Thursday, September 29, 2005

Tax Consequences of "Flipping" real estate

Are you a "flipper"? Or, do you want to be one?

Someone who buys real estate to fix it up and sell it quickly is expecting this to be the road to profits. But, you must be informed! There are tax consequences of this strategy, which you need to know.

There's an article on Bankrate.com that sheds light on this real estate investment strategy here.

Tuesday, September 27, 2005

Spend more than you expected to buy your home?

... Then join nearly one in five home buyers who also did just that. The Wall Street Journal Online/Harris Interactive Personal Finance Poll "finds that nearly one in five (19%) U.S. adults who purchased a home within the last three years for their primary residence say they spent above their suggested price range, while two-thirds (67%) stayed within their price range and 12% were below their price range."

That same Poll found that home buyers mainly used a fixed-rate mortgage to finance the purchase.

To read the entire article, go here (pdf file).

Sunday, September 25, 2005

CAR's predictions for 2006 Housing Market

The California Association of Realtors has made it's prediction for next year's housing market. As the title of the article states - "Moderate price increase, slight cooling in home sales next year".

CAR is predicting a 10% appreciation in home prices for 2006, and also predicts the interest rate on a 30 year fixed mortgage will go to 6.4%. CAR is also predicting record home sales for California.

To read more, go here.

Friday, September 23, 2005

Federal Reserve raises interest rates

For the 11th straight time, the Federal Reserve raised interest rates this week. The federal funds rate was raised one-quarter of a point, to 3.75%, representing the highest level it has been at in four years.

Some people were thinking that in light of Hurricane Katrina, the rate might not be touched. The press release from the Federal Reserve Board does acknowledge the Hurricane and it's effect.

To read the press release from the Federal Reserve Board, go here.

Wednesday, September 21, 2005

Real estate and the internet, and real estate market conditions

The California Association of Realtors (CAR) is holding their annual convention this week. It's being held in San Diego.

Having just returned from the convention, we can tell you that the realtors in attendance are all wondering what is going to happen in the coming months with regard to the real estate market. Some feel we are already experiencing a slower-paced real estate market is what we were hearing.

The CAR released a new study at the opening session of the convention on Tuesday. The "2005 Use of Technology Survey" studies the way Realtors® use technology in their business. With more and more products offered to enhance real estate professionals and how they do business, this important survey confirms how important technology is in our business.

Some interesting statistics from the survey are:
- 46% of Realtors® use e-mail as their primary form of communication with their clients;
- 33% of Realtors®’ business is coming from the Internet.

To read more, go here.

Monday, September 19, 2005

NEW California HVAC Duct Sealing Law!

Do you own property in California? Effective October 1, 2005, a new law goes into effect regarding your HVAC (heating, ventilating and air conditioning) system. This new requirement of the California Energy Commission requires you to have your home's ductwork tested for leaks when installing or replacing your central air conditioner or furnace.

To read about it, we have put information on our website here, including a link to the California Energy Commission website.

Saturday, September 17, 2005

Mortgage interest rates unchanged

Bankrate.com reports that for the week ending September 14, interest rates remain virtually unchanged.

The site reports that "The average 30-year fixed-rate mortgage increased from 5.8 percent to 5.84 percent, and the average 15-year fixed mortgage rate increased by a similar amount, rising from 5.39 percent to 5.44 percent. The average jumbo 30-year fixed rate climbed above the 6 percent barrier to 6.02 percent from 5.97 percent last week."

It will be interesting to follow the impact that Hurricane Katrina may/will have on interest rates. Stay tuned for that analysis!

The Federal Open Market Committee meets again September 20.

To read more, and see current interest rates for different loan programs, go here.

Thursday, September 15, 2005

What real estate bubble?

With all the talk about a possible real estate bubble, or a slowdown in the market, it appears that the real estate market is still alive and well! Front page articles in Sunday's Los Angeles Times, and this week's Los Angeles Business Journal (article titled "L.A.’s Housing Market Surges, Ignores Gloom", read it here) report on the continued strong levels of activity and prices.

Now, there's a collaborating article online at CNN/Money titled "Slowdown? Real estate still going strong" that you can read here.

And the effect of Hurricane Katrina? Quoting the article, "According to the National Association of Realtors, with inventory of homes available for sale across the country so tight anyway, rebuilding the Gulf Coast will place additional pressure on all home prices."

Our personal experience is that the reduced level of inventory in our market has dulled the activity level in our area. And, some buyers have dropped out of the market entirely, due to many differing factors - high prices, sheer frustration over finding an affordable and suitable property, etc. We're not sure that Southern California will be a factor in the relocation of people from the Gulf Coast due to the price of real estate in Southern California.

Tuesday, September 13, 2005

National Association of Realtors (NAR) sued by U.S. Department of Justice (DOJ)

The DOJ has sued the NAR over NAR's policy on the sharing of listings via the internet. We previously reported on this ongoing dispute on May 23, 2005.

To read the actual complaint, go here.

To read the NAR statement on the lawsuit, go here.

Sunday, September 11, 2005

California Association of Realtors (CAR) reports on housing affordability

The CAR reports that "The percentage of households in California able to afford a median-priced home stood at 16 percent in July, a 3 percentage-point decrease compared with the same period a year ago when the Index was at 19 percent. The July Housing Affordability Index (HAI) was unchanged from June, when it also stood at 16 percent."

And, it is interesting to note the income required to buy in California:
"The minimum household income needed to purchase a median-priced home at $540,900 in California in July was $125,670, based on an average effective mortgage interest rate of 5.73 percent and assuming a 20 percent downpayment. The minimum household income needed to purchase a median-priced home was up from $109,170 in July 2004, when the median price of a home was $461,760 and the prevailing interest rate was 5.93 percent."

This is compared to stats for the U.S. in general:
"The minimum household income needed to purchase a median-priced home at $218,000 in the U.S. in July 2005 was $50,650."

To read more, go here.

Friday, September 09, 2005

Interest rates unchanged

Bankrate.com reports that the 30 year fixed rate remained steady at 5.80%.

And, fewer people are electing to get an adjustable rate loan. Bankrate.com reports that "A year ago, almost one-third of mortgage applicants sought adjustable-rate mortgages, or ARMs. Last week, according to the Mortgage Bankers Association, 26.5 percent of mortgage applicants wanted ARMs."

To see the rates, go here.

Thursday, September 08, 2005

Pending Homes Sales declines for month of July

The National Association of Realtors® (NAR) has reports that "The Pending Home Sales Index, based on data collected for July, slipped 1.0 percent to a reading of 125.1, but is 3.5 percent higher than July 2004."

Let's see what happened to the PHSI in different parts of the country during July:
The South was up 1.2% to 139.2 (8.3% over July 2004).
The West was down 1.1% to 127.5 (4.7% over July 2004).
The Midwest was down 3.1% to 113.6 (2.5% below July 2004).
The Northeast was down 3.7% 109.0 (0.8% below July 2004).

To read more, go here.

Tuesday, September 06, 2005

Is the housing market cooling off?

If you read some of the news, the answer is a definite "maybe".

The Associated Press reports that there are signs of a slowdown, even with strong sales and continued rising prices. The number of existing homes sold in July was down nationwide, and the demand for mortgages has also declined.

The article states "But analysts are forecasting that housing sales will begin to decline from record levels by the end of this year and into 2006. The slowing sales pace is expected to end the super-sized price gains many parts of the country have experienced."

To read more, including "advice from housing experts on what people should consider in the current environment", go here.

Saturday, September 03, 2005

Remodeling remains strong

The National Association of Home Builders (NAHB) reports that "Remodeling activity continued to grow in the second quarter of 2005, according to the National Association of Home Builders' Remodeling Market Index (RMI)." The NAHB attributes this to the continued price appreciation and strong real estate sales.

In our real estate market, we've seen a growth in remodeling. Many of our clients who are thinking of moving actually decide they prefer to remodel the home they have in the location they love! It's all a matter of whether or not you can "live" through the remodel! A remodeling project, big or small, can be quite stressful and disruptive.

To read more, go here.

Thursday, September 01, 2005

Hurricane Katrina and how to find people

We understand many are using "Craig's List" to post people they are looking for.

Link is here.
Hurricane Katrina and how to help victims

Our thoughts are with those affected by this disaster. Please support the relief efforts as you are able.

HOW TO HELP VICTIMS -

from the Federal Energy Management Agency (FEMA), go here.

from the National Voluntary Organizations Active in Disaster, go here.