California Real Estate - Appreciation on Steroids

For the last five years, owners of California real estate have been hitting the ball out of the appreciation ballpark. Yes, a real estate market on steroids.

California

California is heavily populated from north to south along the coastline, but they state offers significantly different ecologies. In Northern California, one is much more likely to see signs of the four seasons, get cold temperatures and more historic feel in locations such as San Francisco. Southern California, on the other hand, has an extremely moderate climate with temperatures rarely dipping below 60 degrees even in the winter. Rainfall is also scant with San Diego receiving roughly 11 inches a year. If you are considering moving to California, there are two constants throughout the state.

Traffic

So many people have moved to the state that traffic can be a real issue even on weekends. Los Angles traffic is legendary, but San Francisco and San Diego have their own congestion problems.

Earthquakes

Earthquakes are a constant throughout the state as the San Andres Fault bisects much of the state. Earthquakes happen all of the time, but they are typically very small. If you live in California for more than a month, you won’t even notice them.

Beaches, Sun and Culture

There are serious benefits to living in California. Foremost, of course, are the beaches. If the thought of spending weekends and evenings on the beach appeals to you, this is the place. You’ll pay a premium for it, but there is nothing like it. For example, the temperature in San Diego on October 5, 2005, the day I am writing this, is 79 degrees!   

California Real Estate

California is an incredible place to live and real estate prices reflect it. Single-family home prices average as follows for the three major metropolitan areas - $620,000 for San Diego, $1,300,000 for central San Francisco and $750,000 for central Los Angeles. As a general rule, the closer the home is to the ocean, the more it will cost.

As shocking as the prices are, the rate of appreciation is downright impossible to believe. In the last 12 months, California real estate has appreciated over 25 percent. For a 500,000 home, that is a gain of $125,000 in 12 months. Steroids indeed!

Real estate is all about location, location, location. While this is certainly a cliché, there is no doubt it is true in California.

California Real Estate – Appreciation on Steroids

For the last five years, owners of California real estate have been hitting the ball out of the appreciation ballpark. Yes, a real estate market on steroids.

California

California is heavily populated from north to south along the coastline, but they state offers significantly different ecologies. In Northern California, one is much more likely to see signs of the four seasons, get cold temperatures and more historic feel in locations such as San Francisco. Southern California, on the other hand, has an extremely moderate climate with temperatures rarely dipping below 60 degrees even in the winter. Rainfall is also scant with San Diego receiving roughly 11 inches a year. If you are considering moving to California, there are two constants throughout the state.

Traffic

So many people have moved to the state that traffic can be a real issue even on weekends. Los Angles traffic is legendary, but San Francisco and San Diego have their own congestion problems.

Earthquakes

Earthquakes are a constant throughout the state as the San Andres Fault bisects much of the state. Earthquakes happen all of the time, but they are typically very small. If you live in California for more than a month, you won’t even notice them.

Beaches, Sun and Culture

There are serious benefits to living in California. Foremost, of course, are the beaches. If the thought of spending weekends and evenings on the beach appeals to you, this is the place. You’ll pay a premium for it, but there is nothing like it. For example, the temperature in San Diego on October 5, 2005, the day I am writing this, is 79 degrees!   

California Real Estate

California is an incredible place to live and real estate prices reflect it. Single-family home prices average as follows for the three major metropolitan areas - $620,000 for San Diego, $1,300,000 for central San Francisco and $750,000 for central Los Angeles. As a general rule, the closer the home is to the ocean, the more it will cost.

As shocking as the prices are, the rate of appreciation is downright impossible to believe. In the last 12 months, California real estate has appreciated over 25 percent. For a 500,000 home, that is a gain of $125,000 in 12 months. Steroids indeed!

Real estate is all about location, location, location. While this is certainly a cliché, there is no doubt it is true in California.

Avoid Buying into Bats: A Thorough House Inspection Includes Checking for Sign of Bats

Twice now, I have spotted a bat in our home. My husband and I recently purchased this house. As careful, first-time buyers we made sure to dot all of our i's and cross all our t's. We hired a reputable building inspector and he spent hours checking into all possible or potential problems with our to-be home. The house was built in 65' and as expected, the inspection brought up a few concerns. What did come up seemed minor and do-able: until the bats flew in.

Now, I dont know for sure if we have a bat colony roosting in the house. But watching my husband flailing around the house, swatting at these moth-like flying mammals, all the while experiencing my first lock-myself-in-the-bathroom screaming session, was enough to kick-start a thorough investigation. I called the bat police. If we have bats in the house, their removal will be a potentially costly service. Likewise, there are specific health concerns that set off significant alarm bells. So, let's talk bats, in hopes that as you look into the purchase of your next home, you make sure to check for the tell-tale signs.

First off, just to get you thinking seriously about this concern, consider the fact that bats are not pests. In most states, as in most places in the world, these unique critters are both endangered and protected. Indeed, when I first googled my problem, I was expecting a sea full of comforting headlines: BAT EXTERMINATORS AT YOUR SERVICE. GET YOUR EFFECTIVE BAT POISON HERE. This was not the case. Most of my research sang to the tune of bats being the least understood and most persecuted animals in the world. I was ignorant to the fact that people, our environment and our legislation, love bats. Okay, I get it now. Without bats we could be swarming in a swamp fullof blood hungry mosquitoes. Bats are serious insectivores and their populations are on the decline. For this reason alone, they need our protection. But beware, homeowners who unwittingly house them, may end up paying for this unconditional love. It is best to avoid this problem completely, by not buying into a house with bats.

If you are interested in purchasing a home that is on the old to older side, it won't hurt to look for signs of bats. Chat with your building inspector before an official house inspection and see that he/she is savvy to these indicators. The following signs may be evidence of bats roosting in your to-be home:

Staining:

Look for unusual brown or grey stains in areas where bats might potentially enter the home. These entry points may be attic vents, cracks and holes under rotted eaves, where a chimney meets the house and openings where the pipes and wiring enter the house. The main characteristic of these stains is that they are oil based and difficult to remove.

Guano:

Guano is a pretty, Spanish name for bat poo. The droppings will be found around the roost site. Guano droppings are pellet-like and give off a particular scent. This ammonia or musky smell may be present near the roosting bats, notably in the summer. In the winter months, the scent lessens as the bats have either migrated or are hibernating. Guano presents the most dangerous concern in housing bats. Inhaling dust that contains fungal spores found in guano can cause a serious lung infection. Histoplasmosis is the name of this fungal lung disease associated with bat droppings.

Chirping:

If your inspector thinks they hear the sweet chirpings of baby birds, have them double check that this cute social chatter is not emerging from a bat colony. Bats audible chatter is very similar to that of birds.

The reason for all the ominous forewarnings, is not that bats flat-out creep me out. Yes, I was terrified when I first saw one flying about our house. Now, after having done some research, I have gained a vast respect and curiosity for these amazing mammals of the night. Still, who wants to live with bats? The reason to consider checking for signs of roosting bats, is that they can be very tricky to remove. You can't poison them. It is illegal and otherwise ineffective. Proper bat removal usually involves an intervention by a bat removal company. The company will use exclusion methods to remove the bats and seal up any potential re-entry points in your home. Depending on the size of the bat colony and how long they have roosted, the damages, guano clean-up, re-insulation and repair can be costly and time consuming. So buyers beware of bats. Yes, they are vital ecosystem managers and need to be protected. Let them be protected by our laws and not by our roofs.

THE BIG BAT FACTS:

- Bats are the only mammals in the world capable of natural flight.

- Bats can consume 500-1000 insects per hour.

- Bats are protected in the United States and should never be harmed or killed.

- Bats make up nearly one quarter of all known mammal species.

- Bats use echolocation, a kind of natural sonar, to navigate and locate food.

- Bats are gentle, passive creatures that will only bite in self defense if they are picked up and handled.

- Never touch a bat with your bare hands! Although rare, sick bats may carry rabies.

- Bats can crawl through openings as small as 1cm in diameter.

- Over the past 20 years nearly 80 percent of the country's bat population has been lost.

- To help conserve the bat population, build a bat house. It may attract bats to roost near, but not in your home!

5 General Trends in the California Real Estate Market to Watch 2006

Historically, the real estate trends of California have always been the precursors for the rest of the country. Which is why leading players of the real estate market keep a close watch on the Golden State’s real estate market conditions.

And whether you are a first time homebuyer, debating the viability of building your dream house in San Bernardino, or a real estate investor looking to sell condominium units in Los Angeles, you certainly want to know: When is it the optimum time to buy or sell?

Purchasing a house is a major investment. With judicious planning, this valuable asset will appreciate with each year.

But how do you get the big picture? Fortunately, real estate trends are predictable because these develop over a long period, unlike the stock market, which is rather volatile.

The first thing you will need to do is to read and track real estate articles: the market reports of the California Association of Realtors or the California Building Industry Association, and the briefs created by housing analyst companies.

Once you have identified the following key indicators you will have a better grasp of the general trends in California’s real estate market.

THE FIVE KEY INDICATORS TO WATCH

Interest Rates
When interest rates rise, buyers shy away. Conversely, lowered interest rates attract more buyers.

This year, interest rates in California are on an upswing. For example, thirty-year fixed mortgage rates, which averaged 5.71 percent in 2005, has risen to 6 percent levels in January 2006. And adjustable mortgage interest rates have moved up to 5 percent levels compared to 4.12 percent in 2005.

Building Permits
The higher the number of building permits issued, the higher the demand for houses.

Figures show that number of building permits issued for the year 2006, have fallen by 10 percent in comparison to last year’s figures. In terms of houses, that’s a decrease of 1,430 building permits compared to January 2005 figures, according to California Building Industry Association report.

Home Sales
This key indicator refers to the total number of homes sold. In the law of supply and demand, when there are few buyers, real estate prices fall.

The January 2006 figures of the California Association of Realtors reveal that the number of existing single-family detached homes sold, has gone down by 24.1 percent in comparison to sales for the entire year 2005.

Another factor to consider is the growing inventory of available houses in certain counties in California, which is changing the market dynamics. What was once a sellers market is slowly turning into a buyers market.

Loan Defaults
This refers to the failure of homeowners to pay their monthly mortgage fees. One downside to this is that many Californian homeowners are choosing to have a bad credit report, rather than to keep paying fees for a home whose value has been inflated by as much as 20 percent more.

Foreclosure Sales
Figures presented by DataQuick Information Systems, a housing analyst company, indicate that foreclosure activities in California have gone up by 19 percent in the last quarter of 2005. This is an increase of 3 percent compared to the third quarter of 2005, and is 4.6 percent higher when compared to 2004’s last quarter figures.

When foreclosure sales are on an upswing, consumer spending is down and consumer debt levels have risen. In the real estate market, this has meant that many financially strapped homeowners are selling their homes at lower prices. The other contributable factors are inflation, the rising prices of gasoline, federal budget deficit, and interest rates.

Concurrently, these key indicators confirm that although home sales levels in California are falling, the demand for houses remains strong and steady. Always do your due diligence before undertaking a purchase of property in California.

California Real Estate

The process for purchasing a home in California is different from the procedures that are used in other states. Unlike the East Coast, attorneys are not used  to complete the sale of real estate. Instead, an escrow is used. Once you have located a home you want to buy, you will begin hearing people talk about the escrow. In California, there are no closing meetings. It is not common for sellers and buyers to meet each other on a regular basis. If you want to buy a home in California, you will want to make sure you have a loan before you begin the process of looking for a home.

All real estate agents in California must be licensed to buy or sell real estate. Every agent you deal with should either have a Salespeople or Brokers license. Brokers are allowed to receive payment for the sale of a property, while salespersons must work under the broker. Multiple brokers are allowed to work together, and are called sales agents. Sales agents must answer to a Broker of Record, and this is the person who will supervise them. There are three agencies that will be found in California, and these are dual-agencies, buyer's agencies, and sub-agencies.

Before you decide to get a loan or broker, you will first want to find the right home in the best possible neighborhood. You will also want to consult an agent to find out what type of home is best for your income level. The agent will want to know what home you're interested in. You should always be ready to buy a home when you visit the agent. If you are truly ready, you will be given a better deal, because agents will often have to deal with people who are just "looking," and are not commited to making a purchase. Once the agent knows what type of home you want, they will begin driving you around to show you the different homes that are available.

The agent will not want to drive you around until after they've interviewed you. As the buyer, you will want to make sure the agent is experienced. When you deal with agents in California, they should put you in the loan qualification process as soon as possible.  By getting approved for a loan, you will be placed in a powerful position where you can negotiate. Once you have found the home you want, you will want to make an offer to the agent. In California, the offer should always be made in writing. The paper that it should be written on is named the Deposit Receipt.

You will want to place all the information about your offer on the Deposit Receipt. The agent will help by providing you a list of homes that are much like the one you're interested in. When an offer is made, it is also customary to write a check which is about 3% of the offer that you are making for the home.