In May of 2009 a report drawn up by the San Diego-based real estate data firm MDA DataQuick showed that the median real estate price of homes in California had actually climbed slightly from the previous month. This was the first time in two years that home prices in the Golden State had actually gone up. Since then, things have started to get better, or mostly better, albeit slowly still. No big dramatic change for the better has occurred, but there has been some increase in sales activity in many parts of California.

A big part of this increase has been due to the fact that high end properties, ones whose median price is well over $500,000, have started to sell more. This is the sector of the California real estate market that was practically frozen for the past few years and it’s just now starting to thaw, bringing back some equilibrium to the overall median home prices. Thus, many of today’s real estate “hot spots” in California, meaning areas where activity is moving in the positive direction, even if only slightly, are located in mostly wealthy neighborhoods, with some exceptions, of course. The following five hot spots are all located in Southern California, which one one of the areas that was hardest hit by the bubble burst.

La Jolla
La Jolla is one of the wealthiest cities in the San Diego County area. Though it’s located in the middle of San Diego County, however, La Jolla is technically its own city and has thrived in great part to its air of exclusivity. La Jolla was not spared from the repercussions of the real estate crisis, but home prices in La Jolla have held on pretty well. According to Trulia Real Estate Research, there have been 131 recent foreclosures in La Jolla, but there have also been almost 500 homes sold (marking a 39% increase in sales), with the median price of homes at more than $800 thousand. From November of 2009 to January of 2010, average home prices in La Jolla actually increased by more than 17%.

Carlsbad
Carlsbad is a quaint costal town in the northern part of San Diego County. It’s a mostly wealthy town, with homes near the beach being the most expensive ones. Carlsbad real estate suffered a lot in the past few years, largely due to over-speculation and shady financing practices that left many homeowners in impossible binds. A lot of people who bought up new homes in Carlsbad simply could not realistically afford them. This led to a series of foreclosures that is just now starting to flatten out. The only good news is that many of these foreclosures were second homes. The median home price in Carlsbad is somewhere around $540,000, up 1.3% from last year.

Newport Beach
Newport Beach is one of the wealthiest parts of California. It’s located in Orange County and the median sales price right now is $1 million, up 1.3% from last year. The average listing price has also gone up, though only by .5% and it stands at just over $2,100,000 as of the second week of February. Home sales in Newport Beach have gone up by 135.4% since last year, showing that this tried and true market has a great deal of vitality.

Del Mar
Del Mar, another wealthy costal town the San Diego County, is one of the few cities that has actually seen a significant increase in the average price per square foot of its homes; it is up 9.9% from last year. The median sales price of homes in Del Mar, which stands at just under $900 thousand, is up 6.3% from last year as well, and the number of sales has increased by 95%. Overall prices in San Diego County are expected to go up 13% by the year 2012.

Inland Empire
The Inland Empire is the area that extends from the easternmost part of Los Angles all the way to the border between California and Arizona. Unlike the above four hot spots, it is not an area predominantly filled with wealthy neighborhoods. The Inland Empire includes cities like Riverside, San Bernardino, Murrieta, Orange Crest and Ramona, where some of the average listing prices are as low as $160,000, and foreclosures are still plentiful. The reason California’s Inland Empire is listed as a “hot spot” is because, even though prices are not going up much, there is a lot of activity from investors and first time buyers who are snatching up foreclosed properties with cash. There have been over 5,000 sales in Riverside County alone. How the flurry of foreclosures and cash purchases is going to affect this desert region is a point of much speculation, but there is no doubt that the Inland Empire is right now one of the most interesting real estate areas to watch.

With prices and interest rates at rock-bottom, it’s a great time to buy real estate. However, I run across a lot of people who can’t qualify for a loan to get into a property, even though they have good credit and income. Credit is still very tight. Fortunately, you can still buy property without a bank loan. How? Two words: Seller financing. 

Five years ago no one needed seller financing because credit was so easy to come by. But in times like these, or when interest rates are high, buyers and sellers get creative and figure out ways to make the deal happen without a bank. I know because my husband and I bought our first house in 1994 using this financing technique. The seller had to sell because of a job transfer and we couldn’t get a loan to buy. We both wanted to deal to happen, so the seller left his loan in place and we took over his payments. Everybody was happy. 

Can you get deals like this in Corona del Mar? Here’s one example of a home you can buy without a bank on Acacia in The Village of Corona del Mar. 

http://www.cdmrealty.com/506-5_Acacia_Corona_del_Mar_CA_92625.html 

The advantages of seller financing for the seller are:

1) Your property stands out in the market place because more buyers can qualify to but it.

2) You may get a higher price because the buyer doesn’t have to pay points or fees to get a loan.

3) You may be able to pay less income tax by capitalizing on the rules of a 1031 tax deferred exchange. 

The advantages of seller financing for the buyer are:

1) You don’t have to qualify and may be able to put a lower down payment.

2) You don’t have to pay to get financing.

3) You can buy a property that you might not otherwise be able to afford. 

The simplest form of seller financing is when the seller has no mortgage on the property. Instead of applying for a loan from Wells Fargo, a potential buyer asks the seller to finance the purchase directly. If both parties agree, the buyer gives the seller a down payment and then signs a note for the balance owed on the property. The seller is now the lender who holds a first mortgage on the property and the buyer takes title to the property. This is a very effective way for buyers and sellers to both get what they want. I helped a client with some credit issues get into an ocean-view condo this way recently and he couldn’t be happier that he is owning instead of renting. 

If the seller owes a mortgage on the property, the process is a little different. With traditional financing from Bank of America, the existing mortgage would be paid off during the sale. With seller financing, the existing loan is left in place and the seller agrees to provide more financing if it’s needed in the form of a note in second position, behind the existing mortgage. This kind of seller financing is called an AITD, all-inclusive-trust-deed, or a wraparound loan, because you’re wrapping a loan around the existing financing. 

If you’re thinking of selling, offering financing is a terrific way of making your house more desirable. If you’re thinking of buying, seller financing may improve your options. For more information on buying and selling with seller financing, call me at 949-729-9843.

CDM Realty is Born

Doyle & Hayes Associates has a new name: CDM Realty. Nothing else has changed–we still have the same great service, market knowledge, personnel and experience as always. We just got tired of running out of room when we tried to put our name on a name tag. Doyle & Hayes Associates was quite a mouthful! What do you think of the new name?

Some Sellers Will Sell Faster and for More Money Than Others. Here’s why.

A home that stays on the real estate market for too long starts depreciating in the eyes of buyers and the real estate agents who represent them. For this reason, it’s in your best interest to sell your home as quickly as possible. Knowing how to attract buyers is thus very important. Often, the methods that work best are simple and inexpensive. The key to it all is in the presentation.

Law #1: Disassociate Yourself from your House

When you set out to sell your home, it helps to disassociate yourself from it. You have to think of it now as a product, to be marketed and shown around. Make a mental decision to let go of any emotional attachments you might and start focusing in what you can do to get it sold. Listen to feedback objectively. If you hear that a buyer was turned off by the smell of the dog, don’t take it personally. That’s valuable information that you can use to improve the salability—and therefore the profit—of your home.

Law #2: Depersonalize the House

When potential buyers come to see your home, you want them to be able to picture themselves living in it. Pack away any personal and family photographs, collection displays, and heirlooms. Those will go up on the shelves of your next house. The goal here is to make sure there are no distractions for your visitors.

Law #3: Get Rid of the Clutter

De-cluttering your house before you put it up on the market is essential. If you garage is stuffed to the walls with boxes and junk, clean it up! You want your home to be as clean and mess-free as possible. You’ll be surprised at how much a messy home will turn off potential home buyers. It’s not always easy to do, but try to donate or throw away unused items. Consider taking out one piece of furniture in each room to make it feel more spacious. Putting away your personal items gives you a head start on the packing process. Keeping the clutter down will your home shine during the open house.

Two blocks from Big Corona Beach on the wet side of PCH

Here’s a property that’s for sale but not listed on the MLS. You won’t see it anywhere else. This is a rare property because it’s a single-family house on the south side of PCH in the Village of Corona del Mar. Those are hard to come by. It has a private yard and a two-car garage. The price is $1,275,000. Call me at 949-729-9843 for an appointment to see it.

I don’t often leave Corona del Mar, because why would I? We have everything here–great weather, delicious sushi, terrific sunsets, beach volleyball, boutiques and wine tasting. However, I did cross the city limits recently to go to the other happiest place on earth. And as you can see from the pictures I had a supercalifragilisticexpealidocious time at Disneyland. Check out Bert kicking up his heels with Mary Poppins, my husband John and me.

When I first walked through the Village of Corona del Mar at night I thought it was a lot like Disneyland with the pleasing architecture, landscape lighting and narrow, pedestrian-friendly streets. Now that I’ve lived and worked here for years, I really think we’re giving Disneyland a run for the happiest-place title. There might be somewhere better than Corona del Mar on the planet, but I’ve never been there.

My Encounter With Mary Poppins