December, 2006 Valley Center Market Analysis

This market analysis information was provided by Sandicor, Inc. and is deemed reliable, but not guaranteed.

So you think the market is struggling, do you? Based on these numbers, we would say "better have another look." Remember, this is for December, supposedly the worst time of year to sell.

There were 18 detached homes sold in Valley Center in December, 2006. They range from a Bank-owned cottage on Woods Valley that sold for $385,000 to a home, just under 4,000 SF that sold for $930,000.

Let's look at the cottage. We saw it and frankly would not have housed a horse there. To say it is a fixer is an imaginative understatement. At 720 SF, it was built in 1966 with 1 tiny little bedroom and 1 tiny little bath on 1.3 acres. Well, you say, all the value is in the land, and you might be right if not for the fact that much of that valuable land was used up in the very long, narrow driveway that is the property's approach. It's not like you could build a barn and arena there.

So you think that homes are taking longer to sell. You're right, but not by much. The average days on the market for these 18 homes that sold is 59, not quite 2 months. Interestingly, the most expensive property sold, at $930,000, was one of the quickest to sell, 43 days. And if you think the holidays are a bad time to sell, this one closed escrow on December 22nd, 3 days before Christmas.

Ok, now lets' look at homes that went on the market in December. There were 20 of them. Two more than were sold, but there are currently 23 homes in Valley Center that are pending in escrow. Of these listed homes, the least expensive was 1,305 square feet for $465,000 with the most expensive being $985,000 in a gated community. There are currently 144 homes for sale in Valley Center. Aha you say! See, there's a tremendous backlog of inventory that has to be absorbed before our market is healthy again. OK, you can say that, but please remember that the least expensive home in Valley Center right now is being offered between $345,000 and $360,000, on 1.31 acres and on wheels!

Here's the good part. The average price per foot for homes currently on the market is $300.00. The average price per foot of homes currenly in escrow is $287.00 and the average price per foot of homes sold in December was $272.00. A decent range, which suggests to us that sellers are accurately pricing their property and buyers are no longer suffering an inflated market. Now's a great time to sell and buy!

Jag's Grill & Spirits

Located just 15 minutes from Escondido, Jag's Grill & Spirits is located right in the heart of Valley Center. Jag's is an original family-owned restaurant where community pride dominates in a futuristic setting. Jag's Grill is short for Jaguars, the Valley Center High School mascot, and the restaurant is honoring the hard work and dedication of the high school athlete. Walls are flanked with championship banners and large action photos of our atheletes. A Jaguar auto is suspended over the full service bar as if it crashed through the wall! Black, vaulted ceilings, specialty, high-tech lighting and large luminescent moons represent outer space and a bright future for Valley Center.

We absolutely love this place! It's new and clean and totally Valley Center's own. There's nothing else like it in town and the bar is a great place to stop in and catch the game. The decor is completely over the top. Just that alone is worth the trip, but on top of it, the food is spectacular! Certified Angus Beef for heaven's sake, right here in our town! Believe us, you'll be more than pleasantly surprised, and, like us, you'll be back often. If you haven't already, you need to discover this place.

Menu offerings range from appetizers such as Spinanch Artichoke Dip, Dungeness Crab Cakes and Jag's Calamari Steak Strips to mouth-watering dinners like slow-roasted Certified Angus Prime Rib, 16 oz. certified Angus T-Bone Steak and Chicken with Sherry Mushroom Cream Sauce.

Jag's is open for lunch every day, dinner nightly, as well as breakfast on Saturday and Sunday.

To contact them, please call (760) 751-2252 or visit their website: www.jagsgrill.com.

Please email Nancy and me for a coupon that will entitle you to 1/2 off one regular appetizer, so that you can experience this local gem for yourself.

Resale Home Sales Up Nationally

US home resales increased 0.6 percent in November, industry data showed, suggesting the property market is stabilizing.

The National Association of Realtors said existing-home sales amounted to a seasonally adjusted annual rate of 6.28 million units in November, well ahead of the 6.15 million figure expected on Wall Street. This followed a 0.5 percent increase in October.

David Lereah, NAR's chief economist, said the report suggests the worst may be over for the housing slump.
"As the housing market recovers from its correction, existing-home sales should be rising gradually during 2007 -- it looks like we may have reached the low point for the current cycle in September," he said.
"We've entered a more sustainable period of home sales now, and we expect greater support for prices over time as inventory levels are eventually drawn down."

The latest report showed housing inventory levels fell 1.0 percent at the end of November to 3.82 million existing homes available for sale, which represents a 7.3-month supply at the current sales pace.
The median existing-home price for all housing types was 218,000 dollars in November.

Welcome to David

We're excited to have David Banks of Coldwell Banker Home Loans joining us as a guest blogger. He will keep us up to date with mortgage rates and programs and what to look for in the future of real estate lending. Welcome, David. Glad to have you on board!

Now's the Time to Evaluate. . .

As the end of the year approaches now is the time to evaluate the status of your real estate holdings. Do you hold your property in a trust. . . do you have a Trust . . .did you refinance & take your property out of the Trust & you need to put out it back into your Trust?
You may verify how you hold title to your property by calling Amelia & Nancy & they will be happy obtain current vesting for you at no cost to you via Equity Title.

Finding the Right Home

We can provide detailed information on almost any property currently listed for sale, whether is't listed by us or another company. If you see a "For Sale" sign or an ad in the newspaper that interests you, we have access to all the data. Please be sure and call us for all the details.

We'll arrange an appointment to show you the property at your convenience. We will make all the details available to you including the listing price, description, special features and financing terms. We can save you time and take all the hassle out of house hunting.

Through our website and through www.ColdwellBanker.com you can view thousands of properties, anywhere, anytime. Coldwell Banker Online offers ""Personal Retriever", where you can search for homes that meet your needs and you can establish an e-mail service that lets you know the instant one becomes available. "Neighborhood Explorer" lets you learn more about the communities that interest you. There you will find road maps and school information, climate and housing values. "Rate Watch" gives you access to interactive mortgage information, rate calculators and other tools.

Here are 10 important questions that we will answer for you before we begin the negotiation process.

1. How long has the property been on the market?

Why: The length of time a property has been on the market may indicate the seller's willingness to negotiate.

2. Have there been any price reductions during the listing period?

Why: The amount of any price reduction, as it relates to the overall purchase price, may indicate the seller's desire to attract an offer.

3. Have there been any other offers on the property?

Why: It will be helpful to know what offers may have been turned down and for what reason.

4. What is the motivation of the seller?

Why: Motivation is a key element in any negotiation. As an example, if the seller has already purchased a new property, your ability to close quickly may be an attractive element of negotiation.

5. What personal items are included in the sale?

Why: Anything the seller is willing to leave behind that you won't need to buy when you move in has real value. Consider those items in your offer.

6. What is the price range of SOLD properties in the area?

Why: This information indicates the top and bottom of a specific market.

7. What is the average time on the market for properties in the area?

Why: You may face competition from other buyers.

8. What is the list to sale price ratio in the area?

Why: This information indicates sellers' past willingness to negotiate and by how much.

9. What is the average sales price per square foot of recently sold properties?

Why: This approach to establish value works best where there are similar homes, lot sizes and improvements.

10. What other known factors about the property or neighborhood could affect value?

Why: Review the seller's disclosure statement very carefully with us. The surrounding can effect your enjoyment of the property and it's resale value.

2006 ~ no bubble burst

How many times last year did you hear some "expert" say real estate was not a good investment? 2005 was supposed to be the pinnacle for real estate values ~ the highs in 2005 prices would slowly begin to decline, creating what most newspapers depicted as the “Bursting Bubble”. This, after many years of growth and the Federal Reserves reduction of interest rates allowing leverage and creative financing to boost the wealth factor across the Nation from appreciation of personal homes and other real estate investments. However, this illusionary bubble never expanded to the point of popping.

2006 was supposed to be the year of fear. Consumers were told that anything in real estate would turn their hard earned down payments into large losses. However, looking at the statistics, the return on a real estate investment is still one of the smartest money decisions out there. You simply adjust the time frame to reflect the market. Take into consideration
declining interest rates due to the softening bond market yield, incorporated with seller's ideas of value now more inline with current market conditions, the expectation is that consumers can now develop a 5 year investor's strategy.

Did you know that a property purchased in 2002 with 20% down payment per $100,000 dollars would yield a return in 2006 of approximately $118,400 dollars of appreciation equity? Did you also know that the added deductions from interest paid on mortgage loans increased that return on investment? If you didn’t know this fact you need to get real estate advice from a proven professional and quit reading stories from uninformed staff writers or media articles that create nothing but fear in consumers.

Would you invest in the stock market if there were a guarantee of a 100% return on your investment? In other words an investment of 20,000 for a guaranteed 20,000-dollar return? How about leaving your money in a bank or mutual fund for a 12% return? Which seems better to you and has less risk? After all, banks are built every day, but nobody's making any more land. The only thing that holds most people back from buying more real estate is the payments and fear of carrying cost. If you invest in real estate and you receive the tax benefits all year long with continued equity even if the market has ZERO natural appreciation. But did you also know that a miniscule ½% increase in the purchase price per year with 20% down still returns a gross equity return of approximately 8.50%?

Still not convinced? Waiting to buy because of falling prices does not affect the payment if the interest rates are climbing. If interest climbs 1% and property values decline 10% the payment is still the same. Therefore, with prices stabilizing and inline with market conditions and the reduction of interest rates back to 2004 pricing, an investor or homeowner can invest their money and receive the benefits of the adjusted prices plus the lower rate. When can you remember a decline in interest rates along with the adjustment of prices ever happening before? Most times it is the reverse where interest rates are climbing when prices are falling, due to inflation.

I believe there is no better way to invest your cash than real estate. I have found no other investment that creates full control over decisions and that provides a full benefits program that associates itself with ownership. If real estate continues to appreciate at a 6% level for the next 3 years, the return on investment with 20% down will be approximately 70%. Is that good enough? Think about it. What will you do in 2007?

Valley Center Activity Report for November, 2006

This information has been provided by Sandicor. The information is believed to be accurate but not guaranteed.

Residential Detached Homes
New Listings: 43 Average list price $828.592 Total New $35,629476
Number sold: 9 Average sales price $617,888 Total sold $5,561,000
Average days on market: 86

Lot/Land
New Listings: 8 Average list price $631,222 Total New $5,049,776
Number sold: 0

How Important is Internet Marketing?

According to a member survey published in SanDiegoREALTOR Magazine, only FORTY EIGHT PERCENT of Realtors use a personal website! This, even though the same survey discovered that almost 100% of them own a computer and use the internet and email. Does this make sense?

Let's look at some interesting facts:

Over 82% of potential homebuyers log onto real estate company Web sites to search for properties.

Recently more than 50% of all people who bought homes used the Internet to search for them.

Internet home buyers are highly qualified and more affluent. The median household income of Internet buyers was 25% higher. California home buyers using the Internet are twice as likely to have higher incomes.

Internet home buyers purchase more expensive homes. The median price of homes purchased was nearly a third higher than that of traditional buyers.

Buyers who use the Internet to search for a home, purchase their homes twice as quickly as people who use other sources. They typically contact the listing agent after visiting a real estate website and 66% are interested in a specific home.

Realtor.com, the official website of the National Association of Realtors, states that each home listed on their site averages 114 viewers and the site gets 86 million page views each month.

Coldwellbanker.com has over 17 million hits each week and visitors spend an average of 20 minutes on our site.

Searching for a home online is easy. Buyers can view your property from the comfort of home, anytime, any day.

Internet house hunting saves buyers time over traditional methods. Search functions make it easy and quick to find and zero in on homes that offer the features they want.

Internet buyers have a happier experience. They're twice as likely to be very satisfied with the home buying experience.

Not only do we have our own personal, specialized website, but we are plugged into the Coldwell Banker network, which is the leader in leveraging an Internet presence for your property.

Coldwell Banker's CAmoves.com features a property search function allowing buyers to search for a home by city, zip code, MLS number or property type and features. The powerful home delivery function allows buyers to register for an automatic e-mail alert when homes matching their search criteria become available. The Open Home Search automatically creates a tour with schedules, maps and driving directions.

ColdwellBanker.com is an award-winning National website. This site's exclusive "Personal Retriever" will actively e-mail buyers looking for property and there are over 170,000 home seekers signed up for this service.

Through our state-of-the-art Intranet, we will give your property instant exposure to over 4,000 other Coldwell Banker agents who are working with pre-approved buyers right now. No other company can find you the right buyer faster.

http://www.smithnlayne.com is linked to Realtor.com, which as of September, 2006, has had 146.5 million visits. It is the #1 website nationally.

November, 2006 Homedex Report(market info)

This useful information has been provided by the North San Diego County Association of Realtors. Our association has no position or stake in the results of a monthly study called HOMEDEX. The sole purpose in producing the index is to provide its' members and our clients with consistent informaiton of home prices in the region. The Homedex provides our seller clients information that can help them establish a viable price on the property they wish to sell and our buyer clients identify areas where homes are more affordably priced.

For a complete copy of this report, including charts and graphs and information on specific areas of North County, please contact us and we will send it to you.

1. The median price for all North County home sales, attached and detached, declined from $545,500 in October to $540,000 in November, 2006.
a. Detached homes in North County declined 1.21 percent from $609,375 to $602,000 from
October to November, 2006.
i. Detached home sales outside North County rose 1.82 percent in the same time period.
b. Attached home sales in North County fell 11.39 percent from $395,000 in October to
$350,000 in November, 2006

2. The present market conditions are highly ideal for buyers. Interest rates remain comparable to 40-year lows and the inventories are becoming higher than has been the case in the recent
past.
a. Conditions may not last with early indications that the housing market outlook is
improving. Prices are expected to rise modestly next year.

3. Even in a cooler market, 2006 will still be the third-best year on record, according to the
National Association or Realtors.

4. The current condition of the housing market needs to be kept in perspective. House values
rose 88 percent on a national average, higher in California, over the past decade.
a. The number of U.S. households is expected to increase 15 percent over the next decade
creating a continued high demand for housing.
b. Even with the lower appreciation levels in home prices, there will be a strong investment incentive
to buy homes in North San Diego County.
i. Especially considering that a home is not like other investment assets. A home provides a basic
human need; it has the ability of use by its owner.

5. There's no housing bubble to burst since.....
a. People continue to come to San Diego and want to enjoy the benefits of owning their own home.
b. Mortgage rates still remain below those of the past several decades.
i. And there are numerous mortgage programs and creative financing techniques buyers are using
to qualify to purchase homes.

Sell your home faster by making fewer mistakes

#1 Price your property appropriately - You want to get the most for your home. The best way to do this is NOT to list your home at an excessively high price. A high listing price will cause some prospective buyer to lose interest before even seeing your property. As a result, overpriced properties tend to take longer to sell, and they end up being sold for less than they would have sold for if priced appropriately from the start. We listed a property in Bonsall that the sellers initially wanted to list about $200,000 above the market. I shook their hand and said "thank you but no thank you." When we turned to go to my car, they said "wait a minute. What is it worth". We told them what the comparable market analysis showed and, because of their strong motivation, (it had been on the market for a long time with another agent and the condition was poor,) they agreed to list it slightly below the market. At that time, the market was very active and their neighborhood in particular was HOT. We had 10 written offers with deposit checks within 48 hours of submitting into the multiple listing service. A bidding war ensued through the counter offer process and the home ended up selling for more than the listed price and slightly higher than the market supported. By UNDER pricing their home, they sold it for about $50,000 above market.

#2 Re-finance appraisals are not an accurate reflection of value - A re-finance appraisal may have been stated at an untruthfully high price. Lenders will sometimes estimate the value of your property to be higher than it actually is in order to encourage re-financing. The MARKET value of your home may actually be lower. Beyond that, the market fluctuates and the re-finance appraised value may be out dated. If you have a lot of equity in your home and the new loan will be a low percentage of your home's total value, say 70% or less, then the lender is not really taking a risk by allowing an overvalued appraisal. There's 30% equity to fall back on. Your best bet is to ask us for the most recent information regarding property sales in your community and, more particularly, your neighborhood. We will give you an up-to-date and factual estimate of your property value.

#3 Always negotiate with pre-qualified buyers - A prospective buyer who shows interest because of a "for sale" sign he/she saw may not really be interested in your property. Often buyer prospects who do NOT come through a Realtor are a long way from actually buying. They may still have to sell their house, or may not be able to afford your house at all. They may still even be unsure whether or not they want to move. We always investigate and question on your behalf and there is absolutely no reason what-so-ever to negotiate an offer with a pre-approval, as opposed to a a pre-qualification, as part of the offer. In today's highly competitive lending market, a prospective buyer can get pre-approved in less than a day most of the time. It always makes me laugh when I hear someone say, "I had someone offer me (fill in the amount) just the other day. Oh really? Did they have something to sell before they could buy? Had they been pre-approved for a loan? Do they even qualify for loan? Did they have any cash available for a down payment? A verbal offer isn't legally binding so if the offer is not written and you don't know the answers to these questions, and more, then what you actually had was a conversation.

#4 Know your rights and responsibilities - We cannot stress how important it is that you are informed about the real estate contract. They are legally binding and can be complex and confusing. Mistakes in the contract could cost you tens of thousands for repairs and inspections. Know your responsibilities before signing the contract and limit your exposure to liability when you create one. I once represented the buyer of a property who asked in the contract for the seller to make any repairs called for on a termite inspection report. I did not represent the seller and the agent who did allowed them to agree to that without explaining that what they were doing was signing a "blank check" regarding damage from termites, dry rot and fungus. The home had been built on a sub-floor and during one unusually rainy season, water had ponded in the sub-floor causing fungus to infect much of the area. The cost to repair the damage was roughly $10,000, which the seller's had unknowingly agreed to repair at their expense. We actually suggest to our selling clients that they obtain a termite inspection report when the property is first listed. That way when the offer does come in asking for termite repairs, they know how much money they are negotiating.

#5 Allow your property the greatest amount of exposure possible - Ask your real estate sales person for a specific marketing plan, including where the property will advertised and when before you sign the listing agreement. If the only exposure they will give it is word of mouth, give us a call. We will employ a wide variety of marketing techniques. We will also be committed to selling your property. We will be available for every phone call from a prospective buyer or their agent. We are always available by office and cell phone and email to take these important contacts. We have sold many properties that became expired listings after the previous agent didn't do enough to get it sold during their listing period. Ask the prospective sales agent; who is the most important target market? If they don't say "other real estate agents," give us a call. If you have a property to sell, there is likely a real estate agent out there right now with a buyer looking for it. Marketing to other agents is one of the most important things we do to get your property sold. Through our specialized web site, we have the ability to send E-cards on your home to our data base of active real estate agents in the community, state, country and throughout the extensive Coldwell Banker and Coldwell Banker Previews networks.

Title Insurance? What's that?

A title insurance policy protects a real estate owner and/or lender against loss or damage they might experience because of liens, encumbrances or defects in the title to property, or the incorrectness of the related search. (Inaccurate information being linked to the property before the title policy is issued) Car, life and health insurers assume risk for future events, collecting continuing premiums for the service. A title policy is the only form of insurance that protects against past events and is issued for a one-time premium paid at close of escrow.

Buyers and lenders need title insurance to know that the property they are involved with is insured against various title defects, such as another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements and other items that are mentioned in the actual policy. Whether it is a sale, refinance, construction loan, etc., the seller, buyer and lender all benefit from title insurance.

Once a property goes into escrow a title policy is created after the lender or escrow company opens a title order with a title company. The title company then makes a comprehensive search including public records of the county recorder, federal and state agencies, and county and city offices. A preliminary title report is issued to the Realtors, buyers, sellers and lenders for review and approval.

The preliminary title report is part of the buyer's mandatory inspection of the property made during their due diligence period negotiated in the purchase contract. The buyer and lender must be happy with what will remain recorded against the property after close of escrow, such as taxes, new mortgages, burdening and beneficial easements before escrow can close. Once escrow closes, the actual title policy is typed and sent to the new owner and the lender.

When "flip flopping" is a good thing....

"Flip flopping" has gotten a bad rap lately. In the political arena, at least. However, in real estate, it can be a good thing. Buying a fixer and flipping it after rehab has become an entrepreneurial dream job. It requires some skill, though, and certainly inventiveness. The hardest part is chossing a likely prospect for a flip. This usually requires the neighborhood support the sales price of the finished project, not the wreck you're hoping to convert. In other words, if all the homes in the neighborhood are cheap, you might want to look somewhere else. Finding the right materials at a price which doesn't break the budget and shrink your profits while still presenting a home which will sell is a balancing act which gets easier with time, but is never wholly conquered. The one thing about the "Flipping business" which is constant, is the fact that nothing is a sure deal. There's very often surprises in homes which only becomes visible when the walls are opened up. Things like improper wiring, broken pipes, improper insulation, and other issues which could drain resources. The key is to discover them before closing escrow.

If the right house is purchased at the right time, the right changes are made, and the right materials used, "flipping" can be great fun and a great investment. It makes sense to utilize every source when choosing an investment of this kind, and using a real estate agent who is knowledgeable and well versed in the neighborhood you're considering is a smart move.