Real Estate Roundup: Distressed Sales Drop in Most Bay Area Counties

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:


FIVE BAY AREA COUNTIES HAVE FEWEST DISTRESSED SALES IN STATE
The number of distressed home sales decreased across most Bay Area regions from July to August, with five of our local counties seeing the fewest such transactions in California.

According to the California Association of Realtors’ August 2014 pending and distressed sales report, San Mateo County had the fewest distressed sales in the state: just 1 percent. In Marin and Santa Clara counties, distressed properties accounted for 2 percent of sales, followed by Alameda and Contra Costa (both at 3 percent) and Sonoma (4 percent) counties.

Solano is currently the only Bay Area county included in the report with a higher rate of distressed sales than the statewide average of 9 percent.

PACIFIC UNION RECOGNIZED FOR UNIQUE CUSTOMER-SERVICE INITIATIVE

 The National Association of Realtors recently recognized Pacific Union for an innovative customer-service program that our firm has undertaken.

Designed by the Gualala, Calif.-based firm Thank You Very Much Inc., the program will better enable Pacific Union’s full-time staff to provide support to its network of more than 600 real estate professionals in the Bay Area and the Tahoe/Truckee region. Pacific Union CEO Mark A. McLaughlin told NAR that he believes training the firm’s employees to more efficiently assist real estate professionals will ultimately translate into an improved experience for homebuyers and sellers.

“We don’t think we can move the needle on consumer satisfaction until we move it with our internal clients — our salespeople,” McLaughlin said.

BAY AREA DROUGHT DRAINS ENTHUSIASM FOR SWIMMING POOLS

 The prolonged drought that has plagued Northern California for the past three years is helping to put a damper on many Bay Area homeowners’ desire for swimming pools, according to a recent article in the San Jose Mercury News.

The publication says that permits for new pools have declined substantially in both San Jose and Concord. And in Walnut Creek, where summer temperatures often reach 100 degrees, more homeowners are submitting applications to demolish pools than those seeking permits to build them.

Although homeowners cite a variety of other reasons for removing pools – including maintenance and insurance costs and nonuse – the drought is often the deciding factor for some.

“The drought is the last nail in the coffin for the pool,” Zali Lorincz of ZL Construction told the Mercury News.

NAR WANTS DRONE BAN LIFTED FOR INDUSTRY

 Citing keen interest from real estate professionals across the country, NAR is asking the Federal Aviation Administration to amend its rules to allow for the use of drones, according to a HousingWire article.

Currently, the FAA doesn’t allow the use of drones for any commercial purpose, but NAR says it is concerned that continuing to disallow them could impede industry innovation. The organization also stated it believes that addressing national and personal security concerns related to the use of drones won’t pose a problem.

“Properly written regulation would permit the use of UAV technology within the real estate industry, while maintaining safety in the NAS and privacy of citizens,” the organization said in a statement.

(Photo: Flickr/Jeff Turner)

Number of underwater homes falls 40 percent as Silicon Valley rebound continues

Continuing last year's trend, Silicon Valley's economic recovery has resulted in more homeowners coming up from under water, with the latest figures revealing that about 8 percent of properties remain at values lower than what they were pre-recession.

The Santa Clara County Assessor's Office announced Wednesday that the expected recovery means more people will see their property taxes increase, but maintained that the hit -- which can be as high as 24 percent in some areas -- is a good thing in the bigger picture.

"Equity is coming back, and people are breathing a sigh of relief," said David Ginsborg of the assessor's office. "Properties are worth more than what people paid for it. Of course that means an increase in taxes, but nobody likes to buy a piece of property and have it worth less than they paid three years later."

This Tuesday, Aug. 21, 2012, photo, shows an exterior view of house with a pending home sale sign in Palo Alto, Calif. (Paul Sakuma/AP Photo)

By state law, when a property's market value drops below what was paid for it, the assessor has to recalculate taxes to reflect that decline. But if the price bounces back, the assessor can increase the property valuation at more than the 2 percent annual limit set by Proposition 13, up to its original tax base.

"It's a good news bad news thing," said Colleen Badagliacco of Legacy Real Estate in San Jose, a former chair of the California Association of Realtors task force on distressed properties. "The lord giveth and the lord taketh away -- we all like to buy low and sell high and keep property taxes low and reap the equity but it doesn't always work that way."

According to the report, in 2012 there were 136,000 residential and commercial properties assessed below their value when purchased. In 2013, that number dropped to 81,000.

"This year, even with surging market values, as many as 40,000 properties are expected to remain below their Proposition 13 value," said Assessor Larry Stone.

Stone said the area seeing the largest growth this year is South County -- Gilroy and Morgan Hill.

"Those were the areas hardest hit, where property values declined by as much as 60 percent," said Stone. "This year they are leading the resurgence."

Other areas of the county, particularly in the north, saw property values surge much more quickly. Now that the southern areas are bouncing back, property owners there can expect to see valuations rise significantly.

"Gilroy will see increases as much as 24 percent, Morgan Hill as much as 19 percent," said Stone, who added that it also depends on the type of property, with condominiums seeing a higher assessment growth than single family homes.

Stone said that property owners should find solace in the fact that every $1 dollar in increased taxes means a $100 jump in equity.

Badagliacco said there's been a building boom in South County, and some of the reassessed value is due to new properties that list for $700,000 or more that boost the value of the area in general.

"It definitely helps pull them up," she said. "It drives people to Morgan Hill or Gilroy to look at homes, and lets say you're a savvy shopper and you see a home for $800,000 to $900,000 with all the bells and whistles. You'll find a fairly good selection of older homes with a similar square footage and might be able to save $100,000 by looking at them."

Homeowners will receive notices of assessed values after they are finalized by July 1. Those who disagree with the new appraisal can contest the judgment; Instructions will be provided along with the notice.

Article and Photos Sourced from:  http://www.mercurynews.com/business/ci_25898399/second-year-more-santa-clara-county-homes-resurface

Short Sales, Pending Sales Down; Bay Area Home Prices up 22.2%

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious:

 

SHORT SALES FALL AS PRICES RISE

Rising home prices may be prompting underwater homeowners to hold off on short sales, amid hopes they soon will be able to sell their properties at a profit.
The research firm RealtyTrac said the number of short sales in the first quarter of 2013 was down 10 percent from the previous quarter and 35 percent from a year earlier.
“Underwater homeowners may be willing to stick it out a few more months or even years in the hope that they will be able to walk away with money at the closing table and without a hit to their credit rating,” said Daren Blomquist, RealtyTrac vice president.
RealtyTrac also reported that foreclosures in the first quarter were down 18 percent from the previous quarter and 22 percent from the first quarter of 2012. Foreclosure-related sales accounted for 21 percent of all U.S. home sales during the first quarter, a decrease of 25 percent from a year ago and 45 percent from the first quarter of 2009.

---

PENDING HOME SALES DOWN IN WEST

Pending home sales in Western states slipped 2.6 percent in April from a year earlier, a victim of “pronounced inventory constraints,” according to a report from the National Association of Realtors.
California and other Western states have some of the tightest real estate markets in the nation, crimping sales. Other regions fared better, and pending sales nationwide were up 10 percent in April from a year ago.
“Because of inventory shortages, higher home sales will push up home values to the highest level in five years,” NAR Chief Economist Lawrence Yun said in a statement accompanying the report.
The NAR’s Pending Home Sales Index is a forward-looking indicator based on contract signings. Pending sales have been above year-ago levels for the past 24 months.

---

22.2% JUMP IN BAY AREA HOME PRICES

Bay Area home prices surged 22.2 percent in the 12 months ending in March, the second-highest rise among the nation’s 20 largest metropolitan areas. Only Phoenix recorded a higher one-year jump in home prices, 22.5 percent.
Nationally, home prices in March were up 10.2 percent from a year ago, the fastest pace in nearly seven years, according to the S&P/Case-Shiller home price index, a trailing index that is nonetheless regarded as one of the most accurate measures of home prices.
The index includes the San Francisco metro area, which encompasses Alameda, Contra Costa, Marin, San Mateo, and San Francisco counties.



Original Article sourced from:  http://blog.pacunion.com/real-estate-roundup-short-sales-pending-sales-down/

Will the Mortgage Forgiveness Act Be Extended?

The Mortgage Forgiveness Debt Relief Act of 2007 is set to expire at the end of the year. The act allows taxpayers to be excluded from paying taxes on forgiven debt in certain situations.

As their website explains: 

“The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.” 

The act also applies to debt forgiven in a short sale. The big question is whether or not Congress will extend it past the December 31st deadline. Forty-one state attorneys general signed a letter urging Congressional leaders to extend the act. In the letter, it is explained: 

 “Each of our offices receives calls every day from homeowners trying to save their homes or struggling to recover from losing their homes…Congress must act. We urge you to extend the existing exclusion of forgiven or cancelled mortgage debt from taxable income under federal law before it expires at the end of this calendar year.” 

The push is on to get an extension. Here are the current bills in Congress: 
U.S. House of Representatives: Resolution 4336 and Resolution 4202 Senate: Senate Bill 2250 Whether Congress will act in time to extend the act before its expiration is anyone’s guess.


Article & Photo Sourced from:  kcmblog.com