Can Everybody Take a Deep Breath? Please?

The venerable NYT made it official yesterday – this is the worst real estate market since the Great Flood. Sales are spiraling down, prices are cratering nationwide. Can another recession dip be far off? Yahoo echoes the vibe today, and if you really want to get a look at the dark inner workings of the American mind, scroll down to the accompanying comments. All 45,000 of them, as of this writing. Yeck!

We don’t know where they get their numbers, but let’s assume that they’re accurate for the U.S. as a whole. But wait! Last time we looked, real estate was still a local business. This is not Tampa or Las Vegas, after all. Or is it?

We checked the MLS, our private site where brokers share all listing and sales data, and compared Marin sales year on year for July. Included are all condo and single-family home sales above $50k, to avoid getting rental data. Results below.

Compared: July ’09 and July ’10

We’ve actually sold a few more homes, for about nine percent more than July a year ago. While these numbers are far lower than the high flying days of 2006, say, we think they reflect a more or less normal market. Healthy, even. And in July this year, 25% sold in the first 30 days they were listed, as compared to 15% in July of ’09, indicating stronger demand coupled with more realistic pricing.

And remember, buyers rushed to close escrow before june 30 to take advantage of the Federal Tax Credit, so homes that normally would have closed in July were squeezed into June.

If you want specific information about your home or neighborhood, give me a shout. And don’t believe everything you see in the news.

After shopping for a home, tired buyers often make poor mortgage choices

New research suggests buyers applying for mortgage loans immediately after house hunting often make poor choices—sometimes selecting the first loan option presented, regardless of the terms.

After a Day of House Hunting

• The research, conducted by two George Washington University instructors, found “cognitive resource depletion” to be a determining factor in why some borrowers make poor choices in selecting a home loan.  Cognitive resource depletion suggests that willpower is a limited resource that can be exhausted.  The study suggests the depletion of willpower may be one reason borrowers choose loan products such as pick-a-pay mortgages, interest-only loans, loans with balloon payments, and mortgages with negative amortization.

• To test the theory of cognitive resource depletion, two test groups were created.  One was presented with an online-shopping simulation, the other was not.  The group completing the simulation then was tasked with selecting a set of mortgage alternatives.  The second test group only was asked to select a mortgage product.  Almost half of those participating in the house-shopping exercise selected a higher-risk mortgage, while less than one in five of those who did not participate in the experience selected a higher-risk mortgage.

• Although most sales contracts require buyers secure financing within a designated time period, the authors of the study recommend even financially savvy borrowers institute a waiting period of at least two days after selecting a home to purchase before applying for a home loan.  To address this, the authors and most real estate professionals advise home buyers apply for a home loan and receive pre-approval prior to searching for a house.

We offer only the best mortgage advice for one simple reason: if you are happy you will tell our story best. Call me right away to get started 302.7787. Cheers! Jack

How to buy a foreclosure in Marin

Many buyers, especially first-timers, hope to purchase a foreclosed property at a bargain price, according to CNN Money.  While purchasing a foreclosed home can be a wise choice for some buyers, it is important that buyers understand the differences in buying at different stages of foreclosure and be prepared to take on the challenges typically associated with each.

• There are three basic stages of foreclosure in California: Pre-foreclosure, trustee’s sale, and repossession, often called an REO or real estate owned by the bank.
• Pre-foreclosure homes are in the foreclosure process, but have not yet been auctioned.  Owners of pre-foreclosed homes often try to sell the properties because they are “underwater,” meaning they owe more on the mortgage than the home currently is worth.  Many homeowners attempt to sell via short sale, where the lender must agree to accept less than the amount owed on the mortgage.  Buying at this stage of foreclosure often is a complicated and slow process. However, buyers of pre-foreclosed properties often are given the opportunity to inspect the home prior to purchasing, whereas this is not always the case when buying at other stages of foreclosures.
• The second basic stage of foreclosure is the public auction at a trustee’s or foreclosure sale.  Homes in this stage often are well priced, but also come with challenges to buy.  These homes may not be available for inspection and buyers may later discover the property needs numerous repairs.  As a result, many of the homes at auction are purchased by investors and contractors who have experience working with homes needing numerous repairs, or taken back as REO by the foreclosing lenders.
• If a home does not sell to a third party at the trustee’s auction, the bank takes the property–the final stage of the foreclosure process. Although homes in this stage typically do not offer buyers the best prices, buyers generally can perform a thorough inspection of the property prior to closing.

People we know who have been on the Marin County Courthouse steps for years tell us that many “newbies” have jumped in, and prices are being pushed up to the point where bargains are scarce now. To get the full story, Call Me or please click here.

$18,000 IN COMBINED HOMEBUYER TAX CREDITS FOR A LIMITED TIME

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. In Marin County, to take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010. Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied. The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)). California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)). Other terms and restrictions apply to both tax credits.

For more information, call me at 415.302.7787 right away. Cheers!

Governor set to sign bill to benefit first-time home buyers

UPDATE: Today Gov. Schwarzenegger signed into law AB 183, a bill which would provide $200 million for homebuyer tax credits.  Especially helpful for Marin County first-time home buyers who will qualify for the full $10,000 tax credit.

The positive impact of the federal home buyer tax credit is clear. Nearly 40 percent of first-time home buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered, according to research conducted last year by the California Association of Realtors.

AB 183, passed at the request of the Governor, is designed to help stimulate the economy and create jobs.  It allocates $100 million for qualified first time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who closes escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or who closes escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, based on a firm contract executed on or before December 31, 2010, will be able to take the allowed tax credit. The credit is equal to the lesser of 5% of the purchase price or $10,000, taken in equal installments over three consecutive years. Under AB 183 purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state).

Not to be confused with the Federal tax credit, which expires April 30 and is limited to purchases under $800,000. Questions? Call me 415.302.7787 right now.

Marin Kids Applying to College? Send to Admissions via YouTube.

Guest blog by Guru of New Tufts goes YouTube; invites prospective students to submit video applications Posted: 15 Mar 2010 12:24 PM PDT We’ve all heard the sorry stories of the drunken student whose photo-tagged Facebook picture gets discovered by either a prospective employer or an admissions officer at the college of her dreams. And these aren’t just snopes-worthy urban legends. According to a NACAC press release on the report, one-fourth of colleges surveyed indicated that they used a Web search or social networking technology to locate information about prospective students. Which is why what topnotch school Tufts did is not only incredibly refreshing but game-changing as well. For the first time this year, Tufts University in Medford, Mass., invited aspiring students to submit short YouTube videos to supplement their applications. According to a report in the New York Times, about 1,000 of the 15,000 applicants did so. The results range from gutsy (convincing the school that admitting a proficient Raver is a swell idea) to adorable (Paulo Nutini’s “New Shoes” meet Hillary) to heartwrenchingly authentic and uber-sincere. Some of the videos have developed a YouTube following. Amelia Downs’ Math Dance video, which has almost 57,000 views, blends “two of my favorite things: being a nerd and dancing.” In the perky video,she performs a bar graph, a scatter plot, a pie chart, and a sine and cosine graph: Hello Tufts Admission person! This movie shows me performing my math dances! The dances shown are: Volume of a solid of revolution (y-axis) Line graph Scatter plot Box and whisker plot Pie graph.. Click here to browse the sample videos. (No word yet on which of these brave and creative videographers made the cut. And they still have to complete the traditional essay.)

Don’t miss this: Take $6,500 to $8,000 off your Federal income tax

First time homebuyer? Trading up? Uncle Sam is here to help. Seriously.

You can reduce your taxes by buying a house this year. But you better hurry. First-time homebuyers who qualify can subtract up to $8,000 from their income tax, and homeowners who buy another residence can cut their taxes by up to $6,500. The Worker, Homeownership, and Business Assistance Act of 2009 has established these tax credits, which have been extended until June 30, 2010.

Generally, if you’ve lived in and owned your current residence for at least five consecutive years and you choose to buy another residence you can take up to $6,500 off your taxes. Likewise, if you haven’t owned your own home before you can deduct as much as $8,000. And if you don’t owe that much in taxes, the government will send you a check for the difference. But you need to hurry, because in order to qualify, you must be in contract by April 30, and close no later than June 30. And, yes, you can use the credit as part of your downpayment. There are maximum limits on the price of the homes, and other qualifying criteria, but most Marin homes sold today will qualify.

Call me at 415.302.7787 or mail me at jmclaughlin@fhallen.com for more information, or Go here. Cheers! Jack

Has Your Marin House Value Gone Up or Down? POLL Results

Last week we asked you,  our blog and Twitter folk, whether you thought your house value is going up or down. Below is a chart of your responses, along with your comments.

Your Comments:

“It is holding its own, with perhaps a drop. Doesn’t matter to me, because I’m not moving any time soon. Kentfield will continue to be strong, due to location and schools. It’s part of the Gold Coast and will maintain its value over time.”	virtualtruth
“Live in Forest Knolls; I can recall only five houses sold in canyon area. I don’t believe many are putting their house on the market with an uncertain future looms.”	Anonymous
“Owned the house since 1989… in my opinion value peaked in 2006….”	cg
“AND I don’t want to know!”	pc
“Just guessing here…”	altjl

Thanks to all of you who took a few minutes to complete our POLL and leave your comments. To some degree, we are all just guessing. This morning I was startled to learn that nearly 40% of the homes and condos on the Marin market today are in escrow, with accepted offers. Now that the holidays are over, maybe we will begin to see a bit more inventory – the buyers are certainly out there looking. If you are thinking of selling, call me now because this may be as good as it gets this year. Buyers? As we work out of the stormy season we will begin to see lots more homes to choose from. Now’s the time to start searching, so you can make an informed decision when the right place comes up. What are you thinking?

At-risk FHA Borrowers in Marin Will Receive Early Relief Assistance

Homeowners with loans insured by the Federal Housing Administration (FHA), including those in Marin County, experiencing financial hardship now are eligible for loss mitigation assistance prior to defaulting on their mortgage, the Dept. of Housing and Urban Development announced Friday. Previously, borrowers with FHA-insured loans were not eligible for such assistance until after they had missed payments.

FHA also issued guidance to FHA-approved loan servicers on how to assist FHA borrowers who are facing “imminent default,” defined as an FHA borrower who is current or less than 30 days past due on the mortgage obligation and is experiencing a significant reduction in income or some other hardship that will prevent him or her from making the next required payment on the mortgage during the month that it is due. Unfortunately, in this economic climate, that includes more and more of us in Marin County.

To become eligible, borrowers must be able to document the cause of the imminent default which may include, but is not limited to, a reduction in, or loss of, income that was supporting the mortgage; or a change in household financial circumstances.

Loan servicers must document the basis for its determination that a payment default is imminent and retain all documentation used to reach its conclusion. The servicer’s documentation must also include information on the borrower’s financial condition. Not yet known is how this will affect the creditworthiness of the borrower. Call me for further information, 415.302.7787. Cheers!

News From Haiti

Message received from Devil’s Gulch Ranch in Nicasio, Saturday PM.

As some of you might know, the entire Pasternak family went down to Haiti 2 weeks ago, to continue the Farmer to Farmer volunteer work Myriam is involved in which helps locals learn how to raise rabbits. Haiti Project

The family ‘vacation’ turned into a disaster, when the earthquake hit. The family is safe, I just spoke to Mark, and he and the girls are in transit back to SFO this afternoon. Myriam decided to stay on longer to help. KRON will be meeting them at the airport around 7:30 to conduct a live interview. KRON  also did a phone interview while Mark was in the Dominican Republic which you can hear at: KRON There has been multiple news coverage:  KRON News and Marin IJ

Below is an email received from Mark yesterday. Thanks to all who called out of concern.

Friends and Family,

The girls and I arrived last night in Santo Domingo, Dominican Republic by C-130 US Coast Guard evacuation plane from Port a Prince. Myriam is staying there a few days to help a bit more.

The devastation is not to be believed. When the earthquake struck, we were just arriving at Rivera Foid, a compound run by Haitian sisters with a school and clinic, approx 30 miles south of Port a Prince. The 3 story school building completely collapsed, killing many, if not most of the 300-400 school children. We were pulling children from the rubble most of the night, doing triage and helping as much as possible with the limited resources available. The girls were troopers. We returned to Signeau, a hospital, school and farm, in the town of Leo Gane, in the country, 30 miles or so further south the next day around noon. We were able to get a brief email message out that evening from a nearby UN compound where they advised us to go to the Port a Prince airport ASAP and evacuate. The girls and I did that Thursday AM, but Myriam stayed. After dropping us off at the airport, she went on to a village in the mountains about an hour North called Gran Boulage with 2 sisters in their jeep with their driver. Her plan is to leave within a day or 2.

Most multistory buildings within 50-100 mile radius of Port a Prince have been destroyed; UN headquarters, national government buildings, international embassies, the national cell phone headquarters, schools, hospitals. The sea port is completely unusable, so they cannot unload cargo ships with aid supplies. The airport is very small, and cannot accommodate many planes at a time. It also has limited infrastructure for unloading cargo. Already planes cannot refuel at Port a Prince, limiting their payload capacity because they must fly there with enough fuel to fly out. Supplies of water, food and fuel in Port a Prince will shortly run out creating the very real possibility of widespread chaos in a city of 1-2 million people. There is very little heavy equipment of the kind that will be necessary to excavate many of the destroyed buildings, so that process will take many weeks, creating huge sanitation risks.

Haiti will be needing as much help as it can get.

The girls and I should be home Saturday evening.

Mark