by Jim the Realtor | Dec 5, 2013 | Short Sales, Short Selling |
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.
Last 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.”
by Jim the Realtor | Dec 5, 2013 | Bidding Wars, Bubbleinfo TV |
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!:
by Jim the Realtor | Dec 4, 2013 | Wednesday Rock Blogging |
This Sunday night you’ll find me and a couple of lawyers near the front of the stage at the Belly Up Tavern for X and the Blasters – don’t miss it:
by Jim the Realtor | Dec 4, 2013 | Market Conditions, The Future |
From the latimes.com:
Southern 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.”
(more…)
by Jim the Realtor | Dec 3, 2013 | Bubbleinfo TV, Del Mar, One-Story |
by Jim the Realtor | Dec 3, 2013 | Forecasts |
As 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.
(more…)
by Jim the Realtor | Dec 3, 2013 | CA Homeowners Bill of Rights, No-Foreclosure as Banking 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:
https://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?
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?
by Jim the Realtor | Dec 2, 2013 | Foreclosures/REOs |
From the latimes.com – an excerpt:
Pro Teck Valuation Services, a national appraisal firm in Waltham, Mass., recently completed research in 30 major metropolitan areas that dramatically illustrates the point. All of the fastest-rebounding markets in October — those with strong sales, price increases and low inventories of unsold houses — were located in so-called nonjudicial states, where foreclosures can proceed without the intervention of courts.
All the worst-performing markets — where prices and sales have been less robust and there are excessive numbers of houses available but unsold — were located in judicial states, where post-default proceedings can stall foreclosure completions for two to three years or even more in some cases.
Among the best-performing areas were California markets such as Los Angeles and San Diego. California is a nonjudicial state. Among the worst performers were Florida markets such as Tampa and Fort Myers, as well as parts of Illinois and Wisconsin. All of these are judicial states.
http://www.latimes.com/business/realestate/la-fi-harney-20131201,0,7128552.story#ixzz2mKE1HdIx
by Jim the Realtor | Dec 2, 2013 | Inventory
Almost half of the active inventory is over $2,000,000 (397 of 834, or 48%), yet only 27 sold in the last 30 days vs. 135 sales closed under $2 million. The only real shortage is in the Under-$800,000 group, where there is only 79 houses for sale in an area of 300,000+ population.
North SD County’s Coastal Region (La Jolla-to-Carlsbad)
The UNDER-$800,000 Market:
Date |
NSDCC Active Listings |
Avg. LP/sf |
DOM |
Avg SF |
November 25 |
95 |
$376/sf |
47 |
1,988sf |
December 2 |
79 |
$371/sf |
50 |
2,047sf |
The $800,000 – $1,400,000 Market:
Date |
NSDCC Active Listings |
Avg. LP/sf |
DOM |
Avg SF |
November 25 |
245 |
$448/sf |
61 |
2,856sf |
December 2 |
239 |
$448/sf |
64 |
2,851sf |
The $1,400,000 – $2,400,000 Market:
Date |
NSDCC Active Listings |
Avg. LP/sf |
DOM |
Avg SF |
November 25 |
227 |
$580/sf |
81 |
3,692sf |
December 2 |
222 |
$588/sf |
85 |
3,653sf |
The OVER-$2,400,000 Market:
Date |
NSDCC Active Listings |
Avg. LP/sf |
DOM |
Avg SF |
November 25 |
340 |
$1,040/sf |
159 |
6,347sf |
December 2 |
330 |
$1,049/sf |
160 |
6,342sf |
This week’s action slowed to a crawl with the Thanksgiving holiday:
Weekly NSDCC New Listings and New Pendings
Week |
New Listings |
New Pendings |
May 30 |
70 |
84 |
June 5 |
87 |
64 |
June 11 |
77 |
69 |
June 17 |
73 |
66 |
June 24 |
100 |
69 |
July 1 |
86 |
64 |
July 8 |
81 |
53 |
July 15 |
106 |
54 |
July 22 |
105 |
89 |
July 29 |
71 |
74 |
Aug 5 |
105 |
64 |
Aug 12 |
77 |
61 |
Aug 19 |
88 |
73 |
Aug 26 |
87 |
77 |
Sep 2 |
76 |
55 |
Sep 9 |
85 |
58 |
Sep 16 |
102 |
61 |
Sep 23 |
84 |
54 |
Sep 30 |
73 |
80 |
Oct 7 |
80 |
61 |
Oct 14 |
78 |
53 |
Oct 21 |
70 |
63 |
Oct 28 |
54 |
40 |
Nov 4 |
63 |
53 |
Nov 11 |
49 |
64 |
Nov 18 |
52 |
44 |
Nov 25 |
48 |
40 |
Dec 2 |
25 |
34 |
by Jim the Realtor | Dec 1, 2013 | Bubbleinfo TV, Carmel Valley, Del Mar |
More tidbits from around town: