THE SECOND STORY | July 27th, 2021

The Dynamics of Home Equity


For many people, their home is their largest asset and their best performing investment. The equity in a home is the difference in what it is worth and what is owed. Two dynamics, appreciation and unpaid balance, work in concert to make homeowner’s equity grow.

It can be said that you appreciate the fact that your home is your best financial investment. It is also ironic that the appreciation, the increase in value, is what causes it to be your best financial investment.

In a one-year period, the increase in value divided by the beginning value will determine the rate of appreciation for the year. News stories and articles, frequently, report statistics on appreciation for the month, the year or longer. In many cases, a national appreciation is mentioned but the local appreciation is more reflective of an individual property.

The National Association of REALTORS® reports “The median existing-home price2 for all housing types in June was $363,300, up 23.4% from June 2020 ($294,400), as every region recorded price jumps. This marks 112 straight months of year-over-year gains.”

The low inventory being experienced nationwide has caused some significant appreciation that has increased homeowners’ equity. According to Black Knight, a mortgage technology and research firm, at the end of 2020, roughly 46 million homeowners held a total of $7.3 trillion in equity.

If a homeowner has a mortgage on their home, while the home is appreciating, the unpaid balance is declining. An increasing portion of each payment is applied, when the payment is made, to the principal balance to retire the debt based on the term of the loan.

Each month the equity in the home becomes larger because the home is worth more due to appreciation and the unpaid balance is less due to amortization.

Once a homeowner has sufficient equity in their home, they can borrow against it and take cash out of their home. Most lenders require that the homeowner maintain at least 20% equity position. This means that owners can borrow up to 80% of the appraised value less the amount that is currently owed on the property.

The options include a cash-out refinance mortgage or a home equity line of credit, HELOC. While some institutions have stopped offering HELOCs, they are still available.

The HELOC is a line of credit that is established for usually ten years. The owner is approved, and the money is available to draw out as needed. The interest is calculated daily. Like a credit card, when the balance is paid down, the unused portion of the available credit is available again.

Your real estate agent may be able to offer some lender suggestions.

THE SECOND STORY | July 22nd, 2021

What’s with the market?

Is real estate cooling off a bit? I have no crystal ball, but I think it may be.

If you look closely, you’ll see a red/pink bird. I took the photo on Wednesday, in my backyard!.

If you know what type of bird it is…let me know!

Unfortunately, the Alameda police Captain did not show up for our Zoom meeting last Friday. I submitted several questions for him…but, oh well. We were to discuss the homeless getting into properties that are on the market. argh!

Have you heard that there may be a POS (point of sale) item coming on the City Council’s agenda?

Our Mayor is suggesting that all property owners should pay for our town to be an all-electric city (which is good) BUT it would be relegated to those properties that are on the market for sale.

This is not a good thing…and who knows how much it would cost? Yes, we need to head in that direction….but there should be a more reasonable/practical way to do it.

Okay. Let’s get on with the stats for this week.


AC (active contingent on selling another property)

PCH (price change)

PSB (pending sale, want backups)

BOM (back on market – fell out of escrow)

REO (real estate owned by the lender, i.e, foreclosure)

DOM (days on market)

Active Listings    

34, including 1 BOM and 3 PCH

DOM  high 1516   low 7   avg 75   med 16

Pending listings 

15, including 3 PSB

DOM  high 1516   low 1   avg 14  med 16

Sold listings 25

DOM   high 52  low 0  avg  11  med 8

Let me know if you have questions about the market….or any answers. And if you have any idea of that type of bird in the photo, I’d like to know that!

Be well, be safe, have a good weekend!  marilyn




THE SECOND STORY | July 20th, 2021

Doing Nothing is Costing Something


It has been said that more money has been lost due to indecisions than ever was due to making the wrong decisions. Many times, the larger the decision, the more likely procrastination comes into play and doing nothing will cost something.

Buying a home is certainly one of the biggest decisions people make. Careful consideration and planning are necessary steps leading to a prudent decision. Considering today’s market that includes a global pandemic, financial volatility, and rapidly rising home prices, it is understandable that many people thinking about a home purchase are in a wait and see posture.

However, there is a cost connected to waiting and it may be a lot more than you think. The recent Home Price Expectation Survey 2021 Quarter two estimated appreciation rates will average just under 5% annual for the next five years. It expects prices to increase by 8% in the next one year.

Being a renter or even putting off moving to a larger home, could keep you from enjoying the benefit of that appreciation. If your down payment is in the bank, your expected earning will be less than 2%. In a home, the owner has the benefit of leverage when a mortgage is used to finance the home.

Buyers are borrowing a large portion of the purchase price at around 3% interest but the entire value of the home is appreciating at a higher rate and the profit builds equity for the homeowner.

Another major component for the owner is that the amortizing mortgage is being reduced with each payment that is made. As the home goes up in value due to appreciation, the unpaid balance goes down with principal reduction creating equity from two directions.

If you waited one year to buy a $350,000 home today, the price could easily be $378,000. A 5% down payment on this home at today’s price is $17,500. If you could earn 2% on a certificate of deposit, it would be worth $17,850 in one year. If it used as a down payment on a $350,000 home that appreciates at 8%, the equity in one year would be $52,442. Use the Your Best Investment calculator to make your own projection.

Mortgage experts anticipate rates to rise by 0.75% in the next year which means that you’ll pay more interest on a larger mortgage by waiting. The monthly payment could easily be $200 more by waiting a year. Based on how long you intend to be in the home, it could make the overall housing cost much more.

To run some examples of projections based on your own expectations and at the price you are considering, go to Cost of Waiting to Buy and Rent vs. Own.

If you have some specific concerns that is keeping you from deciding today, let’s get together on the phone, an online meeting or somewhere face-to-face so that you can get the facts about what it takes to buy a home now.

THE SECOND STORY | July 15th, 2021

Clearing out the carriage house…

….of signs from yesteryear.

These are sign riders from listings from 3+ or more years ago. They all got dumped into the trash in time for the garbage folks to pick them up today.

I’m not sure why I kept them so long. Well, yes, I do! They didn’t take up too much space in the carriage house. Plus I had ivy growing inside the carriage house…and I got rid of that, too, over the last 2 weeks.

My late husband used that space to do all of his woodwork (building half-models of boats/yachts that he designed). He was quite the artist when it came to doing that woodwork. Often he would give his client(s) a gift of that half-model and often he would make one for himself.

It’s so interesting that signs don’t matter this much these days, because most of the info is on the internet. It’s probably better that way because there are photos on the internet, a map showing that location, along with the disclosures, and how to show the property.  The showing agent needs to schedule an appointment..and it’s all done electronically.

I let my clients know that I won’t have any Broker Tours (it’s expected that the listing agent will give vistors/agents lunch.

I don’t have any open houses at my listings, since Covid showed up, because it’s often neighbors who want to be looky-loos. It gives the llisting agent a chance to meet potential new clients (Buyers or Sellers) and IMHO it makes the house turn into an office, which it is not.

Most of my Sellers only want Buyers with their agent inside the house so they can get an in-person sense whether or not the property will work for them.

At that time selling agent has downloaded the disclosures before s(he) shows them the property. Hopefully, they’ll receive a copy of the pest/property inspections, as well.

We were supposed to have a police captain at our Local Goverment Relations (Alameda city) at our meeting last week. S(he) must have gotten busy with other items, because that person never showed up. S(he) was going to explain why/how vacant properties were being broken into/occupied by the homeless.

A couple of us Realtors attended a zoom meeting (with other Alameda citizens) which was led by the gentleman who is in charge of that city committee to let us know how what the city is doing about this subject.

It was most informative, thoughtful, and realistic, about the needs these situations present to the city…and how they’re trying to deal with it. The speaker spoke of the situation near the Tube, and in various other locations where the homeless camp out.


All things being equal (which they’re not), there are a lot of new listings on the market this week. 


AC (active contingent on selling another property)

PCH (price change)

PSB (pending sale, want backups)

BOM (back on market – fell out of escrow)

REO (real estate owned by the lender, i.e. foreclosure)

DOM (days on market)

Active listings this week 27 incl 2 BOM  and 1 PCH (but the price is still the same as last week).

DOM  HIgh 1509  Low 3  Avg 90  Med 16

Pending listings this week 19 including 2 PSB

DOM  HIgh 109  Low 3  Avg 90  Med 16

Sold listings this week 17

DOM  High 28  Low 0  Avg 10  Med 12

Have a great weekend (wherever that takes you) and let me know if you have ???



THE SECOND STORY | July 8th, 2021

More listings on the market…..

….than solds….hmmm…..

I hope everybody had a safe and sane, Independence Day.

Is something changing in this market? Maybe….as I’ve said previously, the buyers choose the price…not the sellers.

The goal is to get the buyers interested enough to get them to slow down: look at the photos, look at the map, then drive/bike by and look at the neighborhood. If they like what they see (the property, the neighborhood) at that point, they’ll make an appointment with their agent to show them your property.

The goal is NOT to see/have a bunch of looky-loos in your house/property/condo/townhome/duplex. etc. The goal is to have pre-APPROVED Buyers look through your property and then decide if they like it enough to write an offer with their agent.

And by the way….I’m on a committee for the BayEast Association of Realtors and our monthly meeting for the Local Government Relations is on Friday. We’ll be interviewing one of the captains of our police department….about what to do if your (vacant) house is being a host to the homeless. And yes, that’s happening in Alameda.


AC (active contingent on selling another property)

PCH (price change)

PSB (pending sale, want backups)

BOM (back on market – fell out of escrow)

REO (real estate owned by the lender, i.e, foreclosure)

DOM (days on market)

Active listings 33

DOM  High 1502  Low 7  Avg  1  Med 20

Pending listings 14 incl 2 PSB

DOM  High 33  Low  0  Avg 10  Med 8

Sold listings 12 

DOM  HIgh 45  Low 0  Avg 13  Med 12

Enjoy the weekend and the weather! Call/text/email me if you have questions about this market! I may not have any answers but if I don’t have them I’ll find a person that may have that answer!  After all, this is a people business and my job is to find out what you expect and how to make it happen. And if I can’t make it happen, I’ll let you know.

Best, marilyn


THE SECOND STORY | July 6th, 2021

Less to Own than to Rent


The question is “financially speaking, are you better off owning than renting in the long term?”

Renting a home has advantages. It is usually a short-term commitment from year to year and the landlord is responsible for the repairs.

Owning a home with today’s low mortgage rates, the total house payment could easily be less than what the rent would be on a comparable home. Once you assume ownership, you will have the responsibility of the repairs and possibly, a homeowner’s association fee.

Many times, an initial benefit of owing a home includes the ability to deduct property taxes and qualified interest on the mortgage. With the increase of the standard deduction and a limit of $10,000 on state and local taxes, it is estimated that 90% of homeowners do not itemize their deductions to consider property tax and mortgage interest. This comparison will not consider them.

There are two very significant benefits that contribute to a home being an excellent investment and they are principal reduction due to normal amortization of the mortgage and appreciation of the property. While the property goes up in value and the unpaid balance decreases, the owner’s equity grows, increasing their net worth.

Renters do not benefit from either of these, but their landlords do. That is the reason for the saying “whether you rent or buy, you pay for the house you occupy.” Tenants pay for the home for their landlord.

Rent Own
$2,500 Rent/Payment $2,232
-0- Principal Reduction $504
-0- Appreciation $875
-0- Estimated Monthly Maintenance $300
-0- Estimated Homeowners Association Fee $25
$2,500 Net Monthly Cost of Housing $1,178

*Projections based on 3% appreciation; $350,000 sales price with 10% down payment and a 3.5%, 30-year mortgage.

With each payment made on a fully amortized loan, the principal balance is reduced. While appreciation is generally expressed in an annual rate, homes go up in value incrementally throughout the year so considering the monthly appreciation is appropriate in this comparison.

In this example, the payment is less than the rent proving the initial idea that it costs less to own a home. After factoring in the effect of the principal reduction and the appreciation, even when you consider the maintenance and HOA fees, the net monthly cost of housing is considerably less than renting.

The largest part of the savings inures to the equity of the home which directly impacts a homeowner’s net worth. While the money may not be easily accessed, it has real value and available in a cash-out refinance or when the home is sold.

If you curious about how your numbers would be reflected in a similar comparison, go to the Rent vs. Own. Please let me know if you have any questions.

THE SECOND STORY | July 3rd, 2021

Inventory is increasing….a bit….

Independence Day 2021

One of the things I found most interesting when I moved (with my husband) to Alameda, was the 4th of July parade. It seemed like the whole town was either in it, watching it from their front porches, or lining the streets: waving flags, and had come over the bridges or through the tube to be part of it. It felt like I was watching something from TV (n the 1970’s).  Andy of Mayberry (by the Bay). 

We didn’t have the parade in 2020, and won’t have our parade in 2021 due to safety precautions regarding Covid. That’s a smart move on behalf of the city. But I bet next year, 2022, could be over-the-top!


AC (active contingent on selling another property)

PCH (price change)

PSB (pending sale, want backups)

BOM (back on market – fell out of escrow)

REO (real estate owned by the lender, i.e, foreclosure)

DOM (days on market)

Active listings 28 (incl. 1 AC and BOM)

DOM  high 1497  low 3  avg 48  med 22

Pending listings 16 (incl 1 PSB)

DOM  high 15  low 3  avg 9  med 9

Sold listings 21

DOM  high 45  low 0  avg 10  med 10

Be safe out there…with those (illegal) fireworks here in town!


THE SECOND STORY | June 29th, 2021

Are You Covered?


A home warranty is a service contract that protects your home’s appliances and some systems from repairs or possible replacements. A convenient benefit of a home warranty is that when you report an item, they will assign a service provider to evaluate whether it should be repaired or replaced without the owner having to act like a middleman.

Homeowner’s insurance is required by most mortgage lenders when there is an outstanding loan. This coverage protects the structure and the dwelling and the homeowner’s personal property from named occurrences like theft, natural disaster, or accident. Homeowner’s insurance does not cover the systems and appliances for repairs or replacements due to normal wear.

The fees for home warranties can vary based on deductibles and how much of the risk the homeowner is willing to accept.

Additional items can be included to the standard coverage to include pool, spa, additional refrigerators, septic tanks, and other items. There may also be some named items that are not covered that could include sprinkler systems, window air conditioning units or other specific items.

Contracts usually are for a one-year period, may have a waiting period and usually will not include pre-existing conditions. The premium or fee is paid in advance.

Many homeowners learned about this type of service when they bought a home. It was provided by the seller and probably gave some element of peace of mind. Home warranties can be purchased even when the home is not being sold and by the current owner. Even rental property owners are using this type of coverage to manage the repairs and replacement expenses.

American Home Shield, Choice Home Warranty, Select Home Warranty, First American Home Warranty.

THE SECOND STORY | June 24th, 2021

Properties are flying off the shelf….

I need to get some bids for my fence.

And there’s always something to do to maintain a property.

But talk about a true disaster in Florida!  I was driving in Oakland (Glenview District) to get some special keys made.  I usually listen to KQED (NPR). A 10 story condo building collapsed near Miami Beach.

I think this bothers me so much because my late husband was a Naval Architect. He majored in Structural Engineering @ Cal Poly San Luis Obispo.

OMG…what happened?

The emergency crews were looking for 99 missing people.  Why did this happen?

(Flashback to the past…  We needed to replace our brick foundation with concrete. The big 1989 earthquake happened 2 weeks after that work was completed. )

I encourage folks to get a pest and property inspection every 10 years. I finally did it myself maybe two years ago. Things change and I don’t have the talent (nor do I want that talent), so I use a professional. The pro that I use built his own house (5000 sf), ran that crew, and still did pest and property inspections.

If you’d like that name, email me and I’ll give it to you.


AC (active contingent on selling another property)

PCH (price change)

PSB (pending sale, want backups)

BOM (back on market – fell out of escrow)

REO (real estate owned by the lender, i.e, foreclosure)

DOM (days on market)

Active listings 29

DOM  high  106  low 6  avg 33  med 14

Pending listings 23 

DOM  high 26   low 0  avg  11  med 12

Sold listings 16

DOM  high 34   low 6  avg 33   med 14

I’ll be going to bed thinking about those folks in Florida. God Bless Them.

??? Let me know! And I’ll let you know if I don’t have an answer!

THE SECOND STORY | June 22nd, 2021

Thoughts on Credit and Getting a Mortgage


Credit plays a huge role in getting a mortgage because it is a variable that helps the lender determine the likelihood that the loan will be repaid on a timely basis. Credit bureaus evaluate people’s credit worthiness using a FICO score. The higher the score the better the borrower’s credit.

The mortgage rate charged to a borrower depends on their credit score. There is an inverse relationship between credit score and interest rate changed. The higher the score the lower the rate and the lower the score, the higher the rate.

Two separate buyers with the same income, purchasing the same price home may both be approved by the lender, but they may be charged different interest rates based on their credit scores.

You could save thousands of dollars over the life of a loan by improving your credit score by just a few points. A $350,000 mortgage at 3.5% has a principal and interest payment of $1,571.66. By improving your credit score to qualify for a 3% rate, it would save $96.04 a month.

Over the life of the mortgage, that would save $34,575 in interest. Improving your credit score to shave 0.25% off the rate would make it worthwhile.

Credit utilization is the percentage of total credit used compared to the total credit available. If you have a $2,500 balance on a credit card with $10,000 available credit, your utilization rate is 25%. Ideally, it should be 10% or below. This ratio accounts for 30% of a person’s FICO score.

Credit utilization is calculated using the balance on the monthly statement so paying it off in full every month could still result in a high CU score. Some credit counselors suggest paying down the balance before the end of month statement comes out. A trusted mortgage professional can make specific recommendations like how to improve your credit utilization.

Your credit score can be adversely affected if your credit limits are lowered. You may have the same monthly outstanding balance you have had for years but it now becomes a larger percentage of your available credit and your score goes down. In the example used earlier, if the available credit was lowered to $5,000 and your balance is $2,500, the credit utilization is now 50%.

Payment history is the largest contributor and counts for 35% of an individual’s FICO score. It is an indication of your likelihood of paying on time and as agreed for your debt, especially mortgages, credit cards, student and car loans, among others.

A big shock to some borrowers is to find out that while they may have never actually incurred a late fee because of a grace period, their score could be dinged because it was not paid on time of the actual due date.

Foreclosures, deeds in lieu of foreclosure and bankruptcies will affect a borrowers payment history as long as they appear on the credit report.

Americans are entitled to a free annual credit report by law from the major credit companies: Experian, TransUnion and Equifax. is the source for these federally authorized reports. During the Covid-19 pandemic, they are offering free weekly reports.

Even if you are not buying a home or getting a mortgage currently, it is a good routine to check your credit report periodically to discover signs of identity theft early.