THE SECOND STORY | January 23rd, 2020

Weather wimps….

 

Rotor clouds over San Francisco, taken at the same time, as the photo below.

Cumulo nimbus clouds over San Francisco, taken on a bike ride a couple of weeks ago.

I hope everybody is staying warm, inside and outside! As I’ve said before, we’re ‘Weather Wimps’ living anywhere in CA.

Well, except for this adventure. The person that sent this to me, knows the people who flew these 2 gliders, recently, a distance of 1000 miles in a ‘wave.’ A wave is caused by high winds hitting a mountain range. Below the mountains, there’s a ton of turbulence. But once you fly into the wave, it’s perfectly smooth. Greg is/was a professional airline pilot.

I went up to Minden, Nevada (way back in the day when I was teaching flying, ferrying airplanes to various airports across the US, repossessing airplanes across the US -(the economy had made a bad downturn) and I got up to 21,000 feet: me, the soaring machine (glider), and an oxygen mask and oxygen tank and some very warm clothes. It was the ride of my life.

These pilots had a lot of info coming to them about the winds, weather, and were followed by motorhomes with sailplane trailers. If you care to, check this out:

http://landseaandsky.blogspot.com/2020/01/1000k-potential-san-joaquin-valley-wave.html

It doesn’t have anything to do with the Alameda real estate market.

______________________

Definitions:

MLS=Multiple Listing Service 

AC= active contingent=the buyer needs to sell something before s(he) can complete the transaction. In this instance, another buyer might write a back-up offer. If the primary buyer can’t meet the contract deadlines, it’s bye-bye to the first buyer. And the back-up offer moves into the primary position. Be sure your agent explains all of this to you! You do NOT want to lose your deposit to the Seller.

BOM=back on the market (could be that the buyer had some conditions in the contract that s/he couldn’t meet in a timely manner).

PCH= price change (seller either raised or dropped the price)

PSB=pending sale (seller & agent wants backup offers)

REO=  real estate owned by the lender (seller may have stopped paying the lender, was behind a few months, etc. This the first time in years that I’ve added this to our list!

___________________

Broker Tour Tues 5

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Active listings (includes 23 Active, 1 BOM, 1 PCH)

Pending listings (includes 18 Pending, 1PSB,  1 PNDR)

Sold listings (1)

___________________

Market Stats for Active Listings

Days on market high = 991

Days on market low = 1 (on Total Agent Network….where clients and the agent decide not to use the MLS)

Days on market average = 132

Days on market median = 20

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Market Stats for Pending Listings

Days on market high = 78

Days on market low = 8

Days on market average = 19

Days on market median = 22

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Market Stats for Sold Listings

Days on market high = 42

Days on market low = 0

Days on market average = 14

Days on market median = 0

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Check out my ‘for fun’ blog….Boomer-chick-musings.

If you want to share what you know about the Alameda real estate market, feel free to do so! I admit I don’t know everything…..

Best, marilyn

 

THE SECOND STORY | January 21st, 2020

Take the Standard Deduction & the Home

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Now that the standard deduction is increased to $12,200 for single taxpayers and $24,400 for married ones, many homeowners are better off with the standard deduction than itemizing their deductions to write off their mortgage interest and property taxes. There was some speculation that without the tax advantages, homeownership is not the investment it once was.

By looking at the other benefits, you can see that homeownership is still one of the best investments people can make.

A $275,000 home financed with a 4.5%, 30-year FHA loan would have an approximate total payment of $2,075. The difference in the value of the home and the amount owed on the mortgage is called equity. Two things cause equity to increase: the home appreciating in value and the principal loan balance being reduced with each payment made on an amortizing loan.

In this example, if the home were appreciating at 2% annually, the value would increase by $5,500 the first year which would be $458.33 per month. At the same time, with each payment made, an increasing amount would reduce the unpaid balance which would average $363.00 a month in the first year.

The homeowner’s equity would increase over $800 a month. Instead of paying rent, the homeowner is building equity in their home. It becomes a forced savings and lowers their net cost of housing. In seven years, the homeowner in this example would have $80,901 in equity instead of seven years of rent receipts.

This example doesn’t consider tax advantages at all. If the homeowner would benefit from itemizing their deductions, it would lower their cost of housing even more.

The IRS recommends each year to compare the standard and itemized deductions to see which would benefit you more. Items such as substantial charitable donations, mortgage interest, property taxes and large out-of-pocket medical expenses could increase the likelihood of itemizing deductions.

You can see the benefits using your own numbers without tax advantages by using the Rent vs. Own.

THE SECOND STORY | January 16th, 2020

Shake it up…..and/or watch the waters rise….

Here’s a list that I received as part of an emergency preparedness bag, a week ago. It was a ‘Thank You’ gift for each of us who served on the Bay East Association of Realtors as a Chair or a Vice-Chair of a Committee. I was the Vice-Chair in 2019, and now I’m the 2020 Chair of our Alameda Local Government Relations Committee (LGR).

If you’d like a clearer copy, email me and I’ll send it as an attachment. But all of us need to get this done (one for each car, one for the house, one in a storage unit and/or in a plastic bin in the backyard/deck or wherever you can get to it, without any damage to yourself!

 

______________________

Definitions:

MLS=Multiple Listing Service 

AC= active contingent=the buyer needs to sell something before s(he) can complete the transaction. In this instance, another buyer might write a back-up offer. If the primary buyer can’t meet the contract deadlines, it’s bye-bye to the first buyer. And the back-up offer moves into the primary position. Be sure your agent explains all of this to you! You do NOT want to lose your deposit to the Seller.

BOM=back on the market (could be that the buyer had some conditions in the contract that s/he couldn’t meet in a timely manner).

PCH= price change (seller either raised or dropped the price)

PSB=pending sale (seller & agent wants backup offers)

REO=  real estate owned by the lender (seller may have stopped paying the lender, was behind a few months, etc. This the first time in years that I’ve added this to our list!

___________________

Broker Tour Tues 9

___________________

Active listings (includes 23 Active, 1 BOM, 1 PCH)

Pending listings (includes 18 Pending, 1PSB,  1 PNDR)

Sold listings (1)

___________________

Market Stats for Active Listings

Days on market high = 985

Days on market low = 8

Days on market average = 132

Days on market median = 35

__________________________

Market Stats for Pending Listings

Days on market high = 159

Days on market low = 9

Days on market average = 53

Days on market median = 44

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Market Stats for Sold Listings

Days on market high, low, average, median = 18

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That’s it for now!  If you listen to any news outlets and/or read a paper online…folks are getting out of Dodge (i.e. CA) and going to other states. Favorite spot…is Boise, and I had a couple move there last year. They had plenty in their pockets, because their bungalow hoouse sold for 1.1M not quite a year ago. I also had a couple move to Vancouver, WA.  In 2018 I had a client move to Boston (she was downsizing), and another client moved out of state. But most are trying to figure out the pros and cons of leaving the Bay Area. It’s all so personal!

Maybe you could give me your views about saying buh-bye to CA!

best, marilyn

take a look @ my ‘for fun’ blog…Boomer-Chick-Musing.com

THE SECOND STORY | January 14th, 2020

Understanding Reverse Mortgages

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Reverse mortgage loans are like traditional mortgages that permits homeowners to borrow money using their home as collateral while retaining title to the property. Reverse mortgage loans don’t require monthly payments.

The loan is due and payable when the borrower no longer lives in the home or dies, whichever comes first. Since no payments are made, interest and fees earned are added to the loan balance each month causing an increasing unpaid balance. Homeowners are required to pay property taxes, insurance and maintain the home, as their principal residence, in good condition.

Reverse mortgages provide older Americans including Baby Boomers access to their home’s equity. Borrowers can use their equity to renovate their homes, eliminate personal debt, pay medical expenses or supplement their income with reverse mortgage funds.

Homeowners are required to be 62 years and older and meet the following requirements:

  • Own the home free and clear or owe very little on the current mortgage that can be paid off with the proceeds
  • Live in the home as their primary residence
  • Be current on all taxes, insurance, and association dues and all federal debt
  • Prove they can keep up with the home’s maintenance and repairs

Payouts are based on the age of the youngest spouse. The younger the age, the less money can be borrowed. Reverse mortgages offer two terms … a fixed rate or variable rate. Fixed rate HECMs have one interest rate and one lump sum payment. Variable rate loans offer multiple payout options:

  • Equal monthly payouts
  • A line of credit with access until the funds are gone
  • Combined line of credit and fixed monthly payments for a specified term
  • Combined line of credit and fixed monthly payments for the life of the loan

Traditional reverse mortgages, also called Home Equity Conversion Mortgage, HECM, are insured by FHA. There are no income limitations or requirements and the loan funds may be used for any purpose. The borrower must attend a counseling session about the HECM, its risk, benefits, and how much can be borrowed. The final loan amount is based on borrower’s age and home value. FHA HECMs require upfront and annual mortgage insurance premiums but can be wrapped into the loan.

Proprietary HECM loans are not federally insured. Lenders create their own terms, including allowing loan amounts higher than the FHA maximum. Proprietary HECMs don’t require mortgage insurance (upfront or monthly), which may result in more funds available. Proprietary reverse mortgages typically have higher interest rates than FHA HECMs.

Advantages

  • Create a steady stream of income during retirement
  • The proceeds aren’t taxed or risk borrower’s Social Security payments
  • Title and rights to the home are retained by the homeowner
  • Monthly payments are not required

Disadvantages

  • The loan balance increases over time rather than decreases as with an amortizing loan
  • The loan balance may exceed the property value eliminating inheritance
  • The fees may be higher than traditional mortgage loans
  • Any absence of the home for longer than 6 months for non-medical or 12 months for medical reasons makes the loan due and payable

More information is available about reverse mortgages from the Consumer Financial Protection Bureau or Federal Trade Commission or HUD.gov.

THE SECOND STORY | January 9th, 2020

New year, old flowers that thrive, and my shredding party!

ALAMEDA Real Estate this Week

Flowers in my (winter) backyard!

The holiday break was quiet and special for me.

For Thanksgiving, I spent it with my son, his wife, their 2 kids, and their dog…who drove up from San Diego. And Evan’s best friend from Jr. 1st grade, Adam, and his family were able to come by for some putt-putt golfing in my back yard, and some pizza from LaVal’s and some Tommy Tucker’s ice cream cones. (check out my Boomer-chick-musings blog about ‘who let the dog out?’

Christmas was lovely. I drove to Napa and met up with Evan and Erin, their two kids, and her huge extended family in Napa (like many generations-worth). They flew up from SD.

Last October I took a class in San Diego to renew my Broker’s license. Four years goes by really fast! I passed 7 of the 8 classes because that’s how many the state allows you to take at once. The 8th class I took just after Christmas. January 7th (the deadline) was getting closer…argh! I passed that one as well.

But when I went online to verify what I did and when I did it, and where my office was….I had put in my home address. Because that’s where I work! When I looked closely at the license…it said I couldn’t do any of the licensed activities because I didn’t have an office! WHA?  Quick as a bunny, I called my ReMax Gold office..and asked the admin people if they could help me! Sure enough…they told me what I needed to know..and BINGO! I was legit!

All is well….and my next event will be my Annual Shredding Party! I usually do it after tax time, when we get to throw the 1993 taxes into the big truck that parks along the curb in front of my house! I’ll send out notices to remind my friends, clients, and neighbors of the event, and will publish it here, and on my FaceBook page. And you can tell your friends as well! Once I know the date, you will too!

There’s no cost to you! However, if you care to make a donation to Alameda Meals On Wheels, I will match that donation….so everybody wins! Last year I think I gave AMOW $800 +/-, besides paying for the shredding company…and buying donuts and juice for all of us. Been doing it for years, rain or shine.

______________________

Definitions:

MLS=Multiple Listing Service 

AC= active contingent=the buyer needs to sell something before s(he) can complete the transaction. In this instance, another buyer might write a back-up offer. If the primary buyer can’t meet the contract deadlines, it’s bye-bye to the first buyer. And the back-up offer moves into the primary position. Be sure your agent explains all of this to you! You do NOT want to lose your deposit to the Seller.

BOM=back on the market (could be that the buyer had some conditions in the contract that s/he couldn’t meet in a timely manner).

PCH= price change (seller either raised or dropped the price)

PSB=pending sale (seller & agent wants backup offers)

REO=  real estate owned by the lender (seller may have stopped paying the lender, was behind a few months, etc. This the first time in years that I’ve add this to our list!

___________________

Broker Tour Tues 3

___________________

Active listings (includes 11 New,  Active 21)

Pending listings (includes 20, 3 PSB,  1 REO – real estate owned by the lender)

Sold listings (4)

___________________

Market Stats for active listings

Days on market high = 977

Days on market low = 0

Days on market average = 131

Days on market median = 54

____________________________

Market Stats for pending listings

Days on market high = 158

Days on market low = 7

Days on market average = 48

Days on market median = 38

____________________________

Market Stats for sold listings

Days on market high = 10

Days on market low = 3

Average Days on market = 29

Median Days on market =  18

Enjoy 2020 (or at least realize that it can’t be that bad)! I know when I’m overwhelmed with ‘stuff’ it helps if I get myself out of the picture and see the good surrounding me.

Get hold of me if you have ???? about the market!

Best, marilyn

check out my for fun blog…. Boomer-chick-musings.com

THE SECOND STORY | January 7th, 2020

Downsizing in 2020

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Approximately 52 million or 16% of Americans are age 65 and over. It is easy to understand that some of them are thinking of downsizing their home because they don’t need the same space they did in the past.

It can be liberating to divest yourself of “things” that have been accumulated over the years but are no longer needed. Moving to a less expensive home, could provide savings for unanticipated expenditures or cash that could be invested for additional income.

Savings can be realized in the lower premiums for insurance and lower property taxes, as well as, the lower utility costs associated with a smaller home.

Typically, owners downsize to a home to 2/3 to 50% of their current home’s size. In some situations, it is not only economically beneficial, but their interests may have changed so that a different style of home, area or city might fit their lifestyle better.

The sale of a home with a lot of profit will not necessarily trigger a tax liability. Homeowners are eligible for an exclusion of $250,000 of gain for single taxpayers and up to $500,000 for married taxpayers who have owned and used their home two out of the last five years and haven’t taken the exclusion in the previous 24 months.

Homeowners should consult their tax professionals to see how this may apply to their individual situation. For more information, you can download the Homeowners Tax Guide.

Call me at (510) 908-9021 to find out what your home is worth and what it would take to make the move to another home.

THE SECOND STORY | January 2nd, 2020

And another decade begins!

 

I sincerely hope you had lovely, peaceful holidays…and may that stay with you throughout the year. I know I needed a break…besides getting a load of items accomplished, I did take the time to think things through…or at least I attempted to!

ALAMEDA Real Estate this Week

 

Definitions:

MLS=Multiple Listing Service 

AC= active contingent=the buyer needs to sell something before s(he) can complete the transaction. In this instance, another buyer might write a back-up offer. If the primary buyer can’t meet the contract deadlines, it’s bye-bye to the first buyer. And the back-up offer moves into the primary position. Be sure your agent explains all of this to you! You do NOT want to lose your deposit to the Seller.

BOM=back on the market (could be that the buyer had some conditions in the contract that s(he) couldn’t meet in a timely manner.)

PCH= price change (seller either raised or dropped the price)

PSB=pending sale (seller & agent wants backup offers)

___________________

Broker Tour Tues 0 (we’ll start fresh next week)

___________________

Active listings 16 (including 16 active, 2 AC, & 1 PCH)

Pending listings 21

Sold listings 35

____________________

Market Stats for active listings

Days on market high = 970

Days on market low = 14

Days on market average = 173

Days on market median = 56

____________________________

Market Stats this week for sold listings

Days on market high = 124 

Days on market low = 0

Average Days on market = 29

Median Days on market =  18

That’s a wrap for this week!

Let me know if you have questions about the market. I don’t pretend to know the future, but I have learned through past experiences. And certainly, I can learn from what your own observations are!

 

best, marliyn

THE SECOND STORY | December 31st, 2019

Another Source for a Down Payment

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Borrowing from a 401k, 403b or the cash value of life insurance policy is a common financial strategy. While taxpayers are not allowed borrow from either a traditional or Roth IRA, they can withdraw funds before age 59 ½ for specific purposes like a first home purchase, qualified higher education expenses or permanent disability without incurring a 10% penalty.

First-time home buyers can make a penalty-free withdrawal of up to $10,000 if they haven’t owned a home in the previous two years. This would allow a married couple who each have an IRA to withdraw a lifetime maximum of $10,000 each, penalty-free for a home purchase.

In many cases, the money would be used for a down payment or closing costs. However, some buyers might consider this source to increase their down payment so they could qualify for a loan without mortgage insurance.

There is another condition where a taxpayer can withdraw money from their IRA without triggering the tax or penalty if it is returned to the IRA within 60 days. This can only be done once in a 12-month period. Unless you’re certain you can redeposit the money in the strict time frame, the potential tax and penalties makes this a risky and expensive way to arrange temporary funds.

If the taxpayer qualifies for the penalty-free withdrawal, there may still be taxes due. Contributions to traditional IRAs are made with before-tax dollars and the tax is paid when the funds are withdrawn. Since Roth IRAs are made with after-tax dollars, there is no tax due when the funds are withdrawn.

Another interesting fact about this provision is that the taxpayer making the withdrawal can help a qualified relative which includes children, grandchildren, parents and grandparents.

Before withdrawing money from an IRA, taxpayers should get advice from their tax professional concerning their individual situation.

THE SECOND STORY | December 24th, 2019

Anticipating the Cost of a Home

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The largest expenditure a buyer has when purchasing a home is the down payment which can range from zero for veterans or 3.5%, 5%, 10% and 20%. With mortgages come closing costs which can be another 2-4% and must be paid at settlement in cash.

Most mortgages require an escrow account to pay the property taxes and insurance when they are due. Generally, the lender will require one to three months of taxes and one month of insurance so they can be paid before the actual due date.

First-time buyers should be aware that they’ll need this amount of funds available to purchase a home. Unlike tenants who are not responsible for repairs, homeowners are, and it is necessary to be able to pay for them when they’re needed.

Newer homes will need less repairs and older homes probably, more. At some point, components like the furnace, air-conditioner and appliances will need to be replaced which could crush a homeowner’s budget if they are not expecting them.

Homeowners should expect between one and four percent of the value of the home in annual repairs. The age and condition of the home and whether some of the items have been replaced will help assess the anticipated expenditures.

Components Estimated Life
Dishwasher 9-10 years
Refrigerator 13 years
Furnace 15-25 years
Air-conditioner 8-15 years
Stove top 13-15 years
Oven 15 years
Compactors 6 years
Water heater 8-12 years
Faucets 15-20 years

A $175,000 home with 2% estimated repair expenditures would be $3,500 a year or about $300 per month. Some years, it may not run that much and other years, it might be more. By anticipating the maintenance expenses, a homeowner is more likely to handle things when they arise.

Another way to handle the risk of unexpected repair expenses would be to purchase a home warranty. For $500 -700 a year, repairs and sometimes, replacements will be handled by the protection plan.

Call me at (510) 908-9021 for a list of trusted protection plans available in our area.

THE SECOND STORY | December 17th, 2019

Personal Finance Review

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Even if Benjamin Franklin never actually used the expression “a penny saved is a penny earned”, the reality is that it has been a sentiment for frugality for centuries. He did say: “Beware of little expenses; a small leak will sink a great ship.” At the end of the day, it is not about how much you make as much as it is about how much you keep.

The first step in a personal finance review is to discover where you are spending your money. It can be very eye-opening to have a detailed accounting of all the money you spend. Coffee breaks, lunches, entertainment, happy hour, groceries and the myriad of subscription services you have contribute to your spending.

This revelation can lead you to obvious areas where savings can be accomplished. The next step is to dig a little deeper to see if there are possible savings on essential services.

  • Get comparative quotes on car, home, other insurance.
  • Review and compare utility providers.
  • Review plans on cell phones.
  • Consider eliminating the phone line in your home.
  • Review plans on cable TV, satellite for unused channels and packages or receivers.
  • Consider entertainment alternatives for cable like Hulu or Netflix.
  • Review available discounts on property taxes.
  • Consider refinancing home … lower rate, shorter term or cash out to payoff higher rate loans.
  • Consider refinancing cars.
  • Call credit card companies to ask for a lower rate.
  • Consider transferring the balance from one card to a new card with a lower rate and then, pay off the balance as soon as possible.
  • Review all the automatic charges on your credit cards … do you need or still use the service?
  • Discover late fees that are regularly being paid and eliminate them.
  • Review all bank charges for accounts and debit cards; determine if they can be reduced or eliminated.
  • Pay your bills on time and avoid all late fees.
  • Monitor your bank account and avoid over-draft charges.
  • Some companies have customer retention departments that can lower your rates to retain your business.

A strategy that some people use is to report their credit cards as lost so new cards will be issued. When they are contacted by the companies to get a valid credit card, they can determine if the service is still needed.

The money you save can ultimately help you in the future for a rainy day, an unanticipated expense, a major life event or retirement. Cutting back now will give you more later, possibly, when you need it even more. Tennessee Williams said “You can be young without money, but you can’t be old without it.”