May 2009 Housing Sales Report
Monterey County 2009 May Housing Sales Report
The real estate market for 2009 continues to maintain a very consistent pace over the past five months. The inventory of homes for sale has continued to fall from a high of 2431 in January to 1906 at the end of May. This is due in part to the decrease of foreclosed properties being released for sale by the financial institutions and a continuing increase in buyer demand. Total closed sales for May was 372 slightly down from the high of 391 in March. The average sales price in Monterey County at the end of May was $283,216. As anticipated, the average price continues to fall due to the foreclosure market setting the bench mark. Since February, the average sales price has declined 21%.
Favorable home prices in many parts of the state have led to an increase in affordability for first-time buyers. In the first quarter of 2009, affordability rose to 71 percent in Monterey County, enabling many to take advantage of first-time buyer programs and near record-low interest rates.
Median Sale Prices within Monterey County
Salinas Area $217,000
South County $163,000
North County $296,000
Marina, Seaside, Sand City, Del Rey Oaks $346,000
Monterey, Pacific Grove $544,000
Carmel Valley, Salinas/Monterey Highway $763,500
Carmel, Pebble Beach, South Coast $2,216,000
Loud and Clear – A summary of last night’s election results
Sometimes election results can be difficult to analyze, sometimes voters reactions in the voting booth leave political pundits scratching their collective heads. Voters have often approved two seemingly opposite propositions on one ballot. Yesterday was not one of those days. Even with last minute threats to lay off thousands by the Governor, the people of California voted loud and clear: cut spending, make changes.
Propositions 1A through 1E were soundly defeated by voters, leaving only 1F victorious. 1F’s passage fits perfectly into this voting pattern, as it had to do with limiting the Legislators access to pay increases in deficit years. It isn’t hard to define the voters’ message, they want Sacramento to make sacrifices in order to balance the budget, just like they have had to do in their own homes.
Across America the average family has made multiple sacrifices the last 18 months in order to make ends meet. Some decided to turn off their expensive HD cable, others agreed not to eat out and most cut back drastically on consumer spending. Very few have been unaffected by the recent financial situation. Even in what can be considered the lavish state of California, people are reeling with lost equity in homes, reduced access to credit and mounting bills because of layoffs. Financial analysts are saying the market will start to round the corner this year, but not soon enough for voters to approve California’s complicated and highly political budget plan on yesterday’s ballot.
The ballot measures were a result of budget negotiations done earlier this year between the Republican Governor and the Democratic majority party leaders. The Big 5, as they are often called, are made up of the Governor, the Assembly and Senate majority leaders and the minority party leaders from both houses. This is the group that put forward the series of propositions voters decided on last night. 1A-1E would have raised significant money for the General Fund, set aside dedicated education monies for the 2011-2012 fiscal year and generally changed how the budget process is done in California. Now, the Big 5 are headed back to the table to attempt a new budget under the June 30th deadline.
With the state now facing an estimated $21 billion dollar deficit, a lot of decisions have to be made. None of them will be politically easy. Whether or not the Governor makes good on his promise to lay off thousands of state employees is yet to be seen. State officials have indicated deep cuts will be necessary to education, public safety and social programs. Politicians do however, have one thing on their side as they head into negotiations, they know without a doubt what the voters have asked them to do.
MCAR / County Assessor Reassessment Overview & Scams PSA
The Monterey County Assessors Office, in conjunction with MCAR, put together a Public Service Announcement which highlights the overall taxation process in California and more specifically, the reassessment process in Monterey County.
Recently, homeowners throughout the state began receiving notices from companies that stated they were paying too much in property tax and that for a flat fee (~$175.00) a reassessment of the properties current value would be undertaken resulting in a lower property tax bill. While at first blush this might seem like a bargain, this very service is available to the public free of charge from the County Tax Assessors Office. The video is approximately 15 minutes in length and is a great resource for those who have questions on how this process works.
MCAR Legal Update with C.A.R’s Gov Hutchinson
Gov Hutchinson, Assistant General Counsel for the California Association of REALTORS® was the key-note speaker for last week’s MCAR Legal Update.
Gov presented on numerous legal topics affecting agents in the field and briefed the membership on new laws impacting transactions, homeownership and general real estate practices. For those unable to attend, a video of the presentation is now available for viewing (approx 2hr).
Gov Hutchinson is Assistant General Counsel and Staff Vice President of the CALIFORNIA ASSOCIATION OF REALTORS®. He has been with C.A.R. since 1985 and manages C.A.R.’s Member Legal Services Program in Los Angeles. Gov advises REALTORS® through the “Hotline” on all aspects of real estate law and trains and supervises other “Hotline” attorneys. Received his Bachelor’s degree in History from Princeton University and his Juris Doctorate from the University of Pennsylvania. Gov has written for CALIFORNIA REAL ESTATE magazine, co-authored C.A.R’s continuing education courses and is a master instructor for the Education Division of C.A.R. with certification from the Department of Real Estate. He also regularly speaks to Associations/Board of REALTORS®, affiliated trade associations, city and county bar associations and major real estate firms. He is also a member of the Real Property Law Sections of the American, California and Los Angeles County Bar Associations.
C.A.R.’s Joel Singer Presents on CA’s Market
Mr. Singer’s presentation highlights a number of national, statewide and local real estate issues that are shaping the dynamic market environment of today.
For those looking for a resource on what is currently happening in the industry and what things we might expect in the future, Joel’s presentation is a must read and is available for download here.
Homeowner Foreclosure Resources and Scams
It’s no secret that foreclosures have been on the rise for the past number of months. It’s unfortunate, though almost predictable, that with this escalation individuals looking to exploit the impacted homeowner emerge from almost every vantage point. So-called “foreclosure rescue companies” attest to the ability to rescue you from foreclosure but, in the end, are simply out for an ill-gotten-gain. Listed are a few things to watch out for with regard to these scams:
- Asks for money upfront prior to providing any type of service
- Instructs you not to contact your lender, lawyer, housing counselor, family, friends or others
- Asks for mortgage payments to be made directly to his or her company or a bank account set up by that person, rather than your lender
- Promises to stop the foreclosure process, no matter the circumstances
- Advises you to transfer your property deed or title to his or her company
- Encourages you to lease your house and buy it back over time
- Offers to buy your house for a fixed price that is not set by the housing market at the time of sale
If you have found yourself facing the unfortunate situation of falling behind on payments and are looking for answers, there are a variety of effective resources at your disposal. One of which is the Housing Resource Center of Monterey County (HRC), formerly known as “MOCHA”.
A non-profit corporation, HRC is a comprehensive one-stop center for homeownership opportunities, rental information, credit counseling services and housing education. HRC’s commitment to effective community service is unyielding and supported by an intelligent and capable staff. While numerous loans have been modified for Monterey County homeowners, attendance at an HRC Mortgage Foreclosure Prevention Workshop is required prior to private counseling services. For more information and to schedule a seat at an upcoming workshop, call HRC at (831) 424-9186.
Other legitimate resources:
- Dept. of Housing & Urban Development (HUD) www.hud.gov
- California Dept. of Real Estate (DRE) www.dre.ca.gov
Q & A with MCAR Attorney Paul Gullion
By Paul D. Gullion, Attorney at Law
QUESTION: I am selling my house, and it needs lots of repairs that I don’t want to pay for. So I am just going to sell my house “as-is” and not tell the buyer? That’s OK, right?
ANSWER: No, and I would like to explain why (remember, you are talking to a lawyer and we simply cannot say yes or no).
QUESTION: I knew this wouldn’t be simple, but tell me why?
ANSWER: Saying that you are selling your house in its “as-is” condition DOES NOT RELIEVE YOU OF YOUR OBLIGATION TO MAKE ALL LEGALLY REQUIRED DISCLOSURES ABOUT YOUR HOUSE TO POTENTIAL BUYERS. You still have to comply with these legal requirements whether you use the phrase “as-is” or not.
QUESTION: OK, so what are these disclosures?
ANSWER: There are two general disclosures, and a variety of specific disclosures. Let us focus on the general ones first. When you sell your house, you are required in almost all instances to complete a Transfer Disclosure Statement. This document requires you to disclose all you know about your house, and if you don’t fill it out completely and honestly you can get into trouble (in other words a lawsuit). The other general disclosure is mandated by Court cases, and it requires that you disclose all facts that would have a material influence on someone’s desire to buy your property, or an impact on the value of your house.
QUESTION: But if I tell buyers about my house, they may not want to buy it?
ANSWER: Remember something I learned a long time ago: everything about a house will eventually be known by the buyer, and it is better that the buyer knows before escrow closes than afterwards. If the buyer finds out the true condition of the house after escrow closes you could be sued, and pay lots of money to an attorney to defend you.
QUESTION: You mentioned specific disclosures. What are those?
ANSWER: California has laws that require the disclosure of such things as natural hazard zones, the existence of lead based paint and smoke detectors, water heating bracing, the availability of the Megan’s Law database, earthquake issues, the proximity of the house to military ordinance and industrial zoning. The list goes on. If your house is in a homeowners’ association, additional disclosures must be made.
QUESTION: Well, now that you have taken all of the fun out of selling my house, how do I go about making sure I have made all disclosures?
ANSWER: The best way to make sure that you comply with the disclosure requirements in California (and to make sure your sale goes as smoothly as possible) is to use a qualified real estate agent who can guide you through this and the other issues that arise in a real estate transaction.
QUESTION: Well does “as-is” mean anything in California?
ANSWER: “As-is” does still have legal meaning in a California real estate transaction. In California today, “as-is” means this: I will sell my house in its “as-is” condition after I have made all required disclosures, and by selling it “as-is” I am saying that I am not going to pay for any repairs to the house.
QUESTION: So I am telling the buyer: “Here is my house, here are my disclosures, and if anything needs repair you, the buyer, pay for it.”
ANSWER: Right, it becomes at that point a matter of negotiation with the buyer. Usually what happens is that the buyer will come back with a counter offer asking you to pay for some items. You are free to say no and move on, or to negotiate with the buyer so that you can sell your house.
In my next article, I want to talk about how these rules come into play when a lender sells a house it got through a foreclosure.
THE INFORMATION PRESENTED IN THIS ARTICLE IS BELIEVED TO BE ACCURATE AS OF THE DATE OF PUBLICATION. IT IS INTENDED TO PROVIDE GENERAL ANSWERS TO QUESTIONS, AND IS NOT INTENDED AS A SUBSTITUTE FOR INDIVIDUAL LEGAL ADVICE. ADVICE IN SPECIFIC SITUATIONS MAY DIFFER DEPENDING UPON A WIDE VARIETY OF FACTORS. THEREFORE, IF YOU HAVE SPECIFIC LEGAL QUESTIONS YOU SHOULD SEEK THE ADVICE OF AN ATTORNEY OF YOUR CHOICE.
Making Home Affordable Plan
On March 4, 2009, the Obama Administration released detailed guidelines for homeowners to help them determine if they qualify for the Administration’s new Making Home Affordable plan. This is a follow up to the Administration’s announcement on February 18 outlining their plan to stem the current tide of foreclosures and stabilize the nation’s housing markets.
The plan has two primary goals:
1.To help homeowners in existing Fannie Mae or Freddie Mac loans that are current on their mortgage payments to refinance and take advantage of today’s lower interest rates. Many of these homeowners are unable to refinance because of lost appreciation in their homes due to the continuing decline in home prices. These homeowners still have equity in their home, just not the necessary 20% to get a refinance. Under the Administration’s plan, Fannie and Freddie will be allowed to refinance qualified homeowners up to a 105 percent loan-to-value of the current value of the home.
2. To help homeowners who are at risk of foreclosure. The Administration is offering loan servicers and investors government assistance to help offset the cost of modifying qualified homeowners into affordable mortgages that will allow them to keep their homes. This may be done by reducing the mortgage interest rate, extending the term of the loan, principal forbearance, and/or principal cramdown. This program is voluntary and the servicers must agree to contracts with the Treasury to participate.
The following links are a GREAT resource for those interested in finding out if they would qualify or benefit from either one of the above-mentioned programs.
Click HERE to find out if you qualify for the Making Home Affordable Refinance
Click HERE to find out if you qualify for the Home Affordable Modification
Seaside Enforcing Business Lic. Ord.
In an effort to raise municipal revenue, the City of Seaside has begun enforcing it’s Business License Tax Ordinance. The ordinance (Municipal Code Sec. 5.04.260) levies a flat charge (and incremental escalator) on gross receipts for transactions which occur within the city limits of Seaside.
NOTE, this is not a new ordinance. This law was passed a number of years ago but was not enforced. The City is now requiring adherence to the code prior to issuance of a city report. I have heard from a number of agents who have attempted to pull a city report and were told that their brokers needed to pay for their license before being granted the requested documents. A breakdown of the business license tax structure is listed below. I am also including a link to the business license application.
Real Estate Broker:
Fee: $58.00 - $0 up to $25,000 or fraction thereof
PLUS $10.00 - for each additional $5,000 or fraction thereof in excess of $25,000.
Example:
Receipts: $0 - $25,000 = $58.00 Amount Due
Receipts: $25,001 - $30,000 = $58.00 (+$10) = $68.00
Click here to visit the Seaside Bus. Lic. page.
The Stimulus Package and Real Estate
The Stimulus Package and Real Estate
Last week the U.S. House of Representative passed H.R. 1, the Economic Recovery Package, by a 244 to 188 vote. The bill contains a number of issues critical to the real estate industry. One of the most important components included in the bill is the extension of the 2008 Fannie Mae, Freddie Mac and FHA loan limits through 2009. This extension would provide lenders the ability to fund borrowers of higher priced real estate without encumbering them with higher interest rates and fees typically associated with loans higher than the established limits.
The proposed legislation will also eliminate an existing payback requirement on the first-time homebuyer tax credit for qualified buyers who purchase a home between December 31, 2008 and July 1, of 2009.
The Senate is now considering its own version of the stimulus package. The California Association of REALTORS® (C.A.R.) in conjunction with the National Association of REALTORS® (N.A.R.) are working to ensure that language similar to that contained in the House bill is included in this version as well.
