Archive for March, 2014
Number 1: 2014 should prove to be the strongest year for housing activity since before the Great Recession
“Most economists expect an improved job market in 2014, with employment growth accelerating and the unemployment rate continuing to decline. That jobless rate drop will reflect more of a pickup in employment than further declines in the labor force participation rate. This will be the key factor improving housing demand this year, even if mortgage rates rise and affordability declines. While the housing market tends to do especially well when the job market improves and mortgage rates decline simultaneously, that combination of events occurs only rarely…People buy homes when their job and income prospects improve – even if it’s more expensive to do so – rather than buy when it is inexpensive to do so but they’re worried about keeping their jobs.”
We agree that the job market will continue to improve and that rising interest rates will not be a detriment to the market in 2014. As Doug Duncan, SVP and chief economist atFannie Mae, recently revealed:
“Consumers have taken the interest rate rise in stride. Expectations for continued improvement in housing persist, and sentiment toward the current buying and selling environment is back on track.”
Number 2: Demographics should start to favor housing activity
“If the economy expands at a faster pace this year, bringing a more rapid rate of job creation, that should translate into more households, raising housing demand. We won’t see all three million missing households return to the housing market at once. (That wouldn’t be a good thing for the housing market anyway, since that would be on top of the 1.2 million households that normally would develop this year; such a surge would swamp the existing housing supply). Beginning in 2014, the pace of household formations should accelerate to an above-trend pace for several years, pushing up housing demand.”
The Urban Land Institute recently released a report, Emerging Trends in Real Estate 2014, projecting that 4.48 million new households will be formed over the next three years. Millennials will make up a large portion of these new households. With the economy improving, we believe they will finally be moving out of their parents’ homes and, after they compare renting versus buying, many will choose homeownership.
Number 3: Mortgage availability shouldn’t worsen and may improve
“The rise in mortgage rates already has reduced mortgage origination volumes as refinance activity declines. If mortgage rates rise further this year, as expected, then refinance activity will fall still more. In response, mortgage lenders probably will ease lending standards to the extent possible under the QM rules to boost lending activity by increasing purchase originations. As a result, the increase in new households expected to be created this year, spurred by a stronger job market, should find that qualifying for a mortgage loan will be somewhat easier in 2014 than in prior years.”
We also believe that, as the refinancing market begins to dry up, mortgage entities will be more aggressive in the purchase money market (mortgages necessary to purchase a home). There even seems to be recent evidence that lending standards are actually loosening.
Now that the housing market is finally on the upswing, many people are looking into buying a new home. One of the first things they have to consider before they begin the home buying process is if they are going to use a real estate agent or not. Everyone is going to be different but we provided this inofgraphic to give the American public some ideas about the importance of Real Estate Agents.
If you are looking to purchase a Huntington Beach or Fountain Valley home, I am an experienced and knowledgeable Real Estate agent here and ready to help you in this exciting process! Contact me for more information; I would love to hear from you!
I have often suggested that potential home buyers consider rising interest rates when thinking about the true cost of a home. Remember, cost is not determined by price alone but by price and mortgage rate. The longer a buyer waits, the higher the mortgage payment will be if rates continue to increase (as is projected by Fannie Mae, Freddie Mac, the National Association of Realtors and the Mortgage Bankers Association).
Money Magazine, in its latest issue, agreed with this analysis as they also warned their readership of the same ramification if they waited to buy a home.
Here is what they said:
“BE MINDFUL OF RATES. The average interest rate on a 30-year fixed loan is predicted to climb from the current 4.4% to 5.3% by the 2015 spring buying season, according to Freddie Mac. For a $250,000 loan, that means that a borrower who waits would pay $136 more per month and an additional $49,090 in interest over the life of the loan. Will you need a big loan? Better to act soon before rates tick up.”
And the monthly increase Money mentioned did not take into consideration that prices are also projected to increase over the next year. Here is what the additional cost would be if prices rise by the 4.5% projected by the latest Home Price Expectation Survey and interest rates go to 5.3%.
So, if you are thinking about buying a Huntington Beach or Fountain Valley home, contact me for more helpful information! I would love to hear from you.
Property Tax Relief
These constitutional initiatives provide property tax relief for real property transfers between parents and children from grandparents to grandchildren. Collectively they make it easier to keep property “in the family.” In general, Proposition 58 states that real property transfers, from parent to child or child to parent, may be excluded from reassessment. Proposition 193 expands this tax relief to include transfers from grandparent(s) to grandchild(ren). In both cases, a claim must be filed within three years of the date of transfer to receive the full benefit of the exclusion.
Requirements and Guidelines for Propositions 58 and 193
- The principal place of residence must have been granted a Homeowners’ Exemption of Disabled Veterans’ Exemption before the transfer. This residence need not be the new principal residence of the person that acquired the property.
- No limit is placed on the assessed value of a principal residence that may be excluded from reassessment.
- In addition to tax relief on the principal residence, you may claim an exclusion on transfers of other real property with an assessed value of up to $1,000,000.
- The $1,000,000 exclusion applies separately to each eligible transferor. A $2,000,000 limit applies to community real property of an eligible married couple.
- Transfers by sale, gift, or inheritance qualify for the exclusion.
- Transfers between parents and children as individuals, from grandparents to children as individuals, between joint tenants, from trusts to individuals, or from individuals to trusts may qualify for the exclusion.
- Transfers from grandchildren to grandparents are not eligible for this tax relief.
- Transfers of ownership interests in legal entities, aside from most trusts, do not qualify for the exclusion.
- A claim must be filed within 3 years after the date of purchase or transfer for which the claim is filed or prior to transfer to a third party, whichever is earlier, or within 6 months after the mailing of the notice of supplemental or escape assessment, issued as a result of the transfer for which the claim is filed. Untimely filed claims are subject to certain conditions, i.e., the property must not have transferred or resold to a third party and the claim will only apply to future tax years.
- If reassessment of your property occurs before the approval and processing of your timely filed claim, the reassessment may be reversed. In these situations, a corrected tax bill and/ or a refund will be processed.
(Proposition 58) Transfer between Parent and Child Eligibility Requirements
- The real property must be owned by the eligible transferor who is either the parent or the child.
- You must be a parent or a child. A child may be a son, daughter, son-in-law, daughter-in-law, stepchild, or child adopted before the age of 18. Spouses of eligible children are also eligible until divorce or, if terminated by death, until the remarriage of the surviving spouse, stepparent, or parent-in-law.
- You must complete a Claim for Reassessment Exclusion for Transfer between Parent and Child form for a gift or purchase of real property between parent and child.
How Do I File for Proposition 58/193 Tax Relief?
Online: Forms are available from the Assessor’s website:
Email: [email protected]
Phone: Call (213)893-1239
If you have any questions regarding this information, please feel free to contact me at [email protected] or (714)815-6215. I would love to hear from you!
Online: Forms are available from the Assessor’s website:
Email: [email protected]
Phone: Call (213)893-1239
The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but rather have been strengthened in recent months with the Federal Government continuing to taper bond purchases and the impact that decision has had on mortgage rates.
1. What do you do with all this paperwork?
Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.
2. Ok, so you found your dream house, now what?
According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, who knows what these actions are to make sure that you acquire your dream?
3. Are you a good negotiator?
So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.
4. What is the home you’re buying/selling really worth?
Not only is it important for your home to be priced correctly from the start, to attract the right buyers and shorten the time that it’s on the market, but you also need someone who is not emotionally connected to your home, to give you the truth as to your home’s value.
According to the National Association of REALTORS, “the typical FSBO home sold for $184,000 compared to $230,000 among agent-assisted home sales.”
Get the most out of your transaction by hiring a professional.
5. Do you know what’s really going on in the market?
There is so much information out there on the news and the Internet about home sales, prices, mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to, to tell you how to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a low-ball offer?
“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.” – Dave Ramsey
Hiring an agent who has their finger on the pulse of the market will make your buying/selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.
You wouldn’t hike up Kilimanjaro without a Sherpa, or replace the engine in your car without a trusted mechanic, why would you make one of your most important financial decisions of your life without hiring a Real Estate Professional?
If you are looking for a Real Estate Professional to help you buy or sell a Huntington Beach or Fountain Valley home, I am here and ready to help you in this exciting process! Contact me at [email protected] or 1(714)815-6215 for more information. I would love to hear from you.