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Bob Schwartz is a Certified Residential Specialist, real estate broker specializing in San Diego real estate & co-owner of an Internet search engine optimization firm,, specializing in domain name registration and Internet domain website hosting. Bob received his... More
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  • San Diego California Real Estate 2014Forecast

    Sure last two years have seen a nice bounce back recovery in almost all of the California's real estate markets, the last quarter of 2013 saw a pronounced slow-down in real estate sales. Many believe the sales slowdown to be a direct result of rising interest rates and the resulting increase in home mortgage rates.

    For those interested in my Outlook for the San Diego real estate market in 2014, I suggest reading my article published on January 5, 2014, entitled 2014 San Diego Real Estate Market Forecast. Today's article has more to do with underlying problems in California's economy and what I see as a possible sure remedy that could turn California back into the 'Golden State'.

    Unless California's economy has a dynamic turnaround, continued meaningful real estate demand and home appreciation will languish behind states that are on sound economic footing.

    After the largest state tax increase in history, many believe that California's economy and financial Outlook is much brighter now. They are overlooking the long term debts and obligations that the state has accrued. California's total debt according to independent estimates is approximately $848 billion! California's state income tax rate, the highest in the nation tops out at 13.3%! California's state sales tax rate is 7 1/2%, but when local city and county taxes are included; it's 10% in some areas. As of 2010, 144,000 households, 1% of the California taxpayers, accounted for 50% of the total state income tax revenues.

    Although Gov. Jerry Brown enacted minor window-dressing pension reforms, nothing has been done to address the real cause of California's huge debt.

    Reckless overspending by the California legislature is at the heart of our woes, but the majority of the States problems can be traced to Cadillac salaries, regal pension and retirement health benefits paid to state employees. Currently, there are 12,199. retired state workers receiving pensions of more than $100,000 a year!

    Even though unemployment in California has been falling, the state still has one of the highest unemployment rates in the nation. Of California's 58 counties 27 have unemployment rates at or above 10%; four of them have unemployment rates higher than 15%. The jobless rate in April was 24% in Imperial County!

    How can California housing continue to appreciate in light of the States underlying fiscal problems? Ever-increasing taxes, water rates, utility rates and some of the highest gasoline prices in the nation are all draining Californians disposable income and their ability not only to qualify for the average home mortgage, but also their ability to accumulate sufficient down payment for the average California home.

    Don't lose heart! Nature has provided a solution to California's financial woes that is immediately available. If government and environmental groups just come to the realization that continuation of the current status quo will only result in stagnation and deterioration, we will have a huge come-back.

    Some estimates are that California is sitting on more oil deposits than all of Saudi Arabia. Until recently extraction of those oil deposits could not be achieved economically, but with the improvement in tracking the entire oil-producing picture has changed.

    Currently the boom that is going on in the Dakotas and Pennsylvania is all directly attributable to fracking. To the consternation of the green class even the Obama administration recently reluctantly admitted that fracking was a safe process.

    Back in September 2013, even the California legislature approved a bill on regulation of fracking. One must keep in mind that this bill does not allow racking, but just that the framework for its regulation. Even though a small step some believe that even the far left California legislature realizes that the income derived from oil production in the state that not only reduce our massive deficit but turn it into a surplus relatively quickly.

    For anyone who would like to see my prior year-end forecast going back to 2005, visit this link:

    San Diego real estate market forecast

    My San Diego real estate site provides full, unrestricted access to search the entire San Diego MLS home listings . Also, if you want to see the actual current San Diego real estate sales activity and actual closed home prices, please visit San Diego California home sales

    San Diego real estate agents

    Bob Schwartz - Calif. real estate Lic.#00706331 brokerforyou

    Feb 19 11:23 AM | Link | Comment!
  • San Diego 2013 Real Estate Market Forecast

    2013 San Diego real estate Outlook

    San Diego real estate has been slowly but steadily improving throughout 2012. Also the hottest segment of the San Diego residential real estate market has been typically in the lower price ranges. Also, the residential real estate market inventory in San Diego is quite tight. Now, combine these factors with mortgage interest rates hovering around 3 1/2% and you have a lot of factors in place that portend to indicate that the San Diego real estate market will continue to improve into the New Year.

    One thing to me seems certain. .. that in some form or another mortgage interest rate write off deduction is soon just going to be a fond memory. Yes, I don't believe it would be just out-right eliminated, but certainly it will be scaled back perhaps over a number of years or geared toward the total income of individual homeowners. What I'm referring to here, is that the government might very well say for anyone making over $200 or $250,000, the mortgage interest rate write off may just the 50% or 25% , while people who are making less than that, could still possibly have a full write off.

    2013 is the first year ever that the Democrats have a majority in the state legislature. As a consequence of this, there has already been talk of various ways to increase taxes for California residents. Yes even though if this last election California moved into the number one spot for the highest state taxes and also increased its sales tax rate, California has not really substantially cut back on spending programs or state employee compensation or extremely generous retirement benefits.

    So just within days of the November tax increase elections, California legislators have already started talking about new ways to increase revenue. One LA legislator has already proposed increasing the vehicle registration fees by 300%! But, let's bring this down to real estate… Here the talk has been on how to eliminate or get around California's proposition 13 which put a cap on residential real estate taxes.

    It still might be somewhat difficult to eliminate proposition 13, so the insiders seem to be focusing on ways to get around proposition 13. Prior to the Democrats getting their super majority, to pass local school bond issues it required a two thirds vote of the public. So, the talk now has been to pass legislation to reduce this two thirds to a simple majority. If this becomes reality, school districts could propose and pass bonds that will add substantially to homeowners' tax bills. Here, even though proposition 13 itself would remain in place; the easier school bond simple majority will accomplish the same thing … raising taxes on California homeowners.

    The third negative factor I see for California home ownership and the San Diego real estate market in particular, is California's own cap and tax program set to go into effect in January 2013.

    With Californians already paying approximately 50% more for their electricity than the average for the rest of the nation, this new law is guaranteed to widen that gap even more. Plus, California has increased its mandate so now 33% of electricity produced in or for California must be from renewable sources by 2020.

    The way this affects real estate is on two fronts. Census data shows that from 2007 the 2010, California lost almost half 1 million people to other states. During the same time frame, Texas gained 394,000 people. So by making it much more expensive to produce products and services in California we are losing jobs and people that would otherwise be creating more demand for high-priced housing. Also, the increasing utility costs and higher taxes because of this new cap and tax legislation will reduce disposable income for all Californians. Disposable income is one of the main factors in mortgage qualification.

    So, when I consider all the factors affecting San Diego and California real estate in 2013, I believe we will see continuing modest improvement that will most likely end up being single digit San Diego housing appreciation for the entire year.

    For anyone who would like to see my prior year-end forecast going back to 2005, visit this link:

    San Diego real estate market forecast

    My San Diego real estate site provides full, unrestricted access to search the entire San Diego MLS home listings . Also, if you want to see the actual current San Diego real estate sales activity and actual closed home prices, please visit San Diego California home sales

    San Diego real estate agents

    Bob Schwartz - Calif. real estate Lic.#00706331 brokerforyou

    Jan 03 10:20 AM | Link | Comment!
  • No Realtor Should Vote For President Obama

    In just a few days we're going to have a presidential election that can forever change the course and character of our great nation. For me, it's about individualism, capitalism and free enterprise that make our nation the shining beacon of freedom throughout the world. The other side is an ever-expanding government that has been eroding our private individual liberties and openly encouraging government dependence, to create a voting block that will propagate one party rule.

    Sure, that's just my opinion, and I know others will vehemently disagree. It's great that we still have a country where people can freely express their opinions. How does this affect the real estate industry and its participants directly? Luckily, we have Obama's track record to refer to here, and that's exactly what I'm going to do to show that based on his track record, if reelected, the chances are extremely high that his past actions will be good indicators for what is coming toward the real estate industry in the next four years with no worry about reelection.

    One of the early moves President Obama made after his election was a proposal to reduce the home mortgage interest rate deduction. Sure, I understand this, and a lot of the other examples I'm going to cite, may have what some perceive as a collective good benefit. Perhaps it is just a change in society that is long overdue. But, I believe these examples, when taken together; definitively show that President Obama is no friend to the real estate industry.

    Go back to the first proposal by President Obama to reduce the home interest rate deduction. This was included as part of the President's budget proposal for 2010 for all my fact checking friends reading this. Sure, to make it palatable, it was to start for those in the higher tax brackets. Once in place, does anyone really doubt that when the government needs more money, as it always does, we would see those tax brackets slowly decrease?

    Luckily, even with full control of all branches of the federal government, this proposal was not passed. Just thinking about it, I don't believe any budget that President Obama has proposed has ever been passed! Now I could be wrong, but I just don't recall any time that the government has been running for years without an approved budget.

    The second fact that I'd like to bring to light occurred in December 2011, when the Senate approved a two-month extension of a payroll tax cut. You see, this tax cut was in exchange for an increase in fees on all new mortgages backed by Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA). As you know, approximately nine out of 10 new mortgages are backed by these agencies.

    It was projected that these new government mortgage fees would add approximately $180 a year to a $200,000 loan and $360 a year for $400,000 loan! Sure, these new fees are built-in to the loan but they're also payable throughout the entire life of the loan. So in essence, for a two-month payroll tax cut, the majority of loans issued in the United States now have a new fee built-in to their repayment schedule.

    Lastly, the real estate industry narrowly missed another bullet aimed at it in the first year of President Obama's term … The American Clean Energy and Security Act. The part of this bill affecting us in the real estate industry would have basically created mandatory energy audits for all home sellers in the United States!

    Sure, under the guise of creating more energy-efficient homes, politicians didn't seem to give a second thought about the constitutional rights of its citizens. Perhaps this proposal would've had a better chance of passing, if they just applied it to new construction.

    When reading this legislation, it immediately brought to mind thoughts of the TSA. Sure, the homeowner would not have had to pay (at least in its initial stages) to bring their home up to some preset energy efficiency level. They would have to pay for the report itself (and give it to the buyer), and since the report would most likely have to be done by some new green shirted government agency, this would just be another potentially expensive cost added to the home sellers cost.

    Yes, I know I'm being tough here, and perhaps these mandatory energy audits should have been pushed more like a new jobs bill. Sure, just like the TSA we could get tens of thousands former fast food workers (we really don't need so many fast food outlets anyway) into the new government mandatory home energy audit Bureau, supply them with nice bright green shirts, embroidered with the agency's new tree logo, give them two weeks of training (the majority of which would be geared toward diversity acceptance) and send them out to search through every crack and cranny of all home seller's residences.

    Lastly, we have Obama-care, where a new 3.8% provision was squirreled away that will affect many home sellers starting January 2013. Although the media has done a great job convincing the masses that this 3.8% tax will only affect those having an adjusted gross income over $200,000, what's not being reported is that after the current tax exclusion on the sale of your principal residence, any additional gain is added to your adjusted gross income in the year of the sale. So, if you've been a long time owner of a California home, and even though you're making just $40,000 a year in retirement, depending on the gain from the sale of your home, over the current tax exclusion, you may be in for a substantial additional tax.

    What's really disconcerting to me is that all of the above examples affecting the real estate industry were proposed or passed during the worst time for the housing market since the Great Depression! If President Obama is reelected I have no doubt that we will see another push for reduction in the home mortgage interest rate deduction right-off as well as mandatory energy audits. So just as the industry is getting to its feet, if such proposals are passed, there is a high probability we will hit the canvas again.

    My San Diego California real estate site provides full, unrestricted access to search the entire San Diego MLS . Also, if you want to see the actual current San Diego real estate sales activity and actual closed home prices, please visit San Diego California home sales

    San Diego California real estate agents

    Bob Schwartz - Calif. real estate Lic.#00706331 brokerforyou

    Nov 01 12:53 PM | Link | Comment!
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