First gain for Calif. prices in 16 months

Here's the Leading News item: 

The median price for an existing, single-family home in California rose 1.6 percent in March compared with the year before, marking the first year-over-year increase in 16 months, the CALIFORNIA ASSOCIATION OF REALTORS® reported Monday.

Making sense of the story

• The statewide median price of an existing, single-family detached home jumped 9.2 percent to $291,080 in March from February’s $266,660 median price and was up 1.6 percent from a revised $286,550 recorded in March 2011.  The month-to-month increase was the largest since March 2004.
• Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 505,360 units in March, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide.  Sales in March were down 4.5 percent month-over-month and 2.3 percent year-to-year.
• The statewide sales figure represents what would be the total number of homes sold during 2012 if sales maintained the March pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.
• “Housing inventory remains extremely tight throughout the state and at levels severely under normal market conditions,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.  “In areas, such as Los Angeles and Riverside counties, where the Federal Housing Finance Agency (FHFA) wants to implement the REO bulk sale pilot program, inventory is running at levels well below the long-run average.  These low inventory levels demonstrate that the pilot program is not necessary in California.”
• The pilot program calls for the sale of more than 600 Fannie Mae-owned foreclosed homes in Los Angeles and Riverside counties to institutional investors.

Here's the whole story...

Mitt Romney Eyes Mortgage-Interest Deduction

By Gino Blefari
President & CEO
Intero Real Estate Services, Inc.
Throughout the economic downturn and recovery, we've seen the topic of the mortgage-interest deduction come up time and again. It's fitting that Republican presidential candidate Mitt Romney would bring it up this week as millions of Americans are frantically filing income taxes to avoid being late.

In a speech on Sunday, Romney said he's considering eliminating the mortgage-interest deduction for second homes for high-income individuals. This often comes up with politicians and congressional groups as a viable option for creating more revenue for the federal government.

Let's first look at the number of homes and owners this might affect. The National Association of Realtors estimates that second homes – including vacation and investment properties – accounted for 38% of home sales in 2011. The group said that about half a million vacation homes and 1.2 million investment properties were sold last year, continuing a trend in which these homes have accounted for the largest chunk of sales since 2005.

Generally speaking, eliminating or making changes to the mortgage-interest deduction is not going to have a great impact on the housing market. While the government may reap some rewards in the form of more cash made via taxation, most homeowners and first-time buyers still see the deduction as an important perk or benefit of owning a home. Messing with this deduction now at a time when the recovery is still quite fragile and slow would be a bad idea.

Eliminating or scaling back the mortgage-interest deduction would hit states in which vacation homes are most popular harder than others. Florida, Maine, Michigan and Colorado could see fewer sales as a result.

Moreover, more buyers have been jumping in the market and buying investment properties in recent years. Sales of investment properties spiked 64% last year. These are properties that otherwise may not have been purchased, which makes a pretty big case for keeping all incentives in place for investors to continue buying, and therefore aiding the housing recovery along.

While some say that the mortgage-interest deduction isn't as big a deal for second home buyers because of the emotional nature of those purchases, I'm leery of mucking up a homeownership perk that's long been held as a great benefit to owning a home. If incentives like this are working to keep investors hungry for real estate – and that hunger in turn is helping the market as a whole – then let's back off and find another way to fix our fiscal mess.

Myths about HUD-approved counseling busted

There are many myths associated with HUD-approved counselors.  Here are some common ones busted to give homeowners an idea of the benefits and limits of their services. This article was written by a Union-Tribune San Diego reporter Lily Leung so it has a San Diego slant. But the cases and examples are good all across the state. Pay attention and read on…

By Gino Blefari
President & CEO, Intero Real Estate Services, Inc.

Spring is in the air – especially for real estate markets. I've always felt like the personal stories and anecdotes I hear from agents who are on the ground and working with buyers and sellers say much more about the state of the market than statistics, which are often time lagging and misleading.

This spring, the agents I talk to are busy – beyond belief it seems. They're seeing multiple offers, pre-recession inventory levels, and a general thirst for real estate from consumers.

But the stats aren't too shabby either. Another great piece of news we saw come out recently was a look at the market for second homes and investment properties in 2011. Investment home sales surged 64.5% to 1.23 million in 2011 from 749,000 in 2010, while vacation home sales rose 7% to 502,000 in 2011 from 469,000 in 2010 (according to the National Association of Realtors' annual survey).

Overall, vacation home purchases accounted for 11% of all transactions last year, up from 10% in 2010, while investment sales jumped to 27% last year from 17% the year before. The shift is good news for real estate markets because it shows the market is able to absorb the foreclosures hitting the market.

That's what some of the stats are saying. What do the agents say?

As I mentioned, most that I talk to are super busy. They tell me that markets where jobs have been picking up and where inventory is at a healthy level are doing very well. However, the pockets of neighborhoods that were overdeveloped for the most part are still struggling to absorb inventory.

This all points to a good spring for buyers and sellers. The tech-heavy economies like ours in Silicon Valley are benefiting from extraordinary job markets in which big standout companies like Zynga and Facebook are growing like weeds, hiring and enjoying new IPOs.

Spring historically has always been a great season for real estate, but this one feels even better as we hear anecdotes and statistics working in the same direction. There's a turning point happening. And although many still argue we're in a mostly jobless recovery, those who are lucky enough to be in areas where the economy is picking up are doing just fine. (Don't get me wrong, though – those who are in badly hit areas that aren't recovering as easily are still struggling and we need to acknowledge that.)

Americans are back in the real estate frame of mind.

Easter Greeting 2012

Lovely San Juan Bautista Condo for RENT

Pricing Your Home for Sale

Yes, again! We bring this up repeatedly because homeowners have a hard time coming to grips with what their home used to be worth, and what it will bring in today's market. This video is just one minute long - WATCH IT!

Open Houses this Week-End

Join us at any or all of these Open Houses this week-end.

10 Mistakes Home Owners Make on Their Taxes

Here's an article from HouseLogic about taxes - something we are beginning to think about. Hope you fine these suggestions helpful.

By: G. M. Filisko

Don’t pay more taxes than necessary — know the score on each home tax deduction and credit.

#1: Deducting the wrong year for property taxes

You take a tax deduction for property taxes in the year you (or the holder of your escrow account) actually paid them. Some taxing authorities work a year behind — that is, you’re not billed for 2011 property taxes until 2012. But that’s irrelevant to the feds.

Enter on your federal forms whatever amount you actually paid in 2011, no matter what the date is on your tax bill. Dave Hampton, CPA, tax manager at the Cincinnati accounting firm of Burke & Schindler, has seen home owners confuse payments for different years and claim the incorrect amount.

#2: Confusing escrow amount for actual taxes paid

If your lender escrows funds to pay your property taxes, don’t just deduct the amount escrowed, says Bob Meighan, CPA and vice president at TurboTax in San Diego. The regular amount you pay into your escrow account each month to cover property taxes is probably a little more or a little less than your property tax bill. Your lender will adjust the amount every year or so to realign the two.

For example, your tax bill might be $1,200, but your lender may have collected $1,100 or $1,300 in escrow over the year. Deduct only $1,200. Your lender will send you an official statement listing the actual taxes paid. Use that. Don’t just add up 12 months of escrow property tax payments.

#3: Deducting points paid to refinance

Deduct points you paid your lender to secure your mortgage in full for the year you bought your home. However, when you refinance, says Meighan, you must deduct points over the life of your new loan. If you paid $2,000 in points to refinance into a 15-year mortgage, your tax deduction is $133 per year.

#4: Failing to deduct private mortgage insurance

Lenders require home buyers with a down payment of less than 20% to purchase private mortgage insurance (PMI). Avoid the common mistake of forgetting to deduct your PMI payments. However, note the deduction begins to phase out once your adjusted gross income reaches $100,000 and disappears entirely when your AGI surpasses $109,000. Also, unless Congress acts to extend the PMI deduction again, 2011 is the last tax year for which you can take this deduction.

#5: Misjudging the home office tax deduction

This deduction may not be as good as it seems. It's complicated, often doesn’t amount to much of a deduction, has to be recaptured if you turn a profit when you sell your home, and can pique the IRS’s interest in your return. Hampton’s advice: Claim it only if it’s worth those drawbacks. If so, here's what to know about what you can write off.

#6: Missing the first-time home buyer tax credit

While the original home buyer tax credit deadline passed in April 2010 (and isn’t available in 2012), military families and some government workers on assignment outside the U.S. were given an extension until April 30, 2011, to get a home under contract and take advantage of up to $8,000 in tax credits for first-time buyers and $6,500 in credits for repeat buyers.

It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.

#7: Failing to track home-related expenses

If the IRS comes a-knockin’, don’t be scrambling to compile your records. Many people forget to track home office and home maintenance and repair expenses, says Meighan. File away documents as you go. For example, save each manufacturer's certification statement for energy tax credits, insurance company statements for PMI, and lender or government statements to confirm property taxes paid.

#8: Forgetting to keep track of capital gains

If you sold your main home last year, don’t forget to pay capital gains taxes on any profit. However, you can exclude $250,000 (or $500,000 if you’re a married couple) of any profits from taxes. So if you bought a home for $100,000 and sold it for $400,000, your capital gains are $300,000. If you’re single, you owe taxes on $50,000 of gains. However, there are minimum time limits for holding property to take advantage of the exclusions, and other details. Consult IRS Publication 523.

#9: Filing incorrectly for energy tax credits

If you made any eligible improvement, fill out Form 5695. Part I, which covers the 30%/$1,500 credit for such items as insulation and windows, is fairly straightforward. But Part II, which covers the 30%/no-limit items such as geothermal heat pumps, can be incredibly complex and involves crosschecking with half a dozen other IRS forms. Read the instructions carefully.

#10: Claiming too much for the mortgage interest tax deduction

You can deduct mortgage interest only up to $1 million of mortgage debt, says Meighan. If you have $1.2 million in mortgage debt, for example, deduct only the mortgage interest attributable to the first $1 million.

This article provides general information about tax laws and consequences, but shouldn't be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.

Happy Saint Patrick's Day