I wish I could answer the question for you. Just like you, I want there to be an answer for everything, so that it all makes sense and fits into a neat box in my head. But there are some things that just won’t fit, and the way the banks do business is definitely one of those things.

Why do you need to sign something again that you already signed? Why does it need to be back by Friday at 5pm when the bank won’t even be open until Monday? Why do the banks ignore Department of Real Estate regulations and force you to do things their way? Why would the bank reject your short sale offer and then sell the property at the Trustee sale for less? These are all questions that have no answers.

The fact is that if you want to buy a bank owned property, they will call the shots every step of the way. You are totally and completely out of control in the transaction. If the bank wants something, you provide it in the ridiculously short time frame specified or you don’t get the house. When they say “Jump”, you only say “How high?” You will be tempted to say “Why?”, but that is the word you must never say.

Now that I’ve learned not to use that word, I feel so much better. The frustration is gone. Once in a while that part of me that wants to think starts to rise up, but I must shove it back down. Don’t think. Don’t ask why. It’s the only way to work with banks and maintain your sanity.

There are still fewer homes for sale than normal in the entry levels, and this means higher prices as sellers see they have no competition. And buyers will face added competition as they compete for the few homes available.

“Entry level” means homes under $300K in nice neighborhoods in Oceanside, or under $150K in a 55+ community, for example. Anything that rents for a 6% return will have investors making offers on that property, and some of them will make cash offers. That makes it tough for someone wanting to buy a house with a loan, especially a low down payment loan. Why? Because sellers will often choose the offer that is most certain to close escrow, and having a low down payment loan adds to the risk that the sale might not go through.

Well what if you raise the price above the cash offers? Wouldn’t the seller take on the risk of the loan not going through if they got a high enough price? Ironically, the higher the price, the more likely the loan will NOT go through because the lender will do an appraisal on the property and appraisers these days tend to be conservative. That means banks tend to appraise homes lower rather than higher in order to reduce the risk to the bank. So your high offer will most likely fail because the home won’t appraise at that price.

So what’s a home buyer to do? There are some strategies we’ve used to help combat this, but they are not for everyone and each person’s situation is different. If you want to hear about some ideas that might work for you, just give me a call.

Single-family, re-sales home sales were up 2.5% last year in San Diego County.

Unfortunately, after a nice gain of 7.1% in 2010, the median price was down last year. The median price for homes dropped 5.3%. The average price dropped 3%.

Condo sales in the county were down 5.7% compared to 2010.

The median price for condos dropped 6.8%.

THE CALIFORNIA ASSOCIATION OF REALTORS®
expects the median home price to increase 1.7% in 2012. They forecast sales to increase by 1%.

“2012 will be another transition year for the California housing market, as the continued uncertainty about the U.S. financial system, job growth, and the stability of the overall economy remain,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “An improvement in job growth, consumer spending, and corresponding gains in housing are essential to a broader recovery in the economy, but would-be buyers will remain cautious as they weigh these myriad uncertainties against the clear opportunities presented by today’s very affordable housing market.

“The most likely scenario is for the modest recovery to continue, and this should push sales up slightly next year by 1 percent and maintain levels that are significantly higher than those recorded during the depths of the housing downturn,” said Appleton-Young.

MARKET STATISTICS
Sales of single-family, re-sale homes were up 8.3% year-over-year in December. This is the sixth month in a row home sales have been higher than the year before.

Condo sales were up 25% year-over-year.

The median price for homes was down 5.3% year-over-year.

The median price for condos rose 2.5% year-over-year.

Inventory of both homes and condos continues to be weak. Home inventory was down 14.7% compared to last December.

Condo inventory was down 29.4% year-over-year.

Pending home sales grew by 9.7% year-over-year. That’s thirteen months in a row pending sales have been higher than the year before.

Pending condo sales were down 14.1% compared to last November.

For trend charts and full graphical information, visit http://denniskaiser.rereport.com

Wouldn’t it be great if all choices were easy? Choice A is good, choice B is bad, so we would pick choice A. But what do you do when both choices are bad? This video offers some help.

I’m often asked, “What is the best real estate invesment in San Diego for cash flow?” This video will answer that questions for you!

Factory-built homes are constructed off site and transported to a home site and installed on a state approved foundation or support system. California law clearly distinguished among the types of factory produced homes by the building code to which the home must comply.

Mobile Homes

Mobile homes were constructed to comply with California standards prior to June 15, 1975, when the the federal preemptive HUD code became effective. Even though there are a significant number of mobile homes in the existing housing stock, no new mobile homes have been constructed since that date.

Manufactured Homes

Manufactured homes are constructed to comply with the National Manufactured Home Construction and Safety Standards (24 CFR 3280), a uniform federal building code administered by the U.S. Department of Housing and Urban Development (HUD). Most factory homes currently constructed in California meet this HUD code. These are less expensive than modular homes because they can be manufactured efficiently and transported to any state without worrying about local building codes.

Modular Homes

Modular homes are constructed to comply with the California Uniform Building Code (UBC) which is incorporated into law at Title 25, Chapter 3 of the California Administrative Code. This is the same building code that all site built construction conforms to. There is no difference between modular and site built, sometimes called “stick built” construction. The advantage is that banks will lend on modular homes the same as site built. The disadvantage is that you must have complete plans drawn and approved by the city or county just like any other custom home.

If a factory-built home is something you’d like to consider, give me a call at 760-889-2272 and we can talk about your options.

Well that depends – are you thinking about buying, selling, investing, or renting? I’ll answer that question in a minute, but first let me bring you up to date.

Crystal and I now work with Coastal Inland Properties, a small boutique real estate firm in Carlsbad. Our old RE/MAX broker gave up the franchise and so that gave us the kick we needed to join a company where we can market ourselves as a team.

We’ve moved several times in the past year, and we’ve learned some valuable lessons about downsizing and letting go. Most people have trouble giving something up even to gain something better, but it really is just a mental game and we know how to play it. The tendency is to get “stuck” in a certain way and let life shoot its arrows at you. I recommend you take inspired action towards you goals and not let inertia hold you back. Someday you may find yourself faced with having to choose between several bad options, and the tendency will be to stay frozen in place. But as you do nothing your options will disappear until only one is left, and that is usually the worst one.

With our last child out of college and living on her own, we are now free to concentrate on our own retirement accounts. A little late in the game, but we are moving forward. Of course the destruction of value in many of our real estate investments has caused us to rewrite the plan, but that is better than having no plan. How about you? What’s your plan?

Now let’s talk about the market.

If you’re thinking about selling, prices have been stable this past year, but it’s still a buyer’s market. That means this is not a time to be mediocre – you must be excellent with your marketing, condition, and price.  We now utilize every tool known to man for marketing property. Our sellers get exposure in all real estate websites, such as Craigslist, Zillow, Trulia, and many more. They get professional photography and copywriting that hits home seekers’ hot buttons and makes them want to see the home. “Cute 3 bedroom” is so last century and doesn’t work in this competitive market.

If you’re thinking about buying, it’s a great time to go shopping! Pricing is softer in the upper-end price ranges than at the entry level, but there is still flexibility in most prices. However, even though interest rates are at record lows, many people can’t qualify for a loan as lending guidelines get tougher all the time.  So our job is to make sure our buyers have rock-solid loan commitments before going house hunting so there are no big disappointments. There’s nothing worse than losing your dream home because of a bank screw-up. So once again, this is not the time to have a friend “write up the offer for you”. You must have excellent representation and we will put our 22 years experience to work in helping you navigate the bank minefield. 

If you’re interested in investing, people today no longer invest in the hopes of appreciation, but instead are looking for cash flow. And San Diego still remains one of the worst places for cash flow. The best cash flow in the county today is in the senior communities, where you can buy a half-duplex with no homeowner fees for around $150K and rent it to tenants 55 years of age or older for $1200 a month. This happens all the time right here in Oceanside.

Frequently I get the “what about REOs?” question, so here’s the scoop. Banks sell their properties on the open market at market value. Whether it is a REO or a short sale, it is not a bargain since they will only sell at what their appraiser says is market value. They will not sell it to you at 60 or 70 cents on the dollar. The only way investors are making money with distressed properties today is by buying them at the trustee sale. This is an enormously labor intensive business that requires investigating 100 defaulted properties to bid on 10 to buy 1.

And finally, what about renting? That is a good option for some, depending on the situation. Renting is less of a commitment than buying, so if you are uncertain about the next few years, renting is better. We have some clients who always wanted to live near the beach but didn’t know if they would like the crowds and the fog, so they rented there for a year. Why not? Home prices are not going up, so they can take their time and explore different options before committing to one.

But if you know what you want and expect to stay put for awhile, it makes sense to buy at today’s prices. There is a guideline in financial planning called the “rule of 15” to determine whether it makes more sense to rent or to buy. If home prices are less than 15 times annual rent, it makes sense to buy. So let’s say you would pay $2000 a month rent for a 3 bedroom house. $2000 times 12 = $24000 times 15 = $360K. That means if you could buy that house for less than $360K you would be better off buying. This is exactly what the prices are in Oceanside or Vista, where yes, today it does make more sense to buy rather than to rent.

So who do you know who is interested in buying, selling, investing or renting? As always, we are offering our best-reasoned, expert advice to you or anyone you know at no cost or obligation. Just let us know how we can best serve you, now or in the future.

This book is especially written for those over 55 years old, because seniors have special circumstances which makes some of the strategies possible. It’s also very important to make the right moves because as we get older, because we don’t have time to recover from a serious fiancial mistake.

The e-book is available as a free download on my website http://www.seniorsandiego.com/.