Marin Real Estate: Market Snapshot

Housing Industry Skates Through Cliff Deal

The housing market and the housing industry have escaped a potential blow on several fronts now that lawmakers have at least partially resolved Washington’s “fiscal cliff” budget morass.

A bill passed by Congress on Tuesday to pull the nation back from the brink of end-of-year tax hikes and spending cuts contains several provisions that are favorable to housing.

Chief among them is one that provides an additional year of relief for troubled homeowners selling their properties. Without action by Congress, those homeowners would have faced big tax bills if they completed “short sales”—those in which the lender agrees to allow the borrower to sell the home for less than the outstanding mortgage amount.

In the past, forgiven debt has typically been considered taxable income. But in 2007, Congress exempted homeowners from treating some forgiven mortgage debt that way as part of an effort to encourage alternatives to foreclosure.

“An extension of the tax break is positive for home values by reducing the number of foreclosures and helping more troubled borrowers stay in their homes,” wrote Jaret Seiberg, an analyst with Guggenheim Securities. “That means less supply on the market.”

Another move that should benefit some homeowners is the restoration of a tax deduction for mortgage-insurance premiums, including premiums paid to the Federal Housing Administration and private mortgage insurers alike. That deduction had been absent for a year after expiring at the end of 2011. In 2009, 3.6 million taxpayers claimed this deduction, according to the National Association of Home Builders.

“This is a meaningful win for the housing lobby generally and, more specifically, the mortgage insurance industry,” wrote Issac Boltansky, a Washington analyst with Compass Point Research and Trading.

The housing industry also dodged a bullet on a big issue—potential limits on itemized deductions, including the cherished mortgage-interest tax break. Last year, there was talk among politicians in both parties of capping those deductions at a particular level, and Republican presidential candidate Mitt Romney suggested several options, ranging from $17,000 to $50,000. But those limits did not come to pass as part of the fiscal cliff deal.

The pact does restore some limits on deductions that had been in place in the 1990s. But they apply only for individuals earning above $250,000 per year and couples earning above $300,000.

These limits reduce how much high-income taxpayers can claim for mortgage interest and other deductions. For example, a couple with a combined income of $350,000 would see their total itemized deductions fall by $1,500. That results from a formula that reduces the amount that can be deducted by 3% of the difference between the taxpayer’s income and the deduction cap. (In this case, $1,500 is 3% of the $50,000 difference between $300,000 and $350,000.)

However, analysts still believe the mortgage-interest deduction could be altered as Congress continues to look for ways to save money. “While the mortgage interest deduction avoided a direct hit this time around, we doubt it will…dodge Congressional scrutiny going forward,” Mr. Boltansky wrote.

Source: WSJ Blog

$34.5 million for an unfinished house on Billionaires Row in San Francisco

Tech mogul David Sacks has just paid $34.5 million for an unfinished house on Billionaires Row in San Francisco’s Pacific Heights neighborhood, making it the most expensive home ever sold in the city.

Sacks, who previously co-founded PayPal and a genealogy service called Geni.com, is CEO of Yammer Inc., a San Francisco-based business social networking service that he co-founded and sold this year. A movie producer in the past as well, Sacks has previously shown a taste for the finer things, throwing a lavish party for his 40th birthday in Los Angeles at the $125 million Fleur de Lys mansion, with guests decked out in 18th Century attire.

Sacks and his wife, Jacqueline, are reportedly buying a 17,500 square foot home and 6,000 square foot guest house house at 2845 Broadway Street — a stretch of road on which Oracle CEO Larry Ellison and members of the Getty clan also own abodes. It was previously owned by Peter Sperling, who works for the University of Phoenix, which his father founded.

The five story home has ten rooms, four bathrooms and was originally listed unfinished for the astronomical price of $65 million, and it has been on and off the market for about six years.

The Sperlings bought the house as part of a two-parcel site or $32 million in 2002, the cost of construction for the property exceeded $20 million, and it will cost $8 million to $16 million to finish.

SocketSite in November reported that the property had apparently sold for $20 million based on the transfer tax paid, but Trulia says local “in-the-know” brokers say a portion of the sale will be recorded as alternative personal property for tax reasons and the actual price is $34.5 million.

San Francisco Monthly Market Update

In San Francisco, 41 percent of homes on the market were in contract in November, the highest level in years, continuing a trend we’ve seen through most of 2012.

The most active price points were for homes selling for $1 million or less: 47 percent in contract for homes priced from $500,000 to $750,000, followed by $750,000 to $1 million (41 percent) and $100,000 to $500,000 (45 percent).

Looking at individual districts, District 9 (Bernal Heights, Mission Bay, South Beach, and SoMa) and District 10 (Bayview, Excelsior, Outer Mission, and Visitacion Valley) were the most active, with 91 and 65 single-family homes and condominiums under contract, respectively, followed by District 5 (Cole Valley, Eureka Valley, Haight-Ashbury, and Noe Valley) with 60 homes in contract.

Marin County- Monthly Market Update

Marin County is one of the few regions where buyers are in the driver’s seat. Six cities had fewer than 25 percent of homes in contract in November — Larkspur (0 percent), Fairfax (7 percent), Ross (17 percent), Sausalito and Tiburon (both 20 percent), and Belvedere (22 percent). The countywide average of homes in contract was 35 percent, up from 32 percent in October.

Among homes priced under $1 million, 35 percent were in contract, led by Ross (100 percent) and Corte Madera and Kentfield (both 67 percent). An average of 20 percent of homes selling for $1 million or higher were in contract, down from 23 percent the month before. All but one city had in-contract rates below 25 percent, the exception being Kentfield (29 percent).

Millennials: “Renter Nation” just a myth

The housing crisis looms especially large for younger adults–those aged 18-34 years old–who’ve only been thinking seriously about housing in these recent years of boom and bust. They have no memory of the decades when home prices rose modestly but steadily, or when mortgage rates were 7%, or up to 10%. These younger adults had a particularly rough recession: their unemployment rate peaked at 10.6% in October 2009, compared with 10.0% for adults overall, and many put off the decision to buy or rent their own home, and instead doubled up with roommates or lived with parents. This age group really matters for the housing market: their decisions about forming households and homeownership directly affect housing demand.

Our survey shows these Millennials haven’t been permanently scarred by the recession. Few have written off homeownership. Among 18-34 year-olds, 72% say homeownership is part of their personal American Dream–same as for the adult population overall. And the vast majority of young renters plan to own: 93% of 18-34 year-old renters plan to purchase a home someday. Older renters are more likely to say they’ll never buy than these young renters are. And, 43% of these younger adults are homeowners already. That leaves very few young adults who rent today and plan to rent forever.

However, despite these long-term aspirations, younger adults see a very different near-term housing market in their crystal ball. Consumers, regardless of age, expect both rents and housing prices to rise in 2013; they also expect more inventory, both for rent and for sale, and higher mortgage rates. Younger adults, though, have a harder time imagining price increases and higher mortgage rates than older adults who have lived through more years of rising prices and high rates.  Just 37% of Millennials expect prices to rise in the next year, and 22% expect prices to fall

Source: Trulia

Real Estate Trends in the New Year

The new year is just three weeks away, and with it come all sorts of questions and uncertainties about the housing market in 2013.

Will the recent recovery take hold, or will the U.S. economy fall off a fiscal cliff? When will home prices return to their pre-recession highs? Where are mortgage rates headed? Ultimately, will 2013 be a good time to sell a home or to buy one?

A recent report in The Fiscal Times took note of the housing recovery and a growing optimism among homeowners and homebuyers. It quizzed real estate economists and reviewed industry surveys to develop a list of the top 10 real estate trends to watch in 2013. Here’s a sampling of the predictions:

HOME PRICES CLIMB HIGHER: New-home construction is far short of its pre-recession pace, failing to keep up with population growth or the rebounding housing market and thereby helping to push home prices higher. The National Association of Realtors forecasts average home prices to rise 5 percent next year.

MORE HOUSEHOLDS, RISING RENTS: Millions of young people who rode out the recession by moving back home with their parents are now getting jobs and looking for their own apartments. The pent-up demand for rentals is twice as big in percentage terms as the country has ever seen. Average rents have been rising in many metro areas by 7 to 9 percent a year, and a recent Zillow analysis found that buying beats renting in 59 percent of markets after three years or less.

EASIER CREDIT STANDARDS: Would-be borrowers now need a FICO credit score in the 760s to get a mortgage, much higher even than in the years before the easy-credit housing boom began, according to the Federal Housing Finance Agency. That should start changing next year — qualifying scores will drop as more qualified buyers come into the market and lenders compete to offer them loans, according to Luis Vergara of Mission Capital Advisors in New York City.

Other trends include fewer opportunities to buy bargain-priced foreclosures, a rising number of short sales, more first-time buyers, higher construction costs, new jobs for property managers, higher mortgage rates, and consolidation in the home-building industry.

For a closer look at the list of real estate trends in 2013, check out the report in The Fiscal Times.

Suce: PacUnion.com

The Weekly: Snow Edition

This is a tribute to the Great Snowfall of 1976, a handful of photos from around the Bay Area from several historic snow dates (San Francisco also saw significant powder in 1882, 1887, 1951 and 1962 1952 and 1961), we can give a pretty good tour of the city on Feb. 5, 1976.

PEOPLE.  The Snow Queen

San Francisco Ballet, The Nutcracker (opened Friday December 7th, ticket information below).

FACT: One of the Snow Queen’s tutus takes 80 hours to make (and five were created!), the gigantic Christmas tree holds 54 ornaments, and the biggest present under the tree is at least eight feet tall (somebody was very good this year).

Did you know that San Francisco Ballet was the first professional company in America to perform the world-famous tree-sprouting, Clara-frolicking, Sugar Plum Fairy-twirling production?

Indeed, it was on Christmas Eve in 1944 when the American rendition of the Nutcracker debuted in San Francisco. With $1,000 costume budget (due to wartime economy and rationing), the dancers sewed their own tights, bought feathers and rhinestone necklaces from Goodwill, and fashioned the soldier’s uniforms out of the former Cort Theater’s red velvet stage curtains.

San Francisco Ballet’s Nutcracker opens Friday, 12/7 at 7 p.m. Tickets range from $20 – $305, purchase here.  Look for family performances here (when kids can take photos with Nutcracker characters).

 PLACES: The San Francisco Zoo, Snow Day Birthday for the Polar Bears

Three weeks ago, the SF zoo’s polar bears had a birthday surprise—the zoo brought in 10 tons of man-made snow to celebrated Pike’s 30th birthday and Ulu’s 32nd birthday. Plus there were other treats, like a fish popsicle in the shape of a teddy bear!

SPACES: The Atrium

After skating with the little ones at the Embarcadero’s outdoor rink, only one thing will be missing – the cool touch of snowflakes melting on your noses. Never you mind – before heading home, stop at the Hyatt Regency, where snow falls in the lobby three times a day at 4:00 pm, 6:00 pm, and 8:00 pm through the end of December.

EXTRA EXTRA! The  Jimmy Wanninger Snow Report 

Generated by Snow Report

The Jimmy Wanninger Snow Report

My up-to-the minute snow report-purchase lift tickets too!

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Lake Tahoe Premier Profile: Martis Camp

Martis Camp is one of the newer residential developments in the Tahoe/Truckee area, selling its first lots in 2006. Already the development has made a name for itself as a premier golf and ski community with family-focused luxury amenities.

Martis Camp is a private, gated community on 2,177 acres of pristine Sierra forest in the Martis Valley, midway between the north shore of Lake Tahoe and downtown Truckee.

Development is capped at 653 lots, and more than 400 have sold so far. Homes are custom-built to suit their owners, but all have a rugged mountain look, whether traditional or modern, employing rough stone and natural timbers.

The Tom Fazio-designed golf course opened in 2008 and was an immediate sensation. Golf Digest ranked it the third-best new private course in the country in 2009, and Forbes named it one of the 12 best private golf communities in America.

The community adjoins the Northstar California ski resort, and Martis Camp club members have direct access to Northstar via a private, door-to-door shuttle that takes them to a new, 8,000-square-foot members ski lodge and express ski lift.

There are two club memberships available for property owners at Martis Camp. The “social” membership comes with the purchase of a developer lot plus yearly dues of $8,500, giving members full access to all amenities and two opportunities a month to play golf.

The “golf” membership costs $15,000 a year on top of a $120,000 initiation fee, giving members full access to all amenities and unlimited use of the golf course. Property owners also pay monthly homeowner association dues of $250.

In addition to golf and skiing, amenities include:

• A luxurious lodge, complete with restaurants, fitness center, locker rooms, day spa, and outdoor terraces;
• The Family Barn, containing a performance stage, rec room, bowling alley, movie theater, community games area, and outdoor swimming pool;
• A library cottage with books, games, and coffee;
• Classes at the on-site Folk School;
• Basketball, tennis, bocce ball, and volleyball courts;
• A sporting field for soccer, softball, and other field games;
• More than 16 miles of community trails;
• A fishing lake.

Martis Camp’s luxury amenities are available year-round, although for most residents the development remains a vacation destination, especially during the summer months and ski season. Most owners come from the Bay Area.

Lots accommodate two types of homes.

Third-of-an-acre “cabin sites” are intended for homes up to 3,200 square feet, and prices for the land range from $550,000 to $900,000, according to one of Pacific Union International’s top real estate professionals in the Tahoe/Truckee region.

“Estate sites” range from three-fourths of an acre to 3 acres, and land prices can go as high as $2.1 million.

Cabin sites with homes already built sell for $2.7 million to $3.2 million, while estate sites range from $3 million to $6 million.

Source: PacUnion.com