Tag Archives: Property Value

The Great Recession and Attitudes Toward Home-Buying

Research Institute For Housing America:

Special Report

In the last few years, Americans have experienced the most severe housing-market downturn since the Great Depression. The national homeownership rate during this period has declined from a peak of 69 percent in 2004 to 66 percent presently. Unemployment is high, income growth is stagnant and home sales are low. Indeed, in this environment, many have questioned whether the American dream of homeownership has ended.

This report utilizes data from the University of Michigan’s Survey of Consumer Attitudes to examine consumer attitudes toward homeownership before, during and after the financial crisis. In particular, it measures the extent to which the recession has changed consumer sentiment toward home buying and selling.

There are a number of principal findings from the report which include:

• Despite high unemployment, slow economic growth and problems plaguing the economy, almost 80 percent of American households believe that now is a good time to buy a home.

• Positive sentiment is strong particularly among young, educated, white and Hispanic households, and is attributable to low house prices and low mortgage interest rates.

• The pattern of home-buying sentiment during the current recession looks similar to the pattern from past recessions. In fact, current positive home-buying sentiment is around its long-run average level.

• What is different about the current recession is that positive home-selling sentiment is at an historic low. Indeed, the sell-side of the market is dominated by deeply negative sentiment.

• Negative home-selling sentiment is strongly related to difficulty in finding buyers at desired sales prices, as well as the large overhang of mortgages past due or in foreclosure.

• Over the last two decades, the value of mortgage purchase originations has tracked home-selling sentiment more strongly than home-buying sentiment.

• Favorable sentiment and real activity in the housing and mortgage markets will be weighed down significantly until the overhang of troubled mortgages is cleared out.

• Over the next five quarters, positive home-buying sentiment is forecast to remain around current and long-run average levels. In contrast, positive home-selling sentiment is forecast to remain around current and historic-low levels. This suggests that selling sentiment and, hence, market activity, will remain sluggish in the near term.

Start building your memories,
as you turn your house into a home. 

As you might guess, this document is a compilation of information from our own efforts as REALTORS, as well as input from other REALTORS in our Coldwell Banker office.  I hope it has been of value to you.  Don’t hesitate to email us with any suggestions that will make this document better for you and your fellow homeowners!
Be sure to follow us on Facebook at www.Facebook.com/ElkGroveRealEstate.  For information about properties available for sale and for more information for buyers and sellers, please visit our website at www.ElkGroveRealEstate.com and don’t hesitate to give us a call or drop us an email with your questions.

WANT TO USE THIS ARTICLE IN YOUR E-ZINE OR WEB SITE? You can, as long as you include this complete blurb with it: Jack & Tracey Edwards, your real estate advocates, specialize in helping buyers and sellers in Elk Grove, CA,  and the greater Sacramento area.   Get information about available homes online at:  www.ElkGroveRealEstate.comOur mobile clients can find us at Mobile.ElkGroveRealEstate.com

 

Coldwell Banker’s 12 Month Home Maintenance Guide

Don’t let deferred maintenance take over your home. Do a little maintenance each month to help keep your new house like new.

January – Decluttering and Organizing
• Take down, clean and store holiday ornaments, decorations and
exterior lights.
• Put away all of those holiday gifts.
• While you are making room for your new gifts, take the opportunity
to go through your closet and get rid of things you haven’t used for
a year.
• Do end-of-the-year accounting and set-up a file folder for the current
year’s taxes.

February – Bathrooms
• Remove and replace any worn or crumbling caulk or grout in and
around bathtubs, sinks and toilets.
• Vacuum bathroom vent fan covers.
• Clean faucet aerators and shower heads.
• Make sure your toilets are not running and are in good working
order. If it’s within your budget, consider replacing your old toilets
with newer, more efficient models—and check with your local water
company to see if they offer rebates.

March – Kitchen
• Clean the range-hood filter in your kitchen.
• Remove all the items from your cupboards and pantry. Wipe shelves
clean, check expiration dates on all products and toss anything old.
• Clean your refrigerator and oven.
• Don’t forget to move your household clocks forward on March 11
during Daylight Saving Time and test your smoke detector and
carbon monoxide batteries.

April – Yards
• Check your sprinkler systems to make sure they are working properly.
• Cut back any trees or branches that are touching the siding or roof.
• Clear out debris from under decks or porches.
• Clear out gutters and downspouts.

May – Bedroom and Closets
• Thoroughly clean all bedding (bedspread, blankets, sheets, mattress
protector). If you have a duvet insert, have it professionally cleaned.
• Change bedding for summer months, if desired.
• Go through your drawers and closets and donate old items that you
haven’t worn for a while.
• Rotate and flip mattress, if needed.

June – Windows
• Wash the inside and outside of your windows (once the rainy season
has stopped).
• Inspect and wash window and door screens and repair any with holes.
• Make sure all doors and locks are working properly and are in good
condition.
• Clean tracks and lubricate hinges.
• Clean drapes, dust blinds and shutters.

July – Paint
• Inspect the exterior of your home. Scrape, caulk and paint any wood
surfaces that have peeled or weathered.
• Inspect interior walls and ceilings for cracks or bulges, and patch
and paint as necessary.
• Clean and seal decks.

August – Vents and Filters
• Check and clean dryer vent, air conditioner, stove hood and room
fans.
• Keep heating and cooling vents clean and free from furniture and
draperies.

September – Seals
• Check the weather stripping around your windows and doors and
make any necessary repairs in preparation for the winter months.
• Make sure your refrigerator door seal is tight.
• Caulk any drafts in your basement, such as around your dryer vent.
• Make sure your roof is good condition and not missing any shingles,
tiles or slates.

October – Fireplace and Chimney
• If you have a fireplace, make sure you have the chimney checked
out by a professional chimney cleaner before starting the first fire.
• Be sure your fireplace tools are in good working order.
• Pull out your nonflammable rug and place it in front of the
fireplace.
• Once you start building fires, clean ashes out regularly but ensure
ashes have completely cooled before discarding.

November – Upholstery and Carpeting
• Vacuum all sofas and pillows.
• Spot clean all upholstery and carpeting.
• For extra cleaning, consider hiring a professional service to clean
your upholstery and carpeting.
• Don’t forget to move your household clocks back on November 4
when Daylight Saving Time ends and test your smoke detector and
carbon monoxide batteries.

December – Miscellaneous
• Clean your garage and get rid of anything you don’t use.
• Neatly organize all of your tools, garden equipment and appliances.
• Wander the house with a screwdriver and tighten screws on
drawers, doors and furniture.
• Make a list of any small repairs that need to be made. If needed,
go to your local hardware store and purchase the necessary items
to make your repairs.

©2012 Coldwell Banker Real Estate LLC. All Rights Reserved. Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate LLC.
An Equal Opportunity Company. Equal Housing Opportunity.
Each Coldwell Banker Residential Brokerage Office Is Owned And Operated by NRT LLC.

Start building your memories,
as you turn your house into a home. 

As you might guess, this document is a compilation of information from our own efforts as REALTORS, as well as input from other REALTORS in our Coldwell Banker office.  I hope it has been of value to you.  Don’t hesitate to email us with any suggestions that will make this document better for you and your fellow home owners!
Be sure to follow us on Facebook at www.Facebook.com/ElkGroveRealEstate.  For information about properties available for sale and for more information for buyers and sellers, please visit our website at www.ElkGroveRealEstate.com and don’t hesitate to give us a call or drop us an email with your questions.

WANT TO USE THIS ARTICLE IN YOUR E-ZINE OR WEB SITE? You can, as long as you include this complete blurb with it: Jack & Tracey Edwards,  your real estate advocates, specialize in helping buyers and sellers in Elk Grove, CA  and the greater Sacramento area.   Get information about available homes online at:   www.ElkGroveRealEstate.com.

Have You Been Cheating On Your Taxes???

Before I get too far into this article, I want to remind you that I am a real estate professional, not a tax professional. When we work our way through the home buying process, buyers almost always ask about property taxes and Mello-Roos fees, and tax impounds. Those are all a part of the real estate transaction. I am doing this blog post to provide you some important information so that you will remember to hold on to your tax bill and to be ready next tax season to talk to your tax professional to make sure that you don’t find yourself in trouble for accidentally cheating on your taxes. If you need tax advise, please talk to your tax professional or your accountant.

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I would venture a guess that most homeowners have been accidentally cheating on their taxes, and getting away with it for years, but that will come to an end next year.

Yes, starting with 2012, taxpayers will no longer be able to illegally deduct their complete property tax bill from their taxes. It has not been legal to do so, but more often than not, taxpayers usually take the number from the 1098 form they receive from their lender and put that on their Schedule A when reporting the amount that they paid in property taxes.

Unfortunately, that number usually includes amounts for various miscellaneous fees, that are not property taxes, and they are not tax deductible expenses.

I think this is another unintended consequence of Prop 13. Adding non deductible fees to the tax bill because they could not increase the taxes. So, what kind of fees are we talking about? Generally anything that is not based on the property value, generally called ad valorem taxes.

Things like Mello-Roos fees, or lighting and landscape fees, or water and drainage studies, or college district fees, are not taxes, therefore they are not deductible even though they show up on your property tax bill.

These fees are also called Direct Levies. On my tax bill, the total each year is about $4,508 of which only $3,096 is property taxes and $1,412 are direct levy fees. That is not as bad as it will be for some taxpayers. Those who bought new homes in the past few years often have Direct Levies that are higher than their ad valorem taxes. If your house was built in the 1970s, then it may not be much of a big deal to you, but if it was built in 2010, you will be paying a little more in income taxes next year.

According to Franchise Tax Board, beginning with the 2012 tax bill (the one due in April 2013), they will require property owners to break down their property taxes into deductible and non-deductible portions. In fact, here is the link to the info so that you can read it yourself if you don’t believe me.

For some people, this will be a real challenge since they are not in the habit of putting the copy of their tax bill with their tax records. All too often, since the mortgage company is taking care of the taxes, they don’t even know where their copy of the tax bill is located when they sit down to do their taxes. For those of you in Sacramento or Placer Counties, you can go online and get your property tax info, if you know your assessors parcel number. In Sacramento, go online to www.eproptax.saccounty.net and in Placer County, go to www.placer.ca.gov/Departments/Tax/Taxes/TaxBillSearch.aspx.
In either case, taxpayers will need their parcel number in addition to the deductible/non-deductible breakdown for their 2012 state income tax filing. If you need help in finding the information, don’t hesitate to contact your real estate professionals at www.ElkGroveRealEstate.com
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Start building your memories,
as you turn your house into a home. 

As you might guess, this document is a compilation of information from our own efforts as REALTORS, as well as input from other REALTORS in our Coldwell Banker office.  I hope it has been of value to you.  Don’t hesitate to email us with any suggestions that will make this document better for you and your fellow home owners!
Be sure to follow us on Facebook at  www.Facebook.com/ElkGroveRealEstate.  For information about properties available for sale and for more information for buyers and sellers, please visit our website at www.ElkGroveRealEstate.com and don’t hesitate to give us a call or drop us an email with your questions.

Make sure to click the Comment box below and share this article with your friends as well.

Coldwell Banker Realty Check for November 2011

Fortune Magazine and the Wall Street Journal: Time To Get Back Into Real Estate

Okay, I know many of us have been saying this for some time now, but when the news media starts saying it – well, I guess that makes people stand up and take notice. A number of recent articles in the national press are now saying that it might be the right time for consumers, who have largely been on the sidelines, to jump back into the housing market.

I understand why potential buyers, whether first-timers or move-up buyers, remain cautious given all the economic headwinds and bad news out there. Economic growth has been slow, the jobless rate too high, and don’t even get me started about the politics in Washington, the euro-zone debt problems and the challenges facing Greece.

But I often urge buyers to examine what I like to call your “personal economy.” That is, if you have a steady job, reasonable credit, and enough savings for a solid down payment, you might want to take a deep breath and think about taking the leap into the housing market while prices and interest rates are so low.

Read what two of the nation’s top business publications, Fortune magazine and The Wall Street Journal, are telling their readers:

“Forget stocks. Don’t bet on gold. After four years of plunging home prices, the most attractive asset class in America is housing.”

– “Real estate: It’s time to buy again,” Fortune Magazine article by Shawn Tully.

“Two key measures now suggest it’s an excellent time to buy a house, either to live in for the long-term or for investment income.”

– “It’s Time to Buy that House,” The Wall Street Journal article by Jack Hough.

Tully in the Fortune piece interviewed Mike Castleman, founder and CEO of Metrostudy, who has spent more than 30 years tracking data on the inventory of new homes in the United States. Each quarter, inspectors go through 45,000 subdivisions from California to Maryland. According to Fortune, inspectors examine 5 million lots and record whether they contain a house under construction or completed.

What has Castleman observed? The glut of new homes that the U.S. had a few years ago at the peak of the market has rapidly disappeared. Instead, he told Tully that he has seen a rapidly declining inventory that could force prices higher. In the 41 cities Metrostudy looked at, there are just 78,000 houses vacant and for sale, or under construction – less than a quarter of the 343,000 units at the height of the market in 2006 and less than the total a decade ago.

“The talking heads who are down on real estate will hate to hear this, but America needs to build a lot more houses,” Fortune quoted Castleman as saying. “And in most markets the price of new homes is fixin’ to rise, not fall.”

Metrostudy collects figures on the number of homes that are vacant and for sale in each city, and the number of months it takes to sell all them to determine whether individual markets have a surplus or a shortage of homes. “If we had anything like normal levels of buying, those houses would sell in 2½ months,” Castleman told Fortune. “We’d see an incredible shortage. And that’s where we’re heading.”

Fortune says that consumers may be confused by conflicting news reports on the housing market, and that could be impacting their confidence in buying a home. On one hand, housing affordability has never been better. But on the other hand, they continue to see housing starts falling and home prices still heading down in some markets.

Tully said economists Robert Shiller and Karl Case, authors of the S&P/Case-Shiller Home Price indices, have different views about where we are in the cycle. While Shiller remains pessimistic, Case is more optimistic that things are starting to turn around, telling Fortune that “the lack of new home building is a huge help that a lot of people are ignoring.”

In its analysis of the housing market, Fortune noted that it’s important to look at the economic fundamentals of home ownership to see where the market is headed. As home prices rose sharply over the past decade, Tully said the magazine warned that a bubble was forming due to the level of new construction and the cost of owning a home compared to renting one.

“Eventually reality set in, and prices plummeted,” Tully said. “Our current view focuses on those same fundamentals — only now they’re pointing in the opposite direction,” Fortune noted. “So let’s state it simply and forcibly: Housing is back.”

The Fortune article said what will drive the recovery of the housing market is a sharp drop in new home construction, as noted in the Metrostudy research, as well as a big drop in home prices. Home prices have fallen about 30% nationwide since 2006, Fortune said, and more than 50 percent in hardest hit markets. With unusually high affordability levels, the article noted, Americans will start returning to the market.

While no one can predict with certainty the future of home prices and sales volume, it is safe to say that a turnaround will eventually happen. Timing the market is very difficult because you will never know the absolute bottom until prices have started going back up again. My advice is to look closely at your own “personal economy” and talk with a professional Realtor to see if now might be a good time for you to take advantage of low prices and rates, and join others in taking the plunge into buying a home.

Thanks for Reading,

Kris Vogt, Coldwell Banker

Start building your memories,
as you turn your house into a home. 

As you might guess, this document is a compilation of information from our own efforts as REALTORS, as well as input from other REALTORS in our Coldwell Banker office.  I hope it has been of value to you.  Don’t hesitate to email us with any suggestions that will make this document better for you and your fellow home owners!
Be sure to follow us on Facebook at  www.Facebook.com/ElkGroveRealEstate.  For information about properties available for sale and for more information for buyers and sellers, please visit our website at www.ElkGroveRealEstate.com and don’t hesitate to give us a call or drop us an email with your questions.

Make sure to click the Comment box below and share this article with your friends as well.

October Market Update from Kris Vogt, Coldwell Banker

Hello,  

First let me apologize for being a bit late on our Real Estate Market Update this month. The good news is, I have very good reason to be late. There has been a lot of attention paid to the numbers released in mid-October and rather than just give you an information dump of the stats, I wanted to take the time to analyze the numbers with my team and make sure I gave you the appropriate details and opinion of what we’re seeing.

Most specifically, when the numbers were reported late last month, much of the media chose to take a top down view, focusing on the decline in sales and home prices. But, in most cases, what wasn’t factored into the equation was the over decline in inventory we are seeing market wide.

The fact is, inventory remains a major troubling spot for our market. Market wide, we are down to 4.2 months supply of inventory (that’s a 31% decline in inventory year over year) and yet sales, year over year market wide, saw a 16% increase. So while an initial look at the numbers may cause some concern, as you delve further into them, you really see some very positive trends coming from our market.

Market Commentary:

Again, this month, we saw some relatively big declines in sales month over month. The reasons for this are twofold:

  1. Seasonality–We typically see a rather large decline in home sales between August and September. This year we saw a 6% decline in sales between August and September versus last year’s 4% decline.
  2. Inventory–As I mentioned before, possibly the most important reason for this decline in sales is a decline in good, solid inventory. For the fifth straight month, we have seen a decline in inventory market wide. In fact, since April of this year, we have seen inventory levels drop by 12%. Year over year, the inventory levels have declined 21%.

Where are we seeing the biggest shifts in sales?

Overall, the big shift in sales have just been in the last month. In fact, year over year, across the board, we are seeing increases in sales across all markets with the entry-level market seeing the biggest rise at 23% year over year. The entry-level market seems to be receiving the biggest boost, thanks largely due to investors.

  • Market Wide: 2,535 (Sept. 11) vs. 2,700 (Aug. 11) = 6% decline
  • Market Wide: 2,535 (Sept. 11) vs. 2,186 (Sept. 10) = 16% increase
  • Entry Level*: 1,822 (Sept. 11) vs. 1,915 (Aug. 10) = 5% decline
  • Entry Level: 1,822 (Sept. 11) vs. 1,478 (Sept. 10) = 23% increase
  • Mid Level*: 642 (Sept. 11) vs. 703 (Aug. 11) = 9% decline
  • Mid Level: 642 (Sept. 11) vs.630 (Sept. 10) = 2% increase
  • Upper End*: 100 (Sept. 11) vs. 109 (Aug. 11) = 8% decline
  • Upper End: 100 (Sept. 11) vs. 99 (Sept. 10) = 1% increase

Let’s take a look at inventory numbers:

  • Market Wide: 10,554 (Sept. 11) vs. 11,118 (Aug. 11) = 5% decline
  • Market Wide: 10,554 (Sept. 11) vs. 13,440 (Sept. 10) = 21% decline
  • Entry Level: 6,965 (Sept. 11) vs. 7,481 (Aug. 11) = 11% decline
  • Entry Level: 6,965 (Sept. 11) vs. 8,705 (Sept. 10) = 23% decline
  • Mid Level: 2,743 (Sept. 11) vs. 2,809 (Aug. 11) = 2% decline
  • Mid Level: 2,743 (Sept. 11) vs.3,666 (Sept. 10) = 25% decline
  • Upper End: 922 (Sept. 11) vs. 903 (Aug. 11) = 2% increase
  • Upper End: 922 (Sept. 11) vs. 1,187 (Sept. 10) = 22% decline

Interestingly, inventory levels are the lowest they’ve been in more than two years.

As I visit our offices, one common thread I hear is, “I have so many great, qualified buyers, but it’s really hard finding them a good home.” Essentially what we have is a skewed view at supply and demand because the demand for a specific type of home is out there. It’s just unfortunate because the inventory for that particular type of home is dwindling. While the buyers are there, the good, solid inventory hasn’t been.

One major shift we have seen in the last month is a sudden decline in buyer interest in the luxury end. Whereas in my last two editions of Real Estate Market Update, we were seeing a solid luxury buying trend, suddenly, in September, we saw that interest decline, with sales dropping 8% and inventory levels rising 2% (month over month).

What is this doing to prices?

Buyers are far more active right now and that coupled with tight inventories is helping to firm up pricing while getting serious buyers to be a little more realistic when making offers–especially in the entry-level arena. Properties priced correctly and that show well are getting a tremendous amount of traffic as well as multiple offers.

Additionally, we are finally seeing many banks starting to process short sales in a more streamlined fashion, allowing us quicker short sale approvals.

Here is a look at sold median home prices.

  • Market Wide: $180,000 (Sept. 11) vs. $185,000 (Aug. 11) = 3% decline
  • Market Wide: $180,000 (Sept. 11) vs. $204,000 (Sept. 10) = 12% decline
  • Entry Level: $146,000 (Sept. 11) vs. $150,000 (Aug. 11) = 3% decline
  • Entry Level: $146,000 (Sept. 11) vs. $158,000 (Sept. 10) = 8% decline
  • Mid Level: $312,000 (Sept. 11) vs. $323,000 (Aug. 11) = 3% decline
  • Mid Level: $312,000 (Sept. 11) vs. $315,000 (Sept. 10) = 1% decline
  • Upper End: $615,000 (Sept. 11) vs. $600,000 (Aug. 11) = 3% increase
  • Upper End: $615,000 (Sept. 11) vs. $619,000 (Sept. 10) = 1% decline

The final piece I’d like to point out this month is that of accepted offers, which I think showcases several interesting trends (take particular note of what we have seen year over year both in the entry-level as well as in the upper end):

  • Market Wide: 2,673 (Sept. 11) vs. 2,822 (Aug. 11) = 5% decline
  • Market Wide: 2,673 (Sept. 11) vs. 2,124 (Sept. 10) = 26% increase
  • Entry Level: 1,986 (Sept. 11) vs. 2,068 (Aug. 11) = 4% decline
  • Entry Level: 1,986 (Sept. 11) vs. 1,430 (Sept. 10) = 39% increase
  • Mid Level: 608 (Sept. 11) vs. 685 (Aug. 11) = 11% decline
  • Mid Level: 608 (Sept. 11) vs. 588 (Sept. 10) = 3% increase
  • Upper End: 95 (Sept. 11) vs. 102 (Aug. 11) = 7% decline
  • Upper End: 95 (Sept. 11) vs. 136 (Sept. 10) = 30% decline

My final food for thought this month is that the market is making some interesting headway. While at first glance, it seems the numbers may be disappointing, when you further analyze them, they share a very different story.

We are seeing significant bright spots (and potentially trends) in the entry-level market while the interest in the upper end has had its fair share of challenges over the last several weeks.

We’ll continue to monitor these numbers over the next few weeks and look forward to sharing with you the October numbers in just a few weeks. I say this often times in my office meeting visits, but I think it’s a good way to end this month’s report:

When the market has changed, no one is going to run out in the middle of the street and yell, “The market has changed!” It’s only upon reflection that we can see that a real trend has been established. Until then, we’ll continue to regularly monitor these stats until we begin to see that strong, solid recovery.

That’s it for now. Make it a great month.

Sincerely, Kris

Start building your memories,
as you turn your house into a home. 

As you might guess, this document is a compilation of information from our own efforts as REALTORS, as well as input from other REALTORS in our Coldwell Banker office.  I hope it has been of value to you.  Don’t hesitate to email us with any suggestions that will make this document better for you and your fellow home owners!
Be sure to follow us on Facebook at  www.Facebook.com/ElkGroveRealEstate.  For information about properties available for sale and for more information for buyers and sellers, please visit our website at www.ElkGroveRealEstate.com and don’t hesitate to give us a call or drop us an email with your questions.

Make sure to click the Comment box below and share this article with your friends as well.