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The Real e-State: Will it be jingle bells or jingle keys?

Happy holidays! I do love this time of year because there is a lot to do and think about.

Real estate may not be on the top of that list. Not yet, anyway.

Most people are not thinking about buying and selling property right now, but are contemplating about parties, gifts, decorations, the meaning of Christmas and making New Year’s resolutions.

But the people taking advantage of the economy and making money in the long run aren’t the tail of the dog; they are the head.

These are the people who were holding their cash towards the end of the last bubble and who got out of the market before the crash. Many of them are now paying cash for discounted properties.

Remember, the head eats first and the tail gets the crap. If you are sick of the crap, it’s time to start leading with your head.

In my September column, I told you about the changes to FHA financing, dropping the qualifying loan amount nearly $200,000, and warned you this would be affecting this market area.

Looking at the market with a mico-lens can be bad, but looking at the market through a macro-lens can be an opportunity for buyers.

The data from the California Association of Realtors (CAR) tell us that despite California having overall gains in sales, the sales in the price segment directly impacted by the loan limit reduction (properties priced between $500,000 and $900,000) dropped 16.4% on a month-to-month basis and were down year-over-year 12.7%.

"It remains to be seen how much of the sales decline in this price tier may be attributed to the rollback of loan limits, the drop was particularly large when compared to sales under $500,000, which only declined 6.1% on a month-to-month basis but increased 11.1% when compared to the same period a year ago,” says the CAR.

That is a large difference when you look at year-to-year!

Now, think opportunity; these sellers become more motivated, and with fewer buyers there is less competition.

Challenge: Loans are more difficult to qualify for right now.

Solution: You don’t have to do this alone. Get some people together.

Solution: Purchase it as an investment property. If rented or multiple units, the rents help you qualify by being counted as income.

Fact: Up to four units is still not a commercial loan.

Fact: Rates on investment properties are still lower than the rates of owner occupied of just two years ago.

Fact: There are tax advantages.

Fact: When the market improves and prices bounce back, you can sell the property without paying capital gains tax on it, if you roll it into another property. This is called a 1031 Exchange.

The chances are that this holiday season you will be around some people you love and trust. Don’t be afraid to be the smart one and talk about something other than the same old, same old.

Bring up a conversation that could help them and help you with your futures. Even if it’s not the right fit for them, you have made interesting and real conversation.

Bring up this article, or better yet, let them read it if either of you have a smart phone.

So wash off your face and start being the part of the dog that is feeding, instead of that other end.

Realtor Bo Bortner offers his sound advice and personal knowledge of the industry as a successful agent with Team Metro Real Estate. He is well-versed in Hillcrest, North Park, University Heights, Mission Hills, Golden Hill and downtown, but his clients come from all over. He gives back to the community through his involvement with Mama's Kitchen, The Trevor Project and University Christian Church. He can be reached at (619) 840-2981 or online at his website.