The San Francisco Peninsula Real Estate Blog

Tough Threshold

Various communities on the Peninsula have tried to get special parcel taxes passed to help prop up the dire financial situations of their respective school districts.   Some have been successful (San Carlos), while others have gone down to defeat (Redwood City.)   In every situation, achieving the required 2/3 “yes” votes has proved to be quite a challenge.  San Carlos had to hold a second election after the first try only yielded a 65% yes vote.

Lowering the Bar?

If a new bill that Senator Joe Simitian is pushing becomes law, the threshold for passing a parcel tax initiative to benefit schools would drop from 66.7% to 55%.  Here’s an article in today’s Daily Journal with more details:  Bill to Ease Tax Passage

This lower threshold would have meant the difference between success and failure for a number of parcel tax votes that happened this year.  Perhaps it will encourage these communities to go back to the well for another try?

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Tags: San Francisco Peninsula Schools

According to this article in the Daily Journal (my favorite local newspaper) it could happen.

Trader Joes moving to the Mall?

According to the article, the location in question is the old Tower/Good Guys building that’s adjacent to the mall and right next to Barnes and Noble.  If this happens, this will be a home-run for Trader Joes.  Great location, big building, and plenty of parking.   The latter two seem to be an ongoing challenge for many TJ stores, especially the one in San Carlos.

Should be interesting.  Love Trader Joes!

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Tags: Hillsdale Mall, Trader Joes

The Clock Begins Ticking Again…

The Washington Independent posted an alarming article this past week that states that Fannie Mae and Freddie Mac have quietly lifted the moratorium that was in place on foreclosures.   The agencies put this moratorium in place in late 2008 as a way to slow the potential tidal wave of  foreclosure filings,  and to allow the new Administration time to implement their economic recovery plan.   Here’s the complete article from the Washington Independent –> Fannie, Freddie Quietly Lift Moratorium on Foreclosures.

What does this mean for the Peninsula?

If this is indeed true, the clock begins ticking again for those homeowners in the pre-foreclosure phase.  In time, if these mortgages aren’t reworked to keep the owners in their homes, another wave of foreclosed and REO properties may hit parts of the Peninsula that was just recovering from the last wave.    Considering how tough the job market currently is, I think in this round you may see some foreclosures in areas you’d least expect.

For investors, this means there may be more bargains coming on the market later in the year when this wave flushes through.

Action is better than inaction…

If you are unfortunate enough to be a homeowner in a very tough situation, the worst thing to do is to do nothing… The sooner you get conversation started with your lender, the better the chance you’ll have of hammering out a deal to stay in your home.   With all of the pressure being applied on lending institutions to work out deals with borrowers who are in trouble, one would hope this would translate into some flexibility for troubled homeowners.

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Tags: Fannie Mae, Foreclosures, Freddie Mac

The San Mateo County Tax Assessor’s Office recently announced that it will review the assessed value on nearly 40,000 homes in San Mateo County.   That’s a lot of homes…  Considering the condition of the economy and the recent drop in home values on the Peninsula, this may spell good news to many homeowners in the form of a reduction in their property taxes.   So far, the County has reviewed nearly 9,000 cases and over half qualify for some sort of reduction.

While this will be welcome news for homeowners, the loss in property tax revenue will put a pinch on many Peninsula communities that rely heavily on property tax revenue to run their cities.  The impact is only starting to be fully understood, but clearly those communities that rely more heavily on property tax revenue will take the brunt.

The Daily Journal interviewed several City Managers to assess the impact of the property tax reductions on their respective communities.  It’s a good summary of how it impacts Burlingame, San Carlos, and other cities.  Here’s the article for your reference:

County and cities brace for tax reductions

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Tags: Property Tax, Re-Assessing Property Tax

In a move that is becoming commonplace in communities on the Peninsula, the City of Burlingame is considering parcel tax as a way to support its school system.  Burlingame already has a  $104 per year parcel tax in place that supports the Burlingame Elementary School District, but that tax expires in 2011.  And with continuing State budget cuts, the School District will need these funds to avoid dipping too deep into their cash reserves.

Burlingame isn’t the only city who will be asking voters for help this year.  San Carlos will be putting a $78 parcel tax on a special ballot in May, less than a year after a similar Measure was defeated.   Redwood City is looking at taking similar steps as well.

Here’s some additional information on the Burlingame proposal, courtesy of The Daily Journal:

Burlingame Considers Parcel Tax Renewal

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Tags: Burlingame School District, City of Burlingame

Proving once again that the government isn’t in business to give things away for free, President Barack Obama’s proposed budget has its sights set on one of the most ferociously protected tax shelters to recoup funds:  The mortgage interest tax deduction.   His proposal is aimed at reducing this deduction for America’s wealthiest familes, and will surely face vigorous opposition from homeowners and the real estate industry.

Here’s an excellent article that summarizes what’s at stake:

Mortgage Interest Deduction on the Slicing Block

There’s a significant percentage of households on the Peninsula who will be impacted by this change.  It’s definitely a discussion you should be having with your CPA or tax attorney….

Tags: Home Mortgages, Mortgage Interest Deduction

Need some ideas on remodeling?   How about some creative tips on redecorating your home?  Or, do you just need something to do outside before it starts raining again?    If you answered “yes” to any of these, then you may be interested in checking out the Peninsula Home and Garden Show, which is running this weekend only at the San Mateo Expo Center (aka San Mateo County Fairgrounds.)   For complete details, just click on the image above, and it will take you right to their website.

There was also a nice write-up in the San Mateo Daily Journal about this event.  It highlights how much of show’s focus will be how to do more with your home for less money — smart strategy in this economic environment.

If you go, have a great time!

Tags: Home & Garden Show, Home Improvement

There has been so much written and speculated about the Obama Administration’s Foreclosure Prevention Plan, that it’s hard to understand what it really means for homeowners.   This morning I found a really nice, concise summary in the lastest edition of Realtor Magazine which briefly touches on the key points.   This is such a good summary, that I have reproduced the article below in its entirety, or you can click the photo above for the online article:

What’s In the Foreclosure Prevention Plan

The Obama administration yesterday released its long-awaited plan to stem foreclosures. It’s organized into three categories:

1.) Help for home owners making their payments but at risk of default and foreclosure.

Home owners with a Fannie Mae or Freddie Mac loan would be eligible to refinance as long as their mortgage doesn’t exceed 105 percent of the home’s current market value. Currently owners need to have at least 20 percent equity. Potential impact: 4-5 million households.

2.) Help for home owners already in default and in need of loan modification.

For lenders that voluntarily agree to lower a borrower’s payment so that it makes up no more than 38 percent of the borrower’s income, the government would share the cost of lowering the mortgage burden to 31 percent of income. Incentives to lenders to participate include a $1,000 payment.

Borrowers can receive up to $1,000 as an incentive to stay current on their new mortgage. Still in the works is a proposed provision that would allow bankruptcy judges to require loan modification (known as a cramdown) as part of a household’s restructuring. That provision requires legislation by Congress. Estimated potential impact: 3-4 million households.

3.) Doubled resources to Fannie Mae and Freddie Mac.

To encourage investors to buy the secondary market companies’ mortgage-backed securities, the government explicitly backstops them to up to $400 billion, twice the current amount.

The plan does not provide help to investors or to home owners who are in trouble with a second home, nor does it apply to homeowners whose mortgage is part of a private-label mortgage security that is not backed by Fannie Mae or Freddie Mac.

“The administration’s proposed plan, combined with provisions like the $8,000 first-time home buyer tax credit in the just-enacted American Recovery and Reinvestment Act, will help minimize foreclosures, shrink housing inventory, stabilize home values, and move the country closer to an economic recovery,” says NAR President Charles McMillan.

Source: REALTOR® Magazine Online

The Message:

The message here is simple: Help is available to you in a variety of ways. If you’re a homeowner in one of the situations outlined  above, the worst thing you can do is to DO NOTHING.  The Administration is trying to keep as many people in their homes as possible, so take advantage of this and get the assistance you need.

Tags: Foreclosure Mitigation, Foreclosure Prevention Plan

There’s absolutely no doubt that the quality of the public school district is one of the top decision criteria for home buyers as they decide where they will ultimately live.  Parents want the best schools for their kids, and home-buyers want their investment to retain value.  Homes in the more desirable school districts fetch higher prices, almost as if they’re tracking the API scores of their respective schools — the higher the API scores, the higher the home prices.   The converse is true as well.

But should you buy a home solely on which school district it resides in?    As some Burlingame families found out this week, the answer is a resounding NO.   Just because you fall within the stated boundaries of a particular school, it does not mean you are guaranteed to get into that school.    Residents in certain San Carlos school boundaries found this out last year.   Clearly, in the case of Lincoln Elementary School, there were examples of inexplicable miscommunication on behalf the School District.  But at the end of the day, this is of no consolation to those parents who will have to enroll their children in other schools.

What can you do?

If you’re searching for a home, and the school district is of paramount concern to you, the best thing you can do is arm yourself with as much information as possible.   Here are three key things you can do to ensure you’re making the right decision:

1. Interview the School Principal.  Find out what the current enrollment is, and what the trends are (increasing or decreasing?)   What percentage of capacity is the school currently at?   When are they projected to be full?   What plans are there to increase capacity?   Meet with the Principal in person, if possible.
2. Understand the District’s policy on Impaction.   What happens when a school is impacted?   How does the District handle decisions on inter-district transfers?  Does having a sibling in the school give higher priority.   These decisions are almost always made at the District level, so get in touch with the respective district and understand their policy.   Call the superintendent if you need to.
3. How are the adjacent schools? It’s not uncommon on the  Peninsula to have a high-scoring school adjacent to under-achieving ones.   Check out the schools adjacent to the area you are searching in.   If you wouldn’t send your kids to any of those, then you’re taking a much bigger risk by buying into a single district.

The bottom line?  Do your homework.  Every school on the Peninsula has its own website, and every School District has one as well.   The contact information for the Superintendent, Principal, and School Board Members is readily accessible.     Be the one to initiate the contact, ask questions, and make yourself a pain-in-the-rear if need be.    Don’t put yourself in a situation where you will suddenly resent the biggest purchase that you’ll likely ever make.

There’s simply too much at stake….

Tags: Peninsula Schools, San Francisco Peninsula Real Estate