The Statewide median price of existing single family homes rose to $304,500 in November according to the California Association of Realtors as well as a 2.4% increase over the previous month and 5.8% higher that the same month a year earlier.

In Palm Springs the median price of a single family home was $319,000 in November according to the Desert Area Multiple Listing Service.  That represents an increase of 13% over the previous month but a decrease of 9% from November of 2008.  Of course the number of homes sold in Palm Springs is a smaller sample than California as a whole and prone to wider variation as one or two sales can greatly affect the median price.   Nonetheless, I would view this as a positive sign that the market in California as well as Palm Springs has rounded the corner and headed in the right direction.

  Look for my year end report shortly after the first of the year, detailing home sales in Palm Springs over the course of 2009 and some interesting information concerning the decade and Palm Springs home sales.

I found myself in a dentist chair a few days ago consulting with a periodontist who had been referred to me by my long time dentist.  As he was discussing his prognosis for me, I began to think about the faith I would be placing in this doctor’s hands.   Not only would the procedure involve anesthesia, surgery, and recover time but also a great deal of money.  Was I choosing the right professional and the right course of action? As I discussed my situation with my friends, they had a wide variety of suggestions for me from “just pull the tooth and forget it ”  to “you are making the right decision”.

I related my thoughts on this situation to meeting clients in my profession for the first time and how they might be feeling about their decision to work with me or another professional.  Of course, in real estate the commitment to a professional is not exactly like selecting a dentist.  Appointments are made with a dentist and paid for at the time of service.  Not so for the real estate professional.  Appointments are made and houses are shown, in some cases over a period of months or even years and no fees are collected.  I am sure during this process; friends and relatives are giving feedback concerning the search for real estate just as my friends did concerning my dentist.  They may have opinions about the Realtor, the city, the price point and the selection of a property once it is made. The client may move on to another Realtor, decide not to buy or move to another state to buy. Thus is the life of a Realtor.

When selecting a real estate professional, like selecting a dentist one is placing a lot of faith in the hands of the Realtor.  When buying there is the  search for the property, negotiating a price for the property, inspecting the property, obtaining financing for the property, and closing escrow on the property to mention a few of the  aspects involved in a real estate transaction.   When selling a property many of the same skills are also involved.   All this does take faith and trust in the professional as well it should.

I am asked time and time again what type of buyer or seller I prefer to represent.  Over my 28 years in real estate, the answer I give is simple.  I want to represent a seller or a buyer, no matter how larger or how small the transaction, who is as honest and as loyal to me as I am honest and am loyal to them.  This is the key to a great professional relationship whether with a dentist or a realtor.

If buying or selling real estate in Palm Springs is in your future, I would appreciate the opportunity to meet with you and discuss a professional relationship and of course, referrals are always welcomed.

Gary CarlsonDirect# 760.883.1453

Median price increases from October to November, 2009.

 Further, the median price-the price for which half the prices sold for more and half sold for less- increased from $284,904 ( 115 condos and sfr’s) to $311,760    ( 109 condos and sfr’s) from October to November, 2009 , a gain of 9% in the median sales price.

So, once again, does this indicate a shift in the Palm Springs housing market?  Dwindling inventories and median price increases seem to be telling the story at least for the last sixty days.

The California  median home price-the point at which half the house sold for more and half sold for less-was $257,000 in October up 2.4 percent from $251,000 in September 2009.  The median price was down 7.6 percent from $278,000 in October, 2008.

In Palm Springs the median home price in October was $284,904 unchanged from the  September median price of $285,587. The median price was down 8.5% from $336,020 in October, 2008.

In Palm Springs for October there was a total of 115 condos and single family homes reported sold by the Greater Palm Springs Multiple Listing Service down from 119 homes and condos sold in September, 2009 for a decrease of 3.25%. Comparing  October, 2008 to October 2009 there was an increase in sales of 9 percent from 107 units to 119.

So while the end of the year is filled with lots of fun stuff—holidays, gift-giving, family visits, etc., it is also the time of year to think carefully about your taxes because once December 31st has come and gone, your tax liability for the 2009 tax year will be set in stone.

Especially this year, when Congress has inserted a handful of powerful but temporary tax breaks to get the economy moving again, you do not want to overlook any deduction or credit that you can take in 2009 to lower this year’s tax bill. Managing what income you recognize or defer also can pay dividends as you focus on balancing your tax rates between 2009 and 2010, and beyond, with tax reform on the horizon.

I wanted to bring to your attention just a few of the tax law changes below, which have taken place to stimulate the economy and those now on the horizon to pay for the recovery.

First-time homebuyer credit. The first-time homebuyer credit is one of the most popular tax incentives in recent years. However, it is not a permanent tax break. It is temporary. Its originally scheduled expiration date of November 30, 2009 prompted Congress to extend and expand it.

Originally, the credit was limited to $8,000 ($4,000 for a married taxpayer filing separately) for first-time homebuyers only.

The new law extends the credit for principal residences purchased (contract signed) on or before April 30, 2010 with escrow closing on or before July 1, 2010.  Members of the U.S. armed forces, foreign service and intelligence community may have additional time to claim the credit if they are serving on qualified official extended duty outside of the U.S.

The new also extends a special rule that could boost your expected tax refund. Eligible taxpayers can elect to treat a qualified purchase of a principal residence after December 31, 2009 as made on December 31 of the calendar year preceding the purchase. For example, if you purchase a qualified principal residence on March 2, 2010 and you are eligible for the credit, you can elect to treat the purchase as made on December 31, 2009 and claim the credit on your 2009 return. This treatment could result in a larger refund in 2010 depending on your personal tax situation. Otherwise, you could wait and claim the credit when you file your 2010 return in 2011. This election needs to be reviewed carefully. A qualified accountant can help you decide when to claim the credit to maximize your tax savings.

Until now, the credit was limited to first-time homebuyers. The full credit (the $8,000 credit) is still limited to first-time homebuyers. However, current homeowners are now eligible for a credit of $6,500 as long as they have owned and used the same residence as their principal residence for any five consecutive year period during the previous eight years. This provision is intended to help younger homeowners who are trading up and seniors who may be looking to downsize.

Another change in the new law is notable in enabling many more taxpayers to take advantage of the credit. Congress raised the income phase-outs for the credit. Previously, the credit phased out for single individuals with modified adjusted gross income (MAGI) between $75,000 and $95,000 and for married couples filing joint returns with MAGI between $150,000 and $175,000. Under the new law, phase out starts for single individuals with MAGI at $125,000 and for married couples filing joint returns with MAGI at $225,000.

The homebuyer credit can be very valuable. The credit is also very complex. In addition to the provisions described, there are special rules for repayment, new documentation requirements, a purchase price cap, and more.  Consult a qualified tax accountant for the most accurate information.

Planning for deductions and credits at year-end can also get complex but can be equally as rewarding. Timing and qualification rules create traps and opportunities:

*        Pre-paying certain expenses, such as real estate taxes or mortgage interest, do not necessarily translate into a larger deduction this year.

*        Paying a spring college tuition bill in late December instead of early January, however, can impact whether you maximize the benefit of the new American Opportunity Tax Credit for both 2009 and 2010.

*        Year-end charitable giving generally has always been a smart way to reduce current year taxes but strict timing rules and revised substantiation requirements for property donations cannot be overlooked.

*        Homeowners should also not ignore taking advantage of the new residential energy property credit which has a unique set of rules on qualifying expenses and deadlines for installations.

Expiring Tax Incentives.  Many of the tax breaks in recent stimulus tax bills will expire at the end of this year. At this point, Congress cannot be counted on to extend any of them for 2010:

*        For individuals, these expiring provisions include the itemized state and local sales tax deduction, the $4,000 higher education tuition deduction; the additional standard deduction for real property taxes; and the above-the-line $250 teachers’ classroom expense deduction.

*        For businesses, bonus depreciation and enhanced “section 179 expensing,” both designed to temporarily encourage business to make capital investments, likely will be headed for extinction at the end of 2009.

Tax Bills for 2010 and beyond.

*        In 2010, the opportunity to convert any IRA into a Roth IRA without the long-time $100,000 income restriction has many individuals already setting aside funds. Some individuals, however, may do better to convert to a Roth IRA before the end of 2009, when the value of their accounts, and the consequential income that must be recognized on conversion, are at historic lows.

*        Effective for 2011, the Obama administration has proposed to increase the income and capital gains tax rates on single individuals with incomes of more than $200,000 and married couples with incomes exceeding $250,000.  For taxpayers in those groups, including unincorporated small businesses from which their owners recognize income on their individual returns, following the traditional year-end planning maxim of deferring income into next year may not work well this year. Deferring too much income into 2010 could result in overloading income next year if you are looking to accelerate income into 2010 to escape the expected higher rates in 2011. The tax increase proposals are not law yet but we do expect an increase to pay for the recovery incentives and the proposed new health care initiatives.

Penalties. Don’t forget—the IRS imposes penalties on taxpayers that fail to file returns. The new law increases two of those penalties. Effective for tax years beginning after December 31, 2009, the penalty for failure to file a partnership return increases from $89 to $195. The penalty for failure to file an S corporation return also increases from $89 to $195 effective for tax years beginning after December 31, 2009.

This information has been provided courtesy of Berson Financial Group. Additional information is available at their online newsletter at http://www.bersonfinancialgroup.com/newsletter.shtml . 

La Jolla, CA—Southern California home sales rose in October as prices showed more signs of firming. The median sale price fell by the smallest amount in two years, the result of a shrinking inventory of homes for sale and government and industry efforts to stoke demand and curtail foreclosures, a real estate information service reported.

Two counties – Orange and San Diego – posted modest year-over-year increases in their overall median sale price last month. It was the second consecutive gain for Orange County and the first in more than three years for San Diego. Both counties also posted small annual gains the past two months in their median price paid for resale single-family detached houses.

Last month 22,132 new and resale houses and condos closed escrow in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was up 2.8 percent from 21,539 in September and also up 2.8 percent from 21,532 a year earlier, according to MDA DataQuick of San Diego.

October marked the 16th month in a row with a year-over-year sales gain, although last month’s was the smallest of those increases. The 2.8 percent uptick in October sales from September wasn’t unusual, given sales have increased between those two months in half of the years – including 2007 and 2008 – since 1988, when DataQuick’s statistics begin. The average change between September and October is a decline of just under 1 percent.

Last month’s sales were the highest for an October since 2006, when 23,745 sold, but were still 9.5 percent lower than the historical October average of 24,458 sales. Since 1988, October sales have ranged from a low of 12,913 in October 2007 to a high of 37,642 in October 2003.

Sales increases over the last two months can be partially attributed to the recent increase in short sales, which take longer to close escrow. The result is that some summer deals that might normally have closed earlier instead closed in September and October.

Other factors driving home sales higher of late: A rush by some to take advantage of the federal tax credit for first-time buyers, which was initially set to expire at the end of this month but was recently extended and expanded. Also, mortgage rates remain extremely attractive and, combined with home price declines, have boosted housing affordability.

A critical financing source for first-time buyers purchasing lower-cost homes, especially foreclosures, has been the federally-insured FHA loan. FHA mortgages accounted for 38.3 percent of all Southland purchase loans last month, compared with 32.5 percent a year ago and just 2 percent two years ago. FHA’s share of purchase loans varied last month from 26.2 percent in Orange County to 49.2 percent in Riverside County. They offer down payments as low as 3.5 percent and relatively lenient qualifying standards.

“The government is playing a huge role in stabilizing and, to some extent, reinvigorating the housing market,” said John Walsh, MDA DataQuick president. “Its actions have triggered ultra-low mortgage rates, plentiful low-down-payment (FHA) financing, an extended and expanded tax credit for home buyers, and programs and political pressure aimed at reducing foreclosures.”

“The real question now is how well can the market perform next year as some of the government stimulus disappears,” he continued. “The more upbeat outlooks suggest a strengthening economy and job market will help pick up the slack, and that demand for lower-cost foreclosures will remain robust. The more negative forecasts assume, among other things, a much slower economic recovery, more foreclosures than the market can readily digest, and more turbulence in the credit markets.”

The latter outlook suggests today’s market stability is contrived and will prove short-lived – nothing more than a temporary price plateau – while the former suggests home prices are currently at or near bottom.

In October, the median price paid for a Southland home was $280,000, up 1.8 percent from $275,000 in September but down 6.7 percent from $300,000 in October 2008. It was the median’s smallest annual decline for any month since September 2007, when the median fell 4 percent from a year earlier. September 2007 – one month after the current credit crunch hit – marked the beginning of a 26-month streak of year-over-year declines in the median price.

The region’s overall median sale price has risen or held steady on a month-to-month basis ever since it dropped to a more-than 7-year low of $247,000 in April. Last month the median was 44.6 percent lower than the peak $505,000 median reached during several months in early and mid 2007.

Orange County logged a 3.9 percent annual gain in its overall median last month and a 1.9 percent increase in its resale single-family house median. San Diego County saw a 0.5 percent annual increase in its overall median price and a 2.9 percent gain in its median for resale houses.

Another price gauge analysts watch, the median paid per square foot for resale single-family houses, has risen or held steady for the past six months. In October it was $170 for the six-county area, the same as in September but 9.5 percent lower than a year earlier. The figure hit a low this year of $147 in April.

Recent month-to-month and year-over-year gains in the median sale price reflect, in large part, a shift of late toward foreclosures representing a lower percentage of sales. It’s mainly the result of lenders and loan servicers increasingly steering distressed borrowers into either an attempted short sale or loan modification. This reduction in foreclosures is key because over the past two years foreclosed properties were often the most aggressively priced on the market.

Last month, foreclosure resales – houses and condos sold in October that had been foreclosed on in the prior 12 months – made up 40.6 percent of all Southland resales. That was up insignificantly from 40.4 percent in September and down from a high of 56.7 percent in February this year.

As sales of lower-cost foreclosures began to wane earlier this year, sales in higher-cost neighborhoods picked up. High-end homes began to account for a greater share of all sales and helped reverse the steep slide in the median price. Over the past few months, however, the high-end’s share of total sales has flattened out.

In October, sales of homes priced $500,000 and above fell to 18.5 percent of all sales, up from a low this year in April of 13.4 percent but down from 20.2 percent in September and 19.6 percent a year earlier. In October 2007, $500,000-plus sales were 41.1 percent of all sales.

Availability of financing for pricier homes appeared to improve in recent months, but the “jumbo” loans that many high-end buyers require remain relatively expensive and difficult to obtain.

Mortgages above $417,000 – formerly the definition of a jumbo loan – made up nearly 40 percent of purchases before the August 2007 credit crunch hit. Last month they accounted for 15.1 percent, the same as in September but up from 13.3 percent a year ago and a 2009 low of 9.3 percent in January.

MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,196 last month, up from $1,189 for September, and down from $1,470 in October a year ago. Adjusted for inflation, current payments were 46.0 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 55.8 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards, although mortgage default notices have flattened out or trended lower in many areas lately. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above-average in some markets, MDA DataQuick reported.

Copyright 2009 DataQuick Information Systems. All rights reserved.

Breathing “new life” into the housing market, home prices in Southern California maybe on the rebound as reported by MDA DataQuick.  Median prices for home sales rose to $280,000 from September to October, a 1.8% increase,  although in Riverside County comparing year to year median prices in October 2009 as to October 2008 are down by 17.4% as reported by DataQuick.

According to information gathered from The Desert Area Multiple Listing Service, single family homes in Palm Springs had a median price of $280,000 in October, 2009 as compared to a median price of $340,000 in September, 2009.  This would be a decrease in median home values  of approximately 14% from September to October.  The average price for single family homes for October in Palm Springs was $370,000 as compared to an average price of $377,000 in September, 2009, a much smaller decrease of approximately 2%.

Probably the average price in a smaller market sample like Palm Springs is more reflective of actual price issues than a median price comparison.  In Palm Springs the comparisons for median and average sales prices was based on  66 single family homes while in Southern California the sample was based on 4197 sales in Riverside County alone, and 22,132 sales in Southern California.

No matter how one views these statistics, it seems that it is a good time to buy in Palm Springs.  Prices seem to be holding fairly steady in Palm Springs and may soon start experiencing increases as the rest of Southern California  which may be a sign that the real estate market in Palms Springs is showing signs of a “new life”.  Inventories in Palm Springs have fallen dramatically as reported in an earlier blog.

Further, The Desert Sun reported today, “Sales down for first time in over a year”.  Coachella Valley home prices fell 3 per cent in September.  Statistics for October are not yet available.

A new report by the real estate information service MDA DataQuick (MDADQ) shows home sales in Southern California rising. November sales totaled 22,132 for Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, up by 2.8 percent in October from the previous month.

MDADQ also saw “more signs of firming” in the region’s house prices, with the median in this, California’s most populous area, up 1.8 percent from September to $280,000. Year on year the median price showed a drop of 6.7 percent, the smallest such decline since September 2007.

“The [annualized] median sale price fell by the smallest amount in two years, the result of a shrinking inventory of homes for sale and government and industry efforts to stoke demand and curtail foreclosures,” the report stated.

House prices in Southern California and elsewhere in the US have been driven by people seeking to take advantage of the federal tax credit for first-time buyers, a benefit the US administration has said it will eventually withdraw as prices firm. Also record low interest rates and bargain prices have helped to post a 16th consecutive month of year-on-year gains in sales.

“The government is playing a huge role in stabilizing and, to some extent, reinvigorating the housing market,” said John Walsh, MDADQ president. “The real question now is how well can the market perform next year as some of the government stimulus disappears?”

It seems analysts are split on how sustainable this housing recovery will prove to be.

“The more upbeat outlooks suggest a strengthening economy and job market will help pick up the slack, and that demand for lower-cost foreclosures will remain robust,” said Walsh.

“The more negative forecasts assume, among other things, a much slower economic recovery, more foreclosures than the market can readily digest, and more turbulence in the credit markets,” he continued.

Observers have noted that US house price stabilization may be temporary and directly attributable to government efforts that may prove temporary. However you have to ask – would an administration prematurely reverse policy decisions that are having the desired effect? Do turkeys vote for Christmas?

 © 2002 - 2009 Property-Abroad.com Ltd. All Rights Reserved

As a matter of comparison for single family home sales for the month of October, I searched sales for this month only from 2000 to the present.Interestingly I found that in October 2000 there were 53 sales and in October of 2009 there were 66 single family homes (SFR) sold.  Overall sales remained fairly steady in the month of October, although the median price rose and dropped dramatically from the high in 2006. 

The following information was obtained from The Multiple Listing Service:    OCTOBER SFR Sold    YEAR       MEDIAN PRICE

53                                     2000        $239,000

65                                     2001        $245,000

76                                     2002        $275,000

73                                     2003        $350,000

72                                     2004        $475,000

66                                     2005        $515,000

51                                     2006        $550,000

72                                     2007        $475,000

56                                     2008        $327,500

66                                     2009        $280,000   Prices have fallen to the level of 2002 considering the median price over this decade for the month of October.  The sales have remained steady with an average of 65 single family home sales in the month over the decade. What does this indicate for the future of Palm Springs real estate?  Sales have remained steady, but prices have dropped tremendously.  The decade will most likely end with the median prices falling to the levels of the early part of this decade.  The big question is what the next decade will hold for real estate sales and prices in Palm Springs and nationwide.  Stay tuned, I look forward to presenting the same information for the month of November.

Single family homes listed in the Palm Springs Multiple Listing Service in Palm Springs experienced an increase from the previous month with 523 homes on the market, a slight increase from October at 512 homes.  Also, condominium inventory increased to 567 units, a jump in November inventory of almost 25% over the October figure of 440 units.  Part of the increase is probably due to owner’s listing properties as the Palm Springs season begins.   There does not seem to be a substantial increase in foreclosure of condominiums in Palm Springs that would cause this increase. You can follow the daily activity in Palm Springs on this web site by going to New Palm Springs Listings.  You will find a daily listing ( Monday to Friday) of new homes and condos offered for sale as well as homes and condos that have closed escrow and are now deemed sold.