There’s No Housing Bubble

The sharp upturn in the housing market over the past year has more economists and housing hunters worried about a housing bubble.

But a new report from the real-estate website Trulia has a different message: chill out, there’s no bubble right now.

Yes, home prices in many parts of the country are rising today at the same rate that they did during the bubble years of 2003, 2004, and 2005. But the Trulia analysis found that, when compared with traditional price drivers such as rents and incomes, home prices are undervalued on a national basis by around 7%, compared to being 39% overvalued in early 2006. (Home prices were undervalued by 15%, relative to rents and incomes, at the bottom of the downturn in late 2011).

“Today’s price gains are actually still a rebound, not a bubble,” writes Jed Kolko, chief economist at Trulia.

 

Information obtained by California Asso of Realtors with permission.

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The Truth About Short Sale

There is a lot of information out there regarding short sales…some accurate, some not.  I thought I would clear up a few of the misconceptions. Here are some myths that people are talking about when it comes to short sales.

You must be behind on your mortgage payments in order to qualify for a short saleYou do not necessarily need to be behind on your mortgage payments to qualify for a short sale; you just have to show that it’s going to get harder to make your payments. These are known as hardship reasons, and can include recent pay cuts, a divorce, a serious illness, job loss and more.

Short sales can take over a year to close.  Most short sales close within 2-4 months. However, there is no specific time frame promised in which homeowners can expect to have their property approved and closed as a short sale. Each short sale transaction differs and can take more or less time depending on the circumstances.

 If you short sale your house, you cannot purchase another property for the next five years or more.  Under conventional lending guidelines, many people can obtain a Fannie Mae backed mortgage two years following the close of their short sale, and other lenders can also lend in 2-3 years time.

 Short sales almost never get approved.  Short sales are getting approved more than ever, since banks prefer this outcome compared to a foreclosure.  Experienced agents like me are far more likely to get your short sale approved.

After a short sale, the homeowner is forced to declare the loss as income and will receive a 1099.  The 2007 Morgage Forgivenesss Act among other considerations protect homeowners from declaring the loss as income and in most circumstances will not owe any taxes on their transaction. This act expires at the end of 2012 but is expected to be extended.  Talk to your tax advisor for more information.

Please contact me if you have any questions or comments about short sales or foreclosures. Contact me before it’s too late and I may be able to help.

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New Homes Sales on the Rise

Sales of new single-family houses rose 8.8 percent in December compared with the previous year to a seasonally adjusted annual rate of 369,000, according to estimates released jointly by the U.S. Census Bureau and the Dept. of Housing and Urban Development. Compared with the previous month, new home sales declined 7.3 percent.

The median sales price of new houses sold in December 2012 was $248,900; the average sales price was $304,000. The seasonally adjusted estimate of new houses for sale at the end of December was 151,000. This represents a supply of 4.9 months at the current sales rate.

An estimated 367,000 new homes were sold in 2012. This is 19.9 percent above the 2011 figure of 306,000.

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Survey Shows Investors Optimistic for 2013

A survey by RealtyTrac found that investors are optimistic about their local real estate market in 2013. Nearly 90 percent of investors surveyed have a mostly positive or extremely positive outlook.

The majority of investors surveyed, 63 percent, said they primarily or exclusively purchased properties in 2012 as buy-and-hold rentals, while the remaining 37 percent said they primarily or exclusively purchased properties to flip in 2012.

This information was obtained and used with permission from the Calif. Asso. of Realtors.

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New Law for 2013

Landlord Must Disclose Notice of Default to Prospective Tenants: Starting January 1, 2013, every landlord who offers for rent a residential property containing one-to-four units must disclose in writing to any prospective tenant the receipt of a notice of default that has not been rescinded. This disclosure must be made before executing a lease agreement. If a landlord violates this law, the tenant can elect to void the lease and recover one month’s rent or twice the amount of actual damages, whichever is greater, plus all prepaid rent. If the lease is not voided and the foreclosure sale has not occurred, the tenant may deduct one month’s rent from future amounts owed. The written disclosure notice as provided by statute must be in English, Spanish, Chinese, Tagalog, Vietnamese, and Korean. A property manager will not be held liable for failing to provide the written disclosure notice unless the landlord has given the property manager written instructions to deliver the written disclosure to the tenant. This law will expire on January 1, 2018. Senate Bill 1191.

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10 Tips for Holiday Lights

1. Safety first. Emergency rooms are filled with home owners who lose fights with their holiday lights and fall off ladders or suffer electric shocks. To avoid the holiday black and blues, never hang lights solo; instead, work with a partner who holds the ladder. Also, avoid climbing on roofs after rain or snow.

2. Unpack carefully. Lights break and glass cuts. So unpack your lights gingerly, looking for and replacing broken bulbs along the way.

3. Extension cords are your friends. Spend money on heavy-duty extension cords that are UL-listed for outdoor use. To avoid overloading, only link five strings of lights together before plugging into an extension cord.

4. LEDs cost less to light. LED Christmas lights use roughly 70% to 90% less energy and last up to 10 times longer than incandescent bulbs. You can safely connect many more LED light strings than incandescents. Downside: Some think they don’t burn as brightly as incandescent bulbs.

5. Solar lights cost nothing to run. Solar Christmas lights are roughly four times more expensive to buy than LEDs, but they cost zero to run. They’re a bright-burning, green alternative. Downside: If there’s no sun during the day, there’s no light at night. The jury’s also still out on how long they last; they’re too new on the market for results.

6. Dismantle lights sooner than later. Sun, wind, rain, and snow all take their toll on Christmas lights. To extend the life of lights, take them down immediately after the holidays. The longer you leave the up, the sooner you’ll have to replace them.

7. Plan next year’s display on Dec. 26. Shop the after-Christmas sales to get the best prices on lights and blowups that you can proudly display next year. Stock up on your favorite lights so you’ll have spares when you need them (and after they’re discontinued).

8. Permanent attachments save time. If you know you’ll always hang lights from eaves, install permanent light clips ($13 for 75 clips) that will save you hanging time each year. You’ll get a couple/three years out of the clips before sun eats the plastic.

9. Find those blueprints. Instead of guessing how many light strings you’ll need, or measuring with a tape, dig up your house blueprints or house location drawings (probably with your closing papers) and use those measurements as a guide.

10. Store them in a ball. It sounds counterintuitive, but the best way to store lights is to ball them up. Wrap five times in one direction, then turn the ball 90 degrees and repeat. Store your light balls in cardboard boxes, rather than in plastic bags: Cardboard absorbs residual moisture and extends the life of your lights.

ENJOY YOUR HOLIDAY.

Article reprinted with permission from the National Assco. of Realtors.

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Homes Are Selling !!!!

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