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Jim Klinge
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Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!

Carlsbad
(760) 434-5000

Carmel Valley
(858) 560-7700
jim@jimklinge.com


Most recent articles

Debt-Tax Relief Forever

Dec. 4 – The CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) announced today it received a letter from the California Franchise Tax Board (FTB), obtained by Board of Equalization (BOE) member George Runner, clarifying that California families who have lost their home in a short sale are not subject to state income tax liability on debt forgiveness “phantom income” they never received in a short sale.

bboxer1Last month, in a letter to California Sen. Barbara Boxer, the Internal Revenue Service (IRS) recognized that the debt written off in a short sale does not constitute recourse debt under California law, and thus does not create so-called “cancellation of debt” income to the underwater home seller for federal income tax purposes.

Following the IRS’s clarification, C.A.R. sought a similar ruling by the California FTB.  Now with the FTB’s clarification, underwater home sellers also are assured that they are not subject to state income tax liability, rescuing tens of thousands of distressed home sellers from California tax liability for debt written off by lenders in short sales.

“We are pleased with the recent clarifications issued by the IRS and the California Franchise Tax Board, which protect distressed homeowners from debt relief income tax associated with a short sale in California,” said C.A.R. President Kevin Brown.  “We would like to thank Sen. Boxer and BOE member Runner for their leadership in obtaining this guidance from the IRS and FTB.”

“Distressed California homeowners can now avoid foreclosure or bankruptcy and can opt for a short sale instead, without incurring federal and state tax liability, even after the Mortgage Forgiveness Debt Relief Act of 2007 expires at the end of this year.”

Posted by on Dec 5, 2013 in Short Sales, Short Selling | 4 comments

Why Bidding Wars?

The inventory is extremely picked over, and any house within 5% to 10% of being right on price has sold – leaving only the junkers, bad locations, and OPTs (see video). When a hot new listing hits the market, it really stands out – making buyers jump.

The wild and furious bidding wars for the high-quality properties are likely to continue – if you are thinking of moving, get good help!:

Posted by on Dec 5, 2013 in Bidding Wars, Bubbleinfo TV | 1 comment

Appetite For Condos

From the latimes.com:

condomaniaSouthern California home buyers have pulled back, purchasing fewer single-family homes in October as they struggled to afford houses that have jumped in price this year.

They didn’t, however, lose their appetite for condos.

Changing cultural attitudes and skyrocketing home prices have boosted demand for condominiums this year, experts say. For many, condos are the only affordable path to homeownership in urban areas near jobs, cafes and boutiques.

“People who a year ago could afford houses can’t,” said Richard Green, director of USC’s Lusk Center for Real Estate. “But they can afford condos.”

Read More

Posted by on Dec 4, 2013 in Market Conditions, The Future | 2 comments

Price Increases Are Moderating

prices slowingAs more inventory hits the housing market and buyers rebel against rising home prices, the real estate market is likely to shift from seller dominance to one that is more counterbalanced by buyer reluctance to acquire homes deemed too expensive.

The tighter inventory conditions of this recent spring and summer are going away as the spring months of next year start to approach, analysts say. Right now, builders are trying to make up for a lack of inventory with new homes,  Lawrence Yun, chief economist for the National Association of Realtors, claimed.

According to the latest Home Price Index report from CoreLogic, home prices, including distressed sales, increased by only 0.2% in October when compared to September.

“In October, the year-over-year appreciation rate remained strong, but the month-over-month appreciation rate was barely positive, indicating that house price appreciation has slowed as expected for the winter,” said Mark Fleming, chief economist for CoreLogic.

“Based on our pending HPI, the monthly growth rate is expected to moderate even further in November and December. The slowdown in price appreciation is positive for the housing market as almost half the states are now within 10% of their respective historical price peaks,” Fleming said.

Read More

Posted by on Dec 3, 2013 in Forecasts | 1 comment

Banks and Foreclosure Policy

Reader avgjoe took exception to the whole idea of foreclosures in this environment.  Yesterday he said,

“There are still people around me getn a free ride after 5 years. The banks have limited inventory by not foreclosing on people hoping for a bigger payday. Lets get the truth to the readers.”

Everyone pointed to the CA Homeowners Bill of Rights as the cause for the drop in foreclosures.  The new law made the foreclosure process more stringent on lenders, and it contained the provision of granting attorney fees to any homeowner who felt the need to sue, whether they won or not:

http://www.bubbleinfo.com/2013/04/16/blaming-the-ca-hbr/

Whether it was actually the CA HBOR that caused the foreclosure process to screach to a halt, or just a handy excuse, we will probably never know.  But lenders must be doing everything they can to keep people in their houses – the unemployment rate hasn’t changed much, and incomes aren’t rising.

How else can you explain why foreclosures have dropped off the table?

Third-Quarter Counts:

3Q-Year
Trustee-Sales Completed
Short-Sales Completed
Total
2009
3,776
1,186
4,962
2010
3,460
1,651
5,111
2011
2,525
1,735
4,260
2012
1,599
2,260
3,859
2013
493
892
1,385

The drop in short-sales looks like the smoking gun.

According to Zillow, 21% of San Diego homeowners who have a mortgage are underwater, and are over-encumbered by an average of 36.8%, or $124,526:

http://www.zillow.com/blog/research/2013/08/28/negative-equity-rate-falls-for-5th-straight-quarter-in-q2/

The 21% equals 97,422 homeowners in San Diego County who are underwater, and only 892 of them, or 0.1%, completed a short sale in 3Q13 with the end of debt-tax forgiveness barreling down on us??

I’m with avgjoe in thinking that the lenders have conveniently adapted a policy of non-foreclosure, and are hiding behind the CA HBOR.  They are putting no pressure on deadbeats to pay, otherwise the short-sale counts would be much higher.  Those who are the furthest underwater have the least reason to pay, and banks have the most to lose – no surprise that the banks want to limit their losses.

The CA HBOR was announced in summer of 2012, and has been a law for almost a year.  The banks have had plenty time to adapt to the new law, and yet the foreclosure notices keep dropping – did most defaulters just go back to making their payments?

San Diego County Filings

The banks own this country, and manipulating the system has become acceptable. Isn’t it a possibility that the market rebound has been so good that banks just decided to not adding more distressed inventory, and keep the good times rolling – at least for now?

Posted by on Dec 3, 2013 in CA Homeowners Bill of Rights, No-Foreclosure as Banking Policy | 7 comments