California

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The Countdown Begins - 17.5% of CA New Home Tax Credit left...

July 2nd, 2009

Basically, if you're not closing escrow in the next two weeks on your never been lived in home - don't plan on getting that $10,000 CA new home tax credit. What's going to be interesting is to see if the sales in new developments, that spiked in May, slow down as the news goes out that the tax credit is gone.

Tax Credit for New Home Purchase [Franchise Tax Board]
CA Tax Credit more than 65% gone in 3 months [SF Home Blog]
$10,000 Reasons to Buy a New Development this Year [SF Home Blog]

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If Case-Shiller March Figures were accurate...

July 2nd, 2009

I know, I've been on this rant before ... but every year or so, I just have to vent again. Mostly because I get tired of hearing one of my very good friends and/or highly intelligent financial advisors my clients are working with quote the index ... ‘According to the Case-Schiller index prices are down over 40% in SF.' Case-Schiller, oft touted as being the most unbiased, thereby accurate measurement of home prices is an index that started 21 years ago. There are no data points prior to 1988. It uses the year 2000 as it's base-line and tracks the same single family homes that have re-sold. According to the Case-Shiller index for March 2009 home prices in San Francisco are down 46.1% from their peak in 2006. Which means, if you are going to rely on those numbers literally, according to the Case-Schiller index, a Single Family Home that sold for $1,000,000 in San Francisco in 2006, was as of March 2009 selling for $539,000. Now go find that sale! Case-Shiller March 2009 Press Release [Standard & Poor's] Here goes my Pet Peeve again the Case-Shiller Index [SFHomeBlog]

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Prices over the Years: 2 Bedroom Tenancies-in-Common

July 2nd, 2009

2 Bedroom Tenancies-in-Common

Click on graph
The periods in which both the lowest and highest number of sales occurred in each area are noted. When the number of sales is very low, statistical analysis is generally not meaningful.
The Median Sales Price is that price at which half the properties sold for more and half for less. It may be affected by "unusual" events in any particular period or by changes in buying trends, such as a market shift to lower-end home sales (such as is happening today - to a large degree due to the current difficulty in financing the purchase of more expensive homes, and for houses, due to the significant increase in foreclosure sales in some neighborhoods).

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Voter Approved High Speed Rail - It's coming to SF

July 2nd, 2009

South of Market Residents have a new reason to lose their cars - as well as yet another major construction project planned for the hood. Just like the Bay Bridge retrofit, this one promises to be delayed, long, debated and probably pretty cool once it's complete.

As real estate agents, we're being advised to take this into consideration when selling properties in the surrounding area...

On November 5, 2008, California voters approved Proposition 1A authorizing funding of a high-speed rail transportation system linking various cities in the State. Both the location of the proposed rail system and the possible effect that the construction and operation of that system will have on residential areas has been the subject of concern and debate. Some news reports have indicated that, depending upon the location of the high-speed rail system, it may have a negative effect on some properties in the San Francisco Bay Area. It is anticipated that construction is
likely to begin as early as 2011.

Precisely what impact, if any, the proposed high-speed rail transportation system will have on any given property is unknown either before, during or after construction. The construction and/or use of the transportation system may affect people differently. Real estate agents are not experts in this area and buyers are advised to satisfy themselves with regard to this issue during their inspection contingency period.

www.CAHighSpeedRail.ca.gov [California High Speed Rail Authority]

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Market Update as of June 5th 2009

July 2nd, 2009

I read a lot of real estate blogs. I am always curious to see what other people are writing about and I can't resist adding my 2 cents if I have an opinion on topic. I swear off a few of those blogs every couple of months when the comments and editorial get particularly vicious towards real estate agents, as they often do - then get sucked back in when there's an interesting story I can't resist.

What I've noticed is that both on the blogs, and in the press, the overall ‘mood' seems to be that we've hit a bottom of sorts. I wrote a post back in March titled ‘Signs of a Real Estate Rebound' about a CBS report on the multiple offers that were happening in the low end of the market, and you would have thought the title was ‘OMG YOU'RE ABOUT TO LOSE OUT ON YOUR ONLY OPPPORTUNITY TO BUY EVER'. Nowadays the venom when people are suggesting we are at a bottom is far less vicious although that opinion is definitely still present. You will always get the side who vehemently insists there is more pain to go through, and there are certainly numerous statistical analysis, and intelligently written articles to make that case. My personal opinion is that prices and the economy as a whole are far more emotional in nature, and that consumer confidence, more than most anything determines whether the market is going either up or down. Right now confidence is up, I'm not certain it still will be this fall, but at the moment we seem to be headed in the right direction - and that is reflected both in the press, and in the subtle changes we've been seeing in real estate sales as a whole. I would say on record, I'm not really a bull or a bear, and that as always buying real estate is a personal decision. What is going to be the right choice for one is not going to be for another. That being said let's take a look at some of the most recent numbers. Hotsheet Statistics for the past 2 weeks: New Listings: 339 (down from 370 from the 2-week period ending May 1st, a not unusual reduction as spring moves into summer)
Back on Market: 78 - 20% of all properties going contingent sale or pending sale are coming back on market
Price Reductions: 252 - the number of price reductions is still very high - for every property that sold, 1.6 properties reduced their prices
Went Contingent Sale: 198 (basically unchanged from 1 month ago, but a significant increase over previous months)
Went Pending Sale: 193 (basically unchanged from 1 month ago, but a significant increase over previous months)
Sold: 157 (basically unchanged from 1 month ago, but a significant increase over previous months)
Sold REO: 13 - 8.5% of home sales were REO sales (Note: there are currently 95 REO sales contingent or pending sale.)
Expired/Withdrawn: 163 (a bit lower than one month ago)

The overview, as of today June 5th 2009, is that market activity has continued to get stronger over the past month, continuing a trend that began in March/April. Median prices of those properties that have accepted offers have increased, which suggests that values are stabilizing. The number of properties that have accepted offers but not yet closed are up in every category and inventory levels of Active properties (available for purchase) is down, slightly. This is all compared to the data collected as of May 1st 2009.

Signs of a Real Estate Recovery [SFHomeBlog] Current Trends in San Francisco Real Estate 3.2.09 [SFHomeBlog] Signs Of Real Estate Rebound In San Francisco [CBS5.com]

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http://www.gregorygarver.com

Dept of Real Estate issues fraud warning on Loan Mod's

July 2nd, 2009

The DRE recently issued a fraud warning alerting consumers about loan modification scams and informing consumers of what they can do to protect themselves. The alert is available in both English and Spanish. Last July, the DRE had fewer than 10 complaints involving loan modification companies; today the department has 750 pending investigations. In addition, since last October, the DRE has filed more than 200 Desist and Refrain Orders. A list of the companies and persons the DRE has filed an action against can be viewed at http://www.dre.ca.gov/cons_drs.asp.

It is worth noting that not all firms who collect advance fees for loan modification services do so illegally, the DRE said. In general, only licensed real estate brokers and attorneys operating within the scope of their license may collect advance fees. Real estate brokers must have their advance fee agreement reviewed by the DRE prior to its use to ensure it is compliant with real estate law.

C.A.R. also has learned of what appears to be a loan modification assistance program and lead generator, from a company using the legislative bill number 3648, that looks as if it's a government entity, complete with a misleading seal closely resembling a governmental seal but that is not affiliated with the government. C.A.R. cautions all members to be on the alert for schemes seeking funds from REALTORS® or consumers with no value, or that may be misleading or unlawful. More info

California Department of Real Estate - Fraud Alert [DRE.Ca.Gov]

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Daly's Draconian Renters Relief Package Passes - Mayor veto coming

July 2nd, 2009

It's basically on Beven Dufty and Sophie Maxwell who does not have to vote for now...to make sure it does not end up in a veto-proof vote. I have no problem with certain aspects of rent control (although there's a decent argument that it hurts more than it helps) - but this measure weights all the burden, including the burden of proof on one end of the population so completely I cannot believe it's even legal. Sane people do not just think that a tenant who opts to work half time - or ends up with half their income coming from under the table is not going to apply for a reduction in rent and get it - with no recourse on the property owners part...uh, where's the sanity in that?

Oh yeah, it's a Daly proposal what was I thinking...calling for sanity.

Rent Plan Promises Relief - to Lawyers [SF Buisness Times]
Proposed Laws for SF Renters + Mayor Weighs In [SFHomeBlog]
Beware of Supervisors Bearing Gifts - Jeff Woo [SFGate]

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Board to Vote on Daly's Renter's Relief Tuesday June 23rd

July 2nd, 2009

Supervisors Will Vote on Renters Economic Relief Package June 23. Vote Delayed Pending FPPC Decision on Maxwell Conflict. The Government Audit & Oversight Committee approved the Renters Economic Relief Package forward at its hearing on May 28 and forwarded it to the Board for a full vote on June 23. The committee adopted some amendments to the package, most significantly limiting the rent increase suspension to periods when the unemployment rate dips below 5%. The full Board vote was delayed to June 23, so that the Fair Political Practices Commission can issue a written decision as to whether or not Sup. Sophie Maxwell-a landlord who usually votes pro-tenant-can vote. Maxwell sought to be recused but there is some dispute as to whther or not she has a conflict of interest under state laws. If the legislation is to survive a Newsom veto, then Maxwell must be able to vote (and then vote for it). Maxwell is typically the 7th vote and Sup. Bevan Dufty would also haveto support it to reach the 8 votes needed to override a Mayoral veto.

The package of amendments to the city's rent control law consists of three parts:

•Suspend any rent increases which will cause a tenant's rent to exceed 33% of their income. This provision expands the law's existing provision which enables the Rent Board to suspend rent increases based on "tenant hardship" by expanding when a tenant can apply for hardship and defining hardship as any rent increase which would cause a tenant's rent to exceed 33% of their gross income.

•Expand the rights of tenants to add roommates to help pay the rent. This provision will let tenants bring in roommates so that the rent will be more affordable. The number of roommates would be limited by San Francisco Housing Code provisions which establish occupancy limits based on the size and number of bedrooms in an apartment. Currently landlords are able to limit the number of tenants to levels below what the law allows.

•Limit the amount of "banked" rent increases which can be imposed in any one year. Current law allows landlords, to "bank" annual rent increases and impose them all at once at a later date, often resulting in rent increases of 20% or more. This provision will limit these banked rent increases to no more than 8% in any one year.

Supervisors will vote on Renters Economic Relief Package [SF Tenants Union]
Proposed Laws for SF Renters + Mayor Weighs In [SFHomeBlog]
Beware of Supervisors Bearing Gifts - Jeff Woo [SFGate]

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New Ban on Permanently Installed Wooden Utility Ladders

July 2nd, 2009

Wooden fixed utility ladders are now illegal in San Francisco. These ladders were commonly added to buildings constructed in the City during the 1930's and earlier. They were never part of a building's fire escape system; but they often were installed as a ‘convenience' to building owners who wanted roof access without bringing a portable ladder to the site.

These ladders are now prohibited on residential buildings and must be removed with a proper building permit (click here for ordinance text).

General Contractors Inspection Service [GCIS] Ordinance Amending the SF Housing Code [SFGov.org]

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2009/2010 Property Tax Appeals Close August 28th 2009

July 2nd, 2009

If you believe your home may be eligible for a reduction in property taxes based upon a decline in value, there are two ways to go about it. An informal review by the Assessor's office and/or a formal appeal with Assessment Appeals Board. The formal appeal, can be a complicated and time consuming but may be worth the effort for the savings in property taxes. Typically, the Assessor's "valuation date" is January 1, 2009 and any sales comparables submitted must have closed before March 31, 2009.

Very generally (it all depends on the neighborhood and other details), homes purchased 2006 through mid-2008 probably have the best case for property tax reduction. The less affluent areas of the city typically peaked in value around 2006 and the more affluent in 2007 - 2008. Declines from peak value generally run in the 10% to 30% range, with the less affluent southern neighborhoods being hit with the largest reductions.

If your appeal is successful, the reduction in assessed value only applies to the 7/1/09 - 6/30/10 tax year. A decline-in-market appeal is only good for 1 year, the year for which it is filed. You have to refile every subsequent year.

Informal Review
The Assessor's Office is now accepting, through 8/28/09, "Requests For Informal Review Of Assessed Value" for tax year 2009/2010. This applies only to single-family dwellings, residential condominiums, townhouses, live-work lofts and cooperative units. The SF Assessor's website offers information regarding Decline-in-Value Informal Reviews:
SF Assessor's Office Forms and FAQs

Formal Appeal
The next open formal appeal filing period for San Francisco will be July 2, 2009 to September 15, 2009 - to appeal the 2009/2010 assessed value of your property. A formal appeal can be made for multi-unit and commercial properties, as well as for houses, condos & cooperative units.These 2 websites offer details regarding the filing of a formal appeal - the instructional videos are highly recommended for those who wish to proceed:
SF Assessment Appeals Board
Informational Videos on Property Tax Appeals

Warning on Scams
There are a number of property-tax-appeal service companies, who have been sending out their solicitations on stationery that suggests a government agency affiliation. SF Assessor-Recorder Phil Ting has stated the following:"We've received reports from dozens of taxpayers who have received a letter from companies offering to facilitate the property tax reassessment for $179 [or more]. This is unnecessary and deceptive. Taxpayers can fill out a simple, one-page application for a review of their property in my office, free of charge, starting on April 15. There is no need to pay for this service." Many of the solicitations received by San Francisco homeowners may be illegal. More on this subject:
Home Reassessment Scams a

Apply for Informal Review of Assessed Value for 2009-2010 Tax Year [SFGov.org]
Peak Value vs Current SF Value Feb 2009 [SFHomeBlog]
Revised: Peak Values vs. Current SF Prices - Single Family Homes [SFHomeBlog]

http://www.gregorygarver.com

The latest information release from DataQuick shows that home prices have begun to increase in the recent months.

Home prices in Orange County are likely to fall 19.1% more - the 15^th biggest drop out of 100 metropolitan areas in the U.S.A. When the dust settles, O.C. prices will have tumbled 49.7% from the peak of the market to the bottom of the 3.5-year-old slump. If true, that means that a median-priced home here will sell for $311,000 to $325,000 at the bottom of the slump.

As for other SoCal metro areas, prices are projected to drop14.3% in the Inland Empire, 11.3% in Los Angeles County and 8.7% in San Diego County.

The city with the largest drop in home prices was New York City which is predicted to fall 40.6% more.

Nationwide, the forecast predicted that U.S. home prices may drop 14% more. Home prices in the United States will fall 41.7% from their peak.