You may be asking yourself who Janet Yellen is? Well she is the President of the Federal Reserve Bank of San Francisco and she just happened to be in San Diego today to give a speech at the Burnham Moores Center for Real Estate University of San Diego 14th Annual Real Estate Conference.

I try to make it out to this event as often as possible. It’s usually a nice breakfast and for $30-40 bucks you get to hear from some of the financial big wigs we have in this county! Some of the talk can get a bit long and dry but I try to post a few of the points that stick out. Here are a few things from Janet Yellen as well as Real estate mogul billionaire Sam Zell who also gave his outlook on the future of real estate. He was fun and brought a bit of energy to the conference!

First, some of the questions that Janet Yellen commented on during her visit to San Diego. After her speech, she spent a few minutes answering some questions. Here was her take on several questions asked.

What is her take on the economy and what direction are wee headed in?

The finalcial system will, “take a long time to fully heal.” She expects economic growth of about 3.5% this year and 4.5% in 2011. “I’m afraid that the economy will continue to operate well below its potential throughout this year and next, even though the recession appears to be over, it does not mean that we are where we want to be.” She referred to the the economic growth being fairly postive but said it’s overshadowed by a poor unemployment rate of 9.7% which she felt would continue through the year and be reduced to 8% by 2011.

How does she feel about the future of interest rates and the possibility of raising rates?

“When the day comes to start raising rates again, we have tools at the ready, for the time being, the economy still needs the support of extraordinarily low rates.” Later she went on to state, “This is not the time to be tightening monetary policy, but eventually the economy will gain enough momentum and won’t need today’s extraordinarily low interest rates.”

The other interesting speech came from Sam Zell.

Some of this speech was a bit over the top but he made some interesting points especially if your an investor in commercial real estate. His opinion on commercial real estate currently underwater in mortgage balances is that, “If there are opportunities in distressed real estate, it’s in buying the debt in return for equity.” What he said makes a lot of sense. Commercial real estate allows you to be much more creative in a bad economy. You don’t have to wait around for a modification or short sale. Investors will go out and seek investments and search for property they can take a equity position in and work out their own deal.

As for the residential market? He noted that San Diego may be an area that would see a slower recovery. One interesting thing he noted is that whenever single family home owners exceeded 62%, we got into trouble. He noted that this time because of sub-prime loans that number rose to 69%. We are currently at 66% and he felt that we needed to get down to 63-64% before we have a sustainable, affordable single family market.

Alex Aguilar
Team Aguilar
Real Estate Agent, Blogger!
Alex@TeamAguilar.com
www.TeamAguilar.com
Real Estate Blog

If your looking for real estate in San Diego, Riverside or Imperial County you have arrived at the right place. Please feel free to contact us and please read our Real Estate Blog and leave your comments.

According to the National Association of Home Builders latest report, the home affordability rate is currently at 48.1% for San Diego County.

What does this mean? Home values are slowly increasing and we may be past the peak of affordability which appears to have peaked at 58.8% during the 1st quarter of 2008.

The NAHB housing opportunity index represents the percentage of homes sold that a median income household could afford using standard lender underwriting guidelines. A few years ago we never had to worry about this because anyone who could fog up a mirror could get a loan.

San Diego County has always been an expensive place to live and these numbers are nothing new but look at the chart below to see how much more affordable it is to live in many other parts of the country. You have to ask yourself, do I want to give up Sunny San Diego to live somewhere I could afford a home? Perhaps……..

See Wichita, KS on that list? Our field agent, Cory has a lot of family there and visits regularly but I think he prefers Sunny San Diego over Wichita.

MOST AFFORDABLE – Kokomo, IN is the most affordable place to live in the United States, 98% of all homes sold there are affordable to the medium household income. WOW, when you think about that it would be really nice if San Diego was a little higher on that list. No offense to anyone reading this from Kokomo In, but I have never been there or even heard of your nice affordable city.

LEAST AFFORDABLE – New York-White Plains-Wayne, NY-NJ is the least affordable. Only 19.7% of all homes sold there are affordable to the medium household income. WOW, now when you think about that it gets a bit scary. It’s nice San Diego is no where close to that.

DATA SOURCE, National Association of Home Builders

Alex Aguilar
Team Aguilar
Real Estate Agent, Blogger!
Alex@TeamAguilar.com
www.TeamAguilar.com
Real Estate Blog

If your looking for real estate in San Diego, Riverside or Imperial County you have arrived at the right place. Please feel free to contact us and please read our Real Estate Blog and leave your comments.

Lets look at the new homes for Sale in Cordova & Trellis community of Windingwalk located in Eastlake Chula Vista.

It appears that brand new home buyers in Chula Vista are not paying any closing costs for the time being. With such good prices, low rates of interest, incentives of saving money and the existence of home buyer tax credit, the opportunity is almost too good to be true. Why not welcome 2010 with a brand new home in this neighborhood?

Home prices at Cordova, Windingwalk begin at around $300,000 and six floor plans are offered along with two-story homes with three or four bedrooms, three bathrooms and garages. Homes in Cordova come with formal dining and living spaces, huge master suites with equally huge closets, well-designed kitchens, downstairs bedrooms and appliances of stainless steel. Some even provide yards.

At Trellis, Windingwalk, on the other hand, single-family homes offer four floor plans with four or five bedrooms, three bathrooms and garages. These homes begin at around $400,000. Homes in Trellis come with traditional styles of architecture with details that range from Spanish to California Cottage. They also come with formal dining and living spaces, butler’s pantries, maple cabinets, granite countertops, downstairs bedroom suites and stainless steel appliances.

This perfectly planned community even comes with various amenities, such as convenient marketplaces, retail centers, and popular food and entertainment places. Anyone familiar with Eastlake Chula Vista know that it offers everything you need to live comfortably.

Residents of Windingwalk have their own private parks, recreation center that provides top-notch amenities like resort-like swimming pools, spas, grassy play areas, basketball courts, spacious courtyards, outdoor barbecues, and wedding garden with a covered gazebo and plush lawns. These facilities stand out with their dramatic covered walkways, entry towers and archways.

Once completed, Windingwalk hopes to offer up more than two thousand residences along with various community facilities, public parks, office spaces and high schools. So what are you waiting for? Take advantage of the market and look at the options available at Windingwalk in Chula Vista.

Home buyers that take out home loans insured by the government will soon learn that their loan officer or Realtor cannot have anything to do with the ordering or choosing of an appraiser. The change comes months after already making the change to Fannie Mae and most conventional loan programs. The reason for the change is the belief that over the last few years appraisers were pressured into giving a loan officer or Realtor a value they needed to make a deal work. With all of the loan fraud and pressure on overvaluing homes the industry feels this is the root of one of the problems that needs to be corrected.

Moving forward Realtors & loan officers will no longer have the power to order appraisals for FHA-insured loans. What does this mean for the typically consumer? It’s hard to say. One thing is for sure. Appraisers are going to have a hard time being aggressive on their appraisal value. It’s going to be their name and their license on the appraisal and since they have no contact with the Realtor or loan officer they won’t feel the pressure to come in with a certain value.

Here is a brief explanation of what would happen in the past.

Loan officer or Realtor need a value of $300,000 to make a purchase or refinance deal work.

If the appraiser comes in at $300,000, everyone is happy but if the appraiser comes in at a value of $290,000 that throws a BIG WRENCH in the deal! Why would this be an issue?

On a purchase deal it means the seller is only going to sell their home for $290,000 which is $10K less and that means less money in their pocket. The seller may just cancel the deal and wait for another offer to come along at $300,000. Hopefully this appraiser is pushed to come in at this value. Perhaps the agents provide listings of recent sales to help support their sales price of $300,000. Believe me, agents, buyers, seller’s and loan officer’s PUSHED appraisers as much as they could to come in at a value they needed. If a commission was on the line, great lengths were taken to close that deal.

What about a refinance? You have similar things to deal with. Cash out refinance means it’s less money going to the home owner and less money for them to take a trip, buy a boat or just blow in Vegas!

The thing that makes this difficult and why I would imagine appraisers would support this change is that the appraisers who were inflating home values were being rewarded by MORE BUSINESS. (More Likely To Get Repeat Business) It made it difficult for a good appraiser to continue to work when the Realtor or loan officer controlled who they ordered the appraisal from. Do you think a loan officer or Realtor would order another appraisal from an appraiser that prevented them from closing their last deal? Probably not, this was a major problem in the real estate industry.

This would mean that consumer home appraisals are going to reflect the value of a home much more closely since brokers that would usually profit from approved loans won’t be choosing appraisers that could declare higher values.

However, there are certain organizations that state that changes and other attempts to reform the industry of appraisal hurts both appraisers and consumers because the new rules will result in home values that are extremely low since the appraisers are not familiar or experienced with the local markets. If you have appraisers coming from miles and miles away to perform an appraisal they may not be familiar with the area like a local appraiser.

The changes started last year when a code was adopted and made to divide loan officers from ordering appraisals. Although the entire process has been changed, it still remains to be seen whether it was a smart move and only time will tell.

Are you looking at homes or condos with an HOA?  If you are looking into buying a home, you may want to do a little more research before you purchase. In today’s real estate market, many HOA’s are underfunded which may require you to make a larger than normal payment to fund the HOA.

A Homeowners Association refers to a legal and formal entity made to maintain a community’s common areas and enforce deed limitations. Their ultimate objective is to protect the values of properties, maintain a community’s appearance and character, as well as meet the expectations of anybody within that community.

Because of this, buying a home with a Homeowners Association could be useful if you want to ensure that your common grounds are maintained, such as community pools and landscaping. However, you should do your research first to avoid getting yourself into undesirable situations because of the rules and financial issues.

Here are several things you should know, learn and explore about a Homeowners Association to help you decide whether this would be the ideal situation for you:

1. Check if any special assessments have been made. Viable funds and studies of reserve could help any community stay away from needing special assessments.

2. Review the funds of reserve, which pay for improvements in the long term, like road paving, pool work, or condominium complex work. Finding out the amount of money that has to be inside the fund might be difficult. However, if you are a buyer, you can find out if your selected Homeowners Association has conducted reserve studies as of late. Such studies will also advise how much money needs to be kept every year to make sure that every need is paid for.

3. Review the charged fees of assessment, which are usually charged by the month, the quarter, or the year. It would be essential to discover exactly which assessments you will be paying for. This usually includes community pools and playgrounds, walking trails and clubhouses, lawn care and landscaping. It might also include the maintenance of common grounds, such as snow removal or trash pickup. If you are aware of this information, you will better understand how much you should budget for these areas that will become your responsibility after buying a home in a certain community.

4. Study the conditions, covenants and restrictions. Now, this might be a problem since you will discover what a community allows and doesn’t allow when it comes to home and yard changes. Many buyers buy homes, only to find out that they can’t add swimming pools or make additions or even plant a certain type of tree! To avoid this, you need to find out the basic rules when it comes to flying flags, satellite dishes, outside antennas, home businesses, patios, fences and pets. It would be absolutely essential to know which rules you have to live by in certain Homeowners Associations.

5. Keep in mind that rules change as time goes by. Because of this, you should periodically review the rules to ensure that you live peacefully within your Homeowners Association. The key in today’s market is to make sure the HOA is funded and has plenty of reserves.

When I heard that Mayor Jerry Sanders and Chargers President Dean Spanos were in serious talks about the possibility of a new stadium located in downtown San Diego, I was THRILLED by the prospect. No offense to the city of Escondido who have been courting the Chargers to move their team there for a quite few years now. It’s just that the Chargers are not Escondido or Chula Vista, and most certainly, not Los Angeles. They are San Diego!

For anyone who has been to Qualcomm Stadium, you fall in to one of two categories:  One type of person believes Qualcomm is an ill-designed cracking slab of concrete with narrow walkways and a cold, uninviting aura. The other type of person is one who has never been to another NFL Stadium to see just how big of a difference a nice stadium can be.  In fact, as far as I’m concerned, Qualcomm and Candlestick in San Francisco are on par with one another and both should be torn down. The Spanos know this and understand this, which is why they want to build a new stadium. But the fact that the city and its taxpayers don’t want to help pay for a new stadium, is the biggest hurdle the Chargers face.

Just because the taxpayers don’t want to help out however, does not mean they are not supportive of Mayor Sanders who is working with Dean Spanos to figure out where the money to build a new stadium can come from. According to Matthew T. Hall of the Union Tribune, one financing option that is being thrown around could come from “selling or developing the city-owned 166-acre Qualcomm Stadium site, which the team would leave vacant.” This is an option where the city can help out without a tax hike. It also brings to light the fact that Qualcomm’s site is HUGE and the proposed site downtown would be much smaller.

The downtown site would be 15 acres directly next to Petco Park that currently includes the city-owned Tailgate Park, the Wonderbread Building, and the bus yard for the San Diego Transit Corp. The beauty of this site, is that the infrastructure is all in place thanks to Petco Park. There’s parking, public transportation set up, and a slew of bars and restaurants in the area that make a killing on game days.  In addition, Hall reports that Charger’s special counsel Mark Fabiani says the downtown stadium makes financial sense “because infrastructure improvements to accommodate a stadium of up to $1 billion elsewhere could cost $200 million, but they are a fraction of that downtown”.

Of course there are naysayers who don’t want to see a stadium go up downtown. Business owners that would have to move, nearby residents who don’t want a huge construction project going on in their neighborhood or the influx of crowds that would be present on game-days.  But I am not going to address such people or such issues, for this is an unapologetically biased blog in favor of a downtown stadium.

Yes, there are hurdles to overcome before this dream can become a reality, mostly of the financial kind. But the city needs this. It needs something it can rally around. Something to be proud of besides the weather, and a beautiful new stadium in the city’s up and coming downtown is just what the doctor ordered.  And can you imagine how much money a Super Bowl hosted downtown would bring into the city?  But all the benefits of a new stadium are light years away. At this point it’s just good to see that San Diego is once again the front-runner for the new home of the San Diego Chargers.

According to Sign On San Diego’s Roger Showley, the Urban Land Institute released its “Emerging Trends in Real Estate 2010” report last week.  On the report’s 9-point scale, San Diego’s real estate market is predicted to improve to 5, a whopping one tenth of a point above 2009’s ranking. What does this mean? Not much really, but it does mean that things certainly are not getting worse.

As we all know, San Diego’s residential sector took an enormous hit dropping from a median home price of $517,500 in 2005, to a much more realistic $325,000. An now, with the residential market coming around, so too will other real estate sectors. Showley reports that Jonathan Miller, a consultant for PricewaterhouseCoopers, who wrote the “Emerging Trends” report said “San Diego is improving because its housing market, having declined earlier than markets in most places, has “stabilized” and is thus setting the stage for nonresidential properties to recover.” “Setting the stage” doesn’t mean nonresidential properties WILL recover in 2010, but I don’t think anyone is going to complain about a stabilizing market that brings with it the hope of once again having flourishing real estate market, even if it is still a ways off. 

What else did the reports say?

“For 2010, the market is a pure hold’ meaning investors should retain their properties and not rush to buy or sell.”

“Shopping center owners should ‘hang on for dear life’ as retailers struggle with falling sales and many vacate their premises.”

“Office-building landlords should expect a game of ‘tenant musical chairs’ as lessees seek the best deals.”

“Hotels can’t get any worse but will ‘lead the commercial real estate industry in recovery’ as the economy improves.”

As for San Diego, even a miniscule glint of improvement on the real estate front is a sign of hope. Jonathon Miller adds, “the point is San Diego, unlike some other markets, has taken a tough hit here, but it appears to be stabilizing, and that’s better than other markets around the country.”  It’s funny to think that just a few years ago “appreciation” was the word that was being used. Appreciation was expected and relied upon, and taken for granted. And now, with our heads in our hands and hopefully a little wiser, appreciation is a distant memory. Now, the word “Stabilizing” holds a similar connotation that “appreciation” once had.

If you missed your chance to reap the benefits of the first-time homebuyer tax credit this past year, you will get one more shot.  The Senate passed a bill on Thursday 98 to 0 that will extend the original first time homebuyer tax credit for another seven months and expand the bill to benefit some current homeowners looking to buy a new home. The bill should reach the House floor by next Thursday and then require the signature of the President.

So what does this new bill consist of? Well, for starters, contrary to many of the proposed bills, this bill does not increase the amount of tax credit. It remains $8000 for first time homebuyers. However this time around, if you are currently a homeowner that has owned your home for at least five consecutive years, you are eligible to receive a $6500 tax credit if you buy a new primary home. In other words, if you are buying a 2^nd home you will not get a tax credit, but if you looking to move and buy a new primary residence, you might be eligible.

Who is eligible? Obviously first time homebuyers, and as previously mentioned, folks that have owned a home for at least five consecutive years. But the bill limits the purchase price of the home to $800,000 and there are income caps, which disqualify any individual who makes more that $125,000 annually and couples who make more than $225,000. In addition, this tax credit offer won’t last as long the second time around. One must sign a contract by April 30 2010, and close on the home by June 30^th to qualify. And if you think they will probably end up extending the offer even further, think again.

According to Dina ElBoghdady of the Washington Post reported that Sen. Johnny Isakson (R-GA), “a longtime advocate of the tax credit, praised passage of the bill in his chamber but said the extension would be the last one. “Tax credits like this only work by creating the sense of urgency to take advantage of them”.  So if you are considering buying a home and are eligible for the tax credit, you better get a move on.

But will this extension of the tax credit really stimulate more home sales? Stephen Ohlemacher of the Associated Press reported that there are those like Senator Kit Bond (R-MO) who question its effectiveness. “For the vast majority of cases, the homebuyer tax credit amounted to a free gift since it did not affect their decision to purchase a home,” Bond said. “And for the small minority of buyers whose decision was directly caused by the credit, this raises the question of whether we are subsidizing buyers who may not have been able to afford buying a home in the first place”.  Though there may be plenty of truth to that statement, it seems that at this point there is nothing else that can be done to at least try and stimulate home buying. And the 98-0 vote in favor of the bill confirms that our Senators don’t think there is anything else that can be done either.

Some may consider this good news, for others it doesn’t help their employment status. Either way, the unemployment number in San Diego County dropped to 10.2% in September from 10.6% in August.  In fact, it’s not just San Diego that’s registered a drop in unemployment rates – it’s the whole State of California with a 12.2% rating in September, decreasing from 12.3% in August.

Let’s try and see what this means.  First, there are some economists who warned that it’s not such a good idea to put too much stock in these figures because they were sourced from a government-conducted telephone survey of households, which is generally, a less accurate way of getting the information.  It’s more logical to rely on payroll numbers which are based on data coming from a broad sampling of employers.  Others believe, however, that a drop (even something this small) is still a good sign because at least, there’s minor movement in the right direction.  It is also very possible that this slight drop is an indication that massive layoffs are beginning to taper off and slow down. 

However, even if unemployment rates are going down, it doesn’t necessarily mean that new jobs will be easy to find.  Experts are even speculating that the slowdown in unemployment rates means that the once-jobless have now found part-time jobs or jobs that don’t involve payroll, like consulting jobs for instance.  Some may even have opted out of being part of the workforce for the meantime, in their frustration from trying to find a job.  Others may have decided to return to school or enrolled in training courses to boost their resumes once the job market picks up. 

The retail and services sectors are primarily two of the segments in the employment market where there are new jobs being offered.  Retailers are being positive about sales and intend on providing good service to their customers, hence the new hires.

What does this mean if you’re thinking of purchasing real estate? Real estate prices are often driven by unemployment rates. If we’ve reached the ceiling or close to it for unemployment then it is safe to say we are at the bottom or close to the bottom of the real estate market. Prices can only drop so much while unemployment rises. Once employment starts to stabilize, you will see the real estate market start to bounce back. It may not bounce back quickly but it will come back. Try to take advantage of the San Diego real estate market.

My boss, Carlos Aguilar, real estate agent extraordinaire (he pays me to say things like that), receives countless emails and calls from renters whose landlord’s are being foreclosed upon, and they are left in the dark, trying to figure out what they need to do. One such email he recently received was from a woman who found out her landlord was being foreclosed on when the Home Owners Association for the complex called her and told her. And since the landlord was no longer paying her HOA fees, the HOA requested that the she pay THEM her rent.

I can imagine that it’s quite unnerving when out of the blue, you get a call from someone you don’t know telling you all this. It’s the kind of call where you hang up and say, “What the F*CK?” Then you try and contact someone…anyone who might have some information on what’s going on, and no one can tell you a thing. So, if you are a renter and your landlord is being foreclosed on, let me help ease your mind. This article is about what will happen and what you need to do.

Finding Out

A few days after the Trustee Sale (foreclosure) occurs, someone will be knocking at your door inquiring about whom you are and the names of any other occupants. This person represents the bank that now owns the property you are occupying. If you are not home, they will post a notice on the door asking you to contact them. This notice may sound harsh, and may even sound like an eviction notice, but it is not. It is simply an initial attempt to impress upon you the seriousness of the situation and to make you aware that the property is now owned by a bank and their purpose is to gather information.  The new owners need to know who you are and what your intentions are. For the most part, they will want the property to be vacant as quickly as possible. The one exception to that is Fannie Mae, who, if they are the new owners, may give the option to some tenants to continue to rent the property. But almost all other lenders are not willing to rent the property and will assign it to an eviction attorney to begin the eviction process.

Eviction Notice

The eviction attorney (or someone representing them) will present you with a notice alerting you that you have 90 days to vacate the property. Depending on how fast the eviction attorney begins the case, this notice may not come for weeks (sometimes even up to a month) after the house has already been foreclosed on. NOTE: Despite what your former owner’s HOA tells you, you DO NOT owe them any money.

Cash for Keys

The Bank, AKA the new owner, will usually offer you cash to entice you to move out and waive the 90 day eviction period. The sooner you move out, the more money the bank is willing to offer you to help with your relocation costs. Typically, if you agree to move out in the first 30 days, the bank may be willing to pay you a fee of $3000-$4000. If you move out within 60 days, this amount is reduced substantially, and if you move out towards the end of the 90 days, you most likely will not be offered any money. The reason the banks are willing to offer you a relocation fee is to offset the cost of having to pay legal fees to have you evicted. And the sooner you are out of the property, the sooner they can put it on the market for sale. And they are EAGER to sell those properties.

Whatever you do, don’t play dumb and pretend like nothing is happening (see The Life and Time of an REO Field Agent: Part III). Talk to the bank, let them know what you intend to do. Will you take the full 90 days to find a new place and move? Or will you take the cash for keys and move out sooner? Depending on how much the banks offer you in the form of cash for keys, it might make sense to get out fast if you are able. If the amount is minimal, it makes sense to use those 90 days of living rent free to search for a new place.

Any way you slice it, it’s not your fault that your landlord got foreclosed on. Don’t take the eviction as a personal attack. It is without a doubt a large inconvenience, but the sooner you address the situation, the sooner you’ll be living in a new place. And who knows, maybe you will even make out with a little extra cash in the process.

By Andrew Brentan