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Pending home sales rise for the 4th straight month

 According to the National Association of Realtors, its Pending Home Sales Index, a forward-looking indicator based on contracts signed in May, rose 0.1% to 90.7 from a reading of 90.6 in April, and is 6.7% higher than May 2008 when it was 85.0. This incidentally is the fourth straight monthly gain; the last time there were 4 consecutive monthly gains was in October 2004.

Lawrence Yun, NAR chief economist, cautions that there could be delays in closure of home contracts. "Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions," said Yun. "The pronounced increase in April and the fact that May sustained this rise does indicate that actual existing home sales are poised to rise in the coming month or two," said Joshua Shapiro, chief U.S. economist for MFR. On a regional basis, the pending home sales index rose 3.1% to 80.9 in the Northeast, increased 2.2% to 96.9 in the West, dropped 1.3% to 89.2 in the Midwest, and dropped 1.7% to 92.6 in the South.

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A new U.S. News & World Report Article puts San Diego at no. 5

A recent article by Matthew Bandyk in U.S. News reports on a working paper from University of Michigan economist David Albouy titled 10 Pricey Cities That Pay Off.  Albouy's paper ranked cities based on their value in relation to the top dollar prices people are willing to pay to live there and what people are getting in return for their money. According to Albouy, "there's a great deal of value to be found in those high prices". In a top ten list from across the United States, San Diego was ranked number 5 above cities like New York, Los Angeles and Boston. As many a San Diego transplants will attest, once you move to San Diego it is very difficult to live anywhere else. Albouy's findings on San Diego:

5. San Diego. This Southern California city has the seventh-highest quality of life and trade productivity that's on par with Philadelphia. San Diego's high value in Albouy's study is probably a product of not only its location but also the presence of many institutions of higher learning, with the University of California-San Diego, the University of San Diego, and San Diego State University all located within the city. Albouy found a strong relationship between the city's quality of life and the share of residents who have college degrees. College students and graduates "support the local arts, and they support walkable, cool downtowns," he says.

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Just listed 1312 Cassins in Carlsbad CA 92011:This pristine home is located in the Mar Fiore neighborhood of Aviara, built by Taylor Woodrow. This home is priced at $999,000 and offers 4 bedrooms, 3.5 baths, 3 car garage and offers a bedroom with it's own full bath down. The floorplan offers soaring ceilings and sun-filled living spaces, granite counters, wood flooring, crown molding and more...backing to dedicated open space with the picturesque Aviara Golf Club course below.

Link to Virtual tour and more photos:

Aviara is a coastal resort community in North San Diego County loacated in Carlsbad California, featuring the Four Seasons Aviara Resort and Aviara Golf Club at the center of the neighborhood.

 See Aviara Video and Aviara Community Info at: Aviara Living

The Home Valuation Code of Conduct (HVCC), a guideline which introduces a firewall between lending institutions and appraisers, went into effect on the first of May this year. According to Federal Housing Finance Agency, the regulator of Fannie Mae and Freddie Mac, HVCC is meant to "improve the reliability of home appraisals," by preventing fraud in the appraisal process. Lenders and brokers who wish to sell loans to Fannie Mae and Freddie Mac can no longer select an appraiser themselves, instead, they should approach an independent appraisal management company which will assign an appraiser for each deal. This would effectively stop collusion between lenders and appraisers leading to inflated home values. Appraisers and lenders say that HVCC, instead of helping the industry, is hurting it. A number of honest and efficient appraisers have been hit because the appraisal fee should now be shared between the appraisal management company and appraisers, instead of appraisers taking the entire fee. There have been instances of appraisal management companies assigning appraisers who have no familiarity with local conditions and data to appraise properties. This leads to incorrect estimates, and incorrect estimates, in turn, lead to buyers and sellers walking away from deals.

Lawrence Yun, chief economist of the National Association of Realtors, has warned that the housing market recovery can get delayed and there could be a rise in foreclosures, if problems related to appraisal are not quickly corrected.

Already Encountering Problems Caused by the HVCC? NAMB wants to know!

If you have experienced issues with appraisals due to the new regulation make your voice heard. You must include specific, tangible evidence of how the HVCC has harmed your consumers and/or prevented you from conducting business.

Send an email, including your contact information, to hvcc@namb.org explaining the problem and it will be included in NAMB's report to the FHFA.

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The tax credit for new homebuyers, scheduled to last through next March, will be out of money long before that.

Time may be running out for California residents wanting to take advantage of a $10,000 tax credit. The state set aside $100 million to help home buyers purchasing newly built homes, the goal was to give a much needed boost to the residential-construction market. But only about 20% of the money is left.

About a third of the way through the program the money is almost gone. The program launched in March and by June 3 nearly $24 million in tax credit certificates had already been issued, according to the state's Franchise Tax Board.

There are already numerous applications in place requesting the credit. In fact, if all the submitted applications are approved, only $17.5 million will be left in the fund.

The credit is available on a first-come first-served basis and was supposed to last through March 2010. Almost any newly built home qualifies, as long as it's an owner-occupied, principal residence on which property tax is paid. It could be a single-family home, a condo, a coop, a manufactured home or mobile home. Only owner-built housing does not qualify. There is no cap on the home price or buyer's income.

The credit reduces taxes dollar-for-dollar up to $3,333 a year for three years, or 5% of the purchase price of a home, whatever is less. Unlike the federal program, which is $8,000 or 10% of the home price, whichever is less, the California credit is not refundable. That means the credit will only wipe out taxes up to the full amount paid or owed but no more.

Is more money coming?

Because the money has gone so quickly, the state legislature is considering adding another $200 million to the program. With the state having a 24 billion dollar deficit this may or may not happen.

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