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Journal

Democratic Platform – Housing

hilla

From the Democratic Platform:

https://www.demconvention.com/platform/

We must make sure that everyone has a fair shot at homeownership. We will keep the housing market robust and inclusive by supporting more first-time homebuyers and putting more Americans into the financial position to become sustainable homeowners; preserving the 30-year fixed rate mortgage; modernizing credit scoring; clarifying lending rules; expanding access to housing counseling; defending and strengthening the Fair Housing Act; and ensuring that regulators have the clear direction, resources, and authority to enforce those rules effectively.

We will prevent predatory lending by defending the Consumer Financial Protection Bureau (CFPB). These steps are especially important because over the next decade most new households will be formed by families in communities of color, which typically have less generational wealth and fewer resources to put towards a down payment.

All three of the housing planks are vague, and who really knows what any of the three would do once in office.  But I think I nailed it on their photos!

http://www.bubbleinfo.com/2016/07/20/republican-platform-housing/

http://www.bubbleinfo.com/2016/07/23/libertarian-platform-housing/

Posted by on Jul 26, 2016 in Jim's Take on the Market, Local Government, The Future | 0 comments

More Granny Flats!

ggg

We know there are millions of people thinking about downsizing, due to costs, maintenance, and their health. But the real estate market provides few quality turn-key solutions.  It makes sense to encourage homeowners to add a granny flat!  From the latimes.com:

To help ease California’s housing crisis, Gov. Jerry Brown and state lawmakers are turning to people’s backyards.

Multiple bills with the endorsement of Brown are moving through the Legislature to make it easier for homeowners to build small units on their properties, whether in their garages, as additions to existing homes or as new, freestanding structures.

Los Angeles Mayor Eric Garcetti and other supporters hope the relaxed rules will spur backyard home building to combat a housing shortage that, by one estimate, leaves the state annually more than 100,000 new units behind what’s needed to keep pace with soaring home prices.

“These bills enhance homeowners’ ability to provide needed housing,” Garcetti and Los Angeles City Councilman Gil Cedillo wrote in a letter supporting measures from Assemblyman Richard Bloom (D-Santa Monica) and Sen. Bob Wieckowski (D-Fremont).

Together, the Bloom and Wieckowski bills would force cities to permit the backyard homes — also known as “secondary units” or “granny flats” — eliminate cities’ ability to require additional parking spaces for units near transit, and limit fees charged to connect to local water and sewer systems.

Homeowners such as Rochelle D. Ventura could stand to benefit if the bills pass.  The retiree, who once worked in city government, said she spent around $5,000 several years ago in an attempt to build a secondary unit in her Beverly Grove backyard.

But after the design was submitted to the city, Ventura said she was denied: The driveway that led to the backyard wasn’t wide enough, and a portion of it was covered.

“I couldn’t do it, and that is a shame,” said Ventura, 78. “I have a beautiful granddaughter who was going to live there.”

Read full article here:

http://www.latimes.com/politics/la-fi-small-houses-solution-20160725-snap-story.html

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We have seen several pre-built alternatives – here is another that sells for around $70,000 plus shipping and installation:

small
http://www.contemporist.com/2016/07/25/this-small-house-is-filled-with-design-ideas-to-maximize-living/

Posted by on Jul 26, 2016 in Boomer Liquidations, Boomers, Jim's Take on the Market, Market Buzz, The Future | 1 comment

San Diego Case-Shiller, May 2016

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Sellers keep asking for more, and the trend is in their favor!  The Case-Shiller Index is a lagging indicator – today’s reading is measuring the spring kick, a blended number from March, April and May sales.

The good news should continue though. Look back at last year’s July – the month-over-month gain was a whopping +1.1%! With the low rates, we might hit that again this year.

Home-price appreciation continues throughout much of the United States, David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, said in a statement.

“Overall, housing is doing quite well. In addition to strong prices, sales of existing homes reached the highest monthly level since 2007 as construction of new homes showed continuing gains,” he said.

Here are the recent San Diego NSA changes:

Month
CSI-SD
M-o-M chg
Y-o-Y chg
December
203.45
-0.3%
+5.0%
January ’15
204.67
+0.6%
+5.0%
February
205.94
+0.6%
+4.6%
March
208.52
+1.2%
+4.6%
April
209.78
+0.6%
+4.5%
May
211.57
+0.9%
+4.8%
June
212.09
+0.3%
+4.6%
July
214.53
+1.1%
+5.4%
August
215.22
+0.3%
+5.9%
September
216.45
+0.6%
+6.6%
October
215.64
-0.3%
+6.2%
November
216.47
+0.3%
+6.0%
December
217.86
+0.7%
+7.2%
January ’16
218.77
+0.4%
+6.9%
February
219.06
+0.1%
+6.4%
March
221.35
+1.0%
+6.2%
April
223.05
+0.8%
+6.3%
May
225.06
+0.9%
+6.4%

fin

Posted by on Jul 26, 2016 in Jim's Take on the Market, Same-House Sales | 0 comments

White is Hot

white1

From our friends at the wsj.com:

In choosing the color of the year, the team at Benjamin Moore found that Mascarpone was too creamy and Ice Mist too frigid. In the end, Simply White OC-177 was just the right white for 2016.

Never before had the New Jersey-based paint manufacturer chosen white as color of the year. (Last year’s winner was Guilford Green.) But in real estate right now, white is hot, with home builders, developers and designers going for a white-on-white look in everything from reclaimed barns to posh penthouses.

“Designers would be paralyzed without white,” says Andrea Magno, who heads the color team at Benjamin Moore, which offers more than 250 shades of white.

In Manhattan, Toll Brothers City Living has built its priciest property to date: a $29.5 million penthouse at 1110 Park Avenue. In the living room, white sofas and rugs play against a backdrop of muted gray walls. White marble surrounds the fireplace. The designer on the project, Cheryl Eisen, president of Interior Marketing Group, says she chose colors that wouldn’t distract from the space’s classic architecture. It is also unlikely to look dated and makes it easy for the buyer to imagine living there, she adds.

“It’s ideal for staging because it isn’t overly taste-specific, and creates a calm, clean, elegant feeling, which resonates with a broad buyer demographic,” Ms. Eisen says. She chose more dramatic neutrals to add personality, like in the den, which is painted greige, a mix of gray and beige.

Interior designer Geoffrey Bradfield says white radiates luxury, sophistication, and serenity. “I, for one, could never be depressed in a white room,” he says. For a project on New York’s Upper East Side, Mr. Bradfield chose white limestone flooring, white walls and Ionic columns and predominantly white upholstered furniture. The home, called White Hall, has a bright white painted stucco exterior.

The color works for practical reasons when clients are big art collectors, he adds. “White is one of the most incredible foils for art.”

Not everyone embraces the stark aesthetic. “That look may not be received as well in our other markets,” says Kira Sterling of Toll Brothers’ marketing division. She says the company would never use that look for a home in Bucks County, Pa., for example, an area renowned for its farms, wineries and covered bridges. “Perhaps too sterile,” she says. “It’s specific to geography and price point.”

Read full article here:

http://www.wsj.com/articles/white-is-the-new-black-for-luxury-real-estate-1469111043

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Posted by on Jul 25, 2016 in Jim's Take on the Market, Remodel Projects | 3 comments

Inventory Watch

2016-07-23 13.13.42

The new pendings have been a little weaker this month than in recent years.  But we should have a couple of good weeks here, due to low rates, and price reductions – this is when sellers start thinking it’s time to make a move.

New NSDCC Pendings – Four Weekly Counts in July:

2014: 270

2015: 256

2016: 231

You can still get in before school starts!  We closed a sale on Friday that was VA-financed through a mortgage broker in just 34 days!

Look out for Chase though.  Recently they have caused delays of two-weeks, three weeks, and even closed late on a 70-day escrow!

Click on the ‘Read More’ link below for the NSDCC active-inventory data:

Read More

Posted by on Jul 25, 2016 in Inventory, Jim's Take on the Market | 0 comments

Libertarian Platform – Housing

gj

The Libertarian Party has the best chance ever to get more than their usual 1% of the vote in November.  Gary Johnson is looking like the middle-of-the-road candidate too, and here’s how he could win:

http://www.denverpost.com/2016/07/21/actually-libertarian-gary-johnson-could-win-the-presidency/

If no candidate wins an absolute majority in the Electoral College, the election is decided by the House of Representatives. Thus, if Johnson were to win, say, Colorado while Trump and Clinton split all other electoral votes 50-50, the House would pick the winner. Given that Trump and Clinton are the most unpopular candidates in recent history, a divided House might compromise by selecting Johnson, a former two-term governor of New Mexico.

If you do not like Trump and Clinton, you needn’t accept them. Johnson is a legitimate option, having recently garnered 13 percent in a CNN poll. At 15 percent, he would be in the debates. Then anything is possible.

From the Libertarian Party Platform about housing:

2.1 – As respect for property rights is fundamental to maintaining a free and prosperous society, it follows that the freedom to contract to obtain, retain, profit from, manage, or dispose of one’s property must also be upheld. Libertarians would free property owners from government restrictions on their rights to control and enjoy their property, as long as their choices do not harm or infringe on the rights of others. Eminent domain, civil asset forfeiture, governmental limits on profits, governmental production mandates, and governmental controls on prices of goods and services (including wages, rents, and interest) are abridgements of such fundamental rights. For voluntary dealings among private entities, parties should be free to choose with whom they trade and set whatever trade terms are mutually agreeable.

While a Libertarian president might mean bad news for Fannie/Freddie and other government-supported entities, there is one thing Johnson could do that would set the real estate market on fire.

He wants to abolish the IRS, and replace it with a federal consumption tax.  Because it would be the House of Representatives that gets Johnson into office, nobody would give him much chance of a second term – so he would have to work fast!

If it took him a year to abolish the IRS, it would give those long-time owners of rental properties the next three years to liquidate the portfolio without paying the federal 20% capital-gains tax – the main reason those owners don’t sell now.

A flood of supply – or at least more than a trickle – would help to calibrate the market, stimulate the economy, and provide opportunities for buyers to purchase well-located beach properties!

It would probably get screwed up by politicians who insist on a compromise in the consumption tax that would then penalize those sellers, but given the alternatives, it’s worth considering!

Posted by on Jul 23, 2016 in Jim's Take on the Market, Local Government | 3 comments

55+ Survey

move

Finally some real evidence on how the Bank of Mom and Dad has been influencing the real estate market – see the bold print:

http://www.freddiemac.com/finance/report/20160608_55ers_significant_impact_housing_market.html

With 55+ homeowners controlling almost two-thirds or $8 trillion of the nation’s home equity*, the housing decisions they make in the coming years will significantly reshape America’s housing market.

The first Freddie Mac 55+ Survey focuses on this 55+ generation of 67 million people because of the impact they are having, and will continue to have, on affordable housing inventories, home prices, and the transition of America’s housing stock from one generation to the next.

The overwhelming message in this first survey is that homeownership works and that 55+ers are confident as they head into retirement or are already there. Some of the key findings include the following.

Baby Boomer Homeowners Expect a Financially Comfortable Retirement

  • Overall, 76 percent of homeowners over the age of 55 are confident they will have a financially comfortable retirement, according to the Freddie Mac 55+ Survey. Majorities in every demographic group surveyed share this confidence to varying degrees: African-Americans (77 percent), Hispanics (64 percent), Asians (80 percent), homeowners who are currently working (74 percent), as well as homeowners earning less than $30,000 (55 percent).
  • The Freddie Mac 55+ Survey also shows consistently strong links between homeownership and a person’s satisfaction with their home, community and financial situation. Specifically, 59 percent of homeowners are “very satisfied” with their communities, 64 percent with their current home, and 54 percent with their quality of life.
  • A majority also believe homeownership makes financial sense for most Americans.  Specifically, 96 percent feel homeownership makes financial sense for people who are either married with children or between 35-49 years of age. Smaller majorities said homeownership makes sense for people over 55 (87 percent), married couples without children (85 percent), single people with children (79 percent), and single people without children (53 percent).
  • In terms of helping others become homeowners, nearly 25 percent of the respondents say they have already helped someone financially with a down payment.

Why Baby Boomers Drive the Housing Market for Millennials

  • The Freddie Mac 55+ Survey also identified a number of other opportunities and challenges for the housing industry that will stem from the decisions Baby Boomers and other older homeowners make over the next few years.
  • For example, 63 percent of the 55+ homeowners surveyed say they prefer to age in place if they had complete control over it. However, nearly 40 percent indicate they would prefer to move at least one more time. This suggests nearly 25 million homeowners over age 55 may move again. When asked when they expect to move next, 13 percent think they will move within four years.
  • Of those homeowners who would consider moving, 12 percent believe their next home will be more expensive than their current one, while 37 percent believe it will be in the same price range, and half believe it will be less expensive. At the same time, 23 percent of homeowners say they would have to make major renovations in order to age in place.
  • 55+ers cite cost and convenience as the top factors influencing whether to move and where to live: affordability of living in a particular community (46%); having the amenities needed to live there for many years after I retire (44%); Less maintenance (41%); proximity to other family members (31%); having a place where I was no longer responsible for caring for the property (e.g. yard work, snow removal) (30%); being in a walkable community (28%); having abundant services for adults my age (25%); access to public transportation (17%); warmer climate (19%); having a place that is smaller than my current home (e.g. downsizing) (19%).

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Posted by on Jul 22, 2016 in Boomer Liquidations, Boomers, Jim's Take on the Market, Market Conditions, One-Story | 1 comment