The World As American’s See It…. Funny

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Luxury Real Estate San Diego & La Jolla, CA

The Power of a Tax Credit Near Expiration

The Power of a Tax Credit Near Expiration

$8,000 is a powerful incentive for home buyers who are buying their first home, especially when half of the homes in the country are trading at below $172,000. Visit www.TheLaJollaLife.com for more info

However, we are also a nation of procrastinators, so the tax credit is really only effective as it nears expiration. We saw this with the new home tax credit in California last Spring and we saw it with the national tax credit last Fall. Note the spike in existing home sales in October and November in the chart below. The existing home data is actually closing data, so most of these contracts were entered into in August September.

I see a large "W" shaped sales volume curve forming, with a huge decline when the December and January data is released, and a potentially even larger spike in May and June, with the new tax credit available to all buyers instead of just entry-level buyers.

Source_ John Burns Real Estate Consulting

2009-2010 La Jolla Housing Trends and Values

2009 La Jolla Housing Stats –

Chargers Disappoint again

Painful, yet again. Our hometown of San Diego still remains the ONLY city left in the entire country with two major sports teams and no championship. That’s right… ONLY city. As much as I love the Chargers…I hate them too. After the last time we lost to the Jets in the playoffs in 2004-05, I have found a way to deal with the unfulfilled promises…take the point spread so you can root for them to win, but ease the disappointment with a couple dollar bills. Call me what you will, but all charger fans should try this until the Chargers sack up…it helps the pain.

Why ShortSales Will Be More Prominant In 2010

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how can i short sale, short sale agent, short sale FAQ, short sale san diego, taxes and short sale, what is a short sale

The Treasury department has released new rules to help simplify the ’short sale’ process. For months, we have been preparing our followers for this great announcement. It should mean we will have less foreclosures in 2010. The sellers will be able to leave the property with dignity and on a timetable. Our neighborhoods will have less vacant houses. The negative impact on real estate values will not be as severe. Get with a good shortsale agent who understands the market. Visit www.JustinBrennan.net for more ShortSale FAQ.

As of now, these seem to be the key points:

• Mortgage servicers have 10 days to accept or deny a short sale request. After a sale is completed, the borrower could be completely released from debt.
• Borrowers are eligible to receive a $1,500 moving allowance, if they sell their home through a short sale.
• Mortgage servicers will receive $1,000 for each completed short sale.
• Investors who hold first mortgages can get as much as $1,000 for allowing second lienholders to release their liens.
• Second lienholders can get only as much as $3,000 in proceeds from short sale to release their liens.
• The property must be the homeowner’s principal residence.
• The homeowner is delinquent on the mortgage or default looks likely.
• The loan was made before Jan. 1 this year and is less than $729,750
• The borrowers’ total monthly mortgage payment exceeds 31 percent of their before-tax income.

www.JustinBrennan.net

If You Don’t Buy a House Now, You’re Stupid or Broke

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buying a home, home buying, interest rates, justin brennan, justin brennan san diego, why buy a home

Interest rates are at historic lows but cyclical trends suggest they will soon rise. Home buyers may never see such a chance again, writes Marc Roth

 Well, you may not be stupid or broke. Maybe you already have a house and you don’t want to move. Or maybe you’re a Trappist monk and have forsworn all earthly possessions. Or whatever. But if you want to buy a house, now is the time, and if you don’t act soon, you will regret it. Here’s why: historically low interest rates.

 As of today, the average 30-year fixed-rate loan with no points or fees is around 5%. That, as the graph above—which you can find on Mortgage-X.com—shows, is the lowest the rate has been in nearly 40 years.

 In fact, rates are so well below historic averages that it should make all current and prospective homeowners take notice of this once-in-a-lifetime opportunity. And it is exactly that, based on what the graph shows us. Let’s look at the point on the far left. In 1970 the rate was approximately 7.25%. After hovering there for a couple of years, it began a trend upward, landing near 10% in late 1973. It settled at 8.5% to 9% from 1974 to the end of 1976. After the rise to 10%, that probably seemed O.K. to most home buyers. But they weren’t happy soon thereafter. From 1977 to 1981, a period of only 60 months, the 30-year fixed rate climbed to 18%. As I mentioned in one of my previous articles, my dad was one of those unluckily stuck needing a loan at that time.

Interest Rate Lessons

And when rates started to decline after that, they took a long time to recede to previous levels. They hit 9% for a brief time in 1986 and bounced around 10% to 11% until 1990. For the next 11 years through 2001, the rates slowly ebbed and flowed downward, ranging from 7% to 9%. We’ve since spent the last nine years, until very recently, at 6% to 7%. So you can see why 5% is so remarkable. So, what can we learn from the historical trends and numbers? First, rates have far further to move upward than downward; for more than 30 years, 7% was the low and 18% the high. The norm was 9% in the 1970s, 10% in the mid-1980s through the early 1990s, 7% to 8% for much of the 1990s, and 6% only over the last handful of years. Second, the last time the long-term trends reversed from low to high, it took more than 20 years (1970 to 1992) for the rate to get back to where it was, and 30 years to actually start trending below the 1970 low. Finally, the most important lesson is to understand the actual financial impact the rate has on the cost of purchasing and paying off a home. Every quarter-point change in interest rates is equivalent to approximately $6,000 for every $100,000 borrowed over the course of a 30-year fixed. While different in each region, for the sake of simplicity, let’s assume that the average person is putting $40,000 down and borrowing $200,000 to pay the price of a typical home nationwide. Thus, over the course of the life of the loan, each quarter-point move up in interest rates will cost that buyer $12,000.

Loan Costs

Stay with me now. We are at 5%. As you can see by the graph above, as the economy stabilizes, it is reasonable for us to see 30-year fixed rates climb to 6% within the foreseeable future and probably to a range of 7% to 8% when the economy is humming again. If every quarter of a point is worth $12,000 per $200,000 borrowed, then each point is worth almost $50,000.

Let’s put that into perspective. You have a good stable job (yes, unemployment is at 10%, but another way of looking at that figure is that most of us have good stable jobs). You would like to own a $240,000 home. However, even though home prices have steadied, you may be thinking you can get another $5,000 or $10,000 discount if you wait (never mind the $8,500 or $6,500 tax credit due to run out next spring). Or you may be waiting for the news to tell you the economy is “more stable” and it’s safe to get back in the pool. In exchange for what you may think is prudence, you will risk paying $50,000 more per point in interest rate changes between now and the time you decide you are ready to buy. And you are ignoring the fact that according to the Case-Shiller index, home prices in most regions have been trending back up for the last several months.

 If you are someone who is looking to buy or upgrade in the $350,000-to-$800,000 home price range, and many people out there are, then you’re borrowing $300,000 to $600,000. At 7%, the $300,000 loan will cost just under $150,000 more over the lifetime, and the $600,000 loan an additional $300,000, if rates move up just 2% before you pull the trigger.

 What I’m trying to impress upon everyone is that if you are planning on being a homeowner now and/or in the foreseeable future, or if you are looking to move your family into a bigger home, then pay more attention to the interest rates than the price of the home. If you have a steady job, good credit, and the down payment, then you really are being offered the gift of a lifetime.

 see homes for sale in San Diego at www.JustinBrennan.net

10 Hot Home Products for 2010

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home improvement, home products, justin brennan, justin brennan san diego, san diego home improvement tips, san diego real estate

As the unofficial “What’s New Guru” of the home improvement industry, I attend numerous trade shows throughout the year and scour lots of magazines and trade publications looking for new and exciting products, intriguing concepts and “gotta have” gadgets that make life just a little bit better.

My checklist for “Hot Home Products” includes simplicity, ingenuity, affordability, and great end results. Here are a few of my most recent finds and all-time favorites: Visit www.TheLaJollaLife.com to meet Justin Brennan, San Diego’s rising star in Luxury Home Real Estate and Downtown San Diego Condos.

1.  Giani Granite Countertop Paint

Got a kitchen countertop that’s seen better days? Laminate chipped and discolored? Solid surface counter stained and scratched? Giani is the world’s first granite paint kit for countertop makeovers. Get the premium “look” of granite at a fraction of the cost — with lots of extra benefits too. Water-based paint kits come in five realistic-looking color combinations and include everything needed to go “granite” in three easy steps in 24-hours or less. One $39.95 kit covers 35 square feet (16 running feet of 24-inch wide counter). Available at paint and hardware stores nationwide. Visit www.GianiGranite.com or call 1-800-650-5699.

2.  One2Flush Dual Flush Conversion Kit

Saving water is as “easy as 1, 2…” with the brand new award-winning One2Flush toilet conversion kit. In about 20-minutes, you can quickly and easily turn a standard water-guzzling tank-type toilet into an eco-friendly, high-efficiency, water-saving dual flush model. University tests prove One2Flush — with its “half flush for liquids and full flush for solids” — reduces water use by more than 38 percent and can save an average family over 10 percent on monthly water bills. Fits all standard two-piece toilets, 1.6-gallon flush and up. Starts paying for itself immediately. Available nationwide at most hardware stores (Ace, True Value, Do-It-Best). For more information visit www.one2flush.com.

3.  Easy Crown Molding by EZ-A-PEEL

Budget-minded? Not up for hammering and sawing? Renting? Add elegance to almost any room with “peel-and-stick” Easy Crown Molding. Kits offer quick and easy installation and an inexpensive alternative to fancy millwork. Vacuum-formed thermoplastic design overlaps and adjusts to length without measuring. Can also be trimmed with scissors. Installs in about one hour and can be left white or painted to match décor. Offered in three popular crown molding profiles for various sized rooms with 16 inside and four outside corners included. Kits start at under $50. To order call 1-888-EZAPEEL (1-800-392-7335) or visit www.easycrownmolding.com.

4.  Dead Bolt Secure Entry Lock Protection

Burglars with “bump keys” can open virtually any standard lock (deadbolt or otherwise) with ease. Until now, the only defense was expensive high-end, pick-proof locks. The new award-winning Dead Bolt Secure offers a low-cost, ingenious solution that makes standard deadbolt locks (with a lever or twist-type inside handle) virtually bump-key and pick-proof. It even blocks entry for anyone with a legitimate key. How? A simple spring-loaded device, that installs in minutes, flips down to prevent a dead bolt’s handle form turning — no matter how it is being unlocked. Offered in brass and satin nickel. The best part? It only costs $9.95. Order online at www.arclink.net.

5.  Aspect Peel and Stick Metal Wall Tile

Create a designer kitchen “look” quickly, easily and affordably with new Aspect peel-and-stick 3-inch by 6-inch metal tiles. Offered in three popular brushed finishes  (stainless, copper, and bronze) for dramatic and dazzling accents, whether a gleaming over-the-counter backsplash or an entire luxurious floor-to-ceiling wall. Aspect tiles adhere to any sub-surface (drywall, plaster, paneling, and old tiles) and are offered with horizontal or vertical graining. Gives kitchens and baths a fresh, new look. Box of eight tiles covers 1-square-foot and costs about $20. The only limitation is your imagination.  Available at some Lowe’s stores or order online at www.aspectideas.com.

6.  Telezapper / Blocks Telemarketer Calls

Get rid of annoying telemarketer calls once and for all. This nifty little device plugs into your phone cord and only intercepts computer-generated calls — indicating this number is disconnected — which automatically takes you off their list. Over time, calls dwindle until you are practically telemarketer-free. Other incoming calls are not affected. When first introduced, millions were sold. Ever since, this product has been “flying under the radar.” However, the original and an updated model can both still be found at www.amazon.comand via online search engines at prices ranging from $40 to $10. It’s worth the effort — I wouldn’t part with mine. Additional info at www.telezapper.com.

7.  Liquid Stainless Steel Brush-on Paint Kit

Want to give your dingy, old kitchen appliances a gleaming stainless steel finish? Award-winning Liquid Stainless Steel is the world’s first brush-on/roll-on “real stainless steel” finish designed to give older stoves, refrigerators and dishwashers a new lease on life. Complete kits are easy to use and update an average size refrigerator for $49 or a range and dishwasher combo for only $19.95. Works great on cabinets, table tops and in many other places too. If it would look good in stainless — now you can do it. Available at paint and hardware stores nationwide. Order online at www.liquidstainlesssteel.com or call 1-800-650-5699.

8.  Schlage Keyless Entry Locks and Wireless LiNK Option

Tired of fumbling with keys? Reluctant to offer extras to visiting guests and service providers? Schlage electronic keypad entry locks and deadbolts — using four-digit access codes — are now both practical and affordable, offered in the $120 to $150 range. Company also offers Schlage LiNK, the first and only DIY wireless system allowing 24/7 remote control for keypad locks and other home management functions via the Internet. Lock or unlock doors from anywhere, add/remove access codes and control lights. Options include adjustable thermostat ($149) and cameras ($149 wired/$179 wireless) to see who is coming and going. Schlage LiNK Starter Kit ($299) offers choice of keypad lock (deadbolt or lever-handle) and everything needed to set-up a Z-Wave wireless system. Monthly subscription $12.99. Available at Lowe’s, Radio Shack, and www.amazon.com, or visit www.consumer.schlage.com for retailers.

9.  Evoba Modular Wood Ceiling System

Turn any room into a stunning showplace with the architectural impact of a rich “coffered” wood ceiling. Prefabricated Evoba system (that’s “Above” spelled backwards), offers the warmth and beauty of real wood without the cost of custom millwork. Pre-engineered main beams and cross-tee grid components surround 2-foot square, beautifully finished, recessed panels and offer easy installation. Available as a suspension or surface mount system, in a variety of wood species and finishes, at $12 to $30 per square foot. It’s affordable-chic that rivals the elegance of any Euro-mansion or lavish boardroom. Available at www.acpideas.com.

10.  INVISILED Low Profile Accent Lighting Tapes

Create dramatic indirect lighting effects almost anywhere with strips of miniature LED lights. Spaced 1-inch apart, and placed on thin flexible strips only 1/8-inch thick and 7/16-inch wide, INVISILED by WAC Lighting offers five basic colors (white, amber, red, blue, and green). One- and 5-foot peel-and-stick or screw-mounted sections can be cut at every inch. New Palette system offers continuous red-green-blue changing colors with control for speed and brilliance. Aura system creates white “daylight” to amber “sunset” with variable control. Cost ranges $75 to $90 per foot. Plug-in drivers cost $60 to $120. Maximum spans from 25 feet to 40 feet. For information and retailers visit www.waclighting.com or call 1-800-526-2588.

There you have it. Great peel-and-stick innovations, dynamic new paint concepts, valuable entry door/security solutions, affordable designer treatments for ceilings, an easy way to save water with new green technology and a classic phone zapper that gives telemarketers the boot. Hope you found something you like.  Stay tuned. More soon. Visit www.TheLaJollaLife.com to meet Justin Brennan, San Diego’s rising star in Luxury Coastal Home Real Estate and Downtown San Diego Condos.

ABOUT THE AUTHOR: Don Logay is an award-winning home improvement writer. Former editor-in-chief of top three professional remodeling magazines, he also created the widely quoted annual study for remodeling investment and return. Today Logay also writes home owner tips heard daily on hundreds of radio stations nationwide.

Uncle Sam’s New Guide to Mortgage Shopping

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FAQ home loans, home financing questions, home lender, home loans, how to find a home lender, san diego home loans

My guess is that the typical American puts more thought into the search for a flat-screen TV than into the choice of a mortgage lender.

Shopping for a TV is fairly straightforward. You read reviews online or in Consumer Reports; you eyeball a few models in the store to see if the image looks sharp; then you buy from whichever merchant has the lowest price. If the TV doesn’t work, the merchant gives you a new one.

Shopping for a mortgage is more complicated, less fun and infinitely more dangerous to your long-term financial interests. At the end of the process, you probably have no idea of whether you got the best deal available. Was the upgrade on those cherry kitchen cabinets really worth the high rate and fees you paid to the lender affiliated with your friendly home builder? Probably not, but that salesman sure was persuasive, and you were glad to be relieved of spending the next three days shopping for mortgages.

Now help is on the way from a most unlikely source: The U.S. Department of Housing and Urban Development, or HUD.

Federal rules that take effect Friday mandate a standard, three-page Good Faith Estimate that urges consumers to shop around for the best loan and helps them compare lenders’ offerings. The rules, announced by HUD in November 2008 but just taking effect this week, are an update of the Real Estate Settlement Procedures Act, a 1974 law known as Respa. (See WSJ story.)

One difficulty of shopping for mortgages is that the lender with the lowest rates often isn’t offering the best deal. High fees can wipe out the benefits of low rates, and little-noticed features such as prepayment penalties might blow up on you later on. Even for members of Mensa, it’s hard to compare different combinations or rates, “points” (paid in exchange for a lower rate), fees and other terms. Lenders often sprinkled in lots of confusing charges, such as processing and messenger fees, to pad their margins. Dickering over theses “junk” fees distracted borrowers from the bigger picture of total costs.

All of these complexities favor lenders, of course. The more confused you get, the less likely you are to realize you just got fleeced.

To address those problems, the new estimate form requires lenders to wrap all the fees they control into one “origination charge.” That lets you compare one lender’s fees with another’s.Jack Guttentag, a finance professor emeritus at the University of Pennsylvania’s Wharton School, recommends that borrowers focus on two items as they shop: the interest rate and the “adjusted origination charge,” which includes any points paid to lower the rate.

Good Faith Estimates have been around for decades, but there was no standard format. Under the new rules, lenders and mortgage brokers are required to give consumers the standard estimate forms within three days of receiving a loan application.

Lenders aren’t allowed to increase the origination fee from the estimate. Some additional charges, including title services and recording charges, can increase by as much as a combined 10%.  Estimates for other charges, such as homeowner’s insurance and other services provided by third parties selected by the borrower, aren’t subject to such limits.

Title insurance typically is the largest fee, and the new forms let consumers know they don’t have to accept the insurer suggested by the lender. Mr. Guttentag says title insurance can be “vastly overpriced” and consumers should take the time to shop for it.

Settlement firms, which organize the closings of home sales, will be required to issue a new version of the HUD-1 form used in closings. This new HUD-1 includes a comparison of the estimated and final costs, as well as a summary of the loan terms.

Will all this make a big difference? Mr. Guttentag, who has been exposing the tricks of lenders and brokers for decades, thinks the new rules will help, though they aren’t a cure-all.

Much depends on whether Americans want to put in a bit of effort rather than simply accept the often biased mortgage advice of a real estate agent, home builder, broker or banker. The real estate agent may urge you to use an affiliate of his firm, or recommend the lender most likely to grant a loan quickly rather than the one with the best terms. The builder wants you to use his in-house lender. The brokers and loan officers are working for themselves, not for you.

When you’re trying to pick a new TV, you don’t rely on a TV manufacturer to give you an impartial review of the alternatives.