Friday, June 7, 2013
Tax break disappears as housing values rise
As property values have
been going up sharply in the Silicon Valley, so are the assessors' values of our
houses, throughout the area. We can expect therefore to pay more in property
taxes, come November and December of 2013.
During the past 4 years I have prepared updated market analysis for several of my clients, in order to justify a lower value to be sent to the tax assessor's office. The goal of course was to pay a lot less in property tax, and I am glad to have been incidental to huge tax reductions in several instances. It is very unlikely that this is going to be possible going forward, as for most of the local area values have gone back to the highs of 2007, and sometimes higher yet. There are some small pockets in the County which would still be lower but there are fewer and fewer of them.
Nonetheless, if you feel that you are being assessed too much, do not hesitate to call on me to double check on it!
An article on the subject was recently published in the Mercury News, stating that "tens of thousands of homeowners will see their property taxes go up significantly this year as rising home values
restore some or all of their homes’ lost equity".
Do you feel you are being assessed unfairly this year? Let me know.
Thanks for reading,
Francis
Local real estate
updated loan rates Rates are up mostly, except for the 1-yr adjustable
Week ending 6/6/2013 (Source: Freddie Mac)
30-yr. fixed: 3.91% fees/points: 0.7%
15-yr. fixed: 3.03% fees/points: 0.7%
1-yr. adjustable: 2.58% Fees/points: 0.4%
During the past 4 years I have prepared updated market analysis for several of my clients, in order to justify a lower value to be sent to the tax assessor's office. The goal of course was to pay a lot less in property tax, and I am glad to have been incidental to huge tax reductions in several instances. It is very unlikely that this is going to be possible going forward, as for most of the local area values have gone back to the highs of 2007, and sometimes higher yet. There are some small pockets in the County which would still be lower but there are fewer and fewer of them.
Nonetheless, if you feel that you are being assessed too much, do not hesitate to call on me to double check on it!
An article on the subject was recently published in the Mercury News, stating that "tens of thousands of homeowners will see their property taxes go up significantly this year as rising home values
restore some or all of their homes’ lost equity".
Do you feel you are being assessed unfairly this year? Let me know.
Thanks for reading,
Francis
Local real estate
updated loan rates Rates are up mostly, except for the 1-yr adjustable
Week ending 6/6/2013 (Source: Freddie Mac)
30-yr. fixed: 3.91% fees/points: 0.7%
15-yr. fixed: 3.03% fees/points: 0.7%
1-yr. adjustable: 2.58% Fees/points: 0.4%
Thursday, May 30, 2013
Where the mortgage deduction really pays
Where the mortgage deduction really pays... an
interesting article.
The mortgage interest deduction is one of the most-expensive tax breaks on
the books, but its benefits are distributed unevenly across the country,
according to a new, comprehensive report by the Pew Charitable Trusts.
In 2010, the year that Pew analyzed, the mortgage deduction resulted in $80 billion of forgone revenue to the federal government. Over five years, the tax break is expected to reduce revenue by about $380 billion.
This article by Jeanne Sahadi @CNNMoney shows however who really benefits from the tax break (and who benefits from other tax breaks), while these report and maps look at the geographical distribution of the mortgage interest deduction.
Make sure to look at the interactive maps, from the Fiscal Federalism Initiative, showing how widely mortgage interest claim rates and average deductions vary, both across and within states. They show in particular some key findings like:
- Average deduction per filer, by state,
- the Claim rate, by zip code,
- the average deduction per filer by zip code.
Local info:
Look at the average deduction per household in your local area.
Simply fascinating!...
Thanks for reading,
Francis
Silicon Valley real estate specialist
Detailed, local trends etc...
In 2010, the year that Pew analyzed, the mortgage deduction resulted in $80 billion of forgone revenue to the federal government. Over five years, the tax break is expected to reduce revenue by about $380 billion.
This article by Jeanne Sahadi @CNNMoney shows however who really benefits from the tax break (and who benefits from other tax breaks), while these report and maps look at the geographical distribution of the mortgage interest deduction.
Make sure to look at the interactive maps, from the Fiscal Federalism Initiative, showing how widely mortgage interest claim rates and average deductions vary, both across and within states. They show in particular some key findings like:
- Average deduction per filer, by state,
- the Claim rate, by zip code,
- the average deduction per filer by zip code.
Local info:
Look at the average deduction per household in your local area.
Simply fascinating!...
Thanks for reading,
Francis
Silicon Valley real estate specialist
Detailed, local trends etc...
Friday, May 24, 2013
Bay Area real estate values...
As seen on Thursday's front page of the San Jose Mercury News (and also in the SF Chronicle of today
Friday), property values in the Bay Area as a whole are definitely picking up.
Typically when it gets in the paper, it is already a few months old, but the
information is organized in a way that shows updates in some communities that
are not obviously visible to us here in the Silicon Valley.
Some of the East Bay Cities are doing fantastic, showing some real improvement in 1st quarter 2013 over the first quarter of last year. For instance:
Oakley is 16% higher in median values than in the first quarter of 2012,
Antioch is 28% higher,
Union City is 34 % higher,
Pittsburg is 9 % higher.
The article is also interesting because it touches on a subject I touched on earlier in this blog: why are there so few homes on the market? They are showing that there are still a lot of houses either underwater, or with not enough equity for people to move:
according to Zillow there are still about 25% of homeowners who are in that situation in the Counties of Santa Clara and San Mateo, and a whopping 46% in the Contra Costa County.
That would include:
- people who bought when prices were higher,
- people who borrowed too much on their home equity over the years,
- prices that are slightly higher than when property was purchased, but would not break even with the costs of the sale.
Francis Rolland
Some of the East Bay Cities are doing fantastic, showing some real improvement in 1st quarter 2013 over the first quarter of last year. For instance:
Oakley is 16% higher in median values than in the first quarter of 2012,
Antioch is 28% higher,
Union City is 34 % higher,
Pittsburg is 9 % higher.
The article is also interesting because it touches on a subject I touched on earlier in this blog: why are there so few homes on the market? They are showing that there are still a lot of houses either underwater, or with not enough equity for people to move:
according to Zillow there are still about 25% of homeowners who are in that situation in the Counties of Santa Clara and San Mateo, and a whopping 46% in the Contra Costa County.
That would include:
- people who bought when prices were higher,
- people who borrowed too much on their home equity over the years,
- prices that are slightly higher than when property was purchased, but would not break even with the costs of the sale.
Francis Rolland
Trends: Local prices and graphs.
Thursday, May 23, 2013
Own vs Rent ...
Despite US population growth of roughly 1
percent per year, the number of owner households has held steady, in the range
of 75 million since 2007, while the number of renter households has increased
from 35 million in 2007 to nearly 40 million today.
This means that the historic proportion of 1/3 - 2/3 tenants - owners in the US is loosing ground.
Some of the reasons are:
- loss of home because of the crisis,
- difficulty to refinance,
- Some renters who would like to take advantage of today's favorable prices and interest rates are finding credit standards too tight to obtain financing.
Here is the evolution over time, nationwide:
In France, that proportion is about opposite: about 1/3 owners, and 2/3 renters.
If you are coming from another Country, let me know what is that proportion where you are coming from!
Thanks,
Francis
PS: in California, the homeownership rate has gone down regularly since 2008 and is now about 54%.
Current Mortgage rates
Non-profit organization worth noting: Partners for New Generations.
This means that the historic proportion of 1/3 - 2/3 tenants - owners in the US is loosing ground.
Some of the reasons are:
- loss of home because of the crisis,
- difficulty to refinance,
- Some renters who would like to take advantage of today's favorable prices and interest rates are finding credit standards too tight to obtain financing.
Here is the evolution over time, nationwide:
In France, that proportion is about opposite: about 1/3 owners, and 2/3 renters.
If you are coming from another Country, let me know what is that proportion where you are coming from!
Thanks,
Francis
PS: in California, the homeownership rate has gone down regularly since 2008 and is now about 54%.
Current Mortgage rates
Non-profit organization worth noting: Partners for New Generations.
Saturday, May 18, 2013
California: foreign-born population and homeownership.
California,
the most popular State for immigrants... When I came here first in 1970 the
mentality was still very much like: "Go West, young man, go West" and a lot of
people were arriving from the East to start anew. There was a lot of space
available, still, right outside your door.
What is the situation
now?
Well,
it is true that historically, California has been the popular destination for
immigrants. Currently, about one quarter of the nation’s
immigrants live in California. The top three countries of origin for the foreign
born entering the U.S are Mexico, China and India.
However,
California’s share of incoming immigrants has been declining since 1990 due to a
rise in state bills related to immigration, and the settlements of new immigrant
arrivals into different states with historically low concentrations of
immigrants.
Length
of stay and region of origin are significant factors in determining
homeownership rate among international buyers. Those who have stayed longer, and
have migrated from Europe and other parts of North America are more likely to
own a home.
Homeownership
rate among the foreign born population is 47.9 percent in California, much less
than the rate among those born in the U.S (58.1 percent). When breaking down the
foreign born population, naturalized citizens are twice as likely to own a home
compare to those who are not (63 percent for naturalized citizens versus 28
percent who are not a U.S citizen).
One
in five REALTORS® has worked with an international buyer in the past
year.
The
share of international buyers has slightly increased from 5.3 percent in 2010 to
5.8 percent in 2011.
In
2012, California accounted for 11 percent of home purchases by international
clients, second behind Florida (26 percent).
The
median home price of foreign clients was $505,000, which is double the median
price of single family homes in the state ($291,000)
Thanks for
reading,
Silicon Valley Real Estate
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