Most of you know we’ve been operating out of the Carlmont Associates office in Belmont. Effective today, Carlmont Associates has joined a partnership with Re/Max Star properties.
Our level of service and commitment to our clients will be unaffected except that we'll have access to the benefits the number one real estate franchise in the world can offer.
FOR IMMEDIATE RELEASE:
(Redwood City, CA Nov. 20, 2010)—Re/Max Star Properties, a real estate leader in San Mateo County with projected sales of over 200 million dollars for 2010 announced today that it has added the premier Carlmont Associates team and premium location in central Belmont to its local group of Peninsula offices. “Carlmont Associates is a well established, centrally located real estate firm serving the Belmont area for over 50 years and we’re proud they’ve chosen to join forces with usâ€.
“We are both pleased and excited by this mergerâ€, said Tom Diridon, one of the principals of Carlmont Associates. He, his wife Eda Diridon and partner Gary Rossetto couldn’t be happierâ€. Mr. Rossetto mentioned, “It will bring state of the art systems, services and global name brand recognition and lead generation systems of RE/MAX to Carlmont Associates allowing us t better serve our clients.â€
“This move will bring major benefits to the local consumers and its agents by the ability to offer more marketing solutions, exceptional financing opportunities and unmatched after the sale protectionâ€.
Anyone wondering where the beef was in the Ranger’s hitting squad during the 2010 world series need look no further–we’ve got a recipe for you to chew on straight from Texas.
When I was traveling to Austin in 2009, I would contemplate where I could dine next to pass my culinary time. A friend of mine and local Austin REALTOR, Jeff Niemeyer, recommended I try Houston’s near the arboretum; trying to stick to lighter fare when on the road, I’d often eat salads for lunch and or dinner, so when I arrived and found a Thai Beef Salad on the menu I was set.
Once, I tried the Thai Beef Salad at Houston’s in Austin, but I never ventured any further down their menu. It was absolutely one of the best salads I have enjoyed. People who know me know I enjoy the challenge of deconstructing something I have tasted while dining out to detect what ingredients were employed. Often, it’s fairly easy as some flavors overpower the dish and are easily identified. But every so often, a chef develops a recipe that is so complex, so well balanced that it titillates the taste buds with a mosaic of contrasting flavors where one could spend days attempting to deconstruct the recipes–or, as in my case, eating the salad many times and taking copious notes.
First and foremost, the salad plays with all the senses of taste- bitter, sweet, sour, and salty- and introduces spice with perfectly contrasting flavors of just enough heat and spice, followed by refreshingly chilled mango. It satisfies your sense of umami with refreshing rice noodles and a perfectly grilled beef filet.
The salad starts with a bed of rice noodles cooked, fried lightly, and brought to room temperature, then ever so lightly tossed with sesame oil. A medley of julienne red bell peppers, carrots, tomato wedges, shredded cabbage, and cubes of mango add complementing textures and wonderfully wild flavor combinations, which serve to enhance the colorful presentation further and add more depth with each irresistible bite.
The dressing offers spice and bitterness with fresh lime, orange juice, and fish sauce, while Sracha adds a kick and is well paired with shiso to create depth to the dressing. Finally, the scallions and crunchy dry roasted peanuts offer a nice contrasting crunch.
While each ingredient has been carefully chosen to perform its respective role of adding texture and color and smacking all the senses of taste, the warm cubes of medium rare beef filet lightly marinated in the dressing, then charcoal grilled, adds the ultimate umami to finish the dish.
When I returned home with my notes in tow, I checked on the internet to find out if Houston’s posted the recipe—no luck. But I found an interestingly close approximation written by Kayla Williams (with my notes added in pen as to what brought it closer to the recipe I had in Austin). For example, the shiso, which is most often associated with sitting alongside your plate of sushi as the Japanese equivalent of parsley, is introduced in the salad as a complex version of what might be confused as a mint and cilantro combination, and, if you can’t find shiso, that’s a relatively logical substitution.
So, without further ado, here’s my collaborated best approximation of one the best salads I’ve had:
With the election behind us and the stock market rallying to the excitement and anticipation of more economic stimulus and legislative gridlock, Belmont’s housing market continues to show signs of what could be viewed as stagnation at its best, or a double dip at its worst.
This October, housing sales for Belmont revealed a slower market and softening prices compared to October 2009.
(Click the picture for a larger image).
SALES
Thirteen home sales—one shy of last year’s 14, would not normally give great cause for consternation—especially since the sample size in Belmont is so small. However across the board indicators are eluding to a reluctance on the part of buyers to commit to purchasing a home.
In light of comments like that of John Paulsen who made a fortune betting on the sub-prime market collapse proclaiming “this is the best time to buy a home in fifty years, exclaiming that, "If you don't own a home, buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home†clearly job security is the number one reason buyers are waiting before taking on any new debt.
MEDIAN HOME PRICE
The October median home price in Belmont was $864,200 and appears to have dropped only slightly from October 2009 when it was $865,000. Once again though larger homes sold this October. The median size home sold was 2010 square feet as compared to last year when the median size home sold was only 1760 square feet. Put another way, this year you could buy a home 250 square feet larger (14%) for the essentially the same price as last year.
DOM
The average time it took to sell a home in Belmont this October also went up from 38 days last year to 46 this October.
% RECEIVED
Seller’s also enjoyed getting 99.6% of their asking price last year while this October dropped to 98%.
PRICE REDUCTIONS
Six of the 13 sales this year had lowered their price on average $92,000 to attract a buyer while last year only three sellers reduced their asking price for on average $40,000.
This October while three homes sold for on average $29,000 more than their asking, last October six homes sold over asking for on average $23,000.
The last thing any seller wants is to get less than their asking price and this year more sellers were disappointed as nine homes sold for on average $34,000 less compared to last October when only seven homes sold for on average $30,000 less than their asking price.
In October of both years just one home sold at the seller’s asking price.
COMMENTARY
This fourth quarter slowdown in real estate is not all that unexpected. It’s a fairly mild hiccup at this point which may be attributed in part to election jitters but certainly it’s exacerbated by our own government when they announce they are re-visiting the home mortgage deduction. Of course every year some committee wants to reexamine if they could do away with it to be replaced by a flat t tax, but to do so in a year when the government is spending billions of dollars trying to stimulate the economy, and particularly the housing sector, one wonders why they wouldn’t just table any further debates on the home mortgage deduction until after they economy was on track.
With a needed 55% voter approval for each measure both passed handily with each measure receiving well over 60% of the votes.
Measures I and N from the San Francisco Examiner: Five schools in Belmont would get new classrooms, repairs to leaky roofs and other improvements if voters approve two bond measures on the November ballot totaling $70 million.
Measure N would give the Belmont-Redwood Shores School District $35 million to spend on facilities at four Belmont elementary schools – Nesbit, Fox, Central and Cipriani.
Measure I, a companion measure, would generate $25 million for Ralston Middle School. Both need a 55 percent majority vote to pass.
Measure I would cost property owners about $11 per $100,000 of assessed value annually, and Measure N will cost about $27 per $100,000, according to the school district. *With the median price in Belmont at $850,000 right now that would mean an additional $110.50 per year.
Measure N only impacts Belmont schools, so voters in Redwood Shores would not be affected.
You may have already heard through an errant email or co-worker that hidden in the health care bill was a provision for adding a 3.8% sales tax on the sale of your home.
We’ve even been forwarded emails with the story contained in a newspaper article. So is there any truth to it? Well, sort of.
The much ballyhooed 3.8% tax in the health care bill which takes effect in 2013 is actually a Medicare tax on investment income—not a real estate tax per se. That alone might not make you feel any better but read on.
According to factcheck.org , which did extensive research, there are very limited circumstances in which this tax would be levied.
As it would apply to real estate, first your income would need to be over $200,000 a year ($250,000 for married couples filing jointly).
Now if you’re selling your principle residence, the first $250,000 of gain for single tax filers and $500,000 for those who file jointly would be exempt from taxation—as it currently stands for capital gain taxation.
The 3.8% tax would, as we understand it, apply only to the portion which might exceed this threshold. It’s also important to note that this tax is on the gain, not the sale price. So if you were to sell a home you and your spouse bought for $500,000 several years later (you need to have lived in the home two of the past five years) for $800,000, you would have a gain of $300,000. This is of course is further diminished by any capital improvements you made to the property and selling costs but to keep it simple we’ll use the higher figure of $300,000. Based on this you would still owe no capital gain tax nor would you owe the new Medicare Tax even if your income was over the $250,000 threshold because your gain was only $300,000—less than the allowable first $500,000 which is forgiven.
So several things need to happen before you would be subject to the tax:
Your income must exceed the thresholds mentioned above.
Your gain on the sale of your home must exceed the allowable forgiven limits.
Note that this capital gain exclusion is for your principle residence only so high wage earners who sell their investment properties would be subject to this new tax on that gain—assuming they had gain to tax.
As far as we can tell the viral nature of this email succeeded in part because it resonates with what many readers feared about the health care bill—that it would be caulk full of special interest groups’ and hidden agendas. Further exacerbating this was that many email authors added their own spin by including miscalculated and outrageous examples of how the tax would be applied. Their agenda was then further picked up by those who wish to freighted people into voting the way they would want by saying, as the email I received said, “People have the right to know the truth because an election iscoming in November!â€
I couldn’t agree more and we hope this explanation is closer to that truth.
Now for the inevitable disclaimer: The information contained in this newsletter 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.
There’s little change to report for sales in Belmont for the month of August 2010 but the Case-Shiller report which was released on September 26th showed another increase in the Bay Area metropolitan index for the sixth straight reporting period. This index follows the change in home prices across the country in 20 metropolitan areas. Their complete methodology can be found here.
(click here for a full sized image)
MEDIAN PRICE:
The median price rose to $885,750 over $837,500 in August of 2009. That represents a 6% increase but is partially negated because the pool of homes which sold were also 14% larger.
SALES:
Home sales remained flat as compared to the previous month but the 20 sales in August 2010 were four more than August 2009.
DOM: (Days on Market)
The days a home took to sell were on average 44—almost half of what it was a year ago.
Of the 20 sales in August only three homes sold for over their asking price for an average of $15,000 more, while four sold right at the asking price and 13 sold for on average $30,000 less.
We’re thinking we should simply name this series after our last post, “There you go againâ€, in honor of the media whenever it manages to make a mountain out of a molehill.
Typically, bad news is negative news since that’s what sells, but sometimes when the media get scooped by another outlet, they will try and dig up an opposing opinion in order to get a piece of the attention; further managing to confuse (or mislead) their audience.
We see it over the spectrum of issues, but one common theme is they are typically issues that are “hot buttons†with their audience, like the economy, housing, jobs etc.
It’s not hard to point out their lack of diligence—to dig a little deeper and ask “whyâ€. So why don’t they do it? In today’s sound-bite media world it’s not about accurate reporting so much as getting the story out there fast and first.
We tend catch slanted real estate reporting since it is what can easily spot, but it’s prevalent in many other areas as well.
Take our last post pointing out the misleading report on housing sales decline. Almost simultaneous with that report was a report on the median price increasing. So they managed to exaggerate the report on the sales decline and overstate the median price increase. What’s a person to do?
If you’re like us we’re sure you’d like to reply on the news you hear as accurate, but unfortunately, that’s not always the case. Sometimes you have to dig deeper. Of course we’ll try and take some of that burden off of you. If you check in here regularly we try and ferret out the real stuff from the fluff.
What was wrong with their story about the median price increase in the Bay Area? On the surface nothing—the median price did increase in the Bay Area. But they are insinuating by the context in which they issue the report that the median price increase is representative of home values going up. In fact, often times the median price changes have more to do with the mix of larger or smaller homes selling than it has to do with varying prices.
As in when the media reported that the sales of homes had decreased in San Mateo County by the highest margin in 15 years, but failed to mention that the data they were basing their story on had yet to be released and was only estimated. They also reported that the median price in San Mateo had increased without mentioning that is was in all likelihood a result of larger homes selling rather than prices increasing, as reported by the California Association of Realtors who provided the information they relied on.
This is from the California Association of Realtor press release. The same one cited in articles discussing the Bay Area median price gain.
“Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for July may be exaggerated due to compositional changes in housing demand…â€
And indeed if one digs deeper they find that foreclosures, which pulled the median prices down, and which accounted for nearly 50 %of all sales had dwindled significantly.
Did the values of homes in the Bay Area rise? In some areas in fact they did, just not as much as reported. The case-shriller report which looks at the same house selling repeated times, and thus considerably a more reliable source, shows that indeed values have been rising steadily since April of 2009.
As with the report on declining sales, in the end is their report wrong? No. just not as accurate as it could be.
Belmont homes sales in July are just the thing headlines are made of.
Last month the median home price in Belmont was $ 975,000 and July it dropped 9% to $885,000. That doesn’t bode well for the positive home sales headlines, but rest assured the median size home that sold last month was also 18% larger. Comparing July sales this year to that of last July, in 2009 the median home price dropped 4.4%, but once again the size home which sold last July were 16% larger. What good does it do to report the median price when it varies from month to month so dramatically? Adjusting for the size home which sold can give us an indication of whether values are going up or down based on examining the price as adjusted for the size home selling. Clearly the values have gone up, even though the median price appears to have fallen.
Sales
The number of homes which sold did disappoint us. This July saw only 20 homes close escrow as opposed to 32 in June and 31 last July. Since the “sales†,or homes which closed escrow in July were no doubt actually “sold†in June, we also looked at the number of pending sales in July—homes which will close escrow in August. That stood at only 15 which is right in line with the last two years’ performance.
DOM
The time it took to sell a home this July was 27 days, down from 46 in June and 34 last July. That’s a good number to track to see where the momentum may be headed.
Percent Received
Sellers will be happy to note that on average they received $35,000 over their asking price with the average seller getting over 100%. Only four of the homes lowered their asking price—with one caveat these numbers are slightly skewed because one home received an offer $100,000 over their asking price. Nine sellers still accepted an offer less than asking—on average $23,000 less, with six sellers receiving what they were asking.
Inventory
Inventory levels remain high for this time of year. The number of available homes for sale is at 71; up from June’s 66 and last July’s 57. More supply would typically put downward pressure on prices, and 71 homes for sale his higher than normal. However, the increase is still well within healthy standards. The months of inventory—the time it would talk to deplete the inventory of homes for sale at the current rate they are selling—is at 3.7, a far cry from the national rate of nine months. This was helped by fewer home being listed for sale in July—only 27.
We attribute the increased inventory to several factors. Some sellers may need to sell their home and they’ve waited as long as they can, and/or sellers want to move and take advantage of lower interest rates on a move-up or retirement home. In any case more sellers are selling and some buyers are buying.
If you are thinking of selling your home this year the window of opportunity is upon us. The second wave buying season gets into full swing just after Labor Day. That gives us just enough time to get your home ready to show at its best. Give us a call for an interview if you are in the mood for a move.
State first-time buyers tax credit deadline Aug. 15 The Franchise Tax Board (FTB) recently announced it will accept applications for the California first-time home buyer tax credit through midnight on Sunday, Aug. 15, 2010. The FTB believes it will have received more than enough applications to cover the $100 million allocated for eligible first-time home buyers. It will continue to accept applications for the new-home portion of the state tax credit.
Due to the high volume of faxes, consumers may experience some delays and difficulties in connecting to the FTB fax number during normal business hours. It can take several minutes or possibly up to an hour to connect and transmit the fax. Buyers who receive a busy signal are advised to try again later. The fax number is open 24 hours a day, so consumers may fax applications during non-business hours when the line is not as busy.
The California Association of Realtors tracks the "HAI" which is the Home Affordability Index. Their methodology can be found here, but in a nut shell they take into consideration the median home price for a particular area, the median income, the current interest rates and mash it into an index which essentially says what percentage of the population can qualify for the median price home assuming they put 20% down and have 30% (which is conservative) income to debt ratios. The higher the index the more home people can afford to buy a home. Since there are three variables which could affect this outcome, a dramatic shift in any one could influence the affordability trend. In the case of today's market two of the three variables are in favor of home affordability-low interest rates and lower median home prices. The third-income-has impacted these number to some degree and kept the index from being even higher as wages have remained stagnate and unemployment is high.
What this means to you is if you are considering whether to buy a home in the Bay Area, unless you are concerned over your job security this is one of the best times to purchase a home in the Bay Area in decades.
Step 1. MEDIAN PRICE: C.A.R.'s housing affordability index is based on the median price of existing single-family homes sold from C.A.R.'s monthly existing home sales survey. Starting in 1987, this survey is based on reports of closed escrow sales from 80 Boards or more of REALTORS® and multiple listing services around the state. Prior to 1987, the survey was based on reports from 45 Boards.
Step 2. DOWNPAYMENT: It is assumed that a household can make a 20 percent downpayment on the median-priced home. Therefore, the loan amount needed to purchase a home would be 80 percent of the median home sales price.
Step 3. INTEREST RATE: Using the national average effective mortgage interest rate on all fixed and adjustable rate mortgages. This is represented by the effective composite rate for previously occupied homes, which is reported monthly by the Federal Housing Finance Board.
Step 4.The monthly payment for PRINCIPAL, INTEREST, TAXES AND INSURANCE (PITI) is computed as the sum of three parts: -Monthly mortgage payment, based on the terms of the mortgage in Steps 2 & 3. -Monthly PROPERTY TAXES are assumed to be 1 percent of the median home sales price divided by 12. -Monthly INSURANCE PAYMENTS on the house are assumed to be 0.38 percent of the median home sales price divided by 12. The results of these three calculations are added together to find the PITI or total monthly payment for a household that buys the median priced home.
Step 5. It is then assumed that the monthly PITI can be no more than 30 percent of a household's income. Thus, the monthly housing payment is divided by .3 to come up with the MINIMUM INCOME NEEDED TO QUALIFY FOR A LOAN on the median-priced home.
Step 6. Starting in 1988, data for the distribution of households by various income ranges was obtained from Claritas. INCOME DISTRIBUTION figures were developed based on the projected percent change in the annual median household income. Prior to 1988, household income utilized in the housing affordability index was based on projections by C.A.R. using the 1980 census data as a base. (I wonder who "projects" incomes-my emphasis and what criteria is used for that)
Step 7. The minimum income amount calculated in Step 5 is multiplied by 12 to determine the minimum annual income needed to qualify. This amount is compared to the income distribution of households. The percent of the households with incomes greater than or equal to the minimum income becomes the HOUSING AFFORDABILITY INDEX (HAI). NOTE: The quarterly HAI series begins in 2006, prior to that the series was monthly. The quarterly HAI for a given geographic area in a particular quarter is based upon the quarterly median price for that area as well as the quarterly income distribution for that area.
