Monday, January 4, 2010

San Diego Area Home Buyers Alert

San Diego Area Home Buyers Alert

The first quarter of 2010 is going to be a challenging time but worth the effort for the greater San Diego area home buyers,
especially for the under $500,000 houses and condos.
(This is good news for sellers.  Call me for the sellers plan.)

The available total inventory is down from the peak 14,709 on 2/6/09
    to 11,317 on 1/4/2010.
Only 3726 homes under $500,000 are available which is a 50 day supply.
1407 of the homes under $500,000 are Short Sales.
The number of bank owned properties is 70% lower than it was a year ago. There is only a 3 week supply (734 on 1/4/2010).
Each quarter we hear that the banks will start dumping homes on the market but not yet and probably not ever…see my Blog article at

Short Sales are still taking 3 to 9 months to close, despite a push from Obama. They keep telling us they will get quicker but that is what we have heard all last year.

You must be in escrow by April 30, 2010 to get your Tax Rebate.
A big time pressure for buyers...but many will procrastinate...DON'T.
For best results, START LOOKING NOW! Plan to buy in Jan. or Feb.
There is some talk or extending it but, can you take that chance?
Many will wait till Mar or April and will loose out.

The Senate Finance Committee and Capitol Hill in general, are not inclined to extend this program again. The National Association of Realtors, the lobbyist for this program, were cautioned that any discussion regarding a further extension of the program was not likely, and would certainly be met with opposition..
Lenders have tightened up on the requirements again.
Interest rates will go up, possibly to 6% which is a 16% increase, over the current 5%.
See  the Washington Post article at about how the Fed will not buy MBS - Mortgage Backed Securities after March 31st and how it will cause interest rates to rise.

What can the serious buyer do to get a home?
1 – Be totally ready with your financing. That means a fully documented loan package submitted to the lender before you start looking for a home. Banks & FHA continue to tighten up their requirements. They want to see higher credit scores (640+ FICO), at least 3 active credit lines (suggestion: pay your utilities on line or buy a tank of gas a few times a year so every card shows activity), no late payments or new collections in the last year. Keep all credit cards below 40% of your limit at all times.

2 – Be prepared to make several offers before you get one accepted. There is a lot of competition as many buyers are fighting for a limited pool of homes and they also need to buy before the Tax Rebate deadline of 4/30/2010. There is no perfect home so do not fall in love with the home until it closes. Remember what your goals are for this home. It probably will not be your last home so think 3-5 years or 5-7 years…whatever your time frame is.

3 – Be prepared to pre-qualify with several lenders along the way. You may still use any lender you chose. Each bank owned property wants you to qualify with them for 2 reasons…they want to find out if you are really qualified, and they want to have a chance of getting your loan. Strategy: keep a copy of your loan application from your first lender along with your credit report & FICO score, copies of pay stubs, bank statements, 2 years of tax returns and more.

4 – Make your first offer, your “Highest and Best” offer. Most of the time the banks will come back to some or all of the buyers in a multiple offer situation and give everybody a second chance. However, some banks will take the first good offer, or the best looking offer without a counter. Wouldn’t it be great if it were your offer that was accepted.

5 – Prices are going up (they have for 10 months in a row). So reasonably higher offers are OK. Todays appraisers often come in on the low side of the property value. If your offer is way too high, the bank will see through that ploy. However if you offer a reasonable amount over the comparable sales, the appraisal may help you bring the price down. Since prices are going up, even if you think your offer is high, you will look back and say “Remember when we bought this house for $X.XX and now it is worth much more than that…we could not afford to buy our own house today”. 

This first quarter will be a challenging time but worth the effort for the greater San Diego area home buyers.  I do not expect to see these prices again.

In the San Diego Union Tribune on 1/3/2010, the caption to the housing chart was "Median price 48.4% higher than January 2000".  Real Estate will always be a good long term investment and sometimes a good short term investment.  Now is the time to buy near the bottom and ride the prices up while you live in, and enjoy your home.

6 – Be on top of the listings and the market. Many of the San Diego area bank homes and regular homes are getting multiple offers and are going into escrow quickly, some in 1 or 2 days of being listed. If you know the market, you will see the value and be ready to make a decision right away without “sleeping on it”. A one day delay could be all it takes to loose the home.

7 - Keep looking, even after you have submitted an offer. If you do not get this one, you must be ready when the next one appears.

Buyers, we need to schedule an appointment to plot our strategy to get you into your San Diego area home. Call me to set an appointment to meet, review your needs and wants, then visit some homes. Call my cell at 760-212-8225 today!

Dennis Smith, ABR, SRES, e-PRO, CDPE, Realtor® DRE# 00476662
Certified Distressed Property Expert
Taylor Place Real Estate
Buy or Sell a Home with Me, Use my Moving Truck - F R E E for life.
760-436-0087, or cell at 760-212-8225

My Market Trends Report with graphs and charts for North Coastal San Diego will give you the Sales Statistics for the month and compare it with last year, by city!

You can view all available San Diego area homes for sale at
You can search by address, by MLS number or by general criteria.

Providing quality Real Estate services in the North Coastal San Diego area including Del Mar, Solana Beach, Rancho Santa Fe, Cardiff by the Sea, Encinitas, Leucadia, Olivenhain, Carlsbad, La Costa, Aviara, Oceanside, Vista, San Marcos, San Elijo Hills, Escondido and San Diego County.

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