Are You Taking Your Tax-Deductible Home Improvements?

With tax day approaching, have you checked out these potential tax deductions?

 - Energy Efficient Upgrades, including Energy Efficiency Home Improvement Credit up to $3200; a home energy audit identifying health and safety issues in the home; Energy Star's exterior windows and skylights; biomass stove which has a thermal efficient rating of at least 75% to qualify for the credit.

 - Clean Energy Upgrades, including the Residential Clean Energy Credit, including a solar water heater and geothermal heat pumps.

- Historic Home Upgrades, for the federal Rehabilitation Tax Credit for renovating a historic home, involving such items as pipes, stairs,  posts and beams.

 - Medically Necessary Upgrades, to qualify for a medical expense deduction.

 - Home Office Repairs and Improvements, including wiring, security, dual and triple-pane windows, repairing damaged outlets.

 - Rental Property Repairs, If part of the home is rented out, certain repair expenses may be deducted; repairing water leaks to avoid mold issues; repairing leaky ducts to prevent heat loss and improve air quality.

See the article below for more information:

7 Types of Tax-Deductible Home Improvements

Your tax professional will be able to give you complete advice on these and other possible tax deductions.

 Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

New Real Estate Practices in California

There are changes coming to the way REALTORS and all real estate licensees do business. 

One change has actually been discussed many many times since about 2004, or perhaps a little earlier, and that is, requiring buyers to sign buyer representation agreements with their agent of choice. Of course, listing a home with a listing agreement in place has been in place for decades, but working with  a buyer, until July 2024, did not require that practice.  Well, this is all changing.

The Road to Solutions

California Regional MLS, one of the largest  MLSs in California and the nation, is soon putting a rule into place that a buyer-broker agreement must be executed before property is shown to a buyer by a REALTOR.  You may have been reading about the lawsuits over the past few months, and the settlement reached with the National Association of Realtors--much information that has come out in the media is just plain inaccurate--however, the following statement comes directly from NAR concerning one of the agreements in the settlement and which I actually look forward to:

"Written agreements for MLS participants acting for buyers: While NAR has been advocating for the use of written agreements for years, in this settlement we have agreed to require MLS participants working with buyers to enter into written agreements with their buyers. This change will go into effect in mid-July 2024."

Many brokers already utilize these agreements, which have been available to the industry for years, with their clients.  The buyer-broker agreement, which is a standardized form provided through California Association of Realtors, may have varying terms, such as length of time, geographic area, commission to agent, or even for a specific number of homes or type of homes to be shown. Putting someone in their car, or meeting them at a property, just scratches the surface of what an agent does to help a buyer find the right home.  Buyer-broker agreements are legally binding contracts which  work in both directions: the buyer commitment to the agent and the broker/agent commitment to the buyer.

An agent should be first sitting down with a buyer and taking in the buyer's thoughts and questions about a home purchase, before showing property. This is how I've always done business since I started, and I believe it's the best way. When there is good communication between buyer and agent, there is usually a better understanding of the process, and less of the phenomenon known as buyer remorse. The buyer should expect a very clear and thorough review of a buyer agreement from the agent.

A home purchase is a huge commitment to a mortgage, obtaining home insurance, understanding future maintenance expenses, property taxes, and how a buyer's income will absorb these costs. A buyer is making a commitment, and that commitment deserves clear professional communication by an agent, and the agent who is offering his/her professional help also needs the commitment of the buyer in order to get to the goal of a home purchase. 

More updates will be provided on this topic, and please don't hesitate to contact me with questions!

Looking forward to the future!

 

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

California Insurance Issues May be Affecting You

Numerous residential insurance companies have stopped writing certain policies, most recently it is State Farm cancelling the insurance of approximately 42,000 apartments. This affects anyone who owns units they are not living in if they have a State Farm policy.

In spite of State Farm's cost issues of coverage on claims, catastrophes, reinsurance and decades of working with old insurance regulations, "State Farm recently reported a net worth of $134 billion, up $3 billion from the year before. The state insurance commissioner says that raises serious questions about its financial situation — questions the company must answer to regulators." But supposedly the claims payout is $1.08 for every dollar taken in on premiums in California.  Read more here: https://www.nbcbayarea.com/news/california/california-homeowners-insurance/3492251/  As the article states, you must receive at least 60 days notice of cancellation from your insurer. And, by the way, water claims are always a sensitive subject, it's better to avoid them if at all possible.

House sitting at edge of eroded beach

For buyers and sellers of residential or income property, it's important to find your insurance coverage very very early in your transaction.   Long gone are the days when a buyer could line up insurance coverage 7 days before closing.  In the current market, buyers must make sure they can get coverage within a few days after going into escrow, if not before. Some people (in fact, many people) are turning to the California Fair Plan, but it is now inundated with requests. A prospective owner is better off turning to either their current agent if they can work with outside carriers, or start searching multiple insurance sources.  One source to turn to is the website for the Insurance Commissioner.  What, you don't like this guy? Forget it, what's important is finding ways to meet your insurance goals. It's tough, you probably will end up paying more (as we all are anyway) than your current policy, and different coverage (I already received notice of less coverage on my earthquake policy from the State), but it's important to get it to meet your goals and satisfy your lender's requirement to be covered. 

Someday, I believe, the crisis will be past us, or at least the worst of it.

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

Long Beach Residential Market for February 2024

Long Beach February sales information

 For the Long Beach single family market, the months supply of inventory remains low, under 2 months.  On a rolling basis over the last 12 months, closed sales are down 18+%, and both the median and average sales prices are up as much as 2.5%.

New SFR listings are down over 18%, and the average sales price, on a 12 month basis, rose to $1,038,606

It's a similar story for condos, with the average sales price over a 12 month period rising to $578,267.  However, condos also have a somewhat higher months of inventory at 2.7 months, an increase of 42% compared to February of 2023.  Condo are also receiving a somewhat lower amount from original list price than single family houses, at -1.5%.  Which is not a huge difference from SFRs which are  down only .5% from original list price.  Still, there seems to be a somewhat greater demand for houses than condominiums in Long Beach.

Compare to all of Los Angeles County over the last 90 days where sales are down by 11%, and the total months of inventory is 8 months, an increase of 13%, compared to Long Beach at under 2 months. The current average sales price for the County as of January 24th is $1,024,684, a level that has remained stable over the last 12 months.

 

Los Angeles County SFR Market for the last 90 days

 

 

 

 

 

 If you are considering a sale of your home or condo, I am happy to provide an estimated selling price based on price within your immediate area. Please call, email or text me.  And, go to my website to search properties to find out what's going on in your market.

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

Quote For the Day By Theodore Roosevelt

Craftsman Bungalow Home in Long Beach

"Every person who invests in well selected real estate in a growing section of a prosperous community adopts the surest and safest methods of becoming independent, for real estate is the basis of wealth."  Theodore Roosevelt, Speech, September 9, 1903.

Whether you're wealthy or not-so-wealthy, consider how you can invest in real estate: as a sole owner, as an income property investor, or as a partner among several at your level of affordability.  You don't have to have the ability to buy the most expensive real estate in order to benefit from real estate ownership.

 

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

Early March 2024 California Real Estate Report

 Here's an abridged summary of CAR's market data report:

March 4, 2024 – Recent economic reports suggest that inflation continues to cool from last year but may remain sticky in the short term. ... While it is widely expected that the Federal Reserve will not cut its policy rate in its upcoming meeting, mortgage rates could begin to trend down more meaningfully towards the end of the second quarter if the economy continues to slow.    

 

Consumer confidence slips for the first time in three months: Consumers’ attitude towards the economy took a step back in February, as the Conference Board’s Consumer Index fell 4.2 points to 106.7 last month, declining for the first time since November of last year. ... Recent rising trend in interest rates could have affected how Americans feel about the economy as well, and concerns over the U.S. political environment may also have been a contributing factor to the decline in the optimism.    

​

Mortgage rates remain elevated after key inflation data: The average 30-year fixed rate mortgage (FRM) reported by Freddie Mac for the week ending February 28 climbed again for the fourth consecutive week to the highest level since mid-December of last year. ... The Fed wants to see more evidence that inflation is slowing consistently and could wait until the second half of the year before making any rate cuts. Mortgage rates, as a result, could remain elevated at the start of the homebuying season. 

​

Income edges up but inflation-adjusted spending dips: Americans were making more in January but may not be spending more after accounting for inflation. Personal income growth jumped 1% on a month-over-month basis and recorded the highest increase since July 2021. ... With the core PCE deflator notching its biggest monthly gain in 12 months, real consumer spending, in fact, declined 0.1%, the lowest since August of last year. 

​

Construction spending unexpectedly falls in January: Construction spending in the U.S. started off the year slow with total outlays declining on a month-to-month basis by 0.2% in January, its first drop in 13 months. ... With vacancy rate likely to climb as more new apartments are expected to be released this year, multifamily construction should pull back further in the next 12 months.

​

Mortgage delinquency holds steady near historic lows: Mortgage delinquency inched up at the end of 2023 but remained near record low levels, according to a recent report from CoreLogic. Mortgage borrowers who were late in making their payments by at least 30 days or more accounted for 3.1% of all outstanding mortgages in December, an increase of 0.1 percentage point from 3.0% recorded in December 2022. ... With home prices projected to increase in 2024 and the economy likely to experience a mild growth this year, delinquency rate could rise but is not expected to increase sharply in the next 12 months.

 

Spring is coming and so is it time to seriously think about your real estate plans for this year?

 

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

Colors Make a Difference When Selling a Home

Many times a property owner loves their colors, that deep purple wall in the living room is such a nice contrast to a golden orange kitchen.  And in some countries, bright colors or very deep colors are seen as desirable, so sellers need to work at what the buyer sees when viewing their home. The fewer the personal elements, the easier for the buyer to make the house his, or hers.  It may be difficult to achieve perfection in staging to sell, but usually paint, at least in the main entry areas and living room, is achievable for most people.

Color definitely has an impact on the feeling a prospective buyer may have about a home. Colors that are a personal reflection of the owner's taste may be seen as an additional expense to paint out for the buyer--and may even be a hurdle to getting an offer.  A large house with a strong forest green exterior was one the market in my area for the entire listing period, and never sold, even though an estimate was obtained for the buyer (multi-thousands of dollars to paint out). So the effect of color cannot be underestimated for most buyers, it's either difficult to look past and reimagine the home, and/or it's seen as another expense to fix.

So what do professionals, and agents, recommend?  Neutral colors. Warm neutral colors as opposed to cool neutral colors.  While certain gray colors are currently often seen in flooring and other interior features, they are usually on the cool side.  The owner should strive for a feeling of warmth according to a majority of 71 professionals surveyed.

Exterior colors may have the same effect.

However, in some areas such as Long Beach that have historic districts guiding the exterior home design, darker colors may prevail and be acceptable due to historic considerations. The era of the home can be the owner's guide in many cases.

For more on this topic, go to https://www.fixr.com/articles/paint-color-trends-2024#colors-for-selling-a-home-in-2024

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

January 2024 Market Report for Long Beach and Los Angeles County

LA County and Long Beach Housing Data, Jan. 2024

 Sales growth for Long Beach in January was down by 5%, while the median price climbed upward another 8% to $886,000.

Median price for all of Los Angles County was $925,000, also an increase by 8%.

Look at other cities: Similar median price but far fewer sales, such as Hawthorne, West Covina,, Claremont and San Dimas. 

 So one of the things this chart shows is that Long Beach is more active than other cities: housing variety, larger city, range of prices.

Sales over list price: in Long Beach in January, 49% of sales were over list price, for Los Angeles County it was 39% of sales were over list price.

(This is an interactive chart, display is a screenshot only.  I would be happy to forward the link upon request, it covers all counties and most cities in California.)

NOTE:  The graph at the right shows average home price for Long Beach for February 2024 was $1,086,764, and increase of  11.1%; the median home price in February was $925,000, an increase of 5.7% (compare to January median price of $886,000).

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

California Continues Upward Price Increase -- See Comparisons

 

Current graph on Calif home price in 2024

 In spite of fluctuating rates, going down, the back up, demand is high and supply is low. Recent data provided by CAR economist Jordan Levine this last week and NAR, shows that currently 32% of home sales are all cash, back to where we were a few years ago. So 1/3 of buyers are not concerned with mortgage interest rates.  The current California home price is $788,940, and the number of single family active listings was 29,000 in January, down from 32,000 in January 2023. And, we are at the lowest level of mortgage applications in the last 30 years!

Why is buyer demand so low right now, when the U.S. unemployment rate is at 3.6%?  Is someone telling you as a buyer it's better to wait because interest rates will be coming down even lower? That is very unlikely to happen.. 

Interest rate data forecast

Typically, the gap between the 10-year Treasury yield and the 30-year fixed mortgage rate spans 1.5 to 2 percentage points. For much of 2023, that margin grew to 3 percentage points, making mortgages more expensive. - Bankrate.com

 Click on this link to use the Purchasing Power Calculator, which provides multiple comparisons for the buyer's location and financial situation :  http://www.car.org/marketdata/interactive/interestrateaffordability

We all remember the extremely low interest rates in the 3% range during Pandemic housing market, and how that coincidentally pushed prices up in bidding wars. It's still a competitive market, but as more listings come on the market in 2024, there is hope that buyers will have a better playing field.

 

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996

Bay Area vs Kansas City Price Comparison

San Francisco and Kansas City home market prices!

This graphic is at the end of 2023, showing median sales prices as of the 4th quarter in the Bay Area vs Kansas City.

If anyone is thinking of relocating to Kansas City or any other area, just get in touch!

 

Julia Huntsman, REALTOR, Broker | http://www.abodes.realestate | 562-896-2609 | California Lic. #01188996