Homeowners' tax deduction in danger?

... Reading the other day the headlines in the San Jose Mercury News: "Coveted tax break in peril?"

With the negotiations going on in Washington to avert the "fiscal cliff", we all know that there will be some combination of cost reduction measures and tax increase, whatever this combination will be.  But the tax deduction for homeowners regarding the interest paid on their loan is definitely in consideration.

For the main parts of the nation, this is not an issue, but for the Bay area, where according to this article, 40% of the purchase loans in the Counties of Santa Clara and San Mateo are for more than $500,000, it is a big deal.  13% of those loans were for more than $800,000, and 10% were for more than $900,000.

One way to find money is to reduce this interest deduction.  If the maximum mortgage cap is brought down from the present $1million to $500,000, over 10 years, it would raise $41.4 billion according to this article, which would look good to reduce the deficit of course. 

What would you do, if in the course of reducing the deficit, the politicians were to take away part of the mortgage deduction?  Most likely, if you own a house in the Bay Area, you have a significant mortgage attached to that house.  Would it affect you?  Would you agree with that?

Francis

Silicon Valley real estate

Current Mortgage rates

Non-profit organization worth noting: Partners for New Generations.

Scams of the year…

Scams of the year…

The troubled housing market, an array of new mortgage programs, and general consumer confusion over the new rules set the stage for a host of scams, from Ponzi schemes to rigged bidding at real estate auctions to “reverse staging”, where investors make negative cosmetic changes to a property to get a low appraisal, sell it to a cohort, then flip the property for a higher price.

The big news was the uptick in “foreclosure rescue” companies and mortgage modification scams. In one version, scam artists find victims via foreclosures notices in newspapers, the internet and public records, offer a loan modification for an up-front fee, then disappear with the money. By mid-year, such scams were up 60%, according to the nonprofit Homeownership Preservation Foundation.

State officials also warned of a new scam from callers promising to help owners apply for the Keep Your Home California program for fees of up to $900, although applying is free.

In May, armed forces members were warned of HAMP scams from companies using official government logos, promising guaranteed results and charging high fees for help or information that could be obtained for free.

Prepaid rental listing services also are in question sometimes, as shown in this article from the Department of Real Estate.

As always, in real estate, it is good to conduct your due diligence before hiring services.  Remember to call me for professional contacts, or professional advice.  I do not know everything but I sure will share my knowledge and help you if I can.

Thanks for reading!

Francis

Silicon Valley real estate

Current Mortgage rates

Non-profit organization worth noting: Partners for New Generations.

Should you buy during the Holidays?

Should you buy a home during the holidays?

Once Thanksgiving is over, the real estate world typically starts to wind down for the holidays and doesn’t usually reawaken until after New Year’s. But potential home buyers who are prepared to close in today’s competitive market may want to keep house hunting while everyone else is waiting for spring.

This article from UT San Diego explains that REALTORS® especially recommend that serious home buyers continue shopping if they have repeatedly lost out on deals because of a limited and continually decreasing supply of homes. Buying intensity typically cools down at the start of fall through early January, which could increase the odds for those with more patience.

Would-be buyers historically have bowed out during the winter season because they are overwhelmed by holiday spending and commitments. There’s also the aversion of moving in the middle of a school year. Consumer interest typically picks back up again in the New Year and peaks in the spring.

It is my experience that prices, statistically, go down at the end of the year. (pls refer to this past blog from June). This would be another reason in my opinion for not stopping a house hunting effort. - it is also true, from one of my recent blogs, that prices this year do not seem to abate as they did in previous years. I am afraid of what it may mean for the coming 2 or 3 months.

What does your crystal ball tell you?
Thanks for reading!
Francis

Local market trends

Current Mortgage rates

Non-profit organization worth noting: Partners for New Generations.

South Bay among best US job markets

Reading this little article in the San Jose Mercury News, dated Nov. 30, about the job market in the Bay Area, it strikes me as something of the utmost interest in explaining why the real estate market is so imbalanced in the Silicon Valley. (i.e.: too much demand, not enough supply).

This article, which I will simply paraphrase, while giving all credits to the SJ Merc, explains that according to a report from the US bureau of Labor Statistics, the County of Santa Clara saw jobs increase by 3.5 % in the one-year period ending in October 2012.

The San Francisco - San Mateo - Marin metro region had an annual growth of 3.4 %, and the East Bay 2%. 

Only the Houston region in Texas showed a higher jobs increase: 3.6%

More work means more people attracted to the area. I believe there is also a parallel between freeway traffic and housing prices... Don't you think so? I have never seen 280 so congested after 3pm between Los Altos and San Francisco.

Thank you for reading!

Francis

Silicon Valley Real Estate

useful links

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Coldwell Banker invites you to warm and brighten the spirits of those in our community this holiday season by supporting One Warm Coat, a coat drive that collects and distributes warm coats to the less fortunate in our local community during the cold winter months.

Our office is accepting donations of new or gently used coats for One Warm Coat now until December 14.
To make a donation or for more information, please contact me today.