Who would imagine that this tax incentive thing becomes a spectator sport?

 As of June 3rd, this tax incentive has been claimed for 82.5 million, which means there is only 17 millions left.  This incentive will be gone before the end of June.

 Again, anyone who is interested in taking advantage of this tax incentive, you need to hurry.

In my April 22nd post, I reported that the California Tax Incentive for new home purchases was down to 60 million.  Guess what, a mere two weeks later, it is down to 45 million now.  So for those of you that are contemplating taking advantage of this wonderful tax incentive, you’d better hurry. 

Contact me if you are interested in any of the new homes in San Diego area.  There are other incentives that you might not be aware of.

Zip code 92129 covers the popular Park Village, Carmel Del Sur areas.  The award-winning Westview highschool is in this zip code.  Many families favor living in this area because the excellent schools.   If you look at this acitivity chart, you will notice that for the past three months, the sales price seemed climbed up. If you dig deep into the sales data (which is not presented here), this price increase is due to the higher sales volume in the >$500k market segment.  This is driven by the price drop in this higher-end market segment.  Last week, I just closed an excellent deal for a client of mine in the 800k range.  And that week, two houses closed on the same street!!! My observation is that the prices of above 500k range have gone down quite a bit in the first quarter of this year so much so that the sales activity will pick up quite a bit in the next couple of months.

92131 covers the Scripps Ranch and part of Poway areas.  Similar to the three areas that I blogged before, both the overall inventory (250 in April 09) and the selling price have declined.  The sales volume is still around 30 to 40 properties a month, and there are about 50 new listings come on the market every month.

92130 includes the Carmel Valley area.  As seen in most of San Diego neighborhoods, the overall inventory (green line) has reduced from the 2006 peak of about 900 properties to about 400 in the month of Feburary 2009.  March 2009 sees an increase of inventory primarily because the new listings (red line) increase consistently starting in January 2009.

The sold price in this area has been quite steady until the recent two months.  Carmel Valley area has resisted the price drop that many of San Diego neighborhoods have seen.  This is the reason the sales volume has been steady.  As I oberved in one of my previous post, there are a lot of demand in this area.  Once the price goes down a bit, you will see buyers swoon in.  For the sellers in this area, your first priority is make sure your property will stand out either in condition or in price.  

Traditionally the sales volume in Carmel Valley area is strongly cyclic.  The spring season usually witness a marked increase in sales volume.  This is primarily due to the fact that families are buying houses in this area so that their kids can go to some of the best schools in San Diego.

To contrast with the chart I presented in my last blog, I am showing you the activity chart of 92127 zip code, which covers Rancho Bernardo, 4S ranch area.

What is common with last chart is that the overall inventory (the green line) is shrinking and the price (the yellow line) is going down as well.  What is different from the last chart is that the sold properties stay at a fairly low level of about 40 properties per month.  This means right now the inventory in 92127 is still 10 months.  What is alarming is that the new listing (the red line) still stays at a high level (100 properties per month in Mar 2009).  My prediction is that when the spring selling season starts, the number of listings will climb up. 

My advice for the buyers in this area, you probably can wait till summer time to buy.  You will have more choices.  But don’t bet on the price will go down further.  Take a look at the sold price line (yellow), it has been flat for the past year. 

For sellers in this area, my advice is to be realistic about your pricing.  There are just too many properties on the market to compete with your property. You need to think about differentiation, which means you want to spruce up your property to make it stand out.  And lower your asking price doesn’t hurt either.

Again, this chart is from San Diego Association of Realtors Multiple Listing Service (MLS).

In the last blog, I was talking about narrow window of opportunity in Mira Mesa Area.  To put things in perspective, I am posting this activity chart of the zip code 92126, which covers mainly the Mira Mesa area.  This chart is from the San Diego Association of Realtors’ Multiple Listing Service (MLS).

The green line represents the active listings, which means how many properties are available for sell in this zip code.  As you can see the overall inventory is shrinking from the peak of 700 properties (in August 2006) to 300 (in April of 2009).   Similarly, the average selling price (the yellow line) is going down as well.  It peaked at 450k (June 2006) and right now it is around 340k.

The sales activity (represented by the blue line) is about 80 properties per months, this is close to the highest level for the past three years.

The red line represents the new listings that come on the market every month.  At the peak (May 2006), there are about 150 properties that come on the market.  Right now it is about 80, which is close to the sold properties. 

From this chart, my read is that the lower selling price of this area propels the sales acitivity to a high level that reduce the house inventory from the historical average of 9 months inventory to the current 4 months inventory.  This is why the market in Mira Mesa is so hot!!!

Just want to give another story on how quickly one needs to act in today’s market.

One investment property in Mira Mesa area came on the market this past Friday afternoon (April 24th, 09).  As soon as the alert hit my blackberry, I recognized that this was great value.  The listing agent didn’t even have time to post the pictures on the MLS yet.  I quickly scheduled showing in the following hour.  My clients liked it and we sent in an offer by 5 pm.  The seller accepted around 7pm.  The property is ours!!!

For the buyers out there, you really need your agent to be on top of things and able to act quickly.  This property was about 20% below the market price and in great condition.  It would have got multiple offers if it stays on the market for a couple of days.  But the window of opportunity opened for just one afternoon!!! So if your agent doesn’t get to it, you would have missed the opportunity.

For anyone who is familiar with San Diego’s housing market knows that Carmel Valley (92130) is one of the best neighborhoods and its housing price has avoided the kind of free falls as in some other neighborhood (East Chula Vista, for example).  One can list many reasons as to why, and maybe I can devote another blog on just that.  For today’s blog, I just want to make an observation as to how much demand there is for single family houses in Carmel Valley area.

Pardee Homes is the only new house builder in Carmel Valley area.  Recently it is starting the registration for its new releases called Manzanita Trail, which is the latest neighborhood in the massive Pacific Highlands Ranch development (where Pardee’s three earlier releases, Santa Rosa, Arabella, and Portico all sold out).

In June 2009, there will be 8 properties released in Manzanita Trail. In the past week, I have taken three clients of mine to register for this coming release.  To my client’s surprises, there are over 200 potential buyers who have registered ahead of them.  Of course,  many of these buyers will chose not to buy when the new releases coming on the market.  But at least, this number (200) is telling me that there are MANY potential buyers who are interested in buying a property in this area. 

Now I understand the demand side, I did some search on the Multiple Listing Services to see on the supply side, how many houses with a similar specification (3 bedroom, at least 2 bath, under 900k) there are in Carmel Valley area.  Guess what, only 37 of them. 

Now I understand why the house price in Carmel Valley has not fallen like some other neighborhood.  This is economics 101, demand is far greater than supply!!!  And this is also why Pardee Homes is keeping building and releasing new homes amigst the so-called “housing crisis”. 

My advice to the buyers, don’t wait.  The price is not going to come down much.

For those of you have homes to sell in this neighborhood, be like Pardee, and be confident about the chance of your houses being sold at a reasonable price.

What can I say, Real Estate is Local!!!

By now, you are probably aware that as a measure to stimulate economy, the state of California is giving new home buyers $10,000 in tax credit.  This is an incredible deal because there is no income limit, it is NOT limited to first-time homebuyers, and it is tax credit, which will reduce your tax liability dollar for dollar. 

There are a number of caveats to this tax credits. For instance, The tax credit is UP to $10,000 (or 5% of home price, whichever is less). This means if you buy a $150k new condo in Chula Vista, you are only qualified for 7500 dollars in tax credit.  To be qualified for the full 10k, the purcase price has to be above 200k. 

There is one caveat that you might not be aware that there is a $100 million limit to this incentive.  In other words, approximately, the first 10,000 houses will qualify for this tax credit.   So if you want to take advantage of this incredible tax incentive, you’d better hurry.  As of April 15, 2009, $35 million of the funds have been claimed.  That leaves about $65 million for those of you who are still interested in getting this great tax incentive.  To put things in perspective in terms of how fast this tax credit is going, this tax credit programs started on March 1st, 2009.  At current rate, this tax incentive fund will be exhausted in another 83 days, i.e. mid July, 2009. 

So hurry up……

For more information, use the following link to California State Government:

http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml