Halloween Scary Story

I was in an older historic neighborhood in Orange County, and wanted to do an impulse preview of a large two-story Victorian home built in the 1890s and located on a corner, with a for sale sign on the front lawn. It really piqued my curiosity.  I called the number on the sign and the front desk person for the company said it was available and I could go direct as it was vacant. 

 

I let myself in on the lockbox on the front door, and started to look around in the living room area when I heard a sound.  It sounded like heavier footsteps upstairs as if someone heard me and got up out of a chair and started walking away.  I immediately thought that there must be someone staying there occasionally and I had walked in on them.  I took a few steps up the stairs and called out "Hello", no one responded.  So I called out "Hello" again.  Then I heard more footsteps going to another part of the second story and the distinct sound of a metal window or door latch, as if it were closed quickly.  Suddenly, I was overcome with a cold chill and, in all the years I have entered vacant properties by myself, I have never ever felt in such a huge panicked rush to exit a property.  I couldn't find the door key fast enough, get outside and slam the key back into the lockbox. I  ran from the front door to the sidewalk, where I became more rational.  I thought there must have been an open window somewhere and I was hearing noises from a neighboring house, or there were unauthorized people sleeping there who heard me and left quickly.  I walked all around looking for outside exit stairs from the top floor, open windows, any sign of someone who could have been inside the house.  There were no stairs, and no sign of any open windows.

Since I wasn't sure what was going on, I decided I should notify the listing agent, so I called the listing office again and requested the agent's phone number.  I got the agent's assistant and said there might be somebody staying in the property.  He said he was coming right away and would be there in less than 15 minutes. I stayed outside in my car and watched the property, too chicken to move.  When he arrived, I let him go in first.  I followed him around downstairs and upstairs to check out everything in every room including closets.  There were no banging doors or open cabinets, no unlocked windows, no sign of anyone having been in the property.  He finally just turned to me and said that, similar to another listing he had one time, this just might be another ghost disclosure property!

(And seriously, if you think the neighbors are going to end up telling a buyer after the close all about the haunted house, it would be a good idea to relate the story to the buyer during escrow!)

Updated: The Ten Commandments of Buying a Home, Plus a Few More

Lenders are just not kidding around when they advise buyers about what to do for successful loan completion.  See the links below for my previous blog post on this subject, and in this post are more sage pieces of wisdom about how to have a best experience:

Always check with your lender, Realtor, and/or escrow officer personally on the phone, before sending a wire transfer to anyone.

Obtain complete documentation from your bank itemizing all money transfers.

Don't withdraw of deposit large sums into accounts unless absolutely necessary.

Try to avoid making career moves before close of escrow.

Don't allow your bank accounts to go negative, even if you have overdraft protection.

Don't apply for new credit.

All gift money must be documented, so avoid having a friend or relative pay for anything concerning the purchase of the home without first discussing with your lender.

If transferring money from overseas account, discuss the best time to do so with you lender.

Be aware if you close any credit card accounts, your debt ratio may appear higher, so DON'T close credit card accounts.  Just stop using them.

Avoid having your credit report run unless required by your lender of choice on a transaction.

More posts: Buyer Mistakes: https://longbeachrealestate.blogspot.com/2017/05/being-prepared-buyer-in-sellers-market.html
                    Wire Fraud:  https://longbeachrealestate.blogspot.com/2017/07/wire-fraud-in-real-estate-is.html

California Housing Market Forecast for 2018

The 2018 California Association of Realtors Housing Market Forecast was released at this month's annual trade show. 

As low housing supply and affordability constraints continue, the 2018 California market is expected to have a "nominal increase" over 2017, up to 4.2% increase in median price, and mortgage rates for 30 yr fixed rate mortgage going to 4.3%.

The proposed tax reforms under the Trump Administration are projected to lead to fewer sales, by 3.4%, accompanied by a decline in home values due to homeowner reluctance to put house on market as homeownership advantages disappear for homebuyers.  The housing supply could drop by 1.5% in the first year if this tax reform is implemented.

At the present, however, the California median price continues to rise, with the statewide median price at $565,330.  This is still not up to the overall market peak in May of 2007 of $594,230.  Orange County, however, has exceed that peak price by 1.8%, the only area in Southern California to do so.  In the Bay Area, five counties have exceed the peak 2007 price by as much as 42% (San Francisco). 
Housing inventory has declined everywhere, with the most inventory in the multi-million dollar market.  The California housing turnover rate is less than the U.S. rate for single family homes--longtime homeowners are staying put for reasons including capital gains hits, and "where can I afford to go"?  Another housing supply problem are the number of single family homes converted to rentals, in San Francisco estimated to be between 400,000 and 700,000 homes formerly owner occupied but now rented.

Housing affordability in California is now at 29%, and 28% for Los Angeles County, 21% for Orange County. 

• Median age for buyers - 45
• Median age for sellers - 57
• One-third of transactions sold above asking price, 6 out of 10 had multiple offers.
• The majority of first time and repeat buyers are in Southern California.
• Fewer international buyers, fewer buyers from China.
• Net cash gain to sellers highest since 2006.
• More sellers are moving out of California, but 38% are staying in the same county.
• List to sell ratio in Southern California at 98.9%.
• Lack of inventory considered one of the biggest challenges for the 2018 market, affordability another challenge.  Total sales are projected to be only 1% higher than 2017.

For the complete presentation pdf, go to http://www.juliahuntsman.com/market-trends-report.html, where, by the way, you can also search for your new home or get an estimated value report on your existing one.

A Tax Change in 1031 Exchanges Would Ultimately Affect Everyone

IRS Section 1031 Like-Kind Exchanges have existed since 1921 for the purpose of avoiding unfair taxation of ongoing investments in property, and to encourage active reinvestment in property.  While the most common image of doing a 1031 exchange is a transaction of selling one real estate property and exchanging into another real estate investment property, like-kind exchanges result in many types of property transactions. The exchanges are a stimulus to many sectors of the economy, i.e., not only for real estate professionals, but also contractors, title insurers, lenders, equipment dealers/manufacturers, transportation, energy and agriculture.  

The benefits of the current 1031 exchange allows for deferral of capital gains taxes on property sold when it is exchanged into "like-kind" property without cash being taken out (which would invalidate the exchange) and thereby allowing for new investment. Americans pay less for products and services because of this type of reinvestment on products such as single family and multiple family home rentals, public transportation fleets exchanged into new buses, trains, taxis, etc., airlines exchange their planes and rental cars--all of which dealt with through this 1031 exchange system which keeps costs lower for the consumer. Farm machinery, mining equipment, art collectible, boats, oil and gas equipment, and business asset trade-ins are all impacted by 1031 exchanges.

According to Fidelity National Finance Company, 

"The last major tax reform was in 1986. At that time, Congress repealed the ability to take passive tax losses in real estate.  An unintended consequence of this change was the ensuing real estate recession and the demise of the savings & loans industry. This eventually tipped the country into the recession of the early 90’s.  Section 1031 is bigger than passive losses. In some U.S. markets, real estate brokers claim that 1031 Exchanges touch at least 45% of the real estate investment transactions."

                                                                                * * *

"Ernst & Young, LLP released a macro-economic study on the impact of repealing or limiting 1031 exchanges in 2015 that quantified that the US economy would actually contract if Section 1031 was repealed or limited, finding that GDP would be reduced by approximately $8.1 billion per year."

Elimination, restriction or changes that would effectively block 1031 exchanges in any contemplated "tax reform" could negatively affect much of the current American economy.  The 1031 exchange is not only important on the large business economy scale, but is one of the few tools small business owners and small apartment owners have to maintain their capital investments over time.

 See more at these sites, which also include ways to contact your Congressional representative:
10 Reasons for a 1031 Exchange
Fidelity National Finance Company 
1031 Corp
Commercial Observer