Todd's Real Estate Blog

FIRPTA- Foreign Investment Real Property Tax Act. 

When a foreign person sells real property in the U.S., the buyer is generally obligated to deduct and withhold 10 percent of the sales price to remit to the IRS. However, no federal withholding is required if, among other things, the seller furnishes the buyer with a Seller's Affidavit of Nonforeign Status (C.A.R. Form AS or equivalent) containing the seller's social security number or taxpayer ID number.

Some sellers, however, do not want to disclose their social security numbers to their buyers. Responding to REALTORS®'s concerns, C.A.R. sponsored federal legislation for a FIRPTA fix which took effect in July 2008. As a new alternative, no federal withholding is required if the seller furnishes Form AS to a "qualified substitute," who in turn, furnishes to the buyer a Qualified Substitute Declaration of Possession of Transferor's Affidavit of Nonforeign Status (C.A.R. Form QS or equivalent). A "qualified substitute" is a person responsible for closing the transaction, such as an escrow company, title insurance company, or the buyer’s agent (but not the seller's agent).

There are title companies out there that are refusing to act as a "Qualified Substitue".  It is imperative that you ensure your title company will act as a subtitute.  I can provide you with a list of title and escrow companies which WILL provide this important service.  Just go to www.ArmstrongEstates.com and email me about the Title and Escrow company FIRPTA list. 

Turner Construction has completed the 1Mission mixed-use project in the Mission Hills community. The project involved the restoration of a turn-of-the century commercial block and building a new five-story complex with 61 residential units residential and 25,000 square feet of retail space. 1Mission features 13 two-story townhomes with street-level entrances and 48 one-story homes. The complex has more than 30 different floor plans, ranging from one-bedroom, one-bath units, to three-bedroom, three-bath units that range from 1,057 to 2,671 square feet.

The homes have oversized windows, ceilings up to 19-feet high, walk-in closets, stainless steel appliances, gas cooktops, European-style cabinetry, Caesarstone counters and balcony decks up to 500 square feet. The mixed-use project also has gated underground parking with two side-by-side parking spaces per home. 1Mission includes a retail component along Goldfinch Street and a restored historic commercial block with street-level shops and restaurants on Washington Street.The project also has an urban garden with a pedestrian promenade. CLB Partners developed the project, and M.W. Steele Group and Spurlock Poirier Landscape Architects designed it.

For pricing and a private tour of this wonderful Mission Hills project, contact Todd Armstrong at www.ArmstrongEstates.com

1Mission is a five-story edifice that completes the renovation of Mission Hills' gateway block, at the corner of Washington and Goldfinch. 13 dramatic townhomes comprise the 1st and 2nd floors, while 48 single-story residences featuring 1 to 3 bedrooms occupy the 3rd, 4th, and 5th floors. Nearly all residences offer generous decks. The building frames a charming interior courtyard for the private use of 1Mission residents.

Prices range from $500,000s to $1.2 million

Finally, finally, Mission Hills and Hillcrest have a steakhouse to call their own, The Wellington Supper Club Steak and Martini lounge.  I recently walked from my Mission Hills home with John to the opening of the 3rd fabulous restaurant by Ric Libiran.  What a sigh of relief to finally have  a great steak house that I can actually walk to.  The food was outstanding from the tangy wellington salad with a light balsamic vinigarette, blue cheese crumbles and sweet candied walnuts to the "cut with your fork" 8oz filet mignon with creamy mashed potatoes.  Everything from the paired 'house recommended' wines to the appetizers were nothing short of spectacular. 

Ric also is famously known for and "happens to be" another one of my favorite neighborhood restuarants, "Cafe Bleu" and "The Red Door".  All 3 restuarants are a few dozen feet from each other right on Washington St.  Cafe Bleu is "The classic French bistro is a working person's place to eat and specializes in hearty foods that are supposed to be well priced," San Diego magazine restaurant critic Robin Kleven Dishon said.  I definitely rate this at 5 stars for great service, atmosphere and awesome food. 

The Red Door features affordable American comfort food with a modern twist.  Wines are from smaller vinyards from around the world by the glass or half glass.  My favorite appetizer has to be the "braised pork cheeks" in white wine and veal sauce, wrapped and baked in a puffed pastry with onion marmalade, braising jus and fine herbs.

Find out more about the Mission Hills neighborhood and real estate market by visiting my website at www.ArmstrongEstates.com.

San Diego will kick off its 32nd year of December Nights on December 4th, 2009 from 5:00 to 10:00 pm and Saturday, December 5 from noon to 10:00pm.  What a great way to spend a chilly San Diego night sipping some hot homemade apple cider!  Most of the museums open their doors for free during this time.  Crowds are expected to exceed over 300,000 people over the two days so get there early.

This San Diego tradition includes unique gifts, foods from around the world, the Spanish Village artistians, music and dancing presentations and much, much more.  Give me a call if you have any questions or need directions. 

By Roger Showley

Tuesday, November 17, 2009 at 12:05 a.m.

San Diego County marked an economic milestone last month when home prices exceeded year-ago levels for the first time in 40 months, MDA DataQuick reported yesterday.

The increase was small - less than a percentage point - and it might be temporary.

But industry observers said the symbolism was important.

"It's a reflection of a market that has stabilized in many areas," DataQuick analyst Andrew LePage said.

The overall median of $325,000 was unchanged from August and September, but it was $1,500 higher than the $323,500 reported in October 2008. It was the first annual increase since June 2006.

That follows a near free-fall in price drops, when for 13 straight months - from May last year to May this year - year-over-year declines exceeded 20 percent; January's was the biggest, down 34.7 percent. Economists focus on year-over-year changes to eliminate seasonal differences. The median price over that period plummeted from $380,000 to $280,000 before starting to rise again.

What changed?

"Government has a lot to do with stabilizing a lot of the market," LePage said.

He cited low mortgage rates, at or below 5 percent, with helping to make affordability the best in years.

When lenders nearly collapsed under the weight of subprime mortgage defaults, the Federal Housing Administration stepped in to insure loans, whose ceilings were raised to cover most loans in most areas. Meanwhile, the U.S. Treasury took over Freddie Mac and Fannie Mae, the two federally chartered companies that buy loans and sell to them to investors.

Finally, Congress approved and recently extended and expanded homebuyers' tax credits to nudge shoppers off the fence.

"If something rocks the boat here - a rate spike, tougher qualifying standards for the FHA because it's had some problems, new waves of foreclosures - then there goes your price stability," LePage said. "So the market is on this precarious perch again. A lot of things that have been driving sales may not be here next year."

Peter Dennehy, senior vice president at the Sullivan Group Real Estate Advisors market analysis firm, said sales tell more about the market than prices.

There were 3,671 sales in October, up 6.3 percent from September and 2 percent higher than a year ago. It was the most active October since 2006. October sales are often less than in September.

"Overall prices are up a little and volume for the year is higher," Dennehy said. "That's probably a good thing."

He said a monthly sales pace of 3,500 homes is healthy, but what is not normal is the dominance of first-time buyers and investors, who are often bidding against each other on low-cost foreclosure homes. Of all resales last month, 34.5 percent involved homes foreclosed on in the previous 12 months, DataQuick said.

"We are in a sellers' market for certain types of product and certain locations," Dennehy said. "Quite clearly, when you have a market where there are 30 to 40 offers per house like you do in some parts of the county, that's a sellers' market."

What needs to happen now to achieve a real housing recovery, he said, is more sales activity in higher-priced neighborhoods. Transactions have remained low because buyers often cannot get financing and sellers have not reduced prices enough.

"It's still a very fragmented market recovery and a market that needs to have broad-based participation," Dennehy said.

At the neighborhood level, there is no clear trend. Low-priced areas are not necessarily rising in value in response to overbidding demand, and high-priced ones aren't necessarily falling because of lackluster demand.

For example, high-priced Mission Hills/Hillcrest and Cardiff saw increases, up 32.2 percent to $750,000 and 20.9 percent to $665,000, respectively.

Similarly, low-priced Golden Hill was down 23 percent to $180,000 on 13 home sales, and City Heights was off 18.8 percent to $195,000 on 25 homes.

Robert Brown, an economist at Cal State San Marcos, focused on the inventory of distressed properties - foreclosure, bank-owned and short-sales, which involve sellers and their lender selling for less than the mortgage balance.

"The number of distressed properties, while still high, seems to be sustained a bit, leveling off and even falling in some ZIPs," Brown said.

The figures from the San Diego Association of Realtors suggest a coming shortage with 8,291 active listings yesterday and 6,350 in pending status. The total is down 13 percent from year-ago levels.

But observers said they cannot predict the future if a new wave of foreclosures floods the market because distressed owners cannot get their loans modified. That would send prices lower again.

"There's still pain in the housing market, as far as people being upside-down in their loans and mortgages," said Kelly Cunningham, economist at the National University System Institute for Policy Research.

But the overall housing picture appears to be turning around.

"We've been looking for that for some time," he said. "Certainly, it does show solid evidence that the market has started to turn a corner. It's not getting worse and it even shows some improvement."

As he has warned in recent months, Cunningham said concerns should now be turning to the long-term supply of housing, if construction continues to remain as low as it has been this year. Through September, single-family housing permits totaled 1,323, one-third of the comparable figure in 2006.

"At some point, when we're building so little new construction, that suggests we'll have in a few years a severe housing shortage because of so little in the pipeline," Cunningham said.

Did you know that you have access to one of the top real estate market and news sources in the United States?  Well you do and the best part, it's FREE for my clients.  It is a $149.00 value! 

Inman News is the leading source of independent real estate news, information, advice, research, opinion and commentary for industry professionals and consumers alike.  Pay me a visit at www.ArmstrongEstates.com.

Get the latest news on technology, real estate laws, pricing, appraisals, home inspections and hundreds of other real estate related topics.  You are just one click away.

More good news for consumers, our members, and the housing market recovery. Following the Senate's favorable vote yesterday, the U.S. House of Representatives just voted 403 to 12 to extend the home buyer tax credit, expanding the parameters to include existing homeowners and not just first-time buyers. As you may know, C.A.R. and our partners at NAR have worked for months urging Congress and the Senate to extend and expand this crucial piece of legislation. We expect President Obama to sign the legislation in short order.

As it now stands, the federal tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. First-time home buyers will continue to be eligible for a tax credit of up to $8,000, while existing homeowners will be eligible for a reduced credit of up to $6,500. To qualify for the $6,500 credit, existing homeowners must have lived in their current residences for at least five years. The bill also increases the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000 in both instances.

Under additional provisions included in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The legislation maintains the provision that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

Nationwide, more than 1.4 million first-time home buyers were given the opportunity to become homeowners as a result of the Federal Tax Credit for First-time Home Buyers.  We expect that number to increase dramatically in the months ahead with this new legislation in place. Thank you to our members who called, wrote, and e-mailed their congressional representatives and voiced their support for the home buyer tax credit. Your voices were heard - today's vote is a direct result of your actions and involvement.

Join us the third Wednesday of every month from 6:00pm to 8:00pm for MISSION NIGHTS in San Diego to stroll through our neighborhood of Mission Hills meet your local merchants and enjoy a sampling of great food, wine, snacks and beverages.   What better way to spend a Wednesday evening than a leisurely walk through the business district of Mission Hills meeting new neighbors and exploring your favorite restaurants, shops, boutiques and cool lounges.  Enjoy live music, free food, dinner and drink specials, discount coupons and live demonstrations-all free to the public. And don't forget the parking meters are free after 6pm too.   For a current schedule and map, please check out the website at ww.MissionNights.com. 

For more information on Mission Hills and Hillcrest in San Diego, please visit my site at www.ArmstrongEstates.com.

The official launch of my real estate website as Armstrong Estates has been a tremendous success.  San Diego real estates websites are not all created equal.  With state-of-the-art search tools, free foreclosure lists and a marketing plan second to none, Todd's San Diego clients have created a huge buzz and resulted in over 5,000 website hits in the last 2 days.  That's great news for sellers currently listed with Armstrong & Associates.  It means tons of exposure to their homes.  Visitors have been spending the majority of the time previewing the dozens of pictures of Todd's listings.   Check us out now at www.ArmstrongEstates.com for more information on how Todd and his team can sell your home in this tough market.

Todd Armstrong and Associates is proud to announce the opening of their newly designed and updated website at www.ArmstrongEstates.com.  New features include state-of-the-art Search Engine for San Diego real estate, foreclosure lists and the ability to search for homes with your cell phone.

While most agents are cutting back, Todd has increased his marketing budget and taken on more clients than ever before.  One of my most knowledgable real estate teams in Mission Hills and Hillcrest, his team services all facets of the metro areas of San Diego to include downtown San Diego, Mission Hills, Banker's Hill, Hillcrest, North Park, South Park, University Heights and Normal Heights.  Take a peek at all homes for sale in San Diego at www.ArmstrongEstates.com