This Week in Real Estate 1-30-2015

The value of trust(s)

This week I am going to start my newsletter with the tip of the week because I want to make sure you all are aware of this VERY IMPORTANT vehicle.

In the past year, I have helped 4 families that would have greatly benefited if their loved ones formed a living trust.

Why form a living trust? From the California Bar Association: A living trust “is a written legal document that partially substitutes for a will. With a living trust, your assets (your home, bank accounts and stocks, for example) are put into the trust, administered for your benefit during your lifetime, and then transferred to your beneficiaries when you die.”

Living Trusts may help you in 5 significant ways:

1.      Avoid long and costly probate.

2.      Provide clear directive should you become incapacitated physically or mentally.

3.      Avoid, delay or reduce taxes

4.      Privacy

5.      Protection against creditors

If you own a home you should have a Trust. Transference of real property probate is required even if you have a last will and testament. Cost of probate can be as little as $2,000 but can also be over $100,000 depending on the estate. Probate also takes weeks if not months to resolve.

My trust attorney is Jonathan Hollister. If you have any questions about your estate plan or how a living trust might benefit you, please feel free to call him at 225-2264 or email hollisterjon@aol.com  to arrange a free consultation.

Hot news of the week.

On Wednesday, the Federal Reserve said that they did not see the need to raise rate for the foreseeable future, which means June at the earliest. We oil prices down and inflation in check, the growth of the economy can be supported by lower interest rates.

This will likely keep interest rates very low. In many cases we are seeing mortgage rates below 3.75% again for 30 year FIXED mortgages and below 3% on most 15 year fixed or 7/1 ARMs.

The Fed’s full press release is here.

http://www.federalreserve.gov/newsevents/press/monetary/20150128a.htm

-Kris

This Week in Real Estate 1-23-2015 - Net zero homes

Net Zero homes have nothing to do with the internet.

Net-zero homes are going mainstream, if the home-building industry has anything to do with it. The definition of a Net Zero home is one that generates more electricity in a year than they use.

In California, we are seeing building standards rise to a level of efficiency that the number of solar panels needed to offset the electricity costs is reducing dramatically.

In 2015 the DOE (department of energy) is requiring that all AC units have a SEER rating (Seasonal Energy Efficiency Ratio) of at least 14. In addition they are requiring more energy efficient standard for all water heaters beginning in April.

Some new home builders, motivated by what they deem as rising demand from home buyers and state and local regulators, are aiming to change those perceptions by designing such homes for the mass market. Achieving net-zero status typically requires builders to install spray-on foam insulation to seal the house of leaks and adding energy-efficient doors, windows, appliances and LED lighting, among numerous other features. Net-zero homes also need high-performance heating and ventilation systems and other equipment to regulate humidity, air quality and air flow.

There are many options to look at to increase the efficiency of your home.

-Kris

Tip of the Week

Looking to improve the efficiencies of your home?

The biggest energy users in the house are in order:

-          Electric Heater/AC

-          Electric Water Heaters

-          Refrigerator

The least expensive way to increase the efficiency of your heating/AC is to increase your insulation. The cost of installing more insulation in your attic can pay back in 2-4 years as well.

Replacing a 10 year old electric water heater with a new gas version could have a payback in as little as 2.5 years for a family of 4.

We can all do a little to help make the world a little more green while keeping a little green in our wallet.

-Kris

This Week in Real Estate - 1-16-2015 2014 Year in Review

2014 Year in Review

2014 was another great year for real estate.

In Napa County, we are returning to more normal conditions.

We saw inventory levels fall significantly total units sold was down 15% from 2013, but with the reduced supply and demand still high we saw another year of double digit increase in the median price. It is important to note that the prices are growing at a much slower pace which is healthy for the market.

-Kris

Tip of the Week

PLEASE ASK YOUR tax professional about these and any other potential deductions you might have. These statements below apply to MOST but not ALL people. The current tax code is over 73,000 pages long, I don’t think a single person has read the entire thing.

In the PMI (Private Mortgage Insurance) is deductible for most home owners. This applies to all FHA buyers and most other buyers who put down less than 20% when purchasing their home.

The Mortgage Interest Deduction limit was not altered so loans up to $1,000,000 are still eligible.

Energy Efficiency Home Improvement Tax Credit has been extended. If you make improvements to your home, like adding insulation, you can get up to a $500 credit.

Estate Taxes have been limited to estates with more than $5,000,000 in assets.

With the record low interest rates I know that some of you refinanced. Portions of that refi cost can also be deducted such as Points paid.

And as always the property taxes can be deducted, be careful you cannot deduct the entire tax bill. Make sure you are doing this part correctly since the government is looking at this one more closely.

If you need a great tax preparer, please give me a call.

Thanks

-Kris

This Week in Real Estate 1-9-2015 - Lower interest rates on low oil prices

Oil Plunges, Lower Interest Rate … Even LOWER Mortgage Insurance

This week has had a lot of unrest in the financial markets and it is mostly because of Oil. We love our cheap gas prices, but what it is bigger meaning.

Oil is now at less than $50 a barrel and in the summer it was over $100 a barrel. This is a 50% drop in just 6 months and the pressure on the pricing is to continue lower. Why this happening is a classic study in supply and demand.

When Oil prices were high, over $100 a barrel, the relatively expensive way of getting oil Fracking, was implemented for the first time on a very large scale in the US. Now the US is producing nearly as much oil as the Middle East. In order to deter investment in more fracking operations, the Saudi Arabian producers have increased production flooding the global market to discourage more competition.

Oil demand is unlikely to soak up the excess supply anytime soon, with Europe’s economy is stalled, Japan picking up the pieces from its recent sales tax hike and China still trying to control its runaway housing and fixed-asset investment bubbles without pricking its bad debt problem. And our economy while growing is doing so very slowly. The threat of a global slowdown is very real.

So this week interest rates hit their 52 week low, which is great news from the stand point of buyers and sellers. Cheap money will keep housing in demand and prices higher.

In addition, yesterday President Obama announced that the Mortgage Insurance on FHA loans will be reduced by 50 basis points (1/2 percent). This move will help thousands of first time home buyers and home buyers that have had a short sale or foreclosure in the last 5 years.

So get off that fence and get shopping.

-Kris

Tip of the Week

When to refinance?  Have you purchased or refinanced your home in the past 12-18 months? Interest rates have been declining since July of 2013. It might be time to think about refinancing.

·         How long do you plan on staying in the home?

·         How much will you be saving?

·         How long is the payback (saving = cost to refinance)?

·         Have you built up enough equity to remove some Mortgage Insurance?

·         Can you reduce the term of your loan?

If you are interested to find out whether or not now is the time to refinance please contact.

Cheris Hallman, HomeStreet Bank

707.333.4900

Cheris.hallman@homestreet.com