Lisa Faria Realtor Are you above Water?

3.9 Million Homeowners Now Above Water  Two key housing indicators were released in the past week that give us more data and context around the state of the market now and moving further into 2014. The first is negative equity and the second is pending home sales. Negative equity improves Thanks to rising home prices, the number of homeowners who find themselves owing more on their mortgage than their home is worth is dropping. This is good news for the move-up market. The more owners who are able to sell without a loss the more housing supply is likely to come on the market this year. Nationally, more than 9.8 million homeowners remain underwater, but the number has fallen for seven consecutive quarters, pulling nearly 3.9 million homeowners out of negative equity, according to Zillow's latest Fourth Quarter Negative Equity Report. While the number may still seem alarming, it's good to remember that negative equity is only a problem to those owners who want or need to move while they are still underwater. Economists, however, do expect the situation to continue to impact the housing market for a few years to come. To see how negative equity fares in your market, check out Zillow's interactive map of the U.S., which allows you to enter a ZIP code, city or county and see how your local market is doing. Slow start for sales In a separate report this past week, the National Association of Realtors said that pending home sales – a prime indicator of sales over the next month or two – were essentially unchanged in January. NAR's Pending Home Sales Index was up 0.1% to 95 in January, but is 9% below January 2013 when it was 104.4. What this means is we're likely to see fewer home sales in the first quarter of the year than we saw during the same period in 2013. Many point to an exceptionally bad winter and lingering problems with lack of homes for sale as causes for the stall. The slowdown doesn't mean we'll have an all-around slow year in housing in 2014, though. Things are very likely to pick up during the traditionally fast-paced spring and summer buying seasons. In fact, we expect particularly hot markets like San Francisco and Silicon Valley to have stellar years again – both in terms of price increases and sales volume.

Lisa Faria & Peter Fleming gain New Certification

 Intero Real Estate is proud to announce that Lisa Faria & Peter Fleming have completed the real

estate industry’s most comprehensive new home sales course to earn their national certification as

a Certified New Home Specialist™. With this certification, (he/she) joins a group dedicated to

providing the highest level of professionalism and service to builders and new home buyers.

“This course is recognized as one of the very best ever offered in real estate,” explains Mrs. Faria-

Fleming “The training covered architectural design and planning, blueprint reading, topography,

building site design, evaluating quality construction, materials, methods, construction

terminology and scheduling. We also studied successful buyer/builder relations, all aspects of

customer service and the use of various organizational tools and systems. This provides me with

the expertise, strategies and tools to more professionally assist anyone interested in a brand new

or existing home.”

Completion of the Certified New Home Specialist™ training involves a total of over 22 hours of

specialized course work and successful completion of the CNHS certification test. The course

was created by trainer, author and consultant Dennis Walsh, who is recognized internationally as

a leading authority in all aspects of residential construction, new home sales and marketing.

Lisa Faria and Peter Fleming of Intero Real Estate Earns Real Estate’s Premier Residential Construction Certification

Intero Real Estate is proud to announce that Lisa E. Faria and Peter Fleming have completed the real estate industry’s most comprehensive residential construction course to earn their national certification as a Residential Construction Certified™ professional. With this certification, Lisa Faria and Peter Fleming join a group dedicated to providing the highest level of professionalism and service.

“This course is recognized as one of the very best ever offered in real estate,” explains Mr. Fleming. “The training covered architectural design and planning, blueprint reading, topography, building site design, evaluating quality construction, materials, methods, construction terminology and scheduling. This provides me with the expertise, strategies and tools to more professionally assist anyone interested in a brand new or existing home.”

“This knowledge provides a foundation that allows them to communicate more confidently and professionally with buyers, sellers, appraisers, inspectors, lenders, designers, engineers and construction professionals. This expertise positions them to better help their customers make their best decisions.”

Completion of the Residential Construction Certified™ training involves over 10 hours of specialized interactive course work and successful completion of RCC certification test. The course was created by trainer, author and consultant Dennis Walsh, who is recognized internationally as a leading authority in all aspects of residential construction, new home sales and marketing. 

Lisa Faria and Peter Fleming  can be reached at 408-857-9924, or 831-206-0775 www.LPFteam.com

We're not big on forecasts for the sake of forecasts. But since we do happen to live and breathe real estate, we thought it made sense to at least give a few high-level observations about where the market is likely headed this year.
 
 
Home sales
 
We expect sales to continue to outperform 2013 levels in markets with hot economies. Here in Silicon Valley, for example, we don't anticipate any slowing whatsoever. In fact, we're expecting a faster pace all around in this part of the world.
 
However, this will probably not be the case in all pockets of the U.S. While we expect steady sales and healthy markets, we think that markets where prices may have climbed a bit too high this year and markets that still struggle with low inventory may not see the same incredible summer sale season that they saw in 2013.
 
Values
 
While sales will be more intense in some markets and just as steady or slightly cooler in others, home values will increase all around, in our view. This is because demand continues to be really strong. And while home building has picked up pace a bit more this year, it so far hasn't been enough to offset low inventory in markets that really need it. This shortage will create more intense situations for buyers – more competition, more multiple bids.
 
All of this points to increased home values.
 
Inventory
 
As already leaked in the predictions above, you can see that inventory again in 2014 will pose challenges in some markets. The good news is that rising home values have put homeowners in a better place overall this year and pulled a lot more owners out of negative equity. That means more freedom to sell.
 
Unfortunately, we do still expect lower inventory than demand in certain areas – namely those that have had the worst inventory situations in the last few years. That's because they're still trying to catch up with years of pent-up demand.
 
 
Mortgage rates
 
Mortgage rates are a funny thing. They sit at incredibly low levels, yet every time there's a slight uptick the market goes crazy. Doomsayers start throwing their predictions out that the rise in rates will derail home sales.
 
Mortgage rates do impact home sales to a certain degree. And while we expect some little increases here and there next year, the Fed hasn't indicated any major moves in the near future that would impact rates – and therefore home sales - on a serious level.
 
If anything, low rates and their small increases will fuel demand even more as buyers feel more of an urgency to get in the market.
 
The economy
 
Trying to predict the economy is like trying to control an angry teenager. It's a volatile situation that's nearly impossible to predict at times.
 
So far, the news we're hearing is of steady growth. But like many things in housing, the economy's impact on buyers and sellers really is more of a local thing. Where local economies strengthen, their housing markets follow.
 
There you have it – the five things to pay most attention to when it concerns real estate

2013 In Review

It's hard to believe another year has come and gone. Looking back, 2013 indeed was a pivotal year for housing markets nationwide. Many markets saw an incredible bounce back, homeowners regained equity and mortgage rates for the most part remained incredibly low. Here's a look back at the highlights that stood out and will help us understand how housing will perform in 2014. 1. Home sales soared for the most part Despite the fact that home sales have hit some seasonal slippage here near the end of the year, it's hard not to remember the amazing summer that took place in many markets. Home sales hit their highest level in over six years in August, and took prices along for the ride. NAR data showed that end-of-summer sales hit an annual rate of 5.48 million in August, the highest pace since February of 2007. 2. Home values inched toward record highs Perhaps even better news for America's homeowners and sellers was that the national median price for existing homesmade major strides in 2013. After a hot summer, the median price was $212,100 in August, up 14.7% from the same month in 2012. 3. Negative equity eased  Of course, one of the best side effects of the rising strength of home values was the easing of negative equity for homeowners. One of the big stories of the fall was data released from RealtyTrac that showed 8.3 million homeowners – or about 18% of homeowners with mortgages – were on track to gain enough equity to sell their homes in the following 15 months without resorting to short sales. Of course, this doesn't mean that 8.3 million homes will come on the market for sale next year. But it does mean a lot more options for sellers who've wanted to sell. 4. Seasonal cooling landed The year was not immune to occasional doses of more sobering news. An expected period of cooling off indeed took place in the fall. It almost had to, given the booming summer that real estate markets experienced. Total existing home sales fell to a rate of 5.29 million in September from August, though it's worth noting they remained 10.7% above year-ago levels. 5. Access to mortgage improved, despite pockets of interest rate increases This month, we saw two great pieces of news that have to do with improving overall access to mortgages. Federal housing officials said they would leave the GSE loan limits as is, which means borrowers in higher-cost areas will still continue to see opportunities for Freddie Mac and Fannie Mae-backed loans. And a report showed that loan eligibility continued to increase for borrowers in the first half of the year. 6. Smaller cities took the lead In NAHB's fall housing index, the builders group found thatsmaller cities are leading the way to a housing recovery. Smaller cities accounted for 43 of the top 50 markets in the NAHB's index released in October, underscoring how much local economies play into housing activity. 7. House flipping made a comeback – at the high end A Reuters story in August investigated a rising trend in flipping homes, revealing that the number of flipped homes valued at $1 million or more had risen nearly 40% nationwide since 2011. RealtyTrac also cited a few specific markets where high-end flipping has become rampant. Luxury flipping was up 867% in Orlando between 2011 and 2012, and increased 456% in Phoenix. 8. 'Boomerang' buyers returned What's a boomerang buyer? A former homeowner who's gone through short sale, foreclosure or bankruptcy in the past few years who is now preparing to buy a home. 2013 saw many more of these folks coming into the market – a good sign as it shows positive sentiment for homeownership from a group of folks who perhaps have the biggest reason to run far far away. Wow, 2013 was exciting, fast-paced and overall really positive for our housing markets. Of course, there's still more work to be done in 2014. Happy holidays from Lisa Faria & Peter Fleming, Realtors

LPF Team, Gilroy LeTip

Lisa Faria and the LPF team are proud to announce their acceptance into Gilroy LeTip.

LeTip International is the world's largest, privately owned, professional business leads organization. Since 1978, LeTip programs have helped over 120,000 members, throughout the United States and Canada, build business success through personal referrals.

LeTip International's structure set the standard in the word-of-mouth referral industry. Members are known for their professionalism, dedication, and loyalty to one another, and to the LeTip Program.

LeTip Chapters meet weekly to exchange qualified leads, build solid business relationships, develop strong presentation skills and become proficient networkers. Only one representative of any given profession is accepted into a chapter, and members are chosen for their occupational expertise.

Lisa Faria of Gilroy, CA LPF team Lisa & Pete

California Home Owners Attention

Troubled homeowners who get a break from their mortgage lenders could face a hefty tax bill next year if a key provision expires at the end of the year, though state laws could determine which borrowers will have to write a check to Uncle Sam.

Homeowners who live in states where mortgages are non-recourse—that is, where they aren’t personally liable for the unpaid balance—may avoid the potential tax hit even if Congress doesn’t act,according to a letter sent by the Internal Revenue Service released by Sen. Barbara Boxer (D., Calif.) on Friday.

The tax provision currently allows some homeowners—mostly those facing foreclosure—to avoid paying taxes on certain relief that they receive on their mortgages. The IRS considers debt forgiveness to be a form of taxable income. That means homeowners who sell their homes for less than the amount they owe in a short sale could face a tax bill.

In 2007, as the foreclosure crisis spread, Congress exempted some homeowners from counting certain kinds of forgiven mortgage debt as taxable income in order to encourage banks and borrowers to seek foreclosure alternatives. Congress retroactively extended the provision earlier this year, after it expired on Dec. 31, 2012. The provision is set to expire this coming Dec. 31 and there appears to be less urgency in Congress right now to pass an extension.

In the letter to Sen. Boxer, the IRS clarified that certain non-recourse debt forgiven by lenders wouldn’t typically be considered taxable income by the IRS. This means that for most California borrowers, the expiration of the tax provision may not have a meaningful effect.

“California homeowners have struggled through years of economic hardships during the Great Recession,” said Ms. Boxer in a statement Friday. “I am relieved that these families will not face a burdensome tax penalty just as they are trying to rebuild their lives with a short sale.”

In the letter, the IRS wrote that “if a property owner cannot be held personally liable for the difference between the loan balance and the sales price, we would consider the obligation a non-recourse obligation.” As a result, the owner would not have to count that forgiven debt as income.

Other states with laws that prevent lenders from seeking so-called “deficiency judgments” to recoup defaulted debts from borrowers would likely be in the same camp as California, the letter said.

Short sales have fallen sharply as a share of overall sales over the past year as the housing market has rebounded and fewer homeowners have found themselves underwater. In California, short sales accounted for around 12.6% of homes that were resold last month, down from 26.7% one year earlier, according to research firmDataQuickMDA.T -0.43%.

Nationally, lenders have approved more than 200,000 short sales this year through August, according to Hope Now, an industry coalition to promote foreclosure alternatives.

The IRS has more information online about the tax implications of mortgage forgiveness. The National Consumer Law Center has a detailed report on anti-deficiency laws by state.