If you or anyone you know has purchased a home anytime after April 9, 2008 and is a first-time home buyer (which is defined in this case as an individual who has not owned a primary home at any time during the past three years) THIS IS A WONDERFUL INCENTIVE!!!
Please go to this website for more information on the RETROACTIVE first-time home-buyers tax credit of up to $7,500! http://www.era.com/erabuy/homebuyers_taxcredit.html
This is yet another incentive for first time homebuyers!
Monday, August 25, 2008
Tuesday, August 19, 2008
A few FHA Facts
The following information is taken from FHA.gov
Sustainable, Affordability Homeownership
Hope for Homeowners maintains FHA’s long-standing requirement that new loans be based on a family’s long-term ability to repay the mortgage. FHA only allows owner-occupants to be eligible for FHA-insured mortgages. Borrowers must also meet the following eligibility criteria:
Their mortgage must have originated on or before January 1, 2008;
Their mortgage debt-to-income must be at least 31 percent;
They cannot afford their current loan;
They did not intentionally miss mortgage payments; and
They do not own second homes.
Features of FHA-insured loans under the new program include:
30-year, fixed rate mortgage;
Maximum 90 percent loan-to-value ratio;
No prepayment penalties;
$550,440 maximum mortgage amount;
Extinguishment of any subordinate liens; and
New home appraisals from FHA-approved appraisers.
HUD, Treasury, FDIC and the Federal Reserve will form the Congressionally-mandated Board of Directors and work together to establish additional program standards.
Voluntary Lender Participation
FHA will continue to offer lenders an alternative to foreclosing on borrowers. Similar to FHASecure’s recent expansion, lenders will be encouraged to write-down the outstanding mortgage principal balances to 90 percent of the new value of the property. In many cases, reductions in principle will cost lenders less than the losses associated with foreclosure.
Market Stability and Liquidity
By continuing to slow the rate of foreclosures, this program will support FHA’s existing effort to stabilize local housing markets. From September 2007 to June 2008, FHA has guaranteed more than $93 billion of mortgage capital.
Funding
FHA will insure up to $300 billion in new loans. Borrowers will pay an upfront premium of 3 percent of the original mortgage amount and an annual premium of 1.5 percent of the outstanding mortgage amount. Any additional costs incurred by FHA will be reimbursed by Fannie Mae and Freddie Mac.
Program Timeline
The program will last from October 1, 2008 through September 30, 2011. Since September 2007, FHASecure has helped more than 290,000 families obtain safer, more affordable mortgages. FHASecure is on pace to help 500,000 families by the end of the year.
Sustainable, Affordability Homeownership
Hope for Homeowners maintains FHA’s long-standing requirement that new loans be based on a family’s long-term ability to repay the mortgage. FHA only allows owner-occupants to be eligible for FHA-insured mortgages. Borrowers must also meet the following eligibility criteria:
Their mortgage must have originated on or before January 1, 2008;
Their mortgage debt-to-income must be at least 31 percent;
They cannot afford their current loan;
They did not intentionally miss mortgage payments; and
They do not own second homes.
Features of FHA-insured loans under the new program include:
30-year, fixed rate mortgage;
Maximum 90 percent loan-to-value ratio;
No prepayment penalties;
$550,440 maximum mortgage amount;
Extinguishment of any subordinate liens; and
New home appraisals from FHA-approved appraisers.
HUD, Treasury, FDIC and the Federal Reserve will form the Congressionally-mandated Board of Directors and work together to establish additional program standards.
Voluntary Lender Participation
FHA will continue to offer lenders an alternative to foreclosing on borrowers. Similar to FHASecure’s recent expansion, lenders will be encouraged to write-down the outstanding mortgage principal balances to 90 percent of the new value of the property. In many cases, reductions in principle will cost lenders less than the losses associated with foreclosure.
Market Stability and Liquidity
By continuing to slow the rate of foreclosures, this program will support FHA’s existing effort to stabilize local housing markets. From September 2007 to June 2008, FHA has guaranteed more than $93 billion of mortgage capital.
Funding
FHA will insure up to $300 billion in new loans. Borrowers will pay an upfront premium of 3 percent of the original mortgage amount and an annual premium of 1.5 percent of the outstanding mortgage amount. Any additional costs incurred by FHA will be reimbursed by Fannie Mae and Freddie Mac.
Program Timeline
The program will last from October 1, 2008 through September 30, 2011. Since September 2007, FHASecure has helped more than 290,000 families obtain safer, more affordable mortgages. FHASecure is on pace to help 500,000 families by the end of the year.
Homeowner Tax Breaks as reported by the LA Times
Homeowners get tax breaks in housing bill
The Housing and Economic Recovery Act doesn't only stave off foreclosures and help troubled lenders. First-time buyers, older homeowners and others also benefit.
Kathy M. Kristof
Personal Finance
August 10, 2008
Tax breaks for owning real estate are undergoing another shift, thanks to the Housing and Economic Recovery Act recently signed into law by President Bush.
The main focus of the bill was on its provisions to stave off foreclosures and to bail out mortgage giants Freddie Mac and Fannie Mae. But there are also measures of interest to people with vacation homes, first-time home buyers or those planning to buy a home who haven't owned one in three years, and homeowners who don't itemize their federal tax returns.
Here's a rundown:
Vacation homes
The housing bill closes a provision that some people with vacation homes had used to avoid paying tax on the appreciation realized on their vacation properties when they sell.
You might wonder: What does this have to do with solving the housing crisis? Nothing, really; it is designed to raise revenue and help pay for the other tax breaks in the bill.
The provision has allowed someone with a vacation home to get a tax break, providing he or she is willing to live in it for at least two years before selling it.
Under current law, taxpayers can exclude up to $250,000 per person, or $500,000 per couple, in gains on the sale of a personal residence from federal tax.
Because tax law defines a personal residence as the place where the taxpayer has lived for two of the last five years, people with vacation homes can move in for two years, sell the home and then move back to their primary residence.
But starting Jan. 1, 2009, taxpayers can exclude only the portion of the gain that corresponds to the "qualified use" of the home. That means the taxpayer will have to divide the number of years lived in the residence by the number of years it was owned to figure out what percentage of the gain is tax-free, said Mark Luscombe, principal tax analyst with CCH Inc., a Riverwoods, Ill.-based publisher of tax information.
Here's an example: If you bought the house in 2009 and owned it for 10 years but lived in it for just two, only two-tenths of the gain would be tax-free.
Even if the home appreciated in uneven fashion (as homes often do), the tax law says you have to act as if the appreciation was earned evenly throughout the time period that you owned it.
The good news is that Congress also put in a generous transition period, he said. Only the period following the law's 2009 start date will count in the "non-qualified use" portion of the home-sale calculation.
So if you bought the house in 2000 and moved into it in 2010, selling in 2012, you would pay tax on only two years of appreciation after the law's start date but before you moved in -- the non-qualified use in 2009 and 2010.
That makes it time to get packing, said Bob Scharin, senior tax analyst with the tax and accounting business of Thomson Reuters, about the change: "If you move in before the end of 2008, the law will not affect you at all," he said.
A 'credit' you must repay
The housing act also ushered in two new tax breaks for homeowners.
The most widely touted was one that provides a tax "credit" of $7,500 for couples and $3,750 for married couples filing separately for first-time home buyers. But the credit is really an interest-free loan, not a credit in the traditional sense of the word, Luscombe said. It must be paid back in equal installments over a 15-year period.
Saying the credit is for first-time home buyers is also a misnomer. Anyone who hasn't owned a home for three years before purchasing the home can qualify.
Before that "look-back period," they could have been Donald Trump and it still wouldn't matter.
"You could have owned many homes in your lifetime, as long as you didn't own a home in the three-year period prior to the purchase of the home to which the credit will apply," Scharin said.
There are income limits, however. Only singles earning less than $75,000 annually and married couples earning less than $150,000 annually can claim the full credit.
Once income exceeds those thresholds, the maximum credit is reduced until it is eliminated for singles earning $95,000 and married couples with $170,000 or more in income.
The credit is also temporary. It is available only for homes purchased April 9, 2008 through July 1, 2009.
One-time deduction
There are fewer strings attached to a new tax deduction for homeowners who don't itemize deductions. The tax law gives non-itemizers a write-off to compensate them for any state and local real estate taxes they pay. The deduction is the lesser of the amount of that tax, or $500 for single filers or $1,000 for married couples.
But this deduction is available for only one year -- 2008.
This deduction is aimed at helping older homeowners, who may have already paid off their mortgages and thus don't have enough deductible expenses to itemize. It is meant to help them through today's tough economy.
Kathy M. Kristof welcomes your comments but regrets that she cannot respond to every question. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail kathy.kristof @latimes.com. For past Personal Finance columns, visit latimes.com/kristof.
The Housing and Economic Recovery Act doesn't only stave off foreclosures and help troubled lenders. First-time buyers, older homeowners and others also benefit.
Kathy M. Kristof
Personal Finance
August 10, 2008
Tax breaks for owning real estate are undergoing another shift, thanks to the Housing and Economic Recovery Act recently signed into law by President Bush.
The main focus of the bill was on its provisions to stave off foreclosures and to bail out mortgage giants Freddie Mac and Fannie Mae. But there are also measures of interest to people with vacation homes, first-time home buyers or those planning to buy a home who haven't owned one in three years, and homeowners who don't itemize their federal tax returns.
Here's a rundown:
Vacation homes
The housing bill closes a provision that some people with vacation homes had used to avoid paying tax on the appreciation realized on their vacation properties when they sell.
You might wonder: What does this have to do with solving the housing crisis? Nothing, really; it is designed to raise revenue and help pay for the other tax breaks in the bill.
The provision has allowed someone with a vacation home to get a tax break, providing he or she is willing to live in it for at least two years before selling it.
Under current law, taxpayers can exclude up to $250,000 per person, or $500,000 per couple, in gains on the sale of a personal residence from federal tax.
Because tax law defines a personal residence as the place where the taxpayer has lived for two of the last five years, people with vacation homes can move in for two years, sell the home and then move back to their primary residence.
But starting Jan. 1, 2009, taxpayers can exclude only the portion of the gain that corresponds to the "qualified use" of the home. That means the taxpayer will have to divide the number of years lived in the residence by the number of years it was owned to figure out what percentage of the gain is tax-free, said Mark Luscombe, principal tax analyst with CCH Inc., a Riverwoods, Ill.-based publisher of tax information.
Here's an example: If you bought the house in 2009 and owned it for 10 years but lived in it for just two, only two-tenths of the gain would be tax-free.
Even if the home appreciated in uneven fashion (as homes often do), the tax law says you have to act as if the appreciation was earned evenly throughout the time period that you owned it.
The good news is that Congress also put in a generous transition period, he said. Only the period following the law's 2009 start date will count in the "non-qualified use" portion of the home-sale calculation.
So if you bought the house in 2000 and moved into it in 2010, selling in 2012, you would pay tax on only two years of appreciation after the law's start date but before you moved in -- the non-qualified use in 2009 and 2010.
That makes it time to get packing, said Bob Scharin, senior tax analyst with the tax and accounting business of Thomson Reuters, about the change: "If you move in before the end of 2008, the law will not affect you at all," he said.
A 'credit' you must repay
The housing act also ushered in two new tax breaks for homeowners.
The most widely touted was one that provides a tax "credit" of $7,500 for couples and $3,750 for married couples filing separately for first-time home buyers. But the credit is really an interest-free loan, not a credit in the traditional sense of the word, Luscombe said. It must be paid back in equal installments over a 15-year period.
Saying the credit is for first-time home buyers is also a misnomer. Anyone who hasn't owned a home for three years before purchasing the home can qualify.
Before that "look-back period," they could have been Donald Trump and it still wouldn't matter.
"You could have owned many homes in your lifetime, as long as you didn't own a home in the three-year period prior to the purchase of the home to which the credit will apply," Scharin said.
There are income limits, however. Only singles earning less than $75,000 annually and married couples earning less than $150,000 annually can claim the full credit.
Once income exceeds those thresholds, the maximum credit is reduced until it is eliminated for singles earning $95,000 and married couples with $170,000 or more in income.
The credit is also temporary. It is available only for homes purchased April 9, 2008 through July 1, 2009.
One-time deduction
There are fewer strings attached to a new tax deduction for homeowners who don't itemize deductions. The tax law gives non-itemizers a write-off to compensate them for any state and local real estate taxes they pay. The deduction is the lesser of the amount of that tax, or $500 for single filers or $1,000 for married couples.
But this deduction is available for only one year -- 2008.
This deduction is aimed at helping older homeowners, who may have already paid off their mortgages and thus don't have enough deductible expenses to itemize. It is meant to help them through today's tough economy.
Kathy M. Kristof welcomes your comments but regrets that she cannot respond to every question. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail kathy.kristof @latimes.com. For past Personal Finance columns, visit latimes.com/kristof.
Homeowner Tax Breaks as reported by the LA Times
Homeowners get tax breaks in housing bill
The Housing and Economic Recovery Act doesn't only stave off foreclosures and help troubled lenders. First-time buyers, older homeowners and others also benefit.
Kathy M. Kristof
Personal Finance
August 10, 2008
Tax breaks for owning real estate are undergoing another shift, thanks to the Housing and Economic Recovery Act recently signed into law by President Bush.
The main focus of the bill was on its provisions to stave off foreclosures and to bail out mortgage giants Freddie Mac and Fannie Mae. But there are also measures of interest to people with vacation homes, first-time home buyers or those planning to buy a home who haven't owned one in three years, and homeowners who don't itemize their federal tax returns.
Here's a rundown:
Vacation homes
The housing bill closes a provision that some people with vacation homes had used to avoid paying tax on the appreciation realized on their vacation properties when they sell.
You might wonder: What does this have to do with solving the housing crisis? Nothing, really; it is designed to raise revenue and help pay for the other tax breaks in the bill.
The provision has allowed someone with a vacation home to get a tax break, providing he or she is willing to live in it for at least two years before selling it.
Under current law, taxpayers can exclude up to $250,000 per person, or $500,000 per couple, in gains on the sale of a personal residence from federal tax.
Because tax law defines a personal residence as the place where the taxpayer has lived for two of the last five years, people with vacation homes can move in for two years, sell the home and then move back to their primary residence.
But starting Jan. 1, 2009, taxpayers can exclude only the portion of the gain that corresponds to the "qualified use" of the home. That means the taxpayer will have to divide the number of years lived in the residence by the number of years it was owned to figure out what percentage of the gain is tax-free, said Mark Luscombe, principal tax analyst with CCH Inc., a Riverwoods, Ill.-based publisher of tax information.
Here's an example: If you bought the house in 2009 and owned it for 10 years but lived in it for just two, only two-tenths of the gain would be tax-free.
Even if the home appreciated in uneven fashion (as homes often do), the tax law says you have to act as if the appreciation was earned evenly throughout the time period that you owned it.
The good news is that Congress also put in a generous transition period, he said. Only the period following the law's 2009 start date will count in the "non-qualified use" portion of the home-sale calculation.
So if you bought the house in 2000 and moved into it in 2010, selling in 2012, you would pay tax on only two years of appreciation after the law's start date but before you moved in -- the non-qualified use in 2009 and 2010.
That makes it time to get packing, said Bob Scharin, senior tax analyst with the tax and accounting business of Thomson Reuters, about the change: "If you move in before the end of 2008, the law will not affect you at all," he said.
A 'credit' you must repay
The housing act also ushered in two new tax breaks for homeowners.
The most widely touted was one that provides a tax "credit" of $7,500 for couples and $3,750 for married couples filing separately for first-time home buyers. But the credit is really an interest-free loan, not a credit in the traditional sense of the word, Luscombe said. It must be paid back in equal installments over a 15-year period.
Saying the credit is for first-time home buyers is also a misnomer. Anyone who hasn't owned a home for three years before purchasing the home can qualify.
Before that "look-back period," they could have been Donald Trump and it still wouldn't matter.
"You could have owned many homes in your lifetime, as long as you didn't own a home in the three-year period prior to the purchase of the home to which the credit will apply," Scharin said.
There are income limits, however. Only singles earning less than $75,000 annually and married couples earning less than $150,000 annually can claim the full credit.
Once income exceeds those thresholds, the maximum credit is reduced until it is eliminated for singles earning $95,000 and married couples with $170,000 or more in income.
The credit is also temporary. It is available only for homes purchased April 9, 2008 through July 1, 2009.
One-time deduction
There are fewer strings attached to a new tax deduction for homeowners who don't itemize deductions. The tax law gives non-itemizers a write-off to compensate them for any state and local real estate taxes they pay. The deduction is the lesser of the amount of that tax, or $500 for single filers or $1,000 for married couples.
But this deduction is available for only one year -- 2008.
This deduction is aimed at helping older homeowners, who may have already paid off their mortgages and thus don't have enough deductible expenses to itemize. It is meant to help them through today's tough economy.
Kathy M. Kristof welcomes your comments but regrets that she cannot respond to every question. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail kathy.kristof @latimes.com. For past Personal Finance columns, visit latimes.com/kristof.
The Housing and Economic Recovery Act doesn't only stave off foreclosures and help troubled lenders. First-time buyers, older homeowners and others also benefit.
Kathy M. Kristof
Personal Finance
August 10, 2008
Tax breaks for owning real estate are undergoing another shift, thanks to the Housing and Economic Recovery Act recently signed into law by President Bush.
The main focus of the bill was on its provisions to stave off foreclosures and to bail out mortgage giants Freddie Mac and Fannie Mae. But there are also measures of interest to people with vacation homes, first-time home buyers or those planning to buy a home who haven't owned one in three years, and homeowners who don't itemize their federal tax returns.
Here's a rundown:
Vacation homes
The housing bill closes a provision that some people with vacation homes had used to avoid paying tax on the appreciation realized on their vacation properties when they sell.
You might wonder: What does this have to do with solving the housing crisis? Nothing, really; it is designed to raise revenue and help pay for the other tax breaks in the bill.
The provision has allowed someone with a vacation home to get a tax break, providing he or she is willing to live in it for at least two years before selling it.
Under current law, taxpayers can exclude up to $250,000 per person, or $500,000 per couple, in gains on the sale of a personal residence from federal tax.
Because tax law defines a personal residence as the place where the taxpayer has lived for two of the last five years, people with vacation homes can move in for two years, sell the home and then move back to their primary residence.
But starting Jan. 1, 2009, taxpayers can exclude only the portion of the gain that corresponds to the "qualified use" of the home. That means the taxpayer will have to divide the number of years lived in the residence by the number of years it was owned to figure out what percentage of the gain is tax-free, said Mark Luscombe, principal tax analyst with CCH Inc., a Riverwoods, Ill.-based publisher of tax information.
Here's an example: If you bought the house in 2009 and owned it for 10 years but lived in it for just two, only two-tenths of the gain would be tax-free.
Even if the home appreciated in uneven fashion (as homes often do), the tax law says you have to act as if the appreciation was earned evenly throughout the time period that you owned it.
The good news is that Congress also put in a generous transition period, he said. Only the period following the law's 2009 start date will count in the "non-qualified use" portion of the home-sale calculation.
So if you bought the house in 2000 and moved into it in 2010, selling in 2012, you would pay tax on only two years of appreciation after the law's start date but before you moved in -- the non-qualified use in 2009 and 2010.
That makes it time to get packing, said Bob Scharin, senior tax analyst with the tax and accounting business of Thomson Reuters, about the change: "If you move in before the end of 2008, the law will not affect you at all," he said.
A 'credit' you must repay
The housing act also ushered in two new tax breaks for homeowners.
The most widely touted was one that provides a tax "credit" of $7,500 for couples and $3,750 for married couples filing separately for first-time home buyers. But the credit is really an interest-free loan, not a credit in the traditional sense of the word, Luscombe said. It must be paid back in equal installments over a 15-year period.
Saying the credit is for first-time home buyers is also a misnomer. Anyone who hasn't owned a home for three years before purchasing the home can qualify.
Before that "look-back period," they could have been Donald Trump and it still wouldn't matter.
"You could have owned many homes in your lifetime, as long as you didn't own a home in the three-year period prior to the purchase of the home to which the credit will apply," Scharin said.
There are income limits, however. Only singles earning less than $75,000 annually and married couples earning less than $150,000 annually can claim the full credit.
Once income exceeds those thresholds, the maximum credit is reduced until it is eliminated for singles earning $95,000 and married couples with $170,000 or more in income.
The credit is also temporary. It is available only for homes purchased April 9, 2008 through July 1, 2009.
One-time deduction
There are fewer strings attached to a new tax deduction for homeowners who don't itemize deductions. The tax law gives non-itemizers a write-off to compensate them for any state and local real estate taxes they pay. The deduction is the lesser of the amount of that tax, or $500 for single filers or $1,000 for married couples.
But this deduction is available for only one year -- 2008.
This deduction is aimed at helping older homeowners, who may have already paid off their mortgages and thus don't have enough deductible expenses to itemize. It is meant to help them through today's tough economy.
Kathy M. Kristof welcomes your comments but regrets that she cannot respond to every question. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail kathy.kristof @latimes.com. For past Personal Finance columns, visit latimes.com/kristof.
LA TIMES REPORTS TODAY Southern California home sales jump 13.8% in July
Posted from the LA Times
Southern California home sales jump 13.8% in July
The year-over-year increase, spurred by falling prices and foreclosures, is the first since September 2005. Los Angeles County sees a slight drop in sales.
By Annette Haddad
Los Angeles Times Staff Writer
August 19, 2008
Southern California home sales rose last month for the first time in nearly three years, as steep discounts lured buyers back into a market where values have tumbled 31% over the last year.
Sales volume was up 13.8% overall from a year earlier, with Riverside County leading the way with a 48.6% jump, MDA DataQuick reported Monday. Los Angeles County was the exception, posting a 3.2% decline.
The rise is being driven in part by buyers like Andre and Jody Ocampo, who attended an auction of 250 foreclosed homes at the Riverside Convention Center on Sunday, looking for a bargain.
After just three minutes of bidding, they became buyers of a Lake Elsinore home -- offering $385,000 for a house that had been appraised just a couple of years ago at nearly $700,000.
The Ocampos said they weren't worried that prices would continue falling, as most real estate experts predict, because they plan to live in the home and not resell it for a quick profit.
"We've been building our nest egg and waiting for the right opportunity," Andre Ocampo said. "Our goal is to move in and make it our home, and wait out the market."
Overall, 20,329 homes in the six-county region closed escrow last month, MDA DataQuick said, for the first increase in Southland sales since September 2005.
G.U. Krueger, an economist with Irvine-based real estate advisory firm IHP Capital Partners, said the uptick was evidence that the "price mechanism is working" -- that is, lower prices are bringing buyers back into the market.
But he and other experts believe that prices will take months to hit bottom, citing the wave of foreclosures and the tightening of lending standards because of the continuing credit crunch.
"Higher sales are great, but foreclosures are still high and people need to appreciate that more discounts may be coming," Krueger said.
Los Angeles County, the one exception to the trend, hasn't been hit as hard by foreclosures and has relatively fewer discounted homes for sale. That's probably why it saw a slight decline in sales instead of the increase seen in neighboring counties, said John Karevoll, MDA DataQuick's chief analyst.
The median home price in Southern California last month fell 31.1% to $348,000 from $505,000 in July 2007, DataQuick said, the lowest level since February 2004, when the region was in the frenzy of the housing expansion. The decline ranged from 25.6% in San Diego County to 35.2% in San Bernardino County.
The decline is being exacerbated by record numbers of homeowners defaulting on their mortgages each month, with most of the homes ultimately being repossessed by the lender and sold at a discount.
The market is also being weakened by "short sales," in which homeowners price their homes for less than what they owe on their mortgages in hopes of avoiding foreclosure.
In addition, most lenders have tightened their standards, eliminating many potential home buyers who might have qualified for a loan during the boom.
There is also concern about the health of mortgage finance giants Fannie Mae and Freddie Mac, which buy the bulk of the nation's home loans. Speculation that the two companies may be facing a government takeover helped trigger a sell-off on Wall Street on Monday.
But with buyers returning to the marketplace, lenders that got burned after approving risky mortgages and that then retreated are becoming slightly less wary these days, some loan brokers and real estate agents say.
"There are a lot of good, well-qualified people out there," said Mitch Ohlbaum, president of Legend Mortgage Corp. in Los Angeles. "People feel, 'OK, I can put down 10% or 20% and do this and the payment will be OK, even with a 30-year fixed mortgage.' "
For bargain hunters like Dale Smet of Santa Clarita, the timing is perfect.
"I've been waiting for this market," he said.
Smet, who works in marketing for Southern California Gas Co., said he carefully conserved an equity line of credit during the boom years, which he tapped to pay $300,000 cash last month for two foreclosed condos near his house.
And that was after being outbid on a handful of other bank-owned homes in the Santa Clarita area.
After a 15-day escrow, Smet did the necessary cosmetic repairs himself and said he had no trouble finding renters willing to pay about $1,500 a month for each unit. He hopes eventually to take a first mortgage on each with monthly payments that he figures would be less than his rental income.
"This isn't risk free. But I don't care if home prices go down," Smet said. "I'll just buy more."
Smet acknowledges that the housing downturn's drag on the broader economy could accelerate, putting his job at risk.
"That's definitely a weak link. The job situation is always an issue," he said.
Andre Ocampo, the buyer of the Lake Elsinore home, has seen firsthand how falling home prices can affect one's livelihood.
His Huntington Beach company, South Shore Extermination, boomed as rising home sales fueled demand for termite inspection and control work.
With the downturn, business fell off. But Ocampo and his wife waited patiently, building their credit and saving their money.
After hearing about the auction, he and his wife scoped out a place they knew would be on the block -- a 2,100-square-foot ranch-style house on two acres near their rental house in the Rancho Capistrano neighborhood.
They liked the place enough to brave the crowds of professional investors and enter a live bidding war for the home, which had an opening price of $189,000.
"We did all our due diligence and this made sense to us," Ocampo said.
"Everything is possible right now; we worked hard to get our ducks in a row."
annette.haddad@latimes.com
--------------------------------------------------------------------------------
Southern California home sales jump 13.8% in July
The year-over-year increase, spurred by falling prices and foreclosures, is the first since September 2005. Los Angeles County sees a slight drop in sales.
By Annette Haddad
Los Angeles Times Staff Writer
August 19, 2008
Southern California home sales rose last month for the first time in nearly three years, as steep discounts lured buyers back into a market where values have tumbled 31% over the last year.
Sales volume was up 13.8% overall from a year earlier, with Riverside County leading the way with a 48.6% jump, MDA DataQuick reported Monday. Los Angeles County was the exception, posting a 3.2% decline.
The rise is being driven in part by buyers like Andre and Jody Ocampo, who attended an auction of 250 foreclosed homes at the Riverside Convention Center on Sunday, looking for a bargain.
After just three minutes of bidding, they became buyers of a Lake Elsinore home -- offering $385,000 for a house that had been appraised just a couple of years ago at nearly $700,000.
The Ocampos said they weren't worried that prices would continue falling, as most real estate experts predict, because they plan to live in the home and not resell it for a quick profit.
"We've been building our nest egg and waiting for the right opportunity," Andre Ocampo said. "Our goal is to move in and make it our home, and wait out the market."
Overall, 20,329 homes in the six-county region closed escrow last month, MDA DataQuick said, for the first increase in Southland sales since September 2005.
G.U. Krueger, an economist with Irvine-based real estate advisory firm IHP Capital Partners, said the uptick was evidence that the "price mechanism is working" -- that is, lower prices are bringing buyers back into the market.
But he and other experts believe that prices will take months to hit bottom, citing the wave of foreclosures and the tightening of lending standards because of the continuing credit crunch.
"Higher sales are great, but foreclosures are still high and people need to appreciate that more discounts may be coming," Krueger said.
Los Angeles County, the one exception to the trend, hasn't been hit as hard by foreclosures and has relatively fewer discounted homes for sale. That's probably why it saw a slight decline in sales instead of the increase seen in neighboring counties, said John Karevoll, MDA DataQuick's chief analyst.
The median home price in Southern California last month fell 31.1% to $348,000 from $505,000 in July 2007, DataQuick said, the lowest level since February 2004, when the region was in the frenzy of the housing expansion. The decline ranged from 25.6% in San Diego County to 35.2% in San Bernardino County.
The decline is being exacerbated by record numbers of homeowners defaulting on their mortgages each month, with most of the homes ultimately being repossessed by the lender and sold at a discount.
The market is also being weakened by "short sales," in which homeowners price their homes for less than what they owe on their mortgages in hopes of avoiding foreclosure.
In addition, most lenders have tightened their standards, eliminating many potential home buyers who might have qualified for a loan during the boom.
There is also concern about the health of mortgage finance giants Fannie Mae and Freddie Mac, which buy the bulk of the nation's home loans. Speculation that the two companies may be facing a government takeover helped trigger a sell-off on Wall Street on Monday.
But with buyers returning to the marketplace, lenders that got burned after approving risky mortgages and that then retreated are becoming slightly less wary these days, some loan brokers and real estate agents say.
"There are a lot of good, well-qualified people out there," said Mitch Ohlbaum, president of Legend Mortgage Corp. in Los Angeles. "People feel, 'OK, I can put down 10% or 20% and do this and the payment will be OK, even with a 30-year fixed mortgage.' "
For bargain hunters like Dale Smet of Santa Clarita, the timing is perfect.
"I've been waiting for this market," he said.
Smet, who works in marketing for Southern California Gas Co., said he carefully conserved an equity line of credit during the boom years, which he tapped to pay $300,000 cash last month for two foreclosed condos near his house.
And that was after being outbid on a handful of other bank-owned homes in the Santa Clarita area.
After a 15-day escrow, Smet did the necessary cosmetic repairs himself and said he had no trouble finding renters willing to pay about $1,500 a month for each unit. He hopes eventually to take a first mortgage on each with monthly payments that he figures would be less than his rental income.
"This isn't risk free. But I don't care if home prices go down," Smet said. "I'll just buy more."
Smet acknowledges that the housing downturn's drag on the broader economy could accelerate, putting his job at risk.
"That's definitely a weak link. The job situation is always an issue," he said.
Andre Ocampo, the buyer of the Lake Elsinore home, has seen firsthand how falling home prices can affect one's livelihood.
His Huntington Beach company, South Shore Extermination, boomed as rising home sales fueled demand for termite inspection and control work.
With the downturn, business fell off. But Ocampo and his wife waited patiently, building their credit and saving their money.
After hearing about the auction, he and his wife scoped out a place they knew would be on the block -- a 2,100-square-foot ranch-style house on two acres near their rental house in the Rancho Capistrano neighborhood.
They liked the place enough to brave the crowds of professional investors and enter a live bidding war for the home, which had an opening price of $189,000.
"We did all our due diligence and this made sense to us," Ocampo said.
"Everything is possible right now; we worked hard to get our ducks in a row."
annette.haddad@latimes.com
--------------------------------------------------------------------------------
Monday, August 11, 2008
Pending Home Sales Rise -- According to the National Association of REALTORS (R)
The following article is a direct copy of an article posted at realtor.org:
Pending Home Sales Rise, Wider Gains Anticipated as Buyers tap Housing Provisions
WASHINGTON, August 07, 2008
Some improvement is projected for existing-home sales in the months ahead, with broader gains seen by the fourth quarter as buyers take advantage of new provisions provided through the recently passed housing stimulus bill, according to the latest forecast by the National Association of Realtors®.
The Pending Home Sales Index,¹ a forward-looking indicator based on contracts signed in June, rose 5.3 percent to 89.0 from a downwardly revised reading of 84.5 in May, but remains 12.3 percent below June 2007 when it stood at 101.4.
Lawrence Yun, NAR chief economist, said sales have been in a pattern of rising and falling within a fairly narrow range. “The vacillation of data from one month to the next indicates a housing market in transition,” he said. “The rise in pending home sales was broad-based with all four regions showing gains. This is welcome news because a rise in contract activity is necessary for an overall housing recovery. With a tax credit now available to first-time home buyers, increases in home sales could be sustained with the momentum carrying into 2009.”
The PHSI in the South jumped 9.3 percent to 92.4 in June but is 16.6 percent below June 2007. In the West, the index rose 4.6 percent to 101.0 in June but remains 1.7 percent below a year ago. The index in the Northeast increased 3.4 percent to 79.6 but is 15.4 percent below June 2007. In the Midwest, the index rose 1.3 percent in June to 79.6 but is 13.3 percent below a year ago.
Sales gains have been consistently strong in recent months in Sacramento, Calif.; Las Vegas; and Ft. Myers, Fla., where affordability conditions have greatly improved.² The pickup in contract signings appears to be broadening with many affordable markets in mid-America now showing year-over-year gains, including Columbus, Ohio; Charleston, W.V.; Oklahoma City; and Colorado Springs, Colo. Pending sales have fallen significantly in Texas markets and in the Pacific Northwest - two regions with very strong local economies.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the housing stimulus package will provide long-term relief. “Provisions to stem foreclosures are helpful, but a greater lift to the economy should come from higher mortgage limits, enhancements to the FHA loan program and the first-time home buyer tax credit,” he said.
“These are excellent tools that will help buyers get into the market to take advantage of the unprecedented drop in home prices in many areas, as well as a wide selection of inventory, to make an investment in their future,” Gaylord said.
With roughly 2.5 million first-time home buyers taking advantage of the temporary tax credit, existing-home sales are likely to rise 7.0 percent to 5.51 million in 2009 from a expected total of 5.15 million this year.
Yun said home prices did not fall as much as anticipated in the second quarter. “Buyers entering the hardest-hit markets, in some cases with multiple-bid offers, may have put a floor on prices,” he said. “ In addition, rising commodity prices and higher construction costs have resulted in a very unusual market today with existing-home prices being less than replacement building costs in some areas. Home prices are projected to increase 3 to 6 percent in 2009.”
“Builders need to further cut production to help trim inventory. However, new-home sales are expected to bottom around the second quarter of next year with slight gains in the second half of 2009,” Yun said. New-home sales are forecast to drop 8.8 percent to 464,000 in 2009 from 509,000 this year. Housing starts, including multifamily units, should fall 8.8 percent next year to 795,000 from 960,000 in 2008.
The 30-year fixed-rate mortgage, which also has been vacillating, is likely to trend up to 6.5 percent by the end of 2008, and then hold at that level for most of next year. NAR’s housing affordability index is forecast to remain favorable this year, averaging 13 percentage points higher than in 2007.
Growth in the U.S. gross domestic product (GDP) is expected to be 1.7 percent this year and 1.5 percent in 2009. The unemployment rate is projected to average 5.5 percent in 2008 and 6.0 percent next year.
Inflation, as measured by the Consumer Price Index, is seen at 4.1 percent in 2008 and 2.6 percent next year. Inflation-adjusted disposable personal income is estimated to grow 1.7 percent this year and 1.1 percent in 2009.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
# # #
¹The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
²Market information is from unpublished snapshot data; please contact your local association of Realtors® for more information.
Second quarter metropolitan area home prices and state home sales will be published August 14. Existing-home sales for July will be released August 25; the next Forecast / Pending Home Sales Index will be released September 9
Pending Home Sales Rise, Wider Gains Anticipated as Buyers tap Housing Provisions
WASHINGTON, August 07, 2008
Some improvement is projected for existing-home sales in the months ahead, with broader gains seen by the fourth quarter as buyers take advantage of new provisions provided through the recently passed housing stimulus bill, according to the latest forecast by the National Association of Realtors®.
The Pending Home Sales Index,¹ a forward-looking indicator based on contracts signed in June, rose 5.3 percent to 89.0 from a downwardly revised reading of 84.5 in May, but remains 12.3 percent below June 2007 when it stood at 101.4.
Lawrence Yun, NAR chief economist, said sales have been in a pattern of rising and falling within a fairly narrow range. “The vacillation of data from one month to the next indicates a housing market in transition,” he said. “The rise in pending home sales was broad-based with all four regions showing gains. This is welcome news because a rise in contract activity is necessary for an overall housing recovery. With a tax credit now available to first-time home buyers, increases in home sales could be sustained with the momentum carrying into 2009.”
The PHSI in the South jumped 9.3 percent to 92.4 in June but is 16.6 percent below June 2007. In the West, the index rose 4.6 percent to 101.0 in June but remains 1.7 percent below a year ago. The index in the Northeast increased 3.4 percent to 79.6 but is 15.4 percent below June 2007. In the Midwest, the index rose 1.3 percent in June to 79.6 but is 13.3 percent below a year ago.
Sales gains have been consistently strong in recent months in Sacramento, Calif.; Las Vegas; and Ft. Myers, Fla., where affordability conditions have greatly improved.² The pickup in contract signings appears to be broadening with many affordable markets in mid-America now showing year-over-year gains, including Columbus, Ohio; Charleston, W.V.; Oklahoma City; and Colorado Springs, Colo. Pending sales have fallen significantly in Texas markets and in the Pacific Northwest - two regions with very strong local economies.
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the housing stimulus package will provide long-term relief. “Provisions to stem foreclosures are helpful, but a greater lift to the economy should come from higher mortgage limits, enhancements to the FHA loan program and the first-time home buyer tax credit,” he said.
“These are excellent tools that will help buyers get into the market to take advantage of the unprecedented drop in home prices in many areas, as well as a wide selection of inventory, to make an investment in their future,” Gaylord said.
With roughly 2.5 million first-time home buyers taking advantage of the temporary tax credit, existing-home sales are likely to rise 7.0 percent to 5.51 million in 2009 from a expected total of 5.15 million this year.
Yun said home prices did not fall as much as anticipated in the second quarter. “Buyers entering the hardest-hit markets, in some cases with multiple-bid offers, may have put a floor on prices,” he said. “ In addition, rising commodity prices and higher construction costs have resulted in a very unusual market today with existing-home prices being less than replacement building costs in some areas. Home prices are projected to increase 3 to 6 percent in 2009.”
“Builders need to further cut production to help trim inventory. However, new-home sales are expected to bottom around the second quarter of next year with slight gains in the second half of 2009,” Yun said. New-home sales are forecast to drop 8.8 percent to 464,000 in 2009 from 509,000 this year. Housing starts, including multifamily units, should fall 8.8 percent next year to 795,000 from 960,000 in 2008.
The 30-year fixed-rate mortgage, which also has been vacillating, is likely to trend up to 6.5 percent by the end of 2008, and then hold at that level for most of next year. NAR’s housing affordability index is forecast to remain favorable this year, averaging 13 percentage points higher than in 2007.
Growth in the U.S. gross domestic product (GDP) is expected to be 1.7 percent this year and 1.5 percent in 2009. The unemployment rate is projected to average 5.5 percent in 2008 and 6.0 percent next year.
Inflation, as measured by the Consumer Price Index, is seen at 4.1 percent in 2008 and 2.6 percent next year. Inflation-adjusted disposable personal income is estimated to grow 1.7 percent this year and 1.1 percent in 2009.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
# # #
¹The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
²Market information is from unpublished snapshot data; please contact your local association of Realtors® for more information.
Second quarter metropolitan area home prices and state home sales will be published August 14. Existing-home sales for July will be released August 25; the next Forecast / Pending Home Sales Index will be released September 9
Friday, August 1, 2008
Shoppers Beware!
I am writing this post very late on Friday night as a reminder and a warning!
Tonight me and my family went to the Santa Anita Mall to take advantage of some good sales for pre-back-to-school shopping. We took a pretzel break, just outside of Nordstrom. We went back into Nordstrom and my husband and I divided and conquered departments -- each with 1 or 2 kids to make things go faster.
As I was ready to pay for a purchase, I realized I did not have my purse. Now, my purse is the keeper of all things, not the least of which a diaper and wipes, social security cards, my credit cards and my husbands, 2 ATM account cards and 2 check books. Let's see, I also had my Suprakey (a lock box device which allows me to access all homes with a lock-box). I recalled that since I had paid cash for the pretzels, I had my purse and my husband saved our little table. As I went back to my family, I hung my purse over the chair (I usually put it in the stroller basket). This time, I was distracted by one child needing one thing and a toddler needing something else. So, on the back of the chair it hung. I recall getting out of the chair to leave and eyeing my purse as I buckled my daughter into the stroller. Before I knew it, my husband and I decided to strategize our last hurrah into Nordstrom and as I began to take command of the journey and part ways with my husband and one child, I left my purse behind.
Fast forward to me arriving back at the table and realizing my purse was gone! After doing the necessary report at the information kiosk and visit every retail store in the vicinity - to no avail, I met up with my husband and reported my mistake.
As we talked through the possibilities, my credit cards were the least of my worries; I realized my kids social security cards, pictures, and lock box key were all at the disposal of someone out there. I tried not to panic. My oldest son prayed.
Fast forward to an hour later and my bank ATM cards cancelled and a very nice Arcadia Police crew taking me to Nordstrom, where my purse was returned. The thieves had rummaged through it all, taken my $40 in cash, 2 ATM cards and an American Express card and called it a day. My purse was found in the parking lot outside of Nordstrom with everything laying around it. A couple of shoppers were nice enough to bring it inside and return it to the Customer Service Dept. As the officer said, "Well, $40 and you get your purse back". Not bad at all, I say.
One thing I have to say, though, is he mentioned that my credit cards were in my purse, but they now had my name, address and phone # and all these thieves needed were my credit card numbers and they could have a go at all that was in my name. VERY SCARY. This incident is the first to happen to me -- but as the police said, Identity Theft is the biggest crime right now. So, I have a couple of logical tips for all those women (and men) who keep their identities and lives in their pocketbooks:
1. Take only what you need.
2. Downsize to a very small bag and do not carry checks, extra cards or social security information.
3. Use cash -- Debit card fraud is on the rise -- big time! The thieves immediately took my card to a gas station across from the mall. The officer said the first thing they would do was get gas! And they did!!!!!!!
4. A personal one -- do not carry pictures of loved ones. We do not want people that steal our purse to have our address and pictures of our kids.
5. If you work in the Real Estate industry do not carry a lock box key with you unless you are on duty. This is a valuable and priceless tool. If this was in the wrong hands, it could be bad. Of course, Supra can cancel the key ASAP, but it is not worth the risk.
6. Never hang your purse over a chair. It is liable to get stolen or forgotten and then stolen.
7. In short, don't do what I did!
All that said, get yourselves a small purse and play it safe!
Stacy
Tonight me and my family went to the Santa Anita Mall to take advantage of some good sales for pre-back-to-school shopping. We took a pretzel break, just outside of Nordstrom. We went back into Nordstrom and my husband and I divided and conquered departments -- each with 1 or 2 kids to make things go faster.
As I was ready to pay for a purchase, I realized I did not have my purse. Now, my purse is the keeper of all things, not the least of which a diaper and wipes, social security cards, my credit cards and my husbands, 2 ATM account cards and 2 check books. Let's see, I also had my Suprakey (a lock box device which allows me to access all homes with a lock-box). I recalled that since I had paid cash for the pretzels, I had my purse and my husband saved our little table. As I went back to my family, I hung my purse over the chair (I usually put it in the stroller basket). This time, I was distracted by one child needing one thing and a toddler needing something else. So, on the back of the chair it hung. I recall getting out of the chair to leave and eyeing my purse as I buckled my daughter into the stroller. Before I knew it, my husband and I decided to strategize our last hurrah into Nordstrom and as I began to take command of the journey and part ways with my husband and one child, I left my purse behind.
Fast forward to me arriving back at the table and realizing my purse was gone! After doing the necessary report at the information kiosk and visit every retail store in the vicinity - to no avail, I met up with my husband and reported my mistake.
As we talked through the possibilities, my credit cards were the least of my worries; I realized my kids social security cards, pictures, and lock box key were all at the disposal of someone out there. I tried not to panic. My oldest son prayed.
Fast forward to an hour later and my bank ATM cards cancelled and a very nice Arcadia Police crew taking me to Nordstrom, where my purse was returned. The thieves had rummaged through it all, taken my $40 in cash, 2 ATM cards and an American Express card and called it a day. My purse was found in the parking lot outside of Nordstrom with everything laying around it. A couple of shoppers were nice enough to bring it inside and return it to the Customer Service Dept. As the officer said, "Well, $40 and you get your purse back". Not bad at all, I say.
One thing I have to say, though, is he mentioned that my credit cards were in my purse, but they now had my name, address and phone # and all these thieves needed were my credit card numbers and they could have a go at all that was in my name. VERY SCARY. This incident is the first to happen to me -- but as the police said, Identity Theft is the biggest crime right now. So, I have a couple of logical tips for all those women (and men) who keep their identities and lives in their pocketbooks:
1. Take only what you need.
2. Downsize to a very small bag and do not carry checks, extra cards or social security information.
3. Use cash -- Debit card fraud is on the rise -- big time! The thieves immediately took my card to a gas station across from the mall. The officer said the first thing they would do was get gas! And they did!!!!!!!
4. A personal one -- do not carry pictures of loved ones. We do not want people that steal our purse to have our address and pictures of our kids.
5. If you work in the Real Estate industry do not carry a lock box key with you unless you are on duty. This is a valuable and priceless tool. If this was in the wrong hands, it could be bad. Of course, Supra can cancel the key ASAP, but it is not worth the risk.
6. Never hang your purse over a chair. It is liable to get stolen or forgotten and then stolen.
7. In short, don't do what I did!
All that said, get yourselves a small purse and play it safe!
Stacy
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