11/05/2014

The New Changes in the 2014 California Residential Purchase Contract

As of November 24th, new changes and additions to our real estate contract will be taking place.  This is one of the most significant series of changes, and the largest amount, in many years.  So if you're a buyer or a seller of a condo, house, duplex, three- or four-unit residential property and you open escrow on November 24th or later, you will be using the new form associated with the California Association of REALTORS.  You don't want to be like the little koala and caught unaware of the changes.

Without going into specific detail that would be reviewed completely if you were actively engaged in an offer or a transaction, here is a general summary of some items that would be encountered:

The contract has expanded by two more pages, making a total of 10 pages.

If you're a condo owner, you will automatically be required to pay up front and deposit funds into escrow for the legally required homeowner association documents given to to the buyer.

The parties can no longer spend the entire escrow period submitting their instructions to escrow, but now must submit within 5 days of opening escrow.

The buyer deposit default language now addresses an electronic fund transfer when submitting funds to escrow.  Checks are still acceptable, but the EFTs are now much more common and direct.

Credits given back to the buyer from the seller must now be disclosed to the buyer's lender and cannot exceed the amount allowed by the buyer's lender.

Termite repairs are now considered just that -- a repair to be requested and negotiated between the buyer and seller when other buyer repairs are requested during the buyer investigation period.

The buyer loan contingency default period has been extended from 17 to 21 days.

There are additional forms added to the transaction not previously used, i.e., if the seller stays even just 3 days past the close of escrow, there is now a separate seller leaseback form used to cover that time period.

If you are contemplating buying or selling a property, you should know that the Residential Purchase Contract should be reviewed with consideration.  The ease of digital signatures and emailing of documents has allowed for less face-to-face time with an agent, while the transactional requirements have grown more explicit and careful.  So while convenience is wonderful, not being aware of what you're signing is undesirable. Unless the transaction must be conducted at a great distance between client and agent, personal contact during escrow probably ensures a clearer explanation of documents.










11/03/2014

Just Sold in Long Beach

Just Sold in Bluff Park:
2601 E Ocean Blvd., #305 -- a 2 bedroom/2 bath + dining room end unit with ocean and neighborhood views. Lots of character and space in this 1970's condominium. Third floor unit in an upgraded homeowner association.

Just Sold in Carson Park:
7027 E Keynote St -- Large 4 bedroom home (expanded many years ago from original one-story model), with two bathrooms and very large family room with a corner brick fireplace, upgraded kitchen and original dining area.  In interior tract location near schools, ideal for family.

Just Sold in Lakewood:
4323 Woodruff Ave. -- in ideal residential location near local shopping, this home has a dining room, family room, unpermitted bonus room ideal for office space, upgraded kitchen and 3 bedrooms/2 baths. 

Call for more information, or visit my website at http://www.juliahuntsman.com.

Serving buyers and sellers since 1994.

10/27/2014

Single Family Home Prices in Long Beach 90803 and the City of Long Beach

Single family home prices in the 90803 zip code (including Bluff Park, Belmont Shore, Naples, Belmont Heights) have, on average, ranged between $554,000 and $970,000 over the last three years. November 2011 and September 2014 are so far the two highest points on the scale. The majority of houses selling over $900,000 during 2014 in this zip code are mostly in Belmont Shore, next is The Peninsula, Bluff Park and the lower part of Belmont Heights.
MLS: RS1406706
A home in the price range may have 3 bedrooms, 2+ baths, about 2100 sq.ft. on the interior, was about 70-80 years old, and was typically on the market for about 80 days. The property at the right at 177 Glendora was actually on the market 203 days per CRMLS, and closed escrow on October 20, 2014 selling at $969,000.

If you would like more information about the value of your home in this area, or any other area, please contact me for an in-person or online valuation.  Online valuations are considered more general, but a reasonable estimate of value may be obtained by looking at similar sales within a certain range and size.   

10/16/2014

There are California Programs to Help Buyers Buy

e Down Payment Resource automated down payment assistance program finder does the research for you and quickly matches you with specific homebuyer assistance programs for which you may be eligible.
With Down Payment Resource, you’ll learn:
  • The total number of homebuyer programs available to you
  • The name of each program
  • The amount of down payment assistance available
  • How to use this information when shopping for a home
  • Your next steps to learn more and apply for the program
- See more at: http://downpaymentresource.com/homebuyers/#sthash.HId2n8o2.dpuf
The Down Payment Resource automated down payment assistance program finder does the research for you and quickly matches you with specific homebuyer assistance programs for which you may be eligible.
With Down Payment Resource, you’ll learn:
  • The total number of homebuyer programs available to you
  • The name of each program
  • The amount of down payment assistance available
  • How to use this information when shopping for a home
  • Your next steps to learn more and apply for the program
- See more at: http://downpaymentresource.com/homebuyers/#sthash.HId2n8o2.dpuf
e Down Payment Resource automated down payment assistance program finder does the research for you and quickly matches you with specific homebuyer assistance programs for which you may be eligible.
With Down Payment Resource, you’ll learn:
  • The total number of homebuyer programs available to you
  • The name of each program
  • The amount of down payment assistance available
  • How to use this information when shopping for a home
  • Your next steps to learn more and apply for the program
- See more at: http://downpaymentresource.com/homebuyers/#sthash.HId2n8o2.dpuf
The Down Payment Resource automated down payment assistance program finder does the research for you and quickly matches you with specific homebuyer assistance programs for which you may be eligible.
With Down Payment Resource, you’ll learn:
  • The total number of homebuyer programs available to you
  • The name of each program
  • The amount of down payment assistance available
  • How to use this information when shopping for a home
  • Your next steps to learn more and apply for the program
Click Here to find out if you are eligible for first time home buyer down payment assistance.
- See more at: http://downpaymentresource.com/homebuyers/#sthash.HId2n8o2.dpuf

Wave of Singles to Make Big Impact on Housing.

Half of all American adults now live in one-person households, a rapidly growing number, according to the Bureau of Labor Statistics. The singles demographic is likely to reshape multifamily communities and single-family home designs going forward, according to Builder Online.

In 1976, only 37 percent of adults were single. As of August 2014, that percentage has bloomed to 50.2 percent, or about 124.6 million singles. It marks the first time that single Americans make up the majority of the adult population since the government began tracking such data.

This growing segment also will impact floor plans, which will go from static to flexible affordability will be a key factor due to the reduced income of a single homeowner compared with that of dual-earner couples.
as living arrangements change more frequently. Analysts also project that this group will job hop more often and bring new types of living arrangements into the housing market – such as friends buying homes together. Additionally,

At the recent California Association of Realtors 2014 Expo and Conference last week, the obstacles for first time buyers--an important force in the real estate market--were characterized as having:         
  Lots of competition for existing housing stock.
• Affordability constraints.
• Lack of a down‐payment.
• Lack of information about the home‐buying
   process.
• Fear of financing: “I can’t qualify”.
• Job prospects/security still dim for many.
• Many who have jobs are under‐employed.
To help all types of buyers with potential programs, there is a resource to help sift through the wide array of programs that could be available in a given area.
 
Down Payment Assistance for Buyers.
Did you know, according to California Association of Realtors' Down Payment Resource™ Homeownership Program Index that there are…
-Over 300 programs in California
-59% provide direct down payment & closing cost assistance
-10% provide mortgage credit up to $2,000 for the life of the loan
-26% are available to repeat buyers.

The Down Payment Resource automated down payment assistance program finder  is a FREE program and does the research for you.  It quickly matches you with specific homebuyer assistance programs for which you may be eligible.  With Down Payment Resource, you’ll learn:
  • The total number of homebuyer programs available to you
  • The name of each program
  • The amount of down payment assistance available
  • How to use this information when shopping for a home.

10/13/2014

Impacts on California Housing and Real Estate

The 2015 California Association of REALTORS annual conference took place in Anaheim last week.  As always, the annual market forecast was given, and these are just some of the highlights from over 128 slides used in the presentation by the Association's Chief Economist:


  • Millennials delaying “adulthood”: Getting married later or not at all; Student loans; dim job prospects.
  • Homeownership rate for 18-34-year-olds still falling.
  • Household formation is VERY slow.
  • Baby boomers delaying “retirement” and staying put longer; they will love their loans when rates do rise.

     First time buyers:

·        Lack of a down-payment.

·        Lack of information about the home-buying process.

·        Average age of first time buyers is between 35 and 43 years.

·        Overall Market information:

·        In Los Angeles County, distressed sales are now 7.6% (August 2014) vs. 36% (August 2012), and figures are even lower in Orange County.

·        In 2007 and 2008, inventory was at 16 months, in August 2014 inventory supply is at 4 months.

·        California homeownership rate is lower than the U.S. rate, just above 50% vs. 65%.

·        Los Angeles metro region is one of 3 lowest housing affordability areas in the State, but the median California house payment and minimum qualifying income are still well below the peak market.

·        Decline in multiple offers.

·        Share of cash buyers is lowest since 2009.

·        Share of FHA buyers at 16% in 2014, but lowest figure since 2007.

·        One-third of the international buyers are from China, next are India and Canada.

·        Sales volume down and prices up (5%-14%) in all Southern California counties.

·        Millennial (ages 18-34) homeownership falling, and younger buyers continue to decline.

·        Three-quarters of millennials not married--this historically impacts household formation.

But, per a REALTOR survey of 18-34 year-old adults, "More than half (54 percent) gave homeownership an importance rating of “8” or higher on a scale of 1-10, with 1 being “not at all important” and 10 being “extremely important.”  The biggest advantages they see in homeownership are the freedom to do what they want with the property, privacy, and the satisfaction of ownership". And aren't those the reasons why people buy homes?

Last but not least is the projected picture for the coming year where the median home price on a statewide level will increase to $478,000; the housing affordability index will be at 27%, and sales volume will increase to a higher level than 2014.  
What do you think about where the market is headed?

2015 California Market Forecast

10/11/2014

Governor Jerry Brown Signs Bill to Stop Tax on Loan Modifications

If the principal on your mortgage was reduced in a loan modification, a new law may lower your taxes. Governor Jerry Brown recently signed AB 1393 (Perea), legislation that will prevent homeowners from being charged state income tax when they’ve had a mortgage loan modified to reduce the principal. Under current law, the forgiven debt created by a reduction in principal as a result of a loan modification isn’t subject to federal income tax, but is currently taxable under state law. The law will become effective immediately and is retroactive to January 1, 2014. This is great news for homeowners.

9/15/2014

What Is The Market Doing in Long Beach, Cerritos, Lakewood and Rossmoor?

See the trends over a 5-year period in these areas.
Long Beach - Median sales price for a single family home in August: $468,500
Cerritos - Median sales price for a single family home in August: $599,000
Lakewood - Median sales price for a single family home in August: $464,500
Rossmoor - Median sales price for a single family home in August: $895,000.
By checking points along the graph, prior months' sales prices are seen. Long Beach and Cerritos are down, Lakewood and Rossmoor are up. This is a live graph, and is updated with each month's sales.

8/08/2014

California Home Equity is Up, But Distressed Owners Are Still Among Us

Distressed property owners have not disappeared totally.  A review of the Los Angeles County tax records today for the entire Long Beach area shows 257 residential properties in pre-foreclosure status.  Who's represented?  Property owners in all zip codes and while I didn't make an exact count, adjustable mortgages seemed to predominate.  This is unfortunate, because while many more owners are now benefiting from the upward trend in values, many are still affected by loss of job or short term jobs or lower paying jobs in the face of an upward increase in their mortgage, just to name a few reasons.

Owners who have attempted loan modifications may not have met all the hardship requirements, or they do not have enough income to refinance under today's more stringent-i.e., traditional-loan guidelines. And so, like the TV advertisements show us, they "freeze" up, unable to take action, and unable to come to the decision they might need to sell and relocate.  If you or someone you know falls into this category, short of finding a financial benefactor, the choices may be to sell, go into foreclosure, or continue to struggle if you possibly can.  One of the dividing lines for being eligible for loan modification or short sale assistance is whether or not your property value is still (much) lower than what you owe, OR you have experienced a qualified economic hardship.

Under a current California program, an owner may be eligible for up to $5,000 in transition assistance, loan principal reduction, unemployment mortgage assistance, and loan reinstatement assistance.  Also, Bank of America and other banks still offer their transition assistance programs for people in short sales. This program does not do loan modifications--for that you need to go directly to your servicer--but it does offer 4 other types of help.

For more information on this program, go to http://keepyourhomecalifornia.org, a program run by California Housing Finance Agency (CalHFA) with $2 billion in funds through the Hardest Hit Fund of the U.S.Treasury.  The site includes all information about eligibility, the participating servicers, and income requirements.  Over 43,000 California homeowners have been helped. 


8/05/2014

Prices Continue Up for June in Many Cities, But Sales Volume Way Down



Average single family home prices in June, 2014, and the increase or decrease compared directly to June of one year ago (prices may differ from overall annualized price), plus stats on closed sales and days on market (DOM).  Actual number and percentage of sales are down (see red column), a lot; properties are usually spending more time on the market before going into escrow (last column); and the average house price, on a citywide basis, is higher than one year ago.  The percentage increase in price, however, is lower compared to May's increases, in many areas. (P.S. See my new Metro Summary page for Long Beach region info for July).
     

Cerritos$739,333+10.8%Closed Sales-40%DOM +27.8%






Lakewood$463,096+7%Closed Sales-32%DOM +8%






Long Beach$555,496+17%Closed Sales-28.4%DOM +58%






Los Alamitos$726,667+9%Closed Sales-57%DOM +72%






Seal Beach$1,021,223+14%Closed Sales-20%DOM -33.3%






Signal Hill$655,000+7%Closed Sales-75%DOM +87%






Huntington Beach$920,396+19%Closed Sales-21%DOM +68%






Norwalk$340,943+9%Closed Sales-8%DOM +5%






Downey$444,903+8%Closed Sales-24%DOM +59%  






Garden Grove$503,922+15%       Closed Sales-58%DOM -9%











7/29/2014

Thinking of Taking Money Out of Your California 1031 Exchange? Do It The Right Way

A basic feature/requirements of 1031 exchanges is that the taxpayer doing the exchange cannot have access to their funds--that's why there's an accommodator, or "qualified intermediary" (QI).  In real estate, 1031 exchanges are allowed where the property owner has not lived in the property as a principal residence, but has owned it usually as some form of income or investment property. There are certain exceptions to this, but they will not be covered here.  Just know that the rules surrounding IRS 1031 exchanges are specific and detailed, and must be complied with to the letter.  A principal 1031 exchange benefit is in deferring capital gains taxes on the sale of property by shifting funds into a new purchase, also a non-owner occupied property.  For a property owner who bought in a low market, and is selling in a much higher market, the tax savings can be significant. Simply, in this type of transaction, the taxpayer is not allowed access to funds which are handled through the QI, unless there is an agreement that the taxpayer is taking money out of the first sale, known as "boot", which will not be used in the acquisition of the next property.

As previously covered in other posts, the State of California wants all of the money it's entitled to, so recently a tax audit of an exchange failed because the State said the taxpayer didn't follow the 1031 exchange agreement.  So that means the taxpayer is now probably paying a lot of taxes which otherwise would not have been the case.  The State didn't like the taxpayer giving the escrow officer, not the QI, instructions to exclude $150,000 from the purchase of the next property and send it over to the taxpayer.  The Franchise Tax Board said the taxpayer thus really had access to the funds, which he/she was not supposed to have, and so the exchange was violated.

Moral of this story:  If you're doing a 1031 exchange transaction and you want to take out money from it, make sure it's included in the actual written agreement with the QI, because the QI is who is responsible for handling all funds in the exchange, not the escrow officer. Make sure you are using an experienced and known professional accommodator, are following the advice of an experienced tax professional, and are working with an experienced REALTOR as well.  It could make a huge difference to your bottom line.  Read more at Asset Preservation.


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