Friday, October 17, 2014

Property Taxes & Household Income Growth

Well, today we're going to look at a couple of items that should be of interest to both homeowners and those considering becoming homeowners. Usually, this type of info pops up on the pages of the Wall Street Journal, or on a financial website. But, as both subjects are important to anyone owning or thinking of owning a home, we're giving the latest, "right off the presses" as it were, on both the rate of household income increases and property taxes.  The first goes toward how much house someone can purchase and maintain, while the latter gives some detailed information about what your property taxes on that home really are, in comparison to other states, and why.

Household income growth in the Bay Area is the highest rate of growth in the nation. 
The Bay Area leads the nation in median household income growth according to new data from the U.S. Census Bureau, the latest indicator of our region’s remarkable economic strength.
Photo of hundred-dollar billsThe median household income rose an estimated 5.1 percent from 2012 to 2013 in the San Francisco metropolitan area, which includes San Francisco, Alameda, Contra Costa, Marin, and San Mateo counties. The San Francisco region outpaced both the U.S. (0.6 percent) and California (1.7 percent) in terms of annual income growth.
Households in the San Francisco metro area earned a median income of $79,624 in 2013, the second-highest in the U.S. behind the Washington, D.C. region. The Census Bureau estimates last year’s U.S. median household income at $52,250 and California’s at $60,190.
Median income is the midpoint in the range of household incomes, from the very wealthy to those with no income.
The income data was released as part of the Census Bureau’s annual American Community Survey, which measures income and poverty levels across the country. San Francisco has placed second in median income among the nation’s 25 most-populous metro areas for at least three years.
Household income is a barometer of purchasing power and is closely tied with real estate activity. The latest Census Bureau results suggest that the Bay Area’s real estate markets will continue to strengthen along with the regional economy. Sounds like a pretty good reason to buy a house and live here in the area, particularly in Marin County, which, within the greater Bay Area, has in its own right, one of the highest income growth rates in the state.

As for property taxes, the following may surprise you, especially given the cost of housing here.  The National Association of Home Builders (NAHB) this week released a report on state real estate taxes across the nation, citing data from the U.S. Census Bureau’s latest American Community Survey. Living in high-tax California, we would absolutely expect to see the Golden State way up on the list of largest real estate taxes paid.
And sure enough, California had the 11th highest annual median real estate tax bill among the 50 states and Washington, D.C. in 2013 — $3,015.
Northeast states tended to have the highest tax bills, with New Jersey No. 1 in the nation at $7,331. The lowest taxes paid were in the South — Alabamans (they ranked 51st) paid $532. So California was solidly on the side of big-tax states.
But wait. Number-crunchers at the NAHB went on to note that it would also be useful to compare real estate tax rates. Most counties sets their own real estate tax rates, but dividing taxes paid statewide by the aggregate value of homes within a state reveals an effective real estate tax rate for each state.
By that calculation, the picture changes dramatically.
California, it turns out, has an effective tax rate of 0.77 percent, owing to its expensive real estate. It ranked 34th among the states.
To be sure, New Jersey is still No. 1 when it comes to real estate tax rates, at 2.09 percent, and Alabama was only one step above the bottom, at 0.39 percent. (Hawaii’s rate was 0.29 percent.) But California, in fact, sits quite comfortably among the low-tax-rate states.
Of course, this may be scant consolation for Bay Area homeowners who still pay hefty taxes for their high-value homes, but it’s worth noting a more accurate source of the pain.
For a look at the complete state rankings, including median home values, click here
Finally, if you want to get an estimate of what your home is worth, or are thinking of buying, give us a call. We can provide you with the latest up-to-the-minute information. Peter: (415) 279-6466; Jane: (415) 531-4091.

Friday, October 10, 2014

Unemployment Drops Again--Are You Ready to Sell?

Well, once again, a strong reason for those of you considering listing your homes for sale has popped up. It's the unemployment rate. Obviously, when folks are not working, the last thing they're thinking of is buying a home. However, conversely, when they are working, it's a lot more likely they'd be thinking of buying a new home!

Well, here's the latest good news on that front!  As in July, every Bay Area county posted a lower unemployment rate that the California average of 7.4 percent on a nonseasonally adjusted basis, which was unchanged from the preceding month. Bay Area counties were the only ones in the state to boast unemployment rates of less than 5 percent, which many economists believe indicates that a market has reached full employment.
Marin County continued to have the state’s lowest percentage of unemployed workers, at 4.2 percent. This is by far the lowest level since the recession began in late 2007.

The EDD’s recent Labor Day briefing says that California has regained all of the 1.33 million jobs it lost during the Great Recession in June of this year. July marked the 53rd consecutive month of statewide employment growth, and California now has about 43,000 more nonagricultural jobs than it did at its prerecession peak in July 2007. This means that there is a greater pool of potential buyers for your home.  Obviously, not all of these employed folks will be buyers. But, for those who are, it's a perfect opportunity to get your house ready to sell, and then get it on the market!

Not sure how to proceed or what may need doing to have your home in perfect shape for that potential buyer? That's OK. We've been handling exactly such situations for many years, and we'd be happy to assist you ready your home so that you get the most money in the shortest possible amount of time! Call us! We'd be happy to help: Peter: (415) 279-6466; Jane: (415) 531-4091.

Friday, September 26, 2014

Interest Rates--Up or Not? What's Really Happening

Well, as many of you have likely heard over and over for the past year and change, interest rates in general--and mortgage rates in particular--were going to be heading up. Some experts predicted that by the end of 2014 mortgage rates would be at 5%, quite a bit higher than where they were last year. As you know, every time these rates climb, the cost to you of buying a home rises with them.  The house may cost a specific amount, but every penny you have to borrow to complete the purchase costs you more.  It's kind of like going to the grocery store--given today's supermarkets, that's a quaint notion--and on day 1 finding steak costs $8/pound; then returning for more steak on day 10 and finding the price has now gone up to $10/pound. Kind of spoils your apatite. Well, as the following information indicates, rates haven't gone up that far--in some cases had begun to do so and then dropped back down.
Good news for homebuyers: Interest rates for home loans continue to linger at historically low levels, extending a rare opportunity to get a mortgage at rates that can shave hundreds of thousands of dollars off payments over the life of the loan.Illustration of a house made of hundred-dollar bills
Bankers and economists last year had forecast mortgage rates to climb higher in 2014 and top 5 percent by the end of the year. But the reverse happened, and rates today on a 30-year mortgage are nearly one-half of a percentage point lower than where they stood a year earlier.
Today’s low rates give another chance at home ownership to Bay Area residents who were outbid on properties during the frenzied real estate scene of 2013 and early 2014.
Since then, the number of all-cash investors has dropped significantly and the supply of homes on the market has gradually expanded — both signaling new opportunities, especially for first-time buyers.
Freddie Mac reported late last week that 30-year fixed-rate mortgages averaged 4.12 percent, down from 4.57 percent last year at this time, and 15-year fixed-rate mortgages averaged 3.26 percent, down from 3.59 percent one year ago.
Surprisingly, mortgage rates aren’t too much higher than when they fell to a record low of 3.31 percent in November 2012. By comparison, mortgage rates averaged 7 to 9 percent in the 1990s and 10 percent in the ’80s.
Last year, Pacific Union explained how rising mortgage rates can add hundreds of thousands of dollars to total house payments over the life of a loan.
Even with increasing home prices, buyers who take advantage of today’s low mortgage rates can still find a bargain. But it’s a wise move to act fast. How long these low rates will linger is a question that even bankers and economists cannot reliably answer.
So, where will the mortgage rates go from here? Well, it is a safe bet that at some point, they will again begin to rise and possibly hit the 5% level.  The question is when and how quickly.  As to decisions about buying or refinancing your home, the current wisdom is to not waste too much time in getting your loan approved. Better to lock in today's rates than to wait for next year and find you cost yourself hundreds if not thousands of Dollars every month on your payments.
Need help in valuing your home or understanding what both the real estate and mortgage markets are doing? Call us! We can handle all of your needs from valuations of your home to finding your next one to getting connected with the best experts in the mortgage market. Peter: (415) 279-6466; Jane: (415) 531-4091.

Friday, September 19, 2014

Boomers Staying Put

It seems to be almost an article of faith that as the Boomer age group (those born after the end of World War II through 1964) are deciding more and more to move and down size as they age.  The logic put forth to explain this always seems to be quite logical.  There's just one thing--it may not be nearly as true as the idea's proponents would have you believe.

“There’s a perception, particularly in many media reports, that this massive generation born between 1946 and 1964 is altering its housing consumption,” said Fannie Mae researcher Patrick Simmons, in a recent interview in the Chicago Tribune.
“It’s true that they’re becoming empty nesters in droves,” Simmons said. “But by one measure, the proportion of boomers who live in single-family homes actually increased between 2006 and 2012.”
He noted that 90 percent of baby boomers in a recent AARP survey said they want to stay in their current home as long as possible.
Simmons is director of strategic planning for Fannie Mae’s economic group, and he said some boomers may be staying put because of the recent housing crisis, when the value of their single-family homes dropped by an average of 13 percent.
Some boomers could still be underwater and are waiting to recoup more on their house before they sell, he said. Others may be holding on to their home because they were able to get a record-low mortgage rate in recent years and they know borrowing won’t be any cheaper if they do decide to sell.
“Eventually, boomers will slow down with age and have the same physical frailties that their predecessors had,” he said. “My sense is that it’s not going to be a major shift, something we see in the numbers in a year. It will likely unfold over a decade or more.”
So, if you're a Boomer and someone tells you that you should move on--that "everyone in your age group" is doing so, don't feel obliged to pay them any attention.
However, if you'd like to update your knowledge of the local real estate market, or check out the value of your home, give us a call.  We'd be happy to advise.  Peter: (415) 279-6466; Jane: (415) 531-4091.

Thursday, September 18, 2014

Sales Slow in August; Marin Judged Best County in State

Two items of note today. First, the rate of sales in the area for the month of August. Every year August seems to slow down as fewer sales are closed. There are a number of reasons for this, and they seem to be consistent from year to year. However, every year someone takes note of it and tries to imply that the market is slowing down overall.  That is NOT the case.

Lest you think this is just a Marin phenomenon, it covers the whole Bay Area. 

A slim supply of available homes, high prices, and abnormalities in the mortgage market combined to constrict sales volume in August across the nine-county Bay Area, according to a recent CoreLogic DataQuick report.down_arrow
The company’s data shows that 7,578 Bay Area homes and condominiums sold in August, a year-over-year decline of 12 percent. Sales volume was down in every Bay Area county last month, ranging from 20.3 percent in San Francisco to 1.3 percent in San Mateo.
On an annual basis, the Bay Area median sales price rose just about as much as volume decreased: 12.4 percent, according to CoreLogic DataQuick. All local counties showed year-over-year price increases, from 19.1 percent in Alameda to 1.6 percent in Napa.
The median sales price across the nine-county region reached $607,000 in August, about $60,000 shy of its summer 2007 peak as measured by the company.
An additional reason for this yearly slowdown that the folks at DataQuick don't mention is the effects of summer vacations.  August seems to always be the month to suffer most from people being away on vacation. Usually, this effect disappears with the advent of the post-Labor Day return to normalcy in many parts of local lifestyles. Folks finish vacations; kids go back to school; everyone's back to business and they can all start to refocus on the major things in life--like buying and selling homes.


Those of us who live here in Marin know this fact, and have probably done so for as long as they have lived here. It's a great place to live! Good schools, great natural beauty, great median income level; excellent shopping--the list goes on and on.  This is why people in the business of telling the world where the best places to live like looking at Marin.

A recent study by online real estate portal Movoto underscores what we here in the Bay Area have always believed: Our region is the best place to live in California.
Using a combination of statistics – including low unemployment and poverty levels and high income and median home sales price – Movoto ranked Marin County as the state’s best. Beyond the numbers, the company pointed to Marin’s lifestyle perks, including its spectacular scenery and varied cultural offerings.
What more can I say?  Enjoy!

And if you have any questions on your home--or anything else about real estate here, call us! Peter: (415) 279-6466; Jane: (415) 531-4091.

Friday, September 12, 2014

Some Healthy News For Your Benefit

Those of you who follow this blog are quite familiar with the info I try to provide about various aspects of the real estate market. Occasionally, I go a bit farther afield when I see something interesting that I wish to share. Today is one of these 'field trips'. I hope you enjoy and benefit.
Eating healthy and exercising regularly are known to reduce the risk of a heart attack — we all know this. But here’s a heart-smart tip you probably never heard of before: People who know and trust their neighbors are less likely to suffer heart attacks.Heart
It’s true. A first-of-its-kind study, published last month in the Journal of Epidemiology and Community Health, found that the more social connections you have in your neighborhood, the less likely you are to have a heart attack.
The study, conducted by psychologists at University of Michigan, assessed the social connectedness of more than 5,000 adults in urban, suburban, and rural areas over a four-year period.
The participants were asked to rate their neighbors’ trustworthiness, reliability and friendliness, which is collectively known as neighborhood cohesion, using a seven-point scale. During the span of the study period, 148 of the participants had heart attacks, but those who gave the highest ratings for neighborhood cohesion were found to be less likely to have a heart attack.
“Each unit of increase in neighborhood social cohesion was associated with a 17 percent reduced risk of heart attacks,” the study’s lead author, Eric Kim, told a writer for The Atlantic magazine. “If you compare the people who had the most versus the least neighborhood social cohesion, they had a 67 percent reduced risk of heart attack.”
Past studies have focused on how negative factors in a neighborhood — such as density of fast-food outlets, violence, noise, and poor air quality — can impact health. For example, University of Pennsylvania researchers found that abandoned buildings in an area could lead to isolation and hamper social relationships and feelings of mutual trust, which also could lead to poor physical health of nearby residents.
And while you're sharing your good feelings with your neighbors, if there's anything you need to know about your housing or the market in general, please feel free to call at any time. We'd be pleased to help. Peter: (415) 279-6466; Jane: (415) 531-4091.

Friday, September 05, 2014

Pacific Union Again in Inc. Magazine 5000!

In business, there are a few lists that all companies strive to be named to every year. One of these is put out by Inc. Magazine, and lists the 5000 fastest growing firms in the nation. 
Pacific Union is happy to share the news that our firm has again been named to the Inc. 5000 list, which ranks the 5,000  fastest-growing companies in the U.S. based on revenue growth from 2010 to 2013. This marks the second consecutive year that Pacific Union has been included in the list, and our firm moved up in the overall rankings substantially.Inc5000
Pacific Union closed 2013 with $5.5 billion in sales volume, for a three-year growth rate of 141 percent. And for the second year in a row, Pacific Union was the only full-service Bay Area-based real estate brokerage to make the list.
In terms of overall three-year growth ranking, Pacific Union moved up the Inc. 5000 list nearly 800 spots from last year, to 2,663.
Between 2010 and 2013, we added 179 of Northern California’s top real estate professionals. Pacific Union closed 2013 with 646 real estate professionals, the most of any California-based firm in our sector named to the list.
The industry accolade is one of several that Pacific Union has earned thus far in 2014. In June, The Wall Street Journal and REAL Trends ranked seven of our real estate professionals among the top 250 in the U.S. for closed 2013 sales volume. And this past spring, REAL Trends 500 Report named our firm No. 3 in the country by average home sales price.
So, if there's a question which firm to use to help you buy or sell your property at any time, there can be ONLY one answer: PACIFIC UNION! It is this quality that is the chief reason that The Richmonds are affiliated with Pacific Union. We operate only to the highest standards in the purchase and sale of real estate, and so does PU. Cal us for any assistance you may need! We'll be glad to help, and you'll be glad you called! Peter: (415) 279-6466; Jane: (415) 531-4091.

Pricing Your Home: It's Not An Exact Science

When it comes time to sell your home, the most important question often is: what should I price it at? Well, even with the help of an expert--your Realtor--it's not an exact science!
Pricing a home for sale is an inexact science — some owners might call it a crapshoot — and determining the right asking price involves both psychological and practical reasons, according to a recent article in The Wall Street Journal.Dollar sign
An asking price is primarily a negotiating tactic, Michael Seiler, professor of real estate and finance at The College of William & Mary, told The Wall Street Journal. “When you set a list price, you’re sending a signal to the market.”
Mike McCann, a real estate professional in Philadelphia, said in the article that most sellers overestimate the value of their home, and some real estate professionals may start with a  price that’s too high to avoid hard feelings or to get the seller’s business. Or, they may price it too low for a quick sale.
Setting the right asking price depends on a variety of practical factors, such as the condition of the property and recent sales activity in the area, but pricing research offers a few tips:
Precise prices suggest you are inflexible. Setting an exact asking price — say, $795,475 — could lead buyers to believe that the price is not negotiable. A round number such as $800,000 can indicate that you’re willing to consider other offers.
A few dollars can make a big difference. Pricing a property at $499,900 rather than $500,000 can subconsciously influence a buyer. It seems to defy logic, but researchers say $499,900 is perceived as a huge bargain compared with a home priced just $100 more.
A low starting price can backfire. A lower asking price may net a flurry of offers, but it may not lead to a higher sales price. “It creates a havoc that doesn’t serve anyone well,” Rebecca Walter, a real estate professional in Portland, Ore., told The Wall Street Journal.
Pricing strategies only go so far, however. Ultimately, determining a home’s real value of requires knowledge of the local real estate market and access to recent sales data. That’s where the assistance of a local real estate professional can be most valuable.
Real estate professionals typically compile neighborhood sales data to prepare a comparative market analysis, which provides a sensible starting point for price negotiations. 
Seiler, the real estate professor mentioned in the article, said that without comparable sales data, “an appraiser will have no clue what a property is worth, and a buyer wouldn’t know either.”
One thing you can do to increase the likelihood that you've priced correctly is to hire a professional Realtor. Pricing a home to your best advantage is one of the things we know from years of experience. So, thinking of selling--or just interested in the value of your home? Give us a call! As always, we'd be happy to assist. Peter: (415) 279-6466; Jane: (415) 531-4091.