Watch CAR’s chief economist, Leslie Appleton-Young, discuss the state the the California real estate market.

View the original at CAR.org.

Proposition 13 passed yesterday, Tuesday June 8, 2010. This amendment prohibits tax assessors from re-evaluating property taxes when property owners seismically retrofit an existing building.

By the Associated Press
Article courtesy of NYTIMES.com

Home sales surged 17 percent in the West last month, as buyers scrambled to take advantage of low mortgage rates and qualify for tax credits that expire at the end of this month.

The median price in the 13-state Western region was $209,400, down almost 8 percent from a year ago, the National Association of Realtors said Thursday.

Nationwide, by contrast, sales of previously occupied homes rose almost 20 percent from March of last year, without adjusting for seasonal factors. The median sales price was flat at $170,700,

Shoppers who have been on the hunt for some time can hear the clock ticking and are trying to make offers before the tax credits run out. Even some people who weren’t planning to buy are jumping in, said Kathi McLeod, sales manager for Windermere Real Estate in Boise, Idaho.

First-time buyers can get a federal tax break of up to $8,000, while current homeowners who relocate to a new home get up to $6,500.

”Last year, a lot of buyers were afraid to follow through with a purchase because of the economy and the extent that lending had changed,” she said. ”What we’re seeing now is confidence, as well as acceptance of what types of loan programs are available.”

Sales across most major Western metros improved in March, according to The Associated Press-Re/Max Monthly Housing Report, which tallies all home sales in the metropolitan statistical areas. The report, also released Thursday, counts sales filed by all real estate agents, regardless of company affiliation.

All but one of the 13 Western cities tracked in the report saw annual sales increases last month. Boise and Seattle both posted gains of more than 50 percent, according to the report. Los Angeles was the only major city that saw a decline in sales, off 7 percent.

San Francisco saw the sharpest gain in median price, up nearly 38 percent to $489,000. The city also had the lowest average number of days on the market, which dropped by about a quarter from last year to 49 days.

Sales in San Francisco climbed nearly 9 percent from a year ago.

”Buyer confidence has increased dramatically from last year,” said Sue Schultes, an agent with Paragon Real Estate Group in San Francisco. ”When things are uncertain, people have a difficult time making a decision. We’re now noticing many houses selling over list prices with multiple offers and a lot more movement in the luxury market.”

In Los Angeles, Julie Kryukova, an agent with 360 Realty, said she expects there will be a jump in sales this month too as buyers grab up foreclosures and other financially distressed properties.

”People are ready to make that last-minute dash and take advantage of these deals,” Kryukova said.

While Los Angeles saw an average decline in sales, swanky pockets of the city including West Hollywood, Santa Monica and Marina del Rey are seeing sales up as much as 300 percent from last year, she said.

Though sales in Boise were strong, the city had the biggest price decline among the Western cities in the AP-Re/Max report. With a drop of 14 percent to $149,900, prices are now back to 2003-levels.

”Now we see affordability back to what it was. Inventory has grown, prices are dropping and investors are back in the market with all of these movers and first-time buyers,” said Van States, an agent with Keller Williams Realty in Boise. ”It’s shaping up to be a great selling season.”

Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, Senate Bill 401 generally aligns California’s tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a “qualified principal residence,” borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.

“Qualified principal residence” indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.

The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.

Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.

For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board’s Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service’s Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.

Source: CAR.ORG

By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) — Home prices in 20 major U.S. cities fell a not-seasonally adjusted 0.4% in January compared with December, according to the Case-Shiller home-price index released Tuesday by Standard & Poor’s.

Prices rose in only in Los Angeles in January. Only four cities had experienced rising prices in December.

The rebound in housing prices seen last fall is fading, said David Blitzer, chairman of the S&P index committee. “We can’t say we’re out of the woods yet,” Blitzer said.

On a seasonally adjusted basis, prices rose 0.3% in January.

Prices were down 0.7% in the past year. This is the closest the index has been to a positive print since January 2007.

Compared with a year ago, prices were lower in 11 of the 20 cities, led by a 17.4% drop in Las Vegas.

In Charlotte, Las Vegas, Seattle and Tampa, prices hit new lows following the financial crisis.

For the 20 metropolitan areas in which repeat sales of homes are tracked in the Case-Shiller index, prices were down 32.6% from the peak in 2006. Prices are now back to levels seen in the summer of 2003.

Falling home prices have eroded Americans’ wealth. In response, households have increased their savings and cut back on spending.

View the original article on Marketwatch.com

Matthew O’Keefe discusses the Los Angeles Real Estate Market-

California Real Estate: Improving From The Bottom Up
By: Susan Yara

If California is an indicator of the US real estate market, then the tide could be turning.

Just ask realtors like Matthew O’Keefe. As the sales director at Gibson International Realty in Los Angeles, he’s feeling the frenzy that has become the real estate market with first-time home buyers taking advantage of the government tax credit, near-record low interest rates and many buyers seeking deals with the abundance of foreclosed homes.

“I’ve seen my business increase about 300 percent since May,” says O’Keefe, a realtor for six years. “Every year I’ve done better and better, and this year I thought I would be in a difficult situation, but this is going to be my best year ever.”

And it’s a trend across the state. According to the California Association of Realtors, CAR,  home sales are now 38 percent higher on a year-to-date basis compared to 2008 and it’s due in large part to the number of distressed properties on the market. In the last 12 months more than 500,000 homes were sold throughout the state and about half involved foreclosed properties.

Read more of the original article HERE

Article courtesy of CNBC.com

Seeking Real Estate Bargains? Try Looking at the High End
Mainstream Home Prices May Be Rising, But Luxury Properties Still Offer Deep Discounts
By BRETT ARENDS
Falling real estate prices are becoming as much a feature of high-end neighborhoods as ocean views, infinity pools and four-car garages.

While the latest data suggests prices for mainstream homes may be stabilizing after several years of pain, the news for luxury homes isn’t looking as good.

That’s bad news for sellers, naturally, but anyone in the market for a home listed for $2 million or more will find deeply discounted asking prices—and may be able to command even lower prices.

On Tuesday, data from the Federal Housing Finance Agency showed that average home prices ticked up 0.3% nationwide between June and July, including a 1.6% bounce on the west coast. The gains are modest, and they are partly influenced by the season—higher-end homes tend to sell better in late spring and early summer, as families try to move before the school year. Analysts are disappointed the rise was not higher.

Nonetheless, prices have now risen three months in a row. And compared with the disastrous events of the past few years, anything other than Armageddon is apt to raise spirits.

But these numbers only relate to homes purchased with conforming loans backed by the FHFA—in most areas, that describes mortgages of up to $417,000, or up to $713,000 in the country’s most expensive regions.

A stone patio surrounds the pool outside a spec home at 38 French Road in Greenwich, Conn. The city is seeing the worst home-sales market—and deepest discounts—in decades.

That overlooks luxury and high-end homes, where the outlook remains bleak.

“I would say we’re 40% off 2007 prices for everything,” says broker Chad Rogers, who covers the area from Malibu to Hollywood Hills for Hilton & Hyland, a Beverly Hills real-estate firm. “We’re now seeing prices consistent with where we were back in 2003.”

“The $10 million to $30 million properties are on the market for a very long time,” says Cathy Wood, a real estate broker covering Beverly Hills and surrounding areas for realty firm Gibson International. “They’re seeing a lot of price reductions.”

Realtors, she says, “are now selling $500,000 condos, when they used to sell $5 million homes.”

Read the rest of the article here

Scott Gibson, President and CEO of Gibson International, reflects on the article, “I would agree with the article that prices in the upper end have come down considerably and are still dropping to some degree. We believe that prices in LA took the biggest drops during the period of October 2008 to April 2009 when the financial meltdown was creating fear and panic even in the wealthy.  Now that things have calmed down and there appears to be some certainty that we are not going into a depression but rather now moving out of a recession, firming of prices and  increased buyer activity is starting to occur.”

Source: Wall Street Journal Online

Freddie Mac announced Wednesday that it would offer loan-to-value ratios on home mortgage refinancings of up to 125 percent for qualified borrowers.

The announcement comes as the Obama administration raised the maximum allowable loan-to-value (LTV) ratio from 105 percent.

Read more at the (source)
Article written by Bryant Ruiz Switzky of the Washington Business Journal

Jim Cramer recently appeared on TheStreet.com TV and was certain of one thing: now is the time to buy a house. Cramer, whose stock picking record has certainly drawn its share of criticism, couldn’t have been more sure of his call here, saying “I am frantically trying to buy multiple properties right now.” Watch the video HERE