2010 August | California Pacific Brokers

Sorry, It’s Too Late to Panic Now.

August 24, 2010 By Michael

Yup, there was some dismal news in the housing market today. Housing sales in July 2010 dropped 25.5 percent below July 2009 sales. That’s not so hot, especially when we’re trying to get into recovery mode. It’s the lowest volume of home sales in 15 years!

So with all this doom and gloom, time to avoid real estate, right? Time to panic and start unloading your investments? Head to the hills and bury yourself in that bunker your crazy uncle built back in 60’s during the nuclear weapons craze?

Sorry, it’s too late to panic now. Actually, about 5 years too late. Checkout this graph. It’s self-explanatory (you can click on it to make it larger).

A good time to panic. You just bought a $500,000 property in 2005, and things never looked better! There was 20 percent year-over-year appreciation for the previous several years. Heck, at this rate, you could double your investment in less than 5 years…without doing a single thing.

A good time to be sane. You’ve been sitting on the sidelines, watching property values decline. At the current rate, and with recent news, it seems like prices are just going to spiral down into an abysmal pit of despair…all without you doing a single thing. So be sane! Take advantage of the decline!

Could prices drop further? Absolutely. How much of a drop? That’s the thing, nobody knows by how much and when it will happen. Prices will not decline forever. This also, is an absolute.*

It’s just like other investment vehicles out there. For example, if you’re going to buy and sell stocks. You can never nail the top or the bottom. As long as you get close, consider yourself lucky. Otherwise, you’ll be on the sidelines watching others make the profitable moves.

*(My personal opinion: looking at market statistics, I believe we hit the market bottom sometime around March of 2009. So far, that number has been holding… Have a different opinion? let me know.)

Filed Under: Featured Properties, News

More Foreclosure Relief? Depends on what Schwarzenegger has for Breakfast.

August 20, 2010 By Michael

Additional Anti-Deficiency Protection is Almost Here!
On Thursday, August 19, the California Senate approved SB1178. This bill extends anti-deficiency protections to homeowners who refinanced their mortgages, but didn’t take any cash out, and are now facing foreclosure.

Ok, in plain english: Most people don’t realize, that when they’ve refinanced their existing mortgage to get a lower payment, that mortgage now becomes hard money. It’s considered purchase money when a buyer takes out a loan to buy a home. Purchase money for a personal residence in California is not subject to a deficiency judgment. But the rules change when an owner refinances. Hard money loans are subject to deficiencies. This means if an owner who has refinanced does a short sale, that lender can come after the owner to collect the difference between the amount the bank received and the amount owed. In a word, that sucks.

So…If signed into law, this would be a stop to deficiencies on California home refinances, where the owner only refinanced the purchase money loan and didn’t take out cash for any other purpose (except for home improvement).

To make this the law, Governor Schwarzenegger needs to sign it into law. His office has indicated which way he’s leaning; to sign or not to sign. So, at this point, it could depend on what he has for breakfast that day .

Personally, I say it’s time for the Governator to say “Hasta la vista, deficiency judgement!”

(feel free to comment with your cheesiest Schwarzenegger-movie-line-infused idioms

Filed Under: Featured Properties, Foreclosure, News Tagged With: deficiency, Foreclosure, judgement, Mortgage, SB 1178, Schwarzenegger

37113 Dutra Way, Fremont, CA – REO

August 19, 2010 By Michael

REO. PRICE REDUCTION. OPENHOUSE: Sunday, September 12th, 3-4pm. Charming single story single family home in Fremont; 3 bdrm/1 bath; wall-to-wall carpeting; Updated Kitchen and Bath; Dual-Pane Windows throughout; large lot; work shed in backyard; 1 car attached garage. Inspection reports available.

Own this property for as little as: $1,906/month*

Sierra Pacific Home Loans

Ask me how we can negotiate closing costs credit from the seller
to greatly reduce total cash required for purchase! (510) 270-2201

*Based on purchase price of $297,500. APR 5.022% with interest rate of 4.375%,
30 Year fixed FHA Loan, Principal & Interest of $1,466/mo,
3.5% Down Payment of $10,413 and Closing Costs and Pre-Paids of $6,834.
Total cash required at closing $17,247. $1906 monthly payment includes taxes & insurance.

Filed Under: 3 Bedrooms, Featured Properties, Foreclosure, Fremont, REO, Single Family Home, Video Clip Tagged With: video

Hold on to your lugnuts, the IRS is getting ready unlock and load!

August 17, 2010 By Michael

Sorry people, but it looks like the party is just about over. That is, if you enjoyed the low capital gains tax rates extended by George W. Bush and set to expire and the end of this year (2010).

Check-out the substantial changes it makes to the higher end of the spectrum (those in highest tax-brackets). Actually, that’s kind-of to be expected. Hey, how are we going to pay for the war(s) and all these bank bail-outs anyways?

On the other hand, if you’re flat-out broke, now you know where future benefits will be coming from (in part).

On the bright-side, perhaps this may further stimulate Real Estate activity amongst investors, looking to lock-in more profits and pay less homage to Uncle Sam. Can’t say I blame them!

Here’s a handy chart for reference:

**Capital Gains Taxation in the United States from 2003 forward** ->
2003 – 2010					2011 -
	2003 – 2007		2008 – 2010		2011 -
Ordinary Income Tax Rate	Short-term Capital Gains Tax Rate	Long-term Capital Gains Tax Rate	Short-term Capital Gains Tax Rate	Long-term Capital Gains Tax Rate	Ordinary Income Tax Rate	Short-term Capital Gains Tax Rate	Long-term Capital Gains Tax Rate
10%	10%	5%	10%	0%	15%	15%	10%
15%	15%	5%	15%	0%	15%	15%	10%
25%	25%	15%	25%	15%	28%	28%	20%
28%	28%	15%	28%	15%	31%	31%	20%
33%	33%	15%	33%	15%	36%	36%	20%
35%	35%	15%	35%	15%	39.6%	39.6%	20%