RealEstate680

 

It’s started.  In last weekend’s Contra Costa Times, Sunday Real Estate Section, one of my colleagues is offering a free Mercedes Benz with the purchase of a $1mm plus home in Walnut Creek.  I don’t see the logic or motivation behind this marketing strategy.

I would certainly coach my buyer to negotiate the price down $60,000+ dollars, the cost of the Benz and ask the seller to also pick up the buyers closing costs.  Why?  Lowering the cost 60 Grand; lowers you tax basis for as long as you own the house!  Go buy your own Benz.  I would bet you that Fred Sherer at Walnut Creek Mercedes is pretty motivated to sell you a car at a very attractive price.

$60 Grand off the price of your home is approximately $750 per year in property tax savings.  Now that’s not a huge chunk of money but I would rather find of ways to save it or spend it; instead of paying it to the Contra Costa County Tax Assessors office.  Pardon me, Gus Kramer.

Plowing though the current real estate market you will find all kinds of tremendous opportunities, find the one that suits you.  It’s all good!

Ever wonder how the economy goes ’round? Or how inflation is controlled, and recessions are avoided? A lot has to do with the Fed and its tight control of key interest rates. These different interest rates do different things, but how does it trickle down to us?

Discount Rate: The Discount Rate is the interest rate the Fed offers to member banks and thrifts who need to avoid having their reserves dip below the required minimum. The higher the discount rate, the higher mortgage interest rates will be. When the discount rate goes up, the prime rate goes up as well, which slows the demand for new loans, and cools the housing market. Our credit card rates are typically tied to the Discount; this is the stuff seniors rely on for retirement. It’s a double edged sword. Lower Discount rates lower CD rates.

The opposite is also true. If the fed lowers the discount rate, the prime rate will come down, and mortgage interest rates will dip to more favorable levels. This can boost a slumping housing market.

So when we hear the Fed is cutting the Discount rate, it’s very possible that mortgage rate will decrease.

Prime Rate: Prime Rate is the interest rate offered by commercial banks to its most valued corporate customers. The prime rate is also the basis for many mortgage programs, including Heloc’s (Home Equity Lines of Credit,) which many banks offer to homeowners at prime plus X amount, prime minus X amount, or simply prime plus zero.

The prime rate always adjusts according to how the Fed changes the discount rate. So if the Fed lowers the Discount rate, it really does not affect this market.

Federal Funds Rate: The Federal Funds Rate is what banks charge one another for overnight use of excess reserves. Banks avoid dipping below their required percentage of money on reserve by borrowing from one another.

The Fed uses the federal funds rate to control the supply of available funds, essentially controlling inflation. If the federal funds rate is low, banks will be keen to borrow from one another, using the reserves to grant more loans which in turn feeds the economy. If the Fed feels the needs to slow things down, they will simply raise the federal funds rate, which will curtail borrowing among banks and reduce the amount of new loans,

My friend Fed Fund Rate does not mean Jack to you and me! It’s pretty much the good old boys, taking care of each other.

It’s been about 10 years since Contra Costa County reduced property taxes on a large scale.  Proposition 8 passed by California voters in 1978, amended Prop 13 to allow for a temporary tax reduction when a property’s market value as of January 1 of each year is below the “base-year” value.  The base year value is typically your purchase price with a possible increase for inflation which should not exceed 2% per year.  Permitted additions and renovations to you home do add to the tax base too.

 Here is  the link  to the actual instructions to apply for the tax reduction in Contra Costa County,

 http://www.co.contra-costa.ca.us/depart/assr/prop_info.htm#prop_8. 

Remember the assessor’s office will look at the value as of January 1, so you may want to wait until next year.  The strongest comparatives in your neighborhood are within 90 days.

 By the way, even if you request a review, you still must pay your property tax bill in full on time to avoid penalties. 

 

Since my wife and I moved into our Eichler home in Walnut Creek five years ago, we have found that it takes a contractor that understands the construction to advise you on the type of new equitpment and understand how it will install .

 Since the California Modern style of architecture is glass, slab foundation and a flat roof with no crawl space, upgrades to heating and air-conditioning,  plumbing, even running wires through the house for surround-sound take the work of a pro with patience.

East Bay Eichlers, the communities in Castro Valley, Walnut Creek and Concord are fortunate to have a good bunch of qualified providers available.  I hope in the next few weeks to be able to share their thoughts and website with other Eichler owners in the East Bay.

On Saturday, October 20, 2007, The City of Walnut Creek is sponcering  “Sustainable Walnut Creek.”  “Going Green Together.”  Exhibits are from 8am to 1pm, with the program starting at 9am and finishing about noon at the Lesher Center in Walnut Creek

This is the first of many more seminars, fairs and other public forums that will help all if us un Walnut Creek and surrounding areas make our life a little more greener.  We need to be aware of our “carbon footprint.”  It’s not just about the car you drive, it’s about the material you use in your home, how we dispose of what we don’t use and how we use energy.

 Here’s a link to web site that has great ideas about living green in your home.  http://www.thegreenguide.com/.  I hope you will enjoy this “Green Fair” in Walnut Creek this Saturday.

 

My wife Christine and I became Eichler fanatics many years ago.  The design, lifestyle and architecture of these California Modern homes create a tremendous environment for an open floorplan with floor to ceiling windows and “loft like” living feeling.

 Joseph Eichler was a California based residential real estate developer know for building homes in the Modernist style.  He build over 11,000 homes in Northern California.  The San Francisco Bay Area Eichlers are mostly in Marin County, the East Bay; specifically Walnut Creek Eichlers, Concord Eichlers and Castro Valley Eichlers. Other areas include San Mateo, Sunnyvale, Palo Alto and San Jose.  There are also communities of Eichler in Southern California.

Unlike most of the ranch style homes build with stucco, Eichlers are on concrete slab floors with radiant heat, large walls of glass, post and bean construction and semi flat roofs that show off the modern style.  Through the years there has been a rediscovery of this architecture.  Families are remodeling the Eichlers back to the original contemporary styles.

My collegue, Heidi Slocomb and I have an Eichler Faire every Spring in Walnut Creek.  I will continue to write about these homes and hope that you will join us at an open house or the Eichler Fair.  Feel free to email us at info@EichlerConnect.com to put your email adress on our list.

 

I remember as a very young child taking the ferry from Benicia to Martinez.  It was a real throw-back to Old California.  Benicia was really far away from Walnut Creek.  The first capitol of California was an artist colony with galleries and second hand stores.

Now the vital town of Benicia is very much a part of the Bay Area.  Most of the second hand stores are real estate offices and micro breweries.  The new bridge has added a closeness that brings Benicia to the 680 corridor.  I suggest that you visit Benicia.  Stroll down First Ave., walk along the waterfront.  It’s very charming.

Your real estate dollar goes farther in Benicia than Walnut Creek.  Visit my web site www.Benson4Homes.com and check out the Benicia market.  Benicia is great to explore anytime.

Here’s a map link for you,   http://maps.google.com/maps?q=Benicia,+CA,+USA&sa=X&oi=map&ct=title

Homes are selling in the Walnut Creek, Pleasant Hill real estate markets.  Homes that are priced to the market and show well have been selling in a reasonable amount of time.

I have a listing in the Gregory Gardens neighborhood of Pleasant Hill that sold in 10 days.  The average days on market in this neighborhood are over 45 days.  I guess it’s all about price and how well the home shows.  We cleaned, painted and implemented a strong marketing program.

The facts are that it is really a good time to buy a home.  All markets show reasonable signs of activity.  The strongest markets are the over $1mm market in Walnut Creek, over $700K in Pleasant Hill and another hot spot is the Benicia market.  The new bridge is expanding the real estate market activity in Benicia.

I have tremendous weekly real estate market analysis information that I want to share with buyers and sellers along the 680 corridor.  This data shows market activity in all price ranges and areas.