I love the easy topics! I explore death at http://www.perfectpassings.com/. Check in if you anticipate that you might 'shed your mortal coil', but if you're here to stay, don't bother!
Taxes, wow, so much misinformation on this topic. Cable news delivers a pre packaged opinion containing very few facts and the local news, well, not much going on there either.
When we talk about these tax 'rates' we feel like they are real. But we are one of the few countries that have a 'tax code' and it is highly manipulated by Congress. Change the tax rates and then pass a new tax regulation that negates the effects. The tax rates only apply AFTER a corporation or individual has fiddled with deductions, so the real margin is very fluid. And what you end up with is an 'effective rate' vs. the published rate. But the explanation doesn't make good news bytes and the CPA's lobbyists love those tax code changes. Here's an interesting publication from 2004 from the GAO. www.gao.gov/new.items/d051009sp/pdf
So a complete redo of the tax code might be simpler. Also, having to pay taxes right off the top might help America return to a 'build and earn' model, rather than a 'quickie get rich quick' model that doesn't really contribute to the social structure. ( I think that the stories of overnight billionaires is demoralizing our young people, but that's another story.)
A simple straightforward tax might also limit corporate crime. If the tax code was simple and violations easy to catch, a CEO might think twice about cooking the books. We have too many loopholes, dark corners and sneaky accounting tricks to make the tax rates even meaningful.
On the macabre side, this is the last month you can pass out of this world with limited tax consequences. When Yankees owner George Steinbrenner died on July 13, 2010 just months after the estate tax expired, he saved his heirs a possible $500 million in taxes. Hospital wards will be contentious places this New Year's Eve.
So this month , death and taxes are going to be a potent brew.
Talk to me, log in to http://www.perfectpassings.com/ and tell me how your family plans for the afterlife. One client has an annual family meeting once a year, outlining expectations and the responsibilities of each family member going forward. Brilliant family they are.
Or talk to me here on Real Estate matters! Love hearing from you.
Seasons Greetings,
Terry
Tuesday, December 7, 2010
Friday, October 22, 2010
Don't Ignore What's Really Going On....
Remember the G-6? Then the G7 and recently the G8? A bunch of severe looking dudes that got together to talk about stuff on a global scale. I always thought it was just another excuse to travel large on the taxpayers money.
I though the G was for: Geeeeeee, we're going out of town, call the mistress!
Well, things changed when China said " hey! " The table is too small, all of us young growing countries are not at the table. "What about us, what about Brazil?" We have way more going on than Italy.
So it became the G 20. Yeah China, you did it! Now they are all headed to Korea.
Well, they may not be so happy with the irony of it now. When the other emerging countries got a seat at the table they realized, "Hey, China, keeping your currency low is messing up our exports too!" It wasn't just the US that was taking a hit.
For some time now Washington has been cajoling, pressuring, encouraging, demanding that China devalue the Yuan. The current situation allows China's exports to be great values and undermines products from other countries. By balancing currencies in the global market , all counties are on a level playing field which seems like the competition will be to make better products, not just the cheapest products.
Our weak dollar does provide some benefits though. "A weaker dollar gives U.S. exporters the opportunity to boost their profit margins or gain market share"., says John Higgins , economist at Capital Economics. Additionally U.S. companies with operations on foreign soil may see a boost in the value of the overseas earnings in terms of the dollar.
The impact is mixed of course, so there is no straight line to a solution or rationale. Ebay reported a rise in the marketplace deals for the first 9 months of the year, helped by foreign exchange gains against the U.S. dollar, but Eli Lilly reported the sales of its main drug Zyprexa, fell 7% in the international market due to the same thing with a different view point. They say,
it fell due to "the unfavorable impact of foreign exchange rates and lower prices".
So watch the bigger picture. The story for the economy isn't really depressed housing prices in Stockton, Tracy and Las Vegas. It's what the big money is doing on a global scale. The world is one big retail store now and the power players are changing the rules and the goals.
It's exciting, exhausting and YES, you have to learn a few basic concepts and terms, but then you get it and you can see your little problems are not that big a deal. Relax, enjoy a smaller life, spend time with our kids and loved ones, bake a pie, go pick out a pumpkin, savor the smell of wet leaves. The big stuff? Out of your hands. The little stuff? It makes a huge difference in the quality of your life.
Let's see what goes on in Korea.
I though the G was for: Geeeeeee, we're going out of town, call the mistress!
Well, things changed when China said " hey! " The table is too small, all of us young growing countries are not at the table. "What about us, what about Brazil?" We have way more going on than Italy.
So it became the G 20. Yeah China, you did it! Now they are all headed to Korea.
Well, they may not be so happy with the irony of it now. When the other emerging countries got a seat at the table they realized, "Hey, China, keeping your currency low is messing up our exports too!" It wasn't just the US that was taking a hit.
For some time now Washington has been cajoling, pressuring, encouraging, demanding that China devalue the Yuan. The current situation allows China's exports to be great values and undermines products from other countries. By balancing currencies in the global market , all counties are on a level playing field which seems like the competition will be to make better products, not just the cheapest products.
Our weak dollar does provide some benefits though. "A weaker dollar gives U.S. exporters the opportunity to boost their profit margins or gain market share"., says John Higgins , economist at Capital Economics. Additionally U.S. companies with operations on foreign soil may see a boost in the value of the overseas earnings in terms of the dollar.
The impact is mixed of course, so there is no straight line to a solution or rationale. Ebay reported a rise in the marketplace deals for the first 9 months of the year, helped by foreign exchange gains against the U.S. dollar, but Eli Lilly reported the sales of its main drug Zyprexa, fell 7% in the international market due to the same thing with a different view point. They say,
it fell due to "the unfavorable impact of foreign exchange rates and lower prices".
So watch the bigger picture. The story for the economy isn't really depressed housing prices in Stockton, Tracy and Las Vegas. It's what the big money is doing on a global scale. The world is one big retail store now and the power players are changing the rules and the goals.
It's exciting, exhausting and YES, you have to learn a few basic concepts and terms, but then you get it and you can see your little problems are not that big a deal. Relax, enjoy a smaller life, spend time with our kids and loved ones, bake a pie, go pick out a pumpkin, savor the smell of wet leaves. The big stuff? Out of your hands. The little stuff? It makes a huge difference in the quality of your life.
Let's see what goes on in Korea.
Tuesday, September 7, 2010
August Housing Statistics
We continue to see strong motivated buyers in the market through the summer. July we saw 16.6% of properties listed in escrow, at the close of August it dropped marginally to 14.1%. The median price for what it's worth rose from an average selling price of $467,000 in July with 188 homes selling to $485,000 in August with 166 homes closing escrow. In Santa Clara, there was an influx of foreign money purchasing homes in the Silicon Valley and some Euros looking in Santa Cruz.
We are hearing from the 30-45 crowd that home ownership is still an attractive goal and that after all the media debate and pundits ranting, folks want to own their own home. We are living through a transition where not everyone will have the privilege however.
Quality properties priced according to this market sell very quickly, often under 10 days, while overpriced and under maintained homes languish.
Santa Cruz is a gem, tucked away from the madness of the greater world, clean air and fresh breezes! Enjoy your day hiking, biking, swimming, kayaking, kite surfing, or walking the beach.
It's a great place to call home.
We are hearing from the 30-45 crowd that home ownership is still an attractive goal and that after all the media debate and pundits ranting, folks want to own their own home. We are living through a transition where not everyone will have the privilege however.
Quality properties priced according to this market sell very quickly, often under 10 days, while overpriced and under maintained homes languish.
Santa Cruz is a gem, tucked away from the madness of the greater world, clean air and fresh breezes! Enjoy your day hiking, biking, swimming, kayaking, kite surfing, or walking the beach.
It's a great place to call home.
Tuesday, August 31, 2010
Mid Year Stats
Don't react to the news about the market as presented on the news. Even the BBC, most neutral of all, gets national stats on air and we are a very micro market at the beach. And within our county we have the devoted sandophiles who must reside ON the beach, all the way to the country folk who prefer drier air, red tail hawks and lots o' space! No one rule applies here in beautiful Santa Cruz.
We are way low on inventory, only a 4.5 month supply of homes. (If nothing new was listed, at the current rate of sale, all homes would be sold in 4.5 months) 16% of homes for sale are in escrow, not the best number but not terrible either. We currently have 1,493 homes up for sale as of July 31, with 248 escrows in play. So if you are a seller, look at your pricing and consider those odds. NOT EVERY HOUSE SELLS. Listen to your agent if you have a good one.
On a year over year basis, DataQuick reports that Bay Area median has risen for 10 straight months, though July's gain was the smallest in that series. Last month, foreclosed on homes made up 26.1% of the sales, down from 33.6 % in July 2009. The monthly average for foreclosure resales oer the past 15 years is about 8%.
Regarding the lending climate, banks are making loans. I have had several great loans close for buyers with good downs, or great credit scores and strong jobs. But, since banks can borrow so low and buy other assets for risk free income, they are disinclined to make riskier home loans in what some perceive to be a still deteriorating economy. This may change as the feds press them to lend money. Look for the Fed rate to change.
We are also starting to see the first round of foreclosed homes that have been updated and put back on the market. Flippers are in the market improving the quality of homes.
It is going to take TIME for this all to clear and there are different levels of activity going on. Solid buyers/investors looking for super deals, cautious first time buyers who instinctively know this is a once in 30 year phenomenon, people leaving home ownership behind forever and the slow slogging through of the defaulted owners. Americans are not good at being patient, but time is the only healer of this mess.
We are way low on inventory, only a 4.5 month supply of homes. (If nothing new was listed, at the current rate of sale, all homes would be sold in 4.5 months) 16% of homes for sale are in escrow, not the best number but not terrible either. We currently have 1,493 homes up for sale as of July 31, with 248 escrows in play. So if you are a seller, look at your pricing and consider those odds. NOT EVERY HOUSE SELLS. Listen to your agent if you have a good one.
On a year over year basis, DataQuick reports that Bay Area median has risen for 10 straight months, though July's gain was the smallest in that series. Last month, foreclosed on homes made up 26.1% of the sales, down from 33.6 % in July 2009. The monthly average for foreclosure resales oer the past 15 years is about 8%.
Regarding the lending climate, banks are making loans. I have had several great loans close for buyers with good downs, or great credit scores and strong jobs. But, since banks can borrow so low and buy other assets for risk free income, they are disinclined to make riskier home loans in what some perceive to be a still deteriorating economy. This may change as the feds press them to lend money. Look for the Fed rate to change.
We are also starting to see the first round of foreclosed homes that have been updated and put back on the market. Flippers are in the market improving the quality of homes.
It is going to take TIME for this all to clear and there are different levels of activity going on. Solid buyers/investors looking for super deals, cautious first time buyers who instinctively know this is a once in 30 year phenomenon, people leaving home ownership behind forever and the slow slogging through of the defaulted owners. Americans are not good at being patient, but time is the only healer of this mess.
Tuesday, August 10, 2010
3 Myths You Should Know About Shortsales
1. Short sales are a waste of time.
NO. If you wear out emotionally and let your home go to foreclosure, it stays on your credit bureau FOREVER! It can affect a career choice, (fiduciary, banker, military, security clearance),
it will torpedo your credit for 10 years and you have to revisit it every time you are asked, "have you ever been foreclosed on?" UGH.
A short sale however, under some circumstances, will let you repurchase in 2 years, your credit score is less adversely impacted and you are relieved of stress as well.
2. No one will show my short sale home.
WRONG. While uninformed agents, or agents without the confidence to handle a short sale won't show it, savvy agents that are informed and competent will be eager to show your listing, especially one listed by a CDPE designated agent. (see http://www.cdpe.com/) These agents know how to get the sale done.
3. Anyone can sell a property short.
WRONG again. You must have a verifiable hardship to begin the process. I can tell you more about that and it's not straight forward, so call me for details. You may not think you can, but check first.
The terrain of real estate is changing daily. From a federal level, from the internal understanding of banks, investors are waking up, (not the purchasing investor, but the investors behind the loans that are defaulting) everyone is getting educated. Folks who brazenly put their flipped short sale resale on YouTube for all the world to see with a 60% profit have banks keeping prices higher. (Thanks guys, don't you know social media gets read by corporations too?)
Bottom line: IF YOU OR SOMEONE YOU KNOW IS SUFFERING from mortgage stress, have them call me. I lost my own vacation home to a short sale, so I understand that it can happen to anyone and it is PAINFUL. But the alternatives are worse. Open your mail, be fearless and call me! 831 515 1101. I can help.
Terry Ballantyne
Broker Associate
GRI~ CDPE
Sereno Group Real Estate
DRE#01257150
NO. If you wear out emotionally and let your home go to foreclosure, it stays on your credit bureau FOREVER! It can affect a career choice, (fiduciary, banker, military, security clearance),
it will torpedo your credit for 10 years and you have to revisit it every time you are asked, "have you ever been foreclosed on?" UGH.
A short sale however, under some circumstances, will let you repurchase in 2 years, your credit score is less adversely impacted and you are relieved of stress as well.
2. No one will show my short sale home.
WRONG. While uninformed agents, or agents without the confidence to handle a short sale won't show it, savvy agents that are informed and competent will be eager to show your listing, especially one listed by a CDPE designated agent. (see http://www.cdpe.com/) These agents know how to get the sale done.
3. Anyone can sell a property short.
WRONG again. You must have a verifiable hardship to begin the process. I can tell you more about that and it's not straight forward, so call me for details. You may not think you can, but check first.
The terrain of real estate is changing daily. From a federal level, from the internal understanding of banks, investors are waking up, (not the purchasing investor, but the investors behind the loans that are defaulting) everyone is getting educated. Folks who brazenly put their flipped short sale resale on YouTube for all the world to see with a 60% profit have banks keeping prices higher. (Thanks guys, don't you know social media gets read by corporations too?)
Bottom line: IF YOU OR SOMEONE YOU KNOW IS SUFFERING from mortgage stress, have them call me. I lost my own vacation home to a short sale, so I understand that it can happen to anyone and it is PAINFUL. But the alternatives are worse. Open your mail, be fearless and call me! 831 515 1101. I can help.
Terry Ballantyne
Broker Associate
GRI~ CDPE
Sereno Group Real Estate
DRE#01257150
Sunday, April 18, 2010
New Homebuyer Tax Credit Update
These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011.
Additionally, these tax credits are available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010. The purchase date is defined as the date escrow closes.
Taxpayers may apply for the tax credits if they have entered into a contract before May 1, 2010, as long as escrow closes on or after May 1, 2010.
These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and unused credits cannot be carried over.
The total amount of allocated tax credit for all taxpayers may not exceed $100 million for the New Home Credit and $100 million for the First-Time Buyer Credit. However, since many taxpayers will not be able to utilize the entire tax credit, the legislation specifies that the $100 million cap for the New Home Credit will be reduced by 70 percent of the tax credit allocated to each buyer and the $100 million cap for the First-Time Buyer Credit will be reduced by 57 percent of the tax credit allocated to each buyer.
For example, if a taxpayer is allocated $10,000 for the New Home Credit, the $100 million cap for the New Home Credit will only be reduced by $7,000. If a taxpayer is allocated $10,000 for the First-Time Buyer Credit, the $100 million cap for the First-Time Buyer Credit will only be reduced by $5,700. The 70 and 57 percent reductions do not impact the amount that can be claimed by the taxpayer.
The State will allocate the tax credits on a first-come, first-served basis.
Only one tax credit is allowed per taxpayer. If a taxpayer qualifies for both tax credits, the law specifies that we will allocate the amount under the New Home Credit.
Taxpayers will not be eligible for either tax credit if any of the following apply:
The taxpayer was allowed a 2009 New Home Credit.
The taxpayer is under 18 years old. (A taxpayer who is married as of the date of purchase will be considered to be 18 if the spouse/registered domestic partner (RDP) of the taxpayer is 18 or older on the date of purchase.)
The taxpayer or the taxpayer’s spouse/RDP is related to the seller.
The taxpayer qualifies as a dependent of any other taxpayer for the tax year of the purchase.
These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011.
Additionally, these tax credits are available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010. The purchase date is defined as the date escrow closes.
Taxpayers may apply for the tax credits if they have entered into a contract before May 1, 2010, as long as escrow closes on or after May 1, 2010.
These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and unused credits cannot be carried over.
The total amount of allocated tax credit for all taxpayers may not exceed $100 million for the New Home Credit and $100 million for the First-Time Buyer Credit. However, since many taxpayers will not be able to utilize the entire tax credit, the legislation specifies that the $100 million cap for the New Home Credit will be reduced by 70 percent of the tax credit allocated to each buyer and the $100 million cap for the First-Time Buyer Credit will be reduced by 57 percent of the tax credit allocated to each buyer.
For example, if a taxpayer is allocated $10,000 for the New Home Credit, the $100 million cap for the New Home Credit will only be reduced by $7,000. If a taxpayer is allocated $10,000 for the First-Time Buyer Credit, the $100 million cap for the First-Time Buyer Credit will only be reduced by $5,700. The 70 and 57 percent reductions do not impact the amount that can be claimed by the taxpayer.
The State will allocate the tax credits on a first-come, first-served basis.
Only one tax credit is allowed per taxpayer. If a taxpayer qualifies for both tax credits, the law specifies that we will allocate the amount under the New Home Credit.
Taxpayers will not be eligible for either tax credit if any of the following apply:
The taxpayer was allowed a 2009 New Home Credit.
The taxpayer is under 18 years old. (A taxpayer who is married as of the date of purchase will be considered to be 18 if the spouse/registered domestic partner (RDP) of the taxpayer is 18 or older on the date of purchase.)
The taxpayer or the taxpayer’s spouse/RDP is related to the seller.
The taxpayer qualifies as a dependent of any other taxpayer for the tax year of the purchase.
Saturday, April 3, 2010
March Home Sale Results in Santa Cruz
Only 4 homes closed escrow in March over the $1,000,000 mark, but 13 went pending, or are under contract, a great gain. 102 properties under the $1,000,000 market are under contract in March, another solid gain.
The statistics are skewed in the media because so many sales are short sales which can be 60-180 days under contract, but the buyers are making offers quickly and the best properties are in escrow in under 20 days in the $400,000-$650,000 market. That market is moving quickly.
If you are in distress, don't wait too long to market your property. Interest rates are starting to climb, and that inflationary cycle that has been looming is still out there. While distressed families often go into paralysis, you must keep your wits about you and reach out to your mortgage lender and your creditors. Make a realistic estimate of your chances for fiscal recovery and decide whether to hold 'em or fold 'em. Often the relief from the pressure gives you renewed energy for a do over.
Our society is struggling with a huge demographic shift right now. Countless workers are reviewing their opportunities, rethinking their options, and determining what the next chapter is going to look like. It won't look like the past, that ship has sailed. So much has changed, gone is the pay phone, film, video rental outlets, music stores, hotel keys, (remember those big plastic tags, "Drop in any mailbox, postage guaranteed"), letters, and countless other changes to our social fabric. Also, America is finally the salad bowl it always claimed to be with diversity in all sectors of the work force. The Baby Boomers are moving en mass to the golden years, leaving behind a generation much smaller and then comes the swell of the Boomlett kids, or Millennials.
This is a time to think creatively, don't be constrained by the past, look forward to what makes you feel valuable, what makes you feel like a contributor. Unshackle yourself from pre-conception, and look at the world as it is now. Find new ways, forge new trails. If you have to let your home go, so be it. It's sticks and mortar. The real value is the memories which are yours to keep. Go out and forge new ones. You are you, regardless of conditions.
The statistics are skewed in the media because so many sales are short sales which can be 60-180 days under contract, but the buyers are making offers quickly and the best properties are in escrow in under 20 days in the $400,000-$650,000 market. That market is moving quickly.
If you are in distress, don't wait too long to market your property. Interest rates are starting to climb, and that inflationary cycle that has been looming is still out there. While distressed families often go into paralysis, you must keep your wits about you and reach out to your mortgage lender and your creditors. Make a realistic estimate of your chances for fiscal recovery and decide whether to hold 'em or fold 'em. Often the relief from the pressure gives you renewed energy for a do over.
Our society is struggling with a huge demographic shift right now. Countless workers are reviewing their opportunities, rethinking their options, and determining what the next chapter is going to look like. It won't look like the past, that ship has sailed. So much has changed, gone is the pay phone, film, video rental outlets, music stores, hotel keys, (remember those big plastic tags, "Drop in any mailbox, postage guaranteed"), letters, and countless other changes to our social fabric. Also, America is finally the salad bowl it always claimed to be with diversity in all sectors of the work force. The Baby Boomers are moving en mass to the golden years, leaving behind a generation much smaller and then comes the swell of the Boomlett kids, or Millennials.
This is a time to think creatively, don't be constrained by the past, look forward to what makes you feel valuable, what makes you feel like a contributor. Unshackle yourself from pre-conception, and look at the world as it is now. Find new ways, forge new trails. If you have to let your home go, so be it. It's sticks and mortar. The real value is the memories which are yours to keep. Go out and forge new ones. You are you, regardless of conditions.
Monday, March 22, 2010
Real Estate Outlook: Freddie Mac Predicts Positive Recoveryby Kenneth R. Harney
Could we be heading for a "double dip" in the economy, taking us back into recession, as some Wall Street analysts predict? Could the Federal Reserve's planned departure from the mortgage securities market send home loan rates spiking upward, and knock the wind out of the housing recovery? Those are scary questions.
But last week one of the country's most accurate economic and housing forecasters came out with projections for the balance of the year that basically said: None of that scary stuff is going to happen.
Frank Nothaft, chief economist for mortgage investor Freddie Mac, sees what he calls "a very steady, quarter to quarter growth" pattern ahead, with no "double-dip" mini-recession hurting real estate, and only minor increases in interest rates.
Notehalf's econometric models point to expansion of the U.S. economy in the 3.3 to 3.5 percent range, as measured by the Gross Domestic Product (or GDP) through 2011. In economic terms, that's sort of a "not too hot, not too cold" scenario that helps keep interest rates low and inflation under control.
Nothaft forecasts average 30-year mortgage rates around 5.6 percent by the end of the year - up from today's rates but still in historically low territory and not high enough to seriously constrain housing demand or sales.
In fact, Nothaft expects total housing sales - that's existing resales plus sales of newly constructed homes -- to be at a nearly 6 million annual rate by the end of 2010, and even higher in 2011.
One sobering area in his projections, however, is prices. On a national average basic, his models point to a pattern of relatively flat prices for the coming year as the result of continuing high foreclosures, short sales and other distress situations in parts of central California, Nevada, Arizona and Florida.
But Nothaft emphasized in an interview with Realty Times last week that "the national numbers tend to obscure what's happening in regional and local markets" that are not heavily burdened with distress sales, and where underlying economic demand already is producing higher prices and multiple bids on homes for sales.
************************************************
We here on the coast are seeing things stabilize. Inventory is down, prices are holding. In Santa Clara county the higher end is beginning to move and we tend to follow them by a number of months. The worst seems to be behind us and if Bloom Energy or Bright Source takes off, go team! The big engine in the Silicon Valley will be roaring again.
Could we be heading for a "double dip" in the economy, taking us back into recession, as some Wall Street analysts predict? Could the Federal Reserve's planned departure from the mortgage securities market send home loan rates spiking upward, and knock the wind out of the housing recovery? Those are scary questions.
But last week one of the country's most accurate economic and housing forecasters came out with projections for the balance of the year that basically said: None of that scary stuff is going to happen.
Frank Nothaft, chief economist for mortgage investor Freddie Mac, sees what he calls "a very steady, quarter to quarter growth" pattern ahead, with no "double-dip" mini-recession hurting real estate, and only minor increases in interest rates.
Notehalf's econometric models point to expansion of the U.S. economy in the 3.3 to 3.5 percent range, as measured by the Gross Domestic Product (or GDP) through 2011. In economic terms, that's sort of a "not too hot, not too cold" scenario that helps keep interest rates low and inflation under control.
Nothaft forecasts average 30-year mortgage rates around 5.6 percent by the end of the year - up from today's rates but still in historically low territory and not high enough to seriously constrain housing demand or sales.
In fact, Nothaft expects total housing sales - that's existing resales plus sales of newly constructed homes -- to be at a nearly 6 million annual rate by the end of 2010, and even higher in 2011.
One sobering area in his projections, however, is prices. On a national average basic, his models point to a pattern of relatively flat prices for the coming year as the result of continuing high foreclosures, short sales and other distress situations in parts of central California, Nevada, Arizona and Florida.
But Nothaft emphasized in an interview with Realty Times last week that "the national numbers tend to obscure what's happening in regional and local markets" that are not heavily burdened with distress sales, and where underlying economic demand already is producing higher prices and multiple bids on homes for sales.
************************************************
We here on the coast are seeing things stabilize. Inventory is down, prices are holding. In Santa Clara county the higher end is beginning to move and we tend to follow them by a number of months. The worst seems to be behind us and if Bloom Energy or Bright Source takes off, go team! The big engine in the Silicon Valley will be roaring again.
Wednesday, March 10, 2010
The 4 Things You Need To Buy and 2 You Don't
Are You Ready to Buy a House?
Four Things you need to buy a home, and two things you don't
By frontdoor.com Published: 11/01/2007
Sure, owning your own home is the American dream. It's also the largest investment most of us will ever make, so go into it knowing what you'll need when you go from tenant to owner -- and what you won't need.
Here's what you'll need:
1. Enough money to make monthly mortgage payments. Duh! If a mortgage payment will bust your budget, you can't get rid of your landlord yet. Use our mortgage calculator to estimate your monthly payment.
2. Enough income to pay property taxes and homeowner's insurance. The mortgage isn't the only cost you'll have each month. You also have to pay taxes and insurance. If you can't make those payments, say bye-bye to the house.
3. The ability to maintain the property.You must keep a home in good repair or it will lose its value and you'll lose money. You can do the work yourself or pay someone to do it. Either way, you can't ignore the peeling paint and the window that won't close like you did when you were a tenant.
4. A decent credit record. If you have lots of late payments, have declared bankruptcy or left old debts unpaid, it's harder to get a mortgage. And if you do get one, your bad credit record will make you pay a much higher interest rate.
Here's what you won't need:
1. A big down payment.It's best to make a big fat down payment so you can skip paying private mortgage insurance and lower your monthly payments, but you can buy a house for almost nothing down.
2. ExperienceIn most major cities, real estate companies hold home-buyer education classes for first-timers. Go, even if you have no immediate plans to buy. The information you get can lead you to other sources of help. And of course, we'll help you right here on FrontDoor.com Real Estate.
Courtesy of Frontdoor by HGTV
Four Things you need to buy a home, and two things you don't
By frontdoor.com Published: 11/01/2007
Sure, owning your own home is the American dream. It's also the largest investment most of us will ever make, so go into it knowing what you'll need when you go from tenant to owner -- and what you won't need.
Here's what you'll need:
1. Enough money to make monthly mortgage payments. Duh! If a mortgage payment will bust your budget, you can't get rid of your landlord yet. Use our mortgage calculator to estimate your monthly payment.
2. Enough income to pay property taxes and homeowner's insurance. The mortgage isn't the only cost you'll have each month. You also have to pay taxes and insurance. If you can't make those payments, say bye-bye to the house.
3. The ability to maintain the property.You must keep a home in good repair or it will lose its value and you'll lose money. You can do the work yourself or pay someone to do it. Either way, you can't ignore the peeling paint and the window that won't close like you did when you were a tenant.
4. A decent credit record. If you have lots of late payments, have declared bankruptcy or left old debts unpaid, it's harder to get a mortgage. And if you do get one, your bad credit record will make you pay a much higher interest rate.
Here's what you won't need:
1. A big down payment.It's best to make a big fat down payment so you can skip paying private mortgage insurance and lower your monthly payments, but you can buy a house for almost nothing down.
2. ExperienceIn most major cities, real estate companies hold home-buyer education classes for first-timers. Go, even if you have no immediate plans to buy. The information you get can lead you to other sources of help. And of course, we'll help you right here on FrontDoor.com Real Estate.
Courtesy of Frontdoor by HGTV
Friday, February 12, 2010
Quick Update on Foreclosures
Good news per DataQuick Research:
The number of California homes entering the foreclosure process declined again during fourth quarter 2009 amid signs that the worst may be over in hard-hit entry-level markets, while slowly spreading to more expensive neighborhoods. There are mixed signals for 2010: It's unclear how much of the drop in mortgage defaults is due to shifting market conditions, and how much is the result of changing foreclosure policies among lenders and loan servicers, a real estate information service reported.
NODs reached an all-time high in first-quarter 2009 of 135,431, a number that was inflated by activity put off from the prior four months. In the second quarter of last year, NODs totaled 124,562. The low of recent years was in the third quarter of 2004 at 12,417, when housing market annual appreciation rates were around 20 percent.
"Clearly, many lenders and servicers have concluded that the traditional foreclosure process isn't necessarily the best way to process market distress, and that losses may be mitigated with so-called short sales or when loan terms are renegotiated with homeowners," said John Walsh, DataQuick president.
While many of the loans that went into default during fourth quarter 2009 were originated in early 2007, the median origination month for last quarter's defaulted loans was July 2006, the same month as during the prior three quarters. The median origination month during the last quarter of 2008 was June 2006. This means the foreclosure process has moved forward through one month of bad loans during the past 12 months.
"Mid 2006 was clearly the worst of the 'loans gone wild' period and it's taking a long time to work through them. We're also watching foreclosure activity start to move into more established mid-level and high-end neighborhoods. Homeowners there were able to make their payments longer than homeowners in entry-level neighborhoods, but because of the recession and job losses, that's changing. Foreclosure activity is a lagging indicator of distress," Walsh said.
The state's most affordable sub-markets, which represent 25 percent of the state's housing stock, accounted for 52.0 percent of all default activity a year ago. In fourth-quarter 2009 that fell to 34.9 percent.
On primary mortgages, California homeowners were a median five months behind on their payments when the lender filed the NOD. The borrowers owed a median $13,510 on a median $325,818 mortgage.
On home equity loans and lines of credit in default, borrowers owed a median $3,939 on a median $62,965 credit line. However the amount of the credit line that was actually in use cannot be determined from public records.
The number of California homes entering the foreclosure process declined again during fourth quarter 2009 amid signs that the worst may be over in hard-hit entry-level markets, while slowly spreading to more expensive neighborhoods. There are mixed signals for 2010: It's unclear how much of the drop in mortgage defaults is due to shifting market conditions, and how much is the result of changing foreclosure policies among lenders and loan servicers, a real estate information service reported.
NODs reached an all-time high in first-quarter 2009 of 135,431, a number that was inflated by activity put off from the prior four months. In the second quarter of last year, NODs totaled 124,562. The low of recent years was in the third quarter of 2004 at 12,417, when housing market annual appreciation rates were around 20 percent.
"Clearly, many lenders and servicers have concluded that the traditional foreclosure process isn't necessarily the best way to process market distress, and that losses may be mitigated with so-called short sales or when loan terms are renegotiated with homeowners," said John Walsh, DataQuick president.
While many of the loans that went into default during fourth quarter 2009 were originated in early 2007, the median origination month for last quarter's defaulted loans was July 2006, the same month as during the prior three quarters. The median origination month during the last quarter of 2008 was June 2006. This means the foreclosure process has moved forward through one month of bad loans during the past 12 months.
"Mid 2006 was clearly the worst of the 'loans gone wild' period and it's taking a long time to work through them. We're also watching foreclosure activity start to move into more established mid-level and high-end neighborhoods. Homeowners there were able to make their payments longer than homeowners in entry-level neighborhoods, but because of the recession and job losses, that's changing. Foreclosure activity is a lagging indicator of distress," Walsh said.
The state's most affordable sub-markets, which represent 25 percent of the state's housing stock, accounted for 52.0 percent of all default activity a year ago. In fourth-quarter 2009 that fell to 34.9 percent.
On primary mortgages, California homeowners were a median five months behind on their payments when the lender filed the NOD. The borrowers owed a median $13,510 on a median $325,818 mortgage.
On home equity loans and lines of credit in default, borrowers owed a median $3,939 on a median $62,965 credit line. However the amount of the credit line that was actually in use cannot be determined from public records.
Sunday, February 7, 2010
Estate Tax and You
It is unfortunate that the U.S. Senate has been unable to forge a resolution to the repeal of the estate and generation skipping tax which took effect on January 1st. These changes last one year and then in 2011 and then we go back to a death tax with only a $1.0 million exemption per taxpayer. The big question is whether Congress will pass legislation during 2010 which will be retroactive to January 1, 1010. Who knows?
The back story:
In the 2001 Tax Act, many changes were made to the transfer tax system, including increasing the estate and generation skipping (GST) transfer tax system gradually to $3.5 million as of 2009, lowering the top rate for all three transfer tax systems to 45%, eliminating the state death tax credit and ultimately repealing the state and GST taxes (but not the gift tax), and thereafter lowering the top gift tax rate to 35% and eliminating of the "step up" in basis under section 1014e of the IRS code, so a decedent's basis will 'carryover' to those who inherit his or her property.
Stay tuned for the what's coming!
Foreclosure Update
Distressed properties continue to dominate the market. Fierce competition is at hand for properties in Santa Cruz county between $400,000 and $650,000. Have your financials, verification of funds, loan approval and pay stubs up to date and be prepared to battle. We are returning home values to more realistic levels.. It is bloody and brutal and lives are being upended. Yes, the banks led us to the slaughter but the good news is hopefully you will not have to be a slave to your mortgage payment. A home will once again become a home, and no longer an ATM machine. Takes a lot of pressure off. But for now, the stories are painful, the stress is enormous and many people will be starting over. It's okay. You are not alone. And the future may be a much better ratio of mortgage to take home pay. Keep fighting for your dreams.
Luxury Market Update
In the last three months 11 properties sold at over $1 million dollars. The winner was a lovely newer home in Rio Del Mar that closed at $3,500,000. But the bulk of the sales were under $2 million with a couple of exceptions. 8 of the 11 homes had market times over 100 days, while the remaining 3 sold in less than a month. Let's see what spring does to this market,
and will over heating in the valley drive those sales come summer?
Selling Hints
Nothing is more important than clearing clutter, you must be able to see the floor, with only the legs of furniture on it. Cleanliness is next to Godliness, or whatever higher power you admire,
and pet or smoking odors are the kiss of death. (Ask a truthful friend if your house is stinky)
Keep the curtains open, light is the most requested quality home buyers ask for. If you can afford it, put in a skylight. You'll get your money back, or you'll get your money from the house because it may mean the difference between selling or not.
Ok, keep the faith, get a great agent that cares about you, understands technology and has seen the inventory.
Peace and competence,
Terry
The back story:
In the 2001 Tax Act, many changes were made to the transfer tax system, including increasing the estate and generation skipping (GST) transfer tax system gradually to $3.5 million as of 2009, lowering the top rate for all three transfer tax systems to 45%, eliminating the state death tax credit and ultimately repealing the state and GST taxes (but not the gift tax), and thereafter lowering the top gift tax rate to 35% and eliminating of the "step up" in basis under section 1014e of the IRS code, so a decedent's basis will 'carryover' to those who inherit his or her property.
Stay tuned for the what's coming!
Foreclosure Update
Distressed properties continue to dominate the market. Fierce competition is at hand for properties in Santa Cruz county between $400,000 and $650,000. Have your financials, verification of funds, loan approval and pay stubs up to date and be prepared to battle. We are returning home values to more realistic levels.. It is bloody and brutal and lives are being upended. Yes, the banks led us to the slaughter but the good news is hopefully you will not have to be a slave to your mortgage payment. A home will once again become a home, and no longer an ATM machine. Takes a lot of pressure off. But for now, the stories are painful, the stress is enormous and many people will be starting over. It's okay. You are not alone. And the future may be a much better ratio of mortgage to take home pay. Keep fighting for your dreams.
Luxury Market Update
In the last three months 11 properties sold at over $1 million dollars. The winner was a lovely newer home in Rio Del Mar that closed at $3,500,000. But the bulk of the sales were under $2 million with a couple of exceptions. 8 of the 11 homes had market times over 100 days, while the remaining 3 sold in less than a month. Let's see what spring does to this market,
and will over heating in the valley drive those sales come summer?
Selling Hints
Nothing is more important than clearing clutter, you must be able to see the floor, with only the legs of furniture on it. Cleanliness is next to Godliness, or whatever higher power you admire,
and pet or smoking odors are the kiss of death. (Ask a truthful friend if your house is stinky)
Keep the curtains open, light is the most requested quality home buyers ask for. If you can afford it, put in a skylight. You'll get your money back, or you'll get your money from the house because it may mean the difference between selling or not.
Ok, keep the faith, get a great agent that cares about you, understands technology and has seen the inventory.
Peace and competence,
Terry
Thursday, January 21, 2010
Why In The World Buy a House? Because you have D needs!
D Needs? yes, according to Abraham Maslow's hierarchy of needs, housing pretty much scratches every itch. From the basic need for shelter, air and food and water our needs progress up. As soon as one need is satisfied, another need arises. And if you are deprived of a need, you default back to getting that one satisfied, pronto. The people in Haiti are now preoccupied with shelter and food. Any higher needs are on hold until that basic need is fulfilled. And so we live our lives. That is why 'noblesse oblige' works. Those who come on line with the baser needs in place provided by parents and family money, can work on self actualization sooner. Their bellies are full. They can contribute to others moving up their own pyramid. The baser needs referred to as D needs or deficiency needs, and the higher ranks a B needs. Here's the list:
1. Physiological Needs (lizard brain) {amygdala}
These include the most basic needs that are vital to survival, such as the need for water, air, food and sleep. Maslow believed that these needs are the most basic and instinctive needs in the hierarchy because all needs become secondary until these physiological needs are met.
2. Security Needs
These include needs for safety and security. Security needs are important for survival, but they are not as demanding as the physiological needs. Examples of security needs include a desire for steady employment, health insurance, safe neighborhoods and shelter from the environment.
3. Social Needs (dog brain) (limbic system)
These include needs for belonging, love and affection. Maslow considered these needs to be less basic than physiological and security needs. Relationships such as friendships, romantic attachments and families help fulfill this need for companionship and acceptance, as does involvement in social, community or religious groups.
4. Esteem Needs (ah, human mind)
After the first three needs have been satisfied, esteem needs becomes increasingly important. These include the need for things that reflect on self-esteem, personal worth, social recognition and accomplishment.
5. Self-actualizing Needs
This is the highest level of Maslow’s hierarchy of needs. Self-actualizing people are self-aware, concerned with personal growth, less concerned with the opinions of others and interested fulfilling their potential.
But back to houses.
Certainly if you are choking, starving, dehydrated or sleep deprived, nothing captures your attention except the satisfaction of that need. But if you are reading this , we can go on to Need #2. Houses answer the call for shelter, they answer need #2, the need for security and certainty. Coming home to a nice warm house in a good welcoming neighborhood, fits #2.
How about #3? Social needs. A house fulfills the desire to belong: belong to a neighborhood, a country club, a street of party givers, a community. A home is the base unit of Need #3.
#4. Okay, here's the trophy house buyer.. Number 4 is about self esteem.. Reflected glory. The big dog neighborhood you made it into. Wine cellars, pools, built in aquariums, media rooms. Oh yeah baby, number 4 is all about real estate and home ownership.
And last? The downsizer.. He is all done with climbing the ladder, pandering to others opinions, keeping up with the Jones'. He like his port, his hybrid camellias and a simple life. Need #5 says, "I am the master of my fate and the captain of my soul" (Invictus)
So don't fight it. If you have a steady job, don't overbuy, pick a great location, know your lender and the terms of the loan, find a Realtor that will steer you away from an impulsive or misguided choice, go ahead.. move up the pyramid, you have needs. Now some facts:
From Dataquick: An increase from November to December is normal for the season. Last month’s year-over-year increase was the 16th in a row. The sales count was the highest for a December since 8,372 homes were sold in December 2006. Sales for Decembers since 1988 have ranged from 5,065 in 2007 to 12,349 in 2003, while the average is 8,762.
The rich are doing fine according to American Express: AmEx dominates the market for affluent customers, with individual card purchases averaging $9,392 in 2008, compared with $2,699 for San Francisco-based Visa Inc. and $2,269 for Purchase, New York-based MasterCard Inc., AmEx said in August, citing company reports.
At year end, AmEx had lowest loss rates among the six- biggest U.S. credit-card issuers, including JPMorgan Chase & Co. and Bank of America Corp. according to Bloomberg.
I think American Express also showed wisdom and vision in dealing with long time clients in trouble with the recession by cutting interest rates, allowing principle reductions and maintaining relationships. Those prudent customer service moves are paying handsomely.
That's the news this week in Real Estate.
Peace and competence,
Terry
1. Physiological Needs (lizard brain) {amygdala}
These include the most basic needs that are vital to survival, such as the need for water, air, food and sleep. Maslow believed that these needs are the most basic and instinctive needs in the hierarchy because all needs become secondary until these physiological needs are met.
2. Security Needs
These include needs for safety and security. Security needs are important for survival, but they are not as demanding as the physiological needs. Examples of security needs include a desire for steady employment, health insurance, safe neighborhoods and shelter from the environment.
3. Social Needs (dog brain) (limbic system)
These include needs for belonging, love and affection. Maslow considered these needs to be less basic than physiological and security needs. Relationships such as friendships, romantic attachments and families help fulfill this need for companionship and acceptance, as does involvement in social, community or religious groups.
4. Esteem Needs (ah, human mind)
After the first three needs have been satisfied, esteem needs becomes increasingly important. These include the need for things that reflect on self-esteem, personal worth, social recognition and accomplishment.
5. Self-actualizing Needs
This is the highest level of Maslow’s hierarchy of needs. Self-actualizing people are self-aware, concerned with personal growth, less concerned with the opinions of others and interested fulfilling their potential.
But back to houses.
Certainly if you are choking, starving, dehydrated or sleep deprived, nothing captures your attention except the satisfaction of that need. But if you are reading this , we can go on to Need #2. Houses answer the call for shelter, they answer need #2, the need for security and certainty. Coming home to a nice warm house in a good welcoming neighborhood, fits #2.
How about #3? Social needs. A house fulfills the desire to belong: belong to a neighborhood, a country club, a street of party givers, a community. A home is the base unit of Need #3.
#4. Okay, here's the trophy house buyer.. Number 4 is about self esteem.. Reflected glory. The big dog neighborhood you made it into. Wine cellars, pools, built in aquariums, media rooms. Oh yeah baby, number 4 is all about real estate and home ownership.
And last? The downsizer.. He is all done with climbing the ladder, pandering to others opinions, keeping up with the Jones'. He like his port, his hybrid camellias and a simple life. Need #5 says, "I am the master of my fate and the captain of my soul" (Invictus)
So don't fight it. If you have a steady job, don't overbuy, pick a great location, know your lender and the terms of the loan, find a Realtor that will steer you away from an impulsive or misguided choice, go ahead.. move up the pyramid, you have needs. Now some facts:
From Dataquick: An increase from November to December is normal for the season. Last month’s year-over-year increase was the 16th in a row. The sales count was the highest for a December since 8,372 homes were sold in December 2006. Sales for Decembers since 1988 have ranged from 5,065 in 2007 to 12,349 in 2003, while the average is 8,762.
The rich are doing fine according to American Express: AmEx dominates the market for affluent customers, with individual card purchases averaging $9,392 in 2008, compared with $2,699 for San Francisco-based Visa Inc. and $2,269 for Purchase, New York-based MasterCard Inc., AmEx said in August, citing company reports.
At year end, AmEx had lowest loss rates among the six- biggest U.S. credit-card issuers, including JPMorgan Chase & Co. and Bank of America Corp. according to Bloomberg.
I think American Express also showed wisdom and vision in dealing with long time clients in trouble with the recession by cutting interest rates, allowing principle reductions and maintaining relationships. Those prudent customer service moves are paying handsomely.
That's the news this week in Real Estate.
Peace and competence,
Terry
Thursday, January 14, 2010
First Things First, Your Safety Online
Here are some tips to keep you safe on line. While the world is becoming increasingly transparent, you are still in charge of your privacy levels.
First:
Be wary of quizzes and games. They’re fun, and seeing how you stack up against your friends is a big ego boost, but it’s amazing the amount of information they can gather as part of their terms of service.
When you sign up for a quiz, typically a notice pops up to declare that interacting with the application requires opening access to information such as: "access will let [the application] pull your profile information, photos, your friends' info, and other content that it requires to work." Pretty broad rights.
Be sure to use the privacy options on Facebook. They provide very granular privacy tools that are useful to spend some time reviewing. Start by dividing your friends into separate lists. You might consider creating lists for ‘work’, ‘good friends’, ‘family’, ‘clients’, etc.Once you’ve created your lists, go through your friends and add them to the appropriate list. Friends can be on more than one list or none of them. Your friends are not able to see how they have been sorted.
Once you have sorted your friends, click on settings in the upper right corner and then on privacy settings. There are many areas of Facebook where you can control what you chose to share. Let’s start with Profile. You can edit many portions of your information here so that it is visible from everyone to no one but yourself. If you have used the list function to sort your friends you can also exclude certain lists from having access. So if you don’t want your coworkers to see photos that your friends might post, you could exclude everyone you listed in ‘work’. The granularity is pretty extreme and appears to be getting even more so. Facebook also give you a link on the page to view your profile as one of your friends will see it. This is a nice way to test if your changes are going to have the desired effect. Here is a quick YouTube video that shows how to set up lists and set privacy.
I want to spare you from the experience of the person that bashed their employer on Facebook, forgetting they were in their network... "your fired" posted on their wall right after they finished their rant!
Peace and competence,
Terry
First:
Be wary of quizzes and games. They’re fun, and seeing how you stack up against your friends is a big ego boost, but it’s amazing the amount of information they can gather as part of their terms of service.
When you sign up for a quiz, typically a notice pops up to declare that interacting with the application requires opening access to information such as: "access will let [the application] pull your profile information, photos, your friends' info, and other content that it requires to work." Pretty broad rights.
Be sure to use the privacy options on Facebook. They provide very granular privacy tools that are useful to spend some time reviewing. Start by dividing your friends into separate lists. You might consider creating lists for ‘work’, ‘good friends’, ‘family’, ‘clients’, etc.Once you’ve created your lists, go through your friends and add them to the appropriate list. Friends can be on more than one list or none of them. Your friends are not able to see how they have been sorted.
Once you have sorted your friends, click on settings in the upper right corner and then on privacy settings. There are many areas of Facebook where you can control what you chose to share. Let’s start with Profile. You can edit many portions of your information here so that it is visible from everyone to no one but yourself. If you have used the list function to sort your friends you can also exclude certain lists from having access. So if you don’t want your coworkers to see photos that your friends might post, you could exclude everyone you listed in ‘work’. The granularity is pretty extreme and appears to be getting even more so. Facebook also give you a link on the page to view your profile as one of your friends will see it. This is a nice way to test if your changes are going to have the desired effect. Here is a quick YouTube video that shows how to set up lists and set privacy.
I want to spare you from the experience of the person that bashed their employer on Facebook, forgetting they were in their network... "your fired" posted on their wall right after they finished their rant!
Peace and competence,
Terry
Wednesday, January 13, 2010
2010 The Market Starts to Quiver
Historically, January in real estate is a void. People recovering from the holidays, travel, and writing resolutions. But this January feels a little like 2002. Multiple offers, a bit of an urgency about getting in on the foreclosures with a loan and some cheap money. Here's how cheap it is:
At 4.87% your house payment of $2116.83 will buy a $400,000 loan amount. at 7.875% that same payment buys a $322,231 loan...whoa. That's a difference of a 2 bedroom or a 3 bedroom. Don't overlook this advantage! Rates will rise.
The crystal ball is still milky, we have rumors of the double dip and just hoping that the banks are getting their act together, but the pent up anxiety of the American consumer is wearing thin and people are anxious to exhale and feel like life is normal again.
Watch here for easy to digest, factual information on real estate in Santa Cruz County.
At 4.87% your house payment of $2116.83 will buy a $400,000 loan amount. at 7.875% that same payment buys a $322,231 loan...whoa. That's a difference of a 2 bedroom or a 3 bedroom. Don't overlook this advantage! Rates will rise.
The crystal ball is still milky, we have rumors of the double dip and just hoping that the banks are getting their act together, but the pent up anxiety of the American consumer is wearing thin and people are anxious to exhale and feel like life is normal again.
Watch here for easy to digest, factual information on real estate in Santa Cruz County.
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