Summer sales sizzle in California

Buy a truck, get an AK-47
God bless America

Affordability, low interest rates, tax credits, and higher conforming loan rates are combining to boost sales in Monterey County and elsewhere in California, far above last year's sales.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Affordability, low interest rates, tax credits, and higher conforming loan rates are combining to boost sales in Monterey County and elsewhere in California, far above last year's sales.

The average price of single-family homes in Monterey County was $302,092 in June, down from $714,829 a year ago, but that's boosted sales by 68 percent, according to the Monterey County Association of Realtors.

There's pot in your iPod

The average sales price of condos fell from $501,087 to $159,011 during the same period, but again, the lower price nearly tripled condo sales.

Statewide, home prices in May were down an average 32 percent for houses and condos combined, according to the latest numbers from the California Association of Realtors (CAR).

"There's a lot of activity in the low end right now, but with the conforming loan limit at $729,750 the $600,000 to $800,000 price range has really picked up too," said Kim DiBenedetto, association president and a real estate agent with Coldwell Banker Del Monte Realty in Carmel.

CAR's "First Time Buyer Housing Affordability Index" for the Monterey region was up to 71 percent during the first quarter of 2009, compared to 31 percent a year earlier.

Statewide, the numbers were 69 percent during the first quarter this year and 46 percent a year ago.

The index measures the percentage of households that can afford to purchase an entry-level home.

DiBenedetto said there should be more activity in the lower end, but banks are holding foreclosures due to industry mergers and a legally mandated moratorium.

That's true for most of the state.

A 90-day foreclosure moratorium, effective June 15, 2009, is designed to get lenders to try harder to keep borrowers in their homes. Under the new law, loan companies have to prove they tried to modify loans of struggling homeowners before they can begin foreclosing. Otherwise, lenders must give homeowners a three-month reprieve before they begin foreclosure.

Interest rates have become more cooperative, trending lower during the first weeks in July. Freddie Mac reported July 16, the average rate was 5.14 percent on conforming, 30-year fixed rate mortgages.

"We don't know how long they can stay this low. One tick up and you can be priced out of the market," DiBenedetto said.

DiBenedetto said buyers include first-timers cashing in on tax credits, a maximum $10,000 for the state and $8,000 from the federal government.

By mid-July, California still had $33 million of $100 million to allocate for first time home buyers who purchase new homes. Unfortunately the $100 million may already be spoken for. The state had also received applications for more than the $100 million in the fund.

The federal government offers a maximum $8,000 tax credit to first time home buyers who purchase any resale or new home.

CAR said the share of first-time buyers statewide is up to 38 percent this year, compared to only 19 percent last year.

"Buyers are beginning to realize that the combination of favorable home prices, historically low mortgage rates, and first-time home buyer tax credits, may not align again for many years," said CAR President James Liptak.

CAR's "2009 Survey of California Home Buyers" said 68 percent of buyers said price decreases motivated them to buy a home, while 39 percent reported low interest rates helped them move to a better location. Twenty-three percent claimed the likelihood that rates will move up as another motivating factor to buy.

The survey also found the large number of distressed properties on the market was more of a motivating factor than in recent years.

Forty-nine percent of all buyers purchased a home through a traditional market sale, while 38 percent purchased a bank-owned property. However, buyers found REO or bank-owned property purchases were more difficult in terms of obtaining financing, compared with a more traditional transaction.

DiBenedetto also said investors are a growing segment of buyers now that home prices are low enough to make purchases viable cash-flow rental properties.

"I would tell buyers it's a good time to buy," said DiBenedetto.

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© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Perkins is also the first Examiner to cover three beats for the Examiner.com news service:
• National Offbeat News Examiner
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Q&A with Kim DiBenedetto, 2009 President MCAR

Kim DiBenedetto
President MCAR

Real estate leader Kim DiBenedetto says there's no time like the present to have a licensed, association affiliated real estate agent on your side.
by Broderick Perkins

© 2008 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - With so much uncertainty in the housing market, it's a good time to seek insight from real estate leaders who have their fingers on the pulse of the market.

We recently sat down in a question-and-answer session with Kim DiBenedetto, the 2009 president of the Monterey County Association of Realtors to get some advice for homeowners, home buyers and home sellers.

DiBenedetto is also a real estate agent with Coldwell Banker Del Monte Realty in Carmel and has been a top sales producer for nine years. She's been president and active with the Women's Council of Realtors' Monterey Peninsula Chapter and was a 2008 member of the Coldwell Banker International President's Circle.

She's married to general contractor Jeff DiBenedetto. They have a daughter Julia currently attending Syracuse University.

DiBenedetto says there's no time like the present to have a licensed, association affiliated real estate agent on your side.

Q: The housing crisis is on the minds of everyone, especially homeowners who are struggling to pay their mortgages, potential home buyers and those who want to sell their home. What steps are you, in your role as president, and MCAR taking to help homeowners keep their homes?

A: We educate our members so that they may better assist home owners and home buyers make the right decision for their situation. We have an excellent Government and Community Affairs Director who keeps us current on new legislation that could affect any of our members and their clients. Working with our legislative representatives, we are advocates for private property rights. As advocates we also make sure our clients' voices are heard when they cannot do it themselves.

Q: Likewise, what can home buyers expect from the association?

A: Not only will buyers get a licensed agent to represent them in a professional and ethical way, they will also have access to the latest legal issues, new legislation, new forms, the most current market information and the latest on the ever changing REO (bank owned) and short sale processes.

Q: How does the association assist homeowners who want to sell their home?

A: In addition to the advantages of professional representation, the website for our association, MCAR.com is helpful for both buyers looking for homes and owners who want to sell their home. The site offers listing services, consumer information, the latest statistical information, a weekly open house list, and community lifestyles information.

Q: There have been some complaints from the real estate industry that the media is not fair in its coverage of the housing crisis. How can the media assist the association and the public in terms of reporting about the crisis and other housing issues?

A: The most important factor is that all real estate is local. It really doesn't matter what the real estate market is doing in Bakersfield or Chicago or Baltimore if someone is thinking of buying or selling in Monterey County. To highlight state or national figures really makes no sense. We need to focus on what is going on here in Monterey County and more specifically in each individual area of the county. The local market is so segmented, that there are different price ranges and different levels of activity in each city. It's not the media's responsibility to be real estate experts. That's what we at MCAR are here for -- to be the source of the most reliable real estate information.

Q: The Obama administration's "Homeowner Affordability and Stability Plan" rolled out in March. The $275 Billion Plan includes:

• A refinancing program for "responsible" borrowers who haven't missed payments and whose loans are larger than the value of their homes.

• A loan modification provision with incentives for lenders to modify certain mortgages.

• A change to bankruptcy rules to allow judicial mortgage modifications designed to reduce mortgage balances to fair market value.

How will these provisions play in Monterey County?

A: We aren't certain yet how the lenders will execute the plan so we don't know for sure how it will play out, but it should help many in our county.

What's most important is the extension of higher conforming loan limits that allow buying and refinancing more expensive properties at the lowest market interest rates. The conforming loan limit in Monterey County has been raised from $417,000 to $729,750. Without the higher conforming loan limits most of these vehicles to help homeowners stay in their homes would be worthless as most loans in jeopardy are higher than the previous limit of $417,000.

We are keeping the public informed at the MCAR Online Forum & Blog.

We are concerned the new bankruptcy rules could raise the interest rates we all pay on our loans because the reduction of mortgage balances by bankruptcy judges may cause lenders to adjust that loss with higher interest rates on new loans. This could negatively impact home buyers and refinancing homeowners who are otherwise taking advantage of some the lowest rates in recent history.

Q: What advice do you think home sellers need most in the current housing market?

A: Just because your neighbor's house sold a year ago or even a month ago for a certain price doesn't necessarily mean you can get the same price. Every niche of the market has different activity. Sellers' pricing strategy has to be precise or your home will sit for longer than it should. That could diminish it's value. Sellers need reliable market information that Realtors provide.

Q: What advice do you think home buyers need most in the current housing market?

A: Again, the most important thing is to have current market information along with a skilled negotiator. I know a Realtor whose client found a home she liked at an open house but when the Realtor assessed the situation for her, they decided to keep looking and ended up getting a larger home in a better location for almost the same money. Without his expert knowledge the buyer could have purchased a lesser home in a less desirable location.

Q: What advice do you think homeowners most need in the current housing market?

A: Real estate has always been a long term investment and, over time, it's still the best investment you can make. Even if your home is not worth what you paid for it at the moment, with time it will bounce back. The key is to remember that a home is more than an investment, it is a lifestyle. Ideally, it is best if you can pay an additional amount each month towards the principle of your loan. If that is not possible, it is important to at least pay the interest only payment if you have an adjustable rate mortgage. If that is not possible, you may want to consider applying for a loan modification to allow you to stay in your home or a short sale, if you decide you need relief from the debt. Your Realtor can help you examine your options.

• More Monterey County, CA news that really hits home.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!

(Also, while waiting for real estate to recover, the DeadlineNews Group is going off the beaten path for a while...)

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Monterey County, CA housing market outlook tentatively rosy

Foreclosures, bank-owned homes, short sales and other distressed properties account for the bulk of home sales in large swaths of Monterey County, CA. That's depressing prices and charging sales.

by Broderick Perkins
© 2008 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Investors are testing the waters. Multiple offers aren't unusual. Interest rates are cooperating. And housing affordability is three times better than it was a year ago.

Monterey County area real estate experts are beaming with hope that early 2009 housing market indicators are harbingers of a real housing market recovery.

With that hope also comes a warning for fence-sitters: Prices are already as low as they've been in 10 years. Further delaying a home buy, with hopes for bottom market prices, could backfire.

It's virtually impossible to pinpoint market bottom until after home prices are already on a steady rise, the experts say. Should prices bounce off the bottom and move up fast, some buyers could be quickly priced out of the market.

"Economists seem to believe that half way through 2009 we'll see some changes that could mean the housing market will swing more toward a sellers market," says Jean Manner Schwimmer, a past president of the Monterey County Association of Realtors.

"I'm not so sure it will happen that quickly and it's not that people should move too fast, but a whole bunch of people may be moving too slowly. Instead of trying to predict what might happen, people should be trying to get an interest rate and (mortgage) payment they are comfortable with. It's time to move," added Schwimmer, also a Realtor with Coldwell Banker-Gay Dales in Salinas.

With foreclosures, bank-owned, short sales and other distressed properties accounting for the bulk of home sales in large swaths of the county, depressed home prices are already charging sales.

Faster sales, shrinking inventories, low prices

Closed sales of single family homes, county-wide, zoomed in January this year to 283, more than triple the 93 sales the same month a year ago, according to Richard Calhoun, a broker-owner of Creekside Realty in San Jose who tracks sales throughout Northern California.

They are also selling faster and for a greater percentage of the asking price compared to a year ago. Inventories are shrinking too -- 1991 single-family detached homes were listed in January this year, compared to 2,381 the same month a year ago, Calhoun reported.

Sales are up because some homes cost less than they did a decade ago and they are nearly three times more affordable than they were a year ago.

"What we are seeing is that prices and activity are reflective of 1999. Some 85 percent of the market in the Salinas area is an REO (bank owned) or short sale. So what we are seeing is the number of sales going high as the median price goes down," said Kim DiBenedetto, the current president of the association.

Calhoun found some areas in Monterey County with distressed properties comprising nearly 100 percent of sales.

It's no surprise then, that in Monterey County, the median price of single-family homes in closed sales was $230,000 in January, down from a $500,000 median just a year ago January and down from a peak of $799,500 in August of 2007.

The January 2009 median for single-family homes is also lower than the $310,000 median in January 1999 -- ten years ago.

Likewise, the much smaller condo market came in with a $74,000 median price in January, compared to $116,000 in January 1999, according to Calhoun.

The low prices, coupled with low mortgage interest rates (the fixed rate average was at or below 5.25 percent in January, according to Freddie Mac) has created a boom in affordability.

Affordability luring investors

In Monterey County, 58 percent of households could afford entry-level housing in the region, up from 21 percent just a year ago, according to the California Association of Realtors (CAR).

CAR says first-time buyers typically purchase a home equal to 85 percent of the prevailing median price. In Monterey County, in the fourth quarter of 2008, the minimum household income needed to purchase that $265,700 entry-level home was $52,200, based on an adjustable interest rate of 6.02 percent and assuming a 10 percent down payment. The monthly payment including, taxes and insurance was $1,740 for the purchase, according to CAR.

A year ago, based on an adjustable interest rate of 6.21 percent and assuming a 10 percent down payment, a $591,200 entry level home came with a $3,940 monthly payment and required a qualifying income of $118,200.

Current market conditions, including interest rates and median prices both lower than CAR's affordability calculations, likely push affordability levels even higher.

That's not lost on investors.

Real estate sales people say investors, including second-home and vacation home buyers, are leading the way, returning to the region attracted by the prospect of bargain basement purchases with enough rental income cash-flow to pay the mortgage.

"Some of them are repositioning wealth because of loses in the stock market. They are the type to come in now and get the best properties. Some condos are less than $100,000 in Salinas. Rent them out and the cash flow totally makes sense now," says DiBenedetto, also a Realtor with Coldwell Banker Del Monte Realty in Carmel.

"In Monterey we see some properties in the $400,000s. We haven't seen that in a very long time," she added.

Schwimmer said priced-right properties in good condition in the $250,000 to $350,000 range can attract multiple offers and a fast sale while other properties priced too high languish unsold.

Sales are slower, but picking up in the higher-end markets of Carmel and Pebble Beach, where values have slipped only to 2004 levels. Even with the slippage they markets still reveal 11-year appreciation rates of 273 percent and 209 percent respectively.

How to cash in

"You can't get that kind of return in the stock market or anywhere else. Fifteen homes sold in Carmel since the first of the year, after the seasonal lapse. Half were for under $2 million and half were for more than $2 million. That's very good activity and a good sign for the market," said DiBenedetto.

Real estate experts advise first-timers and others looking to buy to get both mortgage money in the pipeline and experienced representation on their side if they want to beat what could be a spring rush.

"You have to come in totally preapproved (for a mortgage). Not just prequalified. If you have competition you need to stand out," said Schwimmer.

She added, "And, if you are going to be in this, with short sales and foreclosures, you need help navigating the market. Everybody is looking for a good deal and it's hard to get a good grasp on distressed properties. You won't know how to do this without the guidance of a Realtor who has experience," said Schwimmer.

Broderick Perkins operates a digital real estate news service, the DeadlineNews Group. Contact him at news@deadlinenews.com

© 2008 DeadlineNews.Com

Advertise on DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!

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Bay view Monterey, CA becomes renters' market

The troubled housing market has spawned a rush to rent at a time when rents are flat or falling, but Monterey County renters can't rest on their laurels.

Monterey County is a renters' market.

by Broderick Perkins
© 2008 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - The troubled housing market has spawned a rush to rent at a time when rents are flat or falling, but Monterey County renters can't rest on their laurels.

Finding the best rental deal still requires market savvy and attention to the details of the rental home search.

"It's a great time to be a renter. There are lots of choices. You get more bang for your buck than in past times," says Jan Leasure, managing broker of Monterey Bay Property Management which specializes in managing single-family homes, condos, and apartment buildings in Monterey County.

Leasure says rents have been squeezed by the growing supply of new rentals stemming from foreclosures, unsold new homes and homes left behind by those moving out of the area.

In December, the median price of single-family homes in the area was $255,000, down a whopping 56.4 percent from a year ago, according to the Caliornia Association of Realtors (CAR).

Leasure says the oversupply of rental housing has pushed rents down five to 10 percent in the past year.

Leasure's data is based on anecdotal evidence from owners of single-family homes, condos and smaller rental complexes, which make up the bulk of the residential rental home supply in the county.

On the other hand, Novato-based RealFacts says as of the last quarter of 2008, the average rent for the county, $1,220 a month, rose nearly 8 percent, up from the average $1,131 monthly rent during the last quarter of 2007. The average rent in Salinas, $1,180 during the last quarter of 2008 was up 8.4 percent.

However, RealFacts' data is based only on larger apartment complexes -- those with an average 255 units per complex. There were only 28 properties throughout the county (17 of them in Salinas) that fit that data point. RealFacts' average rent data also includes a wide range of individual rental unit sizes from studios to three-bedroom townhomes.

Leasure says larger properties don't feel market pressures as quickly as smaller units, but you can expect those rents to soon soften. Occupancy rates fell nearly 1 percent in the past year in Salinas.

"If all of a sudden there's one vacancy in a smaller complex for three or four weeks, the impact on the owner is a lot more than one vacancy out of 255 units," Leasure explained.

"We manage in Salinas as well as on the Peninsula and the trends we se are much the same," she added.

Even with trends pointing to ever more favorable conditions for renters, that doesn't mean its time to shirk hard bargaining. Given the current credit squeeze, a rental home, for many, could be the shelter of choice for some time.

Renters need to negotiate for the most affordable housing they can find.

Here's how.

• Approach your rental-housing search like a job search. Be organized, serious, and professional in both actions and appearance so that you stand out as the best applicant.

• Tell everyone you know you are looking for an affordable rental home and what you want in a rental home. Use newspaper classified ads, renter magazines, and the Internet for listings. Check listings first thing every day. Call early. Leave a cell or other number where you can be quickly reached. Respond quickly when a landlord calls you back.

• Know what you really want and don't want in square footage, rooms, housing type and shop that market. Be flexible when it comes to amenities and concessions. Be prepared to decide on the spot and be prepared to leave a deposit and/or credit check fee.

"Most landlords and managers want cash or a cashier's check for the deposit/credit check fee, so they know they have good funds," Leasure said.

• Carefully vet and contact your references ahead of time to be sure your information on them is current and that you have their permission to use them as a reference.

• Keep your credit and finances in good standing. Obtain a free copy of your credit report from the one and only federally-sanctioned AnnualCreditReport.com. Examine it, correct any errors, and make sure what you say in the rental application is consistent with what the landlord will see on the credit report.

• Likewise, any data compiling agency, including major rental screening operations regulated by Fair Credit Reporting Act (FCRA) are required to give you free access to your data. If a report isn't free, purchase it.

• Be prepared with all the information you need to complete a rental application. That includes, full, prior addresses, bank account and credit card numbers, and references. A pre-completed rental application form may be acceptable. If not, it is a good way to compile your information for on-the-spot easy transfer to the landlord's application.

"The most commonly missing information on an application to rent is the contact information for past landlords. That is one of the most crucial pieces of info needed to process the application," Leasure said.

• Consider preparing a renter's resume. Like a job resume, a renter's resume is a chronology of your rental life and helps you stand out as well-organized and prepared.

"Prepare a written explanation of anything that needs explaining, bad credit, a foreclosure, a bankruptcy, an unlawful detainer action. Attach it to your resume. Landlords and property managers respect honesty," Leasure said.

• Lock in your rental costs by negotiating for the longest rental contract your lifestyle permits. Don't rent long-term if you know you soon could be relocated or will have to move. Any savings you hoped to enjoy from a long term contract could be lost in costs to break the contract.

• Before signing on the dotted line, understand the terms of the contract, the monthly rent, due date, deposits, required care and upkeep, community or house rules and any other details. Get help with anything you don't understand.

• Learn more about rental screening from ConsumerAffairs.com's "Behind The Screen Door" series.

• Buy a vacation rental!
• President Obama's 'career renter' moves

© 2008 DeadlineNews.Com

Advertise on DeadlineNews.Com

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Get news that really hits home for your Web site or blog from DeadlineNews.Com.

Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!

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