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Short sales and bank-owned properties shrank to being pretty much a non-factor in our market. We may see a slight increase in both of these next year due to all the mortgages that convert from interest-only to principal-reducing and temporary loan mods that go up next year.


Prices were up about 10% for the year. That’s a slowdown from the huge gains of the past couple of years. Home prices were rising faster than income the last few years, so I was expecting this.


The Fed raised rates in December as expected, but we haven’t seen a big increase in mortgage rates yet. Some experts are predicting low mortgage rates for a while.


Inventory of resale homes for sale is still quite low. There has been a big boom in new home construction again so there is a lot to choose from there. Most of the new homes start in the $500Ks for a base price, not counting upgrades and landscaping.


Sales are way up at Trilogy in Brentwood for that higher-end active-adult community. Shea is also breaking ground on some upper-end, non active-adult homes in that area with price tags over $1M and pre-model sales have been brisk.


Our area continues to benefit from the uber-pricey Bay Area which is driving buyers out our way. I keep thinking affordability is getting out of reach for the average buyer, but as long as the Silicon Valley booms, we should continue to see demand in our area. While our homes are much more expensive than they were just a few years ago, we are still “affordable” compared to San Jose/SF/Danville/Pleasanton/etc.


The end of the year is fast approaching. Now is the time to plan ahead and do what you can to try and reduce your income tax bill.  Here are two ideas for you to consider:


  1. If possible, pay your property tax bill in December. If your property taxes are not impounded, that means you write the checks yourself. If this is your situation, and you can afford it, consider paying the second installment, normally due in February, before the end of this year. This could increase your deductions for the 2015 tax year.


  1. Pay your January mortgage payment(s) in December for the same reason as above. This can generate an extra month’s worth of interest deduction on your taxes.


You’ll want to check with your tax professional first to see if it is more beneficial to increase your deductions this year versus next. If, for example, you believe you will be in a lower tax bracket next year because of a reduction in income, you may want more tax breaks this year. However, if your income is expected to be higher next year, you may want to move as much of your deductions into next year as you can. If this seems backwards, consider that the higher your marginal tax rate, the more beneficial each dollar of deduction is.


This is an important consideration, because by pulling some of your 2016 deductions into 2015, you will be effectively reducing your 2016 deductions by that amount. If you do this again in 2016, you will be roughly breaking even, assuming you will be in the same tax bracket. However, due to the time value of money, I think you’d rather have the tax break THIS year versus next year.


Last week I explained why lenders don’t like items of personal property included in a real estate transaction. This week I’ll discuss the rules governing whether an item is a “fixture” or personal property.


The basic definition of a fixture is something that is attached to the property. For example, no one would argue with you whether the roof is attached to the home. On the other hand, the clothes in your closet obviously don’t stay with the home. But what about window coverings? The brackets to hold them up are obviously attached to the home, but what if the fabric is just hanging there? Well, we need to ask MARIA. No, that’s not a person, it is an acronym to remind us of the rules.


M – Method. How is it attached? Is it attached in a manner that suggests it is to be there permanently, or is it attached just to keep it from falling?

A – Agreement. If buyer and seller agree that the refrigerator stays, it stays.

R – Relationship. If you wind up in court, they usually tend to favor the buyer over the seller, or the tenant over the landlord if there is a dispute.

I – Intent. The intent of the party attaching the item is a factor. If you have free-standing garage cabinets, and put one screw in the back to keep them from falling over, that helps make the case that they are personal property. But if you advertise them on the listing flyer as a feature, that can lead the buyer to think that you intended for them to stay.

A – Adaptability. If the item is specially adapted for that particular home, that makes it more likely to be a fixture.


If you are in doubt, it is always best to mark “gray-area” items with a sign, and also clarify whether they stay or go in the purchase contract. [This is a short article of a lengthy topic and is not meant as legal advice if you are having a dispute in regards to a transaction.]



Last week I talked about whether a pool sweep stays with a property when it’s sold. There are several sticky issues in regards to personal property. This week I’ll discuss the lender’s concerns, next week I’ll discuss the buyer and seller’s concerns.


Lenders don’t like it when items of personal property are included in a real estate transaction. They strongly prefer that buyer and seller work out a separate agreement for payment as opposed to handling it within the real estate sales contract. This becomes especially true the more expensive the item is.


For example, let’s say you have a home FULL of appliances, flat-screen TVs, audio-visual equipment, etc. The seller is moving out of the country and doesn’t want to haul all this with them. When they sell their home, they negotiate with the buyer to have all these items included in the price. The lender is concerned because the price on the real estate contract is inflated to include all these items. So the appraisal and the loan are based on a purchase price that consists of land plus house PLUS “stuff.”


Why is the lender concerned about this? They are lending a certain percentage of the “value” of the property. The lender wants to be able to sell the property and recover enough to cover the loan they made. But in this case, part of the value was in the items of personal property. When a home gets foreclosed on and the owner moves out, they often take anything of value with them that they can remove, or sell it before they leave. It is tough to take a roof, or an air conditioner, but I don’t think they’ll be leaving the flat-screen TV and appliances behind in order to make sure the lender gets their funds back.

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