Real Estate Agent – Orange County, California – Pat Monahan

The Federal Homebuyer Tax Credit  has been extended beyond November 30th of 2009. The new rules include a deadline to be in escrow or under contract by April 30th of 2010 and close the purchase by July 1, 2010. First-time buyers, those who have not owned their principle residence during the past 3 years, are eligible for a tax criedit up to $8,000. Also, current home owners who have lived in their principle residence for 5 consecutive years of the past 8 years are eligible for a tax credit up to $6,500.

The home purchase must be for a principle residence and it can include a boat, motor home or traditional house, condo or townhome up to an $800,000 limit. There are income limits to the new benefits extention. They are $125,000/yr for a single person and $225,000 for a couple.  A purchase by a dependent is not allowed. See your tax advisor for more details.

The good news is that more people can get tax relief when they purchase their next home through April 30, 2010 or have a binding contract to purchase on April 30th and close by July 1, 2010.

The other good news for home buyers is the historically low mortgage interest rate and the reduced market values for homes. This is a combination that probably won’t be seen again in our lifetimes. Contact your realtor to find the best buying opportunites in your area.

I have lovely coastal homes in all price ranges from Orange County to Long Beach, CA. I will find the right one for you. I’m only a click away!

First-time home buyers have an incredible opportunity to purchase a home at the lowest value in many years at the lowest mortgage rate in 40 years AND receive up to $8,000 in credit from the Federal Government.  Many qualified buyers are doing just that. The Federal tax credit expires on December 1, 2009. To receive the credit first-time buyers must close escrow by November 30th.

Many of these first-timers bought “starter” homes that were bank owned or in the foreclosure process or distressed “fixers” that needed TLC.  The investor-buyer has also benefitted with the significantly reduced values (down 25% to 40%), often buying distressed homes in “bulk”, fixing them and selling them for a profit.  The inventory of “low-end” properties in California is down and the demand is up.

All of this activity has put a floor (of sorts) in the Cailifornia market so that the CAR is now forecasting a slight increase in values for 2010.  All real esate is local and markets vary.  So, it’s important to find a knowledgeable realtor to assess your niche market value.

The bottom line for California going forward is an opportunity for the “move-up” buyer = someone who currently owns their home and wants to move into the next bigger, better, newer home while the “getting” is good.  Mortgage rates are historically low for everyone.  But they won’t stay low forever. Property values are low, but they are destined to go up again. First-time buyers are buying. That’s why NOW makes sense for the move-up seller.

Some economists predict an increase in interest rates as early as the second quarter of 2010.  Home values may or may not go down a little more in the coming months.  The banks are not dumping their “shadow inventory” of foreclosed homes, but releasing them slowly to maintain values or selling them in bulk to investors.  The window of opportunity will be open only so long.  Anyone who can buy a property and hold it for 2 to 3 years will be glad they bought in 2009/2010.

The federal government  is offering an $8000.00 credit to first time homebuyers.  This program will expire on December 1, 2009.  Now is the time to act if you want/need the help.  You can use the credit as a tax write-off on this year’s taxes.  However, you must close escrow by November 30th.

To qualify you cannot have owned a house/condo, etc during the past 3 years. There are income caps and credit hurdles to pass, but most first time home buyers can benefit from this government largess. 

It is important to find your next home now and get into escrow ASAP.  Most escrows will take 45 to 60 days to close.  So, don’t delay!  Get pre-approved for a loan with a direct lender and make the all-important appointment with your realtor.  

There’s talk of extending the program, but noone is certain. The government coffers are hard-pressed paying for so many bailouts and stimulus plans.  So, if you qualify for the $8,000.00 credit, get it while you can.  

Any Orange County property owner can challenge the County’s tax assessment value if the market value is less in your neighborhood. You have until September 15th to file for a review. The process is explained and the needed forms are available at assessor’s site:
http://www.ocgov.com/assessor/

You don’t have to pay someone else to do this. The process is simple, but there is a deadline of Sept. 15th for an assessment review. Good luck!

        These are ALL the Huntington Beach single family homes under $500,000 list price on August 24^th.  There are only eight of them. Of these, only two are a standard sale. The rest are distressed sales in some stage of foreclosure. The fact that the inventory is so low in this price range is significant. It is establishing a floor for Huntington Beach. All real estate is local and this is what is happening in our local market today.

        Contact me if you or someone that you care about wants to buy a house in HB or the surrounding communities of Fountain Valley, Costa Mesa, Westminster, Garden Grove, Cypress, Los Alamitos, Buena Park, Anaheim or Santa Ana. There are buying opportunites and a bonus $8,000 credit to firsttime home buyers until November 30th. Don’t wait. You must close on your purchase by Nov 3oth.

Today’s LA Times featured an article by Kenneth R. Harney (8/16/09, Business, B12). In it he suggests a way to ease out of the painful spiral of the foreclosure blight in our current economy.

There is a House bill, Neighborhood Preservation Act, passed before the summer recess which is a response to two important questions: 1.”When homeowners lose their houses to foreclosure, should they be able to stay in the property, leasing it back at fair market rent from the lender?” 2. “Should they also get an option to purchase the house from the bank at the end of the lease term, assuming they have the income to afford it?” 

The Neighborhood Preservation Act “would remove legal impediments blocking federally regulated banks from entering into long-term leases – up to five years- with the former owners of foreclosed homes. It would also allow banks to negotiate option-to-purchase agreements permitting former owners to buy back their houses”

If the bill is approved by the Senate, it would encourage banks to consider if it’s better to foreclose and take a loss now or to lease the property and then sell when values increase in a few years. There is a debate about who should own the home and control the lease agreement.

A San Diego realty broker, Al Hackman, and his partner, Tony Huerta, “contend that lease-backs with options to buy are the way to go – but not if banks run the show.”  They have a program called “the seamless short sale” where the homeowner can stay in the home before and after the settlement. The bank first sells to an investor who agrees “to lease back the house on a “triple net” basis - where the tenants pay taxes, insurance and utilities – for two to three years.”

The property value for the buy-back is pre-set to be more than what the bank sold to the investor and less “than the original price by the foreclosed owners.” For the investor according to Hackman “the internal rate of return . . . can depend on the rents and the buy back price but typically is in the 8% to 10% range. It’s a win-win. . . The owners stay in their houses. Private investors get a moderate return on what should be a safe investment and the banks are out of the equation.”

It is time to think outside of the box to solve the housing crisis of our time. The homeowner facing foreclosure should not have to bear the full burden of a lending experiment gone amok. For those homeowners who can afford the market rent rate, the seamless short sale is one solution.  Banks can slowly clear their books of toxic assets, investors can safely benefit and neighborhoods can remain intact while the country rights itself economically. 

From my perspective, Orange County, CA is experiencing not only stability in the market with values finding a floor and prices firming-up, but an increase in list prices in some areas.

There is still time to find good buying opportunities. The $8,000.00 first-time home buyer’s credit is still in effect through November 30th. There are still bank owned homes and short sales available. However, the room to negotiate a lower price is probably gone.

Here’s more information for the fence sitters to consider. Read the highligts of the NYT’s article. The information is from national survey’s such as the S&P/Case-Schiller Price Index, the NAR and from CAR’s chief economist, Leslie Appleton-Young.  Contact a Realtor in your local market to learn what is happening there.

The New York Times

3-year descent in home prices appears to be at end

According to recent reports and forecasts by housing analysts, the three-year descent in home prices appears to be at an end.  Eight cities, including San Francisco, showed price increases in May, up from four in April, and one in March, according to Standard and Poor’s/Case-Shiller Index.  For the first time since early 2007, the index of 20 major cities was virtually flat, rather than down.
 

MAKING SENSE OF THE STORY FOR CONSUMERS

·      Earlier reports show that sales of existing homes nationwide rose last month for the third consecutive month, while sales of new homes increased in June by the largest percentage in eight years, according to the NATIONAL ASSOCIATION OF REALTORS® (NAR) and the U.S. Commerce Dept., respectively.

·      Although some skeptics believe the market is pausing before home prices decline further, the median price in California’s housing market appears to be stabilizing.  June marked the fourth consecutive month of rising home prices and the second largest gain on record for the month of June, based on statistics dating back to 1979.  The year-to-year decline in June also was the smallest in the past 16 months.

·      The S&P/Case-Shiller price index for 20 cities showed a half-percent gain when May was compared with April.  It was the first month-over-month increase in the index in 34 months.  “It is very possible that years from now we will say that April 2009 was the trough in home prices,” said Maureen Maitland, vice president for index services at Standard & Poor’s.

·       One explanation for the increase in median prices is the rise in demand from buyers, especially first timers taking advantage of the $8,000 federal tax credit, which expires in December.  The NATIONAL ASSOCIATION OF REALTORS® (NAR) is lobbying for the tax credit to be extended and to be replaced with a $15,000 credit for all buyers.

·      Another factor in the market’s resurgence is the prevalence of foreclosures, which make up about a third of all existing home sales.  “Although another surge of foreclosures is expected later this year, demand remains strong, so the market may be able to absorb more distressed properties without significantly impacting the median price,” said C.A.R.’s Chief Economist Leslie Appleton-Young.

Have you seen this article in the O.C Register? Buy Now!

O.C. housing analyst says ‘Buy now!  Lansner on Real Estate

A recently published article from the research staff of the NAR (National Association  of Realtors) titled “Economist’s Commentary: Future First Time Home Buyer Perspective” by Tyler Morrison, Research Intern, very clearly describes the first time home buyer’s dilemma from a graduating student’s perspective. The points made are appropriate for any first time home buyer.

Here are some highlights from that article and important things to know before becoming a first time home buyer:

       Buying a home is a very serious event no matter how many times you have done it. You may be signing a contract binding you for the next 30 years. Many FTHBs make a few similar mistakes over and over again. They ask too few questions of their lender and end up missing out on the best deal. They do not act quickly enough and let someone else buy the home. They do not find the right agent for them, one who is willing to help throughout the home buying experience. When they have found their prospective home they do not do enough to make their offer look appealing to the seller. And, they do not think in the longer term about the resale of the home before they buy. To make sure you are making the right moves here are a couple of tips to prevent any mistakes or regrets in your home buying transaction.

• Be picky, but don’t be unrealistic. There is no perfect home.
• Do your homework before you start looking. Decide specifically what features you want in a home and which are most important to you.
• Get your finances in order. Review your credit report and be sure you have enough money to cover your down payment and your closing costs
• Don’t wait to get a loan. Talk to a lender and get pre-qualified for a mortgage before you start looking.
• Don’t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion.
• Decide when you could move. When is your lease up? Are you allowed to sublet? How tight is the rental market in your area?
• Think long-term. Are you looking for a starter house with the idea of moving up in a few years or do you hope to stay in this home longer? This decision may dictate what type of home you’ll buy as well as type of mortgage terms that suit you best.
• Don’t let yourself be house poor. If you max yourself out to buy the biggest home you can afford, you’ll have no money left for maintenance or decoration or to save money for other financial goals.
• Don’t be naïve. Insist on a home inspection and if possible get a warranty from the seller to cover defects within one year.

The best way to insure that you satisfy the above quoted advice is to work with an experienced Realtor who will jump these hurdles with you. A first time buyer cannot possibly know what the requirements are and how to satisfy them; where the pitfalls are and how to avoid them.  Would you go to court without a lawyer?  Would you avoid seeing a dentist for a painful tooth?  Then it is just as important to seek real estate help from an experienced realtor.  

Remember that a home is a place to live, grow and thrive. It is not just an investment.

The market for Orange County real estate has seen a turn around lately. Properties are selling more quickly, many with multiple offers and some for all cash! The most activity is in the price range below $600,000. The fiercest buyer competition is in the under $400,000 price range where first-time home buyers with low down-payments are competing with seasoned investors with cash. The REO and short sale listings are attracting offers within the first few days on market. If you want to purchase coastal real estate in Orange County, be ready to act fast, have statements to prove your purchase-cash and/or be pre-approved for a loan with a direct lender. Buyers who qualify under FHA guidelines must compete with all cash buyers. Be ready to offer above asking price and accept the property in “as is” condition.

Equity sellers who have maintained and up-graded their home may benefit from this buying frenzy, if they are willing to price their home competitively. Special marketing is essential with strong internet presence and the creative techniques of the “New Rules” of real estate. I know how to utilize the “New Rules” and I can provide you with the internet presence that will get your home widely seen. Learn how you can benefit from this specialized knowledge.

If you are having difficulty making your current mortgage payments, contact your lender before you fall behind in your payments. Ask if you qualify for a loan modification from your lender. If you do not, then you have options. Call me to find out about your options. I can help you steer a path in this sea of confusion and shine some light in the right direction. I can be reached at 714-932-5529.