As I mentioned a few weeks ago, the Mortgage Debt Relief Act was set to expire yesterday, but was renewed in the bill congress passed late last night…big news for sellers considering a short sale. It also included a revival of the tax deduction for mortgage insurance, which had lapsed after 2011, which is good news for FHA borrowers. The Wall Street Journal summarizes the changes here. They didn’t go after the mortgage interest deduction yet, but it sounds like that could still happen so we’ll keep tabs as things develop.
Blog by the bay
Marin County, people, places, culture and real-estate
A Great Time for a Hike to Cascade Falls
With all the rain we’ve had over the last month Marin’s waterfalls are roaring along. One of our favorite spots is Cascade Falls in Fairfax. It’s a 15 minute hike to get to the falls and the walk is beautiful. You walk along the river the whole way and it’s a good way to get the kids out of the house during the holidays. Parking can be tough at the end of Cascade Drive where the trail starts, so keep this in mind but there is usually some parking down the road a bit if it gets full at the end. One of the main reasons we live in Marin is our close connection and access to natural beauty, and there’s nothing like waterfalls in the winter.
The Unfortunately Titled “Fiscal Cliff” has Implications for the Marin Real Estate Market
I’m sure you’re as tired of hearing about the “fiscal cliff” as I am, but there are some important issues in the mix for home buyers and sellers. One option being considered is a change to the mortgage interest deduction, which could be a big deal, depending on what exactly the change turned out to be. Our local IJ real estate reporter summarizes here.
And so far there is no word about an extension of the Mortgage Forgiveness Debt Relief Act, which expires at the end of the month, and would have major implications for homeowners who are underwater and considering a short sale. There’s a good explanation of the issue and the potential impact of congress failing to act here. It’s not as big of an issue in Marin as it is in many other parts of the country since the number of short sales has fallen so drastically here this year, but it’s still important and would likely have an effect on our market to some degree.
House Flippers vs. First-Time Buyers
Since the beginning of the year the market in Marin has been on fire and it has continually sustained that pace throughout the year. We usually see seasonal ups and downs throughout the year but that hasn’t really happened in 2012. The big questions are what is causing this and will it continue into next year?
One major factor is that interest rates are at historic lows. These low rates have made it possible for buyers to push their limits and be able to afford more home. Inventory is low because homes are being snatched up with multiple offers and we think sellers are seeing this and waiting to put their homes on the market, hoping to make more money if they wait. Another factor is the dramatic drop in short sales and foreclosures coming on the market. Also, some say the latest dot.com boom happening in San Francisco is pushing people out of the city and up to Marin because it is more affordable. All of these factors have contributed to making it very competitive in the Marin housing market but there is one other factor that has frustrated buyers and agents–the house flippers who have become so prevalent in Marin and Sonoma counties.
We often say to our buyers that the best investment is trying to find “grandma’s” house because it has often been well maintained and the list price usually reflects the updating that it needs. Most buyers want to pick their own finishes and are okay with pulling out old green carpet, refinishing the hardwood floors underneath, painting and picking out kitchen and bath counter tops. In Marin this usually means instant equity once a buyer transforms the house. The problem is that most of these nuggets are being snatched up by flippers who slap on some cheap updates and re-list for a hefty profit, thus pricing out many young families who would otherwise be able to benefit from such a situation. Of course some flippers are buying foreclosed properties on the courtyard steps for all cash, which in my opinion is fair game since they’re taking that risk, and most buyers don’t have all cash and aren’t willing to take the home subject to all outstanding liens.
But when a sweet home with upside potential hits the MLS buyers need to realize they are probably going to have to go up against flippers, who end up putting in cash offers with no contingencies. This is frustrating because these buyers, who would otherwise be able to compete for a good home with upside, instead end up with the option of buying the flipped house, often with updates done with poor craftsmanship, sometimes with concealed problems, and at an inflated price.
We know it’s “just business” and there is no law against flipping homes. But this trend is making buyers do things they wouldn’t have otherwise done in order to compete. One major concern we have is that now buyers are feeling like they have to rush to do pre-inspections and are basically being forced to write offers without a buyer inspection contingency, which can be very risky. A lot of buyers don’t want to spend up to $2,000 inspecting a home that they aren’t even sure they are going to own, which totally makes sense. We don’t want buyers to feel rushed doing their inspections yet we also want them to be competitive when they are going up against an all-cash flipper in a multiple offer situation. Each home and buyer is different and we of course council each situation differently, but overall we want buyers to have time to do their inspections and have time to reflect on a home’s condition, or to get further inspections if needed.
There’s no easy answer to all of this, but unfortunately it’s something buyers need to be aware of in this market. Obviously there are some good contractor/investor types who do a nice job when flipping a home and take pride in the outcome, but we’ve also seen a rise in the number of flip outfits that have turned the practice into a big business. And that trend is making it tough for regular buyers to compete for those homes, and it’s making them feel like they have to take risks if they want to try.
Spicy Salsa and More at El Huarache Loco
El Huarache Loco Restaurant in Larkspur is one of my favorite places for lunch or brunch in Marin. They opened earlier in the year at the Marin Country Mart and have been a hit ever since. They make their tortillas right on site and everything is really yummy and healthy. Try their salads and incredible tacos, and they have the best salsa bar around…the spicy selections make me happy. The Country Mart is the coolest place to hang out on Saturdays. They have a farmers market and tons of cool shops. We like grabbing a big table outside and just letting the kids explore around the fish and turtle pond, or hang out on the giant tree play structures. I hear in the summer they even have movie nights there. See you next Saturday!
Cornerstone, One of Our Favorite Stops in Sonoma County
Cornerstone Sonoma is one of the coolest places around to visit with the kids, have a picnic, and do some shopping all at the same location. The grounds have a bunch of outdoor art installations and are very inspirational. It’s like walking through a wonderland from each exhibit to the next. There’s a barn with tables to sit at and a great place to share a bottle of wine and just let the kids run wild. They do private functions there as well–a great place for a wedding reception or a kids birthday party. There’s a cool wine bar, a cafe, and numerous shops to browse in. And don’t forget to get a photo of yourself sitting in the big blue chair.
Here’s a Creative Idea for a Stairwell
Looking for a creative way to add a staircase to a home? How about attaching a grain storage silo to the outside of the house like they did to this home in Sonoma. Not sure if it’s actually a recycled grain silo or just was built to look like one, but it’s an interesting idea.
Marin Short Sale Update
We posted back in May about the declining short sale inventory in Marin County, and how that trend has been contributing to the low overall inventory this year. Thought we should update how things have gone since then. A few more came on in May and June but the trend has generally continued, with only twelve new short sale listings in Marin in October, which looks to be the lowest number in any month since the short sale explosion began back in 2007. Here’s a three year look at short sale inventory in Marin through October:
That’s good news in that it looks like fewer homeowners are feeling the need to sell their houses while underwater, but not as great news for buyers who are feeling frustrated by the lack of homes available to purchase. It feels like we’re at a crossroads of sorts, where a lot of the homeowners who needed to sell (even in a bad market) have largely done so, while those who might like to sell, but don’t have to, are seeing the market improve and are thinking they’ll get more for their homes if they wait a bit.
At some point we should see more inventory as more sellers will jump in as prices increase, but that may not happen until spring. And even then it’s hard to say if we’ll then see enough of an increase in listings to satisfy the strong demand for homes in Marin and get us back to a more balanced market. Below is a look at the same period for all residential listings.
Napa’s Oxbow Public Market
Wow, how cool is Oxbow Public Market in Napa! My dream would be to open up something like this in Marin…we have nothing like it. It’s an indoor marketplace with all kinds of super cool restaurants, butchers, cupcake makers, coffee houses, gifts, oysters, and cheeses from around the Bay Area. The atmosphere is awesome and the concept and food are amazing. Stop by here on the way up to wine tasting on the Silverado Trail in Napa. Very inspirational and another reason why we love living North of SF.
Oxbow Public Market. 610 & 644 First Street, Napa, California 94559
Paddleboarding and Kayaking at Sausalito’s Secret Beach
Looking for something fun to do and like the sound of getting out on the water? Head out to Schoonmaker Point in Sausalito (near the Bay Model) and rent a kayak or paddleboard from Sea Trek. Not experienced? That’s okay, you’re provided with a life vest and can stay in the protective cove. A little more daring? Head out of the cove and explore the Bay around Sausalito. You might run into sea otters or seals and beautifully colored jelly fish. You can also check out the boats along the docks and view the eclectic houseboats that line the waterfront.
On a warm day you can go in a bathing suit or shorts and t-shirt, while on colder days, as they are open all year round, throw on a windbreaker and sweats and hit the water. Don’t forget the sunscreen!
The paddleboards are pretty sturdy and you don’t have to fall in the water much, unless of course it’s hot and you just want to cool down. Balancing on the boards is a great core workout, and at an hourly rate you can’t go wrong. The ones that catch on quickly of course are the little kids, and you’ll see them zipping around the cove, sometimes with several of their friends sitting on the board with them. The kayaks can be rented hourly too and they are either singles or doubles, with an option of putting a fairly small child on your lap if they are not big paddlers. Also a great upper body workout!
You will be surprised at how many people go out there to enjoy the view. Whether you are renting or opt to just sit on the beach and read a book or play in the sand, this is a Sausalito must-do.
