Bay Area property tax decline seems to be ending

Carolyn Said, Chronicle Staff Writer

San Francisco Chronicle September 11, 2011 04:00 AM Copyright San Francisco Chronicle. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Sunday, September 11, 2011

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Lance Iversen / The Chronicle

Kit and Miki Wetzler and their two children Mia age 3 and Jason age 1 gather in the family room of their Sunnyvale home Thursday August 25, 2011. to watch TV. The couple were shocked when they opened their annual tax assessment bill and saw that Santa Clara County said their property value had jumped $150,000 in just a year. Assessors who downgraded property values during the real estate downturn are now starting to restore them in some instances, saying the market is recovering, but homeowners including the Wetzler say it’s not possible their homes are worth that much.

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The beleaguered housing market may finally be bumping along the bottom, according to Bay Area county assessors, whose jobs rest on gauging the state of real estate.

After two years during which tax rolls in most of the nine Bay Area counties shrank, often by large margins, this year property tax rolls are fairly flat compared with last year, the assessors said. Admittedly, they’re being compared with a lower base.

“We’re in a holding pattern,” said Marc Tonnesen, assessor for Solano County, one of the areas hardest hit by the foreclosure crisis. Solano’s tax roll was down just 1.56 percent this tax year, after falling 3.62 percent last year and 11 percent the year before. Two cities, Benicia and Fairfield, actually posted gains in their property tax rolls, he said.

One trend is that assessors are starting to restore assessed value to some properties whose tax bills were reduced during the downturn. Under California’s Proposition 8, assessors must reduce a property’s tax value when it drops below the market rate and then restore the value as the market improves.

“We’re beginning to see signs, however meager, of improvement in the market,” said Larry Stone, Santa Clara County assessor. The county partially restored value to 45,000 properties, largely in more affluent areas, he said. Overall, Santa Clara’s assessment roll was up 0.88 percent this year.

This is another indication we may be at the bottom, in regards to home prices. There is no clear indication of when this will be over but at least prices are stabilizing. Another indication is that mortgages are now equal to rent or in some cases its cheaper to rent. The bottom line is that this is a great time to invest or purchase a home to live in.

How to rescue the housing market: Foreclosures!

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By Tami Luhby August 31, 2011: 5:27 AM ET

NEW YORK (CNNMoney) — If the Obama administration really wants to save the housing market, it should speed up the foreclosure process — not prolong the inevitable, experts say.

Four years into the housing crisis, the real estate market is still teetering on the edge. The Obama administration has tried one program after another to stem the tide of foreclosures with limited success. And it is continuing to look for ways “to ease the burden on struggling homeowners,” though no new initiative is imminent, the White House said this week.

This is always a hot topic, the fact is the sooner we get through all the troubled mortgages the sooner we can recover. This article illustrates how we need to speed up the foreclosures but doesn’t talk about expediting the short sale process. Both ways will get us to a recovery but the short sale is the preferred method for many different reasons.

Some Rising Prices Don’t Make a Recovery

By Mike Colpitts

Rising home and condominium prices in isolated markets scattered across the U.S. rarely develop into a sudden real estate recovery, but demonstrate the differences of local housing markets.

For the first time in years the average prices of homes and condos in Miami moved higher in July, showing that even in downtrodden Miami, once the proverbial epicenter of the real estate crash prices can get so low that somebody comes out to buy.

In Miami’s case, most of the market’s strength is from foreign buyers, which won’t help the housing market much in say Peoria, Illinois once a vast test market for home products in the 1960’s.

The power behind home sales in a place like Miami is the resort market, its unique ability to attract tourists from all over the World with the Key Biscayne Waterfront, thousands of restaurants serving everything from Cuban food to Mojitos at the corner bar, a diversified cultural experience and plenty of hard bodies on the beach.

For some reason you don’t see girls in skimpy bikinis in the corn fields outside of Peoria

This article is a perfect illustration of how you need to always study local trends and numbers because there are micro markets happening everywhere. Here in Hayward, some neighborhoods are experiencing bidding wars while others continue to struggle just to get offers. Staying informed and Educating both buyers and sellers is crucial.

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Mortgages rates keep falling: 30-year nears record low

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By Les Christie August 11, 2011: 3:17 PM ET

NEW YORK (CNNMoney) — Just when it seemed mortgage rates weren’t going to get any lower, they started testing new lows.

In the tumultuous days following Standard & Poor’s debt downgrades, rates on 30-year fixed mortgages fell to 4.32%, down from 4.39% last week and closed in on a record low of 4.17% set last November, according to Freddie Mac’s Primary Mortgage Market Survey.

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Rates on 15-year fixed mortgages set a new record for the second week in a row, falling to 3.5%, down from 3.54% last week.

“It’s a crazy time,” said Doug Lebda, the CEO of online lending exchange LendingTree. “I’d say rates can’t get much lower, but I was saying that last week, too.”

The savings for borrowers who lock in rock-bottom rates over the length of a mortgage loan can be sizable. Take, for example, a borrower with a $200,000, 30-year loan. If their mortgage carries a 4.32% rate their monthly payment is just $992 and they make total interest payments of $157,153. However, if the rate on their 30-year fixed mortgage is 5% (ordinarily considered a low rate), they’d pay $1,074 a month and $29,357 more in interest over the 30-year period.

This article perfectly illustrates the fact that interest rates have a bigger impact that price. If you take the example in the article, that shows a purchase price of $200,000 at a interest rate of 4.32, that gives you an amortized payment of $992. Now in order to get the same approx. payment at a 5% interest rate the purchase price would have to drop to $185,000. With prices at record lows and interest rate at record lows this is the perfect storm. The only way to know if prices have hit the bottom, is if they are on their way up. it’s good to see articles covering this comparison.