Top 7 Reasons Why its Better to Buy then Rent in 2009

1. Buying doesn’t always cost much more than renting. According to a recent study by the Associated Press, the gap between monthly mortgage payments on a median-priced home and the median rent has decreased from $777 to just $221 in the last three years.

2. Affordability is at an all-time high. In markets across the nation, including the inland areas of California, prices have declined by nearly 40 percent.

3. Buyers can take advantage of tax benefits of home ownership. Perhaps the biggest tax break is reflected in the house payment homeowners make each month. For most, the bulk of that payment goes towards interest. All interest is deductible, unless the is more than $1 million. Property taxes are also deductible.

4. Buyers can purchase homes with little or no down payment. Qualified first-time buyers may be eligible for loans insured by the Veterans Administration (VA), which does not require a down payment. Another loan product gaining popularity are those insured by the Federal Housing Administration (FHA), which require only a down payment of 3.5 percent.

5. The Tax Credit. First time home buyers—defined as anyone who hasn’t owned a home in the last three years--are entitled to an $8,000 tax credit. (Ownership of a vacation property or a rental property doesn’t disqualify home buyers from this program.) No repayment is required for homes sold after 36 months of occupancy and ownership.

6. Mortgage rates are at all-time lows. Take advantage of low 30 year fixed rates. We haven’t seen rates this low in the last 3 decades!

7. It’s yours! It feels good to own your own home. After all, you can paint it any color you want, make cool improvements, and plant a little garden.

FHA Loans Set New Record

The Federal Housing Administration guaranteed 186,000 mortgages in June, a record number in its 75-year history.

FHA loans are popular because they are one of the few sources of low downpayment mortgages.

In the last year, they have accounted for about 46 percent of all mortgage applications.Along with increasing numbers of FHA activity comes a rising number of delinquent loans, with the level of FHA mortgages in some stage of foreclosure reaching 7.4 percent in May.

Source: The Wall Street Journal, Nick Timiraos (07/20/2009)

Investors Drive Foreclosure Prices Up

Home shoppers in parts of the country with lots of foreclosures are finding it increasingly difficult to buy. Investors are bidding up prices thousands above the original asking price.

Federal legislation slowing the number of foreclosures is adding to the problem by reducing the number of homes on the market. For instance, in Las Vegas, one of the areas where the bidding problem is greatest, home inventories are down 10 percent since March, according to the Las Vegas Association of REALTORS®.

When a bidding war erupts, the problem is particularly difficult for traditional buyers because investors are usually cash purchasers. They can bid up a property without concern whether the appraisal will prevent them from getting a loan.

Experts say the problem is not unlike the situation at the height of the housing bubble."This market is about as abnormal as the hypermarket that we came out of a few years ago," says Jay Butler, director of the Realty Studies program at Arizona State University.

Source: The Associated Press, Jonathan J. Cooper (07/20/2009)

Coronado Best Buys List, July 23

Greetings!

There are 25 properties currently in pending on Coronado Island right now. Again, things are selling quickly in the million-dollar and below range for detached homes. For example, one two-bedroom home at 325 9th priced at $960K had five offers in two days, and went into escrow 5 days after hitting the market. Don’t let these great deals pass you buy…sign up for our ASAP property emails, and you’ll find out the second something comes on the market—just as soon (if not sooner) then other agents!

Here's the current Best Buys List:

$485,000 730 E Condo, 2/2, a charming condo with nice upgrades.$550,000--553 F Avenue, condo, 3 bedroom, 3 bathroom. Wow!

$747,000—835 D #2, Condo, 3/3. Roomy and upgraded condo in the heart of the Village. High ceilings. Private location in the complex. Deck / yard area behind home. 3 bedroom home. More than 1700 square feet!! Granite countertops, stainless appliances.

$745,000—807 8th Street, condo, 3/3. Corner unit town home. Great location. Spacious 3 bdrm/2.5 ba floor plan with over 1,416 sqft of interior living space. Abundant windows and spacious rooms promote a bright and airy feeling throughout the entire home. Laundry hook ups in unit. One car garage plus additional parking space provided. Only six units in this private and well maintained complex. GIANT sundeck, perfect for entertaining!

$775,000-$874,876—242 C Avenue, Condo, 3/2. PRICE DROP! ONE OF CORONADO'S TOP SQUARE FOOTAGE VALUES! SELLERS PAID $935,000 IN APRIL 2005! BEAUTIFUL 3 BEDROOM 2BATH, SINGLE LEVEL, 1805SF PENTHOUSE ON QUIET, WOODED STREET JUST 2 BLOCKS TO BAY & FERRY LANDING! SIERRA QUIKSTEP BRAZILIAN CHERRY LAMINATE FLOORING. PALATIAL MASTER SUITE. FIREPLACE. 2 BALCONIES.

$824,900--78 Kingston, condo, 2/2. Priced reduced from $875,000. BRIGHT ONE LEVEL END UNIT WHICH OVERLOOKS BEAUTIFUL BAY CHANNEL WITH BOAT DOCK FOR UP TO 32' BOAT.. DINING ROOM WITH FULL WINDOWS & FIREPLACE IN LIVING ROOM NICE LIGHT EATING AREA NEXT TO KITCHEN WHICH HAS SLIDING DOOR TO DECK AND BACK STAIRS DOWN TO DOCK. WASHER & DRYER INSIDE. LARGE DEN OFF ENTRY COULD BE USED FOR 3RD BEDROOM W/O CLOSET. GARAGE & CARPORT.

$850,000-$950,000--438 D Avenue, House, 3/3. Brand new construction! Open floorplan with 3 bedrooms, 3 bathrooms and a finished attic. Gourmet kitchen includes a Viking range, cherry hardwood floors, open living room with fireplace, 2 car garage, laundry closet and more! Close proximity to Coronado Schools, Parks, Library and more. This property is approved for a VA loan.

$895,000—649 B, house, 2/1. Price Drop from $995K! This charming Tudor-style home will NOT last. In the heart of the Village on one of the nicest blocks in town. Check with city to build an addition.

$895,000--26 Half Moon Bend, house, 3/3. Beautifully remodeled Coronado Cays Home!! Great 3 bedroom, 2.5 bathroom upgraded in Jamaica Village.1/2 bathroom was added stylish bathroom sink, beautiful kitchen spacious bedrooms....***GREAT INVESTMENT OPPORTUNITY...Tenant occupied until April 2010. Great tenant Rent $3000/month....Jamaica Village is a wonderful neighborhood with Private Beach Club with pool, and opportunity to rent Boat slip.

$995,000—842 D, House, 3/2. TWO ON ONE -GREAT PRICE AND 2 REALLY NICE UNITS. Large lot approx. 3400sqft with FRONT HOUSE IS A CHARMING 2BR 1 BA HOME WITH BOTH A FRONT AND BACK YARD, FIREPLACE, HARDWOOD FLOORS COVED CEILING...THEN A SEPERATE 1 LARGE BEDROOM STUDIO, UPDATED AND CUTE WITH ITS OWN PRIVATE YARD AREA.GREAT LOCATION WALK TO EVERYTHING..SHOPS, RESTAURANTS AND BEACH..ALSO INCLUDED IN SALES PRICE ARE CONCEPTUAL PLANS FOR REMOLDELING OR REBUILDING SEPARATE UNITS...WOW.

$1,065,000—425 E, House, 3/3. Lender approved short sale at $1,050,000 on 5/22/09--Buyer lost patience for short sale process. Great opportunity for your buyer to step in and take advantage of this great buy in the Village. Fantastic home over 2000 square feet.

$1,395,000--710 I Avenue, house, 3/3. This quaint California Craftsman home located in the "heart of the Village" boasts everything wonderful about living in Coronado. Everything is right at your fingertips; bike or walk to shops and restaurants and take in everything Coronado has to offer. Then come home to your quiet place in the beautiful tree lined neighborhood. Enjoy beautiful hardwood floors throughout the living space. The private master suite, located on the second floor, provides intimate space, a large master bath, spacious closet.

$1,450,000-1,535,000—641 A Avenue, house, 4/3. Major price reduction - submit all offers. Beautifully designed, built in 2006. Craftsman Design by Dorothy Howard, AIA. This wonderful home offers 4 BR's each w/french doors leading to private balconies. Kitchen features all Viking appliances & opens to an inviting Breakfast room & Family Room. Classic formal entry leads to LR & separate DR. Professionally landscaped with stone patios & cozy seating areas. Relaxing & private. Oversized Two Car Garage with an abundance of storage. More than 2,400 square feet!

$1,685,000--49 Green Turtle, house, 3 bed, 2 bath—least expensive detached home in the Cays with its own dock—for TWO 45 foot yachts!

$1,750,000-$1,950,000--900 2nd Street, house, 4/3. Redesigned from the ground up in 2006 by local firm The Jackman Group, this home exudes classic style with modern amenities and an island appeal. Features including marble countertops in the kitchen and baths, hardwood floors, high end appliances, custom cabinets and millwork throughout. Bright floor plan with large balconies, porch and BBQ area.

We update this list every two weeks based on price, location, square footage, and condition of ALL homes currently on the Coronado MLS. To subscribe to the Coronado Best Buys List and get pictures and additional information, please email christinevt@prusd.com with BEST BUYS in the subject line.

Housing Experts: Now is the Perfect Time to Buy

Now is the time to buy, but that opportunity may be slipping away.

For people who have a job and money, a dream house is within reach, writes Marc Roth, founder of Home Warranty of America and a columnist for BusinessWeek. He points out that mortgage rates remain low, prices are still at historic lows, and the government is offering incentives for first-time homebuyers.He also adds that the inventory of homes to buy is still large, but it is shrinking.

According to the NATIONAL ASSOCIATION OF REALTORS®, the housing inventory peaked in November 2008 at an 11-month supply. At the end of May 2009, it had fallen to a 9.6-month supply.Roth says anyone who dallies will miss a good opportunity to buy a first home at a terrific price or go shopping for a move-up property that is a great buy.

Source: BusinessWeek.com, Marc Roth (11/17/2009)

California Home Prices Rise in June

California’s median home prices rose 7 percent in June compared to May, according to MDA DataQuick, a real estate research firm. The statewide median price increased to $246,000 from $230,000, triggered by an increase in sales of higher-priced homes.

"We're just now seeing the beginnings of more normal mortgage lending patterns," DataQuick President John Walsh says. "There's still a long way to go, but it looks like the worst of the grind is over."

DataQuick also pointed out that foreclosures accounted for 46 percent of sales, the first month since August 2008 that foreclosure sales were less than 50 percent of the total.

Source: The Associated Press, Jacob Adelman (07/16/2009)

Mortgage Rates Fall Again

Rates on 30-year fixed mortgages fell to 5.14 percent for the week ended July 16, down from 5.20 percent a week before and 6.26 percent a year earlier, Freddie Mac reports.

Interest on fixed home loans has fallen in four of the past five weeks, and Freddie Mac economist Frank Nothaft says rate activity during that time has lowered the monthly payment on a $200,000 loan by $56.

Here’s a look at how other mortgage rates performed this week:
-15-year fixed loans fell to 4.63 percent from 4.69 percent.
-One-year adjustable-rate mortgages fell to 4.76 percent from 4.82 percent.
-Five-year hybrid ARMs bumped up a notch to 4.83 percent from 4.82 percent.

Money Magazine: How to Pick the Best Place to Live

Money Magazine ranks several important factors in picking the "best place to live" within a particular metropolitan area. For example, if you are buying in San Diego, what part of SD would be the best investment?

Here are some things to consider.

Proximity to the city. When home values were soaring, many buyers could afford houses only in the exurbs. But grueling commutes and high gas bills are a drag - which helps explain why prices of homes more than 40 miles outside city centers have generally dropped the most, says Ken Shuman of real estate site Trulia.com. Take this example in the Bay area: homes in Antioch (45 miles from San Francisco) fell 37% in the past 12 months; those in Walnut Creek (25 miles away) fell 18%.

Great schools. Parents will do just about anything to enhance Junior's college prospects. That's why home prices in towns with excellent public schools generally hold up best during downturns, according to a 2008 Trulia.com study - and why you should favor them even if you have no rugrats of your own.

Strict limits on new construction. Towns where zoning regulations made it tough to build have seen much smaller price drops than towns that had huge building booms in recent years. "Prices are more likely to go higher if you can't expand supply," explains Daniel McCue, research analyst at the Harvard University Joint Center for Housing Studies. Another good sign: The town nestles against a barrier, such as a large lake or protected wetland, that limits expansion.

Plenty of commerce. Towns with stores, banks, and movie theaters - plus some large white-collar employers - are a better bet than those that are nearly all residential. People like to live near these services and jobs, and they give a town a stronger tax base to fund things like police and snowplows.

Lots of flower boxes. And manicured lawns, carefully tended parks, and well-maintained streets. "The value of one house depends on the surrounding neighborhood and properties," explains Wheaton. Conversely, towns with overgrown parks and noticeably vacant homes generally aren't great bets.

Click here for a link to the full article.

The Appeal of only 3.5% Down: FHA Loans Increase in Popularity

A recent survey by Zillow.com found that more than one-third of buyers do not plan to make down payments larger than 10 percent, while nearly one-fifth do not plan to issue a down payment. Since loans insured by the Federal Housing Administration (FHA) only require a 3.5 percent down payment, these loans have risen in popularity among buyers.

Last month, the share of applications for government-insured mortgages rose to its highest level since November 1990, accounting for nearly 36 percent of all mortgage applications, according to the Mortgage Bankers Association. In 2005, the share of government-insured mortgages stood at less than 6 percent.

Click here for more.

First Time Buyers: Better Hurry for $8,000 Tax Credit

It’s time to remind first-time home buyers that in order to qualify for the government’s $8,000 gift in the form of a tax credit, the deal must close by Dec. 1.

Buyers should have a purchase contract signed by early October, so they have 45 to 60 days to arrange financing and safely close the deal.

CNN Money Magazine: Coronado the Third Best Place in the Nation for the Rich and Single!

In its current edition, Money Magazine lists 25 towns and cities that are the best for those "seeking a sugar daddy (or sugar mama)." Says the magazine, "Follow the money to these towns and cities, where affluent young professionals are abundant." Third on the list of 25 is Coronado. A full 36.1% of residents are single. Median family income is $106,817. "Coronado is the perfect place for hanging out at the beach. Bond with fellow commuters on the ferry to downtown San Diego," effervesces the magazine, touting the "trendy bars and clubs in San Diego's Gaslamp district." Hermosa Beach is listed first and Arlington, Virginia, second.

Click here for more.

Tips for Parents Buying Homes for Children

With home prices low, now could be a good time for parents to give their children a home or even an investment property.Here are some suggestions for managing the tax consequences from Mark Luscombe, tax analyst with Wolters Kluwer.

Give a cash gift. Individuals are allowed to gift up to $13,000 per person in a given year without incurring gift tax. That means a couple could give their offspring and spouse $52,000 in a single year to go toward a down payment.

Lend money. The government requires that family members meet or exceed minimum loan rates to avoid having the loan be considered a gift. The rates are currently low. One way to handle this is for parent to use the $52,000 gift exclusion to forgive both interest and principal.

Use a trust. Set up a qualified personal residence trust, or QPRT. You’ll need an attorney to handle this transaction, but in a nutshell, parents put the home they want to give their children into a trust. At the end of a pre-set term, the home passes to the children with no taxes due.

Source: The Wall Street Journal, Shelly Banjo (06/25/2009)

Coronado Best Buys List for July 8, 2009

Greetings!

There are 20 properties currently in pending on Coronado Island right now. Action is brisk in the million dollar and below range, while anything above a million has been lingering a little longer. But there are exceptions to that rule...we’ve seen a few good deals sneak on the market priced so low that they are gone in just a few days!

Here is the current BEST BUY LIST:

$485,000 730 E Condo, 2/2, a charming condo with nice upgrades.$550,000--553 F Avenue, condo, 3 bedroom, 3 bathroom. Wow!

-$747,000—835 D #2, Condo, 3/3. Roomy and upgraded condo in the heart of the Village. High ceilings. Private location in the complex. Deck / yard area behind home. 3 bedroom home. More than 1700 square feet!! Granite countertops, stainless appliances.

$760,000. 60 Mardi Gras, House, 2/3. Least expensive detached home in the prestigious Coronado Cays. This home has one of the best locations in the Mardi Gras Village. The entry way is not shared with neighbour and is located across the street from the clubhouse with a common pool, hot tub & tennis court. It features: all hardwood floors throughout the 1st floor and stairway and has an air conditioner. There is a full bath on the first floor so the den/office can be converted into a 3rd bedroom with it's own full bath.

$824,900--78 Kingston, condo, 2/2. Priced reduced from $875,000. BRIGHT ONE LEVEL END UNIT WHICH OVERLOOKS BEAUTIFUL BAY CHANNEL WITH BOAT DOCK FOR UP TO 32' BOAT.. DINING ROOM WITH FULL WINDOWS & FIREPLACE IN LIVING ROOM NICE LIGHT EATING AREA NEXT TO KITCHEN WHICH HAS SLIDING DOOR TO DECK AND BACK STAIRS DOWN TO DOCK. WASHER & DRYER INSIDE. LARGE DEN OFF ENTRY COULD BE USED FOR 3RD BEDROOM W/O CLOSET. GARAGE & CARPORT.
$840,900—310 2nd Street, 3/2, House, BACK ON THE MARKET! Bank owned classic Spanish-styled home with bright exposures in prime location. Some remodeling w/original character preservation. Hardwood flooring, updated kitchen and fireplace in L/R. Bonus space over garage - zoning 1. Enclosed back yard.

$850,000-$950,000--438 D Avenue, House, 3/3. Brand new construction! Open floorplan with 3 bedrooms, 3 bathrooms and a finished attic. Gourmet kitchen includes a Viking range, cherry hardwood floors, open living room with fireplace, 2 car garage, laundry closet and more! Close proximity to Coronado Schools, Parks, Library and more. This property is approved for a VA loan.

$895,000—649 B, house, 2/1. Price Drop from $995K! This charming Tudor-style home will NOT last. In the heart of the Village on one of the nicest blocks in town. Check with city to build an addition.

$995,000—842 D, House, 3/2. TWO ON ONE -GREAT PRICE AND 2 REALLY NICE UNITS. Large lot approx. 3400sqft with FRONT HOUSE IS A CHARMING 2BR 1 BA HOME WITH BOTH A FRONT AND BACK YARD, FIREPLACE, HARDWOOD FLOORS COVED CEILING...THEN A SEPERATE 1 LARGE BEDROOM STUDIO, UPDATED AND CUTE WITH ITS OWN PRIVATE YARD AREA.GREAT LOCATION WALK TO EVERYTHING..SHOPS, RESTAURANTS AND BEACH..ALSO INCLUDED IN SALES PRICE ARE CONCEPTUAL PLANS FOR REMOLDELING OR REBUILDING SEPARATE UNITS...WOW.

$1,065,000—425 E, House, 3/3. Lender approved short sale at $1,050,000 on 5/22/09--Buyer lost patience for short sale process. Great opportunity for your buyer to step in and take advantage of this great buy in the Village. Fantastic home over 2000 square feet.
$1,450,000-1,535,000—641 A Avenue, house, 4/3. Major price reduction - submit all offers. Beautifully designed, built in 2006. Craftsman Design by Dorothy Howard, AIA. This wonderful home offers 4 BR's each w/french doors leading to private balconies. Kitchen features all Viking appliances & opens to an inviting Breakfast room & Family Room. Classic formal entry leads to LR & separate DR. Professionally landscaped with stone patios & cozy seating areas. Relaxing & private. Oversized Two Car Garage with an abundance of storage. More than 2,400 square feet!

-$1,685,000--49 Green Turtle, house, 3 bed, 2 bath—least expensive detached home in the Cays with its own dock—for TWO 45 foot yachts!

We update this list every two weeks based on price, location, square footage, and condition of ALL homes currently on the Coronado MLS. To subscribe to the Coronado Best Buys List and get pictures and additional information, please email christinevt@prusd.com with BEST BUYS in the subject line.

How's Your Zipcode Doing?

Check out this cool chart . Its updated by the San Diego Union-Tribune every month and shows how much homes are selling for in each zip code.

5 Ways to Expedite Your Home Sale

Selling a home quickly remains a challenge in many markets across the country. Here are ways to expedite a sale:

1. Cut the asking price to 10 percent to 15 percent below what comparable properties in the neighborhood are selling for.
2. Spruce up the outside. Update the landscaping. Power-wash the exterior and paint the door.
3. Appeal to first-time buyers. Advertise on younger consumers' favorite Web sites, such as Facebook and Twitter. Hire a photographer to shoot the house with a wide-angle lens so the rooms look bigger in online photos.
4. Price the house in the lower end of the range. A $299,000 house is in the high end of the $250,000 to $300,000 range but a $301,000 home is in the low-end of the $300,000 to $400,000 range.
5. Do what you can to make the deal close quickly. Be ready to move, offer to pay part of the closing costs, and/or throw in a year’s worth of association fees.

Source: Money Magazine, Beth Braverman (06/30/2009)

9 Reasons You Should Use a VA Loan to Buy Your Next Home

Here are some of the big reasons to use a VA loan:
1. Purchase with $0 Down. The VA loan is one of the only loan programs that allows the borrower to finance 100% of the home's value and purchase with $0 down. Compare this to 10-20% down for most conventional loans!
2. Lower Rates. Because the loan is backed by the government, banks do not require PMI (private mortgage insurance) which is an added monthly expense.
3. Lower Monthly Payment. In addition, interest rates for VA loans are significantly lower than conventional loans.
4. No Closing Costs. On a non-VA loan, you pay miscellaneous up-front fees, such as for processing or underwriting the loan. These fees can run around 3% of the loan amount—thousands of dollars. But on a VA loan, the seller frequently pays these fees for you.
5. Getting qualified is easier. Because the loan is backed by the government, banks have relaxed the strict lending rules for VA loan applicants.
6. No Prepay Penalty. For most non-VA loans (especially if you have less than stellar credit), if you pay the loan off early, which often happens if you refinance or sell the home, you pay a fee. Not with VA loans. You won't pay that fee.
7. Assumable Mortgage. With a VA loan, you can transfer your mortgage to someone else. They would assume your mortgage. This can help sell your home, especially if the interest rate on your mortgage is less than the current interest rate.
8. Additional Benefits for Disabled Veterans. If you are 10% disabled or more, the VA waives the funding fee. Also, if you have a permanent and 100% service connected disability, you may be eligible for a $50,000 grant for adapting a home to accommodate your disability.
9. There is a great selection of VA Approved Homes for Purchase! Home inventory around San Diego County is extremely high, giving you more choices and options.

Department of Veterans Affairs home loans -- VA loans for short -- are a popular option with home buyers. In the past fiscal year alone, the government has guaranteed 489,418 VA loans totaling more than $63 billion. Loans are open to active and former members of the armed forces who meet specific criteria for length and time of service, as well as discharge conditions. Reservists and National Guard members could be eligible if they served at least six years and received an honorable discharge. Veterans discharged for a service-related disability are potentially eligible, as are some members of the Public Health Service and foreign veterans who served with the Allied forces during World War II, according to the VA's field operations office.

Do you qualify? Contact christinevt@prusd.com to find out, and to get a list of VA-approved homes to purchase in Coronado! (Disclaimer: Please note that we are licensed real estate agents, not mortgage brokers, but we are happy to put you in contact with a well-qualified mortgage broker who quickly and accurately can assess your lending needs.)