Do you have a home for these buyers?

It's January in Sacramento. And it is that wonderful time of the year when home buyers decide to jump-start their home searches, and sellers start to prep their homes for sale...the perfect storm when buyers are ready to go, but there is very little housing inventory on the market for buyers to choose from. Which brings me to today's post...do you have a home that you would like to sell that my buyers would like to buy? I am working with some really well-qualified (pre-approved!), amazing people...

Buyer A
Seeking a home in the Arden/Arcade or Carmichael areas. Ideally 4 bedrooms (3 bedrooms could also work if there is a separate living and family room, or home office space), 2 or more bathrooms, and 1,800sf or more. Energy efficient features are a plus. A swimming pool would be a huge plus, though not a must have. They would also like a home with good southern exposure to add solar (or could assume an existing solar lease). They are pre-approved for up to $540,000.

Buyer B
Seeking a home in the Citrus Heights, Fair Oaks, or Orangevale areas. Ideally 3 bedrooms, 2 bathrooms, and 1,400sf or more. They would like a decent-sized yard and are not afraid of something that is dated or needs a little cosmetic TLC. They are pre-approved up to $300,000.

Buyer C
Seeking a condo in the Pocket/Greenhaven, Elk Grove, or South Sacramento areas. Ideally 2 bedrooms, 1 or more bathrooms, and 900sf or more. They would prefer an attached or detached garage, but covered parking is also ok. They are pre-approved up to $180,000.

Buyer D
Seeking a home in the East Sacramento, Land Park, Elmhurst, or Midtown Sacramento areas. They would prefer something with architectural character. They would love a 3 bedroom home, but would be ok with a 2 bedroom home. They would love a second bathroom too but realize that's a tall order. Off street parking is a must, and a garage is a huge plus. They are pre-approved up to $460,000.

So anyway, if you own a home something like what I have described here, drop me a line at erin@erinstumpf.com or 916-342-1372! My buyers would love to hear about it.

What does the new Tax Reform Bill mean for home buyers, sellers, and homeowners?

A few weeks ago, right around Christmas and just before the end of the year, the president signed the final version of the Tax Cuts and Jobs Act of 2017. The legislation -- two separate bills -- was advanced in both the United States House of Representatives and the United States Senate pretty quickly, then elements of the two bills were blended together (via a process known as "conference"), resulting in a final bill...

Regarding tax implications for homeowners, several items were on the table for pretty significant changes in both bills. And for a while it was difficult to determine what actually made it into the final bill that was signed into law.

Now that the chips have landed -- here is a summary of what is in the final bill that will affect residential home buyers, home sellers, and homeowners.

Capital Gains Exemption on the Sale of a Primary Residence
The good news here for sellers is the final bill had NO CHANGE. For as long as I can remember, the law has been that up to $250,000 (for individuals) or $500,000 (for married couples) of  the gain (aka profit) from the sale of a primary residence is exempt from capital gains tax, provided that you have lived in the home for at least 2 out of the last 5 years. Both of the original House and Senate bills sought to change this timeline for exemption to 5 out of the last 8 years. This would have placed a huge hardship on many homeowners. Life happens, and many people look to sell and move into larger homes, downsize, or relocate after a short time in a home...so thankfully that change was not part of the final bill, and homeowners can still sell and take their equity with them, untaxed to those amounts, after 2 years.

Mortgage Interest Deductibility for Primary Residences
The good news here is that the final bill only capped tax write-off for mortgage interest at loan amounts of $750,000 or less. The original House bill sought to cap the mortgage interest deduction at loan amounts of $500,000 or less (in fact you may recall I made an appearance on the KCRA News when the original bill was announced). Overall this is still a reduction from the $1,000,000 cap that had been in place for as long as I can remember...though at $750,000 that will not affect too many people purchasing homes in the greater Sacramento region. Our current median home price in Sacramento County is in the mid-$300k range. For those with pre-existing home loans between $750,000 - $1,000,000 -- you are grandfathered in and may still write-off that mortgage interest. Also of note is that interest on home equity lines of credit (HELOCs) is no longer deductible, however it is still deductible on home equity loans (aka, second mortgages). Clear as mud, yes?

Mortgage Interest Deductibility for Second Homes
The good news here is that the final bill did not eliminate the mortgage interest deduction for second homes! The original House bill would have completely eliminated the mortgage interest deduction for second homes (aka vacation homes).

So that is enough information to use as a guideline. The National Association of Realtors also published a detailed Q&A which you can refer to here. Please be sure to confer with your CPA to determine how these things apply specifically to your situation.

Lady Bird - Greta Gerwig's love letter to Sacramento (and did you notice she visited a Dunnigan Realtors open house!?)...

I have seen the movie Lady Bird twice...and not only is it a great movie, it paints a lovely portrait of Sacramento. What Sacramentan doesn't love the Fabulous 40's neighborhood? The McKinley Park Rose Garden? The Tower Theater? Gunthers Ice Cream? The Raven? You know you love the dirty bird. I could go on...

I am a little older than the Lady Bird character, who was a senior in high school in 2002 (I graduated in 1996), but I can totally relate to wanting to get out of Sacramento at that age. 

I didn't, and ended up attending California State University, Sacramento and graduated in 2001. I left Sacramento as soon as I graduated from college though, and moved to San Jose, CA for exactly one year (a 12-month lease where I rented a 10x10 room in a house for $800/month...I hated it there) before moving back as quickly as I could in late 2002. Thankfully my employer at that time allowed me to telecommute from my Sacramento home. I obtained my real estate license a couple years later and the rest is history. And Sacramento has grown up a lot in that time. Candidly, I love it here.

One scene in Lady Bird that caught me completely off guard is that they visit a Dunnigan Realtors open house! I loved that. So cool and unexpected. 

It was also cool to watch the Golden Globes this evening, see Lady Bird win Best Musical/Comedy, Saoirse Ronan win Best Actress Musical/Comedy, and to hear Greta Gerwig thank Sacramento for giving her wings was the icing on the cake.

The monthly costs of renting a home versus buying a home in Sacramento - how do they compare?

I have kicked off the beginning of the last few years with blog posts about the costs of renting versus buying a home in Sacramento. It's not a big secret that apartment and single family home rents in Sacramento are increasing. According to a recent article from the Sacramento Bee, rents in Sacramento from mid-2016 to mid-2017 increased on average 9.9%.

Last year, many of my clients stated one of their reasons for buying a home was, among many other things, so they could take more control over their monthly housing expenses. Many figured that if they remained renters, they would potentially have to deal with regular rent increases, and if they purchased their home the monthly mortgage would be a fixed expense. Additionally in many cases, the cost of purchasing a home is actually less than the cost of rent.

So today, as I have before, I thought I would break down a few home purchase scenarios by zip code. 

• The rental rate data I refer to is the average for a 3-bedroom single family home according to Rent-o-Meter, which compiles rental data from around the United States from a variety of sources. I also note the "80% range". So keep in mind there are lower rents in the range, as well as higher rents, however those are probably "outliers" and that range captures the majority of where rents fall.
• The median home price data I refer to is from November 2017 (most recent data available) per Trendgraphix, which compiles Metrolist MLS home sales data.
• For estimating the monthly payment, I am using today's market interest rates - which according to Freddie Mac, the average rate for last week in the nation for a 30-year fixed mortgage was 3.99% (rounded up to 4%). The monthly payment will be the "fully loaded" payment with principal, interest, property taxes and homeowners insurance (and mortgage insurance if applicable).
  
  
  Carmichael - 95608
  Median single family home price: $374,000
  Average rent for a 3 bedroom home: $1,784 (80% range $1,395 - $2,195)
  30-Year Fixed VA Loan (zero downpayment): $2,237
  30-Year Fixed FHA Loan (3.5% downpayment): $2,419
  30-Year Fixed Conventional Loan (10% downpayment): $2,233
  30-Year Fixed Conventional Loan (20% downpayment): $1,895
  
  Citrus Heights - 95610
  Median single family home price: $325,000
  Average rent for a 3 bedroom home: $1,756 (80% range $1,450 - $2,100)
  30-Year Fixed VA Loan (zero downpayment): $1,944
  30-Year Fixed FHA Loan (3.5% downpayment): $2,111
  30-Year Fixed Conventional Loan (10% downpayment): $1,931
  30-Year Fixed Conventional Loan (20% downpayment): $1,647
  
  Orangevale - 95662
  Median single family home price: $368,000
  Average rent for a 3 bedroom home: $1,792 (80% range $1,525 - $2,000)
  30-Year Fixed VA Loan (zero downpayment): $2,202
  30-Year Fixed FHA Loan (3.5% downpayment): $2,382
  30-Year Fixed Conventional Loan (10% downpayment): $2,187
  30-Year Fixed Conventional Loan (20% downpayment): $1,865
  
  Elk Grove - 95758
  Median single family home price: $380,000
  Average rent for a 3 bedroom home: $1,724 (80% range $1,550 - $1,950)
  30-Year Fixed VA Loan (zero downpayment): $2,273
  30-Year Fixed FHA Loan (3.5% downpayment): $2,457
  30-Year Fixed Conventional Loan (10% downpayment): $2,258
  30-Year Fixed Conventional Loan (20% downpayment): $1,926
  
  Land Park / Curtis Park - 95818
  Median single family home price: $486,000
  Average rent for a 3 bedroom home: $2,313 (80% range $1,725 - $3,000)
  30-Year Fixed VA Loan (zero downpayment): $2,907
  30-Year Fixed FHA Loan (3.5% downpayment): $3,124
  30-Year Fixed Conventional Loan (10% downpayment): $2,888
  30-Year Fixed Conventional Loan (20% downpayment): $2,463
  
  Tahoe Park / Tallac Village / Colonial Heights - 95820
  Median single family home price: $260,000
  Average rent for a 3 bedroom home: $1,568 (80% range $1,295 - $2,000)
  30-Year Fixed VA Loan (zero downpayment): $1,555
  30-Year Fixed FHA Loan (3.5% downpayment): $1,702
  30-Year Fixed Conventional Loan (10% downpayment): $1,545
  30-Year Fixed Conventional Loan (20% downpayment): $1,318
  
  Rosemont / College Greens - 95826
  Median single family home price: $325,000
  Average rent for a 3 bedroom home: $1,652 (80% range $1,450 - $1,900)
  30-Year Fixed VA Loan (zero downpayment): $1,944
  30-Year Fixed FHA Loan (3.5% downpayment): $2,111
  30-Year Fixed Conventional Loan (10% downpayment): $1,931
  30-Year Fixed Conventional Loan (20% downpayment): $1,647
  
  Pocket / Greenhaven - 95831
  Median single family home price: $406,000
  Average rent for a 3 bedroom home: $1,835 (80% range $1,550 - $2,213)
  30-Year Fixed VA Loan (zero downpayment): $2,429
  30-Year Fixed FHA Loan (3.5% downpayment): $2,620
  30-Year Fixed Conventional Loan (10% downpayment): $2,413
  30-Year Fixed Conventional Loan (20% downpayment): $2,058
  
  Arden / Arden Park / Sierra Oaks - 95864
  Median single family home price: $460,000
  Average rent for a 3 bedroom home: $1,775 (range $1,395 - $2,695)
  30-Year Fixed VA Loan (zero downpayment): $2,752
  30-Year Fixed FHA Loan (3.5% downpayment): $2,960
  30-Year Fixed Conventional Loan (10% downpayment): $2,743
  30-Year Fixed Conventional Loan (20% downpayment): $2,331
  
  These numbers are just a baseline to give you an idea of housing affordability in certain areas, and where it might make sense to purchase versus continue to rent. There are other tangible and intangible benefits to homeownership as well. For example, you may be able to deduct mortgage interest, property tax, and other expenses on your annual income tax return (consult your CPA). Additionally as a homeowner, you will have the freedom to decorate as you choose, plant a garden, remodel, and customize your home in other ways that might not make sense as a renter. I picked these zip codes at random...if there is another area that interests you, I would be happy to provide information specific to your situation.