The prices of homes in San Diego County are the highest they have been in the last 6 years. It’s due to a combination of distressed sales continuing to fall, and mortgage rates reaching record lows.

According to DataQuick, a San Diego-based real estate monitoring site, the median price of houses sold in April rose to $400,000. This is a 21% increase from what it was exactly one year ago. Meanwhile, the rate of sales increased by 7% compared to what it was a year ago.

The numbers from the site also indicated that properties lost to foreclosure in the past year were at the lowest they have been in the last 6 years. Less than 10% of home sales were distressed homes such as foreclosures or short sales. January of 2009 was the peak of foreclosure sales where 55% of all homes sold that month were foreclosures. The median price was also $280,000.

Some analysts are worried these figures may trigger another housing bubble, but San Diego State University real estate economist Michael Lea says such fears are overblown.

The primary reason for continued hikes in the prices of homes is caused by a shift from a distressed market. This resulted to heavily discounted deals for buyers, and a decline in short sales. Short sales means that borrowers are selling their homes for less than what they owe.

All in all, the market is finally moving in the right direction. It’s nice to get back to a more normal market where we are helping buyers realize their dream of purchasing a home and dealing with regular sellers that are not facing foreclosure or having to consider a real estate short sale.

San Diego Real Estate Market Update – May 2013

Alex Aguilar

is the owner of Team Aguilar real estate in San Diego and your source for everything related to the San Diego Real Estate market. Please subscribe to his updates on Facebook.

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The latest report from real estate tracker DataQuick paints a sunny picture for San Diego Real Estate in 2013. January’s figures show mortgage default rates in San Diego County at their lowest levels since mid-2005, and foreclosures at a six year low.

Impact of the Homeowner Bill of Rights
A big reason for these declines is the of the Homeowner Bill of Rights, a comprehensive update to California’s mortgage regulations championed by Attorney General Kamala Harris and signed into law by Governor Jerry Brown. The bill includes provisions to stop dual tracking (a controversial procedure where banks went ahead with foreclosure against struggling homeowners in the middle of a short sale or loan modification procedure), stop robo-signing foreclosure documents and to streamlining loan modification applications to make it easier for borrowers.

Despite strenuous objections from industry groups like the California Mortgage Association, California Bankers Association and California Mortgage Bankers Association, the Homeowner Bill of Rights became law on January 1st and had an immediate effect on lowering foreclosures and mortgage defaults, although the jury is still out on long-term ramifications.

Short Sales Popular as Ever
Short sales, where the lender approves the sale of a property for lower-than-market-price and forgives the remainder of the debt, made up 25.9% of all homes sold in Southern California. San Diego short sales remain as popular as ever, as it gives borrowers the opportunity the chance to get back into solvency with minimum impact to their credit ratings, and lenders the chance of avoiding a messy, lengthy and expensive foreclosure.

A large part of the rise in popularity of short sales in recent months is due to the $25 billion joint state-federal settlement reached with the nation’s largest mortgage companies in February 2012. The settlement is meant to help homeowners struggling in the aftermath of the housing-collapse, and the majority of that help is coming in the form of short sales. Now is as good a time as any to get approved for a short sale, seeing as the nation’s largest mortgage servicers are obliged to help.

Tight Inventory, Seller’s Market
San Diego real estate’s lack of inventory has led to a steady increase in prices towards the end of December. The lack of inventory and rising prices have created the perfect conditions for a seller’s market in January, and many homeowners decided to sell their properties to take advantage of this sudden-price hike.

This increase in sales is reflected in January’s figures, which show a six year high in the number of homes sold for that month. Experts are already questioning whether this sudden price hike is sustainable, and if it could encourage short-term property speculators.

Cash is King!
34.9 percent of all homes sold in January were paid for in cash. Buyers are paying with cash in record numbers in San Diego and other real estate markets in Southern California. Jumbo loans, i.e. mortgages above $417,000, accounted for 21.6 percent of January’s home lending, adjustable-rate mortgages (ARMs) made up 5.8 percent while government-insured FHA loans, popular with first-time buyers, accounted for 23.5 percent of home financing options for the month of January.

Think market conditions are ripe for investing? Check out our San Diego real estate listings and contact Carlos or Alex today.

Alex Aguilar

is the owner of Team Aguilar real estate in San Diego and your source for everything related to the San Diego Real Estate market. Please subscribe to his updates on Facebook.

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For many homeowners struggling with underwater mortgages in the aftermath of the housing crash, a short sale is often the best possible solution to their problems.

To put it simply, a short sale is where the homeowner sells his or her property for less than what is owed on it. All the lenders have to be on board and agree with the short sale  before it can be completed. The proceeds of a short sale go directly to the lenders, minus closing-fees and other minor transactions costs. Once the short sale is complete, the borrower is free from any obligations on the property; any outstanding debt (the difference in what was owed on the property and what was realized from the short sale) is forgiven by the lenders.

Short sales are advantageous to both homeowners and banks. Homeowners unable (or unwilling) to make monthly mortgage payments on homes with negative equity can take advantage of a short sale to walk away from their obligations debt free and sometimes have a relatively minor hit on their credit ratings. For a more detailed look into why short sales are preferable to all parties involved, please see my earlier blog on the subject.

One thing every homeowner thinking about doing a short sale must be aware of is the tax consequences. Short sales can affect your taxes in negative or positive ways, depending on your financial situation.

Short sales involve the forgiveness of debt by the lender. Any forgiveness of debt is, as far as the IRS is concerned, considered taxable income.

Here’s a basic example:

Current market value of home is $250,000. The homeowner took out a home equity loan on the house in the height of the housing bubble (when the value was considerably higher) and currently owes the bank $300,000. The bank agrees to a short sale and purchases the house for its current market value of $250,000, writing off the outstanding $50,000 as forgiven debt. The State of California views this forgiven $50,000 as gross taxable income.

$250,000 current house value.

$300,000 loan amount based on previous value when the house was worth considerably more.

$50,000 = Amount forgiven by the bank in a short sale. Remember, THE BANK’S LOSS IS YOUR GAIN, and that is why the IRS views this as taxable income.

Fortunately the State of California has passed the Conformity Act of 2010, a law that offers struggling homeowners from being taxed on the forgiven debt from a short sale. The Conformity Act of 2010 essentially a copy of the federal Mortgage Forgiveness Debt Relief Act, a law that exempts taxpayers from having to report forgiven debt from short sales of their primary residence between 2007 and 2013 as gross income on their tax forms.

In many states, including non-recourse states such as California, second mortgages such as a home-equity-lines-of-credit, popularly known as HELOC, are not covered by the state or federal tax exemption laws. To put it simply, the first loan you took out to purchase your house is covered by the Mortgage Forgiveness Debt Relief Act and the Conformity Act, the second or third home equity loans you took out to buy that speedboat or sports car is not. There have been cases where banks have sued borrowers to recoup HELOC money.

The Federal debt relief Act limits the exempt forgiven debt to $2,000,000 for married people, single people, heads of households, and widows or widowers. Married people filing separately have limits of $1,000,000. California’s Conformity Act covers up to $800,000 (or $400,000 if married filing separately) of mortgage debt forgiven between Jan. 1, 2007 and Dec. 31, 2013, through foreclosure, short sale or some other loan modification. Once, again these only apply to debt used to buy, build or renovate a principal residence – home equity loans taken to purchase speedboats and luxury vacations are not covered.

Keep in mind that these laws are not blanket exemptions, and apply only to homeowners unable to maintain regular monthly payments due to financial hardship or decline in home prices. Also remember that these exemptions are limited to debt forgiven on the taxpayer’s primary residence. Vacation homes and investment properties may not be covered by these specific laws, although there do exist ways to minimize the tax burden from the sales of these as well. Always check with a qualified tax accountant or attorney to find out how and if these laws apply to your own situation.

As part of the fiscal cliff compromise on January of this year, the Mortgage Forgiveness Debt Relief Act has been extended another year till the end of 2013. A California Senate Bill to extend the Conformity Act for the remainder of 2013 has been filed on January 3 and is currently pending review by the State Senate Governance and Finance Committee. (See here for latest updates on the bill.)

For more information on the federal Mortgage Forgiveness Debt Relief Act and Debt Cancellation law please visit: http://www.irs.gov/Individuals/The-Mortgage-Forgiveness-Debt-Relief-Act-and-Debt-Cancellation-

For additional background information on California’s Conformity Act of 2010, please visit: https://www.ftb.ca.gov/aboutFTB/newsroom/Mortgage_Debt_Relief_Law.shtml

If you’re thinking of doing a short sale on your property, please contact either Carlos or Alex at Team Aguilar – your San Diego short sale specialists.

Alex Aguilar

is the owner of Team Aguilar real estate in San Diego and your source for everything related to the San Diego Real Estate market. Please subscribe to his updates on Facebook.

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The latest PHSI figures from the National Association of Realtors have shown a marked decline in new contract signings for December, 2012. The PHSI, or Pending Home Sales Index, is the NAR’s leading indicator of the future condition of the real estate market; it looks at all home sales contracts that have been signed but not closed. (Contracts typically take four to six weeks to close.) Overall PHSI trends are still positive with each month showing higher figures compared to a year ago for 20 consecutive months, but December, 2012 showed a 4.4% drop-off in signed contracts from the previous month (although still up 6.9% compared to December, 2011).

A Loss of Momentum

A downturn of 4.4% indicates “a loss of momentum in the signing of contracts to buy a home,” according to NAR chief economist Lawrence Yun. In spite of the overall positive market trends, Yun adds, December’s slow-down cannot be dismissed as a one-time statistical fluke, and has to be considered a “measurable decline.”

This sudden downturn is not due to a lack of buyers, however, but rather to a lack of inventory in certain key markets. Demand is high and buyer interest remains strong in the fourth quarter of 2012 and is set to continue in 2013. The latest Buyer and Seller Traffic Index from Realtors.org paints clear a picture of a seller’s market; buyer traffic outstripped seller traffic 56 – 38.

Decline in Inventory

The decrease in contract signings is not uniform across the country – three of the four major real estate markets have seen an increase in pending contracts from a year ago. December’s 4.4% decline is actually driven by one key region – the West, which comprises of real estate markets in Arizona, Nevada, California and Washington State. These regions, according to Yun, are suffering from an acute shortage of inventory. The double-digit growth in prices in the West compared to other regional markets reinforces the idea that it is a supply-constraint rather than a lack of demand that is the reason behind December’s slowdown.

Strong Demand + Low Inventory = Rise in Prices

Supplies of homes in the sub $100,000 range are especially low in the West. First time buyers are stuck with few options as demand for starter homes continues to grow, driving up prices. There is more movement at the higher end of the market, although the tight inventory means it is still very much a seller’s market.

This lack of inventory can also be seen in the local San Diego real estate market. The Californian real estate market rebounded earlier than other regions in 2012, seeing increased sales in the fourth quarter and a lower supply of available homes in December and beyond. Everyone who kept expecting a glut of bank owned property to flood the market with new inventory in 2013 are going to be disappointed; the banks report that they don’t have much inventory in the pipeline for California.

Although builders in Western markets are ramping-up housing-starts in 2013, they are doing so from a considerable deficit (due to severely diminished new-home construction in the wake of the 2006-2009 Depression). Even at the increased pace of construction, housing-starts are nowhere near enough to meet demand in California and other markets in the new year.

What to Expect in 2013?

Even with the ongoing inventory problems in certain regional markets, things are looking up in the real estate sector in 2013. Favorable affordability conditions in most regions combined with cheaper borrowing costs and more job gains will likely drive real-estate growth in the new year. Previously owned homes account for over 90 percent of the housing market, and NAR head economist Lawrence Yun expects the sale of these homes to go up 9 percent in 2013.

Home buyers who qualify for financing can take advantage of extremely competitive rates right now. Stats from Freddie Mac show that the average interest rate on a 30-year, fixed-rate mortgage in the last week of January 2013 was 3.42 percent; one of the lowest in the last 40 years.

While inventory may be tight, there are still plenty of active listings at TeamAguilar.com. Looking to buy or sell? Think now is a good time to invest? Contact Carlos or Alex today.

Alex Aguilar

is the owner of Team Aguilar real estate in San Diego and your source for everything related to the San Diego Real Estate market. Please subscribe to his updates on Facebook.

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Earlier this year there were reports of serial killer Jeffrey Dahmer’s childhood home being put up for sale. Located in the quiet township of Bath near Akron, Ohio, this 3 bed 2½ bath 2,170-square foot single-family home was bought by Dahmer’s parents in 1968, when the erstwhile serial killer was 8 years old. The property comes with a 1.5 acre private wooded lot.

A large part of the home’s notoriety comes from the fact that it is the site of Dahmer’s first murder. In 1978 an 18 year old Dahmer killed and dismembered hitchhiker Steven Hicks and buried him in the woods surrounding the house. Even before this there were reports of a young Dahmer dissecting dead animal he found in the woods around his home.

Dahmer went on to kill 16 more people, all young men of various ethnicities, in and around Milwaukee before being caught in a botched attempt to kill his latest victim in 1991. Anyone old enough to remember the trial will recall it being a major media circus at the time. The horrifying details of Dahmer’s crimes were described in grisly detail by the news media – gory tidbits of acid-filled vats of corpses, a shrine of severed heads, cannibalism, necrophilia and attempted zombification of victims were breathlessly reported to a voracious public.

Dahmer’s trial lasted just two weeks, a surprisingly short time for such a high profile case. Milwaukee’s most famous cannibal was found guilty of 15 counts of murder and sentenced to 957 years in prison – the maximum possible penalty in Wisconsin, a state with no death penalty. Dahmer’s story ends in 1994 at the maximum security Columbia Correctional Institution, when he and another prisoner were bludgeoned to death by fellow inmate Christopher Scarver.

(more…)

Alex Aguilar

is the owner of Team Aguilar real estate in San Diego and your source for everything related to the San Diego Real Estate market. Please subscribe to his updates on Facebook.

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The California Attorney General’s office has announced the arrest of two insurance agents on 57 counts of grand theft, elder abuse, burglary, conspiracy and securities fraud. Officials connected to the case state that two men, Edwin Salazar of Downey and Michael Zuniga of Fullerton ran a two year $1.3 million Ponzi scheme targeting Hispanic investors, many of whom were senior citizens.

Investigators from the Department of Justice and the California Department of Insurance say that the pair operated throughout Los Angeles County under the banner of Omega Investment Group. The pair found most of their potential victims through their insurance business.

The scam, which officials say lasted between January 2007 and December 2008, consisted of Salazar and Downey selling one-year promissory notes to gullible investors as a “risk-free” real estate investment. The pair guaranteed a 15 percent annual return to investors, saying their company, Omega Investment Group, had a profitable business buying and selling homes in foreclosure. They even went as far as helping some investors refinance their homes to raise the money needed to take part in the scheme.

(more…)

Alex Aguilar

is the owner of Team Aguilar real estate in San Diego and your source for everything related to the San Diego Real Estate market. Please subscribe to his updates on Facebook.

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Despite all the doom and gloom in the news about the domestic real estate market, the US still remains a highly desirable destination for international investors. While US real estate has always attracted foreign buyers, recent events have pushed this interest even further.

Major reasons for this surge in interest include: the comparative weakening of the US Dollar; plentiful available inventory; lower property prices due to foreclosures; and depressed local real estate markets. Another huge factor is the potential of a gradual economic recovery in the US and a rapidly worsening situation in continental Europe.

Compared to the likes of Spain, Italy or Greece, the US has a stable and secure real estate market with much lower barriers for international buyers to enter into. American homes are also generally less expensive than their European counterparts and offer the tantalizing prospect of long-term appreciation. Foreign buyers are also well aware of the thriving rental property market.

(more…)

Alex Aguilar

is the owner of Team Aguilar real estate in San Diego and your source for everything related to the San Diego Real Estate market. Please subscribe to his updates on Facebook.

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Forecasting where the real estate market will go in 2012 is no easy task, but that didn’t stop analysts at the country’s top investment banks and financial institutions from putting forth their best guesses in their end-of-year reports.

The ongoing recession, the upcoming presidential race and a looming economic crisis in Europe all paint a pessimistic picture for real estate in 2012 – but there is reason to be hopeful in the new year, according to analysts. While a complete recovery of real estate markets nationwide is certainly a long way off, there are some positive indicators.

Here are six things to look out for in 2012:

1. Rise of Rental Properties

Even the most casual observer will have noticed the boom in rental properties in 2011, a trend that is set to continue in 2012. A study from Reis Inc. shows a sharp drop of vacancy rates in the third quarter of 2011 to a nationwide average of just 5.6%. The same study also highlights a 3.6% increase in rents over 2011.

Property developers were not unmindful of the demand for rental properties. Rental unit construction was up 33% nationwide in the third quarter of 2011 – 48 million new units. The high demand in rental properties will inevitably drive up home prices in 2012 as investors look to snap up rental properties and homeowners look to become landlords.

With real estate prices still low in many markets around the country, 2012 is shaping up to be a great year for buying and holding rental properties.

2. The Rise of Shadow Inventory and Its Effect on Home Prices

The specter of shadow inventory looms large in 2012, bringing with it the threat of depressed property values and increased underwater mortgages. Shadow inventory is comprised of properties undergoing foreclosure, properties that have already been foreclosed but not put up for sale, and houses where the borrowers are unable to maintain their monthly mortgage payments. This glut of unsold and foreclosed properties will have the unfortunate effect of reducing property values in affected areas and suppressing buyer demand.

3. Increasing Short Sales

Most analysts agree that home prices are set to decline in the first half of 2012. Falling prices will force more homeowners into a position of negative equity (where they end up owing more than their homes are worth) – which in turn can trigger them to strategically default on their mortgage obligations.

To prevent borrowers from walking away from their debt obligations banks are expected to encourage short sales for homeowners with negative equity. Expect banks and other lending institutions to aggressively pursue short sales in 2012.

4. Fallout from Europe

The ongoing European financial crisis will have a huge effect on not only the real estate sector, but the US economy as a whole. The economic fates of Europe and the United States are closely intertwined – US exports to Europe total around two trillion Dollars a year. A financial collapse in Europe will have dire consequences for US companies at home and abroad. A Europe-wide recession and the ensuing lack of demand for US goods would cause many companies to reduce their operations at home leading to shrinking demand for offices and industrial spaces – a disastrous outcome for the already weak commercial real estate market.

5. Unemployment

The national unemployment rate will have a significant impact on the real estate market in the coming year. Although the national unemployment rate will remain higher than average, experts predict a gradual improvement in 2012. The numbers are encouraging – December saw the rate drop to 8.5 percent, a three-year low, demonstrating that the job market is gaining momentum. Analysts predict the rate will drop even further to 7.5% in the new year. This is encouraging news for real estate markets – moderate economic growth will result in increased demand for both residential and commercial real estate. Improving local job markets will have a knock on effect improving local housing markets, starting first with rental units and spilling into home sales.

6. Commercial Real Estate Woes

2011 was not a good year for commercial real estate. Tight credit markets and a sluggish economy meant there was little incentive for companies to expand their operations, resulting in lower demand for industrial, retail and commercial properties.

It’s not all bad news for commercial real estate in 2012, however. Steve Hentschel, head of Real Estate Banking at Gleacher & Co. indicates “there will be a continued emphasis on major market 24/7 cities that have global appeal.” Cities that are major business and transportation hubs (New York, Atlanta, San Diego, Chicago, etc.) should see positive growth in the commercial real estate sector in 2012.

Things are Looking Good for San Diego Real Estate!

While there’s still a long way to go before a complete recovery, things are looking much brighter closer to home. According to the Emerging Trends in Real Estate 2012 Forecast conducted by PricewaterhouseCoopers and the Urban Land Institute, San Diego is ranked as one of the top ten “real estate markets to watch in 2012.” According to the report, “San Diego benefits from the near-perfect year-round weather, which helps attract talent pools to local biotech companies, as well as a steady stream of upscale retirees.”

Regardless of the overall market trends in 2012, you can always rely on the experienced agents at Team Aguilar with all your real estate needs. Call Carlos or myself today and find out how we can help you!

Alex Aguilar

is the owner of Team Aguilar real estate in San Diego and your source for everything related to the San Diego Real Estate market. Please subscribe to his updates on Facebook.

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The votes have been counted and the results are in! Team Aguilar’s Blog was the winner for the San Diego area Zillow contest. There are several blogs based in the San Diego area that I read on a regular basis that were competing for the award, San Diego Home Blog and Bubble Info. Check them out, they are very good! It was fun and I appreciate the opportunity to have been nominated. Thank you again to all of the people who voted for us. Here is a list of all winners from each city.

Baltimore
Winner – Realtor Marney

Chicago
Winner – Chicago Real Estate Blog

Dallas
Winner – Ebby Halliday Blog

Houston
Winner – Tom D Plant’s Houston Real Estate Blog

Jacksonville
Winner – What’s Up Jacksonville

Oklahoma City
Winner – SellAMetroHome – the Blog

Philadelphia
Winner - The Philadelphia Real Estate Voice

Phoenix
Winner - The Phoenix Real Estate Guy

San Diego
Winner – Team Aguilar Blog

Seattle
Winner - Cooper Jacob Real Estate Blog

Thank you again!

Alex Aguilar

is the owner of Team Aguilar real estate in San Diego and your source for everything related to the San Diego Real Estate market. Please subscribe to his updates on Facebook.

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Anyone who has spent time in San Diego knows “And away they go!” as the popular line from Trevor Denman at the start of each race during the Del Mar Horse Racing season. For me it’s a voice that is easily recognized and associated with many afternoons with friends and family at the track. Others may think of Santa Anita Park, Pimlico Race Course, Laurel Park Racecourse or Hollywood Park Racetrack when they hear Trevor’s classic line but to the locals of Del Mar and the San Diego area we only know Trevor as our own who represents the start of each and every race at the Del Mar Track.

Del Mar has to be one of the greatest places to live. When I was growing up in Del Mar it was definitely a lot more affordable! Now it seems like you can’t find anything for less then a million bucks. When I was growing up, my neighbor owned a small deli, my best friends parents were a police officer and nurse. You get the picture? It was much more affordable back then. Take a minute to look over the listings below. You will see, especially the last 3 at the bottom that this is one expensive ZIP code to live in.

If your in the area make it a point to take in a race at Del Mar, perhaps on a day with a post race concert. Or go on a Friday or Saturday and after the race head up to the Del Mar Plaza to continue the night out at the many fine restaurants and bars. Your sure to have a great time!

$160,000 : 13754 Mango, Del Mar, CA 92014
	1 beds 1 full baths Year built: 1973 Size: 628 sq ft Lot size: 0 sq ft Parking spots: 1
$180,000 : 13754 Mango, Del Mar, CA 92014
	1 beds 1 full baths Year built: 1973 Size: 628 sq ft Lot size: 0 sq ft Parking spots: 1
$180,000 : 13754 Mango, Del Mar, CA 92014
	1 beds 1 full baths Year built: 1973 Size: 609 sq ft Lot size: 0 sq ft Parking spots: 1
$2,950,000 : 2007 Santa Fe, Del Mar, CA 92014
	3 beds 3 full baths Year built: 1959 Size: 2030 sq ft Lot size: 0 sq ft Parking spots: 2
$2,995,000 : 336 Pine Needles, Del Mar, CA 92014
	4 beds 5 full baths Year built: 1954 Size: 3444 sq ft Lot size: 15,600 sq ft Parking spots: 0
$2,995,000 : 2061 Gatun, Del Mar, CA 92014
	4 beds 4 full baths Year built: 1991 Size: 3623 sq ft Lot size: 47,480 sq ft Parking spots: 3
$21,000,000 : 1844 Ocean Front, Del Mar, CA 92014
	4 beds 4 full baths Year built: 1990 Size: 2885 sq ft Lot size: 0 sq ft Parking spots: 3
$39,000,000 : 2928 Camino Del Mar, Del Mar, CA 92014
	6 beds 8 full baths Year built: 1984 Size: 6551 sq ft Lot size: 0 sq ft Parking spots: 0
$61,000,000 : 929 Border, Del Mar, CA 92014
	9 beds 6 full baths Year built: 1937 Size: 10164 sq ft Lot size: 0 sq ft Parking spots: 2

Alex Aguilar

is the owner of Team Aguilar real estate in San Diego and your source for everything related to the San Diego Real Estate market. Please subscribe to his updates on Facebook.

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