Down-Sizing

by | Dec 11, 2012 | Boomers, Sellers Waiting For Comeback, Thinking of Buying?, Thinking of Selling?, Tips, Advice & Links | 10 comments

The McMansion generation is in downsizing mode.

Millions of Americans age 50 and older are looking around their spacious homes and are deciding they don’t need all that room anymore. The kids are gone, maybe a spouse, too. And they could really use the money from a sale to bulk up their retirement funds.

But downsizing isn’t always simple, painless—or even all that beneficial financially. With the real-estate market still fragile, many baby boomers are getting a lot less than they expected for the old homestead. All too often, they have little cash left over after buying a new place, and their monthly expenses don’t fall as much as they thought—or may even rise instead.

Then there’s the emotional pain of scaling back. Many baby boomers are finding they lack the stomach or stamina to dismantle their lives. They can’t bear to sort through or part with all those boxes in the basement, or argue with the adult children who want to keep the house where they grew up. Sometimes they downsize only to find they miss their old lifestyle and stuff.

“Don’t make any broad assumptions that downsizing is going to save your retirement,” cautions Jeff Bogue, a certified financial planner in Wells, Maine. “It may help your finances, but I’ve seen plenty of people who find that it doesn’t pan out as they had thought.”

It’s a challenge lots of boomers are going to face. All told, more than 40% of Americans ages 50 to 64 plan to move within the next five years or so, according to the Demand Institute, which is jointly operated by the Conference Board and Nielsen Co.

Dominated by “the many baby boomers who delayed retirement during the recession,” prospective downsizers exceed would-be “upsizers” by nearly 3 to 1, says Louise Keely, chief research officer at the Demand Institute.

Here’s a look at some of the problems you might face as you scale down—and how to overcome them.

(more…)

Net Decrease of Californians

by | Dec 11, 2012 | Local Flavor | 2 comments

About 100,000 more people moved away from California in 2011 than those who relocated to the Golden State, according to the latest report from the U.S. Census Bureau.

The trend can be explained, in part, in monetary terms. Even in an economic boom, the cost of living in California has increased, prompting people to move out, and, in recent years, unemployment in the state has skyrocketed.

So, where are these former Californians going?

The Census Bureau calculates that the most popular destination is Texas (58,992), a state that is luring California companies. That’s followed by Arizona (49,635), Nevada (40,114), Washington (38,421) and Oregon (34,214).

Although in smaller numbers, people are still relocating to the Golden State.

Texans make up the largest number of translates to California with 37,387 people, according to the report. That is followed by people from Washington (36,481), Nevada (36,159), Arizona (35,650), and New York (25,269).

Economic experts are optimistic that California’s economy has started picking up steam, and may reverse the movement out of the state.

“We expect over the next couple of years that we will add jobs,” said Robert Kleinhenz, chief economist with the Los Angeles County Economic Development Corporation. “This year, we’ve added jobs in California at a faster pace than in the nation as a whole. So, we are moving in right direction. As that happens, we’ll see the migration numbers turn around some.”

A major facet of the state’s economy, the agriculture industry has been affected by fewer undocumented immigrants crossing the border, deterred from coming to the U.S. because of high unemployment and a developing middle class in Mexico.

According to the Census Bureau, 468,428 people have moved to California from other states and 269,772 have moved to the state from other countries.

http://www.nbclosangeles.com/news/local/Californias-Population-Moving-Out-182914961.html

View more videos at: http://nbclosangeles.com.

SD Median Price Up 17%

by | Dec 10, 2012 | Sales and Price Check

The most recent local housing statistics show median prices of resale properties continue to climb, according to the Greater San Diego Association of Realtors (SDAR).

The median price of single-family (detached) homes in San Diego County was $408,000 in November 2012, up 2 percent from the previous month and 17 percent higher than November 2011. November resales of condos and townhomes (attached properties) were up 6 percent from October and 27 percent higher than November 2011. Year to date, median prices of all existing properties are up 6 percent compared to 2011.

The number of sales of existing homes dropped in November as inventory remains at historic lows. Single-family home sales were down 13 percent from the previous month, and condos/townhomes sales were down 5 percent. However, the number of resales rose compared to a year ago, and year to date they are up 12 percent compared to 2011.

“The competition for resale homes is fierce because inventories are so low,” SDAR Board President Donna Sanfilippo said. “We’re seeing multiple offers on homes across the county and median prices are being driven up as a result. Sellers should take heart. The local real estate market simply needs more homeowners to take advantage of this extraordinary chance to move up to the home they’ve always wanted.”

SDAR’s housing statistics are compiled from the Multiple Listing Service (MLS).

Fannie/Freddie Over-Paying Execs

by | Dec 10, 2012 | Mortgage News, Unbelieveable | 2 comments

Hat tip to SM for sending this in from yahoo:

If President Obama gets his way, a lot of folks at Fannie Mae and Freddie Mac will be paying higher taxes in 2013 — and not just the senior executives.

More than 2,000 non-executive senior managers at the two firms were paid over $200,000 in 2011, The Wall Street Journal reports, citing a new report from the Federal Housing Finance Agency. Among those senior managers, the median pay of vice presidents was $388,000 while 1,650 “directors” had a median income of $205,300.

Other findings in the report:

  • The top 90 executives at the two firms took home a combined $92 million last year.
  • The median pay for 23 executive vice presidents was $1.7 million.
  • The median pay for 62 senior vice presidents was $723,500.

Always controversial, Fannie and Freddie have become lighting rods since being taken into conservatorship in 2008 and this report is (almost) guaranteed to generate a strong response.

On the one hand, taxpayers are still nearly $140 billion in the hole for the multiphase rescue of the two firms so reports of big salaries is sure to outrage many. On the other hand, the government has become increasingly reliant on the GSEs since the housing bubble burst: Fannie and Freddie guarantee $5 trillion in outstanding mortgages and fund about two-thirds of new mortgage loans, The WSJ reports.

Given their checkered past, working at Fannie and Freddie doesn’t have the same cache as it did during their “glory years” in the 1990s and early 2000s. But the firms have a critical, ongoing role in the housing market which means that the government (and taxpayers) have an incentive to ensure the firms are staffed with qualified employees.

“It is absolutely critical that our compensation is competitive in the market,” a Fannie spokeswoman tells The WSJ.

Setting aside whether industry compensation itself is out of whack, “the reality is Fannie and Freddie are non-competitive,” says John Tamny, editor of Real Clear Markets. “To say they need to keep these executives around is the problem with bailouts more broadly.”

Among others, Tamny thinks we’d all be better if the government had allowed Fannie and Freddie to fail.

“Someone with a clue about profits would have purchased them and they arguably would have fired all these employees who are clearly overpaid,” he says. “This is why we have free markets so we can get rid of abuses like this — but then again, Fannie Mae and Freddie Mac don’t exist in what anyone would remotely call a free market.”

Read more here:

http://finance.yahoo.com/blogs/daily-ticker/fannie-freddie-employees-rake-big-bucks-165530820.html

Stinson Contemporary

by | Dec 10, 2012 | Interesting Houses | 2 comments

This 1400 square foot home is located on a small infill site in Stinson Beach, California (near San Francisco). The home has a combination of modern detailing and rustic materials. On the exterior, recycled fir ceiling decking offers a counterpoint to metal and cement board siding. With solar water and photovoltaic arrays, the home has a netzero annual energy use.

http://www.contemporist.com/2012/11/27/stinson-beach-house-by-wa-design/

More Chinese Buying in U.S.

by | Dec 10, 2012 | Market Conditions

As the U.S. housing market slowly starts to recover, foreign investment is helping it along.

According to the National Association of Realtors, non-American buyers accounted for $82 billion in home sales last year. More than $7 billion of that is by the Chinese, who are now the second largest foreign home purchasers after Canadians. They’re buying high-end, multimillion-dollar homes from California to New York and paying cash.

“They’re probably the top 1 percent of the Mandarin speakers that are coming from China,” said Brent Chang, a Coldwell Banker realtor in Southern California. “They’re really the people who have their own businesses or maybe were part of the government.”

Some of these homes are specifically catered to Chinese buyers. Fox News visited a home listed at $8 million in Pasadena, Calif., that had two kitchens, the smaller one had ventilation for the cooking for aromatic or “stinky” foods like fish. It also has a lower level in-law suite and even a koi pond.

“People from China do a lot more business in their homes so they want their homes to really scream that they’ve made it and they’re successful, ” said Chang.

The Chinese like the U.S. because their money goes further. In Shanghai, $2 million might only get you a two-bedroom condo.

“You get a huge bang for your buck, you get land, you get good schools, you get a safe environment, nice community life, ” said Linda Chang, a realtor who works with her son, Brent, in the San Marino and Pasadena areas of California.

Chang says while many other real estate markets have suffered, her area has flourished thanks to Chinese and other foreign buyers.

“It’s been fantastic for the U.S. housing market because we have not suffered as other communities have,” said the elder Chang. “In fact, our property values have increased.”

While some of the Chinese buyers live in the U.S. full or part-time, realtors estimate about 40 percent of the homes are for investments. They’re snapping up houses in states hit hard by foreclosures such as Nevada and Florida. Some are buying two or three homes at a time.

According to Shanghai magazine Hurun Report, mainland China has almost 1 million millionaires and nearly half of them say they want to invest in the United States.

“It’s a sign of their status,” said Betty Chan, who deals with Chinese buyers in Las Vegas. “You can show off to your friends and family that I can buy something overseas, not everybody can do it.”

Chan continued: “Most Chinese like to own a Mercedes … it doesn’t matter whether a Mercedes is a good car or not. It’s just showing their status in the community, so owning a foreign house is pretty much a prestigious status in China, so they’re proud to tell their friends: ‘Hey, I own a house overseas.'”

Buyers from China also invested almost $2 billion in commercial property in 2011, or quadruple what they spent several years ago.

Hat tip to daytrip for sending this in: http://www.foxnews.com/us/2012/11/27/chinese-buyers-lead-foreign-investment-in-us-housing-market/#ixzz2EfCsmkuK

Prop 13 and Corporations

by | Dec 9, 2012 | Prop 13 | 4 comments

Hat tip to DOB for sending this article written by Willie Brown from sfgate.com:

It’s good to see lawmakers moving to fix one of Proposition 13’s biggest inequities – the tax break that treats corporations differently from homeowners.  That break is one of the most unfair parts of the state’s tax code. And I should know – I helped write it.

After voters approved Prop. 13 in 1978, capping property taxes for landowners, we had to sit down in the Legislature and figure out how to implement it. One of the biggest questions was how and when properties could be reassessed. We decided that should happen whenever a property was “transferred.”

When you sold your home, it was transferred to someone else. The home was reassessed, and the taxes for the buyer were increased accordingly.

What we did not realize was that corporations don’t actually transfer property – they transfer the stock in the company that owns the property.

And Prop. 13 didn’t apply to stock.

The result is that corporate property that existed in 1978 is still being taxed based on 1978 assessments – even property that has changed hands time and again.

That means a disproportionate burden of California’s property taxes is falling on homeowners.

The remedy, as suggested by Assemblyman Tom Ammiano, D-San Francisco, would be to change the definition of a transfer. With Democrats now controlling two-thirds of both the Assembly and state Senate, they could do that without having to worry about no-tax Republicans.

But they’ll have to be very clever at how they go about it – and having someone like Ammiano carry the ball may not be the way to do it.

The problem is that any effort to “repeal” Prop. 13, no matter how reasonable, still has lawmakers quaking in their shoes. What the Democrats need to do is basically make a racehorse look like a donkey.

If I were in charge, I’d come up with a bill redefining that single word, “transfer.” And I wouldn’t have Ammiano or anyone else with a long history of supporting tax hikes carry the bill – I’d pick the most conservative Democrat I could find and have him do the job.

CV Seller Survey

by | Dec 9, 2012 | Carmel Valley

I speculated here that half of the recent sellers were long-time owners, having purchased prior to the big run-up that started in 2003.  Of the areas in NSDCC, Carmel Valley has the newest housing stock, yet a review of their November sales showed that 43% (13 of 30) had been purchased prior to 2003.

One-third of the sellers (ten of 30) sold for a loss, averaging -$128,700 each.  Most of those were purchased in 2004 and 2005.

Gain/loss results of those sellers who had purchased recently:

2008:  +$53,000, -$40,000

2009:  +$3,000

2010:  +$45,000

There were no REOs, and only one short-sale.

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