Sacramento Real Estate Blog

Trick or treat.

As I prepare my report on Sacramento County’s real estate market for October, 2007, I recall  my happy youth watching The Flintstones.  You remember Fred and the gang.  From the town of bedrock, he’s a page right out of history.

One great cartoon gag from the the Flintstones — though surely it has roots all the way back to the Manichean cartoons of the third century — were the Fred Flintstone as devil / Fred Flintstone as angel that would sometimes perch on Fred’s shoulders, whispering instructions.

Sometimes Gazoo would whisper the instructions.

Bloggers, Find Your Voice (From Among Those You Hear in Your Head)

In my case it’s the eternal angelic optimist, Purva Brown, on one shoulder versus the pitchfork-armed bubblers on the other.

Bubbler pokes me with pitchfork:  In terms of unit volume, October was the second worst month in recorded MLS memory.   803 units sold in Sacramento County in October.

Purva flaps angel wings:   C’mon, John, that MLS data only goes back to October, 2004, so all you have to compare it to are good times.  Plus, October’s volume was an increase of  11.7% over September!  Look on the bright side, will you.

OK, you two.  Behave.  Fight it out between yourselves.  Let my shoulders be your last battleground.

The Rest of the Numbers

The median price of a home in Sacramento has fallen to $300,000 in October, down 14.3% from last October’s median of $349,900, and 24.9% from their peak of $399,499 of November, 2005.  Average sold price per square foot was approximately $189.32 in October, down 18.2% from last October’s $231.23, and down 25.5% from the peak of $254.10 (September, 2005).  (Purva:  That’s not fair, John — you keep making the houses lose 1/4 of the value by picking high peak values from different months.  What are you, some kind of bubble blogger now? ).  The average home sold for $327,719 in Sacramento County in October, down 14.9% from last year’s average of $385,233.

Recently we reported that about a quarter of the homes selling in Sacramento County were foreclosures (REOs).  The numbers have now risen to slightly more than one third.  More precisely, of the 803 units that sold in October, 285 (35.5%) were REOs.  Now you bubblers might think you could get an even 50% if you throw in the short sales, but you can’t, because only 31 short sales sold during this period, so the overall total ends up being about 39.4%.

Inventory is 11.61 months for Sacramento County overall.

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Well, it’s that time of the month again, when all the real estate bloggers race to publish the latest real estate statistics based on what happened last month.  The October numbers are still trickling in, so I’ll publish a full market report in a day or two, but meantime I thought I’d whet your appetite with a chart.

This one shows median prices for residential real estate in Sacramento County, according to MLS data. 

(Chart the chart for a larger version).

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One of the things I love about my job is that skipping out of a business meeting with John by saying, “I have to go watch Oprah” is a perfectly legitimate excuse.

But only if Suze Orman is on. So I can write about it the next day.

The financial guru was on yesterday and unlike her own show, which I don’t watch any more, she spent most of the time answering questions. Although the platitudes in the first half of the show got to me a little, here was some concrete advice for homebuyers, which I thought was pretty well-grounded.

1. Expect to add 40% more expenses per month to your rent if you wish to buy a home.

2. Have 20% down. If you don’t, buy PMI (Private Mortgage Insurance) upfront.

3. Unless you know what you’re doing and have a plan for it or you are a sophisticated investor, stick with a fixed rate loan.

4. If you can’t afford your home, you must sell it and buy something you can afford.

5. Sellers must drop the price of their homes to the point where they sell and lose all attachment to any numbers they may have in their heads.

And lastly,

6. After saving six months of reserves for emergencies, the best investment is to save 20% for a home. It’s the best tax advantage a person will have in the years to come.

I’ve made some improvements and bug fixes to the Sacramento Foreclosure Search Page, and moved the search tool to the main page of the foreclosure section.

I want to thank Daniel Kenna for his excellent suggestions, and I’ve implemented some of those.  Along the way I found a lot of bugs, too, which I’ve tried to fix.  If you see any others, please let me know!

In making the change to the main foreclosure page I did something that my colleagues would probably find counter-intuitive:  I took a lead generating form down and replaced it with a free search tool.  

However, if my experience on the rest of the site is any guide, free search is the way to go.  In the first place, over and over again buyers have told me that they called me because they liked the registration free search tools.  In the second place, I’ve noticed that when I do put up a lead generation form for email updates of foreclosure listings or the like, I get to spend a lot of time working with folks who haven’t yet used the search tool enough to be ready to do anything.

Anyway, give it a whirl and let me know if you see any problems.

Unwarranted sarcasm, I know. But it always draws the readers… oh well, blame me for being a little dramatic.

The Sacramento Bee published an article recently that got pretty strong responses from both sides of the housing debate. You can tell which side of the debate I’m on by now, I’m sure, but I thought the article was also something to read just from a historical point of view.

All real estate is local and the only way you can predict future behavior is by noticing past behavior (okay, enough cliches!) so I think it’s important that we read this article which appeared last week.

It’s a good reminder that while the market is down now, once it recovers, chances are the recovery will be quick and prices will soar like they have in the past.

If you’re buying a home, one of those “closing costs” you hear so much about is Title Insurance.  Title insurance protects you against the claims that may arise against the marketability of title of your home.

OK, well, so far that sounds like a good thing.  The story gets a bit stranger when we get into who’s covered, and for what, who pays for it, who picks the company it, and who’s supposed to pick the company.

The Owner’s Policy

The standard owner’s policy is also called a CLTA policy (California Land Title Association).  It provides good general coverage for claims that may arise as a matter of public record (recorded liens, easements, etc.).  You should check your policy for specifics, but generally it also protects against a lack of capacity in any party in the chain of title, deeds not properly delivered, and fraud.   On the other hand, it provides no coverage for non-recorded matters, such as unrecorded easements, encroachments (wrongful, unauthorized building of a structure on your land by a non-owner — usually a neighbor), and other claims to title that are not matters of record.  This is the policy that protects you, the owner, but it’s important to note that the other owner’s old policy does not cover you.

OK, so that’s what you get, now who pays?  Well, if you’re buying a home in Sacramento County, the seller typically pays for this policy.  In El Dorado County, the seller and buyer typically split the cost of this policy 50/50.  In Amador County, the buyer pays.

The Lender’s Policy

The lender’s policy is a stronger policy, and insures the lender against the same claims as the owner’s policy, but also includes extended coverage against non-recorded claims against the property.  This extended coverage policy is also named after a trade association.  In this case the policy is called ALTA, or American Land Title Association.  Although the ALTA policy protects the lender against a broader range defects in the chain of title, neither the ALTA nor CLTA policy protect against defects that were known to the insured at the time the policy was issued, or government regulations such as zoning changes.  The buyer typically pays for the ALTA policy, whether it’s in Sacramento, Placer, El Dorado, or Amador County.

More To Follow

There are many more wrinkles in the title insurance story.  I will address them in a later post.

There’s definitely been a shift in the market and while all the inventory available will take a while to dry up and regain “normalcy,” I’ve begun to notice foreclosed homes being priced more competitively than six months ago. And that’s definitely having an effect. I was out with a buyer yesterday looking at homes in Natomas and of the four homes we had been considering two weeks ago, two were pending. All four were bank-owned properties.

Six months ago, the situation was different. Foreclosures were priced at 2005 values. Today, foreclosures are where the bargains are.

Banks are finally getting it right!

Placer County experienced a large drop-off in unit sales in September, though not as dramatic as Sacramento County’s. With 235 units selling in September of 2007 versus 362 in September of 2006, unit volume was off 35.1%. Thus, although the number of units that expired (i.e., failed to sell within their listing period) was down somewhat, the ratio of those that expired to those that sold rose from 87.8% to 129.4%.

This September the average home sold for 9.7% less than last September, if you look at sold price per square foot. Last year the sold price per square foot was $240.28, while this September it was $216.99. The actual average sale price increased, from $486,086 last September to $489,748 this September, a .8% increase. Of course, the reason we use the sold price per square foot as a better indicator is that this average hides the fact that this year’s average sold home was 11.6% bigger! At $415,000, the median sale price this September was down 4.6% from last September’s median of $435,000.

Bank owned properties accounted for 16.6% of the sales in September, compared to less than one per cent last year. In active inventory, bank owned homes account for 9.5% of the homes available (based on 300 REOs out of the 3154 available homes).

Inventory in Placer County is high, but still the lowest of the greater Sacramento area we typically write about at 9.5 months.

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Yes, I know. I’ve become a bit of a T.V. correspondent for Sacramento-Home lately, but then who else is watching out for you and bringing you the latest trends? One thing I observe again and again from clients and others is that when they start to renovate a home and / or want to sell a home (a flip or otherwise), a lot of them want to tear down a wall and make a space more open.

While there is a lot to be said about light and bright spaces, you can also consider building a wall. Surprised? You shouldn’t be. “Designed to Sell” recently had a show in which an awkward area with a platform of sorts stuck out like a sore thumb, invading the family room and drawing attention away from it.

The solution? A wall. The wall was built to hide the platform and hide the awkward space, making it more of a storage area, but in a way that didn’t take away from the family room. Of course, it was done very professionally and molding was added to make sure it matched the rest of the home.

Sometimes, adding a wall can add more value than tearing it down.

Like the general residential market that is a part of, the market for Sacramento County Condos fell off sharply in September. The median price for a condo sold in September was $195,00, down 18.6% from last year’s median price of $239,595. The average sold price per square foot showed a similar drop of 18.3%, from $220.46 per square foot last year to $180.15 per square foot this year. The actual average was down somewhat less, since this year’s average condo was slightly larger than last. As a result, this year’s average price of $219,964 was a drop of “only” 14.9% from last September’s average of $258,597.

While the actual number of expired listings only rose 5.3%, a sharp drop in the number of sold units pushed the expired to sold ratio up dramatically. As we saw earlier, the number of overall residential sold dropped 41.3% from September to September. Condo sales lost somewhat less ground, but still dropped a sizeable 34.9%, from 86 units last September to 56 units this September. The expired to sold ratio for both months was 110.5% last September versus 178.6% this September.

Bank owned condos are selling slightly less well than their single family counterparts. Typically for single family homes, we see bank owned properties outselling other properties by about 2 to 1 (based on the percentage of bank owned properties in sales versus actives). In condos, the numbers are about dead even. In September, 17.9% of the sales (ten out of fifty-six) were condos. In active inventory, 17.4% of condos are bank owned.

Even with that in mind, however, September’s average condo buyer negotiated a fairly sizeable 7.6% discount from list price. For homes that sold, the average list price was $238,130, while the average sale price of a Sacramento County Condos as we mention above was $219,964.

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I was watching Oprah the other day and she had her designer Nate Berkus on. And although the show focused on makeovers for people drowning in cutesy country things and stuck in a time warp, I’ve seen enough homes and heard enough potential buyer responses to know that what Nate suggested was right.

Often I hear home sellers say, well, it’s a work in progress. Really, in this market your house cannot be a work in progress.

Here are some notes I took while watching the show so I could share them with you out there having trouble selling your homes. There’s not that many people out there looking for a house, so you must make the ones that are looking want to make an offer.

How? Price is important. But here are some other tips you might want to follow to not drive buyers away:

1. The emphasis seems to be on simplicity. Throw away things you don’t use any more and put other things in storage. Remember, we don’t show our homes the way we live in them. I wouldn’t dream of letting a buyer through my home right now - I’m absolutely not the neatest person in the world!

2. Overaccessorizing is always a problem. So stick with simple accessories. Get rid of anything more than three things on any surface. If possible, try to stick with one thing on each surface. Think an orchid.

3. Finish all projects that are not complete. Do not hide things by covering them up with rugs. That makes buyers wonder what else in the home has not been fixed.

Sometimes, it’s a good idea to let your neighbors walk through the home before you think you’re ready to call an agent. Are you wondering why? Do you have to?

For some time now, we’ve had a Sacramento Foreclosures section where you could browse for Bank Owned Properties or Short Sales by county in El Dorado, Placer, and Sacramento County.

We’ve now added a Foreclosure Search Form to make it a little easier to:

• Select only in the areas you’re interested in, across all three counties.
• Narrow your selections by price range.

We’ve kept it really simple, but hopefully this basic functionality makes things a bit easier.  Please give it a try and let me know if you run into any problems!

Related links:

Buying a house for the college-bound student has become a growing trend lately. In fact, we at Elite Properties handle quite a few calls from parents that are looking to buy their children a house or a condo to live in while they go to college at Sacramento. Just this year, we sold a home to a client from Florida who bought a home blocks away from American River College.

So, based on this story that appeared in the SacBee and Bankrate, what should be some things you should do when considering a residence for your college-bound?

1. Try to find a multi-unit that you can rent out to other students.

2. Make sure to have all leases in writing. (Great opportunity to teach your college-bound the value in investing in real estate!)

3. Pick a property with potential. Make sure it’s close to campus.

4. Have a plan - this is one that most people ignore. Have a plan about what you will do with it before you go out looking. Do prelimnary research and decide.

And oh yeah, if you’re considering Sacramento:
5. Call Elite Properties (very important!)

Last night at what was some ungainly hour of the night New York local time, Laurie Mindnich, a New York Realtor® and an ActiveRain participant, put compassion into action and in one deft stroke, transformed the results of our fundraising effort for the El Dorado County Food Bank’s Hunger Walk from zero to reached our fundraising goal.

Thanks again, Laurie.  You made a huge difference.

For those of you who are sad now that we’ve reached our goal, not to worry!  :)  I understand it’s OK to surpass it.  So feel free to donate.

I’ve updated our site home lists, including the sections for:

• Condos
• New Homes
• Foreclosures

Most of these sections are pretty much “browse only” as of now, but I plan to have a search tool in place for the foreclosures soon — probably some time this week.

A client once told me that it’d be nice to have such a thing for the new homes section as well, so I may tackle that this week as well.

Enjoy.

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I want to thank Oliver Muoto at vFlyer.com for selecting me for their vFlyer Star Program.  This program recognizes the real estate agents and brokers who use vFlyer to help give get the maximum online exposure for their sellers’ homes.

The write-up that Oliver did was very complimentary, but there’s definitely a mutual admiration thing going on here, as you can see from my remarks about them.  vFlyer not only does a fantastic job of putting together a multi-use flier for your home and helping us publish it to various sites like Craigslist and Sacramento News and Review, as I’ve pointed out earlier, on a typical listing the visits to our online vFlyer ad outweighed the visits to Realtor.com for the same listing by over 4 to 1! 

Of course, it helps to have good traffic to begin with, and it helps to make sure the flyer is accessible from a variety of pages.  But in the end, what matters in the end to sellers is people find your home (that’s our job).  It also matters that it looks great when they find it, and vFlyer’s great layouts and templates do a fantastic job of supporting us in that.  (For examples, see the flyers available from our main vFlyer listing site).

They say only two things in life are certain, death and taxes.  I’m happy to report that as Realtors®, we don’t get asked about death a lot, but people do often have questions about property taxes.  We often hear questions like:  “Aren’t California property taxes expensive?” and even more often, “What is the tax rate in [Name Your Favorite] County”.

Folks within the state are trained to ask, “Does this property have Mello Roos?”, whereas folks from out of state think a Mello Roos is a laid-back male chicken — a myth I will dispel conclusively as we go along.

Yes, I know, that was pretty bad.  I’d better get right to the article, at the risk of further taxing your patience.

1) I Live Out Of State and Have Heard that California Property Taxes Are High.  Is That True?

Actually, yes and no.  It’s more correct to say that California property values are high.  Many property taxes are taxes that are levied “according to value”, but we often say ad valorem because saying things in Latin is so much more fun.  Because of this, according to the Tax Foundation, California ranks #10 from the top in the median property taxes paid on homes among the fifty states, but ranks 46th (i.e., 4th from the bottom) in terms of the property tax rate. 

Statewide, our ad valorem property taxes were limited (by proposition 13) to 1% of the market value, and there rate of increase was limited to a maximum of 2% per year for inflation.  (In other words, in the first year they’d be 1%, the second year 1.02%, etc.)  Later, Proposition 8 required assessors also have to take possible devaluation into account, hence Purva Brown’s recent post about Sacramento County taxpayers getting a lower bill.

2) What’s the Tax Rate in Sacramento County and Surrounding Areas?

Though our statewide rates are limited to 1.0%, voter approved bonds and fees can and do increase that figure.  Both Sacramento and El Dorado County claim average tax rates of 1.1%.  When I first got into the real estate business, I was taught to use a more conservative figure of 1.25% to give to my clients as a ballpark number, and most lenders I know use that estimate when calculating the Tax component of PITI (Principle, Interest, Tax, and Insurance).  In all these cases, we’re talking about an initial rate based on the market value at the time your home was sold.

3) What’s A Mello-Roos, and Do I Want One?

Proposition 13 was originally passed in 1978 because older Californians were being priced out of their homes by the ever-growing tax burden, given the wonderful appreciation we enjoy in California.  (Ahem:  well, most years we enjoy it, anyway).  Of course, once you limit the amount of taxes counties can collect, now you’ve got a new problem, especially as new communities develop — how do you pay for things you might want, like streets, water, drainage, sewage facilities, policemen, parks and recreation.  Along came state Senator Henry Mello and Assemblyman Mike Roos, who co-sponsored 1982’s Community Facilities District Act, which allowed communities to pay for these services through bonds when 2/3 of the voters in the district approve them.  Bonds issued under that legislation still (accusingly?) bear the names of the authors of the bill.

Of course, being bonds, the good news is that unlike taxes, they’re eventually paid off.  The bad news (can you say “proposition 13 loophole”) is that now your effective tax rate could be 2.5% or more depending on how much the Mello-Roos bonds bring to the table.

4) Are there Any Mello-Roos Bonds On [Name Your Property Address]?

Well, you’d think we could just go ahead and give you a straight answer to that one by looking in the MLS or calling up the county assessor’s office, wouldn’t you?

Well, yes and no.

The good news is, that in most cases we can get you more information from the county, or in certain cases you can even go online yourself and check.  (We’ll do a tutorial on this soon).  The reason we have to say that “in most cases” is that Community Facilities Districts who issue Mello-Roos bonds may ask the County Tax Collector to include this lien as part of your biennial tax bill.  They may, and in most cases they do, but here’s the problem:  they don’t have to.  For example, the El Dorado County Tax Collector shared with me that the city of Placerville has several properties with 1911 bonds (another form of special assessment) that aren’t on the tax role.  So folks in those areas of Placerville get a separate bill.  Although most Mello-Roos bonds and other special assessments are levied through the county tax collector, if you call any assessor or tax collector in any county, you’ll no doubt come up with several similar exceptions to that rule.  The bottom line is can get you an answer that has maybe a 95% chance of being right within a business day of hearing from you.

5) How Can I Find Out More about Mello-Roos and Other Special Assessments for the Home I’m Buying?

Fortunately, the State legislature has your back on this one, and enacted legislation in 1992 requiring the seller and the listing agent to disclose whether there are Mello-Roos bonds on the property.  In 1992, legislators noticed that some builders were cleverly using other forms of special assessments to avoid having to disclose that they had Mello-Roos bonds.  (”Hey we don’t have any Mello-Roos” [wink, wink]).   Senate Bill 1122 therefore extended this disclosure requirement to other forms of special assessments.

Now if there’s one thing broker’s don’t like (other than water chestnuts — I hate water chestnuts), it’s having liability to disclose something that the seller may not even know, especially where the information is not obvious and our usual way of finding out the answer is right only 95% of the time.  So naturally, companies have sprung up to do the disclosing for us.  One such company that we particularly like is Property ID.  Property ID provides natural hazard disclosures, but as part of their report they also include a special assessment disclosure that is ensured up to $20 million.  We always write Property ID into our agreements asking the seller to provide this when writing up a purchase agreement.

Most agents don’t order Property ID or another disclosure report up front, but if it’s available, we’re happy to provide it to you prior to opening escrow.  Usually you get the report while you’re in escrow and under your inspection period.  If you really want to try to nail it down with more certainty, you might try ordering a report from Mello-Roos.com, but most of our buyers have found that checking with the assessor up front and then getting Property ID (or a report from another reputable disclosure provider) in escrow is a cost-effective alternative.

Related Stories

Sacramento Property Taxes Fall

I’m Moving to the Sacramento Area, and am Over 55. Can I Keep My Tax Base?

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My sponsorship web site for my participation in the El Dorado County Food Bank Walk For Hunger is now live.

Click here to sponsor me in this event.

Thanks to local supermarket sponsors and other efficiencies, the El Dorado County Food Bank distributes $9.00 worth of food for every dollar they get in contributions.  Moreover Elite Properties will match every dollar you contribute, up to the first $100.  So if you contribute $10, that means $180 in food for needy families.

Help us reach our goal of $200 or more.

A few bucks.  A few minutes.  And a few hungry families get to eat. 

How cool is that?

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Yes, I know I said it somewhere before, but since the Sacramento Bee is reporting it, it bears repeating. Many home owners will see their property taxes decline this year. Taxes are based on assessed value as of January 1, 2007. Since market values have fallen, Proposition 8 requires the government to take falling values into consideration and drop taxes accordingly.

Most people that bought homes in 2005 and 2006 will see a reduction of about 5% to 10% off their property taxes.

This might mean that their monthly payments will go down and if they have an impound account, they might receive an unexpected check in the mail.

You can read the entire SacBee story here.

We’ve published the first of our subscriber only discount coupons.  This one is valid for homes purchased throughout October and can save buyers and sellers several hundred dollars in closing costs.  We have just started making these discount offers available to those who subscribe to our blog, which you can now do either through an RSS reader or by email.  A few days ago we mentioned we were testing it out, and now it seems to be working OK, so we hope to have a different offer published about every month or so.

From time to time we may also offer bonus content and free stuff via the same subscriber-only mechanism.

I’m also pleased to announce that the subscribe by email feature is getting more activity this time around than the last time I tried it.  I think the incentives are part of this, but I like to think we’ve also made some good content improvements in the last week or so as well.  Thanks to all who’ve signed up so far!

Related Posts:

Sacramento Real Estate Discounts

New Subscribe by Email Feature

I will be participating in the El Dorado County Food Bank’s  Walk For Hunger, scheduled for Saturday, November 10, 2007.

I am proud to announce that the way I found out about this event was a legacy of the blogathon for hunger that Bridget and I did last year on another blog.  Hence the nice letter from The Food Bank that I got over on the right.

I’d like to ask for your ideas and input about how to make this a more effective event.  For example, I signed up as a team, and I could sponsor a “virtual walker” or two and raffle off their tee shirts to the subscribers of the blog. 

I should have some kind of matching contributions set up and a way to sponsor me officially online in a day or two.

Meantime, if you just can’t wait to help out, that’s a good thing.  If so just click here to make a donation via PayPal.

Or if you prefer to donate at a national level instead of supporting some county you may or may not have heard of or care about, click the America’s Second Harvest banner below.

Here is that link I promised:

Click Here To Sponsor Me

As you can see when you follow that link, Elite Properties will match your contributions up to the first $100.00.

One statistic that you may be interested in is that for every dollar you contribute, the  El Dorado County Food Bank distributes $9.00 worth of food.  With the matching contributions, that means that $10.00 from you provides $180.00 in much needed food to hungry families.

Again, if there are other ways you can think of to make the event more successful or if you would like to walk with me as part of the Elite Properties team, let me know.

It Pays to Subscribe

We’ve started to write about the valuable discounts we provide on our real estate services that are available only by subscription to our blog / newsletter.  In the future we may also be offering additional discounts and prizes that other merchants may provide, and other incentives to subscribe.

The point here is to develop a stronger readership of local people who may be interested in real estate, not to trick you into giving up your email address.  I don’t sell email addresses, and no one so far has found themselves stuck in a home because I spent my days emailing “buy a house, buy a house, buy a house” to my unsuspecting victim.  These discounts and other incentives will also be available to those who subscribe to the feed in an RSS reader.  (What the heck is that?  We’ll have a tutorial coming soon).

Today we’re taking our first step toward implementing this by installing the software that will show you these discounts if you are subscribed.  At the moment we’re still in a testing mode to see if the plugin is on and putting together our first discount offer(s), but if all goes as expected (he said, crossing his fingers) we should be able to announce that our subscribers-only discounts are live within a post or two.  Meantime if you subscribe now you’ll get these discounts when they’re ready. 

No, that’s not shamelessness.  It’s “transparency”.

Related Articles

New Subscribe By Email Feature

Today’s Ask the Broker installment is the first part of a series of articles on everybody’s favorite happy real estate topic — real estate taxes.

Recently a buyer contacted me who wanted to move to Roseville, in Placer County.  He had heard that if he moved, he would be able to keep his tax base.  Unfortunately, I had to give him the news that he’d be unable to do so, since he was moving from another county in California.

In order to understand why not, let’s review the three California ballot propositions allow homeowners to transfer their tax base under certain circumstances.

Proposition 60 - Moving Within The County

California voters passed Proposition 60 on November 4, 1986.  It says that if you or your spouse living with you is aged 55 or older, and you are moving to another home in the same county, you are to transfer your existing tax base to a replacement home of equal or lesser value.  This is a one time benefit, so if either you or your spouse have done this before, you can’t do it again.  If you buy the home before selling your existing home, then the value of the replacement home must be 100% or less than the market value of your existing home.  If you buy a replacement home within the first year after selling your replacement home, then the value must be 105% or less than the market value of your existing home.  If you buy the replacement home  within the second year of the selling your home, then the value of the replacement home must be 110% or less than the market value of your first home.

One thing that’s important to note is that the market value is determined by the tax assessor, for both your original home and your replacement home.  It is not the same as the purchase price.

Proposition 90 - Moving Between Counties

Four years after Proposition 60 was passed, California voters went to the polls on November 8, 1988 and passed proposition 90, which allowed owners aged 55 and older to transfer their tax base between counties under certain circumstances.  When my buyer heard he could move his tax base to Placer County, whoever he heard it from no doubt had Proposition 90 in mind, however, here’s the important point about proposition 90:  It must be supported in the county where the replacement property is located.  Where you’re moving from is irrelevant, so long as it’s in California.  Where you’re moving to is what counts.

As of about last week (Early October, 2007), according to the Placer County assessor, the list of counties that support proposition 90 includes  Alameda,  Los Angeles, Orange, San Diego, San Mateo, Santa Clara, and Ventura.  That list hasn’t changed in a couple of years, but it’s possible that it can, so you should always contact the Assessor’s office of the county you’re moving to to make sure.  We’re happy to assist you if you’re moving to our local area, but if you just want to check before you move, here are the numbers:

Proposition 110 - Severely Disabled Persons

On June 5, 1990, California voters passed ballot proposition 110 into law, allowing severely disabled persons to transfer their tax base under certain circumstances.  The State Board of Equalization maintains a Proposition 110 FAQ.

For more information about Proposition 60, see Sacramento County’s Proposition 60 Questions and Answers.

When our series on taxes continues, we’ll have more information about Proposition 13, local tax rates, resources for researching the taxes on a given property, Mello Roos, etc.  To receive more information on these subjects and other real estate topics as they become available, please Subscribe to Our Blog.

Do you have a question and want to Ask the Broker? If so, please feel free to call John Lockwood directly at (530) 672-9160, or you can submit your question using our Contact Form.  (Note that the phone number there is optional.  Also, you will not be subscribed if you submit a question).

I am pleased to announce that we are now offering you two ways to subscribe to the Sacramento Real Estate Blog (see the form at the left).

The subscription form says “Weekly” but please note that for subscriptions processed before October 15th, you may receive messages more often. We’re in a testing and roll-out mode, so we have it set to send messages more often.

For those of you who don’t want to mess around with RSS readers, or don’t know what one is, or don’t care what one is, you can now subscribe via email to get the latest Sacramento real estate news, including market updates, tutorials, the latest real estate bargains, and many new features that we’ll be rolling out in the weeks ahead.

After that, I think weekly is a good schedule. Leave me a comment and let me know if you prefer weekly, daily, monthly, what have you.

After all, we think most buyers and sellers will benefit from a more email-friendly approach, since RSS stands for “Realtors Sure Subscribe”.

“If you don’t subscribe, the terrorists win.”
– New York Mayor, Rudolph Giuliani

“Aren’t you going to laugh at my nose too?”
– Rudolph the Red Nosed Reindeer

Over the weeks we’ve highlighted some of our online listing services under the heading of “Elite’s Ultimate Online Listing”. In this seven-minute screencast, we show you how much exposure you get from a typical listing agreement with an agent, and how our listing marketing compares to this.

Topics we cover include:

• The multiple listing service — great for agent exposure, bad for clients.
• What to make of the claim “I will list your home on Realtor.com” and how valuable that is.
• How buyers find your home, and what you can expect from our online marketing.

We have a local version of the video here, but a couple of folks mentioned some technical trouble with that one, so even though it’s smaller you might try the YouTube version if the big one gives you trouble.

Congratulations to CAR, the California Association of Realtors®, on their new CAR Legal Blog.

As a working real estate broker, I consider the chief benefit of all the Realtor® organizations to which I belong to be the state-level legal hotline.  It seems like once every couple of months or so, a question will come up that’s a bit of a legal stumper, and the attorneys on CAR’s legal staff sort it out elegantly and professionally, usually in less time than it takes to get an order of fries with no salt.

I look forward to reading their blog, and also commend their decision to make it available to the public instead of by sign-in only.

Those of you who do real estate searches from the either our main search page or many of our other search pages have access to listings that are updated six times per week.

I’m not sure why it’s six and not seven.  Presumably it’s to give FTP a Sabbath.  The point is, it’s practically daily, so it’s about as up to date as you can get without calling a Realtor up and asking him.

In addition to the search pages, there are also a lot of pages where you can browse listings, such as our foreclosure pages, the condos pages, and the new homes pages.  These pages are driven by a separate database that we maintain, that we update once per week or so.  We’ve recently improved the import mechanism on these pages to fix a few issues, so we expect these pages to more closely match our MLS (Metrolist) as time goes along.

We just did an import as well, so we’re pretty current as of now.  Enjoy!

If you’re a landlord, or manage property for someone else, you MUST have a story to tell! We’re inviting you to tell us those stories. We’re working on putting together an e-book with axioms every landlord must follow to have a successful investing future.

Please go to www.SacramentoRealEstateGal.com and comment on the posts to submit your stories, anecdotes, advice or what have you. You will be featured in the e-book, but we could change the names of your tenants to protect their privacy.

Please contribute.

Today I got a nice call from Rhona Sutter at the Pet Realty Network, a group of Pet Friendly Realtors®. Rhona and I had a discussion at one time about different marketing strategies, and I found her to be one of those really nice people who put up with me in one of my cantankerous moments.

I had argued fairly vehemently against outdoor vanity advertising and in favor of pay-per-click ads, and she called to say hello and let me know I was half right, that the vanity ad she bought didn’t work but also that she doesn’t have much success with pay per click for her particular business model.

We also talked about Mark Twain, and the jumping frogs of Calaveras County, which is beyond the borders of the Elite empire, which is Amador County. If Elite Properties were Rome, Amador County would be, I don’t know, probably Gaul. Of course if we’re going to be Rome I think we’ll need more than six people.

So anyway, Rhona’s really a nice lady, and you should go check out her web site.

Being among dogs has a humanizing influence on people.

You’d think it would have a dogizing influence, but there you go.

Established in 1987, the city called West Sacramento has 343 single family homes to look at between $135,000 and $1,595,000.

Last year 428 homes sold for a median value of $381,250. This year so far only 252 homes have sold and 31 more are pending sale as of today. The average days on market has ballooned to 80 from the 53 of 2006.

Median prices have dropped to $359,500. That’s 5.7% under last year’s median.