| Has Your Property Dropped in Value? Me, too. | September 29th, 2007 |
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Fortunately, I’m experienced with buying real estate that drops in value. I say ‘fortunately’ because I’ve learned time and again that home prices always ultimately go up. The first property I bought that tanked in value was a set of flats in NOPA I bought them when the market was peaking in December of 1988. They cost $375,000. I sold the units off piecemeal over the next ten years and more than doubled my money. The second one was a little South Beach condo. I paid $462,000 for it in 2000, right before the Dot-Bomb Bust. I sold it five years later for $640,000. I paid $817,000 for my current home It’s probably worth under $800,00 now, but I don’t care. Until the market goes up again, I get to live in a place that’s a gazillion times better than my old one. So I’m glad I beat out the other four offers and bought it when I did. |
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I’m in the same boat as you are if you own something that’s declined in value. Two months ago, I closed on a home that I’m fairly certain is worth less today than what I paid for it.| Found Money– Reducing your Property Taxes | September 28th, 2007 |
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If you’ve owned your property for less than years and think it’s gone down in value, here’s article I wrote for the Chronicle about how to appeal your property tax bill.It was published back in 2003 during our “Dot-Bomb” rut, when we had a similar downward trend. I pride myself on being a resource for information about all things related to San Francisco real estate There’s no such thing as a stupid question, so if you have one, call me. I promise an honest answer and useful information. |
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While most of San Francisco continues to appreciate in value, a handful of neighborhoods (most notably South Beach, SOMA and Mission Bay) have properties that may be worth less today than they were a year ago.| Real Estate Insanity on the Jersey Shore - Why We Love Prop 13 | September 26th, 2007 |
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Dear Cece:San Francisco is not the only insane real estate market in the world. About 70 years ago, my grandfather bought a cute little cottage (pictured here) on a barrier island off the New Jersey shore about 100 miles East of Philadelphia. Its now owned jointly by my Mom and her two brothers (baaaaaaaaad arrangement). A couple of years ago the tax assessment broke $1 million dollars, based largely on the land value. Our town, Mantoloking, has become one of the most sought-after high end markets, because its very small, exclusive, has no business district or school and no space to grow (i.e. no new neighbors). Anyway, we just got a new assessment for our house….. $3.4 million dollars ( !!!!! ) We’re talking about a tiny cottage, not winterized, ancient electrical system and plumbing patched will-nilly for 70 years. It’s only useable a maximum four months out of the year, cramped litle bedrooms…. … so $50,000 a year in taxes !!!!! We love it, but can’t afford it anymore. Sad end to a long family era. Too bad no one in my family is as rich as the neighbors on our block. (All the other cottages were bulldozed in the 70s). Jonathan– If you have questions about how property taxes are assessed (and re-assessed) in California, logon to The State Board of Equalization FAQs. You’ll learn about when a property is excluded from re-appraisal upon transfer (hint– you have to be over 55, disabled or transferring the property to a child or grandchild.) |
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Complain all you want about how high property taxes are– it could be worse. To wit, an anecdote below from one of my favorite people:| Fabulous Financing at The Hayes condominiums in the Heart of the Civic Center | September 14th, 2007 |
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There is some fine print in the offer. You have to work their approved lender (at Triton Funding) and must have a credit score of 720 or above The Hayes sales office is off-site and they still don’t have models set up in the building yet. Actually the whole thing is literally “under wraps” and swathed in black scaffolding that makes it look a bit like a Christo scultpure. Stats on the Hayes:128 Units- combination of studios, one-bedrooms and two-bedrooms. Nota Bene: While the building is called “The Hayes” the address is actually 50 Page Street– three blocks to the South. Here’s pitch I got in my email box about the financing deal The Hayes is approaching the final stages of construction and homes are currently selling. Located on Page Street in the heart of Hayes Valley, the anticipated new community offers many of the most sought-after urban amenities, including an attended lobby, a state-of-the-art fitness center and a roof deck with great city views. Individual homes are outfitted with exceptional detail, including Italian tile, German cabinetry, and French fixtures. The Hayes’ instinctive design allows for more corner-oriented floor plans with expansive bay windows and private balconies that connect you with the energy of the neighborhood. Take advantage of our limited-time special financing offer today - visit our sales office and find out how you can obtain an interest rate of 5.500% on a 5 year-fixed interest-only loan.* Now’s the time to make The Hayes your home and to be part of one of San Francisco’s most unique neighborhoods. About The Hayes |
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The developers at The Hayes condos are offering a deal on financing at 5.5% fixed for five years. This would make the financing cost on an $800,000 purchase (with 20%) down $3,340/month. And it’s all interest only, so each month you save $1,100 on your income taxes.| Do Shrinking Pools Matter? | September 12th, 2007 |
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What follows is another opinion– from Natasha Lovas at Triton Funding in San Francisco. She offers an additional insider’s perspective on what’s going on with buyers right now. It’s also full of good nitty-gritty information on what the new restrictions are for approving buyers: Sorry to say, and this is only my PERSONAL opinion, but I really do disagree with your colleague’s take on the market. Or maybe I don’t really disagree, I am just seeing it from a different perspective. To the extent that the buyers out there now 1) were pre-approved with a stated income loan or 2) barely qualified for a full documentation loan, they will be rudely surprised to find out they no longer qualify in the same price range.Many lenders are now using higher qualification rates (not all, but the majority now) such as the fully amortized payment rather than the interest only payment. On many second mortgages (again, not all, but most), we need to qualify people at the prime rate PLUS 2%, not the interest only start rate.) Many lenders will no longer do stated income unless the borrower is self-employed — they used to do stated income if you were salaried. Cash reserves have gone up on stated loans, from a mere $5,000 or 2 month PITI to 6 months PITI. And rates are higher on jumbo loans, which also affects qualification, especially if the borrower had high ratios to begin with. Looking at the loans I closed in the first half of this year, how many of them could I still pull off today? About half would be my guess. There are many more examples I could give you, but overall, lending has changed in a major way from what it was only 2 months ago. There is currently a lot of denial out there and I also believe that many mortgage brokers don’t even realize how much things have changed, but changed they have. It may take another month or two for these realities to filter down to buyers (and their realtors, many of whom are still oblivious), but I do see the pool of buyers shrinking. Enough to make a difference to prices in SF? I don’t know. BTW, I am saying “I don’t know” a lot lately! Thanks Natasha! BTW, I love all your feedback and will post anything that I think is relevant or of interest. So feel free to send it in. |
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Recently I quoted a fellow Paragon agent who is unphased by the mortgage mess. He doesn’t believe there will be any serious affect on the real estate market in San Francisco. Relative to his 30 years of experience, he says, what we’re experiencing is really only a blip in the market.| Overbidding? In This Market?? | September 10th, 2007 |
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************************************ My aim with The Buzz is to inform and entertain. If you or anyone you know would enjoy receiving these postings directly in their inbox, please sign up for The Buzz or send me their name and I will add you and them to my list of “Favorite People.” As always, my interest in helping you and others continues. Should you think of someone who could benefit from my expertise, I’d love to hear from you. |
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Hello My Favorite People!Once upon a time in the very recent past (actually, just last week)—a Paragon agent had a buyer who refused to believe that there was still overbidding in San Francisco. She thought the mortgage mess was pushing buyers out of the market and making others shy away. To prove her client wrong, this agent requested email anecdotes from us about overbidding in the current market.What follows are some examples of properties that have been overbid, and an interesting remark from an industry veteran who has been in the business since the 1970s. To see addresses, photos and more details about these properties, please visit my website, www.sfrealestatebuzz.com| Overbidding Example #4 | September 7th, 2007 |
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List Price: $989,000 Came on market July 26 |
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166 Lenox WayWest Portal charmer. 2br/1ba with illegal rooms and bath down. Two doors up from West Portal Avenue and street car line (think noise), but showed beautifully. Older kitchen and baths.| Overbidding Example #3 | September 7th, 2007 |
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List Price: $1,250,000 Came on market August 23 All offers were above the listing price. |
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343 ColeridgeUsually large for Bernal– Edwardian 3br/2ba, nearly 1900 square feet. Great scale. High end finishings in baths and kitchen. Excellent Noe Valley alternative.| Overbidding Example #2 | September 7th, 2007 |
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List Price $799,000 Came on market August 2 |
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45 Lippard1922 Single Family with Craftsman detail. Needed work. 2BR/1BA. 1,000 square feet.| Overbidding Example #1 | September 7th, 2007 |
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Edwardian condominium flat with great architecture and good square footage (1400+). No parking. List Price: $725,000 Came on Market August 2 |
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569 3rd Avenue.
