San Diego Market in 2015 Projection

According to our San Diego Association of Realtors our real estate market for San Diego has stabilized.

In 2014 our home values for single family homes went up around 5 percent however overall home sales county wide were down.

Interest rates right now are still at an all time low. You can get a 3.25% interest rate for 30 years which is un heard of.  With that said we can expect a surge of buyers flooding the market to take advantage of that interest rates, however they are anticipated to go up later this year which should keep the appreciation of homes in the single digits to balance each other out and keep affordability down.

Inventory is low now which means its a great time to sell your home as there is not a lot of competition and interest rates are low which creates the perfect storm for buyers to flood the market.

This time a year ago the median home price was about 462,000 and if you waited and not bought a home in 2013 the difference from 2013  to 2014 is about $30,000 dollars more.

We have also noticed that home prices today have reached in some areas the home prices of 2007, when the market was at its peak before it went down.

I always love to tell buyers and sellers the best time to buy is when your ready and the best time to sell is when you are ready. There is never a right time. You can only hope to buy near the bottom and sell near the top. This is the perfect market for that cause even though the home prices are up the interest rates are low so that makes it affordable.

Take advantage of these interest rates while you can and if your thinking of buying or selling please feel free to reach out to us for a free no obligation consultation and we can determine whether or not this is the right time for you to do anything.

5 Reasons to Hire a Real Estate Professional

Whether you are buying or selling a home, it can be quite an adventurous journey. You need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO.

The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but have rather been strengthened due to the projections of higher mortgage interest rates & home prices as the market continues to recover. 

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?

According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream?

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.

4. What is the home you’re buying/selling really worth?

It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to the National Association of REALTORS, “the typical FSBO home sold for $208,000 compared to $235,000 among agent-assisted home sales.”

Get the most out of your transaction by hiring a professional.  

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer?

Dave Ramsey, the financial guru advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line:

You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?

Attaining the American Dream: 5 Financial Reasons to Buy

Heading into 2015 many people have their sights set on buying a home. The personal reasons differ for each buyer, with many basic similarities. Eric Belsky, the Managing Director of the Joint Center of Housing Studies at Harvard University expanded on the top 5 financial benefits of homeownership his paper - The Dream Lives On: the Future of Homeownership in America.

Here are the five reasons, each followed by an excerpt from the study:

1.) Housing is typically the one leveraged investment available.

“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”

2.) You're paying for housing whether you own or rent. 

“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”

3.) Owning is usually a form of “forced savings”.

“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”

4.) There are substantial tax benefits to owning.

“Homeowners are able to deduct mortgage interest and property taxes from income...On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”

5.) Owning is a hedge against inflation.

“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.”

Bottom Line

We realize that homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially.

Is it better to sell Now or Spring time?

One of the most common questions I get asked this time of the year is, "is it a good time to sell now or in the spring time?" Majority of people hold their homes off the market this time of the year and than put it on the market in the spring time. That seems like the normal thing to do, however I think a little different.

Great things are not accomplished by those who yield to trends and fads and popular opinion. Charles Kuralt American journalist

Being that the majority of people think the same way and wait till the spring time to sell I think NOW is the best time to sell. Interest rates are low, FHA changed their PMI fee and there is a whole less competition out there so the chances of you selling your home now for a higher price is a lot better now than in the Spring Time when buyers have more to chose from.

So Whether you live in San Diego, La Mesa, Santee, Lakeside, Alpine, El Cajon, Poway, Rancho Bernardo, Carmel Valley, Scripps Poway, Mira Mesa, Del Cerro or San Carlos I can help. If you want a FREE no Obligation Price evaluation of your home call me now at 619.449.1919

San Diego County office leasing increased through 2014

Office leasing overall in San Diego County continued to improve last year, although there are soft spots, according to reports by JLL, Newmark Grubb Knight Frank, Colliers International and CoStar Group Inc.

Colliers reported 486,918 square feet of net absorption in the fourth quarter and more than 1.7 million square feet of net office absorption for 2014.

This ranked 2014 with the most absorption during the past nine years, Colliers reported.

JLL reported 997,067 square feet of net absorption in 2014, which included 224,903 square feet in net absorption in the fourth quarter.

CoStar (Nasdaq: CGSP) reported that net office absorption was 886,295 square feet in the fourth quarter.

"The absorption trend continues to be consistently positive, with 18 of the prior 19 quarters driving vacancy rates steadily downward," Colliers wrote. "The overall countywide vacancy rate dropped 59 basis points during [the fourth quarter] to end the year at 12.2 percent."

By all accounts, downtown San Diego, which about 2 million square feet of vacant space, depending on the survey, is waiting for tenants.

That situation could worsen when Sempra Energy (NYSE: SRE) vacates more than 347,000 square feet at 101 Ash St. to move into 320,000 square feet at 424 Eighth Ave. sometime this summer.

Demand was essentially flat in 2014 in downtown San Diego's central business district. That district’s net absorption of 11,263 square feet in the fourth quarter evened out 2014 activity to 281 square feet of negative net absorption, Colliers wrote.

The JLL fourth-quarter report said there is a lot to like in the year-end numbers, which were fueled by the addition of more than 43,000 nonfarm jobs last year.

Professional and business services recorded the greatest year-over-year gain, adding 13,300 jobs in November. Professional, scientific and technical services contributed to more than 60 percent of the job growth in this sector.

"This steady job growth, especially in office-using employment, points to continued demand for office space in the future," JLL reported.

The past year was also a very good one, by Newmark Grubb Knight Frank's accounts.

"The close of 2014 marked a year of robust expansion for the San Diego office market," it reported. "Fourth-quarter vacancy fell to 13.7 percent, down 30 basis points from the prior quarter and 470 basis points from year-end 2010."

JLL (NYSE: JLL) put the countywide office vacancy rate at 14 percent, but CoStar reported a significantly better 11.2 percent.

CoStar said the Class A vacancy had reached 9.8 percent as of the end of 2014. Colliers was in the middle at 12.2 percent.

Disparities in vacancy numbers may be attributable to a variety of factors, including the parameters of a sample and whether a leased but empty space is considered occupied.

CoStar reported tenants vacating large blocks of space in 2014 included JPMorgan Chase (NYSE: JPM), out of 126,000 square feet in Rancho Bernardo at 10790 Rancho Bernardo Road; LPL Financial (Nasdaq: LPL), moving out of 105,358 square feet at Towne Centre Tech Park in UTC; and Latham Watkins leaving 77,147 square feet at One America Plaza in downtown San Diego.

CoStar reported tenants moving into large spaces in 2014, including LPL Financial, into 414,570 square feet at La Jolla Commons Tower II in UTC; Entropic Communications Inc., into 132,600 square feet at 6350 Sequence Drive in Sorrento Mesa; and Rady Children’s Hospital San Diego, into 80,281 square feet at the Copley Corporate Center in Kearny Mesa.

Along with sizable differences in vacancies, the different brokerages had a wide range of net absorption figures. All seemed to agree that rents are climbing.

"Rents continued on their upward trajectory, increasing 6 percent year over year, as the supply of large blocks and high-end Class A space continued their decline. This quarter marks the 10th straight quarter of positive rent growth," JLL reported.

JLL and Newmark Grubb Knight Frank reported that the average asking rental rate was $2.33 per square foot per month. CoStar reported the rate was $2.35 per square foot per month, while Colliers put the figure at $2.29.

"While there remain areas of value and opportunity in lower-demand submarkets, as well as in older office space across the market, quality Class A space remains scarce," JLL added. "In fact, the direct vacancy rate has reached the single-digits for this asset at 9.9 percent, the lowest level in almost 10 years."

Newmark Grubb Knight Frank said that although Class A space was scarce, it still represented 78 percent of the net absorption in the fourth quarter.

The strongest demand for Class A office space came from University Towne Centre, where the year-to-date Class A absorption totaled 350,215 square feet, it said.

JLL noted that the end of 2014 marked the beginning of 558,164 square feet of speculative construction, with the largest of these projects being The Irvine Co.'s 306,000-square-foot One La Jolla Center going up in the University Towne Centre submarket.

That building is expected to be completed by early next year.

"As of yet, there is no word on preleasing activity, but the new construction will help to alleviate the supply constrained office market," JLL said.

Another sizable building under construction is the 177,269-square-foot Make Project by Cruzan Monroe, on the former Carlsbad Floral Trade Center site in Carlsbad.

Another project on a smaller scale is Kilroy Realty Corp's (NYSE: KRC) 74,000-square-foot building within its development in Del Mar Heights.

CoStar reported that through the first three quarters of the year at least, the county saw 42 office sales transactions with a total volume of $704,787,950.

During the same period in 2013, the market posted 42 transactions with a total volume of nearly $578 million, according to CoStar. By THOR KAMBAN BIBERMAN, The Daily Transcript

Don’t Wait! Move Up To The House You Always Wanted

Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. In most areas, prices are still below those of a few years ago. Also, interest rates are still near 4%.

However, sellers should realize that waiting to make the move while mortgage rates are increasing probably doesn’t make sense. As rates increase, the price of the house you can buy will decrease. Here is a chart detailing this point:

San Diego home appreciation slows

San Diego’s real estate market is seeing a milder rise in price appreciation than in years past, which is good news, the incoming president of a local Realtors association said.

Price appreciation slowed in San Diego in 2014, with home prices closing out the year nearly 9 percent higher, compared to about 20 percent the year before, according to new numbers released by the Greater San Diego Association of Realtors.

“To me, it’s very healthy to have the appreciation under the double digits because it means we are gradually moving up, rather than having astronomical differences,” said Chris Anderson, a 25-year veteran of San Diego real estate and the association’s 2015 president.

She recalled a condo she had listed about three years ago that received 31 offers. “It was unbelievable,” she said.

With both annual and monthly prices in the single digits for December, offers are more normal and prices are better gauged, she said.

Anderson, of Town & Country Real Estate in Ramona, said she has high hopes for continued success in 2015. She anticipates higher inventory, and thus more sales in 2015, due to an expected bump in interest rates.

Average fixed mortgage rates started the year by continuing to dive, according to Freddie Mac, to their lowest level since May 2013. A 30-year fixed-rate mortgage averaged 3.73 percent last week.

Should there be a rise in rates, as economists continue to say, the change would encourage buyers to get off the fence and hesitant sellers to list their properties and consider buying up, Anderson said.

Relaxed loan programs taking effect this year should also help buyers.

The 2014 median sales price for single-family detached homes through the end of 2014 was $495,000, up 8.8 percent from the prior year. Year-end prices saw an even greater increase for attached homes, such as condos and townhomes, up 10.5 percent to a median price of $325,000 for the year.

Year-end numbers from 2013 saw a median price of $457,000, a steep 19 percent increase from 2012.

In 2014, the number of sold listings was down 12 percent to 21,899, while total sales volume slipped 4 percent to $14.2 billion.

Sales increased in December compared to November. Single-family home sales jumped 11 percent; condo and townhome sales were up 5 percent.

The median sales price for single-family detached homes for December was $499,000, a 5 percent increase from the median price of $475,150 recorded in December 2013.

The total sales volume for the month was up slightly, 1.9 percent from the previous year, while the number of sold listings for the month of December dropped 7.1 percent year-over-year to 1,620 for the month.

Active listings on the Multiple Listing Service in San Diego County have been on the decline, and are now fewer than 6,000, about the same as a year ago, representing about 2.5 months of housing stock. Five to six months is considered a healthy inventory level.

The average number of days on the market have consistently dropped for the past three years, from 93 in 2012, to 57 in 2013 and 44 days in 2014.

Anderson attributes the decline to a dramatic reduction in the number of distressed sales, which typically have longer market days because of the time it takes to negotiate with lien holders for the losses. A normal market would have properties listed for about six months, she said.

“If it’s priced right, it’s selling very quickly,” Anderson said.

According to county data, foreclosure filings have dropped steadily since their height. Trustee deeds in San Diego County have decreased since peaking in July 2008. Trustee deeds — filed as the last step of the foreclosure process — decreased to 140 in November from 176 during the prior month.

In December, the ZIP codes in San Diego County with the most single-family sales were: 92157 in Oceanside with 49; 92114 in Encanto with 43; 92127 in Rancho Bernardo with 42; 92028 in Fallbrook with 42; and 92009 in Carlsbad with 40.

The most expensive listing sold in the county last month was a 3-bedroom 3-bath, 2,500-square-foot beach home in Solana Beach at $8.75 million. By KATIE THISDELL, The Daily Transcript

Friday, January 9, 2015

Did It Make Sense to Wait?

There are many people out there who debated purchasing a home over the course of the last year, but ultimately did not. Whatever their reasons were for delaying, let’s look at whether the decision to wait to buy made sense.

What happened in 2014?

The 30 year fixed rate on January 2, 2014 was 4.53% as reported by Freddie Mac. Looking at the chart below, your monthly mortgage payment with principal and interest for a $250,000 home would have been $1,271.17.

Even though interest rates have dropped below 4% and ended 2014 at 3.87%, home prices appreciated by 4.8 percent over the same time according to the Home Price Expectation Survey.

So that same home appreciated by $12,000 and now costs $262,000. The most recent report by Freddie Mac reports the average 30-year fixed rate is currently 3.73%.

Many may say, “See waiting a year made total sense, I’m saving $60 a month.” And they’d be right, over the course of the year they saved $729.36.

But what they haven’t realized, is that as the price of the home they purchased went up by $12,000, even if they just put a down payment of 5%, they had to come up with an additional $600 at the start of the process. So really they’ve only saved $129.36 in a year.

Is a savings of $11 a month really worth holding off on pursuing a home to call your own after you weigh all the benefits that come along with that?

• Building equity you can borrow against in the future
• Having a safe, comfortable environment that fits your family’s needs
• Having control over your space
• Tax benefits
• And so many more…

Bottom Line

The experts are predicting that homes will appreciate by another 4% and interest rateswill increase by a full percentage point by the end of 2015. If you are in a position to be able to buy a home now before these predictions become reality, contact a local real estate professional and start the process.

What Will $450,000 Buy In San Diego County?

What Will $450,000 Buy In San Diego County? 

The San Diego Union Tribune recently ran an article showing what the county median home price ($448,500 in August 2014) could get you in the rest of the country. I thought it would be nice to see what you can buy in various parts of San Diego for about $450,000 during Q3 2014. The information below is based on median sales, you can find lower and higher priced options in these areas but this is just to demonstrate what you could buy at the median county price. Call today to see what you qualify for absolutely free at 619.449.1919

#1 Reason to Sell Now

If you are one of the many homeowners out there who are debating putting their home on the market in 2015, don’t miss out on the opportunity that currently exists. There will be significantly less competition in the winter months than in the spring.

According to the National Housing Survey released by Fannie Mae, 45% of homeowners“say mortgage rates will go up in the next 12 months.”

What Does This Mean?

Homeowners are unaware that interest rates are projected to go up by all four major reporting institutions – This is big news for move-up buyers reflecting the overall amount of housing inventory that will be on the market.

If existing homeowners believe that mortgage interest rates are not going to increase, then they won’t be inclined to make a move by putting their home up for sale, meaning less competition for sellers who list now.

Don’t Wait!

The study also revealed that:

“Those who say it is a good time to buy a house rose to 68%” & “the share of respondents who think it would be difficult to get a home mortgage today decreased by 3 percentage points.”

As Doug Duncan, senior vice president and chief economist at Fannie Mae explains:

“We expect consumer attitudes toward housing to improve as the pickup in the overall economy lifts employment and income prospects.“

Bottom Line

There are buyers out there who are ready to make a move. If your goal this year is to move up to your dream home, what are you waiting for?