Are master-planned communities a development of the past?

Much of the history of San Diego County housing has been one of master-plans, including Rancho Bernardo, Scripps Ranch, Carmel Valley, Tierrasanta, 4S Ranch, Mira Mesa and Rancho Peñasquitos.

Master-plans are typically undeveloped areas that are transformed into new communities that include a mix of residential, commercial and places to work. The area is built out in phases and are designed with the hope that residents can live and work in the area.

Real estate consultant Gary London said from the 1970s to 1990s the bulk of new housing came in the form of master-plan communities — mainly up the Interstate 15 and Interstate 5 corridors.

He said a lot of the talk these days is about building dense developments that can accommodate a lot of people, but that is only a recent shift in thinking.

“The way most San Diegans still find themselves housed today are new master-plan communities,” London said, “where to accommodate our growth we built out instead of up.”

He said the difference now is San Diego County is running out of land and voters don’t like new housing projects. A recent example was the proposed Lilac Hills Ranch project that would have included more than 1,700 homes in what is mostly farmland in Valley Center. The plan was soundly defeated by voters in November.

The first big master-plan community in San Diego County outside of downtown was Rancho Bernardo, now the northernmost residential community in the city of San Diego.

The community went from mainly rugged ranchland to 2,000 people in about a year, said the Rancho Bernardo Historical Society. According to the most-recent San Diego Association of Governments data, there was an estimated 50,268 people living there in 2016.

Read the rest HERE!

First Time Home Buyer New Tax Bill Example

To illustrate how the changes to the standard deduction, repeal of personal exemptions, mortgage interest and state and local taxes might affect a first-time homebuyer, consider the example of Barbara Buyer. Barbara, an accountant making $91,580 per year, is single and currently rents an apartment. She also pays state income tax of $5,086 and makes charitable contributions of$2,088, but the total of these is lower than the standard deduction, so she claims the standard deduction.

Barbara’s tax liability for 2018 under the prior law is as follows:

Income $91,580
Standard Deduction -$6,500
Personal Exemption -$4,150
Taxable Income $79,862
Tax $15,619

Under the new law, Barbara would get a tax cut, computed as follows:

Income $91,580
Standard Deduction -$12,000
Personal Exemption $ 0
Taxable Income $77,492
Tax $12,988

Tax Difference Under New Law.
Even though Barbara would not get the benefit of the personal exemption under the new law, her higher standard deduction would more than make up for the loss. In addition, the lower tax rates of the new law would help deliver the total tax cut of $2,632 ($15,619 – $12,988) as compared with the prior law.

However, let’s take a look at what happens to Barbara if she were to purchase a condo costing $440,000 (median price for a condo in California). She takes out a 30-year fixed rate mortgage at 4.5% interest, putting down 20%. Assuming she buys early in 2018, her first-year mortgage interest would total $15,372 and she would pay real property taxes of $5,500.

As a first-time homeowner, her tax liability under the prior law would be computed as follows:

Income 91,580
Mortgage Interest $15,372
Property tax $5,500
State Income Tax $3,738
Charitable Contributions $2,088
Total Itemized Deductions -$26,699
Personal Exemption -$4,150
Taxable Income $60,731
Tax $10,837

Note: Under the prior law, Barbara would lower her tax liability for 2018 by $4,783 ($15,619 – $10,837) by purchasing the condo. This is the financial effect of the prior law’s tax benefits of buying a home. This amount effectively lowers her monthly mortgage payment by $399 per month

Now, let’s take a look at what her tax situation would be under the new law as a first-time homebuyer:

Income $91,850
Mortgage Interest $15,372
Property Tax $5,500
State Income tax $3,738
Charitable Contributions $2,088
Total Itemized Deductions -$26,699
Personal Exemption $0
Taxable Income $64,881
Tax $10,213

Tax Difference Under New Law. Even though Barbara would still be able to claim all of her itemized deductions under the new law, she would lose the benefit of her personal exemption. However, her taxes would actually go down under the new law by $623 ($10,837 – $10,213) as the lower tax rate would more than make up for the loss.

Download the Example sheet Here

Download (FIrst-Time-Buyer-Example.pdf)

Carmel Valley, Poway, Rancho Bernardo, Rancho Penasquitos, and Scripps Ranch housing stats March 2018

Carmel Valley, Poway, Rancho Bernardo, Rancho Penasquitos, Scripps Ranch January 2018 Numbers by Zip Code

Carmel Valley, Poway, Rancho Bernardo, Rancho Penasquitos, and Scripps Ranch
Listings, Sales, Days on Market and more broken out by zip code.

Use the ‘Pop-Out’ to view report or the link to download.

Download (Mar-2018-RB-RP-CV-SR-POW.pdf)

Monthly Market Overview North San Diego County

New residential real estate activity has been relatively slow in the first quarter of 2018, yet housing is proving its resiliency in a consistently improving economy. Some markets have had increases in signed contracts, but the vast majority of the nation continues to experience fewer closed sales and lower
inventory compared to last year at this time. Despite there being fewer homes for sale, buyer demand has remained strong enough to keep prices on the rise, which should continue for the foreseeable future.

Closed Sales decreased 14.7 percent for Detached homes and 18.5 percent for Attached homes.

Pending Sales decreased 6.6 percent for Detached homes and 11.4 percent for Attached homes.

The Median Sales Price was up 9.9 percent to $714,400 for Detached homes and 2.6 percent to $436,000 for Attached homes.

Days on Market decreased 17.6 percent for Detached homes but increased 4.5 percent for Attached homes.

Supply decreased 9.1 percent for Detached homes and 7.7 percent for Attached homes.

The Federal Reserve raised its key short-term interest rate by .25 percent in March, citing concerns about inflation. It is the sixth rate increase by the Fed since December 2015, and at least two more rate increases are expected this year. Borrowing money will be more expensive, particularly for home equity
loans, credit cards and adjustable rate mortgages, but rising wages and a low national unemployment rate that has been at 4.1 percent for five months in a row would seem to indicate that we are prepared for this. And although mortgage rates have risen to their highest point in four years, they have been quite low for several years.

Monthly Market Overview North San Diego County
San Diego North County Monthly Housing Market Indicators March 2018

Download (Mar-2018-Monthly.pdf)

What FIRST-TIME Buyers Should Know About Tax Reform

Here’s what first-time buyers need to know about the Tax Cuts and Jobs Act that was signed into law December 2017.

MORTGAGE INTEREST DEDUCTION

  • The new limit on deductible mortgage debt is $750,000, down from the previous $1 million. There are certain situations which may allow a home purchase to qualify for the $1 million, even if the home closes after Jan. 1, 2018. Talk to a tax professional to learn more.
  • Interest paid on home equity loans is only deductible if the proceeds are used to substantially improve the residence.
  • Interest remains deductible on second homes, but is subject to the $1 million/$750,000 limits.

DEDUCTION FOR STATE AND LOCAL TAXES (SALT)

  • Homeowners who itemize their tax returns can claim up to $10,000 total for state and local property taxes and income or sales taxes. This $10,000 limit applies for both single and married filers and is not indexed for inflation.

HOUSING MARKET IMPACT

  • Homes priced $500,000 and below will only be slightly impacted.
  • C.A.R. estimates that 60 percent of first-time buyers will purchase a property priced below $500,000, and 80 percent will purchase a home priced below $750,000, so most first-time buyers will not feel the effect that tax reform exerts on home prices.
  • The supply of available homes for sale also will be slightly impacted, as homeowners delay trading up/down to their next home. Overall, the California housing market is expected to see a decline of 0.3 percent in active listings in 2018 due to tax reform.

MOVING EXPENSES

  • Only members of the Armed Forces may deduct moving expenses.

Download the Info Sheet

Download (First-Time-Buyer-Tax.pdf)