Proposition 5

by | Aug 12, 2018 | Jim's Take on the Market, Prop 13, Tax Reform | 7 comments

I’d sure like to see the research that makes the C.A.R. think this idea will bring a flood of inventory because Prop 60/90 already cover this issue.  The realtor bashing alone might be enough to sink this proposition:

Would it be a merciful end to the “moving penalty” or a giveaway to rich homeowners and real estate agents?

Proposition 5, which California voters will decide on this November, allows homeowners age 55 and up to receive a major break on their property taxes when they move homes. Sponsored by the California Association of Realtors, the initiative attempts to address a problem familiar to many Californians of a certain age: You want to move from your empty nest, but you’re scared of the new taxes you’d have to pay on a downsized property.

That dilemma is a byproduct of Proposition 13, the landmark 1978 initiative that capped how much local governments can levy homeowners on escalating home values. If you bought your home in 1988, you’re still paying property taxes based of the value of your home when the Soviet Union was still in existence. It’s a pretty great deal. But try to move into a different—and invariably more expensive—home at today’s prices, and your property taxes will jump dramatically. Those property tax bills could be tough for older homeowners on fixed incomes to afford.

“These are largely larger family homes,” said Steve White, president of the Realtors association. “If these folks were able to sell, then folks in (younger) generations would be able to purchase.”

The Realtors argue that Prop. 5 will induce more senior homeowners to sell their homes and buy new ones. Obviously that’s good for their commissions. But beyond allowing older homeowners to perhaps move closer to their children, the Realtors argue it would bring a flood of new homes to the market perfect for younger households starting their families.

Prop. 5 is opposed by local governments and public employee unions such as teachers and firefighters, who say the initiative is a costly giveaway to wealthy homeowners and the real estate industry. There are plenty of property tax protections already in place for senior homeowners who truly want to downsize. Because of a similar proposition passed decades ago, homeowners age 55 and up can buy a new home of equal or lesser value to their current property anywhere in their own county and retain their Prop. 13 property tax savings. Prop. 5 would allow senior homeowners to buy more expensive homes anywhere in California and still get a large tax break.

“What the real estate industry is really trying to do with this measure is turn the market and drive up prices so their end profit is really to their benefit,” said Dorothy Johnson, an advocate for the California State Association of Counties, which oppose the measure.

The Realtors could not have been pleased with the analysis Prop. 5 received from the Legislative Analyst’s Office, which voters will see included in their sample ballots this fall. It concludes that Prop. 5 would eventually costs local governments and schools $2 billion a year in revenue, and that the vast majority of Baby Boomers who would benefit from the initiative were likely going to move anyway. In other words, the initiative was not likely to induce a lot of people to move or result in lower home prices.

That’s partly why the Realtors have pursued a somewhat odd political strategy—while pushing for Prop. 5’s passage this fall, they’re already planning to put a very similar initiative on the ballot in 2020. That initiative would provide the same property tax breaks for older homeowners, but would also close some Prop. 13 loopholes to lessen the cost on local governments.

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HGTV Brady!

by | Aug 11, 2018 | Frenzy, Historic Homes, Jim's Take on the Market | 6 comments

The bidding for the “Brady Bunch” house got down to a horse race, listing agent Ernie Carswell said, but it was HGTV that ultimately pulled away from the pack. So, just how much did the cable network spend to secure the television-famous property? About twice the asking price.

HGTV paid $3.5 million to buy the Studio City residence, or $1.615 million more than the list price of $1.885 million. The sale closed Friday.

The home received eight offers, Carswell said.

The players included stage and television producers, corporate parties and entertainers such as singer-dancer Lance Bass, who was “heartbroken” to learn he had not submitted the winning bid.

All of them planned to keep the home basically intact.

“Every [bidder] intended to retain the front facade as a historic preservation, but most of them intended to renovate the interiors,” Carswell said. “No developer submitted a bid for the property.”

Link to Article

“The business model is flawed”

by | Aug 11, 2018 | Jim's Take on the Market, Listing Agent Practices, Market Conditions, Realtor, Realtors Talking Shop | 1 comment

They charge even less in America, and you need good help to handle the load:

“Broke” real estate agents are quitting British disrupter Purplebricks in droves as the fixed-fee agency’s low-margin, high-turnover business struggles to achieve enough sales amid a slowing Australian housing market.

Research by The Australian Financial Review found at least 27 agents had quit Purplebricks Australia since March with overall agent numbers now down to 88 from 105 reported by the company in October when it filed its British interim results.

Purplebricks territory owners (franchisees) and agents, who spoke to the Financial Review, said they were struggling to make a living and were preparing exit paths after the $100,000 to $180,000-a-year salaries they were told they could earn failed to materialise.

Employment contracts show Australian agents earn just over $1000 out of the $5000 to $6000 upfront fee vendors pay when they list with the Purplebricks.

Internal sales figures obtained by the Financial Review for NSW – where the market has slowed the most – paint a picture of struggle for many.

They show that 15 agents undertook a combined 768 home appraisals between February and April, but have so far secured just 189 listings between them

While two of these agents have 72 instructions between them, the remaining agents have won between zero and 18 new listings each over the three-month period.

“The concept is brilliant, but the business model is wrong for Australia,” said former Purplebricks Newcastle agent Steve Bashford, who quit in May. “There is a big difference between what they promised us and what we achieved.”

Many other current agents and franchisees, who asked not to be named, made similar observations.

“There’s no money in it. The business model is flawed,” said a current franchisee.

“I’ve sold 50 properties in 18 months and I’m broke,” said another agent who recently quit.

Apart from the $1000 instruction fee, agents can earn additional fees if a customer arranges a Purplebricks home viewing or signs up for a mortgage with one of its partners.

However, much of this additional income has vanished as franchisees have had to hire and pay sales assistants to help clear the backlog of listings.

In addition, agents told the Financial Review, Purplebricks clawed back money from them if a customer complained and obtained a refund.

They also said the company had been “turning off postcodes” in places such as Sydney’s eastern suburbs without notice as agents battled to manage their ever-growing number of unsold listings.

According to its Australian website, since launching in September 2016, Purplebricks has secured more than 5200 listings and sold more than 3600 homes. It currently has 1563 properties for sale.

It reported a £5.1 million loss from its heavily marketed Australian business for the six months to the end of October 2017.

(more…)

San Diego Tiered Pricing

by | Aug 10, 2018 | Jim's Take on the Market, Market Conditions, Sales and Price Check, Same-House Sales

These are through May, and though all three are at new record levels, we should see the usual year-end leveling the rest of the way:

More Slowdown Talk

by | Aug 9, 2018 | Jim's Take on the Market, Market Conditions | 5 comments

Hat tip to Richard for sending this in:

The housing market hit a sudden and “significant” slowdown in the past few weeks that could continue in coming months, Redfin Corp.’s chief executive said Thursday afternoon.

The real-estate brokerage and website company announced second-quarter earnings Thursday afternoon that beat expectations, but the company’s third-quarter forecast came in short of what Wall Street was projecting. On a conference call to discuss the results, Chief Executive Glenn Kelman reported that Redfin had pulled down its forecast after “an unexpected drop in Redfin’s bookings growth in the past three weeks, slowing traffic growth in a weakening real-estate market.”

Redfin stock, which fell in extended trading after the forecast was made public, saw that decline accelerate to a loss of almost 10% after Kelman spoke Thursday afternoon, but he did not hold back. He said a decline in U.S. home sales in June was expected to reappear in August and September after a slight relief in July, specifically calling out difficulties in markets on the West Coast that have driven home sales higher in the past few years.

“For the first time in years, we are getting reports from managers of some markets that home buyer demand is waning, especially in some of Redfin’s largest markets,” Kelman said, specifically calling out Seattle, Portland and San Jose as areas where inventory was still tight but did not seem to be pushing prices higher still.

“June sales were down in these markets by double-digits and inventory was up also by double-digits,” he said of the West Coast cities. “The trend is continuing in July and reports are now coming in from Washington, D.C.; Boston; Virginia and parts of Chicago as well that homes there are getting harder to sell.”

“We aren’t entirely sure how much of it is the market and how much of it is us because our guidance is based on a slowdown that only occurred in the last few weeks. It was a significant slowdown,” Kelman said. “It may be that we have a good week this week and a good week next week and we can outperform it. But we are seeing a significant change.

“My guess is that only some of it is driven by the environment. It is definitely changing.”

Link to Full Article

Kayla and Manhattan RE

by | Aug 8, 2018 | About Kayla, Jim's Take on the Market, Kayla Training, Listing Agent Practices, Realtor | 8 comments

Selling homes in Manhattan is competitive, even without a central MLS run by the realtor board.  Once an agent uploads a listing onto their company system, it gets distributed immediately to the regular portals StreetEasy (owned by Zillow), realtor.com, etc. where agents and consumers access the same data.

So even though there isn’t an official MLS, there is a commitment to full market exposure, and giving every agent a shot at selling each listing.

William (KK’s new boss) said that if agents were keeping listings in-house, then the Manhattan board of realtors would step in and do something about it.

It’s going to be competitive everywhere, but if every agent was committed to doing what was best for their sellers, then we could all get along nicely.

He also said that it is very rare that they do a home inspection.  There isn’t a requirement for seller disclosures either – it’s up to the buyer’s attorney to include any questions about the property in the contract.

It has been a buyer’s market around Manhattan for the last couple of years.  Maybe a sign of things to come everywhere?

Kayla will start her new job there on August 27th!  I will let her share her experience here as she sees fit, but she couldn’t be more excited to begin this new chapter in her life!

 

Are Small Towns For You?

by | Aug 7, 2018 | Boomer Liquidations, Boomers, Jim's Take on the Market, Where to Move | 3 comments

Hat tip to daytrip for sending in this article, though it somewhat contradicts what I believe – I think you should move somewhere!

Yes, many retirees are looking for a version of Mayberry, the fictional North Carolina town that actor Andy Griffith called home in his 1960s TV show. But even the best Mayberrys, like most communities, have drawbacks.

So, before you pull up stakes, here are some cautionary tales about small towns that retirees have shared with us through the years:

• “I’m here! Hello?” The ideal town is easy enough to envision: a cozy, safe and picturesque spot with—perhaps most essential—a sense of community. It’s important, though, to be realistic about your chances of fitting in with your new surroundings. While you certainly could become part of the inner circle, many transplants find themselves instead joining the ranks of other retirees in the area.

Consider, for instance, this bumper sticker seen in Florida: “We don’t care how you did it up North.” You get the idea.

• Character traits. Along these same lines, and at the risk of overgeneralizing, retirees who relocate often are more assertive, more aggressive and more likely to have been managers or decision makers than those who stay put. (After all, starting a new life in a distant locale isn’t for the faint of heart.) But a strong personality that might have been a big help in the business world might not work as well in an unhurried environment.

In short, ask yourself if the temperament of a possible retirement destination—and, in particular, a small town—is comparable to your own. “I think new arrivals are more concerned about immediate productivity and less patient than those who have been retired 10 or 20 years,” Ms. Carlson says.

• Small—but for how long? Unfortunately, the chances of any small, attractive community staying that way are increasingly slim, as word about such places gets around much faster than before. (Indeed, Ms. Carlson asked us not to identify her new home.) If you do find your Mayberry, the best place to settle—even if you find yourself paying a premium—could be in a historic district, where future development likely will be kept to a minimum.

• Health care. Here’s what Ms. Carlson told us about relocating to a small town: “We were assured, primarily by our real-estate agent, that medical care was excellent. What we weren’t told was that there was a yearlong waiting list for an appointment with most internists. We discovered that there’s an unfavorable ratio of physicians to residents because many younger doctors aren’t interested in an area with limited opportunities for working spouses and a small school system.”

In hindsight, she says, she would have done more digging about health care, as well as asking about emergency care. “Had we asked some questions at the visitor center, instead of just picking up maps and using the restrooms, we might have received more-accurate information,” she says.

“Once we arrived and discovered how hard it is to get into a [medical] practice, I asked at the local fire district: ‘What happens if I have to call the medics?’ I was told that patients with heart problems who must be hospitalized are sent two counties over from us, and that other problems requiring hospital care mean a trip 15 or 20 miles west of here.”

• Transportation. Again, some digging is needed here. A small town is likely to have fewer public-transportation options than a larger community. And remember: You could be living in your new home for a long time. With all that in mind, what happens if you’re forced to cut back, or eliminate, your time behind the wheel? Do volunteer organizations or local government agencies offer transportation programs for older adults?

Says Ms. Carlson of her new town: “Our county has some door-to-door bus service for the disabled, but there appear to be long waits to be returned home. A carwash/gas station operates a single cab. There’s no Uber and no car-sharing rentals.”

And be aware, she adds, “that many small businesses—I’m thinking, in this case, about our local dairy that sells composted manure for gardens and yards—don’t deliver, and may not be able to refer you to delivery services.”

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