Even As The Holidays Approach, You Still Can Buy A Home This Year

With Thanksgiving around the corner, Hanukkah beginning a week after, and Christmas only four weeks away, despite all the fun, food, and celebrations, if you have your focus laser beam tight, you can buy a house before the end of 2015.

But why in the world would you want to take any time away from your cherished Holiday traditions – including deep frying a Turducken, hosting a marathon game of Risk, standing in store lines at zero dark thirty on Black Friday, or marching with the Brief Case Drill Team in the Occasional Pasadena Doo Dah Parade – to buy a house?

Here are a couple reasons I can think of that might get your boots on the ground, pounding the local pavements as you deploy from your Realtor’s car, searching for the right house and getting into a time-sucking battle of counter offers until you make a deal.

Taxes: Buying a house triggers a “taxable event” that may give you some tax advantages for your 2015 return, if you close before the end of this year.

Check with your tax professional to see which of your closing costs can be deducted from your taxable income. And as far as I know, for 2016, your mortgage interest paid on your primary residence still qualifies as a tax deduction. This is another point for you to confirm with your tax professional.

Look at you – winning this year and all of next year! Motivated now?

Mortgage Interest Rates: Are you a gambler? There you are, needing a bigger place for yourself, your spouse or significant other, your kids, their kids and your sister (one definition of the modern family).

How long are you going to wait out the impending increase in mortgage interest rates, which will erode your buying power? Because as mortgage interest rates rise, your qualifying loan amount typically decreases. You might choose to leave the Risk marathon, pick up your Pre-Approval letter and go find a house to buy for your “clan.”

Motivated Sellers: If you can take your eye off the Turducken for just a few minutes and study the stats of the homes you’re actually interested in owning, you might see a trend toward a higher number of days on the market in your target zone.

Do you think the owner of a house that’s been listed for sale for 220 days might be motivated to respond to your offer, even if it is as low as your respectable Realtor will let you go? It’s worth a try.

Thirty Day Escrow: Despite the implementation of new lending guidelines, savvy lenders can and are accommodating 30 day escrows. Which means yes, you can buy a house before the end of 2015! So grab your brief case and get going!

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CSUF Analysis Predicts OC Home Prices Will Rise Up to 12% in 2 Years

Orange County house prices will rise between 4 percent and 6 percent next year and the year after, a Cal State Fullerton forecast predicted.

If accurate, the median price of an existing single-family home will climb to $751,000 to $765,000 in 2016, up from the $722,170 median home price reported by the California Association of Realtors in July.

That’s less than $10,000 below the the all-time high of $775,424 for a single-family home reached in June 2007, according to state Realtors.

The median is the price at the midpoint of all homes sold.

“Given the substantial price increases in the last few years, the expected increase in interest rates and moderate to good (but not great) growth in jobs and output, we believe that this is a reasonable expectation,” Anil Puri, dean of CSUF’s Mihaylo College of Business and Economics, said Monday in an email to the Register.

Earlier, Puri issued CSUF’s annual forecast predicting Orange County will add 37,700 new jobs in 2016, compared to an increase of 40,100 this year. In 2017, job growth could slow even more, he said.

Unemployment, the forecast predicts, will drop only slightly – from an average of 4.4 percent in 2015 to 4.3 percent in 2016.

Puri said the Orange County house-price forecast, issued separately this week, is based on CSUF’s Orange County Business Expectations survey and on its analysis of the housing market.

The forecast is only for the median price of a existing single-family home. But if the all-home price reported by CoreLogic grows at that same 4 percent and 6 percent pace, the median would surpass the June 2007 record by $9,700 to $22,000, reaching a new peak of $654,680 to $667,270.

On the other hand, Orange County home values still will remain well below peak values when taking inflation into account.

The Realtors’ June 2007 peak price of $775,424 for a single-family home is equal to almost $890,000 after taking inflation into account.

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What's Your Home Worth? Why Do You Want to Know?

At some point, every home owner asks the question, “What's my home worth?”

But the ways to answer that question are as varied as the reasons for asking it.

Here are a few home-value estimating techniques, and the scenarios that prompt that question most frequently.

Current Market Value estimate: People want to know what their is home is worth periodically just as people check in on the value of their stock portfolio.

There are as many online opportunities to request a Current Market Value report as there are agents with a website.

And you usually only fill in the bare facts on such sites as bedroom and bathroom count; square foot of living space; lot size; and whether or not you have a pool. Who wants an agent in their house when they don’t even know if they are ready to sell, right?

So you enter all of your data and say, “What’ll my house sell for right now?”

You’ll most likely receive an answer in the form of a range of prices, from low to high. You can then apply your own opinion of how your house stacks up against the homes similar in size and bed/bath count to see where you land within the range provided.

As is vs. Upgraded Value estimate: Many sellers want to know what kind of return they are likely to get from an investment in upgrades to their home. Or asked another way, how much less they will likely get for their house if they sell it the way it is.

This is a tricky area when it comes to the math, but suffice it to say that recent upgrades in the current prevailing style, finish, and fashion will fetch more money than a home with no upgrades, or upgrades done 20 years ago that are no longer in step with the current trends.

Sharpen your pencil.

Highest Current Value estimate: Many times agents are asked to provide an estimate of the highest possible value of a home so owners can evaluate whether or not they can potentially re-finance into a better loan, get rid of the Private Mortgage Insurance (PMI) and pull a little cash out to add a pool.

This exercise often involves really scouring the comparable closed sales to find any little shred of evidence that will justify an increase in the estimated value of the home.

Lowest Current Value estimate: Believe it or not, there are times home owners are trying to justify the lowest possible value of their home. One reason is to contest the value set by the tax assessor and potentially lower your annual property tax bill.

Another reason is in a divorce, when one spouse wants to buy out the other . The spouse wanting to keep the house is looking for evidence to keep the buyout cost as low as possible.

The spouse being bought out will be looking for the highest price possible.

Sometimes both parties submit evidence to their respective attorneys, most likely provided by two different brokers. Then the attorneys duke it out.

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4 Things You Should Know About Online Real Estate Listings

Online listing have transformed the way we shop for homes. While listing sites make the home buying process more convenient, they also have their flaws. Here are a few things you should know about listing sites before you buy a home.

The Listings Are Not Always Accurate

Criss-crossing the city to see a handful of properties is not the most efficient way to find your dream home. Which is why buyers love listing — they can provide a wealth of information at a quick glance. A typical listing will tell you the lot size, square footage, how many bedrooms, and the year the home was built, along with many other details. The problem is that this information isn’t always correct. You might spend an afternoon chasing down a prospective home, only to find out that an offer was accepted several days ago and it’s no longer on the market. Or you might find out during a tour that the square footage was listed incorrectly and the home is significantly smaller than you expected. When you’re house hunting, it’s important to ask questions, even if you think you know the answer. Don’t let the details in an online listing prevent you from performing your due-diligence.

There’s No Substitute for Actually Seeing a Home

The centerpiece of any home listing is the photo slideshow. Buyers will spend hours flicking through these pictures trying to find a place they can fall in love with. Real estate agents know how important these pictures are, and that’s why the best agents will hire a professional photographer to show off the property. They’ll use wide-angle lens to make the place feel spacious, studio lighting to make it bright, and color correction to give it vibrancy. But these photos can be misleading. As a buyer, you might waste a lot of time pursuing a looker that ends up being a dud in person. And by focusing all of your attention on the homes with the best looking pictures, you might end up missing a great deal on a property that didn’t invest in a good photographer.

The Price Isn’t Right

Online tools have made life easier for real estate agents. Buyers today are better informed and better able to explain what they are looking for. But these sites can also drive agents crazy, especially when they feed buyers and sellers wrong information. Many sites provide an online estimate of a property’s value, which they base on recent sales data and tax assessments. Unfortunately, these estimates are often inaccurate, especially when they fail to take into account things like a major remodel or recent fluctuations in neighborhood real estate prices. Despite the inaccuracy, sellers can get attached to these estimates, and refuse to budge on price, even if a weak housing market tells them otherwise. On the other hand, buyers who rely on this figure might put in a lowball offer that wastes everyone’s time. If you’re a homeowner and you feel like the current estimate is too low, you can reach out to companies like Zillow and Redfin to correct the facts about your home in order to improve the company’s estimated price. And if you’re a buyer, keep in mind that these are just estimates — the market will decide what the home is worth.

Real Estate Isn’t Easy

Online listings lure people into thinking that real estate is easy. But buying a home is not like ordering a new pair of shoes off of Zappos. It’s hard work. Sure, you can spend your days looking at listings, and your weekends visiting open houses, but finding the right place to live is just a small part of the process. You’ll need to come up with a downpayment, get pre-approved for a mortgage, find an agent that you can work with, fill out stacks of paperwork, get a home inspection, and finally close on the home. Checking the online listings during your lunch break is a fine way to kick off the process, but once you’ve made the decision to actually buy a home, be ready to treat it like a full-time job for the next several months.

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California Home Gains Forecast to Run at Least 2 More Years

California home prices should continue to rise in the next two years, extending the state’s housing gains to a six-year winning streak, according to a new forecast by Wells Fargo Bank.

Bank economists see the CoreLogic median selling price for the state finishing 2015 up 6.5 percent vs. a year ago; then rising 5.8 percent next year and up 5.5 percent in 2017. This index rose 13.4 percent in 2012, 20.5 percent in 2013 and 7.6 percent last year.

“Modestly higher interest rates should not present much of a direct challenge for the state, but with home prices rising and mortgage markets far less flexible than in the past, home sales might come under pressure if mortgage rates rise too quickly. That does not appear to be an immediate risk,” the forecast says. “Interest rates look like they will remain low for even longer than thought previously, which should allow the housing recovery to gain further momentum.”

Pushing home prices higher is the fact that California’s economy is outperforming the nation.

“We look for the Golden State to again add close to a half million net new jobs this year, which is a pace 1.5 times that of the nation as whole,” says the forecast. “Stronger growth is creating some strains, however. About 20 percent of the state’s new jobs have been created in the high-paying technology and life sciences industry.

“Hiring has also picked up in other higher-paying sectors, including construction, manufacturing, health care and logistics,” the report continues. “California, however, has also added plenty of lower-paying jobs as well, and many of these low-paying jobs are being created in the same geographic areas where higher-paying jobs are being added. These wage discrepancies have made finding affordable housing an even greater challenge than in the past.”

The California Association of Realtors last week predicted that the median price of a California existing, detached house will rise 3.2 percent to $491,300 in 2016. Its house price index rose 9.8 percent in 2014 and 6.5 percent so far this year.

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