Ryan Blanco San Diego real estate agent

San Diego Housing Market Update-June 2015 Sales

Below is my monthly analysis of the San Diego housing market. It will show many different metrics to help us get an accurate “feel” for what is happening in our local real estate market!

Activity Snapshot:

One-year change in closed sales

One-year change in median sales price

One year change in homes for sale

-0.9%

+6.5%

-19.1%

Inventory levels (the number of homes on the market “actively” for sale) continues to stay strong. This San Diego housing market update shows san diego housing market updatethere are currently 7039 active residential listings in San Diego county, which is up when compared to last month of 6600.

According to Bankrate.com, interest rates have come above the 4% level. They are currently at 4.20% for a 30-year fixed loan (they were 4.11% at this time last month). This is still well below the historical average of 6% or so, which is great for home buyers. To calculate your potential mortgage payment or see what you can afford, go HERE.

Finally, as you will see on the chart below, prices are starting to take on a more normal pattern. There are much more modest changes than the previous year, with a 6.4% increase in median prices, compared to over 20% we saw in 2013 and early 2014. However, these higher prices are now resulting in a considerable slow-down of the number of homes sold over a year ago.

The San Diego Association of Realtors analyzes housing market data for San Diego county every month. Below is their monthly report for home prices. The figures represents ALL property types.

San Diego Housing market update for June 2015-page-0

CLICK TO ENLARGE

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com

Should You Pay All-Cash For That Home?

Most home buyers have trouble coming up with the initial down payment to buy a home. But there are people out there lucky enough to be paying for their homes in full in cash. Finding a great property and forgoing all the bank paperwork, fees, and loan repayments may seem like a dream, but it can, in fact, be a mixed blessing. So, if you are looking to buy a home and could afford to pay all cash for it, should you?

Looking at the Numbers

A great place to start in this process is figuring out how much money you would save buying a home in an all-cash payout vs. traditional loan payments. Compare the sales price with what you will eventually pay for the home after your loan term is up. Yes, you will save money on interest, but don’t forget to factor in the loss of the mortgage interest deduction at tax time. Also, consider what paying in cash will do to your savings — emergency, retirement or otherwise — in the short term. If it’s not money you will need anytime soon, you shouldn’t have to worry.

should i pay all cash for san diego home

Pros

If you truly have the extra funds available immediately and it won’t put you in jeopardy of going into debt if an emergency were to come up, you will most likely save money by not paying interest and fees like closing cost on a loan.

If your credit history isn’t great, this won’t be a factor to come into play. You will also have 100% equity in the home, since you own it free and clear. Furthermore, you can only lose the amount of money you have put in because you are not leveraged, meaning you do not need to get as concerned about market changes.

For many, a great benefit is psychological — you actually own your house, giving you a sense of security and pride. And if you ever look to buy another home, you are a very attractive buyer to motivated sellers, which gives you an edge over other buyers. The deal will be smoother and faster for both sides. Buying in cash may even put you in a position you to get a better deal. After all, time is money.

Cons

Paying cash for your home likely means most of your savings or at least a lot of your money will be tied in one asset, leaving less money to invest in other, diversified assets classes. Real estate has a historically lower return on investment than stocks or bonds, meaning you could be losing out overall, if other investments would have outperformed the interest you pay on a mortgage. Here is a good calculator.

Additionally, you are sacrificing liquidity, so it’s probably only a good idea to buy a house with cash only if you can afford it without taking all the money out of your emergency fund. Homes normally take months to sell, and borrowing against your home’s equity brings fees and borrowing limits into play. You further lose the financial leverage a mortgage provides because your payment is locked in for the life of the loan (assuming you have  a fixed rate loan) and hopefully you received a favorable interest rate. Lastly, you will not qualify for the tax deductions mortgage payers receive, which often total tens of thousands of dollars.

How you pay for your home is a very personal decision and paying in all cash will likely work for some people but not for others. The bottom line is it generally makes sense if the home’s price does not subtract a significant portion of your liquid assets and/or the interest rate you would pay on a mortgage is higher than what you could earn on other investments. It’s important to properly assess your financial situation and long-term investment strategies, the drawbacks as well as the benefits.

 

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com

How Can I Avoid Or Get Rid Of PMI?

If you are looking to buy a home, but don’t have at least 20% as a down payment, you will likely have to buy private mortgage insurance — PMI. This insurance, which makes home ownership possible for so many home buyers, covers your lender in case you default, and it easily adds between $50- $200 to your monthly payments (depending on the purchase price). You may be stuck with it for now, but can you get rid of it?

Eventually, yes you can. After making enough payments, you reach a point where the bank basically sees that you have enough equity in the house so the insurance isn’t required anymore. Federal law actually requires banks to cancel PMI when you hit certain thresholds. This happens when the principal balance of the mortgage is less than 78%  of the original value of the property. This is referred to as the loan-to-value ratio — the outstanding loan divided by the value of the property.get rid of PMI mortgage insurance san diego

Even if you haven’t reached the 78% level yet, you can request cancellation at other times. The servicer is supposed to cancel the insurance at the halfway point — so, 15 years into a conventional 30-year mortgage.

Also, you have the right to ask for earlier cancellations — at 80 percent. The Consumer Financial Protection Bureau gives instructions for doing this:

  • Your request must be in writing.
  • You must have a good payment history and be current on your payments.
  • Your lender may require you to certify that there are no junior liens (such as a second mortgage) on your home.
  • Your lender can also require you to provide evidence (for example, an appraisal) that the value of your property hasn’t declined below the value of the home when you first bought it. If the value of your home has decreased, you may not be able to cancel your PMI.

Of course, you should also have a clean payment history.

Look on the Bright Side

Even if you are not yet able to cancel you PMI, at least it’s tax-deductible!

 

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com

Challenging Your Property Tax Bill

Typically, every few years San Diego homeowners have the value of their property re-assessed by the San Diego County Treasurer-Tax Collector office. The property tax you pay is based on the local tax rate (normally 1-1.25%), which you have no control over (except at the voting booth!), and the assessed market value of your home, which you can appeal in hopes of potentially lower your property tax bill.

challenge your property tax bill san diegoGenerally speaking, there are 3 ways you can challenge the assessed value of your home:

  1. You can challenge the work of your tax assessor. To assess your home’s value, the assessor uses information that they have about your property. This data may include the condition of your property, the features, and the square footage. Compare your own data to theirs, and if their information is off, you may be able to challenge the assessment.
  1. You can see how the assessed market value of your home compares to similar homes in your neighborhood. This data is public information. If you determine that your home is assessed at a value that’s higher than similar homes close by, you may be able to challenge your assessment. If you need help with this, your local real estate agent would be happy to put together a CMA (comparative market analysis).
  1. Tax assessors use the sales prices of nearby homes to establish a market value. You can also challenge your assessment if you can show that similar homes near you are selling for prices lower than what your home was assessed. Past sale records of homes are public information.

To begin the appeals process for San Diego County, go here: San Diego Tax AssessorGood luck!

San Diego Housing Market Update-May 2015 Sales

Below is my monthly analysis of the San Diego housing market. It will show many different metrics to help us get an accurate “feel” for what is happening in our local real estate market!

Activity Snapshot:

One-year change in closed sales

One-year change in median sales price

One year change in homes for sale

-2.0%

+6.4%

-16.9%

Inventory levels (the number of homes on the market “actively” for sale) continues to stay strong. This San Diego housing market update shows san diego housing market updatethere are currently only 6600 active residential listings in San Diego county, which is up slightly when compared to last month of 6393.

According to Bankrate.com, interest rates have come above the 4% level. They are currently at 4.11% for a 30-year fixed loan (they were 3.97% at this time last month). This is still well below the historical average of 6% or so, which is great for home buyers. To calculate your potential mortgage payment or see what you can afford, go HERE.

Finally, as you will see on the chart below, prices are starting to take on a more normal pattern. There are much more modest changes than the previous year, with a 6.4% increase in median prices, compared to over 20% we saw in 2013 and early 2014. However, these higher prices are now resulting in a considerable slow-down of the number of homes sold over a year ago.

The San Diego Association of Realtors analyzes housing market date for San Diego county every month. Below is their monthly report. The figures represents ALL property types.

Housing Market Statistics for San Diego May 2015

CLICK TO ENLARGE

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com

The Real Costs Of A Swimming Pool

As summer approaches, perhaps you’re thinking about putting in a swimming pool or buying a property with a backyard pool. That way you can take a dip and cool off in your own pool whenever you like, never mind piling the kids in the car on a hot summer day or jockeying for space at a community pool. 

As of recently with the California drought, pools are losing some of their past glory. Some homeowners are opting to fill in their pools, rather than keep them. For the first time in years, pool demolitions are outpacing newly built ones. My bet is that this is a temporary trend and pools will gain popularity back down the road.is a swimming pool worth it?

Either way, before you “dive in” to this, consider these financial implications of a swimming pool.

Installing A New Pool

The average cost of a residential in-ground swimming pool is close to $40,000. Don’t expect to recoup that amount when you sell your house in the future. It’s not something that’s value-enhancing to a lot of people. Just as there are people with positive feelings towards pools, there are those with negative feelings. In other words, don’t get a pool as an investment in your property, get it because you want it.

If you decide to move forward with a pool installation. If it’s in one faraway corner, people aren’t going to use the pool nearly as much. You need to look at the natural daylight as it travels around the house. I don’t think it’s a good idea to put a pool into a dark, shadowy, and thus cooler place.Find an installer who offers a good warranty.

Don’t forget to check your city’s regulations around pools. Each town will have its own definition of a ‘pool,’ often based on its size and water depth. The pool must comply with local safety standards and building codes. This may include installing a fence of a certain size, locks, decks and pool safety equipment.”

Buying A Home With A Pool

Before you buy a home with a pool, be sure to get the pool inspected. The best way, I find, is to get a pool company to come and look at the pool carefully. Some home inspectors are certified to do pool inspections as well. Also, be sure your Realtor asks for the pool to be included in the one-year home warranty plan. This will cover any major costs after purchasing the home.

Also, find out if the previous homeowner had a pool company servicing the pool so you can find out if it’s been serviced regularly and what that company charges. The quality of a pool’s construction matters more than its age. For example in-ground pools can get cracks, causing it to gradually lose water.

Maintenance Costs

According to HomeAdvisor.com, the average pool owner in San Diego spends $175/month on pool maintenance. Of course, this amount can be lowered by doing the maintenance yourself.

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com
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