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The Markets in a Minute

The Markets in a Minute

September 15, 2016

The Economy

Opinions vary on the likelihood of a Fed policy rate increase at next week’s meeting. Markets are volatile as traders prepare for what they think will happen. Central bank economic stimulus overseas has been helping U.S. bond yields remain low but is now waning. Higher bond yields could cause mortgage rates to increase. A strong jobs report and firming inflation pressured rates and fueled volatility this week. On the flip side, retail sales slumped.

Housing News

According to CoreLogic, 548,000 homeowners regained equity in Q2. That brings the percentage of homes in the U.S. with positive equity to almost 93%. Foreclosure inventory continues to dwindle. CoreLogic reports that foreclosure inventory declined 29.1% in July, and was down 16.5% year-over-year. Mortgage applications for purchase transactions were up 9%, signaling a stronger fall market ahead. Although up slightly, mortgage rates are still near record lows.

San Diego County Rentals

Average rent was $1,743 a month in San Diego County at the start of September, increasing 8.4 percent in a year. The vacancy rate dropped to 2.17 percent, its lowest level in roughly five years.

Rent increased 7.7 percent from March, when the average was $1,618 a month. The rise is largely attributed to lack of new housing and apartments. Only two new major projects entered the market in the past six months, adding 370 apartments.

Blame for lack of housing has been placed rising prices on California environmental laws, lack of political leadership and the hesitancy of city and county government to approve new housing. There is no expected change in foreseeable future.

In early September, the average rent for a studio was $1,383; $1,533 for a one-bedroom; $1,821 for a two-bedroom; $2,257 for a three-bedroom; and $3,043 for a four-bedroom. The highest rent in the county is on the coast in North County, where the average rent runs $2,152 a month. The cheapest is in East County, at $1,422 a month. Vacancy rates for apartments in East County are at only 1 percent. Out of 18,622 apartments, just 275 were empty at the start of September.

San Diego Community Spotlight

Clairemont50 new Single Family Home listings in August 2016 and 14 new Condo listings in 2016.

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J.R. Thrasher
Realtor®
CalBRE# 01888955

SanDiegoRealEstateVeterans
Keller Williams Realty

7050 Friars Rd. Suite 100
San Diego, CA 92108
Direct: 619-929-0105
Office: 619-814-7500

www.SanDiegoRealEstateVeterans.com
Serving our military,VETERANS and civilians faithfully.

Credit Requirements for VA Loans Explained

scoreIn the past when a veteran wanted to use the VA home loan benefit in order to buy and finance a home with nothing down, the VA would ultimately approve the loan application. The VA would not just issue the approval but order the appraisal and set the VA interest rate for the loan. You can imagine the time it would take just to get a loan approval from the VA and one of the reasons many sellers at times would refuse an offer on a home if the buyer was using a VA loan for the purchase—it simply took too long.

Today however, the approval process is completely performed by approved VA lenders. The VA doesn’t approve the loan but does issue the requirements that lenders must follow if the lender expects to receive the VA loan guarantee. From debt ratios to employment history, it’s all up to the lender. And that of course includes the creditworthiness of the borrower. What are the credit requirements for a VA loan?

The Evolution of Credit Scores

Prior to the introduction of credit scores, a VA lender would review a credit report line item by line item to manually evaluate a credit report. The credit report contains information about a trade line, how much is owed, the monthly payments and whether or not the payments were made more than 30, 60 or 90 days late. The report also listed any outstanding or paid collection items, charge-offs and judgments. If the underwriter saw any derogatory credit, unless it was a missed payment or two, the loan would likely be declined.

The FICO company devised a complex analysis of payment patterns to produce a three digit number reflecting a borrower’s credit past as a way to predict the future. This number ranges from 300 to 850 and the higher the number, the better the credit. The three main credit agencies, Experian, Equifax and Transunion all use the FICO model and report their scores to a VA lender when asked. The numbers will be similar to one another but rarely exactly the same. Because information can be reported differently and at different times to the credit agencies by creditors, the three digit numbers will be slightly off. For example, a VA lender might receive three scores of 734, 746, and 752. The lender will use the middle score and throw out the lowest and highest.

The VA doesn’t set a minimum score but VA lenders do. Most VA lenders require a minimum 640 credit score but still others have a 620 rule. That means if your scores are low and the VA lender declines your loan because your score is 635, another VA lender could approve your VA loan request because the 635 score is above their 620 minimum.

Regarding Bankruptcies, Foreclosures and VA Loans

It’s true that a bankruptcy or a foreclosure can stay on your credit report for seven years but that doesn’t mean you have to wait that long in order to use your VA home loan benefit. In fact, in the instance of a foreclosure, you may qualify if more than two years have passed since the foreclosure date. If you used your VA entitlement and it was involved in the foreclosure, the amount of the entitlement in the foreclosure must be redeemed.

VA loans allow for a bankruptcy in the past as long as two years have passed since the discharge date and credit has been re-established. This is very important. A VA lender will have a difficult time approving a VA loan if there is even one late payment over the past two years. The most important payment to keep current is your rent in addition to your utility payments and mobile phone bill. Some VA lenders can use such payments as evidence of timely payment and is called “alternative” credit. A bankruptcy or a foreclosure will hurt your scores, but eligible veterans can repair the damage to the credit report sooner rather than later. It’s done every single day.

Article Credit: Grant Moon,  Army Reserve Captain and CEO of VA Loan Captain, Inc.

March by the Numbers

New home sales continued to turn in disappointing performance, while lay-offs were at historic lows, and incomes were on the rise.

New Home Sales

New home sales took a plunge in March, with completed transactions of new, single-family homes dropping 1.5 percent to an annual rate of 511,000, according to a joint report from the Census Bureau and the Department of Housing and Urban Development. That said, compared annually, March’s new home sales marked a 5.4 percent increase over March 2015’s rate of 485,000.

Looking at price and supply, the median sales price of new homes sold in March was $288,000, and the average sales price was $356,200. The estimated number of new homes for sale at the end of March totaled 246,000, which represented a 5.8-month supply of homes at March’s sales rate.

The big hope was that seasonal sales increases will help turn around new home sales’ recent disappointments.

“While new home sales have lost some luster in recent months, we believe they will re-accelerate as we head into [the] spring season,” noted Gregory Daco, head of U.S. macroeconomics at Oxford Economics, in a public statement.

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Initial Jobless Claims

Lay-offs ticked up, but remained at lows not seen since the 1970s. First-time claims for unemployment benefits filed by the newly unemployed during the week ending April 23 hit 257,000, a gain of 9,000 claims over the preceding week’s level of 248,000, the Employment and Training Administration reported. This marked the 60th straight week of initial claims below 300,000 — a level that economists associate with a growing job market — which is the longest streak at that level since 1973.

The four-week moving average — which is regarded as a more reliable measure of job losses — dropped to 256,000, a decline of 4,750 claims from the previous week’s average of 260,750 claims.

“We’re seeing things in the labor market hold up well,” Wells Fargo Securities LLC Economist Sarah House told Bloomberg. “Businesses are feeling pretty comfortable with where the economy is going, so they don’t feel like they have to make those cuts.”

Homes under $350,000

Incomes and Spending

Personal incomes saw welcome news in March: a 0.4 percent increase to $57.4 billion for the month, with disposable personal income (DPI; income after taxes) also growing 0.4 percent to $50.4 billion, according to last week’s report from the Bureau of Economic Analysis.

Personal consumption expenditures (PCE) grew 0.1 percent to hit $12.8 billion. Personal outlays — which combine PCE, personal interest payments, and personal current transfer payments — grew $11.2 billion in March.

Wages and salaries rose to $29.2 billion in March, with private wages and salaries growing $26.3 billion. Supplements to wages and salaries grew by $5.4 billion in March.

Personal saving — which is DPI less personal outlays — grew to $735.5 billion in March, with the personal saving rate — which describes personal saving as a percentage of DPI — increased to 5.4 percent. This week we can expect:

  • Monday — Construction spending for March from the Census Bureau.
  • Tuesday — Car and truck sales for April from the auto makers.
  • Wednesday — First quarter productivity from the Bureau of Labor Statistics; March factory orders from the Census Bureau.
  • Thursday — Initial jobless claims for last week from the Employment and Training Administration.
  • Friday — March consumer credit from the Federal Reserve; April payrolls, unemployment, average workweek and hourly earnings from the Bureau of Labor Statistics.

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Sometimes you just have to take a break…

MVAREP BadgeMy wife Pia and I were invited to an exclusive “Family and Friends” screening of a new TV show on the SyFy Channel “Wynonna Earp”. We saw the first two episodes and met the cast, producers, creators, etc. It was very well done and I’m super excited to have a new show on SyFy…. check it out starting April 1st!

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Click on the pic to check out the show!

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Attn: Is your home financed by Bank of America?

Short Sale Update

February 4, 2016 

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Distressed California Homeowners May Qualify for California’s Keep Your Home California Transition Assistance Program (TAP)     

If you live in California and feel that you can no longer afford your home and are pursuing a short sale or a deed in lieu of foreclosure, you may be eligible for financial help with your relocation to alternative housing.

Click here for San Diego Foreclosures

The funds come from the Transition Assistance Program (TAP), part of the Keep Your Home California Program.

The state of California is providing up to $5,000 in transition assistance to qualified homeowners who can no longer afford to stay in their homes. Here’s what you must do:

  • Apply for the funds through the “Keep Your Home California” website or by calling 1.888.954.5337.
  • Maintain their home until it is sold or returned to the lender via a negotiated deed in lieu of foreclosure.

For qualified homeowners, these state funds may be used in addition to any other transition assistance that the homeowner may receive by participating in the Federal Home Affordable Foreclosure Alternatives (HAFA) program or in any other pre-offer short sale program.

Click here for San Diego Short Sales

To learn more about the Transition Assistance Program’s guidelines, and how you may qualify, please visit the program’s website at http://keepyourhomecalifornia.org. You can also call 1.888.954.5337 and identify yourself as a Bank of America customer.

To see the latest information home/rental information nationwide on your phone download my FREE mobile app here. It connects you directly to me, not some company that monitors your search habits and resales that information to third parties.

Proud to serve,

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“Changes” in staging your home to sell

2016-02-03 15.37.18

Staging homes for sale has evolved over the past decade, but has been a proven method to get buyers to make an offer. Some ideas have changed, but others have stayed tested and true. Here are some current staging tips from the pros.

Condo’s & Townhomes in Scripps Ranch for sale

Nix the Stage Set: Setting the dining table with plates, cutlery and glasses, or placing a breakfast tray at the foot of the bed appears too contrived to savvy buyers.

Replace Traditional Furniture: Rent or buy inexpensive contemporary furniture to stand in for pieces that appear dark, heavy, old or ornate.

A New Coat of Paint: It makes a place look clean and fresh – it’s the best money you can spend on staging.

Embrace the Accent Wall: While most walls should be painted neutral hues, some stagers now use a bold color or wallpaper on a single wall.

New Towels and Linens: Fresh, fluffy towels and crisp white bed linens are an inexpensive way to suggest luxury.

Short Sales & Foreclosures in San Marcos

Edit Personal Photos: Stagers used to recommend removing all personal photos, so potential buyers could picture themselves in the home. Now, many say it’s acceptable to leave some photos if they are pleasant or evocative images in handsome frames.

Reduce Clutter: Long considered one of the most vital aspects of preparing a home for sale, it may be more important than ever to tidy up and sell, store, donate or dispose of unnecessary goods.

Clean Out Closets: Having space in closets makes them look larger.

Avoid Scents: Smells that are pleasing to you may be off-putting to potential buyers. Avoid scented candles, fragrant flowers and baking or cooking right before showings.

Do you have of your own staging tips? We’d love to hear from you.

JRThrasherContact

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El Niño is Coming, El Niño is Coming

www.SanDiegoRealEstateVeterans.comThe forecast for this winter seems to bring with it a prediction for a new El Niño. With that in mind here are a few tips to prepare for the anticipated downpours.

  • Clean out your rain gutters and downspouts. Clean all of them before it rains, then check and clean them after the first rain. Leaves and debris from your roof may have accumulated in rain gutters after the rain. Make sure your rain gutters aren’t damaged.
  • Fix any leaks before it starts to rain. Check your roof for any trouble areas.
  • Invest in an emergency generator. Think about a portable generator or permanent standby generator that comes on automatically when the power goes out.
  • Check any decks and balconies. Make sure water flows away from your walls and foundation.

Condo’s & Townhomes under $100,000 in San Diego County

  • If your crawl space or garage could be flooded, think of installing a sump pump. El Niño rains can cause water to gather where you normally don’t find it.
  • Have an arborist check your trees. Trees may look fine, but can be weak. Wet branches weigh more and they can break.
  • If you live on a hill or below a hill, talk to your neighbors. Drainage from your yard may cause water to damage your neighbor’s house. Your neighbor’s drainage may flood your home.
  • Store your outdoor patio furniture or securely cover it. Put your potted plants in a covered area. Too much water and rain can damage them.
  • Know where your sprinkler controller is located. Learn how to turn off your automatic sprinklers. You may not need to water for weeks or months.
  • Talk to your insurance agent about purchasing flood insurance. Even though you may not live in a flood area, flood insurance may protect you from mud and water damage losses. Flood damages are not usually covered by homeowner’s insurance.

Foreclosures in Chula Vista

  • Plan what you’ll do if water starts to infiltrate your home. Have sandbags, plywood, on hand to divert water away from your home.
  • Check the lights in your car, headlights, brake lights, turn signals and emergency flashers.
  • Replace your windshield wipers. You don’t need wait until it’s raining to realize you should have changed the wipers.
  • Have your mechanic check your car’s tires. Check for tread wear and proper inflation. Both can be the cause of serious accidents in the rain.
  • Talking about cars, how old is your car battery? Ask your mechanic to check the battery. It may be better to replace it before it fails in the rain

www.SanDiegoRealEstateVeterans.com

Do you have any tips you’d like to share with us? We’d love to hear from you.

JRThrasherContact

Save Green with an Energy-Efficient Home

doeimageEnergy costs can deplete a significant portion of a homeowner’s budget. In fact, they account for almost half of a typical U.S. home’s utility costs, according to the U.S. Department of Energy. With energy bills rising steadily, REALTORS® can play an important role in helping their clients manage their energy costs. These tips can help you get started.

View my featured homes for sale

1. Schedule a professional home energy audit. A professional will assess the home from top-to-bottom, using the Home Energy Rating System (HERS) Index, the industry standard by which a home’s energy efficiency is measured. Often they’ll perform a “blower door test,” which shows thermographic imaging to pinpoint exactly where energy is escaping from. As part of the assessment, they’ll also offer suggestions on which upgrades to consider for maximum benefit.

2. Check the insulation. A properly insulated home can save up to 20 percent on heating and cooling costs. Not sure where to start? A significant amount of heat loss – up to 40 percent – is due to poorly insulated attics. It’s simple to determine whether the insulation is adequate. If you can see the wood joists of the attic floor, you may want to consider adding more insulation – a simple DIY project.

3. Install a programmable thermostat. Wi-Fi-enabled thermostats are automatically adjusted, and can be controlled with a broad choice of phone apps.  You are able to leave the heat or air conditioning at a lower setting during the day to keep your energy bills in check, and still come home to a comfortable house by changing the thermostat before you leave work.

4. Conduct routine maintenance. Everyday tasks, like replacing a furnace filter, can make appliances run more efficiently and last longer. One often-overlooked chore is the draining of sediment from the water heater. Over time, sediment and mineral deposits can accumulate, reducing the water heater’s efficiency.

5. Know your numbers. The U. S. Department of Energy has issued new mandatory energy efficiency standards that affect residential central air conditioners, heat pumps and water heaters. For instance, water heaters larger than 55 gallons may require additional equipment, thereby increasing the size of some units.

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6. Check the dates. The new standards for air conditioners and heat pumps went into effect Jan. 1, and the new water heater standards began April 16. However, an 18-month grace period is in place for installing non-compliant central air conditioners that were manufactured before the new standards went into effect. This grace period will expire June 30, 2016, pending existing inventory availability.

7. Utilize a home warranty contract. Some home warranty companies may help clients meet their energy efficiency goals by helping with situations that include refrigerant recapture, reclaim, and disposal; removal of defective equipment; mismatched systems; undetectable preexisting conditions; improper installations, repairs or modifications; and permits and code violations within stated limits. For more information on home warranties, services or coverage questions, contact me via phone, email or text. There are several companies that I have worked with over the years that will provide you with the plan that makes the most sense for you and your home.

Saving money through increased energy efficiency is a win-win for your wallet and the environment.

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