The Eleventh Hour on the Eleventh Day of the Eleventh Month—Where Will You Be?

The Eleventh Hour on the Eleventh Day of the Eleventh Month—Where Will You Be?

Veterans Day originated as “Armistice Day” on Nov. 11, 1919, the first anniversary of the end of World War I. Armistice is an agreement made by opposing sides in a war to stop fighting for a certain time— a truce.

Congress passed a resolution in 1926 for an annual observance, and Nov. 11 became a national holiday beginning in 1938.Veterans Day

Veterans Day is not to be confused with Memorial Day–a common misunderstanding, according to the U.S. Department of Veterans Affairs. Memorial Day (the fourth Monday in May) honors American service members who died in service to their country or as a result of injuries incurred during battle, while Veterans Day pays tribute to all American veterans–living or dead–but especially gives thanks to living veterans who served their country honorably during war or peacetime.

  • In 1954, President Eisenhower officially changed the name of the holiday from Armistice Day to Veterans Day.
  • In 1968, the Uniform Holidays Bill was passed by Congress, which moved the celebration of Veterans Day to the fourth Monday in October. The law went into effect in 1971, but in 1975 President Ford returned Veterans Day to November 11, due to the important historical significance of the date.
  • Britain, France, Australia and Canada also commemorate the veterans of World Wars I and II on or near November 11th: Canada has Remembrance Day, while Britain has Remembrance Sunday (the second Sunday of November). In Europe, Britain and the Commonwealth countries it is common to observe two minutes of silence at the eleventh hour on the eleventh day of the eleventh month.

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Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and on Twitter @ https://twitter.com/morganhomes

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

 

 

Local Housing Market Shows Signs of Change

BELMONT (AND BAY AREA) MARKET SHIFT

In order to know what changed in our housing market, one must understand that markets are constantly in flux, it’s just hard to see when you are in the middle of one—sort of like being in the eye of a hurricane. We looked at home sales in Belmont and compared the periods from January to September for 2015 and 2016. We’re always asked what’s going on in our market and we like to be armed with facts.

Most people want to know if the housing market is in the seller’s or buyer’s favor-if prices are going up, steady, or dropping. Buyers want to know as they are trying to decide if they should wait and see what happens with the market, or just move forward with life’s plans.

Anecdotally, many agents will tell you their opinion based upon their personal observations. If they had a hard time selling their last home they might tell you the market is “changing” and if their last listing flew off the shelf they might proclaim the housing market to be as robust as ever. But whatever people feel, the numbers don’t lie. They are an unemotional representation of what is occurring in a given market.

Let’s first discuss the market conditions. There’s a lot of hyperbole as to the state of our current housing market. Sellers are still in the mindset that they hold all of the cards, yet buyers are beginning to push back on prices. Sellers are receiving fewer offers, many have had to lower their asking prices, and homes are often times closing below the asking price—something that rarely happened from 2012-2015. This would suggest a shifting market.

Clearly, the sky is not falling, the shift is towards a more normal market, where homes sit on the market longer, and may sell above, at, or below the seller’s asking price. This long awaited market shift is not a correction, but rather a predictable and healthy move towards a more balanced and sustainable market. To be blunt, prices have risen to a level that the majority of buyers can no longer afford.

We first examined all of the home sales in Belmont that occurred in 2015 through August 31st in order to compare with the same period in 2016. We added no search filter other than the date range, since the larger the pool of sales, the more reliable the data.

Here are the data:belmont-analysuis-for-10-2016

We added an arrow to represent if the numbers went up or down as compared to 2015, and then rated with a “Thumb’s Up” icon for those parameters that showed little change or improved a bit over 2015.

Note that while the raw median home price dropped in 2016, you can see at the very bottom of this inset that we made an adjustment, since smaller homes sold in 2016 of the two periods we examined. So for example, although the size of homes which sold were 4.8% smaller in 2016, they only sold for 1.2% less. Could that be interpreted that the median price actually rose 3.6%? Our numerical calculation based upon price per square foot comes up with 1.5%. In either case, it’s a modest increase year over year at best.

On a macro-level, when we look at the San Francisco Metropolitan Statistical Area (SFMSA) as produced by Case-Shiller for Standard and Poor’s, which encompasses the counties of Marin, Alameda, Contra Costa, San Francisco and San Mateo, one can see that there was a nominal 1% increase in home values between May and June alone. This lends more credence to our theory that home values are initially topping out in higher priced areas like the Mid- Peninsula.

It’s clear that a market shift has occurred. While the median home price reflects a marginal change year over year (YOY), in almost every category there’s a distinct shift towards a more normal market. There were fewer homes selling for more than the asking price and the ones that did sell over asking sold for 30% less than in 2015. There were more cancelled listings, and more price reductions for greater amounts. The inventory of homes for sale is growing—up from 0.3 to 0.7 months of inventory (still considered seller’s territory).

The month’s supply of inventory is the measure of how many months it would take for the current inventory of homes on the market to sell, given the current pace of home sales. For example, if there are 50 homes on the market and 10 homes selling each month, there is a 5-month supply of homes for sale. The months of supply are a good indicator of whether a particular real estate market is favoring buyers or sellers. Typically, a market that favors sellers has less than 3 months of supply, while more than 6 months of supply indicates an excess of homes for sale that favors buyers.

Belmont still has less than one month of housing inventory but Foster City, also on the Mid-Peninsula, is currently running a housing inventory level of 3 months. What this means is that the market shift will no doubt continue until there’s a full blown correction. We could be years away from that happening, but we appear to be moving in that direction and we’re also moving into the slowest part of the season (winter), when seller’s typically net the least for their homes. In addition, if interest rates rise—and they should since they are at historic lows—that too will have a damping effect on home values in the near future.

How long will the new normal market continue? We’ll save that wild card question for other talking heads. Nobody really knows of course, and anybody that professes to know should scare you. However, the market appears to have hit a price threshold. As fewer and fewer buyers can qualify for the median priced home, more sellers will be getting less windfall profits like they did during the meteoric rise over the last three years.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441.

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

Days on the Market—What’s in a Statistic…

How long it takes when selling one’s home to get into contract is one of the most nerve racking periods during the home sale process—for sellers, but how long should it take to sell a home?gambling

Don’t gamble on the outcome. Our study shows that selling a home too fast or having it take too long can be detrimental. Not every case is the same, and not every market has the same perception, but on the Bay Area, specifically the mid-peninsula, statistically, there’s a sweet spot for selling a home quickly, and getting the most money at the same time.

One must understand how potential buyers view this statistic in order to evaluate why there’s a correlation.

When a home is being sold “off-market”, or off the MLS, buyers can have a difficult time ascertaining the intrinsic value. If a seller is asking “X”, potential buyers might think it’s worth the asking price—perhaps more, or less, who knows?

When that same homes goes “Live” to the entire community of house hunters and REALTORS®, if no offers materialize within the first 10 days—or on offer day—it’s a safe bet that the home is overpriced for the value offered, and will more likely than not eventually, sell for less—and savvy buyers know this.

If hordes of buyers line up right away to make offers, buyers looking on will feel confident that the home is priced well—or even too low. Conversely, if the home languishes on the market more than 14 days, and there’s scant interest, it’s a pretty good indication to buyers that the home may be priced too high—or worse that there’s something wrong with the home. In either of the latter cases, buyers will often sit back and wait to see what happens. They typically wonder when, and or if, the seller will lower the asking price.

This is when the tables shift and buyers are empowered to make offers at or below the seller’s asking price.

As a seller the last thing you want to do is overprice your home. Trying to alter a general opinion that there may be something wrong with your home puts a seller in a quandary, if not a perilous position.

Sellers can’t advertise that there’s “nothing wrong with their home”, since certainly every home has some inherent flaw. What they’d like to advertise is, “There’s no reason you shouldn’t be buying my home—it’s just as good as all of the others”. Except that, it’s probably overpriced.

What other factors can cause the days a home is on the market to creep up? In addition to the number one factor of overpricing a home, there’s accessibility and presentation.

Making your home hard to show can be hugely detrimental to getting the most buyers in to see your home. Making it “appointment only” or having it shown through your “agent only” will invariably limit the number of potential visits to your home.

When Real Estate agents set up a day to show their buyers homes, they know everyone’s time is limited. It does no good for them to show buyers so many homes that their buyers become overwhelmed, so agents will limit the showings to as many as they can comfortably fit in. If your home is hard to get into, they might save it for another day—or they might skip it altogether. Often a buyer will find a suitable home on their first outing.

Buyers are busy people. Often they are juggling jobs with long hours, pets and/or small children as they traipse around trying to find a suitable home. Having an open house where they can leisurely stop by on a weekend afternoon will benefit the accessibility of your home and increase the showings. Think how many mid-week dinner time appointments can be deferred by inviting buyers to a weekend open house.

Is one weekend enough? Many times it can be, but then you could be missing out on that one high bidder who was out of town on a business trip, or heavenly forbid, a weekend getaway from the stress of house hunting.  Imagine how frustrating it is for buyers who finally take a break for a one-week vacation only to learn that there dream home sold before they could return. And if you’re a seller, imagine potentially leaving that much money on the table.

Lastly, but certainly not least, is a home’s presentation. Not all sellers nor their agents present homes the same way. Some sellers despite their agents’ vehement admonitions will still cook a fried fish diner right before a critical showing. Real estate agents can also sabotage a seller’s likelihood of a sale by not realizing the importance of market saturation advertising—tapping onto the full potential of the internet with international and social marketing which includes the latest 3D virtual tours, video and of course Facebook and Twitter portals.

Our Next Post…Photographing Your Home—It’s Not Child’s Play. The photography of your homes is best left to professional. Too often we see homes presented with pictures taken from a cell phone.

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Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and on Twitter @ https://twitter.com/morganhomes

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

 

 

 

 

Making Heads or Tails of The Housing Market

Making Heads or Tails of The Housing MarketCoin Toss

Whenever the real estate market has been heading in an upward or downward direction for an extended period of time, people naturally begin to question when the current trajectory will end—and we are not immune to that natural tendency.

We live in Belmont and our real estate office is in Belmont but we also look to national and macro indicators as well, since the Bay Area really is its own microcosm of tech and real estate activity and what happens in the Bay Area tends to stay in the Bay Area.

Trying to make heads or tails of our local market is much harder since the number of sales (data points) are so few they are easily distorted by one or two outlier sales—a bidder who “had to have the home” and paid way too much, or a seller that sold off market for far too little.

The Macro Level

We post Standard & Poor’s Case-Shiller analysis each month to our web site. Even though the data has a three month lag time, its relative information and year-over-year data points are telling.

This is a graph of the MSA for our area—referred to as the San Francisco MSA (Metropolitan Statistical Area) but it’s composed of counties, Alameda, Contract Costa, Marin, San Francisco and San Mateo. Note that we’ve recently experienced a blip on the radar of declining index values for two months in a row.  Is it a trend? It could be. We’ll know more over the next two month’s reporting periods. Since the beginning of the recovery in February of 2012, there have only been two other instances when the index declined, only to bounce right back up—but only one  cycle of decline during this period ever lasted more than three consecutive months . What is disconcerting is that four of the five index declines have occurred in the last two years.SFMSA 2015-2016

With that in mind, we turn to Belmont home sales for March 2016.

Stats March 2016

The chart depicts Belmont real estate activity for the month of March in 2015 as compared to March 2016.

SALES

Sales of existing single family homes waere down 70 percent YOY, which might seem frightening except that inventory levels—the homes available to sell were down 60%.

MEDIAN HOME PRICE

We believe this actually dropped, here’s why. Technically, the median home price was up 6.3% YOY but that bought a Belmont home which was over 30% larger than in 2015. The 539 square feet difference at the going rate of $643 per square foot equals a disparity of almost $350,000. If you were to subtract that from the 2016 median home price, we get an adjusted media home price of $1,175,000—or an 18% drop in the median home price YOY.

PERCENT RECEIVED

This also dropped from 120% of asking in 2015 to 104.5% in 2016—a 13% drop. Now 120% in March of last year was an anomaly, but still on either side of March in 2015 it was 107% and 117%.

Belmont home values have reached a point where fewer and fewer people qualify for the median home price. That puts a damper on the rate of appreciation, so we expect that this year we will see more volatility in the numbers, and continue to put these numbers into perspective as best we can.

Disclaimer:

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

You can find them on Facebook at https://www.facebook.com/Morganhomes and also find them on Twitter @ https://twitter.com/morganhomes

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

Free Solar Panels May not be Such a Bright Idea

Solar power leases may have pitfalls. We’re seeing more and more solar panel popping up on home these days and with them come issue when trying to resell one’s home. Studies have suggested that the addition of solar panels on a home can boost a home’s value. But sometimes those solar panels can sabotage a deal when it comes time to sell.Solar Power Savings

Selling Green Homes

Making the Case for Energy-Efficient Homes

Energy-Efficient Mortgages Gain Popularity

More Builders Find the Sun Is a Selling Point

Do Green Homes Fetch Higher Sales Prices?

More companies are offering home owners a contract to lease solar panels where they pay no upfront costs for the installation and could start saving on their electricity bills right away. But some home owners who sign onto these deals are finding some snags when they go to sell.

Many potential buyers are leery of taking on the leasing payment contracts for the next 15 to 17 years because they often have to qualify on credit from the solar companies themselves, in addition to the mortgage. Also, some buyers are hesitant to sign a contract because they’re concerned the solar equipment will become obsolete or won’t amount to a big savings in the end after paying the leasing fee.

We asked Solar city over to our home in Belmont for an estimate. Of course the carrot is free installation, but the savings is minimal. Since they are leasing you the equipment, they take an override on the energy their panels on your roof produce–and they sell that energy to you at a reduced rate–but it’s not anywhere close to free, as if you owned the equipment.

But we’re seeing issues trying to re-sell home with leased solar panels. Some home buyers are refusing to buy the house unless the seller buys out of the remaining lease payment stream — which could be $15,000 or more. If you’re going to eventually buy-out the contract anyway, it’s a far better idea to but it up front and enjoy 100% of the energy dollar savings.

In Fresno, Calif., a couple trying to sell their house told The Los Angeles Times that it attracted multiple offers but two sets of buyers backed out of the contracts due to the leased solar panels on their roof. The buyers felt the long-term cost of the lease agreement was too high or they were concerned about the credit qualifications they had to meet in order to take over the lease. Ultimately, the couple selling the home had to pay $22,000 to break the lease with the solar company so that they could sell the house.

With the rising popularity of solar, we already have seen several disputes arise over solar panel leases, and we expect the problem will get nothing but more frequent.

Residential solar installations are rising dramatically — up by 50 percent per year since 2012, according to the Solar Energy Industries Association.

Before you sign on the dotted line for a solar lease, check with your accountant for tax consequences if you purchase the system, you might qualify for a tax incentive write-off. A simple home equity line of credit may be all you need to qualify to own 100% of the power your home generates.

Source: “Leased Solar Panels Can Complicate – or Kill – a Home Sale,” The Los Angeles Times (March 22, 2015)

How Low Can Housing Inventory go?

The year is just getting started but already there’s a problem with the housing inventory levels. Belmont’s housing inventory consisted of five homes for the month of January 2016. To put that into perspective, Belmont’s housing inventory has averaged 41 homes a month since 1998. In 2015 the average for the year was 12 homes a month. Since housing inventory fluctuates seasonally, we looked at the housing inventory levels for each January—that averaged 30—remember, we are at five right now.

This inadequate housing supply puts intense upward pressure on home prices. As we have seen in the past year alone, the amount sellers received of asking increased from 105% in January 2015 to 107% in 2016.

MONTHS OF INVENTORY

Month’s supply of inventory is the measure of how many months it would take for the current inventory of homes on the market to sell, given the current pace of home sales. For example, if there are 50 homes on the market and 10 homes selling each month, there is a 5 month supply of homes for sale.

The months of supply is a good indicator of whether a particular real estate market is favoring buyers or sellers. Typically, a market that favors sellers has less than 6 months of supply, while more than 6 months of supply indicates an excess of homes for sale that favors buyers. Belmont currently is running a housing inventory level of .56—yes, less than one month. On a national level, we’re still hovering around 5.6 months of inventory. Home Sales January 2016

MEDIAN HOME PRICE

The median home price in Belmont increased 24% YOY, from $1,210,000 in 2015 to $1,500,000 in January 2016.

The median size home which sold increased YOY too, from 1,500 sqft in 2015 to 1,610 sqft in 2016. If it’s any consolation to buyers, while homes went up 24% in January 2016, buyers did get a home that was 7.3% larger.

PRICE REDUCTIONS

Price reductions remain at an all-time low. Only one seller in 2015 had to lower their initial asking price and in 2016 no one suffered the price reduction fate. Imagine the chatter around the water cooler when it’s time to fess up to your colleagues yours is the only home that had to have its asking price lowered.

OVER/UNDER GAME

Of the homes that sold in 2016, seven sold for over the asking price, one home sold right at asking and one home sold for less—strange as that may sound given the tight market conditions—it’s still possible to overprice one’s home.

Days on Market [DOM]

The time it took to sell a home in Belmont dropped nominally from 12.7 days in 2015 to 11 days in 2016.

Don’t Wait—Beat the Crowds and Buy This Winter

Don’t Wait—Beat the Crowds and Buy This Winter

snow-globe-house

We’ve been saying this for years, the best time to buy a home is when it’s not the best time to sell–and the statistics back us up. But we’re not telling you anything you shouldn’t already know. However, there’s even more compelling reasons this year, with the much ballyhooed talk about interest rate hikes.

Now that the U.S. has regained its job-creation mojo, as the October employment report showed, the demand for housing is only going to grow.

After all, when people have jobs they can break off and form new households—ditching the roommates behind or finally moving out of Mom and Dad’s basement—and that’s what fundamentally drives home purchases.

Most of the households created over the past two years have been renting households, but based on U.S. Census data for the third quarter of this year, it appears that homeownership has started to recover.

This especially makes sense now that it is cheaper to own than rent in more than three-quarters of the counties in the U.S. And it’s not getting better— rents are rising year over year at twice the pace of listing prices. Meanwhile, mortgage rates remain at near record lows but appear poised to increase over the next year. And home prices are rising, too.

So if you qualify for a mortgage and have the funds for a down payment and closing costs—and if you intend to live in a home long enough to cover the transaction costs of buying and selling—you will be better off financially if you buy as soon as you can. After all, if you are tired of your current home now, you won’t feel better about it in six months.

The top factors driving home shoppers this summer were pent-up demand and recognition of favorable mortgage rates and home prices. These drivers will likely remain well into next year.

Yet demand for housing is extremely seasonal. In most markets in the country, we are conditioned to believe that we should buy homes in the spring and summer. So come each October, plans to purchase shift to the spring. While the school calendar and weather do influence the ideal time to move, many buyers would benefit from buying this fall and winter rather than waiting until next spring.

In October, the percentage of would-be buyers on realtor.com® saying that they intend to buy in seven to 12 months was the highest it has been all year and represented the largest time frame for purchase. Likewise, October produced the lowest percentage of would-be buyers saying they intend to buy in the next three months.

In other words, people’s stated plans point to a very strong spring for home sales. Great, right? But here’s the problem: Inventory isn’t likely to be higher in March and April than it is now. And while inventory should grow in late spring and into summer, it won’t grow as fast as the seasonal demand.

So, if you are ready, consider getting in the market now instead of early spring. You will have more choices and less competition, and you can lock in today’s rates rather than risk rates being 25 to 50 basis points higher. (A basis point is 0.01 percentage point.)

A 50 basis-point increase in rates (for example, from 4.05% to 4.55%) would cause monthly payments to be 6% higher. And that increase would not only affect your monthly cash flow but could also affect your ability to qualify.

So if you are considering buying a home this spring, it’s worth exploring the inventory now and reaching out to a local Realtor®. A new home could be the best gift you give yourself and your family this holiday season.

And if you are considering a move, we’re ready to help you make a good decision.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

You can find them on Facebook at https://www.facebook.com/Morganhomes and also find them on Twitter @ https://twitter.com/morganhomes

 

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

Belmont Home Values Peak–August 2015

It’s very hard to stare at numbers that are counterintuitive to what you feel about the market around you. This is the case once again in Belmont when we compare last August to August of 2015.

This August felt really slow—like there was a pull-back in the market. Many of our colleagues are still commenting about how if just feels different—but the numbers say something else.

One can account for the lag between an offer date and closing to explain away part of this nagging feeling, since most of the homes which closed in August were sales consummated in July. August could turn out to be a slow month when we look at September closings next October.

Certainly the stock market vacillation has people on edge and the Federal Reserve’s non-stop droning about interest rate hikes has people feeling uneasy, and when people feel uneasy they tend to pull back or even freeze, absent a clear path through the valley of the unknown.

 

We’ll summarize this very quickly for you: (click on the picture for a larger image).

Belmont August* Rinconada was our sale.

SALES—

The housing units sold over the two period was a dead tie at 24—so nothing to note there.

SIZE—

However the median size of a home which sold in the two periods was vastly different—as the homes which sold in 2015 were 450 sqft or 21.5% smaller and on lots 12% smaller.

MEDIAN PRICE—

That did nothing to dent the increase in the median home price, which rose another 20% year-over-year despite the homes were 21.5% smaller—that’s noticeable.

PRICE PER SQUARE FOOT—

We’d expect this to be higher, since smaller homes sell for more per square foot than their larger counterparts—and it was, 35% higher than last year.

So what’s the real median price increase if the homes are selling for 20% more and yet are 21.5% smaller? Let’s look at that difference of 450 sqft and multiply it by the amount at which homes are selling. To be conservative, we’ll use the smaller number a year ago of the larger homes—a median price per square foot of $665 x 450 = ~ $300,000, which we then add to the median price in 2015 of $1,517,500 to arrive at an adjusted median price of $1,817,500 or an adjusted 44% more year-over-year.

Looking at this from a different angle, what if we added the raw 20% year-over-year growth numbers and added to that 21.5% since the homes were that much smaller? We get 42.5% year-over-year.

Could it be that prices in August went up 40+ % year-over-year? No wonder the market feels like it’s slowing down. Home affordability is at its lowest point since the highs of 2009.

 

DISCLAIMER

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441.

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

Drew & Christine Morgan did not necessarily participate in these sales.

How to Buy a New Home and Keep Your Tax Base

How to Buy a New Home and Keep Your Tax Base. If you’ve thought of moving but are frightened at the prospect of a property tax increase we have a few propositions for you—60, 90 and 110. You may already be aware of these but we have some new information which might make them more attractive.

Most homeowner’s are keenly aware that buying a new home means having their property tax base increased to 1% of the purchase price. For those of you who have owned a home for many years this alone can make a move financially impossible; for many, it means they couldn’t afford to buy the home they already own.

A BRIEF HISTORY

Proposition 60 enacted into law in 1986 allowed for the one-time transfer of your current home’s tax base to a replacement property of equal or lesser value after the age of 55 of either spouse, providing that the replacement property was located within the same county.

Proposition 90 passed by the legislature in 1989 allowed counties to voluntarily extend the transfer into their county to all 58 California Counties.

Proposition 110 passed in 1996 extends this relief to permanently disabled people, whether 55 or not.

The problem for most people wishing to benefit from this tax base transfer is they are limited to moving within the county in which they currently reside, or moving to one of only a handful of reciprocal counties (Alameda, Los Angeles, Orange, San Diego, Ventura, San Mateo, and Santa Clara).

Fortunately, another very desirable county in the Sierra foothills was added to the list—El Dorado. Their legislature passed a resolution into law on December 10th 2009 taking effect February 15th of 2010 allowing anyone in the 58 California counties to transfer their tax base to El Dorado County.

There are rules you must follow or your transfer will be denied so before you consider a move you will want to read several of the helpful publications which exist, and/or consult with your tax or legal advisor. The State Board of Equalization offers some easy to understand  “Question and Answer” publications as well as a pdf containing many test case scenarios, but here’s a brief summary:

The market value of the replacement principal residence must be equal to or less than 100 percent of the full cash value of the original property as of the date of sale, assuming the replacement dwelling is purchased prior to the date of sale of the original property. That number is increased to 105 percent of the full cash value if the replacement dwelling is purchased within the first year following the date of the sale of the original property, or 110 percent of the full cash value of the original property if the replacement dwelling is purchased within the second year following the date of the sale.

If you’ve been holding back on making a move to retain your home’s current tax base it’s nice to know you now have some great options. And if you’re not familiar with this Gold Rush era county, you owe it to yourself to check it out.

There are many cities within El Dorado County which offer a great quality with life. Located around Folsom Lake with its various water activities (when the lake has water), El Dorado County extends all of the way north to South Lake Tahoe. The many towns in between including Placerville,  offer affordable housing options—from award winning retirement communities to cities catering to the first time buyer and neighborhoods that rival homes the Peninsula has to offer—including Hillsborough—all at a fraction of what it costs to live in the Bay Area.

Visit the on-line version of this newsletter at MorganHomes.com and use the underlined links in this article to read more.  If you are not comfortable with the internet, simply give us a call and we’ll mail you out some more information or schedule a time with us for a short visit to discuss these opportunities.

 

Disclaimer:

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441.

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

How to Find the Best Schools

This you already know: Parents want to send their kids to good schools. So that’s why they flock to neighborhoods—sometimes paying hundreds of thousands more to live there—that purport to have them. But what does “good school” really mean? Is it really all about the test scores?

Increasingly, educational experts say: not really. These days, many of them hail the importance of other, less tangible goals such as fostering social and emotional intelligence. Others tout the importance of executive function skills: the ability to plan, focus, remember instructions, and multitask. In the Finnish school system, purportedly the best in the world, academics are delayed, homework and testing are minimized, and free play time is valued.

But not so much in the U.S. With the ever-growing emphasis on standardized test scores, including for the new Common Core standards, educators and parents worry that schools are “teaching to the test” instead of teaching what kids need.

So how can you really figure out what that is? As with all things parenting, you have to decide for yourself what’s best for your family. Here are some tips on how to figure that out.

Determine what kind of learner your child is.

No matter what kids are required to learn, there are different ways to get them there.

Kids often have strikingly different learning styles. Some are visual, and fare better when things are illustrated rather than spoken; some learn better in groups; some are better able to focus if they’re alone. And some simply learn best by doing. And while no school caters entirely to one kind of learner, you may be able to find a school whose approach works better for your kid. Talk to the principal and teachers about how they accommodate different learning styles.

Find out if the school has the basics

Traditional barometers such as class size, student-to-teacher ratio and, yeah, test scores do matter—to some extent.

“They’re the best predictors of a school or district’s academic foundation,” says Bill Jackson, founder and CEO of GreatSchools, a nonprofit organization that provides nationwide school ratings. And schools need that foundation so they have something on which to build and to set goals.

Joyce Szuflita, an educational coach and founder of NYC School Help in New York City, has another view.

“If I were stuck on a desert island and could only ask for one piece of data while considering a school for my child, I’d want to know the percentage of kids who are chronically absent,” she says, arguing that a high attendance rate indicates a positive school culture in which the staff, students, and parents are all committed to success.

Look beyond academic development

In addition to solid academics, experts increasingly tout the importance of a holistic education, which cultivates students’ moral, emotional, physical, and psychological aptitudes.

Schools with programs that teach empathy, self-motivation, and adaptability—or emotional intelligence—equip students with the life skills proven to foster success. Having a high IQ might demonstrate mastery of a body of knowledge, but a high EQ (emotional quotient) indicates that a student can be flexible and understanding, synthesize information and successfully interact with all kinds of people, which might be better predictors of future success than high grades or scores.

Seek creative learning opportunities

Forget rote memorization; the academic and intellectual skills needed to thrive in tomorrow’s multinational, dynamic workforce aren’t the same as those that led to success before the millennium.

“Expansive ideas and creative thinking will become even more essential in the future,” says Dr. Shimi Kang, author of the forthcoming book “The Self-Motivated Kid: How to Raise Happy, Healthy Children Who Know What They Want and Go After It (Without Being Told).” Consequently, she contends that a “good” school today is one that helps foster 21st-century skills such as creativity, collaboration, communication, and critical thinking.

These might be schools with highly developed music programs, team sports, extracurricular clubs with broad focus (environmental protection, community service, even juggling or a “Harry Potter”-themed Wizards & Muggles club)—any activity that develops diligence, creativity, and quick thinking.

Consider lower-ranked or up-and-coming schools

Szuflita suggests resisting the urge to follow the crowds to the “best” schools in town, which could have problems with overcrowding and waitlists, despite their virtues. Instead, track the progress of previously overlooked schools, ones that may have a new principal, an increasingly active PTA, and/or an attendance rate that has steadily risen, even if the school itself doesn’t have the most stellar reputation or highest rankings.

Research (free) alternatives to public schools.

Themed charter schools (which receive public funding but operate outside of their regional public school districts) or magnet schools (public schools with specialized courses or curricula that draw students from across school districts or zones) infuse their offerings and activities with a specific emphasis.

At Expeditionary Learning schools (nationwide), for instance, students study a single topic from many angles. Heavy emphasis is placed on the importance of nature, reflection, and service, and classes can involve Outward Bound–style excursions.

The tuition-free Muskegon Montessori Academy for Environmental Change in Norton Shores, MI, drives home the importance of clean water by having students care for the local river.

Schools that take the multiple intelligences view recognize that intellect comes in many forms (e.g., word smart, people smart, numbers smart) and teach to individuals’ strengths.

Check out the ‘vibe’—it really means something.

This may seem obvious, but we can’t stress it enough: Go see the schools for yourself, and visit as many as possible. (By the way, did you know you can search for homes by school district on our app?) You might discover what you thought was important isn’t really at all. And test scores and state rankings don’t convey the important yet difficult-to-quantify vibe of a place.

“Actually experiencing a school is the best way to inspect the vitality of the work, the energy of the teachers, and the rapport between the staff and students,” says Szuflita.

One tip: Arrive early to the visit, so you can evaluate the school when no one is looking.

Ask yourself what ‘good’ means to you.

What do you want from your school? Racial and economic diversity? Sports and arts programs? A campus? Leadership/internship opportunities? Is your No. 1 criterion a neighborhood school that you can invest and create community in, even if it means sacrificing a few things like class size or an emphasis on the arts?

If traditional academics and high test scores really are the most important things, you’re lucky: Those are the easiest things to find.

Today, finding a good school means you grown-ups have to do serious homework, figuring out the best fit for your family and zeroing in on schools that are equipping students with the skills and experiences that will lead to a broader definition of success.

Anything else no longer makes the grade.

Contributed by Audrey Brashich
Audrey D. Brashich writes regularly about trending pop culture issues for The Washington Post, Yahoo Parenting and other national news outlets. She is also the author of All Made Up: A Girl’s Guide to Seeing Through Celebrity Hype and Celebrating Real Beauty.