Look! Up in the air! It’s a bird! It’s a plane! No, it’s power lines! If you live in Carlsbad it is impossible not to notice these endless electric eels and their display stands that blanket our landscape. Their paths are cut without discrimination, passing by apartments, schools, Carlsbad homes and anything else that gets in their way. Their final destination is the coastal NRG Cabrillo Power Plant that’s just north of Cannon Road on Carlsbad Boulevard. Drive south out of downtown Carlsbad and you can’t miss the highly recognizable giant smoke stack—a topic for another day.

I personally feel, and most would likely agree, Carlsbad is a very scenic city. It is blessed with rolling hills, lagoons and a very long stretch of usable beach.  The power lines are a nuisance, but they definitely do not define the area. They do impact Carlsbad real estate though.

I prefer not to debate the possible health implications on homes near power lines because it is a topic I know absolutely zero facts on. What I can offer a professional opinion on is how a Carlsbad homebuyer’s distaste for them can affect Carlsbad home values. If I had a mere nickel for every time I watched buyers tour a home, fall in love with it, catch a glimpse of a nearby power tower through a window, and then fall out of love with it, I would have a pocket full of annoying nickels. Naturally, those homes tend to sell for less. Reselling a home is the same as starting a storefront business: Location, location, location.

I should clarify though. I don’t see this reaction take place if the power towers/lines are a certain distance away.  Residents of Carlsbad have learned to expect them around; it is just that most want to keep them at a comfortable distance. And, there are different sizes of towers and lines. General rule: the larger they are, the more offensive. And, it’s preferable to not be within earshot of the “hum.” Finally, it’s not just Carlsbad Real Estate that’s affected, the lines skirt across a large part of North County San Diego Real Estate. My advice is that if you are buying a new home or a resale, try to avoid homes/streets that are directly in the paths of the electric eels. They are not an ideal neighbor.

San Diego Real Estate Market Trends and Absorbtion Rate August 2010

The newest San Diego market trend chart is out.  Of course, this is open to interpretation.  There are viewpoints coming from both sides right now (of course there always has been).  Fortunately all speculators have a 50% chance of being right.  The only challenge with this specific chart is that it is for all of San Diego County, and as we’ve discussed in the past San Diego County has a multitude of micro-markets.  So to properly evaluate the specifc type of home that you may be looking for we would need to narrow our focus including the specifc area and price range.

San Diego Real Estate Market Stats (click to elarge)

Have you noticed how the interest rates have continued to fall through the market recovery?  According to most financial analysts, the current interest rates are artificially low and being kept that way through the Fed in an effort to stimulate borrowing in the housing segment of the market and through inflation.

This is essentially a “false positive” around the actual state /condition of our real estate market.  This is also apparent in the statistics used on the market activity in San Diego.  Numbers reported show an appreciable gain year to year from 2009-2010.  This I believe, this is also a “false positive”.  Consider the activity reported through the end of May 2010 – sales up and prices up!  However, much of that was fueled by the tax incentive (State and Federal), limited inventory, and continued pressure by the Federal Government on lending institutions to process and approve short sales, while continuing to sit on over 2 million foreclosed homes – “shadow inventory”.

When one considers the facts:

1. Unemployment is still rising (California is in the double digits!)
2. Interest rates are artificially low
3. Bank foreclosures (although they are slowing they are plentiful)
4. Banks are sitting on 2 million that they have already taken back
5. State and national deficits
6. Waning builder confidence
7. Waning buyer confidence
8. Dramatic drop off in sales of existing homes since tax credit expired….

And numerous other indicators seem to predict that we are from out of the woods and on stable ground.

So what does this mean to you?

If you are a buyer - it is an excellent time to purchase based on interest rates and pricing.

If you are seller – (unless you wish to ride the uncertainty out) now is a great time to sell (relative to where we have been and are probably headed)

If you are an investor – for the first time in a long time (and we’ve been doing this since the early ‘80’s, you can buy income property in San Diego that is cash flow positive!

Agree with my position?  Great let me know your thoughts!  Disagree with my position?  Great let me know your thoughts.

Looking to take advantage of today’s market?  ….call 858-523-0523 or Contact Us.  Buying…Selling…Investing…we have you covered – Experience, knowledge and Integrity in ACTION.

1.  See your new home through your little one’s eyes: what would looks interesting to a baby? what can be reached from their height? It will help if you get down on your hands and knees and check for anything your baby can choke on (i.e. small decorative items, candles, toys etc) or pull on (i.e. electrical cords, cords from blinds/wallcoverings etc).

2.  To prevent electrical shocks, cover easy to reach outlets with a child-resistant cover available at baby stores and hardware stores.

3.  Place barriers around heat sources like radiators and fireplaces.

4.  Install safety gates (hardware mounted is best) at the top and bottom of stairs that have >2 steps. Pressure-mounted models are available but may not be good enough to hold.

5.  Pad sharp edges of furniture such as coffee tables Avoid heavy furniture tipping over by anchoring them to the wall.

6.  To prevent baby from falling out of open windows, have window guards on all windows.

7.  Keep all emergency numbers (poison control, Dr, hospital) near phones or on autodial on your cell.

My initial impression of the homes:  they looked like detached townhomes– with little distance between your home and the neighbors.  They have a relatively small footprint and lot sizes vary from 3,500 sq ft with an average lot size of around 4,100 sq ft.  So bottom line is these are a cross between a detached townhome and a detached home with some of the benefits and disadvantages of both.

The first model I looked at was Plan 1A.  This plan is a 3BR/3.5 Bath, approximately 1,989 sq ft, with three levels.   I was surprised with the efficient use of space and the modern floorplan.  After my 2nd flight of stairs I realized what made this floorplan and the SolTerra concept unique: The 3rd floor was the 3rd bedroom or an optional loft.  It was a perfect setup for those of that work from home and typically use a 3rd bedroom for a home office or work area.  If you can tolerate the two flights of stairs this could be a great option for you.  This floorplan and the other two floorplans have 3 elevations or exterior designs: Spanish  A, Tuscan B, or Monterey Ranch  C.  Prices on the list as of this blog for this floorplan started at $594,990.

Plan 2CR had a similar feel to 1A–although it felt more spacious with a larger master bath, and a laundry room instead of a laundry closet.  This floorplan is around 2.105 sq ft and includes a spacious  loft on the 3rd level, that can be split to include an optional 4th bedroom. 

Plan 3BX is the largest of the floorplans and doesn’t have a third floor.  It seems more like a modern, conventional detached home with less of the townhome feel. Plan 3BX is around 2,196 sq ft, and has 4BR’s/3BA’s.   One of the great features  is a 4th bedroom on the entry level.

SolTerra is part of the La Costa Greens subdivision and so with the HOA fees you also receive full access to the Presidio, their private club with a well equipped  clubhouse, swimming pool, tennis courts and hiking trails nearby. 

Acceptance:  the date when both parties, seller and buyer, have agreed to and completed signing and/or initialing the contract.

Adjustable Rate Mortgage:  a mortgage that permits the lender to adjust the mortgage’s interest rate periodically on the basis of changes in a specified index. Interest rates may move up or down, as market conditions change.

Amortized Loan:  a loan that is paid in equal installments during its term.

Appraisal:  an estimate of real estate value, usually issued to standards of FHA, VA and FHMA.  Recent comparable sales in the neighborhood is the most important factor in determining value.

Appreciation:  an increase in the value of a property due to changes in market conditions or other causes. The opposite of depreciation.

Assumable Mortgage:  purchaser takes ownership to real estate encumbered by an existing mortgage and assumes responsibility as the guarantor for the unpaid balance of the mortgage.

Bill of Sale:  document used to transfer title (ownership) of PERSONAL property.

Cloud on Title:  any condition that affects the clear title to real property.

Comparable Market Analyses:  process that is typically done by a real estate agent to determine a fair market value for your home by finding similar properties that have sold within a reasonable time period.

Consideration:  anything of value to induce another to enter into a contract, i.e., money, services, a promise.

Contingent/Contingencies:   is a provision in a real estate contract that specifies the contract would cease to exist upon the occurrence of a certain event.

Contingent Status:  A property is in contingent status if any one of the following takes place 1)  Offer accepted contingent on court approval 2) Offer(s) accepted pending lender approval of Short Sale 3) Offer(s) submitted awaiting bank approval 4) Offer accepted with first right of refusal.

Deed:  a written instrument, which when properly executed and delivered, conveys title to real property.

Discount Points:  a loan fee charged by a lender of FHA, VA or conventional loans to increase the yield on the investment.  One point = 1% of the loan amount.

Easement:  the right to use the land of another.

Encumbrance:  anything that burdens (limits) the title to property, such as a lien, easement, or restriction of any kind.

Equity:  the value of real estate over and above the liens against it.  It is obtained by subtracting the total liens from the value.

Escrow Payment:  that portion of a mortgagor’s monthly payment held in trust by the lender to pay for taxes, hazard insurance and other items as they become due.

Fannie Mae:  nickname for Federal National Mortgage Corporation (FNMA), a tax-paying corporation created by congress to support the secondary mortgages insured by FHA or guaranteed by VA, as well as conventional loans.

Federal Housing Administration (FHA):  an agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing.

FHA Insured Mortgage:  a mortgage under which the Federal Housing Administration insures loans made, according to its regulations.

Fixed Rate Mortgage:  a loan that fixes the interest rate at a prescribed rate for the duration of the loan.

Foreclosure:  procedure whereby property pledged as security for a debt is sold to pay the debt in the event of default.

Freddie Mac:  nickname for Federal Home Loan Mortgage Corporation (FHLMC), a federally controlled and operated corporation to support the secondary mortgage market.  It purchases and sells residential conventional home mortgages.

Graduated Payment Mortgage:  any loan where the borrower pays a portion of the interest due each month during the first few years of the loan.  The payment increases gradually during the first few years to the amount necessary to fully amortize the loan during its life.

Lease Purchase Agreement:  buyer makes a deposit for future purchases of a property with the right to lease property in the interim.

Lease with Option:  a contract, which gives one the right to lease property at a certain sum with the option to purchase at a future date.

Real Estate Glossary (continued)

Loan to Value Ratio (LTV):  the ratio of the mortgage loan principal (amount borrowed) to the property’s appraised value (selling price).  Example – on a $100,000 home, with a mortgage loan principal of $80,000 the loan to value ratio is 80%.

Mortgage:  a legal document that pledges a property to the lender as security for payment of a debt.

Mortgage Insurance Premium (MIP):  the amount paid by a mortgagor for mortgage insurance.  This insurance protects the investor from possible loss in the event of a borrower’s default on a loan.

Note:  a written promise to pay a certain amount of money.

Origination Fee:  a fee paid to a lender for services provided when granting a loan, usually a percentage of the face amount of the loan.

Pending Status:  Listings with accepted offers that have not closed escrow yet.

Private Mortgage Insurance (PMI):  see Mortgage Insurance Premium.

Second Mortgage / Second Deed of Trust / Junior Mortgage / Junior Lien:  an additional loan imposed on a property with a first mortgage.  Generally, a higher interest rate and shorter term than a “first” mortgage.

Settlement Statement (HUD-1):  a financial statement rendered to the buyer and seller at the time of transfer of ownership, giving an account of all funds received or expended.

Severalty Ownership:  ownership by one person only.  Sole ownership.

Tenancy In Common:  ownership by two or more persons who hold an undivided interest without right of survivorship.  (In event of the death of one owner, his/her share will pass to his/her heirs.

Title Insurance:  an insurance policy that protects the insured (buyer or lender) against loss arising from defects in the title.

40 Actives (including short sales)
53 Pending
47 Contingent (Properties with an accepted offer from the seller that are awaiting lender approval or bank owned that still have paperwork that needs to be completed.)

Now this is for under $400k in 92056 Oceanside.  The numbers get scarier when I go to $250k.

What does this mean to a person who is in the market for a home is San Diego?  It means don’t focus on what the media is saying about San Diego County.  Focus on your micro market.  Work with a buyer’s agent that can supply you with data that is relevant to the city or even subdivision that is of interest to you.  You may find out that it may be worth making certain sacrifices to be in a location that can endure and withstand our current market, and rise above the rest when the tides turn.

As many “lemon” cars are out there, there are “lemon” homes out there too.  One of the most important tenets of caveat emptor (buyer beware) is to have an expert on your side and in real estate, that expert would be a home inspector. 

Not any home inspector will do however– you need a superstar home inspector.

What makes a superstar home inspector?

Make sure that the inspector you select is a full time inspector that performs at least 250 inspections a year.  Your inspector should also have a professional background beyond just inspecting homes.  Some of the best inspectors have previous training as general contractors, engineers or in architecture.  This additional knowledge and continuing education on the various systems of a home is what contributes to them being a home inspection superstar.  Ask them what they actively do to keep up to date with their industry.  Certifications (ex California Real Estate Inspection Association) will require the inspector to take ongoing courses to hone their skills so they are in the forefront of their industry. 

How to find a superstar home inspector?

The best way to find a great home inspector is to ask your real estate agent which inspector their clients have had the best experience with.  Personally call the inspector and start asking some of the questions listed in this article.  Communication is equally important as a good inspection.  They must have the ability to explain their report in layman’s terms so you understand what requires immediate action and what may not.  There may be issues that sound like deal breakers which can easily be repaired or negotiated to have the seller repair.  There is a misconception by buyers that there is a pass or fail on an inspection.  In actuality, the inspector’s job is to convey their findings–  not to give a recommendation on whether to make the purchase.   Rarely are there items that can’t be remedied by requesting repairs.  The most important factor is that you have excellent representation that can negotiate the requests for repairs that are required to make you comfortable about your home purchase.  The price you pay for a home usually dictates the amount of negotiating you can do to bring your home to showroom condition.  If you pay fair market value for a home, you can expect the seller to be more cooperative than a bank owned foreclosure that is priced to be sold as is.

When should you hire a superstar inspector?

The answer is on any real estate purchase you make.  Regardless of the age of the home or if the home is new construction, you should always get a home inspection.  One of the first steps of the escrow process is to get the inspector out there as soon as possible.  The bottom line is that the home inspection is the smallest monetary investments you will make in ensuring you have peace of mind in the quality of your home.  In addition to finding what problems the home may have, you will also find out the positive aspects as well.  A great inspector will educate you in how to properly use your home.  They will show you how to shut off your water, how your electrical panel works, where your meters are located, and preventative measures you can make to keep your new investment in tip top condition.

One of the initial decisions you will need to make is how you will be moving. Would it make more sense to rent a truck and move yourself or find a company to do it for you? Moving companies are well known for taking advantage of consumers, so do a lot of research before employing one. Be very careful, this is one of the most crucial steps of your move and one of the easiest ways to be taken advantage of. Beware of moving companies that you have never heard of that contact you through the Internet. Instead talk to your friends and colleagues about whom they have had a good move with on a previous move. For additional info on what you need to know about moving companies and common scams go to www.movingscam.com.

You may want to shop around in advance for the best rates and specials if you’ve decided to move on your own. There is a possibility you can save some money if you have your own packing supplies and moving equipment. A lot of the truck rental companies may have low rates for their trucks, but high rates for moving and packing supplies. It would be a good idea to have at least a hand truck or dolly, furniture blankets and rope or straps you can lock down. Look over the truck to make sure it is in good condition before making your move.

One of the best times to consolidate your belongings is during a move. You may find you have one vacuum cleaner too many or an extra Betamax machine. Contact a charity to arrange for a pick up or a drop off of these items. Make sure to file the receipts of the donations for tax time. The other fun family alternative is to have a garage sale.

Keep the list of addresses and phone numbers you will need for your move close by and not packed away. It is a good idea to get in touch with your utility companies to transfer or turn off services, your home insurance provider, and the post office to forward old mail at this time.

It’s time to leave! Moving day is usually spent at home. You will need to oversee the work of the moving company, so don’t leave while they’re present. When they have done their job they are required to present you with a bill of lading. The drivers should have a means of contacting you, so leave them a phone number. Before you leave for the last time, make sure all of the widows are closed and doors are locked. Wave to all of your neighbors and give them any unwanted unpacked items as a parting gift. Relax and think about the end of the journey.