It is a good time to buy? You bet it is. With interest rates at or below 4%, prices at record lows in the area, I believe there has been no better time in the last 10 years. If you are able to leverage your dollars into real estate: ie: put 30% down and buy a house for $250,000 “ then in 10 years you will most likely be sitting with a house almost paid off (if you chose a 15yr. loan and with interest rates below 4% – why wouldn™t you?) and even if it only appreciated 20% you™d be sitting pretty for retirement. Now that is a sound investment.

The stock market has the volatility of a feral cat. It might look sweet when things are good but just when you think it™s going to like you and you get too close, it tries to scratch your eyes out!

Real Estate, on the other hand,  allows you to get in without putting your full investment at risk “ ie: leverage. And then there are the tax breaks,   the tangibility, the satisfaction in knowing you own a piece of dirt and not a piece of paper. I tend to like that idea.

There is a new ordinance in Santa Cruz County that is going to require a basic permit for a Vacation Rental (VR).

A VR is a single-family dwelling unit, duplex, or triplex (including condominium and townhouse units), rented for the purpose of overnight lodging for a period of not more than thirty days.

 The minimum requirements for each Vacation Rental are:

          1. A VR permit

          2. Transient Occupancy Tax registrations.

There are some rules applicable to all VR™s.

1. Maximum Occupancy.
2. Local Contact Person.
3. Signs identifying the structure as a permitted vacation rental and listing a 24-hour local contact person responsible for responding to complaints and providing general information.
4. Posting of Rules.
5. Noise.
6. Transient Occupancy Tax.
7. No legalization of a non-permitted structure.

 If you are in the Live Oak district there are an additional set of rules that you should be aware of.  

I have been very brief outlining the basics of the ordinance. If you would like more information concerning this ordinance please contact me and I will send you more information.

I read an article lately talking about little things you can do to add value to your home which may help with the selling price. The article was written from a review of New York brokers talking about Manhattan Apartments. Not exactly our kind of real estate here in the Santa Cruz area, but I think the results are still valid and thought I™d share them with you.

 WHAT CAN DECREASE A PROPERTY™S VALUE

·                 Chipped plaster or broken bathroom tiles: Knock $500 to $5,000 off an offer

·                 Dirty rugs: Subtract $5,000

·                 Clutter: Subtract 5 to 15 percent from sales price

WHAT CAN INCREASE A PROPERTY™S VALUE

·                 Fresh towels and throw pillows (estimated cost: $700): Add $25,000 to sales price

·                 New lights (cost: $2,000 replacing lighting fixtures and $250 for a professional lighting designers expertise): Add $32,500

·                 Professional paint job (estimated cost: $10,000): Add $50,000 to the sales price

·                 Replacing cabinets (estimated cost: $20,000 on new kitchen cabinets and paint): Add $107,000

Taken from the article œTo Sell an Apartment, No Detail Is Too Small,

The values may differ a bit in our market, but I know from experience that a few throw pillows with color can make a white couch sitting on white carpet look a whole lot more¦well, inviting. A person looking to buy will linger in a more inviting house a long longer.   The more time spent in a house, the more likely it will sell.

There are many benefits of owning a home, but some of the financial advantages happen during tax time. A number of tax deductions are still available for home owners. These deductions are for mortage interest and capital gains on homes sales and certain credits  for certain energy-efficient home improvements.    Check with your accountant for specific information.

There have been recent proposals to reduce or eliminate the mortage interest deduction and remove government support of the housing finance market but the debate goes on. This could have a disastrous effect for the enonomy and for families who own their own home.

Santa Cruz County first time home buyers have hit on a perfect storm. If you are earning a living. but not rich, work in Santa Cruz area, have not owned a home in the last 3 years, you might qualify for a 25% down payment, in the form of a silent second mortgage, from the county of Santa Cruz. Yes, that’s right, they will put 25% of the purchase price down on your home to help you buy it!

There are hoops to jump through and conditions to meet and restictions put on the you and the house, but it’s a deal worth considering if you are looking to buy a home to live in for the next 10 years or so and are not looking for an invesment opportunity.

 For more information contact me  or check out the county web site.

Check out this new Single-family property that I just posted on my Web site. It is at 245 St. Francis Drive in Boulder Creek. This Single-family property has 3 bedrooms and 1 baths. This cute house has all the right moves. Just in need of an owner to bestow a little love on it. .

Talk of gradually phasing out government supported Fannie Mae and Freddie Mac, the two institutions that buy and have bought 90% of all mortgages in this country, is causing quite an uproar “ from both sides of the argument.

The time frame for phasing out Fannie and Freddie is planned for over a five to seven year span, according to Treasury Secretary Timothy F. Geithner. He outlined the three options as:   1) scaling back the government’s role but continuing a limited government guarantee mechanism for mortgages; 2) a greater pullback that would have the government step in with guarantees largely only during a recession, providing an “emergency backstop” to mortgages to keep the housing market from collapsing; and 3) limiting the government role in the market only to support for low-income buyers through the Federal Housing Administration.

Some say this has to happen in order to get government out of the mortgage industry and back into the hands of private lending.

Others say that if government is not in the game, then interest rates will rise significantly and as well as down payment requirements, making it more difficult to purchase a home.

Right now FHA (federal housing administration) insured loan are available for 3.5% down with an interest rate near 5% for 30 years, with a loan limit up to $729,750.   Talk is in the works to up that down payment percentage to 10% and decrease the loan limit down to $625,500 as of September 30, 2011.

With interest rates already rising (over 5% on average), but still relatively low, and the uncertainty of the future of lending requirements, many would-be buyers are feeling the urgency to act sooner rather than later.   The market for first time buyers entering the marketplace, and investors looking to take advantage of the decreased values and increased inventory of housing, is the best it™s been in California for years.

“If you’re thinking of buying a house, you’re probably better off buying in this reasonably certain lending environment than in the rather uncertain environment that’s coming,” said Keith Gumbinger of HSH Associates. http://www.hsh.com/abouthsh.html

If this is illegible, change your browser, for some reason Firefox can't read this blog. this blog.

Changes in the median price is one of the first indicators looked at to determine the health of the housing market. The Median price change of single family homes from 2009 to 2010 showed a small rise; the first in the last three years. Our area, like all areas, is unique and does not necessarily follow the trend of the rest of the country as whole - not even the rest of the state. Short sales and REO's are still dominating our market and holding prices down. However, we are seeing more and more buyers climbing down off their fences and using their strong buying power to take advantage of some of the lowest prices we have seen in our area in fove or more years.

Any questions or comments please email bettsy@bettsytyler.com

Mr. and Mrs. œWorrisome Wander into Good Fortune

(ficticious names but a real possibility)  

Wallace and Wanda Worrisome have been pondering the idea of buying some investment property. They know property values in the beautiful seaside community of Hot Bods and Beaches, has never been lower than they are now. They also know that they could qualify for a very low interest loan. They have learned from past generations of œWorrisomes that real estate as an investment can create a nice, cozy nest egg for them in their retirement years. But they are worriers, none the less, so therefore they worry; will the economy continue on it™s dismal path? Would they be better off keeping their cash   in the Bank of Nothingness? Is it too hard to be a landlords dealing with tenants that may turn out to be drug dealing creepers? This all provides great fodder for worry.

While visiting their favorite seaside town they come across a œFor Sale sign in front of a cute little bungalow. Perfect location, should they ever want to downsize and move to the beach. The bungalow has a small yard, requiring little care, and an adorable front porch for people or sunset watching. Their worries start to take a back seat to their dreams.  

They decide to check a little further into this dream of theirs and they call their favorite REALTORS, Bettsy and Linda.   They learn that the house is priced at $500,000. It™s a two bedroom one bath but it also has a second 1 bedroom unit in the back that rents for $1200/month. They figure they could rent the front house for an additional $1600/month for a total of $2800/month in rent! Sweet! Okay, now, what will it cost them, they worry, if they were to use $100,000 as a down payment and take out a loan for $400,000. They cleverly go to the TylerandDarrigo.com website and click on the œMortgage Info button. There they easily calculate their mortgage payment and learn that including property taxes and insurance their total monthly payment is going to be $2706.00 permonth!! Wow! They now are overjoyed that maybe it won™t be so scary to buy this bungalow as a rental. Again their worries are overshadowed by their dreams of owing some investment property at a time when prices are so attractive.  

Bettsy and Linda advised them to speak with a lender and perhaps their tax adviser as well, to help confirm their numbers and solidify their decision. Wallace and Wanda appreciate this sound advice knowing that it will help to have additional professional advice as they continue their process, knowing that the worries will again rise up as they pursue their new venture.  

After giving all this some serious thought and a sufficient dose of worrying, the Worrisomes become the proud owners of the cute bungalow in their favorite seaside town. Five years later they have paid down their loan and are collecting a handsome monthly rental income from wonderful tenants. Five more years to retirement and their bungalow is well on it™s way to a higher value than they bought at and the fears of bad tenants has proved to be for nothing.  

It just goes to show that even though we might be scared to make the move, the leap of faith may not be over a cliff, but into the arms of prosperity. May you all live well and prosper.

Lately it seems that the talk is all about “getting the best deal out there.” And the type of agents that have been joining the ranks – though few – are more about getting a piece of the REO market and turning as many properties as possible with as little contact with clients as possible. That’s not what I signed up for.

For me, it’s all about getting to know the buyer or seller. I find that the better I know my clients, the better I can guide them to the right house to buy or the right buyer to sell to. This sometimes requires telling people what they don’t want to hear, but what they will benefit from hearing – what they need to hear. If I think you are pricing your house too high, I’ll tell you the pitfalls that await you. If I think you don’t really want to buy the house that’s a “good deal”, I’ll guide you through ALL investigations and find out all the underlying truths, before you allow yourself to close escrow.

These kind of things are what I like to do. I like to see people satisfied when we close a transaction. I don’t see a carrot of money at the end of that stick – I see a satisfied client who will come back to me again or refer a friend when real estate topics arise.

The market of real estate changes with the wind – which makes it dynamic and exciting – but the wind is a little squirrly these days. I look forward to the winds of change.