Santa Cruz Real Estate Blog
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Santa Cruz, California real estate experts. Buy or sell your home today with Team Sedenquist!
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Enough of This Teen Pregnancy Talk. How Do the Presidential Candidates Compare on Real Issues? |
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Written by Dan and Lyn
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Friday, 05 September 2008 |
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I’m getting increasingly frustrated that while people are having an very hard time with the economy and are depressed about their own futures, the media continues to focus on non-issues. Here is a Q&A provided by REALTOR magazine that gives insight into how each candidate differs on real issues.
2008 Presidential Race: Candidate Q&A
We ask the Republican and Democrat presidential contenders to detail their stands on issues that affect you.
By Robert Freedman | September 2008
The Republican and Democratic candidates for president share a belief in the private sector's ability to lift the economy back into growth mode. But their paths diverge on how the federal government should contribute to this goal.
For example, both Sen. John McCain and Sen. Barack Obama embrace the need to close the health insurance gap. Sen. Obama would take an aggressive approach by creating a national health insurance exchange; Sen. McCain favors providing a tax credit for households who purchase individual coverage.
To see where the candidates stand on issues vital to real estate practitioners, REALTOR® magazine went to the sources.
Q: What’s the most important action the federal government can take to ease the mortgage crisis and prevent a recurrence?
Sen. Barack Obama: For the short term, the housing relief legislation [signed by Pres. George W. Bush July 30] authorizing the FHA to refinance the mortgages of struggling homeowners is the right approach. I’ve also called for the creation of a $10 billion foreclosure prevention fund that works in tandem with state, local, and community nonprofit efforts to help households facing foreclosure renegotiate with lenders or put their homes on the market. We also need to expand the mortgage revenue bond program to give state housing agencies $10 billion in new resources to help struggling homeowners. For the long term, the Stop Fraud Act that I introduced two years ago would create criminal penalties for mortgage professionals found guilty of fraud and increase funding for federal and state enforcement of antifraud programs. I also want to see a simplified, standardized metric for calculating the costs of a home mortgage, similar to the annual percentage rate used by banks to identify the effective interest rate a borrower ends up paying on a loan.
Sen. John McCain: First, we need to boost the economy to help borrowers in economically challenged states like Michigan. To this end, we need to keep tax rates low and increase business investment incentives while arming households with tools like middle-class tax cuts. Second, we need to help borrowers in fast-growth states forced into risky mortgages refinance into safe FHA financing through the housing relief bill. But it’s important that borrowers, not lenders, be the ones to initiate the restructuring process. That way, undeserving lenders can’t try to use the FHA as a dumping ground for all of the bad loans they made. We also need to crack down on unprofessional conduct among lenders and advance greater transparency about the risk of new mortgage securities that the market has developed. We also need to give the new national mortgage standards developed by banking regulators a chance to work.
Q: What role should the federal government play in reducing gridlock and carbon emission and in promoting livable communities?
Sen. McCain: We need to work with cities to help them grow—and downsize—effectively. Cities that are losing population have an opportunity to downsize in a smart way by converting obsolete areas into green space that can increase the quality of life for the people there. For growing cities, it’s important not to stand in the way of local governments using federal community development block grants to grow in a sustainable way. That said, it’s clear that allocations of CBDGs and other federal grants should be made based on need rather than size, with rich cities getting less and struggling cities getting more.
Sen. Obama: Our long-term competitiveness depends on the development of new transportation networks that reflect our increasingly mobile society. That’s why a strengthened transportation system is a priority for me. We must renew the federal government’s commitment to high-speed rail and take steps at the front end of planning processes for many transportation options. For example, I support a measure by Sen. Tom Harkin (D-Iowa) to require states and metropolitan planning organizations to adopt policies that incentivize bicycle and pedestrian use of roads. I’ll double the federal Jobs Access and Reverse Commute program to ensure that additional federal public transportation dollars flow to the highest-need communities and that urban planning initiatives take this aspect of transportation policy into account.
Q: Even though prices have been easing for the last two years, housing affordability remains a challenge for many people. What can the federal government do to improve this situation?
Sen. Obama: I’ve proposed a universal mortgage interest tax credit for families that aren’t benefiting from the mortgage interest deduction. They would get an average credit of $500 a year. And I worked to pass the bipartisan homeownership tax credit. That’s a strong incentive because it gives developers a credit to bridge the gap between the cost of building a house and a sale price that’s affordable to low- and moderate-income households.
Sen. McCain: Housing affordability is really a question of good-paying jobs and making sure wages aren’t eaten up by taxes and escalating costs like health insurance. If wage earners have to sink all their money into health care, they can’t save for a down payment or meet a monthly mortgage payment.
Q: How should the federal government help millions of small-business owners and the self-employed obtain affordable health insurance?
Sen. McCain: The solution requires a two-pronged approach: First, lower the cost of health care by emphasizing prevention, early intervention, new treatment models, more competition in drug markets, expanded use of coordinated care, and reforms to payment systems. Then, improve insurance options by building on our existing employer-based coverage. I support a refundable tax credit of up to $5,000 per household to help offset its insurance costs. Families would use the credit to buy the coverage that works best for them and put any balance remaining into their own health savings accounts. We would also work with states to establish a guaranteed access plan for individuals who are otherwise unable to get insurance.
Sen. Obama: Let’s build on our existing private health care system by allowing small employers and independent contractors to participate in a “national health insurance exchange” so they can purchase affordable health coverage similar to the plans available to federal employees. Individuals who need help paying for premiums will receive tax credits to ensure they can afford coverage. Employers that do not make a meaningful contribution to the cost of quality health coverage for their employees will be required to contribute a percentage of payroll toward the costs of the national plan. Small employers that meet certain revenue thresholds will be exempt. The plan will reimburse employer health plans for a portion of the catastrophic costs they incur above a threshold if they guarantee these savings are used to reduce workers’ premiums.
Q: What’s the federal government’s role in promoting energy efficiency in commercial properties?
Sen. Obama: I’ll establish a goal of making all new buildings carbon-neutral by 2030 and work to improve new building efficiency by 50 percent and existing building efficiency by 25 percent over the next decade. To achieve that, I’ll seek to make federal buildings zero-emission by 2025, starting with a goal to make them 40 percent more efficient in five years. I’ll create a competitive grant program to recognize states and localities that take the first steps in implementing new building codes that prioritize energy efficiency. I’ll also seek to provide a federal match for states with public benefits funds that support energy-efficiency retrofits of existing buildings. In addition, I’ll invest in green-collar job training programs and create a “Green Jobs Corps” to connect disadvantaged youth with job skills in high-growth clean-energy industries.
Sen. McCain: Government can encourage developers to make buildings more efficient with incentives for using what’s already available—such as energy-efficient lightbulbs. But there shouldn’t be a mandate. It’s appropriate to use the White House as a bully pulpit on green building, motivating the private sector to migrate to a smarter way of doing things. What we don’t want to do is go into a building and start measuring its carbon footprint.
Q: What IRS code changes are needed to spur growth while ensuring tax burdens are spread evenly?
Sen. McCain: We have to keep tax rates low because that’s what spurs business expansion. I would reduce the corporate tax rate to 25 percent from 35 percent, keep taxes on dividends and capital gains low, and allow for immediate deductibility of business equipment. We also should scale back the estate tax and eliminate the alternative minimum tax. The mortgage interest deduction should be left alone; it’s embedded in the U.S. tax code.
Sen. Obama: We need to reform our tax code so that it’s simple and fair and advances opportunity rather than loopholes for special interests. I’ll end tax breaks for companies that ship jobs overseas and reward companies that create good jobs here. I’ll encourage innovation and entrepreneurship by extending the research and development and renewable energy production tax credits and eliminating capital gains taxes for small and start-up businesses. And I’ll provide broad middle class tax relief—a “Making Work Pay” $500 tax credit, among other things—to help working families struggling with stagnant wages and skyrocketing energy and health costs.
Source: REALTOR.org | | No comments for this item |
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September 2008 Santa Cruz Real Estate Update |
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Written by Dan and Lyn
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Monday, 01 September 2008 |
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Nationally, existing-home sales rose in July to the highest level in five months, although they continue to be well below the numbers from last year at this time. “Sales have picked up significantly in several Florida and California markets. Home prices generally follow sales trends after a few months of lag time,” according to the National Association of Realtors. “Still, inventory remains high in many parts of the country and will require time to fully absorb. We expect more balanced conditions in 2009 and will eventually return to normal long-term appreciation patterns.”
What does all that mean? We expect that sales activity will slowly start to climb through the rest of 2008 and into 2009 and prices will slowly find bottom. Until then, there are some amazing bargains available for the investor.
Call us if you’re thinking about buying or selling a home, we’d love to hear from you or your friends anytime.
Dan and Lyn
Sept 2008
For the latest in real estate news, trends, and advice, see our monthly client newsletter. | | No comments for this item |
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Hey, How Come Santa Cruz Ain’t on This List? |
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Written by Dan and Lyn
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Monday, 25 August 2008 |
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More Top 10 lists. Santa Cruz has long been considered desirable because of the quality of life we enjoy here. The air is clean (when the forest isn’t burning), the traffic is minor (compared to real cities), crime is low, and schools are reasonably good. Here are some communities where all these things are true, and real estate is more affordable. Interesting. . .
Top 10 Best Counties to Raise a Family
Low cost of living, reasonably priced homes, and short commute times helps add to excellent schools and is what landed 10 communities at the top of Forbes magazine’s best places to raise a family.
To be considered, the communities had to have populations greater than 65,000 and most of the school funding had to come from property taxes. Average SAT and ACT scores must top 1,050 or 22, respectively. These factors reduced the number of counties under consideration to 51.
After that, the magazine considered cost of living, graduation rate, home prices, property tax rates as a percentage of median home prices, percentage of homes occupied by owners, per-capita income, air quality, crime rate and commute times.
Here are the results:
- Hamilton County, Ind. (near Indianapolis)
- Ozaukee County, Wis. (near Milwaukee)
- Johnson County, Kan. (near Kansas City)
- Geauga County, Ohio (near Cleveland)
- Delaware County, Ohio (near Columbus)
- Morris County, N.J. (northern N.J.)
- Hunterdon County, N.J. (central N.J.)
- Waukesha County, Wis. (near Milwaukee)
- Montgomery County, Pa. (near Philadelphia)
- Chester County, Pa. (near Wilmington, DE)
Source: Forbes, Zack O’Malley Greenburg (06/30/08) via REALTOR® Magazine Online | | No comments for this item |
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What's In, and What's Out |
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Written by Dan and Lyn
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Friday, 22 August 2008 |
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It is interesting to see that the housing style trends that we see in little ol’ Santa Cruz are the same as in the big cities. Small is beautiful.
What's In, What's Out
Each year, Mark Nash of Coldwell Banker Residential Real Estate in Chicago asks subscribers to his e-zine what buyers want most. His most recent poll shows:
IN
- A reduced carbon footprint: How your home and you impact the earth matters to more buyers who want a home that lets them save energy and lessen their contribution to global warming.
- Outdoor living: Massive fireplaces, outdoor kitchens, and under-patio heating to extend the season are not just for the Sun Belt anymore.
- Fully concealed appliances: That wood-printed cover for the fridge is not enough any longer; now appliances are hidden behind hinged doors.
- Floating homes: Not your father’s houseboat, these nonmobile homes are basically ranch houses sitting on stationary barges in a lake or river.
- Home elevators: Even builders of mid-priced homes are adding this essential for boomers wanting to age in place.
- Pet showers: Clean pets mean clean homes, and who wants to mess up the bathtub when this feature can be a part of the garage or mudroom?
- Freestanding bathtubs: These oversized soaker tubs, or “bath thrones,” have supplanted whirlpool baths as the must-have bathroom centerpiece.
- Bathroom suites: Whether it’s multiple flat-screen TVs or a mini fridge and cappuccino maker, you’ll soon have a whole home inside this one room.
OUT
- Living rooms: The incredible shrinking parlor has ceased to exist in some homes.
- Voluminous ceiling heights: The absurd look and wasted space of 20-foot ceilings in 12- by 10-foot rooms is finally dawning on buyers. Tiny balconies Room for only one chair is worthless; balconies must now function for entertaining too.
- McMansions: Could it be that “small is beautiful” finally is gaining traction?
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Dang! Congress Closes a Big Capital Gains Tax Loophole |
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Written by Dan and Lyn
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Wednesday, 20 August 2008 |
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Congress is working to provide some relief to homeowners facing foreclosure. And they have to fund all these tax breaks they’re handing out. So they’ve closed one of the largest remaining tax loopholes that smart homeowners have been using; the ability for a married couple to take $500,000 in profit when you sell a second home without paying any capital gains tax. This is a big change for those fortunate enough to own multiple homes who planned to move into each of the properties as their primary residence for two years, then sell it and take the gain. Here is how this new change will work.
Second Home Conversion Tax Offset
- One of the offsets included in H.R. 3221 was the closing of a tax loophole concerning the conversion of a second home to a primary residence and the capital gains exclusion. This offset ONLY applies when a second home is converted to a primary residence and does not affect the capital gains exclusion when a home has only been a primary residence.
- The loophole allowed it so that if a second home was converted to a primary residence and was used as such for at least two out of the previous five years; the homeowner could use the $250,000/$500,000 capital gains exclusion.
- H.R. 3221 closes that loophole and will now only allow the capital gains exclusion to apply to gain received once the house became a primary residence
- Any gain earned prior to January 1, 2009 would be affected by this provision and there are some exclusions of this policy for extended military service (with limitations) as well as change of employment, health conditions or other unforeseen circumstances (not to exceed an aggregate period of two years).
- There is also an allowance of 5-years of gain if a property is converted from a principle residence to a second home.
- The new formula to calculate the gain allowed to be included in the capital gains exclusion would be: Profit from the sale multiplied by the number of days the home was a primary residence over the number of days the home was owned.
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Top 5 Cities in the U.S. to Build Personal Wealth |
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Written by Dan and Lyn
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Monday, 18 August 2008 |
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I love these Top 10 lists. Apparently so do all you readers. So here are some more ways to compare where you live with other cities.
Best Cities for Building Wealth
Salary.com, which provides compensation information, has ranked the best and worst cities in which to build personal wealth.
Salary.com’s salary value index compares local salaries, the cost of living and unemployment rates among U.S. cities with populations greater than 250,000.
Other considerations including diversity of industry, education level of the cities’ population, proximity to post secondary institutions, percent of population below the poverty level and median travel time to work.
“The most favorable cities offer the largest difference between pay and costs," says Bill Coleman, chief compensation officer.
Cities at the bottom of the list typically represent the places where living is the most expensive and pay differentials are not proportionately inflated. Cities at the top are headquarters for large companies, have appealing amenities and are growing.
Here are the five cities at the top and bottom of the list:
Best Cities to Build Personal Wealth
- Plano, Texas
- Aurora, Colo.
- Omaha, Neb.
- Minneapolis
- Albuquerque, N.M.
Worst Cities to Build Personal Wealth
- New York
- Washington
- Los Angeles
- Honolulu
- San Francisco
Source: Salary.com (06/30/08) via REALTOR® Magazine Online | | No comments for this item |
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Big News. Cash is King. (But Then, It Always Is) |
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Written by Dan and Lyn
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Friday, 15 August 2008 |
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Lynette and I are seeing the return of investors to our rental housing market, especially in south county. Even with smaller down payments, these properties will cash flow, and the rents are climbing. This same trend can be seen elsewhere throughout the country.
Investors With Cash Are Kings in Today's Market
Some are calling this the best market for investors since real estate tanked in the early 1980s.
Investors, alone and in groups, are negotiating volume deals as they purchase whole subdivisions and bundles of 10 to 50 defaulted loans for pennies on the dollar.
"What we're seeing today dwarfs [the 1980s] by five or 10 times," says Bob Leonetti, president of SMI Funding, an Austin, Texas, company that originates and acquires private and conventional mortgages. "There are huge opportunities for investors."
"People who have cash positions now are going to do very well," says Central Florida real estate practitioner Mike Norvell of Developers Capital Realty in Leesburg, Fla. "It's just crazy the prices you can buy for right now for cash."
Source: Investor’s Business Daily, Kathleen Doler (07/07/08) via REALTOR® Magazine Online | | No comments for this item |
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Rising Inflation? I'm Already Running As Fast As I Can |
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Written by Dan and Lyn
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Monday, 11 August 2008 |
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We all try to save money for our retirements and for that future rainy day. You know what rapid inflation actually does to your savings? It means that in these U.S. cities, your savings have to be earning at least 6% or you’re losing money. (I don’t know about you, but I don’t know any banks that are paying 6% for CD’s. . .)
10 Cities Where Cost of Living Is Growing Fast
Forbes magazine looked at inflation in the 40 largest metro areas in the U.S. to see where prices were rising fastest.
The numbers were supplied by the Bureau of Labor Statistics and Moody’s Economy.com and reflected changes between January and June 2008.
Resetting mortgages, rising food prices and runaway fuel costs are the biggest sources of the pain.
Here are the top 10 cities with the highest annual inflation rates.
- Seattle, 5.82 percent
- Dallas, 5.82 percent
- Washington, D.C., 5.74 percent
- Miami, 5.71 percent
- Portland, Ore., 5.68 percent
- San Jose, Calif., 5.61 percent
- Milwaukee, Wisc., 5.61 percent
- Tampa, 5.60 percent
- Phoenix, 5.44 percent
- Los Angeles, 5.41 percent
Source: Forbes, Matt Woolsey (07/18/2008) via REALTOR® Magazine Online | | No comments for this item |
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Mr. Bad Hair Gets Richer |
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Written by Dan and Lyn
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Friday, 08 August 2008 |
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“Go big, or don’t go at all.” Apparently all this noise about a collapsing housing market doesn’t apply to the fabulously rich. Check out what The Donald did. . .
Trump's Palm Beach Mansion Goes for $100M
Donald Trump has sold his mansion in Palm Beach, Fla., for $100 million to a Russian fertilizer billionaire Dmitry Rybolovlev.
Trump, who paid $41 million for the 60,000-square-foot oceanfront house in 2004, told the Associated Press, "I think it's a great sign for the area, a great sign for Palm Beach and all that Palm Beach represents. ... In an age of so many people getting hurt in real estate, it shows that you can still do well in real estate.”
Source: The Associated Press (07/16/08) via REALTOR® Magazine Online | | No comments for this item |
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A New President and Increasing American Confidence |
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Written by Dan and Lyn
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Monday, 04 August 2008 |
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Good news. We all know that perception equals reality. The American consumer sees better times coming.
Poll: Housing Market to Improve with New President
A recent survey conducted by Harris Interactive on behalf of Move Inc. shows that 44 percent of home buyers expect improvements in the housing market when the new president is installed next year.
At the same time, 81 percent of home buyers are still nervous about the current housing market and say there are barriers between them and home ownership. What kinds of barriers? Respondents cited the cost of a down payment (28 percent), their annual income level (20 percent), lack of confidence in the economy (26 percent) and high home prices (31 percent).
Despite these reservations, the survey indicates underlying demand for homeownership is healthy. While nearly half (41 percent) of current homeowners do plan to purchase a home again, 80 percent of all renters plan to purchase a home someday with 47 percent planning to purchase a home within the next five years.
Most home buyers (78 percent) are also willing to make sacrifices to save and earn extra income for down payments, and will compromise on neighborhood features and residential amenities in order to buy a home in the current market.
Many of their choices may reflect changing values, including a growing concern over the environment, the importance of community features and the rising cost of fuel.
"These findings show that despite the difficulties home buyers face in the wake of the subprime crisis and their concerns about economic uncertainty, underlying demand appears relatively strong. Consumers see better times coming," said Lorna Borenstein, president of Move, Inc.
Source: Move Inc. via REALTOR® Magazine Online | | No comments for this item |
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