How Proposed Tax Changes Could Affect You, the Homeowner

On September 27, proposed tax reform information was released by Republican leaders known as the Big 6* which outlines the elimination of certain tax deductions while doubling the standard tax deduction and elimination personal and dependency exemptions.  The National Association of Realtors 'believes the result would all but nullify the incentive to purchase a home for most, amounting to a de facto tax increase on homeowners, putting home values across the country at risk and ensuring that only the top 5 percent of Americans have the opportunity to benefit from the mortgage interest deduction."
In other words, should such tax reform become reality, it's not good for homeowners.

• It recommends a "backdoor elimination" of the mortgage interest deduction for all except the top 5% who would still be able to itemize their deductions.
• The total effect would be a tax increase on most Americans due to a combined loss of state and local tax deductions
• Lost incentive to purchase a home could result in overall loss of home values.
• It could strongly affect new homebuyers and older Americans who rely on the equity in their homes for retirement. 

The tax code has historically favored homeownership but these proposals that would limit tax deductability of the mortgage interest deduction and property taxes would reverse that support. An analysis by PricewaterhouseCoopers states that "values could fall in the short run by more than 10 percent if a Blueprint-like tax reform plan were enacted. The drop could be even larger in high-cost areas.   It may take years for home values to rebound from such a significant decrease."  See a summary here.

The National Association of Realtors believes that repealing such deductions would in effect cause double taxation on the same income.  For further information go to the NAR site.

The discussion about tax reform has been present for much of 2017. To preserve your homeowner deductions, contact your Congressional representative.


*House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, Treasury Secretary Steve Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch, and House Ways and Means Committee Chairman Kevin Brady

Average Selling Prices in Long Beach, Cerritos, Lakewood, and Orange County, August 2017

Prices are still going up, and here's what they look like locally.
For a single family detached home, the average prices in this group range from $579,687 to $1,019,768.

Overall the Los Angeles County average price for single family home is $905,787, a decrease from the previous month of $955,973.

All these prices are for the month of August, 2017, based on data from CRMLS.

Both Long Beach and Lakewood saw average price decreases from July, and Orange County is up slightly from July 2017, while Los Angeles County as a whole decreased from August's $955,973 in July.  San Bernardino County average has increased slightly since July, still under $360,000.

August 2017

Long Beach
$686,728 | +8.4%

Lakewood
$579,687 | +9.1%

Cerritos
$773,835 | +9.1%

Los Angeles County
$905,787 | +5.4%

San Bernardino County
$357,482 | +7.0%

Orange County
$1,019,768 | +4.9%

This statistic show a mix of pricing, with Long Beach/Lakewood and Cerritos having less than 30 days on the market on average, approximately 2 months inventory, and closing within 1-2% of original price.

Keeping an eye on things

For an online and automated home valuation, try my site at http://www.juliahuntsman.com/home-evaluation.  It probably works more accurately for single family homes than condos in some areas, depending on what properties lie within about a one-mile radius.  Try it!  And I am always happy to do a more customized report to send out via e-mail.  If you're thinking about making a move, do it! It pays to keep an eye on things.

The "Bureau of Real Estate" is slated to return to the "Department of Real Estate" when Gov. Brown signs

Several years ago when Gov. Jerry Brown took office, efforts to streamline state operations the Department of Real Estate was renamed the Bureau of Real Estate and moved to function as part of the Department of Consumer of Affairs, as of 2012.

Instead of being known under the acronym of DRE, it became CalBRE--more letters and, I thought, more awkward sounding.  But what really determines things in the government is how much money is involved.  The Bureau--former Department--is funded by solely by the fees paid by real estate licensees, and is not part of the State's budget system. However, part of the money going to the Bureau was being allocated to the Department of Consumer Affairs.  The Bureau, still found on the internet as http://www.dre.ca.gov, oversees a variety of functions which are found on its website.

A bill has now passed the Legislature and will hopefully be signed very soon by Gov. Brown, which will finalize the return of this agency to being a Department, and thereby saving the current Bureau of Real Estate about $3.5 million which can be utilized to make the agency function at its property level.

This site is where current news, education and enforcement about California real estate laws can be found, and should you want to check someone's real estate license, this is where to do it.

We are looking forward to the upcoming change.

See Inside a Listing Styled by a Former White House Decorator

While not all property owners can afford a high-end decorator, there is no doubt that preparing properties for sale with some professional resources for advice is a benefit to the home seller.  It's not unusual for investors to redo a home for sale, and spend hundreds of, if not several thousand, dollars to make it appealing to a new buyer. Buyers have come to expect this, having been trained by television shows making it look easy to do this, even though the show(s) typically don't show the behind-the-scenes months of actual work performed to achieve the finished product.  But sellers can still go a long way, keeping expenses very reasonable, to add the selling appeal to their property.  Adding appeal to a property does not require an expensive remodel in order to sell, but it does mean looking at the property from the buyer's point of view.  If you take just some of the ideas from the following sources, you will be able to make your home stand out!

For the story of a Newport Beach property staged and decorated by the decorator who worked for President and Mrs. Obama, as well as many celebrities, please don't miss the photos at the following link.  See Inside a Listing Styled by a Former White House Decorator

To read 50 tips on boosting your property's appeal, see 50 Cheap, Easy Ways to Boost Your Listing’s Appeal

For tips on preparing your outdoor space (and some of these tips may work for indoor space too) see this article The 5 Biggest Yard and Patio Staging Mistakes

The first clue to your home's interior is your entryway, so meet the buyer's expectations from the beginning by a good door refinishing or paint job, and the buyer will have a more favorable impression from the beginning.   Top Entryway Decor Ideas for 2017

Proposed Density Changes to East Long Beach, More Traffic, Less Choice. What?!!?

What is Your Vision for Long Beach?

Read below the post concerning plans developed by Amy Bodek, Long Beach Developmental Services Director, and her staff, prior to any public discussion, and affecting many many locations in the 4th and 5th Council districts in which retail would disappear and population density and traffic would greatly increase. Perhaps this is an attempt by the City staff to singlehandedly address a national housing crunch in the belief that no one around here is going to church anymore or shopping at stores, at the expense of local Long Beach neighborhoods. However, after a scheduled hearing on August 17 with the Planning Commission at which Ms. Bodek praised "invisible government" as a good government, the Mayor's office released a statement on August 18 supporting neighborhood review at public hearings (the way we used to do things) as follows--

 

Future citywide workshops:
· Saturday, September 30, 3-5 PM at Veterans Park Community Center
· Wednesday, October 4, 6-8 PM at Whaley Park Community Center
· Saturday, October 14, 11-1 PM at Best Western Golden Sails Hotel
· Wednesday, October 18, 6-8 PM at Expo Center in Bixby Knolls

Read on: 
"RESIDENTS IN LOS ALTOS/EAST LONG BEACH NEED TO SPEAK UP!!
FUTURE VISION for East Long Beach: NO churches, NO retail, NO parking, hundreds more residents under the flight path.When faced with growing opposition to the LUE Plan [Long Beach Land Use Element]- the Bodek bureaucrats re-did their LUE maps to spread the density into the planned and balanced East Long Beach's 5th and 4th Districts.

In the Planning Commission presentation,  Bodek's staff looked to the church properties and called them underused. In the 4th District those underused houses of worship on the LUE map slated for high density housing include:
· Unitarian Church property on Atherton next to the small Botoun Creek Park: rezoned for 5 story condos or apartments.
· Bethany Church property on Clark next to single family residence- rezoned for 3 story apartments or condos
· First Church of the Nazarene on Clark next to single family residence- rezoned for 3 story apartments or condos
The church leadership contacted by LB4D had no idea about the LUE future plans for their properties.
In the Planning Commission presentation, Bodek's staff version of the future of East Long Beach retail would be on the bottom of five to six story residential buildings. The staff described the retailers on the bottom doing most of their business on-line- but giving "discounts" to the neighbors in the buildings above them.
Under the Los Altos Center plan, Bodek would leave a legacy to the City Council's of the future by putting hundreds of new residents in five story apartment houses directly under the flight path that goes over Los Altos Center South with jets flying literally just above their buildings.
4th District legacy properties are also targeted by the new maps. The Long Beach Playhouse property is on the Anaheim Corridor slated for 5 story residences. The architecturally significant Los Altos Medical Center, designed by architect Gordon Powers is slated for a 5 story residential re-zoning.
This is what Bodek's team has planned for East Long Beach retail redo:
4th District
· Los Altos Center North (Trader Joe's area) and South (L.A. Fitness/Lazy Acres): multiple five story condos or apartments
· Los Altos Center South (Hoff's Hut): multiple four story apartments/condos
· The Circle Center retail, Circle Porsche and Audi properties: 5 story apartments/condos
5th District
· Los Altos Gateway center (Kmart/Lowes): multiple five story apartment/condos
· Spring/Palo Verde retail centers : multiple 3 and 4 story buildings
· Town Center: Multiple six story condos and apartments.
The 4th District also gets increased density in its apartment communities. The well kept up and maintained Beverly Plaza-home to a CSULB mini-city- with multiple students living in two bedroom apartments in two story buildings is envisioned in the Bodek plan as SIX story apartment buildings-with the current parking situation.
The six story plan would continue to the apartments just north on PCH and the Traffic Circle."

See the original Long Beach 4th District Blog post on events at the August 17 Planning Commission meeting.  And thanks to the Facebook post by concerned citizen Michele Klein

The Powerful Effect of Clutter

A search on these words pulled up pages and pages of references on Google, which claimed over 7 million results.

According to these, there are psychological results, medical effects, happiness impacts, how it decreases productivity, how it affects your brain, the list goes on and on.

You can solve your clutter problems by getting a coach, getting therapy, using feng shui, stop overeating, clean off your messy desk, even using flower essences, or learning to overcome hoarding. You can stop buying stuff you don't need--it could be that simple. But we live in a society that manufactures more and more for us to take home, just look at the cargo containers arriving at the port before Christmas, where we associate buying with bringing happiness or fulfillment.  

Really, what is clutter? Merriam-Webster dictionary says: "to fill or cover with scattered or disordered things that impede movement or reduce effectiveness, a room cluttered with toys," or according to Oprah: "Clutter is anything that stands between you and the vision you have for your best life."    It's stuff you keep accumulating, bring into your environment, and don't find a place for it where it's out of your way until you really need it.  It's stuff you really don't have a purpose for, and haven't used or no longer use. Yes, there have been studies done, article in journals, all about people with messy desks or messy lives, but how long do you need to sit around and analyze and rationalize this? Don't you  really want to be more effective, and move freely?

It's time to get on top of things, literally.  It's time to stop denying that you have too much stuff, that you have lost control of keeping order in your own home.  Admitting you have a problem is the first important step, where have you heard that before?

When does this become a problem in the real estate world?  When people decide to sell their homes.  To put off the pain of parting with objects, they tell themselves that buyers actually want to come in and view all their stuff, all the while trying to see past it with the ultimate purpose of really finding a home they can love with their stuff in it.  This is not how it really works. All that clutter (to you, precious objects, to them, clutter) is a huge distraction for them, they don't know what to focus on as they look around this house.  And all your possessions are a distraction to you, it's a big job to decide about all those things, it's stultifying, and you can get locked in a quagmire. But you can manage it.

I don't know which method of decluttering will work best for you, but choosing one and following it will eventually lead you to a less complicated existence, which  I believe is a more rewarding way of life.  Try donating, having a yard sale, or going around your house and marking things that you will allow to leave you with a sticky, and then eliminate those things. Search for recycle centers in your area, or donate your car.  Other people may be helped by what you are ready to let go of.

When you make more space in your home, you make more space in your life where new and interesting experiences are allowed to enter.

If you're thinking of selling, please contact me, we can review the entire process to make it as painless as possible.

What Are Appraisal-Free Mortgages? Starting Soon

Fannie Mae (Federal National Mortgage Association since 1938) and Freddie Mac (Federal Home

Get good grades and you get an easier loan

Loan Mortgage Corporation since 1970s) are both government sponsored enterprises (GSEs).  Freddie Mac "buys mortgages on the secondary market, pools them, and sells them as a mortgage-backed security to investors on the open market." (Wikipedia).  Fannie Mae's "purpose is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities (MBS), allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on locally based savings and loan associations (or "thrifts")." (Wikipedia)

So in other words, both entities buy back mortgage loans to resell to investors.  In order to do that, mortgage loans made to new home buyers through various lending institutions are often completed under the guidelines of either or these two entities. 

The appraisal process is a key feature or the mortgage loan process, as the loan must be shown to be a good risk for the price agreed upon between buyer and seller, but that appraisal has often been a source of contention especially when market prices are moving up  rapidly. In addition, changes to the mortgage loan process in recent years has lengthened the time taken for many loan to get completed due to new lending guides required by the Consumer Financial Protection Bureau to protect borrowers.

So, beginning in 2016, certain refinance mortgages by Fannie Mae were approved for "appraisal free" loans.  Now, both Freddie Mac and Fannie Mae are jumping onto the bandwagon to offer mortgage purchase loans with internal automated appraisals which may save 10 days off escrow time and $500 to the borrower.

But this will not work for every borrower--the automated process will look at the borrower's loan-to-value (lower loan is better), the borrower's FICO scores and other determining factors about their application in order to determine the eligibility for the appraisal-free process.  Does this mean there's no calculation on the value of the property? No, because "Collateral Underwriter uses statistical models and algorithms built on a database of over 26 million appraisals to evaluate appraisal quality and drive greater confidence in the valuation of properties securing the loans acquired by Fannie Mae." 

So given that application and property value targets are met in this process, the buyer may obtain a Property Inspection Waiver on properties with low loan-to-value ratios. See Housing Wire
article. Fannie Mae does believe that the majority of mortgages will still require a traditional appraisal, however, for the right buyer, appraisal free transactions will ease their property purchase!

Average Selling Prices in Long Beach, Cerritos, Lakewood, and Orange County, July 2017

 

Prices are still going up, and here's what they look like locally.

For a single family detached home, the average prices in this group range from $586,928 to $1,003,739, which represent increases between 1.3%-13.2% over June prices.

Overall the Los Angeles County average price for single family home is $956,939, an increase from the previous month (the median price is $610,000 for July).

All these prices are for the month of July, 2017, based on data from CRMLS.

Orange County as a whole has slowed to just over 1.3% from last month while Los Angeles County as a whole increased over 11% in July.  The areas with more lower priced homes (relatively speaking) are seeing bigger increases than Orange County, with overall higher priced homes, with a smaller percentage increase.

July 2017

Long Beach
$705,682 | +13.2%

Lakewood
$586,928 | +12.1%

Cerritos
$757,438 | +4.5%

Los Angeles County
$956,939 | +11.0%

San Bernardino County
$355,603 | +3.1%

Orange County
$1,003,739 | +1.3%

How much higher will things go?  Unknown, but as long as the interest rates are lower, and buyers are able to find sources for down payment funds, the end is not in sight according to many market experts.

If a buyer were interested in the average selling price of $350,000 for a house, then San Bernardino County (average at $355,000 in July) and the Inland Empire would be the place to search in Southern California, and Northern California in many counties, excluding the Bay Area, would hold some similar opportunities.

For an online and automated home valuation, try my site at http://www.juliahuntsman.com/home-evaluation.  It probably works more accurately for single family homes than condos in some areas, depending on what properties lie within about a one-mile radius.  Try it!  And I am always happy to do a more customized report to send out via e-mail.  If you're thinking about making a move, do it! The future is yours.

Who Is A Coterminous Owner? (Hint: Do You Have Trees on Your Property?)

Property owners are probably most familiar with the understanding that if part of a neighbor's tree branches overhang their property, they have the right to remove those branches back to the property line, and may cut roots also if doing so does not damage the health of the tree.  But there could be more . . .

overhanging branches

An adjoining homeowner wanting to cut back a tree is advised to obtain the services of an arborist (tree professional) beforehand, in order to avoid any trespass issues (the saw goes over the fence line), and/or cutting correctly to avoid the appearance that too much of a branch was cut off (it can curl back) which could result in an award of double or triple damages in court.  And next, coterminous owners of a tree, meaning a tree trunk that straddles both properties so both owners own the tree, are subject to the following:

"Neither coterminous landowner may remove a tree on a property line without the other's consent, nor may either land owner cut away any part that extends onto his or her land if by so doing the landowner injures the common property interest in the tree. Each owner has an interest in the tree identical with the part that is on his or her land and has a right to demand that the owner of the other portion use his or her portion so as to "not unreasonably…injure or destroy the whole." (Scarborough v. Woodill, 7 CA 39 P. 383 (2d Dis. 1907)) (Anderson v. Weiland, 12 CA 2d 730 (1936)."

 Should leaves fall onto the adjoining neighbor's property which are seen as a problem, that owner must prove in court that the tree owner is causing a nuisance.  It might be easier to clean it up yourself.  An overhanging tree that might topple onto a house may also have to be taken to court, so an adjoining owner should first get photos and help from an expert.

Is your tree shading an adjoining neighbor who has solar panels? The 1978 California Solar Shade Control Act put limitations on shading during hours of maximum intensity, and according to California Association of Realtors legal experts, the property owner there first determines who has to cut back their trees or not.

Should an owner of an encroaching tree put his/her property on the market, the appropriate disclosures must be made to the incoming buyer, including any ongoing dispute with a neighbor.  Such a dispute could be a potential obstacle in the sale of the property for some buyers--and make no mistake, if a seller does not disclose the issue before close of escrow, the neighbor most certainly will. 

Some people are really not that upset about tree issues from their neighbor, but just watch Judge Judy and you will hear the exceptions.  Just being a good neighbor and keeping your tree trimmed can alleviate many future problems!

For more information about these disclosures, please contact me, I will be happy to forward the entire article.

 

Home Safety Check - Things Every Homeowner and Renter Should Do

A home security breach is not a pleasant thing to experience, or even just think about.

Besides reviewing your home, condo or renter insurance policy annually for adequate coverage, and taking home videos or photos of possessions for your records, there are several essential things to do if you experience a break-in.

I once knew someone who always rang his home doorbell before entering after being away for a period of time, thinking this would alert someone who might still be in the house, give the burglar a chance to get away and avoid a personal confrontation. This assumes there is a window or back door through which an uninvited visitor could escape. But if it already looks as if a break-in has occurred, call the police first.  If you have prior documentation on what was taken, your job will be much easier.

Protect yourself against being a target, by doing the following:

• Automatic timers on lights and radios, especially when away.
• Always keep your garage door closed
•  Do not leaves notes on the door for anyone or leave newspapers in the driveway (this can be a problem sometimes when newspapers decide to give you a free promotional newspaper while away, so have someone remove your throwaways); keep your landscaping maintained.
• If home is new, change your locks when you move in.
• Insert steel rods into track of sliding doors.
• Install impact-resistant glass for windows
• At a minimum, install deadbolts on all doors (be sure they do not require a key from the inside).
• Arrange for removal of trash receptacles from the street.
• Forward your calls to another number that is answered while you're away--a no-answer call can be a tipoff that no one is home.
• Ask a relative or friend to do a drive by while you're away.
• And, if you're home during the day, keep your doors and windows locked especially when you are at the back of your home. Don't assume you live in a perfectly safe area, because opportunists can be anywhere at any time.