An article on the Bloomberg BusinessWeek website illustrates that, according to Freddie Mac, 3o-year fixed mortgage rates fell to an average of 4.93% this week, the 3rd-lowest rate on record in the United States.  As has been the case for the past year or two, interest rates on a variety of mortgage types (fixed and adjustable) continue to hover around historic low points.  However, a key point to take from the article is found in a quote from Metrostudy chief economist Brad Hunter, who states that rates are expected to climb, maybe as early as April.  If you are still on the fence about jumping into the San Clemente real estate market, don’t wait to long as it is an absolute certainty that rates will rise.

To read the complete article, click here: “Mortgage Rates on 30-Year U.S. Loans Fall to 4.93%”

To find out more information about current listings in the San Clemente real estate market, please contact San Clemente Coastal Living’s residential consultants.

With a tight housing market and large inventories of homes for sale, many sellers are looking for ways to gain an edge in the sale of their home.  Remodeling has always been an investment homeowners are willing to make as upgrades and additions add value to the home, both from a sales price standpoint and by making your home stand out from similar homes in your area.  On CNN’s website, there is an interesting article titled “6 Ways to Ensure a Remodeling Project Pays Off” that highlights specific rules that you may want to follow if you are planning to remodel your San Clemente home or condo.  From eco-friendly upgrades to completing simple repairs, the article demonstrates some effective ways to complete your remodel and realize a healthy return on your investment.  Simply adding granite countertops to your kitchen or making a large bedroom into two smaller rooms does not guarantee that your home will stand out in a crazy marketplace; you need to think outside the bubble yet get back to basics in order to make your remodel a success.  Another great point that the article makes is that if you are planning on staying in your home for awhile, now is a great time for remodeling and updating as home improvement contractor bids are 10-40% lower than they were a year or two ago (according to senior economist Bernie Markstein of the National Association of Home Builders).

A couple of months ago, San Clemente Coastal Living published a blog article (found here) explaining the extension of the $8,000 first-time home buyers’ tax credit along with the creation of a tax credit for repeat or “move-up” home buyers that would pay up to $6,500.  As tax time is now upon us, many people have been wondering how to apply for the credit since this is a brand new program.  The IRS has finally published the credit’s requirements on their main website, and a recent article in the Los Angeles Times breaks down the specific forms and documents you will need to successfully claim the tax credit from the IRS.  As we stated before, repeat buyers who have lived in their current principal residence for five of the past eight years and plan to use the new purchase as their primary residence may claim this credit.  The purchase contract must be dated between November 7, 2009, and April 30, 2010, and the close of escrow must occur no later than June 30, 2010; the maximum purchase price is $800,000, and eligible buyers will receive a tax credit of 10% of the purchase price up to $6,500.  Like the first-time home buyers’ program, there are income limits which have increased due to the program’s extension/expansion ($125,000 for single person, $225,000 for married couple filing jointly).  Also, the credit does not have to be paid back to the IRS unless you vacate this new primary residence within 36 months of purchasing the home; if this occurs, you will be required to pay back the credit to the government.  The IRS website has the forms you will need to submit with your 2009 tax return along with a layout of all additional documents you will need to prove that you are eligible for the credit. 

As you can see, this is a great program for first-time buyers or people looking to purchase a new primary residence for themselves, but keep in mind that you only have a few more months to take advantage of this program.  If you would like more information about purchasing a new San Clemente home or condo, please CONTACT US to schedule a personal consultation with one of our San Clemente real estate experts. 

Are you a troubled borrower and want help, but don’t know where to turn?  Do you want to find out if you are eligible for the Obama’s Administration’s mortgage modification and refinancing program?  There are free solutions available to you.

You can apply for help in working with your mortgage servicer through a local Housing and Urban Development (HUD)-Approved Housing Counseling Agency.  Orange County approved HUD Agencies include:

• Fair Housing Council of Orange County
• Neighborhood Housing Services of Orange County
• Consumer Credit Counseling Services of Orange County

If you want to find out if you are eligible for a loan modification and refinance under Obama’s plan, you can apply online for help from your mortgage servicer through MakingHomeAffordable.org .

For a list of local housing counseling resources and the latest events, visit the Orange County Home Ownership Preservation Collaborative or the website for the United States Department of Housing and Urban Development.

For a complete list of current San Clemente Foreclosures and Short-Sales, please contact us via the link or call us directly at 949-281-5444 and we will gladly provide it. 

Last week, Congress passed a bill extending the first-time home buyer tax credit from its original end date of November 30, 2009 to April 30, 2010.  First-time home buyers (defined as someone who has not owned a home during the three years prior to the current purchase) who enter into a binding sales contract between January 1, 2009 and April 30, 2010 are eligible to receive the credit providing that the sale is closed by June 30, 2010.  In addition, the income limits for buyers looking to qualify for this credit have changed.  The original limits for sales between January 1 and November 6, 2009 were $75,000 for single taxpayers and $150,000 for married taxpayers filing jointly; with the new extension, the limits have increased for sales occurring after November 6 to $125,000 for single taxpayers and $225,000 for married taxpayers filing jointly.  As before, the home purchase price must be $800,000 or less to qualify for the credit, and the tax credit will be 10% of the home’s purchase price up to $8,000.  Since this is a tax credit, it does not have to be repaid to the federal government.

The biggest change, one that will affect wider range of recent and future buyers in the San Clemente Real Estate Market, is the new tax credit for move-up and repeat home buyers.  Buyers who do not fall under the first-time home buyer definition may still qualify for a tax credit if they purchase a home after November 6, 2009 and by April 30, 2010.  The stipulations for qualifying for this credit are as follows: completing a binding sales contract to purchase a home between November 6, 2009 and April 30, 2010; completing the home purchase by June 30, 2010; showing proof that you lived in your previously purchased home 5 consecutive years out of the last 8; purchasing a new home priced at $800,000 or less; and meeting the new income requirements listed above ($125,000 for single taxpayers, $225,000 for married taxpayers filing jointly).  If you meet these qualifications, you are eligible for a tax credit equal to 10% of the purchase price up to $6,500, and like the first-time home buyer credit, these monies do not have to be repaid.

For first-time buyers still looking to purchase San Clemente real estate, you now have a longer window in which to find your perfect home and still qualify for the tax credit.  The best thing about the expansion of the tax credit to move-up and repeat buyers is that more people are now eligible to qualify for this free tax credit, not just first-time home buyers.  If you have recently entered into a sales contract or are thinking about buying that vacation condo or upgrading to a new San Clemente home, you now have an opportunity to get money back from the government for your home purchase (provided you meet the above criteria).  This is another sign that the federal government is committed to turning around the housing market, and the best part is that the benefits may be enjoyed by buyers, not the banks.  If you have been on the fence about purchasing your San Clemente Home or Condo, now is the time to start looking.

If you would like more information on the first-time or move-up/repeat buyer tax credits or have questions about the San Clemente Real Estate Market in general, please do not hesitate to contact us.

If you are in the market to buy a San Clemente home or condo for sale and are a first-time homebuyer, you can now use the available $8,000 tax credit upfront towards your down payment or closing costs without having to wait for it when you file your tax return for 2009 in 2010.  Here is a summary of how the plan works now:

• Must purchase the home and close escrow no later than December 1, 2009
• First-time homebuyers (i.e. have never owned or have not owned in past three years) can use the $8,000 up front as closing costs or towards down payment
• Only FHA-approved loans are required if tax credit is used as down payment
• While the $8,000 tax credit can be used towards down payment or closing costs, it cannot go towards the 3.5% FHA required down payment.

For more information on using this credit, please feel free to contact us for a free consultation.

In addition to the enticing benefit to purchase San Clemente real estate with the $8,000 tax credit for first-time homebuyers (i.e. have not owned in the past three years), the California Association of Realtors recently launched a new program to help ease the nerves of first-time homebuyers who are afraid they may lose their job and be unable to pay their mortgage after they purchase a home.  The program, known as the Housing Affordability Fund Mortgage Protection Program, allows first-time homebuyers who lose their job due to a layoff to receive $1500 per month for up to six months towards their monthly mortgage payment.  In addition, a qualified co-buyer can also participate in the event of being laid off and receive an additional $750 per month.  So if you and your co-buyer both lose your jobs, you could receive up to $2250 per month for up to six months to help pay for your mortgage.  This is a significant supplement on top of severance and/or unemployment benefits to help you get through such a difficult event.  In addition to these benefits, this new program also includes a benefit of $10,000 in the event of dealth and coverage in the event of a disability. 

In order to qualify for the Mortgage Protection Program, you must:

• Be a first-time homebuyer (i.e. someone who has not owned in the past three years)
• Use a California Realtor in the transaction
• Purchase the property in California after April 2, 2009 and close the transaction before December 31, 2009 (i.e. go into escrow no later than November 15 in the event a 30 day escrow is delayed)
• Be an employee that receives a W-2 (self-employed and military unfortunately do not qualify; though military qualifies for a VA loan)

If you are a first-time homebuyers and would like to take advantage of this new program in addition to the $8,000 tax credit offered this year and interest rates at or near all-time lows, please contact us and we will gladly assist you in starting the process by providing you the program’s application.

Why have the prices of San Clemente real estate dropped substantially over the past year and since the top of the market in 2006?

Due to the anomally during the market boom when prices appreciated nearly 100%,  prices are now adjusting for the inconsistent and nonsustainable growth of the first six years of the decade and towards a healthier market of stability where various income ranges can actually afford homes in the market through conventional financing.  Rather than the majority of buyers being financed through exotic mortgages that were high risk, required little due diligence on the part of the lender for approval, and that the average consumer did not understand or could even afford, we are now on the opposite end of the risk spectrum and moving back towards normal markets.  As a rule of thumb, the median income in a housing market should be able to at least afford to purchase an average condo, otherwise you have too few buyers and too many sellers that results in downward pressure on prices.  This is fundamental economics of supply and demand that determine prices!

How do I determine the direction of prices in my market?

While there are no solid rules, months of supply is a solid indicator.  5-6 months of supply indicates a stable market, 7-8 months of supply indicates single digit depreciation, and 9-10 months indicates double digit depreciation.  On the other hand,  3-4 months indicates single digit appreciation and 1-2 months means double digit appreciation as buyers are fighting over a smaller supply of homes, and therefore, pushing home values up.  For April 2009, the inventory of San Clemente real estate cotinues to move back towards a stable market as current homes under contract are up 109% and new listings are down nearly 25%.  A year ago, inventory was above 12 months. 

Why should I buy now?

An investment no matter what, follows a typical nine stage cycle.  Lets start in the middle of the cycle with optimism that turns into excitement and eventually becomes euphoria with all the hype.  Euphoria (i.e. irrational excuberance) we have seen in the dot-com era of the late 90’s and then in the real estate era of the early 2000’s.  We should all know by now that euphoria eventually results in a market downturn causing denial, then fear, panic, and ultimately despondency and depression (where we are in today’s market).  Nevertheless, this cycle returns back to optimism in the end and we begin the market cycle all over again.  As a comparison to the real estate market and to illustrate our example of market cycles, lets look at Bank of America stock.  Earlier this year with all the negative news about the market and in particular bank stocks, this stock hit a 52 week low of nearly $2.50 per share.  While Bank of America represents one of the most solid banks in our country (after taking into account the subprime mess), there was complete panic about what was going on with the banking sector and the fundamentals of what makes a solid company or solid investment were forgotten by investors.  Today, the same stock after some positive news in the market, is trading near $9 per share or up over 300% from its low (its 52 week high is in the $40 range).  While you may be thinking I should have invested (this is not a stock recommendation), the point we are making is that the point of greatest opportunity to capitalize on investments is in the despondency and depression stage (i.e. today’s market).  Since this is today’s market, the  buyers who understand where we are in the cycle know now is the best time to invest in real estate.  These buyers know if they retain a long-term investment focus they will realize great returns in the end, especially given the long-term outlook for California real estate of projected statewide population growth of nearly 12 million or 30% by 2030 with little coastal real estate left to develop.  In the end this means a growth in demand for real estate and less supply that ultimately drives values up.  Again, this is basic fundamental economics!

Is homeownership really a good way to build wealth?

Real estate on average has appreciated 8-9 percent per year in California or 4-5 nationally.  While this is a decent return, the better way to evaluate your real estate investment is based on the amount of cash you put into your home and the return on this, also known as a return on equity or return on investment.  For example, a buyer that puts $50,000 into a $500,000 home that appreciates conservatively 5% per year in California will see their home being valued at $525,000 over one year or an increase of $25,000 on their $50,000 invested.  This represents a 50% return on equity in just one year.  Stocks and bonds as a comparative on average generate returns of 7-12%, and therefore, this is why real estate is a great investment as it can be leveraged (i.e. financed).  While transaction costs can be much higher for real estate and it is not as liquid (i.e. cannot be sold as quickly as stocks and bonds), a long-term focus on real estate investing will ultimately provide a well balanced portfolio with other investments in order to hedge your risks.  In addition, owning real estate is one of the greatest tax savings that one can realize each and every year.

For more information on San Clemente real estate, please contact us for a free consultation.

A recent article in the Orange County Register discusses the marketing of one’s home when looking to sell it in today’s tough real estate market.  With so many homes on the market, it is crucial to not only price your home competitively but to reach the largest amount of potential buyers possible with your marketing efforts.  The days of creating a listing with a few pictures and purchasing ads in the local paper are over, mainly because today’s technologies create a variety of unique and creative ways to market one’s home.  With the popularity of searching for homes on the Internet at an all-time high (with studies showing that around 80% of home searches begin on the Internet), utilizing an array of technologies will help your home stand out in a crowded marketplace.

When creating a listing with your real estate agent, make sure that the photographs of your home are professional-looking and give the viewer an overall portrait of your home and its qualities.  General pictures of the outside and inside do not excite; make sure to focus on the unique aspects of your home to set it apart from other homes on the market (in these difficult times, chances are that a similar home in your neighborhood will be for sale).  Besides pictures, virtual tours are a great marketing tool that literally gets the viewer inside your home for a personalized tour. 

After creating your listing and marketing tools, the next step is to find ways to get this information to the general public in an effective way.  With so many people utilizing Internet search engines (Google, Yahoo, etc…) for finding real estate, your home will need to have a heavy Internet presence outside of putting your home on the Multiple Listing Service and Realtor.com.  Find an agent who is knowledgeable of high-ranking Internet websites where you may place your listing.  Also, search for an agent or agency with a successful, high-ranking website of their own.  If you can get front-page placement on a top-ranked website, the amount of eyes that see your home will increase exponentially.  This is why sites like San Clemente Coastal Living are an invaluable tool for real estate sellers and buyers.  When someone performs a keyword search on one of the aforementioned search engines, they will click on the first few links that they see.  Having your listing on the home page of a top-ranked website increases your chances of selling your home quickly, which is tough to do in today’s market.  Try doing keyword searches of your own to uncover these competitive websites; this will help in finding an agent/agency who understands the value of the Internet with regards to the buying and selling of real estate in the present-day market.

For more information on the variety of techniques San Clemente Coastal Living utilizes to sell your San Clemente real estate, please do not hesitate to contact us.

In a recent article in the OC Register, the author compares the seller’s market of a couple of years ago to today’s market when speaking about pricing one’s home for sale.  In a seller’s market, it was easy for the homeowner to list their San Clemente real estate above the current value, because prices were continually rising due to low market inventory and constant bidding wars.  Now that we are in a buyer’s market, it is crucial for the owner to sell the home quickly in order to receive the best value.  As the article illustrates, San Clemente homes that sold within 30 days of listing in 2007 received a minimal 3% discount from their asking price, while homes that were on the market longer than 30 days received an average 10% discount from the listed price. 

While you should not completely devalue your home just to get it sold quickly, it is very important to be reasonable when it comes to setting the listing price.  It is human nature to feel that something you own is worth more than it actually is, and in these erratic economic times, people are looking for ways to make the extra buck.  However, it is crucial not to price your home out of the market during a buyer’s market, because the home will just sit there, forcing you to lower the price on a consistent basis.  This plays right into the psyche of buyers in this type of market, so you need to find the most competitive ways to create urgency with your home sale.  First, the initial listing price is crucial; if your home is overpriced, buyers will not waste their time until the inevitable price drop comes.  Your agent should provide you with a CMA (Comparative Market Analysis), showing you current comparable San Clemente homes for sale, pending sales, recent expired listings and home sales from the past 6 to 12 months.  The article makes a great suggestion - once you have this list in front of you, pretend that you are a buyer and have your agent take you on tours of the current comparable listings.  A visual comparison of your home to others will go a long way in helping you set the listing price. 

Another arena that is vital to a quick home sale is reaching a wide array of potential buyers through creative and aggressive marketing of your San Clemente property.  In a buyer’s market, simply placing a sign on your front lawn and an ad in the local paper will not create the buzz you need to sell your home.  Today’s buyers are a lot more savvy in their real estate search, with many turning to the internet for guidance.  Studies have shown that between 75-80% of homebuyers begin their real estate search online, making an internet presence for your listing crucial if you want a lot of buyers to see the place.  The first two weeks your property is on the market are the most important, because this is the timeframe when you will get the most traffic in your home, both from buyers and real estate agents.  To ensure a high volume of traffic (which will aid in reaching the goal of selling the home within 30 days of listing), you need to be aggressive with your marketing.  Find out from the potential listing agents how they plan on marketing your home: print ads, online or both.  If they propose advertising online, find out the websites and do a little research on them to see the amount of hits they receive and where they are ranked on internet search engines (Yahoo, Google, etc.).  You will want your listing to be seen by as many people as possible, so make sure your agent plans on being creative and hitting as many arenas as possible.  This is something that is a specialty of San Clemente Coastal Living - we are a top-ranked website in a variety of keyword searches that promises front-page placement on our website.  While we cannot guarantee that this will sell your home, we give you a better chance by utilizing the popularity of our website along with a variety of innovative online and print marketing tools.

When it is finally time to set the price, use all of the above methods to set a competitive value for your home, and you will have a good chance of seeing a sale in a short period of time.  For more information on tips to selling your home quickly and how San Clemente Coastal Living can assist in this process, please do not hesitate to contact us.