Palomar Models For Sale

The production homes were selling for $1.9M to $3.5M, so those new residents have to be elated to see that all three models are priced in the $4-millions. And don’t be surprised if they sell quickly!

The Plan 2 is priced on the range $4,398,000 to $4,698,000 – here’s my tour from 2018:

P.S. The grand opening was September 22, 2018. They are going to sell 69 of these between $2 million and $5 million in less than two years, all while Pardee sold 100+ homes across the canyon for $1.5M to $3.0M!

P.S.S. The Plan 3 model was nicer but my video wasn’t as good: https://youtu.be/LJEPllQNiA4

Where To Move in California

Tips on the best towns in California:

Link to Article

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A comprehensive assessment of the housing and community of an area. This grade takes into account key factors of a location’s housing market, including home values, taxes, crime rates, and quality of local schools, in an attempt to measure the quality and stability of an area’s real estate market:

https://www.niche.com/places-to-live/search/best-suburbs-to-buy-a-house/s/california/

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A list of the more affluent towns – Mill Valley is #1, and Solana Beach is #10:

https://www.areavibes.com/best-places/california/

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My favorite list – San Diego is ranked #1:

https://www.thecrazytourist.com/15-best-places-live-california/

San Diego Case Shiller Index, April

The local Case-Shiller Index for April rose again, which makes you wonder how big the 2020 selling season could have been without the ‘rona – though if more sellers would have listed their home for sale, and rates were higher, the price increases probably wouldn’t have been so pronounced. Buyers can’t get a break!

San Diego Non-Seasonally-Adjusted CSI changes:

Observation Month
SD CSI
M-o-M chg
Y-o-Y chg
January ’18
248.16
+0.8%
+7.3%
Feb
250.91
+1.1%
+7.5%
Mar
253.41
+1.0%
+7.6%
April
255.63
+0.9%
+7.7%
May
257.07
+0.6%
+7.3%
Jun
258.44
+0.6%
+6.9%
Jul
258.49
0.0%
+6.2%
Aug
257.32
-0.5%
+4.7%
Sept
256.13
-0.4%
+3.9%
Oct
255.26
-0.1%
+3.7%
Nov
253.37
-0.6%
+3.3%
Dec
251.68
-0.7%
+2.3%
January ’19
251.30
-0.2%
+1.3%
Feb
253.69
+0.9%
+1.1%
Mar
256.40
+1.1%
+1.2%
Apr
257.63
+0.5%
+0.8%
May
260.08
+1.0%
+1.1%
June
261.90
+0.7%
+1.3%
July
263.66
+0.7%
+2.0%
Aug
263.23
-0.2%
+2.3%
Sep
263.26
0%
+2.8%
Oct
262.56
-0.2%
+2.7%
Nov
263.18
+0.2%
+3.9%
Dec
263.51
+0.1%
+4.7%
Jan ’20
264.04
+0.2%
+5.1%
Feb
265.34
+0.5%
+4.6%
Mar
269.63
+1.6%
+5.2%
Apr
272.48
+1.1%
+5.8%

From cnbc.com:

Home prices strengthened in April, despite a national economic shutdown and a sharp drop in home sales due to the coronavirus.

Prices for existing homes rose 4.7% compared with April 2019, and up from 4.6% in the previous month, according to the S&P CoreLogic Case-Shiller National Home Price Index. Price gains have been accelerating since autumn.

The 10-City Composite rose 3.4% annually, which was unchanged from March. The 20-City Composite increased 4% year over year, up from 3.9% in the previous month. Detroit continues to be excluded from 20-City Composite due to price reporting issues caused by the pandemic.

Cities with the strongest annual price gains were Phoenix, Seattle and Minneapolis. They reported increases of  8.8%, 7.3% and 6.4% respectively. Twelve of the 19 cities reported higher price increases in the year ending April 2020 versus the year ending March 2020.

“April’s housing price data continue to be remarkably stable,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices. “The price trend that was in place pre-pandemic seems so far to be undisturbed, at least at the national level.”

Record low mortgage rates have been giving buyers more purchasing power, thereby helping to keep prices strong. The average rate on the popular 30-year fixed mortgage, however, did jump briefly in March, which would have factored into April closed sales. Rates have since pulled back.

Sales of existing homes dropped to the slowest pace in a decade in April, according to the National Association of Realtors, as open houses were shuttered and the entire house hunting process went online. Not only did buyers pull back, but sellers either waited to list their homes or those already on the market pulled their listings.

But home sales have rebounded quickly and dramatically, with signed contracts on existing homes in May making the strongest monthly jump since the Realtors began tracking the metric in 2001. The supply of homes for sale continues drop, even as new listings now come on the market. Demand is incredibly strong, suggesting that prices will only get hotter in the coming months.

“As states and businesses continue expanding activity, homebuyers are showing increasing interest in purchasing homes, particularly those looking to take advantage of enticingly low mortgage rates,” said George Ratiu, senior economist at realtor.com. “However, extremely scarce inventory, tight mortgage underwriting and high unemployment continue to be the main challenges for many buyers. The latest weekly housing data shows national inventory is on a steep downward trend.”

BioDisco

When we were selling REOs, the bank clerks objected to reports that their properties had mold in them. Why? Because we weren’t mold experts, so how did we know for sure? Out of that, a new description was created, ‘biological discoloration’, which we shortened to BioDisco.

We still run into the discoloration, and it’s usually a hot topic for buyers – and a big ticket for the mold-remediation companies. But how bad is it? From the U-T:

One must know what kind of mold it is. Mold consultants and injury attorneys often describe some molds as worse than others. Their star is Stachybotrys chartarum, a black mold reported to produce infinitesimal quantities of a toxin. It sounds frightening, but the scientific community long ago debunked the myth that this or any mold was poisonous to breathe. For example, read the National Institute of Health Fact Sheet on Mold, found at www.niehs.nih.gov, or visit the Center for Disease Control site at cdc.gov/mold/faqs.htm. Nevertheless, the mold industry continues to call mold “toxic.”

Always start with a mold test. The Environmental Protection Agency recommends against mold testing. As confirmed by the DPH, there is no standard as to how much of a given airborne mold is “unhealthy.” Furthermore, indoor air sampling tests are extremely vulnerable to recent events in the home. For example, a recent shower, window opening, or carpet cleaning can completely change the test results. So, mold tests mainly unnecessarily frighten the home’s occupants with disembodied meaningless spore counts. There is rarely a legitimate reason to spend money on a mold test.

More tips here:

Link to U-T Article

Inventory Watch


We had a couple of big weeks in the middle of June, but our local market cooled off a bit this past week.

The inventory of active (unsold) listings is growing, and the total number of pendings has paused – which should continue as more of them start closing escrows.

Remember when the mortgage-interest tax deduction changed when they lowered the eligible mortgage amounts from $1,000,000 to $750,000?  And we thought it would decimate the $1.0M – $1.5M market?

Today there are 153 actives, and 137 pendings in that range – wow!

(more…)

Rents During Coronavirus

When an average or median price is moving less than 1%, let’s call it unchanged.

San Diego, which saw rent increases slow last year after a period of skyrocketing costs, continues to absorb drops following the start of the coronavirus pandemic.

ApartmentList.com, in its National Rent Report for June, reported that in the region, median rent stands at $1,573 for a one-bedroom apartment and $2,041 for a two-bedroom. Affordability remains an issue for county renters. The national median for two-bedrooms, by comparison, is $1,192.

Recent trends show that:

  • Rents in San Diego have decreased by 0.3% month-over-month, and are down 0.6% since the start of the pandemic.
  • Year-over-year rent growth in San Diego currently stands at 0.4%, lower in June than in the recent data.

The researchers noted that the pandemic “put a halt to normal moving activity.” That, combined with job losses, has “dampened the demand for rental housing across the country.”

“The economic fallout from the pandemic does not appear on track for the quick V-shaped recovery that many had originally hoped for,” the researchers wrote. “and this economic weakness is reflected in our rent data.”

This is normally peak season for rental activity. From 2014-2019, rent growth from March to June in San Diego averaged 1.2%.

North County rents are up sharply, year-over-year. The median price for a two-bedroom in Oceanside rose to $2,351. Though rents in Carlsbad fell the most, by .3% in the last three months, median rent for two-bedrooms there remains the most expensive in the county at $2,540.

Median rent in National City is the most affordable for a two-bedroom, at $1,323. It has fallen .8% in the last year, but just slightly since May.

San Francisco leads the nation in rent declines since March, followed by Orlando, Fla. and New York City.

Link to Times of San Diego

C.A.R. Backs ACA-11

June 26, 2020

Dear Jim,

Today, the California State Legislature passed a strong bipartisan measure (Assembly Constitutional Amendment 11) co-sponsored by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) and the California Professional Firefighters that is poised to be placed on the November ballot. This new ballot initiative is known as “The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act” (ACA 11).

This is great news as it builds on C.A.R.’s original initiative, strengthening the provisions we care most about and incorporates dedicated funding for fire protection and emergency response to safeguard millions of lives in communities across the state. The new initiative will continue to expand Proposition 13 property tax portability for all homeowners over 55 years old, people with severe disabilities, and wildfire victims by removing unfair location and cost restrictions to allow homeowners to move anywhere in the state. In addition, it will open up housing inventory throughout California, creating home ownership opportunities for first-time homebuyers.

This legislative solution passed through the California State Legislature with two-thirds support in the State Assembly and State Senate with strong bipartisan support. Together, C.A.R. and the California Professional Firefighters built an unprecedented broad and diverse coalition including local elected officials, business groups, labor, agriculture, Republicans and Democrats. Some of the supporters include the California Farm Bureau, California Fresh Fruit Association, California Forestry Association, California Business Roundtable, California Building Industry Association, California Business Properties Association, California Cattlemen’s Association, as well as wildfire victims, local elected officials, school officials, and senior groups.

This updated initiative generates hundreds of millions of dollars in annual revenue for local governments and school districts without raising property tax rates. It also creates a historic dedicated Fire Response Fund providing needed revenue to help protect millions of homes and lives across the state, including dedicated revenue for historically underfunded fire districts in rural and urban communities.

In addition, the initiative will provide added tax relief for California’s family-owned farms and ranches. The additional tax savings for a farmer or rancher will help protect generational farming.

Lastly, the initiative continues to constitutionally protect the right for parents and grandparents to pass the family home to their children and grandchildren so they can afford to live in the home as intended by Propositions 58 and 193. Since family transfer benefits have been under attack and face potential elimination, this initiative protects family homes for Californians.

The next step is for Governor Newsom to sign legislation in the next few days that will officially place ACA 11 on the ballot.

We are in an even stronger position to pass this important initiative that will improve housing affordability, benefit communities, and all Californians. I appreciate your support. Our team will be providing you with updates soon on how to get involved.

Sincerely,

Jeanne Radsick, C.A.R. President

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I need to keep the tax initiatives straight – this one allows seniors to buy a home in any California county and take their previous property-tax basis with them (called ‘property tax portability’).  If seniors buy down in price, then the previous taxation applies.  If a senior buys UP in price, there is a formula here at 2B:

(2) For purposes of this subdivision:

(A) For any transfer of taxable value to a replacement primary residence of equal or lesser value than the original primary residence, the taxable value of the replacement primary residence shall be deemed to be the taxable value of the original primary residence.

(B) For any transfer of taxable value to a replacement primary residence of greater value than the original primary residence, the taxable value of the replacement primary residence shall be calculated by adding the difference between the full cash value of the original primary residence and the full cash value of the replacement primary residence to the taxable value of the original primary residence.

(3) An owner of a primary residence who is over 55 years of age or severely disabled shall not be allowed to transfer the taxable value of a primary residence more than three times pursuant to this subdivision.

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200ACA11

I still think they are wildly optimistic that it will generate ‘hundreds of millions of dollars in annual revenue’.

Proposed Rent Relief From State

A relief package is being considered – excerpts from the SF Chronicle:

State Senate leaders proposed a massive economic relief package Tuesday to guide California through its coronavirus budget woes by encouraging residents to prepay their future state income taxes and offering struggling tenants more than a decade to make up the rent they owe.

The rent stabilization program would give tax credits to landlords to forgive the rent of tenants who cannot pay because of financial hardships related to the coronavirus, keeping them from being evicted.

The tax credits would be equal to the amount of rent, spread out over 10 years starting in 2024, though landlords who needed immediate cash could sell them to other taxpayers. Tenants would pay back their rent interest-free to the state, also over the course of 10 years starting in 2024. Those who continued to struggle financially would be given exemptions.

Major details of the program, including how many months of rent would be covered, still need to be worked out. But Senate officials said it could benefit about 2.3 million renter households that have at least one worker in a sector of the economy that has seen major job losses during the pandemic. Forgiving that rent would cost the state between $300 million and $500 million annually, if none of it were paid back by tenants.

“This is not a giveaway to anyone. It’s not a free ride,” said Sen. Steven Bradford, D-Gardena (Los Angeles County). “The Senate is giving tenants and landlords a hand up, not a handout.”

The California Apartment Association, which represents owners and developers of rental properties, said it would work with the Senate to refine the proposal.

“During these unprecedented times, we appreciate the Senate pro tem’s creative effort to help tenants and rental property owners,” Tom Bannon, chief executive officer of the apartment association, said in a statement.

Other rent relief proposals that lawmakers have floated include AB828, by Assemblyman Phil Ting, D-San Francisco, which would freeze evictions and allow courts to set up repayment plans for tenants, and SB1410 by Sen. Lena Gonzalez, D-Long Beach, which would create a fund to cover at least 80% of the rent that a tenant could not afford because of the pandemic, for up to seven months, if the landlord forgives the rest.

Link to Article

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