Consumer questions: Bay Area housing market

March 13, 2009 5:02:50 PM PDT
Michael Finney answers your questions about the housing market, your credit score and what to do with your old car.

Bay Area housing market:

Question: "I heard on the radio today that the homes in the Bay Area were increasing, the number of houses being sold was increasing. So, I was wondering if you feel this is a trend and people will be able to buy houses shortly at a reasonable rate?"

Answer: For the seventh month in a row, housing sales have gone up. The average home in the Bay Area is now $300,000, it was $550,000 at the peak a year and a half ago. Now is a good time to shop. But can it go lower? Absolutely. It can always go lower, but it can always go back up. Towards the valley you're seeing 50 percent off. You're never going to time the market exactly, but now is a good time to shop.

Credit cards and your credit score

Question: "Can having too many credit cards affect your credit score?"

Answer: Yes, but not by much. The big thing they look at with your credit score (when it comes to credit cards) is how much debt do you have to the cards. So if you have a card that has a $1,000 credit limit, you never want to go above $500. You want to keep all your cards like that at half. If you're looking to close cards, you don't want to close the cards you've had the longest because your credit score is based on how long you've had credit.

Selling vs. donating cars

Question: "Should my mom sell her Honda Odyssey on Craigslist or should she donate it for tax purposes?"

Answer: The best thing you can do is sell the car yourself, even if you want to give it to charity. The bottom line is, when you donate a car, it sounds easy, but there are a couple of things that can go wrong. One is they don't take it out of your name and then it rolls back on you, even criminallly. The second is, there's a lot of cost in giving that car away, so less money gets to charity. So you're better off just selling it at a great deal, keeping the money, giving it to charity.

For more of Michael Finney's consumer stories and advice, visit 7 On Your Side.