North County Coastal Living

Life and living in San Diego's North County Coastal region.

Aug. 17, 2015

Mortgage Payments are More Affordable Than Ever With Rents at an All-Time High

Rents are at an all-time high for single-family homes, but monthly mortgage payments are more affordable now than they were before the housing bust, according to Zillow's affordability report for the second quarter of 2015.

Zillow found that renters nationwide can expect to spend 30.2 percent of their monthly income on rents in Q2 2015. In markets where single-family rental housing is in high demand, like Los Angeles, San Jose, Miami, and San Francisco, renters can expect to spend more than 40 percent of their monthly income on the rent—more than 10 percent higher than the national average for Q2.

Rent affordability worsened in 28 of the nation's 35 largest metros in the last year, according to Zillow chief economist Svenja Gudell. Rent affordability stayed the same in three metros and improved in just four of those 35 (Pittsburgh, Chicago, Minneapolis, and New York).

Conversely, homebuyers can expect to spend about 15.1 percent of their monthly income on a mortgage payment, according to Zillow's research. In the years immediately prior to the crisis in 2008, those who own a home could expect to spend about 21.3 percent of their monthly income on a mortgage payment. Purchase affordability improved in 14 of the top 35 metros in the last year, according to Gudell.

Why do monthly mortgage payments cost so much less than rents these days? According to Gudell, the answer lies with low mortgage rates. Mortgage rates could be as high as 6 percent (they are currently below 4 percent) and buyers in 265 out of 290 metros analyzed by Zillow could still expect to put less than 30 percent of their monthly income toward paying the mortgage, according to Zillow.

"(Rates) are currently hovering near all-time lows," Gudell said. "This helps keep monthly mortgage payments low. Renters can’t take advantage of mortgage financing each month. Additionally, while home values dropped steeply during the most recent recession and remain below their pre-recession peaks in most areas, rents have been on a slow, steady, upward climb for much of the past decade. Finally, income itself—while showing signs of picking up in recent months—isn’t growing sufficiently to keep pace with growth in rents and is growing far more slowly than it was prior to the recession."

With consumers spending an average of twice as much of their monthly income on rents as they are on mortgage payments, now is a good time to buy a home. High rents make it difficult to save for a down payment, however.

"There are good reasons to rent temporarily—when you move to a new city, for example—but from an affordability perspective, rents are crazy right now," Gudell said. "If you can possibly come up with a down payment, then it’s a good time to buy a home and start putting your money toward a mortgage."

Not only are some renters not able to save for a down payment on a mortgage, but some who are overdrawn are even cutting back on healthcare, according to Zillow.

"Looking forward, the picture doesn’t look bright for renters," Gudell said. "Rents will likely keep rising at roughly their current pace for at least the next few years, which will lead to a continued affordability crunch unless wage growth significantly improves."

http://dsnews.com/daily-dose/08-13-2015/mortgage-payments-are-more-affordable-than-ever-with-rents-at-an-all-time-high

Posted in Real Estate
Aug. 14, 2015

SOLD for $17 million in La Jolla, CA

The Foxhill estate in La Jolla, formerly owned by the Copley Publishing Family at 7007 Country Club Drive, was sold Aug. 6 for $17 million to Manchester Foxhill, LLC.

The property, listed by Greg Noonan & Associates, Berkshire Hathaway HomeServices California Properties was originally priced at $25 million in February 2015. The buyer was represented by Andy Nelson, president and CEO of Willis Allen Real Estate.

"Foxhill is a magnificent, unique jewel in La Jolla, with panoramic sea views and eight acres of vast lawns, orchards, rose and cutting gardens, and more. No one would even believe the treasure chest of luxuries found inside those gates," said Noonan. "It has been a tremendous honor to represent the property, the sales proceeds of which will benefit charities right here in San Diego according to David Copley's wishes."

Of the purchase Manchester said, "This is an opportunity to return to the Muirlands (in La Jolla) in an unparalleled setting originally built by Jim Copley.” Manchester, who built a La Jolla home not far from there 30 years ago, sold it in 1990.

The French country-style manor, the crowning the pinnacle of the Country Club neighborhood, was home was built in 1959, and has handcrafted woodwork, a paneled library office and a formal dining room with a hand-painted mural and built-in cabinetry. There are seven bedrooms and 9.5 bathrooms. A guesthouse, pool pavilion, staff quarters and a fitness/center office are included in the 20,000-square-feet of living space.

A swimming pool, a greenhouse, a garden shed, garages for 12 cars and an entry gatehouse are also on the acreage. Orchards, terraced gardens, lawns and walkways complete the manicured grounds.

Fox Hill owners, James and Helen Copley, were publishers of the San Diego Union-Tribune. Their son, David C. Copley (who died at age 60 in 2012 without heirs) sold the paper to the Platinum Equity Group in 2009.

“Papa” Doug Manchester bought the Union-Tribune from Platinum in 2011 and earlier this year sold it to Tribune Publishing (parent company of the Los Angeles Times). The transaction also included theLa Jolla Light, part of the U-T Community Press Group.

 

Posted in Real Estate
Aug. 13, 2015

Foreclosure Inventory Rate Drops to Below Pre-Recession Levels

With nearly a 30 percent year-over-year decline in June, the nation's foreclosure inventory rate—the share of residential homes with a mortgage in some state of foreclosure—is at 1.2 percent, the lowest level since 2007, according to CoreLogic's June 2015 National Foreclosure Report released Tuesday.

The foreclosure inventory rate has now declined year-over-year for 44 consecutive months, including June. The 1.2 percent foreclosure inventory rate represented about 472,000 homes, down from 664,000 in June 2014.

 

Although the national foreclosure inventory rate is back to pre-recession levels, the rate remains high in select areas hit hardest by the crisis, such as Florida and New Jersey.

"The foreclosure rate for the U.S. has dropped to its lowest level since 2007, supported by a continuing decline in loans made before 2009, gains in employment, and higher housing prices," said Frank Nothaft, chief economist for CoreLogic. "The decline has not been uniform geographically, as the foreclosure rate varies across metropolitan areas. In the Denver and San Francisco areas, the foreclosure rate has fallen to 0.3 percent, whereas in the Tampa market the rate is 3.5 percent and in Nassau and Suffolk counties it is an elevated 4.8 percent."

 

The serious delinquency rate—the share of residential mortgages that are more than 90 days overdue, including those that are in foreclosure or REO—also took a substantial drop in June 2015 down to 3.5 percent, about 1.3 million homes, the lowest number since January 2008.

 

"Serious delinquency is at the lowest level in seven and a half years reflecting the benefits of slow but steady improvements in the economy and rising home prices," said Anand Nallathambi, president and CEO of CoreLogic. "We are also seeing the positive impact of more stringent underwriting criteria for loans originated since 2009 which has helped to lower the national seriously delinquent rate."

Completed foreclosures, which are an indication of the actual number of homes lost to foreclosure, dropped by nearly 15 percent year-over-year in June from 50,000 to 43,000. The number of completed foreclosures nationwide in June 2015 represented a 63.3 percent decline from their peak of 117,000 reached in September 2010, according to CoreLogic.

 

Despite the year-over-year decline and the large dropoff from their peak total nearly five years ago, completed foreclosure bumped up by 41,000 in May to 43,000 in June, which is more than double the monthly pre-recession total. From 2000 to 2006, completed foreclosures averaged about 21,000 monthly. A total of about 5.8 million homes have been lost to foreclosure since the beginning of the financial crisis in September 2008. About 7.8 million homes have been lost to foreclosure since home prices peaked in the second quarter of 2004, according to Corelogic.

Posted in Real Estate
Aug. 10, 2015

Is flipping a flop?

Is flipping a flop?

Flipping returns rise but flips as percentage of sales drop

A total of 30,013 single family homes were flipped — sold as part of an arms-length sale for the second time within a 12-month period — in the second quarter, accounting for 4.5% of all single-family home sales during the quarter, according to RealtyTrac’s Q2 2015 U.S. Home Flipping Report.

That 4.5% share was down from 5.5% in the previous quarter and down from 4.9% a year ago. Going back to the first quarter of 2000, the peak in flipping was in the first quarter of 2006, when 8% of all single-family home sales were flips.

The average gross profit — the difference between the purchase price and the flipped price (not including rehab costs and other expenses incurred, which flipping experts estimate typically run between 20% and 33% of the property’s after repair value) — for completed flips in the second quarter was $70,696, up from $67,753 in the previous quarter and up from $49,842 a year ago.

The average gross return on investment — the average gross profit as a percentage of the average original purchase price — was 35.9% for completed flips in the second quarter, up slightly from 35.6% in the first quarter and up from 23.4% a year ago. The average gross ROI on flips reached a 10-year peak of 44.9% in Q2 2013.

Read the full article at: http://www.housingwire.com/articles/print/34694-realtytrac-is-flipping-a-flop

Posted in Real Estate
Aug. 7, 2015

Builders Plan to Build More Detached Homes for Single-Family Rentals

 

for-rent-twoMore detached homes will be built for single-family rental to meet increasing demand for rental housing, according to a report from John Burns, CEO of John Burns Real Estate Consulting released Tuesday.

For many years, resale homes have filled the demand for rental housing while builders ignored a significant share of the nation's households – 12.7 million out of 120 million, or nearly 10 percent – that rented a single-family detached home, according to Burns.

"The 12.7 million detached home renters have largely been ignored by builders and developers for years as both supply and demand steadily grew over many decades," Burns wrote. "The vast majority of the growth of individually owned rental homes has historically come from households who lived in the home before relocating and decided to continue owning and renting the home rather than selling it."

That number of 12.7 million detached homes currently in the single-family rental market comprise about 29 percent of the demand for rentals nationwide (out of 44.3 million), according to Burns.

Burns' report notes that the single-family rental market has been "historically a mom and pop business," noting RentRange reported that about 54 percent of landlords who own single-family rental homes own only one home.

The research from Burns, confirmed with CEOs from several institutional investors, found that renters generally live in detached homes because that is the lifestyle they preferred and that most of them did not even consider renting an apartment. Burns found that the three top reasons people lived in a detached home and rented were: Necessity, because they could not qualify for a mortgage; flexibility, because renting allowed them the flexibility to more easily move if they wanted to; and choice, because they would rather spend their money than save for a downpayment on a mortgage.

The competition of single-family rental homes with the detached resale and new home market has created a need for new homes to be built for single-family rentals, according to Burns.

"Clearly, there is a subset of renters who will pay a premium to rent new, as evidenced by the 200K+ apartment units that are built and leased every year," Burns said. "If it works for apartment developers, why has there not been much attempt to build single-family homes for rent? Those days are now ending."

Burns cited several builders, including American Rental Properties, Starwood Waypoint, Lennar, and Rancho Sahuarita, who have expressed plans to build more single-family detached homes either to sell to investors or manage themselves.

"Last year, approximately 25,000 detached homes were built for rent," Burns wrote. "We believe that number will increase significantly over the next several years. We expect detached homes for rent to become an important segmentation opportunity for the top masterplans in the country, who will no longer ignore 10 percent of housing demand."

The increased popularity of single-family rentals has prompted industry leader The Five Star Institute to host its first-ever Single-Family Rental Summit in Las Vegas, October 11 through 13. Five Star's summit will provide an education and networking event for private equity, REIT, Institutional/bank, and small/mid-sized investors.

Editor's note: The Five Star Institute is the parent company of DS News and DSNews.com.

 

Posted in Real Estate
Aug. 6, 2015

What Do Home Buyers and Sellers in the North County Coastal Area Need to Know?

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We are now in our 3rd consecutive year of a very hot real estate market here in the North County Coastal area, meaning we still have a lot more buyers in our market than sellers. Today we are going to give you the latest market update for our area, so you know what to expect if you plan on buying or selling soon.

 

A majority of the buyers in the North County Coastal area are chasing a small group of homes. These are homes that are either new, updated, or move-in ready. You can have two identical homes on the same block and if one is move-in ready, it will get those multiple offers while the other one sits stagnant on the market.

 

 

On the buyer side, this market has been pretty frustrating as of late. With fewer homes, searches are taking longer. You also have to deal with the stress of competing with multiple offers, not to mention buyers who can pay in cash.

 

The hottest segment of homes right now are the smaller ones, between 1,500 and 2,000 sq ft. There are two different buying groups chasing this segment, first time home buyers, and baby boomers looking to downsize.

 

Because this smaller segment of homes is being chased by so many, the price for these homes has risen at a faster pace than any other, eclipsing the highs we saw in 2006.


That’s all we have for today. If you have any questions for us, feel free to give us a call or send us an email. We look forward to hearing from you!

Posted in Real Estate
Aug. 5, 2015

July's Del Mar Home Report

Detached Homes SOLD in Del Mar! 3 detached homes sold in the month of June, with a average sale price of $2,038,333, average square footage of 2,749 thus making the average cost per square foot $987.02.

Contact me for more details! 858-754-7155

 

 

July 30, 2015

Home price gains in San Diego County held steady


 

The S&P Case-Shiller Home Price Index showed Tuesday that resale single family homes gained 4.8 percent in value from May 2014 to May 2015. Since September, home prices have grown between 4.5 and 5 percent on an annual basis.

 

The growth shows that the housing market is now in a stable phase. In other words, it is no longer being paced by investor led activity that had home prices rising more than 21 percent annually in the summer of 2013.

 

"Supply is still pretty tight while demand continues to improve and that spells ongoing increases in prices," he said. "I wouldn't be surprised to see it pick up the pace a little bit while rates remain low."

 

San Diego's 4.8 percent annual gain ranked it 12th on the 20-city Case Shiller Index. Nationwide, home prices rose 4.9 percent on the 20-city composite. They rose fastest in Denver, growing 10 percent, and in San Francisco, where they are up 9.7 percent.

 

Adjusted for seasonality, San Diego home prices rose 0.2 percent from April to May. The index lags two months.

 

CoreLogic, another real-estate tracker, reported that in May single family home prices rose 8.2 percent over the year to a median $502,000.

 

Nationally single family home prices have settled into the 4 to 5 percent annual growth range, following the bubbly pattern seen in 2013

 

"As home prices continue rising, they are sending more upbeat signals than other housing market indicators, first time homebuyers are the weak spot in the market. First time buyers provide the demand and liquidity that supports trading up by current home owners. Without a boost in first timers, there is less housing market activity."

For the full article: utsandiego.com

 

 

 

Posted in Real Estate
July 22, 2015

"Real estate sales took off in June"

California single-family home and condominium sales grew 8.5% to 41,539 in June, up from 38,143 in May, mainly driven by an increase in non-distressed property sales, the latest California housing report from PropertyRadar said.

On a yearly basis, sales were up 16.4% from 35,681 in June 2014.

Non-distressed property sales jumped 19.9% year-over-year. Of note to investors, distressed property sales volume has remained nearly unchanged for 18 months and continues to remain a source of opportunity.

The median price of a California home in June increased to $415,000, the highest since November 2007. 

Furthermore, the median price was up $10,000, or 2.5%, from $405,000 in May. Across the state’s 26 largest counties, 19 counties saw median price increases while 7 experienced price decreases. The counties with the biggest median price increases were San Joaquin (8.5%), San Diego (5.7%) and Ventura (5.5%).

On a yearly basis, the median price of a California home was up 5.1% from $395,000 in June 2014.

 

Full article at http://www.housingwire.com/articles/34504-california-non-distressed-property-sales-drive-home-sales-higher

Posted in Real Estate
July 21, 2015

6 Myths About Your Cedit Score