Michael Roberts' Blog -San Jose Homes, Real Estate and Houses for Sale

RealtyTrac®, one of the leading online marketplaces for foreclosure properties, released its May 2009 U.S. Foreclosure Market Report^TM, which shows foreclosure filings-default notices, scheduled auctions and bank repossessions-were reported on 321,480 U.S. properties during the month, a decrease of 6% from the previous month but an increase of nearly 18% from April 2008. The report also shows that one in every 398 U.S. housing units received a foreclosure filing in May.

“May foreclosure activity was the third highest month on record, and marked the third straight month where the total number of properties with foreclosure filings exceeded 300,000 – a first in the history of our report,” said James J. Saccacio, chief executive officer of RealtyTrac. “While defaults and scheduled foreclosure auctions were both down from the previous month, bank repossessions, or REOs, were up 2% thanks largely to substantial increases in several states, including Michigan, Arizona, Washington, Nevada, Oregon and New York. We expect REO activity to spike in the coming months as foreclosure delays and moratoria implemented by various state laws come to an end.”

Nevada, California, Florida post top state foreclosure rates

Nevada continued to document the nation’s highest foreclosure rate, with one in every 64 housing units receiving a foreclosure filing during the month – more than six times the national average.

With one in every 144 housing units receiving a foreclosure filing during the month, California posted the nation’s second highest state foreclosure rate despite a 4% decrease in foreclosure activity from the previous month.

Florida posted the third highest state foreclosure rate in May, with one in every 148 housing units receiving a foreclosure filing during the month

Arizona posted the fourth highest state foreclosure rate in May, with one in every 158 housing units receiving a foreclosure filing, and Utah posted the fifth highest state foreclosure rate, with one in every 316 housing units receiving a foreclosure filing.

Other states with foreclosure rates ranking among the nation’s 10 highest were Michigan, Georgia, Colorado, Idaho and Ohio.

Top 10 states account for nearly 77% of total U.S. foreclosure activity.

California reported 92,249 properties with foreclosure filings in May, the highest total of any state and up nearly 23% from May 2008. Bank repossessions in California were down 1% from the previous month and defaults were down 18%, but scheduled auctions were up 18%.

Default notices, scheduled auctions and bank repossessions in Florida were all down from the previous month, but the state still posted the nation’s second highest number of properties with foreclosure filings: 58,931, up 50% from May 2008.

Nevada documented 17,157 properties with foreclosure filings in May, the third highest total of any state and up nearly 83% from May 2008. A 23% increase in bank repossessions helped push Nevada foreclosure activity up 5% from the previous month.

Other states with totals among the 10 highest in the country were Arizona (16,865), Michigan (13,891), Ohio (11,360), Illinois (10,942), Georgia (10,516), Texas (9,813) and Virginia (5,385). The top 10 states accounted for nearly 77% of total properties with foreclosure filings nationwide.

California, Florida, Nevada dominate top 10 metro foreclosure rates
Foreclosure filings were reported on 14,681 Las Vegas properties in May, one in every 54 housing units – more than seven times the national average and the highest foreclosure rate among metro areas with a population of at least 200,000. The city’s foreclosure activity increased 4% from the previous month and 78% from May 2008.

California and Florida accounted for the remainder of top 10 metro foreclosure rates.

California cities accounted for six of the top 10 spots: Stockton at No. 2 (one in 68 housing units), Modesto at No. 3 (one in 71), Riverside-San Bernardino at No. 4 (one in 75), Merced at No. 5 (one in 78), Bakersfield at No. 7 (one in 94), and Vallejo-Fairfield at No. 9 (one in 101).

Florida cities accounted for three of the top 10 spots: Cape Coral-Fort Myers at No. 6 (one in 82 housing units), Orlando-Kissimmee at No. 8 (one in 101), and Miami-Fort Lauderdale-Pompano Beach at No. 10 (one in 105).

Wow,  it’s 98 degrees out!  The number of sales for the month of April for Santa Clara County are also hot and very encouraging.    It is obvious our market is stabilizing,  finally!  Or is it?  Could this just be a spike that will pop this little bubble?

If  I were a gambling man, I would bet that the heat today might keep (some) buyers away.  Nah!  Didn’t apply yesterday.

Yesterday,   Saturday,  there were so many agents and clients showing/viewing property that parking in front of many listings was hard to find.     Several new home listings, a few my clients found worth pursuing, were already looking at multiple offers.

The average days on market for the County was down by almost 30 days.     We were looking at 125+days and now we are seeing 108 days.   The average sales/listing price percentage is up to 96% and has held consistently here for a couple of months now.

I wonder if I should buy that 30,000sq ft home now.  It;s only $64mil.  Maybe after Ice Cream!

Update: June 11, 2009-First-time home buyers who would otherwise qualify for the $8,000 tax credit, but don’t have the money for a down payment or closing fees, may now be able to get a loan to help cover those upfront costs.

The U.S. Department of Housing and Urban Development (HUD) announced on May 29 that the Federal Housing Administration (FHA) will allow state housing finance agencies to provide second mortgages “monetizing” the tax credit so that borrowers can use the funds toward their down payments and closing costs for the purchase of homes with FHA-insured mortgage loans.  End Update

New measures for the $8K First Time Buyer Tax Credit have been announced and I am one who believes it may be something that first time buyers, here in high priced Santa Clara County, will find useful.

The measures announced by HUD would allow FHA-approved lenders; federal, state and local government agencies; and FHA-approved non-profit organizations to supply home buyers short-term or “bridge loans” up to the amount of the $8,000 first-time home buyer tax credit

I am not sure how lenders will implement repayment requirements though.   Stay tuned for that.

Previously, the home buyer would have been unable to access the tax credit until they filed their next annual tax return or an amended 2008 tax return and received the refund from the IRS.

“Secretary Donovan shares our view on the need for a housing and economic recovery,” said Robson(NHBA Chairman). “We appreciate his leadership in moving swiftly to help first-time home buyers to access the tax credit up-front at the time of closing. The timing could not have been better as we are in the midst of the crucial spring home buying season.”

To qualify for the tax credit, first-time home buyers must actually close on their home purchase by Dec. 1, 2009. Buyers can take the credit on their 2008 or 2009 income tax return.

In San Jose and surrounding cities like Cupertino, Los Gatos and Cambrian we have seen several creative financing programs serve buyers.   I hope this is one finance “tweek” that proves out to be successful.   The other programs were “funded” mortgage packages and the demand usually sucked the air out of them pretty quick.

Just learned the flood zone area boundaries will be changing May 18th.

The Federal Emergency Management Agency (FEMA) has issued revised Flood Insurance Rate Maps (FIRMs) for all of Santa Clara County that become effective on Monday, May 18, 2009

Prospective home buyers may wish to check with their insurance agent to see if the property’s flood zone, and insurance requirements, will be affected by the map changes. To comply with federal law and to obtain the lowest available rate, owners drawn into a higher-risk zone must purchase flood insurance before the new maps become effective on May 18, 2009.

Areas affected by the new maps…….

The revised FEMA maps will expand the 100-year flood zone and affect residential parcels in Palo Alto near Foothill Expressway, in Cupertino near Heney Creek Place, and in San Jose near Zanker Road and Component Drive, and Kingston Way and Manitoba Drive.

In some areas, the 100-year flood zone will be reduced in size and parcels will be removed.

Ok!  I am suffering from too many numbers, quotes and opinions.  Cap Rates, Cap and Trade, Carpet Tiles, Carbon and Tire Piles.   From Obama’s economic plan and Bush’s mistakes to Barney Franks…too much clutter!  Maybe it’s from the Starbucks at 9pm.

Like Obama said yesterday ” The stars have aligned…”  He was referring to the congress and white house being on the same side, I know.  Who cares!   I only care about the residential housing segment!  In my 28 years of working in the residential housing market has made it clear to me..The Stars Have Aligned..NOW!!!!

The market has bounced around, the housing segment has free fallen, like a trolley car going down Lombard street without a break man.  The job losses are about to level off.  The truth is the housing market is preparing to make a surge big time.  The mortgage finance rates are so low they are nearly free considering the 5-7 year equity upside coming.  Especially the fixed rates.  It is bringing tears to my eyes!..or is it the coffee?

I have been writing offer after offer for buyers, lately(today),  and homes are seeing multiple offers like 2003.  It is amazing how many best buys we are finding for everyone… are you one?   The inventory is down from 16 months worth to 4 months worth.   Some communities are at 3 months worth of inventory.  The big question….Where is the bottom?  Ummm…I think it is about to go on sabbatical.

If anyone is waiting…they are going to be like those in 2005 and “wanting”.    Market conditions have never been better.   Find a savvy Realtor, mortgage professional and your calculator and get moving on the Foreclosures and Short Sales available.    Where?  Wherever YOU want to buy a home in Santa Clara County or an investment out of the area.  Your Realtor is licensed to sell in California!  Everywhere in California!

Don’t believe me!   Call your friends…Call your Uncle, the Realtor…Go to open houses this weekend!  Then come back here and tell me what you learned!

While searching for a particular single family home for a recent buyer client, looking for REO’s (bank owned properties) (foreclosure to be specific), I kept getting the same results….good relative data that was current and up to date in the right communities.   In the meantime,  my new client forwarded a handful of MLS numbers and excitedly asked  “Can we see these foreclosure homes this afternoon?”   Funny thing was… They were no longer available.  One had a  pending sold status another was no longer on the market and the last one…I could not even find.

Frustrated, I asked my client where did you find these listings?   The answer was disappointing…another website.  I won’t share which one as I have found the data there to be poorly arranged and not current by any standards.   Figures!   I asked “Why would you go to another website to find a home when I have been sending you the most recent daily updates?”   I got another “figures” answer. …”I saw it on the web and they advertised on the TV news”.    Oh Gosh!  Not the web monkeys!

Many new websites and data exchanges have been popping up lately.  The problem with these other sites is that their data is third party.   They are built by web masters to capture leads that are then sold to the uninformed Real Estate agent looking for new business. These sites load from the same place your search is sourced from.  The one you set it up with your Realtor whom you probaly hired to find you the best home at the best price available.

Unfortunately, the web architecture does not have a true update process programmed in.  This allows for information to become old and irrelevant.    Much of the information is derived from Title records too.  If someone refinances their mortgage it will report it as a sale when it is “far from that”.   If you thought a home sold for $250,000 which was actullay in a million dollar neighborhood…good chance it did not REALLY sell.    Then there is the home that is $300,000 under market price….it actually sold 2 years ago!

In short,  all the homes available for sale were right here at their finger tips.   The data derived from this search tool is current, changes are updated by the minute and there is the capability to have any new results, based on the home search criteria, emailed directly to them.

The map search is the Best home search tool for many buyers.  This allows you to draw a line around a neighborhood and see only those results without being overwhelmed with a zip code search that will, invariably, return homes not anywhere near your desired neighborhood.   San Jose is rich in investors and fast, filtered results are paramount in being the first to find the best buys.

I hope I remember, the next time a meet a new client,  to share with them the dynamic web source for home buyers is right here.   Santa Clara County, Los Gatos, Cambrian, Blossom Valley, East Hills, Silver Creek, Milpitas, Fremont and Campbell etc… are included.   Cities in Merced, Stanislaus, Alameda and San Joaquin County are participating in the results found in this too.

Maybe I should post a bulletin on TV!

Which season is the best time to be a homeowner? Tax season! Along with the freedom to paint and remodel, tax breaks are one of the many perks of homeownership.

The bad news? Unless you choose to take the standard deduction, your days of “EZ” tax returns are over. You’ll need to pick up the 1040 long form and itemize your deductions on Schedule A. Get IRS forms here.

Most state and local governments charge property taxes, which are an annual tax on the value of your property. You can deduct all of the real estate taxes that you pay.

There is some good news about those monthly mortgage bills: A part of the soul-crushing sum can be deducted on your tax return. For most homeowners, the bulk of each payment goes towards interest. That interest is tax deductible, up to a total of $1 million ($500,000 if you are married filing separately) on loans taken out to buy, build or substantially improve a principal residence and a second home. Any type of home is eligible: a mobile home, house, condo or even a houseboat.

In order to deduct mortgage interest on your second home, you must stay there at least 14 days a year or more than 10 percent of the days it is rented during a year. If you don’t meet this requirement, it is considered a rental property rather than a second home.

Also, other rules apply if you rent out space in your primary residence.

“Talk to a tax professional. You have to report the income because that is business use of the home as well as residential,” explains Alison Flores, a research analyst at the H&R Block Tax Institute.

You can also deduct interest on home equity loans of less than $100,000 ($50,000 if single or married filing separately), as long as the first and second mortgages total less than the value of your home.

EXAMPLE: You take out a $40,000 home equity loan to pay for your son’s college tuition. Your home is worth $100,000, and you owe $70,000. You can deduct the interest on $30,000 dollars of the loan, but you’re on your own for the remaining $10,000.

If you deduct enough mortgage interest to get a tax refund, you’ll need to claim that money as income in the year you receive it.

Always consult your tax advisor. For more information, read IRS Publication 936.

Scroll Down for More Tax Tips….

Congratulations — you’re a homeowner! Now that you’ve moved into your new digs, you’ll need to:

• Decide what color to paint the living room
• Sort through those last few boxes (eventually)
• Learn about tax deductions for new homeowners

Even before you sign on the dotted line, you can get a mortgage credit certificate (MCC), which is intended to help lower-income buyers afford homeownership.

If you qualify, you can claim the credit each year to cover part of your home’s interest. The only catch: You must get an MCC before you get a mortgage and buy a home. Contact your state or local housing finance agency for more information.

You’re eligible for a host of tax deductions the minute you get the keys to your front door. Like all homeowners, you can subtract real estate taxes and mortgage interest from your tax tab. Even if you bought a home in December, it’s worth getting a few dollars off your IRS bill.

The year you buy your home, you can also deduct any money paid towards mortgage points. The term “points” refers to charges paid by a borrower to get a mortgage, and can also be called loan discounts, discount points, origination fees or maximum loan charges.

You must meet these criteria to qualify: You are buying (not refinancing) a primary residence. Your loan must be secured by the home you live in most of the time.

·  Your overall cash paid at closing exceeds the points charged. This can include money from you, or points paid by the seller. You can’t deduct points you paid for with borrowed funds from a lender or mortgage broker.

·  You’re not using the points to avoid traditional closing costs. If you paid points in lieu of closing costs, like title insurance and attorney’s fees, you can’t get a tax credit.

If you meet that criteria, the amount on your settlement statement that’s listed as “points charged for the mortgage” can be deducted from your taxes.

If you refinanced your mortgage, the points you paid are not deductible in the year you paid them, unlike the points you paid when you first took out your mortgage. For refinanced mortgages, you have to deduct the points equally over the life of the loan. This also goes for loans you take out to buy a second home or investment property.

HERE’S HOW: Divide the points paid by the number of payments to be made over the life of the loan. EXAMPLE: If you paid $2,000 in points and will make 360 payments on a 30-year mortgage, you can deduct $66.72 [($2,000/360) x 12] each year, assuming you make 12 mortgage payments in a year.

There is an exception: If you use part of the money for home improvements, you can deduct the portion of points related to the improvements in the year you paid them.

EXAMPLE: If you refinanced your $200,000 mortgage with a new 30-year loan of $250,000, paid $2,000 in points and used the extra $50,000 to make home improvements, you can deduct 20 percent or $400 [($50,000/250,000) x 2,000] of points in the year they were paid. The remaining points paid must be deducted equally over 360 monthly payments or $53.28 [($1,600/360) x 12] each year.

NOTE: If your mortgage ends early because you paid it off, refinanced it with another lender or sold the home, you can deduct any remaining points for the mortgage in that year. So, in the above example, if you sold the house the following year, you can deduct $1,546.72 ($1,600-$53.28).

“I want to remodel now however, the market is so soft will I waste my money?”   That depends on the property value and what your LTV (loan to value) actually is.   Consider this news from NAHB.  The residential remodeling market declined further during the final quarter of 2008, according to the latest National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI). The current market conditions indicator slid to 27.7, from 33.5 in the previous quarter. Future expectations of remodeling work plummeted to 19.6, from 27.7 in the third quarter. Both these indices descended to historic lows since the start of the RMI in 2001.

Wow!  If you have a low LTV and plan to be in your home fro a few more years maybe a small re-do would be of value now.  I bet some contractors are ready to get any job to keep some cash flow and stay relevant.

The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects. Any number over 50 indicates that the majority of remodelers view market conditions as improving. The RMI has been running below 50 since the final quarter of 2005, following decreasing remodeling expenditures since that time.

“During the last quarter many remodelers were asking if their phones were still working because they received virtually no calls for work,” said NAHB Remodelers Chairman Greg Miedema, CGR, CGB, CAPS, a remodeler from Tucson, Ariz. “The jobs we are getting are for smaller projects and necessary home maintenance.”

 Yep, it is time to make the call.

Nationally, market conditions for major additions and alterations shrank to 20.2 (from 29.4 in the third quarter), while minor additions and alterations conditions slowed to 33.5 (from 38.51). Maintenance and repair dropped to 27.6 from 30.9 in the previous quarter. Overall, major additions and other large remodeling jobs have experienced a greater decline than smaller remodels and maintenance.

“Remodelers suggest that the huge decline in consumer confidence, volatility of the stock market, and uncertainty about the future of the economy have made homeowners delay remodeling decisions,” said NAHB Chief Economist David Crowe. “These anxieties are causing consumers to wait and see if conditions improve before they are willing to commit to home improvement spending.”

All measures for future expectations in the remodeling market (calls for bids, amount of work committed for next three months, backlog of remodeling jobs, and appointments for proposals) dropped. Current market expectations slipped in all regions during the fourth quarter, with the Northeast declining to 24.9 (from 32.9 in the third quarter), the South 30.7 (from 31.5), the Midwest to 28.0 (from 36.2), and the West to 25.0 (from 36.1).

 Ok!  So, If you bought a REO (foreclosure) you know you bought at a super price probably very near the bottom, and you can see yourself living in your home for a few years then it is definetly time to take advantage of the soft remodel market and get your bids.  Good Luck ….and remember I am always a great source for tips.

This Green Co. is flourishing…More jobs maybe?

Sol is for Sun…This company (linked below) appears to be adding some sunlight to our recent rainy days.

SolFocus Inc. raised an additional $19.28 million in its third round of funding on a day when we are all focused on the economic stimulus.

The Mountain View-based company in January reported raising $47.5 million and said it expected to close the third round between $60 million and $70 million.

The developer of concentrator photovoltaic systems said it will use the new funding to accelerate expansion of its manufacturing operations and extend its early base of commercial CPV deployments. The company aims to grow deployments from .5 MW in 2008 to approximately 100MW by the end of 2010. 

This should help add jobs and relieve some pressure in our local real estate market.   Especially where most of the work force lives, San Jose right? 

Does the Green Economy have staying power though?  I think about the wind farm subsidies and how they went away in the 80′s.   I wonder if these new Solar co’s will last. 

 SolFocus Inc.