Friday, October 28, 2011

Tax Credit for green improvements

It’s almost the end of 2011 and several tax credits for energy efficiency will soon be expiring. There are limits to the maximum credit allowed on each type of improvement, with a total cap of $500*

  • Central Air Conditioning. Cap: $300. Labor allowed: Yes.
  • Electric Heat Pump. Cap: $300. Labor allowed: Yes.
  • Advanced Main Circulating Fan. Cap: $50. Labor allowed: No, but the credit is 30%.
  • Roofing. Cap: $500. Labor allowed: No.
  • Gas, Oil, or Propane Water Heater. Cap: $300. Labor allowed: Yes.
  • Electric Heat Pump Water Heater. Cap: $300. Labor allowed: Yes.
  • Windows. Cap: $200. Labor allowed: No.
  • Doors. Cap: $500. Labor allowed: No.
  • Insulation. Cap: $500. Labor allowed: No.

If you’ve been considering one of the above home improvements, it may be worth your while to make sure you get the improvement completed before the end of 2011 in order to claim the tax credit.

For further information you can visit

the U.S. Department of Energy


the American Council for an Energy Efficient America

In addition to federal tax credits you can also find credits for the State of California through the Database of State Incentives for Renewables and Efficiency (DSIRE):


Disclaimer – This flyer is intended for informational purposes only and is not to be construed as legal or tax advice. Before making any decisions dealing with the subject matter found in this flyer the Company recommends that you seek out specific advice from legal or tax professionals.

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at More to follow within the next couple of weeks.

Friday, October 21, 2011

Existing-Home Sales Off in September but Higher Than a Year Ago

Existing-home sales were down in September on the heels of a strong gain in August, but remain well above a year ago, according to the National Association of Realtors®.

Total existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, declined 3.0 percent to a seasonally adjusted annual rate of 4.91 million in September from an upwardly revised 5.06 million in August, but are 11.3 percent above the 4.41 million unit pace in September 2010.

Lawrence Yun, NAR chief economist, said the market has been stable although at low levels, and there is plenty of room for improvement. “Existing-home sales have bounced around this year, staying relatively close to the current level in most months,” he said. “The irony is affordability conditions have improved to historic highs and more creditworthy borrowers are trying to purchase homes, but the share of contract failures is double the level of September 2010. Even so, the volume of successful buyers is higher than a year ago and is remaining fairly stable – this speaks to an unfulfilled demand.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.11 percent in September, down from 4.27 percent in August; the rate was 4.35 percent in September 2010.

Contract failures2 were reported by 18 percent of NAR members in September, unchanged from August; they were 9 percent in September 2010. Contract failures are cancellations caused by declined mortgage applications, failures in loan underwriting from appraised values coming in below the negotiated price, or other problems including home inspections and employment losses.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said access to credit is unbalanced. “All year we’ve been discussing the fact that many creditworthy home buyers are being denied mortgages,” he said. “On top of that, loan limits have been lowered, which means buyers of higher priced homes, including many in more expensive housing markets, now have to pay a higher interest rate for a jumbo mortgage than buyers who can qualify for a conventional loan. We need to remove the roadblocks to a housing recovery – not place more obstacles in the way of financially qualified buyers.”

All-cash sales accounted for 30 percent of purchase activity in September, up from 29 percent in August and 29 percent also in September 2010; investors make up the bulk of cash purchases.

Investors purchased 19 percent of homes in September, down from 22 percent in August; they were 18 percent in September 2010. First-time buyers accounted for 32 percent of transactions in September, unchanged from August; they were also 32 percent in September 2010.

The national median existing-home price3 for all housing types was $165,400 in September, down 3.5 percent from September 2010. Distressed homes – foreclosures and short sales typically sold at deep discounts – accounted for 30 percent of sales in September (18 percent were foreclosures and 12 percent were short sales), down from 31 percent in August and 35 percent in September 2010.

Total housing inventory at the end of September declined 2.0 percent to 3.48 million existing homes available for sale, which represents an 8.5-month supply4 at the current sales pace, compared with an 8.4-month supply in August.

Single-family home sales fell 3.6 percent to a seasonally adjusted annual rate of 4.33 million in September from 4.49 million in August, but are 12.2 percent above the 3.86 million-unit level in September 2010. The median existing single-family home price was $165,600 in September, down 3.9 percent from a year ago.

Existing condominium and co-op sales rose 1.8 percent a seasonally adjusted annual rate of 580,000 in September from 570,000 in August, and are 5.6 percent above the 549,000-unit pace one year ago. The median existing condo price5 was $163,800 in September, which is 1.0 percent below September 2010.

Regionally, existing-home sales in the Northeast rose 2.6 percent to an annual level of 790,000 in September and are 6.8 percent above a year ago. The median price in the Northeast was $229,400, down 3.3 percent from September 2010.

Existing-home sales in the Midwest slipped 0.9 percent in September to a pace of 1.09 million but are 17.2 percent higher than September 2010. The median price in the Midwest was $137,400, which is 1.4 percent below a year ago.

In the South, existing-home sales declined 2.6 percent to an annual level of 1.89 million in September but are 10.5 percent above a year ago. The median price in the South was $144,400, down 3.0 percent from September 2010.

Existing-home sales in the West fell 8.8 percent to an annual pace of 1.14 million in September but are 10.7 percent higher than September 2010. The median price in the West was $207,400, which is 4.5 percent below a year ago.

“The falloff in Western sales from a surge in August was expected because many lenders had lowered mortgage loan limits over concerns that sales wouldn’t close before the higher loan limits expired at the end of the September,” Yun said. “Given the concentration of higher cost housing in the West, particularly in California, many buyers were motivated to close in the months leading up to the changeover while they could still get low interest rates on conventional mortgages. Unless Congress reinstates the higher limits, the overall housing market recovery will be slower than it otherwise could be, and will hold back the broader economic recovery.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE: NAR also tracks monthly comparisons of existing single-family home sales and median prices for select metropolitan statistical areas, which is posted with other tables at: For information on areas not included in the report, please contact the local association of Realtors®.

1 Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 to 90 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

Update on Benchmark Revisions: All major statistical data series go through periodic reviews and revisions to ensure that sampling and methodology keep up with changes in the market, such as population changes in sampled areas, to ensure accuracy. NAR began its normal process for benchmarking sales at the beginning of this year in consultation with government agencies, outside housing economists and academic experts.

There will be no change to median prices or months-supply of inventory. Although there will be downward revisions to sales volume and unsold inventory, there will be no notable change to previous characterizations of the market in terms of sales trends, monthly percentage changes, etc.

In the past NAR has benchmarked to the decennial Census, most recently to the 2000 Census, because it included home sales data. However, the data are no longer included in the Census, so we’ve had to develop a new approach using an independent source to improve methodology and to permit more frequent revisions.

Preliminary data for the new benchmark will undergo broad review shortly by professional economists and government agencies. After any issues that may surface in the review process are addressed, we will update monthly seasonal adjustment factors and publish revisions.

2 Contract failures, all-cash transactions, investors, first-time buyers, and distressed sales are from a monthly survey for the Realtors® Confidence Index, posted at

3 The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

4 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, condos were measured quarterly while single-family sales accounted for more than 90 percent of transactions).

5 Because there is a concentration of condos in high-cost metro areas, the national median condo price often is higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.

Friday, October 14, 2011

The Honest Truth: People Are Buying Houses

The Honest Truth: People Are Buying Houses
Posted by Jim Gillespie

I love my iPad. And one of my favorite apps is Zite. If you don’t have it, get it! It pulls articles of interest to you and essentially creates a daily online magazine with sections of interest to you. And what’s really cool about it is that it doesn’t only pull content from mainstream outlets, but allows me to read “off-the-beaten path” articles or blogs I might not have found before.

My “real estate” section routinely pulls blog posts from an outfit called The KCM blog. Yesterday I saw this great post and thought I’d share it. As a math guy, I loved the simple presence. The author broke down the National Association of Realtor’s estimate for annualized home sales for 2011 and determined that nearly 14,000 homes are being sold every day.

I’d like to break it down a little more. With 22% of all August sales being to investors, that leaves 10,749 homes being sold every day to “regular” people. Those with a lifestyle need. Births. Marriages. Job promotions or transfers. A myriad of other reasons.

Why is that figure important? Because it showcases that those with a lifestyle need and the financial viability to do so ARE buying homes. They are taking advantage of the lowered – yet correcting – prices, increased inventory affording choice and all-time low mortgage rates. These nearly 11,000 “regular” homebuyers a day are really smart.

I know there are many, many people who would love to enter the home buying process today but can’t. The economy is tough, unemployment is high and consumer confidence is low. And, I know, we as people are almost pre-wired to follow the herd.

But in homeownership today, I caution you to make sure the herd has your individual best interests at heart.

No matter where I travel and no matter how many people I meet – both inside and outside of real estate – I continually hear stories of people who just bought a home. These people looked at their individual situations and made the determination that was OK for them to be an active participant in the home buying process.

Is it home ownership for everyone today? No. But for nearly 11,000 “regular” people a day it is!

As always, I’d love to hear your thoughts.

For Buying or Selling, it helps to have a guide that gives you straight answers. For more information on buying, selling, or renting out an income property in San Diego, please call Frank Rashid's cell phone at (858) 676-5250 or email him at More to follow within the next couple of weeks.