The sands of time are sliding down the hourglass quickly, and
time is running out for 2006. Are there new things in store for
real estate in 2007? You betcha. Experts are running about madly,
predicting more sales or less sales, flat prices, descending
prices, ascending prices, mortgage rates up and mortgage rates
down. No one knows for sure. Whoa, doggies! If we Realtors had that
magic ball, we’d all be rich and retired in some exotic coastal
resort sipping drinks with umbrellas.
The sands of time are sliding down the hourglass quickly, and time is running out for 2006. Are there new things in store for real estate in 2007? You betcha. Experts are running about madly, predicting more sales or less sales, flat prices, descending prices, ascending prices, mortgage rates up and mortgage rates down. No one knows for sure. Whoa, doggies! If we Realtors had that magic ball, we’d all be rich and retired in some exotic coastal resort sipping drinks with umbrellas.
But there are a few things we do know about 2007. First of all, the cost of financing a home remains out of reach for many households in California. The Office of Federal Housing Enterprise Oversight (OFHEO) sets the conforming loan limits. The maximum conforming loan for single-family mortgages in 2007 will remain at $417,000, unchanged from the 2006 level. The conforming loan limit determines the maximum size of a mortgage that Fannie Mae and Freddie Mac can buy or guarantee.
Home buyers in California are shortchanged because the median price of a home in California exceeds the national median by 79 percent, yet California is not recognized by OFHEO as a ‘high-cost’ state. Only Alaska, Hawaii, Guam and the U.S. Virgin Islands are recognized by OFHEO as ‘high-cost’ areas. California actually has the third highest home price in the nation, compared with Hawaii at seventh, and Alaska, which ranks 39th in terms of median home price.
Partly because of this, California has the second lowest rate of homeownership in the nation. This is because most buyers need what’s known as a non-conforming or jumbo loan. This will typically carry a higher mortgage interest rate than a conforming loan, increasing the monthly payment and making housing less affordable.
The second thing we know about 2007 is that AB 2962 changes the California real estate withholding law. Withholding is required on all transfers of real property unless either the total sales price does not exceed $100,000 (You can imagine how often that occurs in California!), the property is foreclosed upon (Guess they figure you can’t bleed a stone) the seller is a bank acting as a trustee other than a trustee of a deed of trust (Run that by me again?) or it is a primary residence or the seller has a zero gain. There are a few other exceptions: You can talk to your Realtor about them if you’d like.
The penalty for not withholding is either $500 or 10% of the required amount, whichever is larger. Usually your escrow officer will document and withhold, sending the payment to the Franchise Tax Board.
You can’t escape this even if there isn’t enough cash in the deal to make the payment. You’ll have to dig into your pocket for the total amount.
Hmmm. This column is turning out to be filled with bad news. Let’s look at the lighter side of real estate. I was in San Francisco this last week. While there, my husband Tim shared a story he was reading in the newspaper. It was about a professional football player who had a doghouse built to match his home. It was two stories, dual-zoned air conditioned, and…get this…it had a huge flat screen TV on the wall. I ask you, is that not excess carried to a vulgar level? I mean, I don’t have a flat screen TV on my wall. In fact, my walls need painting! Let’s get back to basics here. People cannot afford a home at all, and dogs have mansions. There’s something seriously wrong with this picture.
So I went online and searched under a lot of different things: lavish doghouse, spoiled dog, football dog mansion, etc. I couldn’t find the original story, but oh, my gosh! I had no idea the luxury dog house was a must-have for the rich and famous and the wannabes.
After exhausting the topic, my search honed in one new trends for human-house design. (I just made that word up.) It appears the look of our homes is moving from the traditional perfectionism (they obviously haven’t been in my home lately) to the look of comfort and serenity. As consumers, we are more aware of the global economy and it is reflected in our choice of home furnishings and decor. The focus is on homemade and crafted items rather than manufactured. The new standard for luxury is turning from opulence to craftsmanship and quality. The focus continues in the “less is more” mentality which we have been leaning towards in the past few years.
According to the International Home and Housewares Association, the color palettes are “melange” which is a mix of melon, orange and strawberry (I did NOT make up that word, I swear) back-filled with khaki and blues and “simply elegant” which is “unexpected blends of mahogany and silvered mink, silvery blues, elegant purples and deep bronzed tones set off by the glint of pale gold, frosty almond and copper.” (You know I didn’t make that up!)
However you finance your house or decorate your house or repair your house, you’re always be wise to talk to your local Realtor, your trusted advisor.
And be kind to your Realtor!
