wanted to stop by with an update on the San Diego market so far in 2017 and also let you know about some upcoming events that we'd love to see you at.
Looking back, we can see that 2016 was a great year for the San Diego real estate market. We led the nation several times in appreciation in the Case-Shiller Index, but the early numbers for 2017 show that some other metropolitan areas are taking the lead. San Diego has actually fallen to 14th on that list. The San Diego market is still appreciating, but not as much as some of those other markets.
After about 6% or 7% appreciation in 2016, some predict we'll see that slow a little bit. This is probably because many areas in San Diego have already surpassed their all-time highs in values. You may have even experienced how homes are flying off the shelves.
We've seen a lot of activity this quarter, likely due to interest rates rising, causing people to jump off the fence and lock in a rate while they're low. This year, we expect a lot of early appreciation to take place in the first part of the year; April and May have typically been our market's busiest months.
As for inventory, we're at just under 5,000 homes on the market for San Diego County. As interest rates continue to fuel activity, upward pressure on prices will be fueled too until something dramatic happens that could change inventory levels.
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Interest rates are causing people to jump off the fence and buy a home to lock in a low rate.
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There are a few other events here in San Diego coming up that I wanted to tell you about. The first is The Taste of Morena on April 26th from 5 p.m. to 9 p.m. Here at our office at 4112 Napier Street, we're holding an open house as one of the sponsors. We're also selling tickets, so if you need tickets, you can get them from us for $25 apiece. There will be 23 different restaurant and bar stops where you'll get free samples from.
It's going to be a fun night, and we'll also have some drawings, drinks, and giveaways at our office as well. We'd love for you to join us.
On May 6th, we're also sponsoring the 21st Clairemont Garden Tour at 2151 Burgener Street. We'll have a booth there, and there will be a food truck nearby as well. It's a great opportunity to walk through and get some great ideas and inspiration for landscaping. We hope to see you there as well!
As always, give us a call or send us an email with any questions you have. We're happy to help.
If you have to sell your home before buying your next home, you become a contingent buyer. Many people find themselves in this situation, and many are also nervous about selling their house before they have the next one bought and lined up. They worry they won't be able to find a home they're excited about.
When figuring out your situation, you have to consider price and terms. Check out the video above for a graph that visually explains how the better the terms are in your offer, the better the price you can expect to pay. For example, if you offer a fast close and an all-cash offer, you will probably get a better price.
If you're a contingent buyer, you're a big unknown to the people selling their home.
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As a contingent buyer, the closer you are to selling your current home, the better.
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Since your terms won't be as good, you'll have to pay a premium for the home you want. If you make an offer contingent on the sale of your house and your house isn't even on the market yet, your offer will probably go into the seller's trash can. If your house is at least on the market, your offer becomes more attractive to a seller. If it's under contract, it's better still. If you get to the point where you're a contingent buyer but your house is under contract and ready to close in a week, it's as good as a standard non-contingent offer.
Basically, as a seller you've got a lot of leverage right now. This means you can extend escrow a little bit if you need to or arrange a leaseback agreement so you don't have to move twice.
If you have any other questions about buying a home contingent upon the sale of your existing home or about anything else related to the market here in San Diego, give me a call or send me an email. I'd be more than happy to help.
Even in a hot market like ours, it's important to have representation by your side when buying a home. Here are the major benefits of working with a buyer's agent.
When you're buying a home, it's extremely beneficial to hire a buyer's agent and stick with them.
In our market with limited inventory, we see a lot of buyers thinking they can go directly to a home's listing agent and that the agent will cut their commission, giving them a price benefit. In reality, though, the listing agent has a contract with the home seller for the total amount of commission of the sale. They offer a portion of it to the person that brings a buyer. Whether that person is themselves, somebody on their team, or a third-party agent, they will get paid that same amount.
Wouldn't you want somebody representing you and your interests in the negotiation?
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Let an agent take care of coordinating all those showings you want to go on.
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That listing agent has known the seller at least as long as it took to get the home on the market, if not longer, whereas they've only known you for 15 minutes or so. Who do you think is going to win in that negotiation?
Another benefit to having a buyer's agent is that they can coordinate all the different showings. When you want to look at five or six houses, you don't have to try and schedule around open houses and availability. Let your agent take care of those things.
Additionally, buyer's agents have access to 'coming soon' properties that haven't even been listed yet. For example, I have a list of 12 of these properties currently that I share with my clients. They're not my listings, but I know about them because I network with all the other agents in the area. If you want that inside track, you need to find somebody who does their homework to benefit you.
Another great example of the benefits of having a buyer's agent is the marketing. One of the agents in our office has a client looking specifically in the Escala complex in Mission Valley where there's just nothing on the market. Our agent is putting together a letter about that buyer and mailing it to the entire complex to find out who is thinking about selling their house to see if we can put together a deal.
If you're looking to buy a home, we'd love to represent you, but we want you to at least reach out to a couple buyer's agents to find the best fit for you. Just give me a call or send me an email soon. I look forward to hearing from you!
