Firm: Calif median home price rises in month

By JACOB ADELMAN Associated Press Writer

Posted: 04/16/2010 05:07:26 AM PDT

Updated: 04/16/2010 05:07:27 AM PDT

 San Ramon —The median home price in California increased 14 percent last month from March 2009, its highest year-over-year increase in more than four years, a tracking firm reported Thursday.

The increase was driven by a boost in sales in expensive coastal markets and a drop in lower-cost inland communities, San Diego-based MDA DataQuick said.

The median for the state rose to $255,000 from $223,000 in March 2009. Last month's median was up about 2 percent from $249,000 in February.

It was the state's fifth consecutive month of year-to-year price increases after more than two year of declines, and it's highest percentage year-to-year increase since November 2005.

But DataQuick president John Walsh cautioned that the data revealed a shift in the sales mix toward higher-end homes, not an across-the-board increase in prices.

"It's a statistical quirk," he said. "A variety of data indicate prices in many communities have more or less flattened out or risen modestly, while they remain soft in others."

DataQuick said nearly 37,300 homes were sold in March, up almost 33 percent from February.

The firm stressed that it is normal for sales to rise sharply between February and March. Increases in that period have averaged almost 37 percent since DataQuick began keeping records in 1988.

The firm also said sales were up 3 percent from about 36,200 in March 2009.

Statewide foreclosures comprised nearly 41 percent of all resales last month, their lowest level since November 2009, DataQuick said.

In the nine-county region of Northern California, sales jumped about 11 percent to 6,990 in March from a year earlier. That figure rose 5 percent to more than 20,000 in a six-county region of Southern California.

The median home price in Northern California increased 31 percent to $380,000 last month from $290,000 in February 2009, reaching a three-year high. In Southern California, the median price rose 14 percent to $285,000, up from $250,000 in the year-ago period.

Walsh said the future stability of the state's housing market would depend heavily on the strengthening of the broader economy, which faced several risks.

"Government housing stimulus is fading, and there are threats from higher mortgage rates, more distressed properties hitting the market and continued job losses," he said.

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The Future of Home-Price Appreciation - US News and World Report

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After its historic decline brought the global economy to its knees, the U.S. housing market is gearing up for a long-awaited recovery. Real estate experts expect home prices to hit bottom in late 2010 or early 2011 before—finally!—heading north again. But what shape will the rebound take? Are we in for another boom? Or will we have to settle for sluggish growth? Here's the outlook for home price appreciation through 2020.

[See 10 Cities For Real Estate Steals.]

The trajectory of real estate values will vary a great deal from one market to the next. But home prices at the national level should appreciate at "pre-bubble" rates once the market re-establishes its equilibrium, says Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California–Berkeley: "I'd say prices are back to [increasing] 1 or 2 percent more than the inflation rate over the next 10 years." Although that might seem like peanuts to those who watched prices skyrocket during the first half of the past decade, it's actually in line with long-term averages. When adjusted for inflation, American home prices increased by an average of about half a percentage point per year from 1890 through 2008, according to data compiled by Yale University Prof. Robert Shiller.

Modest increases in home prices will be supported by larger paychecks, says Mark Fleming, chief economist of First American CoreLogic. "In the long run, house prices basically go in lock step with wage growth," he says. With the unemployment rate holding near double digits, that might not seem encouraging. But Fleming says that while the labor market is a late arrival in modern-day economic recoveries, jobs always return in some form. This time around, he expects high-tech companies and research-based industries like biotechnology to lead a resurgence that eventually sparks employment and wage growth throughout the economy. Inflation-adjusted personal incomes should increase roughly 2 percent a year from 2010 to 2020, according to Moody's Economy.com.

[See America's Best Places to Live.]

The "echo boomers." Meanwhile, demographic forces should boost demand for housing over the next decade, according to Harvard University researchers. Members of the "echo boom" generation—children of the baby boomers—are "entering their peak household formation years of 25 to 44 with more than 5 million more members than the baby boomers had in the 1970s," Harvard researchers said in a June 2009 report. "The echo boomers will help keep demand strong for the next 10 years and beyond." While some of this demand is likely to flow into the rental market, the preferred tax treatment of mortgage loans should help keep the American infatuation with homeownership alive. And if tax rates increase, as many expect, the value of the mortgage interest deduction will go up as well.

A more restricted flow of credit should prevent another housing bubble from forming anytime soon, says former Fed governor Lyle Gramley. Banks, hammered by souring loans, have raised their lending standards for even well-qualified borrowers. And federal regulators have taken steps to eliminate some of the reckless lending practices that precipitated the crash, such as banning lenders from making a higher-priced mortgage loan without first scrutinizing a borrower's ability to repay it. Tight mortgage credit "is going to persist for quite some time," Gramley says.

Still, housing bubbles haven't been driven to extinction. That's because the real estate market is cyclical. Regional housing markets have gone from boom to bust for as long as people have had mortgages. And because the booms generate so much wealth for home¬owners, investors, and influential industries—like home builders—it's unlikely that Congress can work up the courage to snuff them out with tough regulation, says Mark Calabria, a former senior Senate staffer who now works at the Cato Institute. "It's not an economic question, it's a political question: How do you build institutions that push against bubbles when you know they are going to be incredibly popular when they happen?" Calabria says. "And we all know Congress does what's popular, not necessarily what's right." Nothing in Capitol Hill's effort to reform financial regulation suggests that things will be different this time, he says. Insufficient regulation is one reason he expects another real estate bubble to surface within 15 years. "I would bet my life on it," he says.

So what's the best way to play an asset that will appreciate 1 or 2 percentage points above inflation during periods of stability but can swing wildly in times of imbalance? Simple: Buy a house because you'd enjoy living in it, not because you expect blowout returns. Then you'll never be disappointed by its quarterly statements.

via usnews.com

Great news...2010 is the bottom of the real estate market. So there you have it folks start making your plans accordingly.

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The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance...

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The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance

• To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
• The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
• The tax credit applies only to homes priced at $800,000 or less.
• The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
• Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

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Federal Housing Tax Credit: Tax Credits at a Glance

$8,000 First-time Home Buyer Tax Credit at a Glance

• The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
• The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer%u2019s principal residence within three years after the initial purchase.
• The tax credit is equal to 10 percent of the home%u2019s purchase price up to a maximum of $8,000.
• The tax credit applies only to homes priced at $800,000 or less.
• The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
• For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
• For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance

• To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
• The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer%u2019s principal residence within three years after the initial purchase.
• The tax credit is equal to 10 percent of the home%u2019s purchase price up to a maximum of $6,500.
• The tax credit applies only to homes priced at $800,000 or less.
• The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
• Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

via federalhousingtaxcredit.com

if you have any questions I will be glad to help and answer them for you. samparwiz@gmail.com

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