Tuesday, November 24, 2015 • 06:20

Threat of a housing bubble and more: Your real estate snapshot

November 07, 2013
January 2013 showed a fast paced increase in home prices that remained steady through the spring and summer months. By the time we reached June, some areas of San Diego County had seen an increase of 30-percent with buyers scrambling to get their bids in to

listings that were only on the market for a few days. Multiple offer situations became the norm and submitting an attractive

and unique offer was the challenge. With that, the threat of another housing bubble became a concern for many consumers.

Fast-forward to October and that threat seems a little less likely, as we've seen a steady decline in home value appreciation over the last few months. Nevertheless, this is not necessarily a bad thing, it's a sign that the market will start balancing out, maintain a sustainable level and decrease chances of another housing bubble. Earlier this year, fast rising prices threatened home affordability as

home appreciation began outpacing consumer income growth. A balanced market will help buyers and sellers make better home buying or selling decisions and be happier and more satisfied with those decisions.

This slowing of home value appreciation is, however, in no way slowing down investor interest and purchases in the area.

According to RealtyTrac's September Residential and Foreclosure Sales Report, almost half of all home sales in September were all cash

transactions, pointing to a major presence of investors. The National Association of Realtors places that statistic closer to one-third of all home sales. The large amount of distressed and short sales has chiefly contributed in enabling these cash purchases. How does this affect housing recovery?

Although rising mortgage rates can push owner occupier buyers out of the market, the rise in home prices produced by investor demand increases homeowner household we a l t h and bolster s investment value in homes.

On another note, distressed home owners may find it easier to acquire federal money to pay their mortgages with new rules from the Keep Your Home California program that took effect on Monday.

The program was given $2 billion in 2010 from the U.S. Treasury Department to spend on struggling homeowners and has largely been criticized for not spending more of it. By September of 2013, the program had only given out 20 percent, about $402 million. If not used by 2017, the remaining money will go back to the government.

The program in California was structured to include four kinds of assistance, one of which included payment assistance to the unemployed. The program for the unemployed covers all of their mortgage payment, up to $3,000 per month, for up to 12 months with

maximum assistance per household at $36,000.

The policy states that homeowners need to be receiving unemployment benefits or have used their benefits within 30 days of applying for the program. The new rules will clarify that if a homeowner is on unemployment but takes a part-time job, it will not eliminate their

mortgage assistance. For more information on this program which also covers mortgage reinstatement assistance, principal reduction, and transition assistance, please visit www.keepyourhomecalifornia.org.

Jeana Boulos is a local real estate professional living in Valley Center. She can be reached at: 760-694-1123 or jeana.h.boulos@gmail.com her website is: www.boulosrealty.com CA BRE# 01923953

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