December 2020

Your Real Estate Expert for Berkeley and Beyond

  • Deep Market Knowledge
  • Analytical, Strategic, Creative
  • Honest, Adept, Direct

“Marilyn is exceptional. Her knowledge base, enthusiasm for her job, professional ethics, organization, sensitivity to our aesthetic requirements, loyalty and gentle perseverance set her apart.”

-- Bill and Carol Seidel

Marilyn Garcia, PhD

Marilyn Garcia, PhD Broker Associate, Realtor® CA DRE LICENSE #01355514

The Grubb Company 1656 Shattuck Avenue Berkeley, CA 94709

Direct: (510) 390-5406

THE OUTLOOK: North Berkeley & Berkeley Hills, Fall 2020 wrap-up

I find this sort of amazing given what’s been going on in the world this year, but our real estate market has continued to do remarkably well through the fall season.  The combination of super low interest rates and the desire to have a better space to shelter in has kept demand from buyers strong.  At the same time, fewer property owners have put their homes on the market — for Berkeley as whole, the number of homes for sale from January through November this year was down 14% compared to the same period last year. With low supply and [...]

LOW RATES & HIGHER CONFORMING LOAN LIMITS

LOW RATES AND HIGHER CONFORMING LOAN LIMITS Interest rates are low, low, low right now! As I write this, the 30-year fixed rate is lower than it’s been since Freddie Mac began tracking mortgage rates in 1971. While it’s not surprising that rates are low given the economic impacts of the pandemic, it is still an opportunity for both buyers getting new loans and homeowners who can refinance their existing loans.  Fixed rate 30-year conforming loans (up to the loan limits discussed below) can in many cases be had for under 3%.  Even larger-amount jumbo loans, which were challenging to [...]

By |December 22nd, 2020|Data, General Interest, Home loans, Interest rates|

REAL ESTATE ANSWERS: How are property tax assessment transfer rules changing due to Prop. 19?

How are property tax assessment transfer rules changing due to Proposition 19? If you are one of the many people in California who at some point considered moving but decided not to because your property taxes would increase sharply, you could be in luck now.  Proposition 19, which passed in the last election and goes into effect April 1, 2021, allows a homeowner who is 55 or older, severely disabled, or whose home was substantially damaged by wildfire or natural disaster to transfer their property tax assessment to a new replacement home with fewer restrictions than is currently the case.  [...]

By |December 22nd, 2020|Buyers, Election, Property Taxes, Sellers|

THE OUTLOOK: North Berkeley & Berkeley Hills, Fall 2020 wrap-up

I find this sort of amazing given what’s been going on in the world this year, but our real estate market has continued to do remarkably well through the fall season.  The combination of super low interest rates and the desire to have a better space to shelter in has kept demand from buyers strong.  At the same time, fewer property owners have put their homes on the market — for Berkeley as whole, the number of homes for sale from January through November this year was down 14% compared to the same period last year.

With low supply and high demand, it’s not surprising that we’re seeing high prices and a strong seller’s market.  Note, though, that condos (where you may share outdoor spaces or an elevator with other people) and multi-unit properties (which are challenging in this environment where tenants may not be able to pay rent) are not faring as well.

***

Berkeley Hills, Fall results:

There were 81 active listings in the hills from September through the end of November, which is actually on the high side of normal despite the year-to-date figures for Berkeley as a whole. 53 properties sold, in an average of 40 days on the market.  40 days on the market is a long time for our area, but looking at the data, the reason is quite clear. 1960 San Antonio (commonly referred to as “The Spring Mansion”) sold this fall after literally years on the market.  The fact that that property finally sold says something about the strength of the market, but it’s also an extremely unusual property (if you’re not familiar with it, it’s a 12,000 square foot historic fixer), so its time on the market is an outlier.  Leaving that data point out, the average days on the market was only 15.   Three quarters of the fall sales were for more than list price, and those that went over averaged 14% over list.  5 of the 53 properties that sold had price changes (4 reductions and 1 increase) before finding a buyer.

The median sold price in the hills was $1,535,000, which is up 6.6% from the summer, and up 8.6% from Fall 2019.  The average sold price per square foot was also higher at $786, up 1.1% from the summer, and 7.8% higher than last fall.

***

North Berkeley, Fall results:

There were 40 active listings in North Berkeley from September through the end of November, which, like in the hills, is slightly on the high side of normal (making up a bit for earlier in the year). 32 properties sold, in an average of 18 days on the market.  81 percent of the fall sales were for more than list price, and those that went over averaged 24% over list.  2 of the 32 sold properties had price reductions before finding a buyer.

There were 3 condos in the sales this fall, and these three all sold quickly and above list price.  There are others, though, that have been sitting on the market well beyond the typical two weeks.

The median sold price in North Berkeley over the fall was $1,388,750, which is up 5.2% from the summer, and up 3.8% from Fall 2019.  The average sold price per square foot was also higher at $920, up 3.6% from the summer, and 9.2% higher than last fall.

***

Usually, the market slows down substantially in December and January, but that doesn’t seem to be the case so far this winter.  With fewer people traveling, we’re not seeing the usual dip in activity, and winter seems to be shaping up to be another very strong quarter.

Sending you all my best wishes for the holiday season and the new year — stay safe, stay healthy, stay sane, and here’s hoping we’re all able to get back to the people, places and activities we love in 2021!

LOW RATES & HIGHER CONFORMING LOAN LIMITS

LOW RATES AND HIGHER CONFORMING LOAN LIMITS

Interest rates are low, low, low right now! As I write this, the 30-year fixed rate is lower than it’s been since Freddie Mac began tracking mortgage rates in 1971.

While it’s not surprising that rates are low given the economic impacts of the pandemic, it is still an opportunity for both buyers getting new loans and homeowners who can refinance their existing loans.  Fixed rate 30-year conforming loans (up to the loan limits discussed below) can in many cases be had for under 3%.  Even larger-amount jumbo loans, which were challenging to get and much more expensive earlier in the year, are available around 3%.

The loan limits for conforming loans (those that meet the funding criteria of Freddie Mac & Fannie Mae) are set to go up again in 2021.  The Federal Housing Finance Agency determined that home prices nationwide rose an average of 7.42% from the third quarter of 2019 to the third quarter of 2020, so loan limits will be increased that same amount (7.42%) for the coming year.  In high-cost areas like ours, that means the limit for single-family homes will increase from the current $765,600 to $822,375 in 2021.

By |December 22nd, 2020|Categories: Data, General Interest, Home loans, Interest rates|Tags: , , , |

REAL ESTATE ANSWERS: How are property tax assessment transfer rules changing due to Prop. 19?

How are property tax assessment transfer rules changing due to Proposition 19?

If you are one of the many people in California who at some point considered moving but decided not to because your property taxes would increase sharply, you could be in luck now.  Proposition 19, which passed in the last election and goes into effect April 1, 2021, allows a homeowner who is 55 or older, severely disabled, or whose home was substantially damaged by wildfire or natural disaster to transfer their property tax assessment to a new replacement home with fewer restrictions than is currently the case.  Here are the main ways the rules will be different when it goes into effect:

(1) Currently, to be eligible for an assessment transfer, your new property must be either in the same county as the home you sell, or in one of the very few counties that allow transfers in from other counties.  Under Prop. 19, your new residence can be anywhere in the state.

(2) Under the current rules, you can only transfer your assessed value one time.  Under Prop. 19, you can transfer your assessed value up to three times (or potentially more for those who lost a home to fire).

(3) Under the current rules, your new property must be of “equal or lesser value,” or else you do not qualify for a transfer.  Under Prop. 19, the new property can be of any value.  If you pay more for your new home than what your old home sells for, you keep your old tax assessment for the portion of the new property up to the value of your old property, and the amount over is added to your tax base.  Here’s an example.  Suppose your old house sells for $1M, and the assessed value on that property was $500K.  If you qualify for a transfer and buy a new home for $1.2M, the assessment on the new property will be $700K (your old assessment of $500K on the first $1M, plus the amount over the value of your old house, $200K). If you buy a property that is of equal or lesser value, you keep your old assessment with no adjustment.  To complicate things a bit more, it may end up being the case (as it is now) that there is an inflation factor if you sell your old property first.  Under current rules, you can actually spend 5% more than the sale price of your old property in the first year, or 10% more in the second year, and still keep your old assessed value.  Whether this will be the case under Prop. 19 is yet to be completely determined.

There are, of course, some restrictions.  To do an assessment transfer at all, you need to be 55 or over, severely disabled, or have lost a home to wildfire or natural disaster.  You have to buy your replacement home within two years of the sale of your previous home, and both properties have to be your primary residences.   You can, though, buy the new property before selling the old property, or vice versa.

Prop. 19 is a great opportunity, but if you’re thinking of taking advantage of it, be sure to talk to a qualified California real estate attorney and/or a professional tax advisor about how this applies to your specific situation.  While you’re talking to your tax professional, make sure you also discuss what capital gains taxes may be triggered by a sale.

 

Your Real Estate Expert for Berkeley and Beyond

  • Deep Market Knowledge
  • Analytical, Strategic, Creative
  • Honest, Adept, Direct

“Marilyn is exceptional. Her knowledge base, enthusiasm for her job, professional ethics, organization, sensitivity to our aesthetic requirements, loyalty and gentle perseverance set her apart.”

-- Bill and Carol Seidel

Marilyn Garcia, PhD

Marilyn Garcia, PhD Broker Associate, Realtor® CA DRE LICENSE #01355514

The Grubb Company 1656 Shattuck Avenue Berkeley, CA 94709

Direct: (510) 390-5406

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