Sign of the Times

As if we need more signs of the stagnating real estate market in Marin county, the Marin IJ has published two articles recently that bring the point home.

First, as we reported earlier in our latest monthly report a couple of weeks ago, average selling prices continue to fall.

Second, yet another mortgage broker has called it quits. First Security Loan in San Rafael will close up shop -- just the latest in a series of firms to do so. Not only does this highlight how few real estate transactions there are, it also adds to the unemployment rolls and reduces the sources available for home loans. You see the same signs in the halls of previously bustling escrow/title offices and, of course, some real estate brokerage offices -- empty desks, few people, and phones not ringing.

Change to IRS Rules Excluding Capital Gains from Sale of Principle Residence

Included in the Housing and Economic Recovery Act of 2008 passed last October was a new restriction on how much capital gains from the sale of your principle residence you can exclude from income taxes. This change relates to rental properties or second homes that were subsequently converted to your principle residence. Basically, "the exclusion from capital gains recognition will be reduced by the amount of time the property was not used as a principal residence". It does not apply to situations where you rent out the home after you lived in it as your principle residence for two years or more.

Simple example 1 -- Buy a home and live in it for three years, then rent it for two years. You can exclude up to $250,000 ($500,000 for married couples filing jointly) -- no change.

Simple example 2 -- Buy a property and rent it out for three years, then live in it for two years. You can only exclude two fifths of the capital gains.

These rules are complicated and my examples are intended only to alert you to the change -- certainly not as individual tax advice. We always recommend talking to your professional tax advisor for guidance in your specific situation.

Today's Grumble

We work out of two offices in parts of the city that are particularly susceptible to parking tickets.

Our office staff is always warning us when the parking enforcement hawks come zooming down the street. Many of us know the various quirks of individual meters. Nevertheless, let's just say we contribute mightily to the City's revenue stream.

So it's particularly annoying to see this:

And, no, the enforcement officer was not writing tickets. In fact he/she was nowhere to be seen -- I imagine shopping at Trader Joe's or one of the other stores next door.

Spring - 2

Speaking of spring (and finding the silver lining in the gloomy cloud), we've gone through our annual exercise of summarizing what's positive about the current real estate market in San Francisco and Marin counties.

1. It's a Buyer's Market The calendar and the weather indicate spring has arrived and, for the most part San Francisco is a buyer's market for the first time in most people's memory.
2. Prices are Down Prices have moderated in almost all 10 real estate districts in San Francisco and throughout Marin and are expected to remain stable for the next few months.
3. Selection is Outstanding Buyers have not seen this number of available homes for sale, at competitive prices, in the last five years. And the available number of condominiums has never been this high.
4. Interest Rates are Down Loan rates are the lowest they've been in over 30 years.
5. Tax Benefits President Obama's stimulus plan offers new tax incentives for first-time buyers with additional California tax incentives for purchases of newly constructed homes.
6. Full Service Prudential's one-stop shopping helps minimize the work involved in hunting for a home mortgage, insurance and home warranty -- everything you need for a smooth, efficient closing of your escrow.
7. Knowledgeable Agents Our agents keep a constant watch on all segments of the real estate market, tracking the vital, fast changing trends and keeping our buyers informed. As always, we remain committed to getting your lowest and best price possible.
8. Technology Our unique WebTop technology allows us to deliver daily e-mail notifications of new listings throughout the Bay area that meet your specific needs. No need to hunt through multiple web sites.
9. The Extra Mile We want and appreciate your business and are prepared to go the "extra mile" to earn it.
10. Now Is the Time If you're waiting for the market "to hit bottom", we believe that any further delay will mean that you missed it again. As with most markets, by the time you know we've hit bottom, it's already passed.

Spring - 1

Spring has arrived officially, according to the calendar. Of course, the blooming trees have long since lost their flowers and the magnolias are already past their peak. This time of year our garden's pride and glory is usually the old Wisteria vine that adorns the back of the house.

Last year at this time it completely full of blossoms:

This year looks like it will be a bit of a disappointment. A week ago the vines were full of buds but we had quite a strong (but brief) rain storm last Saturday night and it seems to have knocked many of the buds off before they had a chance to bloom.



On the other hand, our orchids have been spectacular for months.

New Flood Insurance Requirements in Marin

Apparently coming as a surprise to many of the property owners directly affect, the Marin IJ has reported on new flood zone maps being issued by FEMA that will result in requiring hundreds of property owners in Marin County to purchase flood insurance for the first time.

As many as 1,300 properties are affected. Here's the breakdown as reported in the IJ:

San Rafael 300
Marin County (unincorporated) 261
Belvedere 200
San Anselmo 177
Corte Madera 150
Ross 80
Tiburon 50
Mill Valley 50
Novato 15
Larkspur 10-13
Sausalito N/A

Even though FEMA has been working on the new maps since before Katrina and most town/city managers were aware of the coming update, some affected residents only found out recently.

Today's Grumble

We rely on carefully drafted forms for all phases of most transactions -- from listing, to offers, counter offers, contract, addenda -- you name it, we have a form. And generally this is a good thing. It keeps us out of trouble and helps us avoid trespassing into lawyer territory.

There are approximately 50 forms specific to San Francisco, and another 200 or so that are used state-wide.

Today I was looking for a form that asks tenants to provide their landlord with a statement if they claim to be a member of a protected class. I've used this form in the past but couldn't remember the correct name. Searching for "tenant" or "protected" turned up nothing (the search function of our on-line forms system only searches the title of the form, not the body).

Turns out it's called "Request for Information under Title 39.1(i)(4)". Come on! About as helpful as e-mails with the subject line "hi!"