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Buying or selling a home? We've got home search tips, staging advice, tips on where to put your renovation dollars and more information and advice.

Need to get another mortgage and still don't understand the process? Always wanted to understand escrow? Mortgage broker/real estate broker Chuck Tebbetts makes it all understandable.

Always wanted to be a real estate investor? Jean Tebbetts will show you how to keep your property rented for top dollar while controlling expenses.

San Diego Market Trends

San Diego Market Trends

RENTS RISING. Rents in San Diego county in general are rising, according to Zillow in their February report, released last week. San Diego Metro rents in February increased 0.4% from January and 4.3% from last February. Chula Vista, Oceanside, Escondido, and El Cajon rose similarly. Highest annual increases were Encinitas (5.3%, Ramona (5.1%), Lemon Grove (5.1%), National City (4.7%), and Valley Center (4.6%). Lowest were Coronado (-1.8%), Del Mar (0), Solana Beach (0.2% Bonsall (0.6%) and Borrego Springs (1%). The average of rents for San Diego Metro was $2,643. Rent asked by owners/property managers averaged $2,700. The national average rent is $1,472.

Rising rents make owning a home more attractive, as real estate values are dropping. Read below.

HOME VALUES DROPPING. Home values in San Diego county dropped 0.2% from January, 0.4% from the previous quarter, and rose only 2.1% year over year, according to the same Zillow report. The recovery from the large drop late last year is nonexistent. Zillow’s estimated change for home values in San Diego county is -0.2% over the next 12 months, which is far lower than their forecast several months ago. National estimate is +7.5% Current average value of homes for San Diego county is $590,500. National average is $226,300.

Flat home appreciation makes folks want to wait to buy. Risk of higher rates could change that. Read below.

RATES STAY LOW; COULD RISE. Mortgage rates remain at 14 month lows, according to Mortgage News Daily. However, the outlook for the rest of the year is murky at best. The collapse of the stock market late last year and the Fed stating they would take a “patient approach” helped lower the rates from the highest rates in 7 years in October/November. But future rates depend largely on economic data, fiscal policies, and the stock market, all of which are hard to predict. The worse they are, the better for lower rates. What the Fed says on Wednesday could give us a clue for the immediate future.

It’s going to be a bumpy road for rates this year. Improving economy, volatile stock market, China, Federal Reserve, inflation, Brexit, just to name a few. Buckle up, Buttercup!

Relevant articles:

https://www.zillow.com/research/local-market-reports/

http://www.mortgagenewsdaily.com/consumer_rates/904784.aspx

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San Diego sales much lower in January, while prices barely rise


Even though the U.S. economy was robust, unemployment was low, and wages grew, home sales across the nation began to drop late last year. Reasons given were high prices and a number of interest rate hikes by the Federal Reserve.

Higher rates made houses less affordable, so the Fed took a “patient approach” to further rate changes, and not increase rates during January 2019.
This from the San Diego Association of Realtors for January:

“Closed Sales decreased 13.3 percent for Detached homes and 26.2 percent for Attached homes. Pending Sales decreased 2.6 percent for Detached homes and 5.8 percent for Attached homes. Inventory increased 28.3 percent for Detached homes and 45.2 percent for Attached homes.
The Median Sales Price was up 3.4 percent to $615,000 for Detached homes and 2.5 percent to $415,000 for Attached homes. Days on Market increased 13.5 percent for Detached homes and 28.6 percent for Attached homes. Supply increased 41.2 percent for Detached homes and 61.5 percent for Attached homes.”

So, the number of sales in January plunged, while the number of listings increased. And how long the listings were on the market increased as well.

What that means is, there are now more homes for sale than in the past, making it a more buyer friendly environment. More inventory means lower prices, so more buyers will qualify.

If home prices increase about as fast as wages do, and the Fed keeps being patient with interest rates, homes will be more affordable, and home buyers can more confident about buying a home.

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Are Seniors keeping Millennials from entering the housing market?

Millennials are buying fewer homes than in times past. This fact has caused quite a ruckus, with numerous pundits looking for answers. Last week, Freddie Mac joined the fray, blaming it all in large part on seniors.

Is that true?

Freddie Mac has been writing about housing shortages across the US for years. In its most recent INSIGHT article, it dealt with who or what is affected the most by the shortage. Of the 2.5 million house shortfall in 2018 alone, about 1.6 million, or 64% is due to seniors deciding to “age in place”, and stay in the homes they’ve had for years.

Seniors can stay in their homes mainly because of better health, and higher levels of education, which make it possible for them to work longer. That, and construction of new homes failing to meet demand, are causing home prices to increase more rapidly, making it more attractive for millennials to rent, and harder for them to qualify to buy. It’s also causing rents to rise.

The impact of 1.6 million fewer homes on the market due to seniors is that 3.4 million fewer millennials can afford home ownership, according to the Urban Institute.

Despite the cooling off of the housing market in the fourth quarter of 2018, Freddie Mac forecasts that home prices will increase by 4.1% in 2019 and 2.7% in 2020.

Relevant article: http://www.freddiemac.com/research/pdf/201901-Insight-02.pdf

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Did Trump’s New Tax Plan Make Buying a Home Unattractive?

Trump Tax Plan

The Tax Cuts and Jobs Act will have its first effect on tax returns this tax season with the 2018 returns.

Of large concern to many is whether homeowners can write off their mortgage interest under the new tax law.

 For people considering buying a home, there have been numerous articles saying that the mortgage interest deduction is effectively gone. Is that true?

  1. It’s true that, for the majority of states in the USA, the new standard deduction will be more than mortgage interest and property taxes, and other itemized deductions in most cases, by a lot. For example, the average home value in 32 states is less than $300,000.  But for coastal states, and California in particular, the majority of homeowners buying in 2018 and later will almost certainly be itemizing their deductions. As a matter of fact, a single person buying a home today would pass the $12,000 standard deduction buying a condo for $250,000, with a $200,000 loan. Married couples would surpass $24,000 buying a $500,000 home with a $400,000 loan. And that’s just with mortgage interest and property taxes, excluding any other eligible deductions.
  2. While most will itemize, the new standard deduction is nearly double what it was, so the difference between the standard deduction is and your itemized deductions will be less. In the examples above, the single person’s itemized deductions would be $5,650 lower ($12,000  – $6,350) than they were with the old tax code. Double that for the married couple. So it does have some impact. However, because the new standard deduction is bigger, it means you’ll be getting a bigger write off, whether it’s mortgage interest or not. Consult your tax professional to get the total picture.
  3. However, while no one can predict the future, most the volatility of real estate values has ended since Dodd-Frank Wall Street Reform Act was enacted in 2010. The huge housing bubble caused by the collapse of the sub-prime industry won’t be repeated because of that legislation; a large segment of the population that was able to buy homes with bad credit and little or nothing down is gone. So home buyers can, once again, count on a consistent upward trend in real estate values over the long haul.
  4. Buying a home and paying down the loan as the value goes up remains the best way to buy a bigger home as your family grows, using the equity accrued, and, when the kids are gone, downsize and own a home with a small mortgage or no mortgage at all when you retire.

Relevant articles:

Kiplinger: https://www.kiplinger.com/article/real-estate/T010-C000-S002-where-home-prices-are-headed-in-2018.html

Credit Karma: https://www.creditkarma.com/tax/i/mortgage-interest-deduction-cap/

Zillow: https://www.zillow.com/san-diego-ca/home-values/

Investopedia: https://www.investopedia.com/terms/d/dodd-frank-financial-regulatory-reform-bill.asp

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3 Methods to Organize Your Home and Life

We all have some level of attachment to our things. However, many of us feel as though we’re drowning in stuff. Fortunately, there’s been a growing movement toward minimalism, and there are numerous methods that can help. Below are three decluttering philosophies to help you clear out and clean up your home and life.

  1. Feng Shui — The driving principle behind this Eastern philosophy is to create harmony and balance between an individual and his or her environment. Good feng shui invites prosperity and brings an overall sense of well-being into your space. From the front door to the bathroom, small changes to color, decor and furniture arrangement are believed to promote health, wealth, happiness and good energy.
  2. The KonMari Method — Famed Japanese organizer Marie Kondo promises that you can drastically improve your life by tidying up. In her book, “The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing,” she explains a two-step approach. First, you take all of your possessions and lay them out categorically (clothes first and sentimental pieces last). Then, you hold each item in your hand and decide whether or not it brings you joy. If it doesn’t, you let it go.
  3. The 90/90 Rule (Minimalism) — This home organization concept also relies on a two-part process. When implementing the 90/90 rule, assess each belonging based on two simple questions: Have I used it within the last 90 days, and will I use it in the next 90 days? If not, it’s time to say goodbye.

Ultimately, there’s no shortage of ways to declutter and simplify your life. The important thing is to be willing to let go of the items that no longer serve you and make way for new experiences.

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Frequently Asked Mortgage Questions

Does the term “amortization” leave you perplexed? Are you unsure how preapproval differs from prequalification? If so, you’re not alone. Here are some mortgage basics to help you become more familiar with the process.

What’s the difference between prequalification and preapproval?
Getting prequalified is often the first step when searching for a home. You supply basic financial information, such as your income, assets and debts, and the lender then provides a preliminary estimate of the amount for which you may qualify.

Preapproval involves an in-depth look at your finances and usually requires an application fee, but this process brings you closer to determining your potential interest rate and monthly payment. Being preapproved also puts you in a better position in a competitive market because it shows you have your finances in order.

What is amortization?
Amortization is the process of paying off a home loan’s principal and interest over time within a consistent, planned repayment schedule. In the beginning, a large portion of each payment goes toward interest, but as the loan matures, larger amounts go toward paying down the principal.

What types of loans are there?
Fixed and adjustable rate mortgages operate as their respective names imply. The former has a rate that stays the same for the life of the loan. The latter’s rate may start low, but it can increase after a predetermined period or depending on market conditions.

Government-guaranteed mortgages include FHA and VA loans. These are usually easier to qualify for and typically require lower down payments than other types of loans.

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Prepare your home for emergencies

Emergency situations such as fire, extreme weather and power outages can happen without warning. By taking the time to prepare for a possible disaster now, you and your family will be equipped to handle a crisis if one ever occurs.

Fire Escape Route and Meeting Spot
It can take a mere five minutes for a fire to engulf your entire home. This is one reason having an escape plan is so important. Include at least two exit routes in your plan in case one is blocked, and designate a safe location for everyone in your household to meet. Identifying a secondary location outside your neighborhood is good to have in the event it’s not safe to return or you’re asked to evacuate.

List of Emergency Contacts
Make laminated cards with a list of important phone numbers for each family member. This might include contact information for the local authorities and emergency services as well as your nearest relatives.

Home Safety Items
Be prepared in case an emergency does occur by having these home safety items:

  • Fire Extinguisher — Keep one on each floor, and check them annually to make sure they’re functioning properly.
  • First-Aid Kit — Store it in a central location, such as the kitchen, and make sure everyone knows where it is.
  • Smoke and Carbon Monoxide Detectors — Install detectors in each room and test them once a month. Use long-life lithium batteries to cut back on replacements.
  • Food and Water — Put together a three-day supply of nonperishable foods and at least three gallons of water for each member of your household.

There’s often very little time to react in a crisis. But with a little planning and prep work, you can be well-equipped and ready to respond accordingly.

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Fastest Growing American Cities

Cities all over the United States are experiencing unprecedented population swells. Fueled by a general migration to urban areas, these boomtowns are supported by steady job growth and thriving home markets. Here are four standouts whose numbers are on the rise.

Seattle-Tacoma
A healthy tech industry seems to be tempering the rain in the Pacific Northwest. The promise of employment in the Seattle-Tacoma area is strong and home price growth is even more robust, and together they help make this soggy city one of America’s fastest-growing regions.

Cape Coral-Fort Myers
Occupying the peak spot in Forbes’ 2017 list of America’s fastest-growing regions is Cape Coral-Fort Myers, Florida. This area is especially popular among retirees. With the near year-round sunshine, exceedingly low tax rates and virtually nonexistent crime, it’s not hard to see why.

Dallas-Fort Worth
In terms of projected job growth, the DFW area is proving everything is bigger in Texas. The housing market is also solid, which may explain why four out of five of the fastest-growing southern cities are in the Lone Star State. Perhaps not surprisingly, two of them are Dallas-Fort Worth suburbs.

Denver
Farther west, Denver takes the prize for highest home price growth. The strong economy and seasonal amenities make this Colorado capital a go-to for savvy real estate investors.

Of course, thanks to a tech economy that’s growing at breakneck speeds, these four cities aren’t the only ones undergoing serious expansion. As tech industries continue to advance, expect to see more parts of the country experience new growth and development.

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Save Energy and Money This Fall

October isn’t just about pumpkin spice lattes and Halloween celebrations; it’s also Energy Awareness Month. Find out how you can reduce your household’s energy consumption this fall while preparing for the seasons ahead.

Reducing Home Energy Use
The average U.S. household consumes tens of thousands of kilowatt hours of electricity each year, and much of it is completely unnecessary. Making changes as simple as adding a few energy-efficient appliances and turning off gadgets when you’re not using them can save you a significant amount of money while also reducing your carbon footprint.

Don’t fret if new Energy Star-labeled appliances aren’t in the budget. Instead, try working in a few small changes from this Home Energy Checklist to help you save throughout the year. Here are a few more ideas:

  • Unplug electronics, gaming consoles and chargers when not in use.
  • Insulate your water heater with a blanket and turn the temperature down to at least 120 degrees.
  • Replace bulbs with LED or CFL bulbs and turn them off anytime you leave a room.
  • Schedule an energy audit and replace your thermostat with a programmable unit.

Prepping Your Home for the Cold
During cooler months you can save additional money and energy with simple, inexpensive fixes like:

  • Using insulating drapes to help diffuse winter chill. Just make sure to open any south-facing drapes to take advantage of the sun’s natural heating capabilities.
  • Finding and sealing air leaks. Check your windows, doors and pipes, and use weatherstripping or caulk to stop cool air from seeping in.
  • Closing fireplace dampers when not in use. You can also have the entire flume completely sealed off if you use your home’s heating system exclusively.

Reducing your energy consumption not only makes a positive contribution to our planet, it also leaves money on the table for fun fall pastimes. With just a few of these small changes, you can get more from your energy budget.

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5 Mistakes New Homebuilders Often Make

Designing your own home can be exciting, but it’s a lot more work than buying an existing house. With so many moving pieces involved, knowing what works and what doesn’t is key. Protect your home’s long-term value by sidestepping these five avoidable pitfalls of building a new home.

1. Forgetting About Storage Space
From seasonal items to extra bedding, everything requires a temporary home when not in use. For that, you’ll need plenty of storage space. Some simple solutions might include a few extra closets, a sizeable garage space or built-in cabinets and shelving.

2. Skimping on Materials
Anything worth doing is worth doing right, and new home construction is no exception. Even if you’re watching your pennies, try not to scrimp on quality, especially when it comes to important things like flooring. The materials you choose can have a huge impact on your home’s overall value.

3. Overlooking Energy Efficiency
For an energy-efficient home design, make sure to use earth- and wallet-friendly features like well-sealed windows and green materials during the build. These are your strongest assets in keeping heating and cooling costs down long-term.

4. Losing Sight of Current and Future Needs
Design for your current needs, but keep the future in mind, too. For instance, do you plan to have children? Are you going to pursue a specific hobby, such as woodworking, when you retire? Whatever the future holds, work with your builder to create a dream home that will support your evolving needs.

5. Letting Someone Else Decide
You don’t need to keep up with the Joneses to have an ideal space. Only you and your family know what you need most in a new home, so choose and upgrade according to your preferences alone.

In the end, building your ideal home is about identifying both what you want and what you don’t want. Choose wisely so your new abode will be comfortable, efficient and attractive to future buyers.

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