Pasadena Real Estate - Everything You Ever Wanted to Know About Buying or Selling Your Home in Pasadena!

Greater Pasadena real estate market trends, valuable news about market conditions, including foreclosure information in Pasadena and surrounding cities plus much more.

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June 16, 2012

Selling Your Home? Generate Multiple Offers!

Selling your Pasadena home?  Why is it that some homes sell immediately and others sit on the market?  What do successful home sellers do to generate offers?

Did you know that if you price your home at market, only 60% of potential home buyers will take the time to look at your property?

I am going to share with you 5 sure fire tips that will help generate not just one, but multiple offers on your home.

  1. Make buyers fall in love with your home!  Homes are sold on emotion.  You need to do everything possible for potential home buyers to head-over-heels fall in love with your home at first glance.  So... what do you do?  Hire a home stager.  Yes... a home stager, not a decorator, not your real estate agent who claims they will tell you what to do, but a professional home stager with proven and quantifiable experience in helping you prepare your home for sale.  A great home stager will work with you and your real estate agent to give you a step by step plan of what needs to be done to present your home in its possible light.  READ MORE:  Preparing Your Home for Sale
  2. Give buyers peace of mind!  Buying a home can be a very stressfull and emotional (yes... there goes that word again) experience.  Make it easy for potential home buyers to make an offer on your home.  Hire a physical inspector and provide an inspection report.  Get a foundation expert to come out and give a report card on the structural stability of your property. If you replaced or updated plumbing, electrical or did any type of significant work to your house, have a house book available at all your showings clearly identifying all you've done.  Buyers love that and will feel comfortable moving forward with the home purchase transaction.  READ MORE:  Pasadena home sellers can save thousands of dollars with home inspections!
  3. Get as many eyeballs on your home as possible!  Once your house is staged, ensure that your realtor takes spectacular, professional photographs to showcase your house.  Remember over 90% of all home buyes begin their home on line.  Your house needs to stand out from the rest of the Pasadena homes.  Your home has only a few seconds to make that first impression.  
  4. Exposure and Marketing!  Hire an internet savvy real estate agent who not only will aggressively negotiate on your behalf, but also understands how to promote your house on-line and via traditional efforts.  Does your real estate agent know how to syndicate your home to multiple real estate portals? Various local Pasadena blogs?  Does your Realtor know how to use Social Media?  How will they communicate your home listings to the real estate community locally and area wide?
  5. Strategic Pricing!  Remember the asking price also known as list price is not the same as the sales price.  Make sure that you listen to the guidance of your real estate agent to ensure that your home is priced correctly to generate activity and bring in the highest number of "eyeballs" which in turn with the presentation and disclosure will bring you multiple offers!

Thinking of selling your home? Interested in finding out the current market value of your single family home, condo or investment property? Then call Irina Netchaev at (626) 629-8439 to discuss what is happening in today’s Southern California Real Estate Market.

REQUEST YOUR HOME'S MARKET ANALYSIS TODAY!

Interested in more information about Greater Pasadena Area cities, check out our City Guide below:

Pasadena City Guide

And, if you are interested in fun activities to do, take a look at our 365 Things To Do In Pasadena® page.

Generating Multiple Offers Infographic Pasadena Real Estate Team

CALL YOUR PASADENA REAL ESTATE AGENT TODAY AT 626-629-8439

 

 

May 29, 2012

Pasadena Real Estate Market Conditions - May 2012

Let's take a look at what's been happening with Pasadena home sales over the last year or so.  Overall, the real estate market has exploded not just in Pasadena, but in all surrounding cities and neighborhoods.  Home buyers are out in force and unfortunately, property inventory is non-existent.

What's causing all this activity?

Partly, it's seasonal.  Real estate market is cyclical and we always see an uptick in activity as we get closer to summer months. Families are waiting for kids to finish school before they move and others are just in a sunnier mood and can focus more on looking for a new house.

However, for the most part, consumer confidence in housing is up in response to positive news coming out from various real estate analysts:

Real Estate Expert quotes

So... did we hit bottom? That's to be debated, but the majority say YES it has.

More importantly, I think what is driving real estate market activity in the San Gabriel Valley is affordability.  With the interest rates, dropping even further, it is makes a lot more sense to buy a home vs rent one for many consumers.  Let's take a look at this chart:

Buying a home for $250,000 in 2003 even at really low interest rates of 5.83% would mean a mortgage payment of $1,472. Buying the same home today at 4% interest, even if the price is exactly the same would cost you a bit under $1,200.  HUGE difference!

And, consumers are realizing that it makes much more sense to buy then rent if they have the financial ability to do so.  Plus, you get tax deductions and long term equity gains.  And, for many, the importance of having a home to call their own!

Let's take a look at how Pasadena's housing market is fairing.

Pasadena Housing Statistics - May 2012

  • Let's look at the # of pending sales... this item represents the number of Pasadena properties under contract or in real estate lingo for California - in escrow.  It's interesting to note that in the last six months 141 homes went into escrow, almost as many as in the entire 2011!  What does that say?  Homes are moving and buyers are writing contracts.
  • The number of homes sold are running pretty much the same as last year.  So... significantly more homes are pending, but about the same number of homes as before are closing.  I think that speaks to the tightening of credit and a lot of short sales that do not culminate in the actual sale.
  • A lot more price changes - 402 in the last six months compared to 432 last year.  Home sellers are becoming more realistic and are adjusting their home prices accordingly.
  • And note... Notices of Default have been non-existent in the last month and really went down drastically compared to last year.  Take a look at my post on the National Mortgage Settlement and how it will affect the foreclosure process.

Pasadena Real Estate Conditions May 2012

It'll definitely be interesting to look at Pasadena housing statistics in the next few months.  That's when all the escrows will start closing on homes that sold over the last month or so.

LOOKING FOR A HOME?  SEARCH FOR HOMES HERE

Interested in more information about Greater Pasadena Area cities, check out our City Guide below:

Pasadena City Guide

And, if you are interested in fun activities to do, take a look at our 365 Things To Do In Pasadena® page.

Thinking of selling your home? Interested in finding out the current market value of your single family home, condo or investment property? Then call Irina Netchaev at (626) 629-8439 to discuss what is happening in today’s Southern California Real Estate Market.

March 29, 2012

Should you Buy or Rent a Pasadena Home?

Should I buy or rent a home in Pasadena?

As long as I've been selling real estate, this question comes up.  Actually, I take it back... it has come up even before I got into the  real estate business.  You hear it at "get togethers", as you're sitting in the lunch room with your coworkers, talking with your parents, etc.  It's about money and having a roof over your head, right?

I thank the good folks at Keeping Current Matters for putting together this great visual which pulled information from an article that appeared in Forbes titled "The Next Mortgage Crisis".

Buy or rent a Pasadena home?

 

Here's a direct quote from Forbes:

Today, there’s another mortgage crisis in the works—that is, NOT having one—choosing to rent when you can afford to buy...

Powerful, isn't it?  Here's what Forbes is saying:

  • Investing in a home and building equity is a major source of retirement security now.  Especially now... given the soft stock market and low interest rates.
  • Americans must change their perspective about home ownership before it's too late.

Takeaways:

  • A homeowner with a mortgage will still be writing the same mortgage check for $1,500 (as in the illustration above) 15 years from now while prices everywhere increase around them.
  • A homeowner will spend $540,000 on their monthly payments over 30 years while a renter will spend $900,000 with the cost of inflation being 3.2% a year.
  • Even if the real estate market only appreciates 1% a year.  A homeowner of a $300,000 home will still gain $100,000 in equity towards their retirement.  A renter would be giving up $400,000 of their retirement assets since they have no equity ($300,000 pay off on the house and $100,000 in equity).
  • A homeowner will have a place to live in that has been paid off.  The renter needs to continue to find housing and pay rent.
  • US government encourages home ownership and subsidizes it by allowing deductions of mortgage interest and property taxes - tax benefits! And should you decide to sell your home will allow you not to pay taxes on the first $250,000 of gains for singles and $500,000 in gains for couples.

Of course, there are still additional expenses even after you pay off your home:  real estate property taxes, home owner association fees if you live in a condominium or a townouse, upkeep costs.  All have to be taken into consideration.  But, consider you should.  Run your numbers, talk to a great CPA and consult your local real estate agent.

Is renting a "safer" choice that provides more freedom?  YES!  But, it might be a very expensive choice in the long run

What do you think?  I posted this on my Pasadena Real Estate Facebook page and the conversation became quite lively.  Leave your comments here or join our Facebook discussion.

LOOKING FOR A HOME?  SEARCH FOR HOMES HERE

Interested in more information about Greater Pasadena Area cities, check out our City Guide below:

Pasadena City Guide

And, if you are interested in fun activities to do, take a look at our 365 Things To Do In Pasadena® page.

Thinking of selling your home? Interested in finding out the current market value of your single family home, condo or investment property? Then call Irina Netchaev at (626) 629-8439 to discuss what is happening in today’s Southern California Real Estate Market.

March 27, 2012

Outlook on Pasadena Home Prices

National Mortgage Settlement's Affect on Pasadena Home Prices

In part 3 of Shadow Inventory and National Mortgage Settlement discussion takes us to the most important question that most Pasadena home sellers and home buyers have.  Will the home prices go up or down?

The price of pretty much anything is impacted by the supply and demand. In case of Pasadena real estate, how many Pasadena homes and condos are for sale and how many home buyers are out there wanting to buy.

A rule of thumb guideline to see if you're in a home seller's market or a buyer's market is this:

Sellers Market = less than 4 months of home inventory
Buyers Market = more than 7 months of home inventory
Stable or Normal real estate market = 5 to 6 months of inventory

[caption id="attachment_3582" align="aligncenter" width="537" caption="Courtesy of Keeping Matters Current"]Month's Supply Impact on Price[/caption]

Pasadena months of inventory statistics:

Pasadena Single Family Homes are running 5 months of inventory as of February 2012 compared to 10.7 months of inventory as of February 2011.
Pasadena Condos and Townhomes are running at 4.3 months of inventory as of February 2012 compared to 9.9 months of inventory as of February 2011.

Those of us in the field and the serious home buyers have experienced a very low supply of available Pasadena homes pretty much across the board all price ranges and types of properties.  Multiple offers are more prevalent and cash buyers are out in droves bidding out regular conventional loan buyers.  However, remember that "shadow inventory" that we talked about and the fact that the National Mortgage Settlement is now providing a clear "road map" to the lenders on moving forward with the foreclosures.  This could seriously change the landscape of available homes for sale over the next year or so.

The chart below provides you with a quick feel for the current inventory in the Greater Pasadena area and the potential additional inventory that banks have been sitting on.  There are several strategies that lenders are reviewing right now.  Some lenders are considering foreclosing and renting some of these homes out.  Others are piloting programs allowing the existing homeowners to stay in their homes as rentals after foreclosure takes place.  However, whatever the strategy or decision taken by a particular lender, we can be assured that quite a few homes will hit the market as Real Estate Owned (REO) properties.

[caption id="attachment_3587" align="aligncenter" width="592" caption="Data from ForeclosureRadar.com and Pasadena Foothill Association of Realtors"]Greater Pasadena Shadow Inventory Volume[/caption]

What this means is prices most likely will move down a teeny bit more than they are now.  Does that mean that you as a home buyer should wait?  Well... it's a personal decision.  You might wait for the prices to move down a bit, but then again the interest can inch up.  Remember a 1% point in interest increase equates to 10% in affordability.  The likelihood of the interest rates moving up 1% point is pretty high.  The likelihood of prices falling 10% is not as high.

Home Buyer Recommendation:  Now is the time to buy!  Find the right property, take advantage of the low prices and lock in a low mortgage interest rate while it lasts.

Home Seller Recommendation:  Price your home AGGRESSIVELY!  You will be competing with distressed properties and sellers.  Now is a perfect time to look for that move-up property.

We are truly in the eye of that perfect storm in the Pasadena Real Estate market!

LOOKING FOR A HOME?  SEARCH FOR HOMES HERE

Interested in more information about Greater Pasadena Area cities, check out our City Guide below:

Pasadena City Guide

And, if you are interested in fun activities to do, take a look at our 365 Things To Do In Pasadena® page.

Thinking of selling your home? Interested in finding out the current market value of your single family home, condo or investment property? Then call Irina Netchaev at (626) 629-8439 to discuss what is happening in today’s Southern California Real Estate Market.

Posted in Pasadena
March 20, 2012

National Mortgage Settlement Affects Pasadena Home Inventory

Now that we understand what Shadow Inventory is and how the Robo Signing fiasco created a backlog of distressed homes waiting to be released on the Pasadena real estate market, let's take a look at what role the National Mortgage Settlement plays in all of this.

National Mortgage Settlement

For full details on the $25 Billion settlement visit www.NationalMortgageSettlement.com.  But, basically, it does four things:

  1. It sets aside some money between $1,500 to $2,000 to folks that were foreclosed on where the paperwork was not filled out correctly by the banks.
  2. It sets money aside for the people that are underwater and not making their payments so that they can get a principal reduction on the house to help them hold on to their home.
  3. Homeowners that are making their payments on time, but are underwater may be allowed to refinance to make it easier on them to make their home mortgage payments.  AND...
  4. Most importantly, the settlement gave guidance to the banks on how they can proceed forward legally without penalty on the foreclosures that are currently in the pipeline.

Impact of National Mortgage Settlement

Here's what some experts around the country say:

“It does appear the number of completed foreclosures will increase following this settlement - especially in some judicial states with large backlogs - so there will probably be more REOs (lender Real Estate Owned) for sale.”    - Calculated Risk

 

“The settlement sets forth clear guidelines for lenders and servicers to follow when foreclosing, which should allow them to push through some of the delayed foreclosures from last year.”   - Brandon Moore, chief executive of RealtyTrac

 

And, Mark Vitner, a senior economist at Wells Fargo Securities, one of the biggest players says:

“The settlement helps the housing market in the long run because it allows banks to proceed with millions of foreclosures that have been stalled. Many lenders have refrained from foreclosing on homes as they awaited the settlement.”

So how will this impact Pasadena home prices? We now know that banks have a "road map" on how to proceed with foreclosures in and around Pasadena California.  This means that we'll be seeing more inventory hitting our Pasadena real estate market.  Come back tomorrow for Part 3 of our series - "How will Shadow Inventory Affect Your Home Price?"

Read More:  Pasadena Real Estate Guide - Everything You need to Know about Buying or Selling Your Home

Irina Netchaev is a Top Realtor and the founder and President of Pasadena Views Real Estate Team™. She is available to assist you in all of your Real Estate transactions. Email or call her today at (626)629-8439.

LOOKING FOR A HOME?  SEARCH FOR HOMES HERE

Interested in more information about Greater Pasadena Area cities, check out our City Guides below:

Alhambra City Guide

Altadena City Guide

Arcadia City Guide

Eagle Rock City Guide

Monterey Hills City Guide

Pasadena City Guide

San Gabriel City Guide

San Marino City Guide

Sierra Madre City Guide

South Pasadena City Guide

And, if you are interested in fun activities to do, take a look at our 365 Things To Do In Pasadena® page.

Thinking of selling your home? Interested in finding out the current market value of your single family home, condo or investment property? Then call Irina Netchaev at (626) 629-8439 to discuss what is happening in today’s Southern California Real Estate Market.

March 18, 2012

How Will Shadow Inventory Affect Your Home Price?

A couple of weeks ago, federal government and Attorneys General in 50 states reached a settlement with major banks called the National Mortgage Settlement.  I’m sure you have read and seen from the newspapers and on tv about the current state of affairs in the real estate market and you have formed an opinion.   By the time, we’re finished with this article and you watch the videos below, I promise you that you will  have a better understanding of exactly how the distressed homes will affect the real estate market.

I've put together a webinar to take you through step by step what Shadow Inventory is, what the National Mortgage Settlement is and how it will affect our market. To make it easier for my readers, I'm breaking the webinar into 3 parts and providing a quick overview below.

What is Shadow Inventory?

Let's start out with the definition of Shadow Inventory. It breaks down into 3 components:

  1. Houses that are 90 days delinquent on their mortgage. These are homes that are not in the  foreclosure process yet.  The homeowners are just 3 months behind on their payments.  The reason this is considered shadow inventory is that statistics show us that over 97% of people that fall 3 months behind will never catch up with their mortgage payment.   They wind up as a distressed property.  There is a thing called the cure rate.  Cure rate represents the number of people that fall 90 days behind on their home mortgage and are able to catch up to current.   The cure rate, right now in United States,  is a little less than 3%.  What this means is that 97% of the people will not catch up and will wind up in some sort of distressed property situation.
  2. The 2nd category are homes that are already in the foreclosure process.  Notice of Default has been filed, but the banks did not foreclose on these homeowners yet.
  3. And the 3rd category is homes already foreclosed on and owned by the bank, but are not on the market yet.

Each and every state has "Shadow Inventory".  California's volume is not as great as other states because the banks have been clearing through the existing inventory faster than in other places around the country.

Foreclosure Process and Robo Signing Fiasco

The foreclosure process, overall, is pretty simple:

People go 90 days late on their mortgage, then they go into a foreclosure process.  Once the foreclosure process is finished, the banks get ownership of the house and once the property is cleaned up, the banks release  it on the market as an REO (Real Estate Owned)

See Pasadena Foreclosures for Sale here.

Different states have different ways to foreclose.  California is considered a non-judicial state meaning that the banks do not have to take the foreclosure through the courts and usually the process is pretty fast.

However, because of the Robo signing and the mess that occurred when the mortgage companies didn't really finish their paperwork right, the Attorneys General in all 50 states started to push back  on the banks and insist that the banks complete the paperwork correctly or they will be penalized.

So... between the foreclosure process and the actual foreclosure when the banks were able to take the property back, there was a line drawn by each local state saying that the banks could not take the house back before they finished filling out the paperwork correctly.

Completed Foreclosures Nationwide

Completed Foreclosures Nationwide

Let's take a look at the 4th quarter of 2009 to the 3rd quarter of 2010 above. What we can see is that in those quarters, and by the way these are not cumulative numbers, but are individual to each quarter, we can see that the number of houses that the banks were taking back, actually foreclosing on, were growing dramatically.

Then the robo signing scandal was announced - banks were not processing the paperwork right and were just signing off on it. That's when the Attorneys General stepped in and said that they were going to penalize banks for not foreclosing correctly.  So the banks simply stopped or slowed down the foreclosure process until they found out what they were allowed to do.

And, the impact it had on the number of completed foreclosures in this country is that they dropped like a rock in the 4th quarter of 2010.

This is why you might see some headlines in the papers saying that foreclosures are down 3+% from 2 years ago. In some papers, they're spinning this as a very positive thing saying that we're finished with the foreclosure challenge and though that's accurate that the numbers are down, it's not true that we're finished with the foreclosure challenge.  And, here's why...

Foreclosures in Process Nationwide

Foreclosures in Process Nationwide

The foreclosures that are actually in process where the homeowners are behind 3 months or more on their payments are actually increasing steadily for the same time period.

The number of homes going into the foreclosure process continues to increase, but the number of completed foreclosures dropped off dramatically.

And, that's what's causing the back log and is a huge component of the "Shadow Inventory" that you keep hearing about.  Tomorrow, I'll post Part 2 that will explain the National Mortgage Settlement and how it provides the banks with a road map in releasing all this inventory.

READ MORE:  Part 2 - National Mortgage Settlement Affects Pasadena Home Inventory

Irina Netchaev is a Top Realtor and the founder and President of Pasadena Views Real Estate Team™. She is available to assist you in all of your Real Estate transactions. Email or call her today at (626)629-8439.

LOOKING FOR A HOME?  SEARCH FOR HOMES HERE

Interested in more information about Greater Pasadena Area cities, check out our City Guides below:

Alhambra City Guide

Altadena City Guide

Arcadia City Guide

Eagle Rock City Guide

Monterey Hills City Guide

Pasadena City Guide

San Gabriel City Guide

San Marino City Guide

Sierra Madre City Guide

South Pasadena City Guide

And, if you are interested in fun activities to do, take a look at our 365 Things To Do In Pasadena® page.

Thinking of selling your home? Interested in finding out the current market value of your single family home, condo or investment property? Then call Irina Netchaev at (626) 629-8439 to discuss what is happening in today’s Southern California Real Estate Market.

March 15, 2012

Real Estate Investors: Bulk Foreclosures for Sale

Homes for Sale - Real Estate - Bulk ForeclosuresThere has been much talk about the government selling bulk foreclosures which will be converted into rentals. What will this actually mean to the housing market? For the answer to that question, we go directly to the 2/28/2012 Senate testimony of the person making the decisions on this subject: Edward J. DeMarco, Acting Director of the Federal Housing Finance Agency.

Have Any Foreclosures Been Sold in Bulk?

“Yesterday we announced the first transaction in our REO Initiative pilot program. This transaction includes approximately 2,500 properties, divided into 8 sub pools by geographic area.”

Will These Sales Be Limited to Certain Markets?

“The targeted Metropolitan Statistical Areas are likely no surprise to you because they represent hard-hit parts of the country: Las Vegas, Nevada; Phoenix, Arizona; various communities in Florida; Chicago, Illinois; Riverside and Los Angeles, California; and Atlanta, Georgia… Future transactions will also be targeted to these types of markets, where the supply of homes for sale is greater than the demand from homebuyers and where demand for rental housing is strong.

Who Qualifies for These Sales?

Investors will be able to submit applications to demonstrate their financial capacity, relevant market experience, and specific plans for purchasing pools of 6 foreclosed properties with the requirement to rent the purchased properties for a specified number of years.”

Will Most Foreclosures Be Sold This Way?

“Our primary goal will continue to be selling properties first to homebuyers who will use them as their primary residences or non-profits that include homes in mission-oriented activities. We also want to enhance the opportunity for smaller-scale investors to bid on properties, and obtain financing, should initial efforts to market the properties to owner-occupants fail.

Will the Bulk Sales Program Lessen the Pressure on Home Prices?

“The number of properties available for sale by Fannie Mae and Freddie Mac represents only a fraction of the total supply that is depressing home values in certain affected markets.”

Bottom Line

Any plan that reduces the number of foreclosures will help home prices. However, this plan will not have a dramatic impact on the large number of homes that are currently in the foreclosure process.

Article original published at KCM blog.

About Irina:  Irina is a Top Realtor and the founder and President of Pasadena Views Real Estate Team™ and 365 Things To Do In Pasadena®. She is available to assist you in all of your Real Estate transactions. Email or call her today at (626)629-8439.

March 3, 2012

FHA Loans More Expensive?

Many Pasadena home buyers turn to HUD for their FHA financing to purchase their home with minimal down payment. Unfortunately, April 1, 2012, these loans will be significantly more expensive.

[caption id="" align="aligncenter" width="640" caption="Photo courtesy of Jeremy Brooks via flickr"]Home Loans[/caption]

The cost of borrowing is going up...

Why?  This Monday, HUD has announced that they're increasing premiums that they charge borrowers to increase their financial standing.

As reported by KCMBlog:

FHA loans, by design, are more liberal in their underwriting guidelines than most conventional loan products (in terms of credit, income ratios, required investment from the borrower, and maximum loan amount). HUD is not a lender. Rather, it is a federally-insured insurance company. They insure lenders against default on loans underwritten in compliance with their published guidelines. It is because of this insurance that lenders approve and close loans with more liberal guidelines.

As an insurance company, HUD charges two types of premiums on the FHA mortgages:

  • The UFMIP (Up Front Mortgage Insurance Premium) will be raised effective April 1, 2012 from its current 1% to 1.75%. One advantage to the UFMIP is the fact that it is typically built into the loan amount and does not require additional cash outlay at closing. However, the increase in loan amount does impact monthly payment and cash flow.
  • The MMIP (Monthly Mortgage Insurance Premium) will be raised 10 basis points on April 1, 2012 to cover the requirements of the payroll tax extension approved last year. This is a direct increase of 10 basis points in the borrower’s mortgage payment, and has the effect of a 10 basis point increase in interest rates. As a kicker, loans over $625,000 will be bumped 35 basis points from today’s levels effective June 1, 2012. This bump is substantial.  See the chart below... (click on the image to enlarge)

For example, on a loan amount of $300,000, we are seeing an increased payment of $36.41, which doesn’t sound too bad. However, we know that home buyers buy homes comparing what their monthly payment will be after they close. This hike in payment is equivalent to borrowing an additional $7000. Starting next month, it’s as if the home became $7000 more expensive. What is the result? Buyers are going to have to pay more OR they’re going to have to offer less to the seller (to maintain the same mortgage payment they were comfortable with today). A $7000 lower offer is like another 2.5% decline of home prices. Not good for anyone.

Pasadena Home Buyer Advice:

Buyers, today is the cheapest mortgage you are likely to see in your lifetime (all things considered)! Get off the fence and buy NOW!

Pasadena Home Seller Advice:

Sellers, price correctly and get into contract in March.

About Irina:  Irina is a Top Realtor and the founder and President of Pasadena Views Real Estate Team™. She is available to assist you in all of your Real Estate transactions. Email or call her today at (626)629-8439.

Feb. 28, 2012

Mortgage Debt Forgiveness - What IRS Wants You to Know

Did you short sell your Pasadena home last year?

If so, the lender wrote off some debt to make your home sale happen.  The question that comes up is "Do I have to pay taxes on the amount that the lender wrote off?"  It depends... Canceled debt is normally taxable to you, but there are exceptions. One of those exceptions is available to homeowners whose mortgage debt is partly or entirely forgiven during tax years 2007 through 2012.

READ MORE:   Understanding Short Sales

The IRS would like you to know these 10 facts about Mortgage Debt Forgiveness:

1. Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.

2. The limit is $1 million for a married person filing a separate return.

3. You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.

4. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.

5. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.

6. Proceeds of refinanced debt used for other purposes – for example, to pay off credit card debt – do not qualify for the exclusion.

7. If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.

8. Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision. In some cases, however, other tax relief provisions – such as insolvency – may be applicable. IRS Form 982 provides more details about these provisions.

9. If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.

10. Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.

READ MORE:  Life after foreclosure or short sale

About Irina:  Irina is a Top Realtor and the founder and President of Pasadena Views Real Estate Team™. She is available to assist you in all of your Real Estate transactions. Email or call her today at (626)629-8439.

Feb. 27, 2012

Pasadena Real Estate Housing Review - 2003 through 2011

Pasadena appears to be one of the few bright spots in an otherwise declining market. The median price of houses sold in the wealthy 91105 and 91106 Zip codes rose from $888,500 in 2010 to $907,165 in 2011. - Tina Daunt of Hollywood Reporter

 

Pasadena California has been offering gracious architecture to many homeowners.  Beautiful, tree lined canopy streets are home to Craftsman style homes, Bungalows, Spanish, Victorian, and English Tudor mansions.  Visitors flock to the city of roses on New Year's day for its world famous Tournament of Roses Parade, but day in and day out, there's always something to do here.

And, that is what's driving the real estate market - architecture and lifestyle!  Minutes from Hollywood, beach and the mountains, Pasadena truly offers a wonderful place to live.

Pasadena Real Estate Housing Statistics - 2003 to 2011

Single Family Home Prices:

[caption id="attachment_3515" align="aligncenter" width="594" caption="Average Price of Homes Sold in Pasadena 2003-2011"]Average Price of Homes Sold in Pasadena 2003-2011[/caption]

  • Average Price of homes sold has been pretty consistent over the last three years - in the mid $700K range.
  • And, yes... even though there's been a drop from the height of the market in 2007, overall, the market is staying strong.  Investors seem to feel the same way and it shows in the amount of cash sales that we've seen in 2011.  An incredible 19% of all Pasadena home sales were not financed and purchased for all CASH.  And, cash speaks highly to the level of confidence in the real estate market place for Pasadena.

Pasadena Single Family Home Inventory:

[caption id="attachment_3516" align="aligncenter" width="508" caption="Pasadena Housing Inventory - 2003 - 2011"]Pasadena Housing Inventory - 2003 - 2011[/caption]

  • Housing volume is finally picking up just a bit, but still is significantly lower than what we saw in the early 2000s.  Pasadena homeowners are holding on to their homes.
  • Distressed sales account for almost 23% of the inventory sold.  Short sales represent 101 transactions and foreclosures represent 92 homes sold.
  • Short sales are actually closing in higher numbers than ever before.  They're still very stressful on home buyers because of the wait and the unknown of the outcome until the very last day before closing.  Definitely not for the faint of heart and are more for the investors that are not emotionally vested in the property.  We are seeing about 44% of short sales close which is great news.  The average priced short sale sold in 2011 was $435,358.

Pasadena's Price Per Square Foot Analysis:

[caption id="attachment_3517" align="aligncenter" width="514" caption="Pasadena Price Per Sq Ft Analysis 2003-2011"]Pasadena Price Per Sq Ft Analysis 2003-2011[/caption]

  • 2011 closed with an average price per sq. ft. of $374 which was just under 2010 price per sq. ft. of $377 and 2009 of $375.
  • The height of the market was in 2006 when the price per square foot was $497

Statistics gathered from Pasadena Foothill Association.

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Irina is a Top Realtor and the founder and President of Pasadena Views Real Estate Team™. She is available to assist you in all of your Real Estate transactions. Email or call her today at (626)629-8439.

Interested in seeing what available for sale? Click on the form below to search for full access to the Multiple Listing Service. 

READ MORE:  Pasadena real estate update 2012 – see luxury home sales.


Irina is a Top Realtor and the founder and President of Pasadena Views Real Estate Team™. She is available to assist you in all of your Real Estate transactions. Email or call her today at (626)629-8439.

Interested in seeing what available for sale? Take a look at the home listings below. The information is updated real-time as new homes are entered into the Multiple listings service: