Stable, strong real estate market ahead in 2015

San Diego's real estate market looks like it's on a solid foundation as 2015 gets underway.

The double-digit appreciation may be gone, but the buzz in the real estate world says it's a healthier economy which should mean brighter days ahead for the housing market.

Chris Anderson, the 2015 president of the San Diego Association of Realtors, says the real estate market has stabilized.

Single-family home values went up nearly 5 percent in 2014, while the number of homes sold in the county went down.

"Our interest rates were really low, yet because we have such a crunch on our credit for our buyers … we just didn't have the movement that we expected," said Anderson.

She says 2015 will be the year interest rates creep up a little.

"But that will give us the balance, so that we can keep the appreciation down under the double digits like we did this year and that's healthy," she said.

Expect prices to climb again this year, attracting interest.

"It usually causes buyers to flood our market because they want to get in while they're still low ... and so we will probably have more sales and that will cause a little more appreciation," said Anderson.

She cautions first-time homebuyers not to sit on the fence trying to save up more money even if they have enough for a down payment.

"If you waited one year from '13 to '14, you're paying about $30,000 more for the median priced home ... you can't save 30,000 in a year, so buy now and you can catch that appreciation," she said.

Despite historically low inventory with just 8,000 homes up for sale, Anderson says job growth will be a key factor helping drive the housing market as first-time buyers move in and existing owners move up to bigger homes.

According to real estate tracker CoreLogic DataQuick, the median priced home in the county was $462,000 in November.

If you own a home your value has gone up.....How much? Call 619.449.1919 for a FREE market analysis on your home. 

“Lagging Supply” Leads to Slowdown in Sales

The National Association of Realtors (NAR) recently released the results of their Existing Home Sales Report. Despite the fact that properties are selling faster than they have at any other time since July of 2013, existing home sales declined 3.3% from March.

NAR’s Chief Economist Lawrence Yun explained the main reason for the slow:

"April's setback is the result of lagging supply relative to demand and the upward pressure it's putting on prices.”

One major news organization actually used this headline about the decline:

Existing home sales crater in April, falling 3.3%

They certainly haven’t cratered! April marked the second month in a row that the annual sales pace remained above the five million mark (5.04 million). Year-over-year sales have increased for seven consecutive months and are still 6.1% above a year ago.

Every month, SentriLock, LLC provides NAR Research with data on the number of homes shown to potential buyers. This data is referred to as ‘Foot Traffic’ and is a great predictor of future sales and buyer demand. In April, buyer demand remained at the same level experienced in March. 

So why did sales go down?

Buyers who are ready and willing to make a purchase are entering a market where their dream house may not have been listed yet. They can’t find it! Or if they find it, it happens to catch the eye of other buyers and an ‘auction like environment’ begins.

"Housing inventory declined from last year and supply in many markets is very tight, which in turn is leading to bidding wars, faster price growth and properties selling at a quicker pace," says Yun. "To put it in perspective, roughly 40 percent of properties sold last month went at or above asking price, the highest since NAR began tracking this monthly data in December 2012." (emphasis added)

The median home price of existing homes sold in April was $219,400, which is 8.9% higher than last year, and marks the 38th consecutive month of year-over-year price gains.

Bottom Line

So how do you make sense of everything that’s going on in the housing market when there are so many conflicting headlines on the same report?

John Burns, real estate expert and CEO of John Burns Real Estate Consulting gives this advice:

“The bottom line is this: don't make decisions based on newspaper articles. Read the actual press release, including the methodology, and make sure the results jive with other data points and qualitative feedback you receive.” 

If you are one of the many homeowners out there realizing that now may be the time to list your home for sale, or one of the many renters debating a purchase, sitting with a local real estate professional who takes the time to find out what’s really going on in the market, should be your first step!

Buying a Home is 35% Less Expensive than Renting!

In the latest Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage throughout the 100 largest metro areas in the United States.

The updated numbers actually show that the range is from an average of 16% in Honolulu (HI), all the way to 55% in Sarasota (FL), and 35% Nationwide!

The other interesting findings in the report include:

• Interest rates have remained low and even though home prices have appreciated around the country (3.9%), they haven’t greatly outpaced rental appreciation (3.7%). “In the past year, these two trends have made homeownership even more affordable compared with renting.”
• Some markets might tip in favor of renting if home prices increase at a greater rate than rents and if – as most economists expect – mortgage rates rise, due to the strengthening economy.
• Nationally, rates would have to rise to 10.6% for renting to be cheaper than buying – and rates haven’t been that high since 1989. 

Bottom Line

Buying a home makes sense socially and financially. Rents are predicted to increasesubstantially in the next year, so lock in your housing cost with a mortgage payment now.

Attaining the American Dream: The 5 Financial Reasons to Buy

We have reported many times that the American Dream of homeownership is alive and well. The personal reasons to own 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 in 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. If you are considering a purchase this year, contact a local professional who can help evaluate your ability to do so.

5 Home Upgrades for $5,000 or Less

(BPT) - It's a sobering truth in real estate: sellers often have to spend money to make money. Even if your home is relatively new, you still face costs associated with getting it ready to show, such as repainting interior rooms or hiring professional cleaners and stagers. If your home could use some TLC and updating, spending as little as $5,000 on key upgrades could improve its appeal for buyers - and ensure a speedier sale at a better price.

Here are five upgrades you can make for under than $5,000 to help put your home at the top of every buyer's must-see list.

1. Upgrade Your Entryway
Replacing an old, dated or worn entry door can be a cost-effective way to ensure buyers get a good first impression when they walk in your house. Whether you choose a fiberglass, wooden or steel model, installing a new entry door can cost a few thousand dollars, yet the return on investment at the time of resale can be significant. A fiberglass entry door returns about 72 percent of its investment, while a steel door recoups more than 100 percent of its value, according to Remodeling Magazine's Cost vs. Value report.

Enhance your new door with attractive plantings, fresh paint and clean windows around the entryway to create a memorable, attractive entry for just a few thousand dollars.

2. Increase Natural Light

(Image via FreeDigitalPhotos.net)

More buyers are becoming aware of the mood- and productivity-enhancing benefits of natural light, and homes with big, bright windows have always been in demand. Adding windows to a room can be a costly, time-consuming affair. Not so with a skylight. For well under $5,000 and in just a day or two, a professional can install an Energy Star-qualified, solar-powered, no-leak fresh air skylight, Professional installation costs nationally range from around $900 to $2,325, with an average of $1,400, according to HomeAdvisor.com.

The most popular rooms in the home for fresh air skylights are baths, where they provide privacy in addition to natural light, and kitchens, where they vent cooking odors and humidity naturally while brightening a much-used workspace.

3. Beautify a Master Bathroom
Bathrooms and kitchens sell homes. Making a few cosmetic upgrades to even a small master bath can help increase a home's appeal and value. For less than $5,000 you can easily repaint, upgrade faucets, replace old cabinet hardware and add decorative touches like designer towels.

In addition, take a look at the floor or countertops - two cost-effective upgrades that can wow buyers. Since counters don't make up that much square footage in most bathrooms, replacing them with granite can cost just a couple thousand dollars. Tile flooring is also a relatively inexpensive way to improve a bathroom's look and usability.

4. Heat Things Up in the Kitchen
Kitchen remodels can offer high ROI for sellers, but a full remodel may be outside your budget. If you've already done the obvious - like repainting and de-cluttering - it's time to look for a few more cost-effective improvements that will appeal to buyers.

Shabby, outdated appliances can hinder a speedy sale, so consider replacing them with new ones. You don't necessarily need to install top-of-the-line, high-priced appliances to make a good impression, either. Newer, Energy Star-qualified appliances represent savings for buyers down the road.

5. Lavish Landscaping
No single aspect of your home has a greater impact on a buyer's first impression than the landscaping. A great front yard sets the tone for the rest of the home, appealing to buyers on a number of levels, including beauty, practicality and savings.

With $5,000, you can accomplish a lot in terms of landscaping. You can sod a small front yard, add decorative planting beds to a lush lawn, or even install shade trees that will both beautify the yard and enhance the home's energy efficiency in summer. 

Decorative concrete stamping of walkways and driveways is another cost-effective way to improve a home's curb appeal.

Whether it's a buyer's market or a seller's market, no one wants to see their home linger long before selling. A few simple upgrades can help ensure your home gets plenty of attention this selling season. For other pointers to help you get top dollar when selling your house feel free to call us at 619.449.1919 for a FREE market analysis of your home. 

San Diego housing market surges

San Diego County's housing market surged in March, seeing its biggest annual increase in sales in nearly two years.

Last month, 3,467 real-estate transactions closed in the county, a 13.4 percent jump from March 2014, real estate tracker CoreLogic reported Thursday. It was the biggest annual increase in sales since they rose more than 19 percent from July 2012 to July 2013. The housing market's momentum pushed the county's median sales price up 6.8 percent over the year to $456,000. 

"People are feeling good about the economy and interest rates are still relatively low, so buyers are willing to buy," said Michelle Silverman, a La Jolla-based real estate agent with Berkshire Hathaway. "Sellers are at the advantage because you have little inventory."

The real-estate market generally has its most active time of the year in the spring and summer, with March kicking off the peak season. In summer 2013, housing prices were up 24 percent annually, paced by investor led activity such as fix-and-flip foreclosure resales. The 2014 peak season never materialized. After the big jump in 2013, the local real estate market saw a streak of annual sales declines lasting from October 2013 to November 2014, when the pace of year-over-year appreciation bottomed out at 3.6 percent.

In March 2014, sales were down 18 percent over the year. Last month, however, momentum seemed to be returning to the housing market. While prices are up, the average rate for a 30-year fixed fell to 3.77 percent in March, down from 4.34 percent a year earlier, Freddie Mac reports. 

Michael Lea, a San Diego real estate consultant, said modest annual appreciation has given property owners enough equity to sell their homes. He said concerns that interest rates may be increasing later this year could also be a motivator for the increased activity. 

CoreLogic analyst Andrew LePage said inventory still remains an issue holding back the housing market. In March, there were 6,101 active listings in the county, the San Diego Association of Realtors reports. That represents fewer than two months of supply, which bodes well for sellers. 

LePage said as a general rule between three and six months of supply would render the market neutral, while any more would turn the tide in favor of buyers. In March, inventory fell about 2 percent over the year. 

"Housing demand has been stoked over the last year by job growth mainly, to some extent some income growth, and increased job security," LePage said. 

From February to March sales rose 35 percent in the county, while the median home sales price was up from $440,000. 

San Diego's annual sales increase was identical to what happened across Southern California, with sales up regionwide for the first time in three months. In Los Angeles County, sales rose 12.5 percent over the year to 6,653, pushing the median up 9.5 percent to $476,000. In Orange County, transactions rose 8.9 percent to 3,140, but the median sales price remained at $580,000.

If you would like a FREE in depth market analysis for your home to find out its value call us at 619.449.1919 now or email us at Tony@TonyRElias.com

4 Reasons To Move-Up This Spring

Spring is in full force; the summer months are right around the corner. If you are debating moving up to your dream home, here are four great reasons to consider buying today instead of waiting.

1.) Buyer Demand is High & Inventory Is Low

Recent numbers show that buyer demand is at the highest peak experienced in years, and inventory for sale is at a 4.6 months supply, which is still markedly lower than the 6.0 months needed for a historically normal market.

The National Association of Realtors, Chief Economist, Lawrence Yun put it this way, "Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer."

Listing your home today can greatly increase exposure to buyers who are out in force and ready to act.

2.) Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects appreciation in home values over the next five years to be between 11.7% (most pessimistic) and 27.5% (most optimistic).

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting for your current home’s value to increase before selling could price you out of your new home if you aren’t careful.

3.) Mortgage Interest Rates Are Still Near Record Lows

As we reported last week, interest rates have remained below 4% for some time now, and are substantially lower than the rate previous generations paid when getting a mortgage.

The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison projecting that rates will rise over the next 12 months.

An increase in rates will impact YOUR monthly mortgage payment. Even an increase of half a percentage point can put a dent in your family’s net worth. Whether you are moving up or buying your first home, your housing expense will be more a year from now if a mortgage is necessary to purchase your home.

4.) It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Have you always wanted to live in a certain neighborhood? Would a climate change be just what the doctor ordered? Would you like to be closer to family?

Bottom Line

If the right thing for you and your family is to move up to your dream home this year, buying sooner rather than later could lead to substantial savings.

What's Happening with Real Estate in San Diego!!!

San Diego is currently experiencing a shortage of inventory and low interest rates. As per the chart below you can see the breakdown of activity based on price range, size of home and average market time it takes to sell a home.

Class	Bedrooms	Total Listed	Num Sold	Pct Sold	Avg List Price Sold	Avg Sale Price Sold	Sale Price/List Price Ratio	Avg DOM Sold	Avg List Price Unsold	Pct Expired
All	All	9,942	4,527	45.53%	$616,382	$599,128	97.20%	48	$770,701	14.95%
RE	All	9,942	4,527	45.53%	$616,382	$599,128	97.20%	48	$770,701	14.95%
RE	0 to 0 Bedrooms	73	23	31.51%	$243,916	$233,213	95.61%	73	$295,734	15.07%
RE	1 to 1 Bedrooms	642	271	42.21%	$290,444	$282,076	97.12%	45	$312,238	11.21%
RE	2 to 2 Bedrooms	2,202	1,063	48.27%	$442,439	$431,592	97.55%	50	$471,643	14.21%
RE	3 to 3 Bedrooms	3,551	1,760	49.56%	$570,889	$557,826	97.71%	44	$665,002	13.88%
RE	4 to 4 Bedrooms	2,495	1,104	44.25%	$783,291	$758,569	96.84%	49	$909,654	16.51%
RE	5 to 5 Bedrooms	822	280	34.06%	$1,171,083	$1,128,968	96.40%	59	$1,434,187	17.76%
RE	6 to 6 Bedrooms	121	22	18.18%	$1,507,881	$1,433,462	95.06%	97	$2,426,170	22.31%
RE	7 to 7 Bedrooms	21	3	14.29%	$1,587,966	$1,469,666	92.55%	24	$4,468,062	33.33%
RE	8 to 8 Bedrooms	8	1	12.50%	$369,900	$373,000	100.84%	16	$12,260,750	37.50%
RE	9 to 9 Bedrooms	2	0	0.00%	$0	$0	0.00%	0	$2,599,999	50.00%
RE	10 to Max Bedrooms	5	0	0.00%	$0	$0	0.00%	0	$24,500,000	20.00%
RI	All	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
LN	All	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
RT	All	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
RT	0 to 0 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
RT	1 to 1 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
RT	2 to 2 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
RT	3 to 3 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
RT	4 to 4 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
RT	5 to 5 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
RT	6 to 6 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
RT	7 to 7 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
RT	8 to 8 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
RT	9 to 9 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
RT	10 to Max Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
TS	All	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
TS	0 to 0 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
TS	1 to 1 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
TS	2 to 2 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
TS	3 to 3 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
TS	4 to 4 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
TS	5 to 5 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
TS	6 to 6 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
TS	7 to 7 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
TS	8 to 8 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
TS	9 to 9 Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
TS	10 to Max Bedrooms	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
RN	All	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
HO	All	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
MH	All	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
OF	All	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
BO	All	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%
LR	All	0	0	0.00%	$0	$0	0.00%	0	$0	0.00%

So being that interest rates are low and inventory is low it makes it a perfect time to both buy and sell a home. Its a unique market in the sense that its not just a sellers market or a buyers market its a fit for both making it a strong market. 

If your looking to buy or sell a home feel free to contact me today for a FREE NO OBLIGATION consultation at 619.449.1919