Tuesday, October 6, 2020

California Proposition 19, and why I am voting YES...

Several colleagues, friends, and clients have asked me recently about a few of the propositions that will be on the ballot for this upcoming election. I guess with my 15-year tenure as a realtor and a graduate degree in public policy they must think I know what I am talking about. Ballots are going out in the mail this week, so I thought it would be timely to post a little information for those who are interested. The first proposition I will explain is Proposition 19, the "The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire and Natural Disasters Act". 

Proposition 19 is on the ballot as a result of a California State Assembly Constitutional Amendment - ACA11 (Mullin), which passed through the legislature with bipartisan support this summer. The proposition has a few main components. 

(1) It expands existing law (previously, Proposition 60 and Proposition 90) to allow seniors, the victims of wildfires, and severely disabled, to transfer their existing property tax base up to 3 times, anywhere in the state, and to a property of higher or lower value. Currently seniors can transfer their property tax base, but they have to stay within the same county AND buy a home of lesser value than the home they ultimately sell. Often these individuals need to move to another county to be closer to family where it is not possible to buy a lesser priced home. For example, if you want to sell a home in Sacramento but want to buy in Alameda where homes generally more expensive you may have a difficult time buying a lesser priced home. If they buy a higher priced home, they would be able to pay a new blended rate based on the difference between the home they sell and the home they buy. Currently people who lose homes in wildfires do not have the option to transfer their existing tax base for the home they lost to a replacement property. And often disabled people need to sell and purchase different homes that can better accommodate their disabilities. 

As a realtor, I encounter situations all the time where people decide to stay in homes they can not maintain or that are too large now that the kids are gone, and they do so just because they cannot afford a higher property tax bill. For example, I have an elderly client whose adult kids have moved away, her husband died, and she can't afford to downsize from her 4 bedroom home into a condo near her kids because on a fixed income she cannot afford the increase in property tax. This would allow people in these types of situations to sell and right-size their living situation with no tax penalty. And with the number of homes lost recently to wildfires, it will allow those who are wildfire victims and never intended to move to not suffer a tax penalty as well. And to allow disabled persons to buy homes that better accommodate their disability is a no-brainer. 

(2) The second component is that it reforms the inheritance tax exclusion. Existing law (previously, Proposition 58 and Proposition 193) allows parents and grandparents to leave their children and grandchildren residential properties and transfer the low property tax base. It also allows property tax base transfer of commercial and other investment property with assessed value up to $1M. Proposition 19 would allow tax base transfer of inherited properties with assessed value up to $1M to family members who will OWNER OCCUPY the home. It also eliminates tax base transfer of inherited commercial and investment property. 

A couple of years ago a LA Times article brought to light that actors Jeff and Beau Bridges inherited a Malibu beach-front property valued at like $20M with a tax base of a few hundred thousand. They use the property as an income-producing a vacation rental and rake in the profit while paying relatively little property tax. This "focusing event" prompted the California Legislative Analyst's Office (LAO) to study this issue of the Inheritance Tax Exclusion. The LAO report noted that MANY people who inherit properties benefit from keeping a low tax base and use the properties for income and profit substantially from this low property tax. The LAO recommended the the legislature look into this, as the original intent of Propositions 58 and 193 was to pass this tax base along to relatives who were going to live in their parents' and grandparents' properties. As a result, there was actually a proposed California Senate Constitutional Amendment (SCA3 Hill) that passed through several committees before Hill pulled it knowing it's provisions would be included with another proposal. 

(3) As there will be additional property tax revenues generated as a result of these changes to property tax assessment transfers, Proposition 19 increases revenues to local governments, and for part of the additional revenues establishes the California Fire Response Fund to specifically fund firefighting efforts.

As it stands, there is a broad and bipartisan coalition of support from MANY groups who don't often see eye-to-eye on things. You do not frequently see Senior and Disability Organizations, Fire and Public Safety Advocates, Labor Organizations, Community Advocates, Education Advocates, Political Organizations, and Business and Trade Organizations support the same initiative.

So with that, I am an enthusiastic YES vote on Proposition 19. Proposition 19 addresses several problems and inequities I see frequently while funding additional support to fight California's wildfires, and providing funding local governments and schools.

Wednesday, September 16, 2020

New Listing - 3125 Carly Way, Sacramento, CA 95816

Your search is over! This stunning 2 bedroom, 2 bathroom, 1,040sf East Sac home has unmatched style and features. Step inside to find an open floorplan, gleaming wood floors, plantation shutters, and cozy fireplace. Formal dining room opens to an enviable kitchen with granite counters, tile backsplash, stainless appliances, and roomy breakfast bar. Two spacious bedrooms, and two full bathrooms that have both been tastefully remodeled. You will love the primary bedroom with ensuite bathroom, which is a truly rare find! The backyard is a tranquil, private retreat. Relax under the expansive covered lighted patio and enjoy the delta breeze! Detached garage is a great place to store your toys. Energy efficiency abounds with a tankless water heater and added insulation. Roof is 4 years new. Exterior recently repainted. All this in close proximity to the grid, shopping, restaurants, public transportation, UCDMC, and more! Don't wait! Offered at $499,900. For more photos and a 3D Virtual Tour, visit 3125 Carly Way, Sacramento, CA 95816.

Wednesday, September 2, 2020

Quoted in today's Sacramento Bee in an article about the real estate market...

I was quoted in today's Sacramento Bee in an article by Tony Bizjak about the Sacramento real estate market. The headline of the article is a little funny to me -- as prices increase, so (generally) does home equity. Clearly this is great for homeowners and sellers. Higher home prices - not so great for buyers.

Things are complicated.

As I have mentioned before, we have an imbalance of supply and demand in the market right now. This stems from fewer than normal sellers listing their homes, and a high number of buyers who are highly motivated to purchase homes as we are all spending so much more time at home now.

Sellers who would otherwise list their homes are faced with several challenges that are unique to our COVID19 environment:

  • Some contractors are reluctant to do repairs or remodeling in occupied homes. This makes things a little more difficult to prepare homes for sale.
  • The courts were closed for a prolonged period of time. Courts are now open but caseloads are backed up. Petitioners for probate have had a much longer wait to receive their "orders and letters" needed to appoint a personal representative. Personal representatives, who have authority to act on the estate's behalf, can't prepare or list homes for sale until their authority is ratified by the court. 
  • Estate liquidators have some challenges selling the contents from the homes of those who have died. The traditional estate sale is just not really feasible right now due to social distancing. This affects homes in trusts and in the probate process, and these properties now take longer to clear out.
  • Ever try to clear out a home yourself where someone has passed away? It it emotionally draining and physically difficult! It takes a long time under normal circumstances, and longer when people are reluctant to come to a garage sale.
  • At a time when everyone is supposed to be social distancing, many sellers are not excited to have dozens of people in and out of their homes for showings! Not only can it be overwhelming to sanitize between showings, but many sellers do not want to take the risk of exposure COVID19. While buyers and agents must provide a health declaration swearing they do not have symptoms of COVID19, there may be asymptomatic carriers of the virus who access the property. 
  • Spending so much time at home, where can you go during showings? It is best to leave during showings, and many local businesses are closed. Travel is not as easy as it used to be, so it may not be super convenient to pack up the kids and pets to leave.
  • The kids are going back to school! Seriously, now that so many people are working from home and kids doing distance-learning during the day, who has time to sell the house? And how much more disruptive will a move be?
  • If you have a home to sell in order to purchase your next home, with such low inventory, what will you be able to buy?
  • Some sellers want to wait things out and get past the COVID19 situation to a time where things are more predictable and certain.
These are common things I hear from people thinking about selling. And for some would-be sellers, sometimes these challenges are insurmountable. I thankfully have been able to work with and around most of these scenarios with sellers. I have numerous inspectors and tradespeople I can refer who will work through these conditions. I have a really creative estate liquidator who has pivoted to virtual estate sales and some creative online sales techniques. There are viable alternatives in many cases. But things are slower moving for sure.

With low inventory and LOTS of interested buyers including more than usual bay area transplants, it can be a good time to put your Sacramento home on the market if you have a well-crafted plan and circumstances allow.

Tuesday, September 1, 2020

New listing - 2305 Ashton Drive, Roseville, CA 95747

Stunning 3 bedroom, 2 bathroom, 1,992sf home in highly sought after active adult 55+ Del Webb Roseville community - The Club at West Park! Located on a quiet, interior street, this Sheley floorplan has all the features you want and more. Enter through the oak and crystal front door, and find 10' ceilings and plantation shutters throughout. Elegant tile and laminate flooring. Large, open gourmet kitchen with plenty of storage, stainless steel GE Profile dual oven, microwave, and gas cooktop, granite counters, and lots of bar seating overlooking the great room. Formal dining room and cozy kitchen nook. The master suite features a spacious bathroom with a large walk in closet, separate tub and shower, and double sinks. HUGE finished 3 car tandem garage with epoxy floor, built-in cabinets and overhead storage. The backyard features a stamped concrete patio, fruiting trees, and a 1-year old 40x18' patio cover with electrical outlets, variable speed fan, and dimmable recessed lights. The HOA covers front lawn care, Retreat Clubhouse, pool and more. Don't wait! HOA dues $540/quarter (approximately $180/month). Offered at $549,900. 3D Virtual Walkthrough. For more photos and information please visit 2305 Ashton Drive, Roseville, CA 95747.

Friday, August 7, 2020

New Listing - 517 Elverta Road, Elverta, CA 95626

Cute renovated 3 bedroom, 2 bathroom, 1117sf Elverta country cottage that's got room for you, your horses, and your toys! You will love the spacious open layout, wood floors, formal dining room and updated kitchen with granite counters and stainless appliances. Large bedrooms, and remodeled bathrooms. Composition roof, dual pane windows, and newer HVAC. Situated on nearly three quarters of an acre, the property is an outdoor oasis. Enjoy hot days around the built-in swimming pool and spa! HUGE metal detached 35'x24 garage is perfect for storage or for your projects. Covered 12x20 carport space. Lots of space for a garden or to play. Your 4-legged babies will have a 10'x12' horse stall and have lots of pasture space to wander. Separate storage shed and chicken coop. All this and a commutable distance to the city! Don't wait! Offered at $399,900. For a 3D virtual walkthrough tour and more photos, please visit 517 Elverta Road, Elverta, CA 95626.

Monday, July 27, 2020

New Listing - 4413 Engle Road, Sacramento, CA 95821

Lovingly maintained by the same family for decades, this 4 bedroom, 2.5 bathroom, 1952sf impeccable Arden Arcade home is the perfect blank canvas for your personal touch! You will love the spacious, open layout. The sizable kitchen opens to the dining area and family room with cozy fireplace and access to the backyard. Adjacent formal living room has a fireplace and sunny window overlooking the manicured front yard. Large hallway bedrooms. Master suite has ensuite bathroom with large closet, dual sinks and stall shower. Freshly painted throughout. Gleaming refinished wood floors and new LVT flooring throughout. Composition roof, central HVAC, newer water heater, lots of storage space, inside laundry room, and 2-car attached garage. HUGE, approximately .29ac park-like backyard with fenced built-in pool! Lots of sunny space to garden or play, covered patio, manicured gardens, and some newer fencing. Section 1 pest clearance. Located near award-winning k-12 schools, parks, shopping & more. Don't wait! Offered at $459,900. MLS #20042445. For a virtual 3D walk-through and more photos, visit 4413 Engle Road, Sacramento, CA 95821.

Thursday, July 23, 2020

Interviewed for CapRadio Insight regarding Sacramento real estate amid the COVID19 pandemic...

I was interviewed live on air by Randol White today on CapRadio Insight about the dynamics of the Sacramento real estate market amid the COVID19 pandemic. Here is the link to the entire episode and I come on just after 10 minutes or so.

Topics covered safety-related requirements for showing property, lacking inventory of homes for sale, how conducting traditional open houses is a misdemeanor, market dynamics, and bay area residents relocating to Sacramento as they have been informed by their employers they are permanently working from home.

Tuesday, July 14, 2020

How's the Sacramento real estate market during the pandemic?

How's the Sacramento real estate market during the pandemic? I answer this question every day. In short: the market is crazy. Multiple offers abound, homes selling for more than listing price, prices increasing. I know: this is contrary to what you were probably thinking. But if you dig into the dynamics and data it makes a lot of sense.

Inventory is scarce. The graph above is a brilliant visual illustration of what is happening currently in the market. We have far fewer homes actively for sale than are currently pending sale (in contract with buyers) and that have closed escrow (sold). This is a HUGE change from last year, and candidly, all of my last 15 years as a realtor. I think as the pandemic has unfolded there are many people who had planned to sell their homes who have hunkered down, deciding not to sell yet. I personally have several would-be seller clients who were ready to list their homes before COVID19 hit who are staying put for now. I am still listing plenty of properties -- folks still need to move, whether relocating out of state, or moving to different school districts, or  moving closer to work, or upsizing to have a home office, or downsizing after the kids move out, or selling an empty home in an estate, etc. But many are holding off to see what happens.

With that though, literally none of my buyer clients have suspended their home searches. And thus we have an imbalance of supply and demand. And prices are increasing.

From the conversations I am having with my buyer clients, for those unaffected by job loss or furlough, MANY people are motivated to purchase homes right now. Some have told me that because we now must spend so much time at home, it has caused them to re-evaluate what is important in their home. Renters are very much wanting to buy. And I am working with several bay area buyers -- which itself is not new -- but several who have been told by their employers that they will now be permanently working from home so they are choosing to buy in Sacramento where they can afford a nicer home. The median home price in Sacramento County, which in June 2020 was $415,000, is SUBSTANTIALLY LESS than bay area counties where the median home price can be well over $1,000,000. Let's not forget that interest rates are also insanely low: One of my clients just locked a 30-year fixed conventional loan under 3%.

So as my good friend Ryan Lundquist always says: the market is always moving.