A Lucky Property Tax Break for California Seniors

The Mercury News had a feature from a national news service in this weekend's Real Estate section. The cover story described an older Florida couple who wanted to downsize from the home that had become too large for them once their children were gone. Unfortunately, they discovered that by leaving their big house for a two bedroom home, their property taxes would more than triple. This couple decided to free some of their equity with a reverse mortgage, and stay in their too-large home. My sister and her husband, who also live in Florida, are in a similar situation. They would love to sell their house and move into a new development nearby, but are trapped by the possibility of a huge increase in property taxes.
Because of Proposition 13, and its outgrowths, Props. 60 and 90, California homeowners are not put in this position. If they are over 55, they can "move down" to a smaller, or less expensive home and retain their existing taxes. If they want to stay in their existing home, a reverse mortgage is still always a possibility.

Top Retirement Destinations

Because I have the SRES(Seniors Real Estate Specialist)designation, I often work with retirees. One of the frequent questions I am asked is what areas seniors should consider for retirement.
When it comes to the most popular retirement spots, you already know many of the usual warm-weather favorites. In fact, a recent Harris Poll confirmed that rural California, Florida, Hawaii, North Carolina, and Oregon are the most popular places where people aged 62-plus would choose to live. Realtors in those locations, and in Arizona, Nevada, and Washington State...destinations that many of my clients favor...should be prepared for an influx of retirees.
Last year, Bizjournals.com did a comprehensive report on the hottest retirement destinations and found some surprising results. Urban destinations making the top-ten list included Portland, Maine; Youngstown, Ohio; Pittsburgh, Pennsylvania; and Knoxville, Tennessee. Top small-town destinations included Gardnerville Ranchos, Nevada, Pahrump, Nevada, Del Rio, Texas, Brevard, North Carolina, and Ocean Pines, Maryland.

New Loan Ceiling for FHA in the Valley

When I first came into the business of Real Estate in 1972, most of the loans that secured our home sales were either FHA or VA. In fact, our first house in Sunnyvale was financed with an FHA loan...an Eichler that we bought for $26,000! But times have changed, and home values have grown exponentially. The FHA loans, with a cap of $362,790, were almost never used in Santa Clara County.
Now the U.S. Department of Urban Development has temporarily raised the maximum allowable loan amounts to $729,750 for expensive areas such as ours. Fannie Mae and Freddie Mac limits have also been raised, but the interest rates on those are still a full percentage point higher than those at the old conforming rate of $417,000.
Our in house lender, Princeton Capital, is already ready to handle these low down payment loans, but some mortgage brokers are rushing to learn the FHA guidelines.
Realtors will also have to include a couple of new forms with their offers, but all in all, this is a welcome addition to the local loan situation.

Is Now the Time to Refinance?

This morning's newspaper carried an article that said Fed Chairman Bernanke is pressing lenders to lower rates. As I drove back from the office today, I heard at least three offers to refinance home loans on my car radio.
If you missed your chance five years ago, this might be the time. The credit crunch had produced the lowest rates in years. A refi now should appeal to three groups: those who have scary interest-only or negative-amortization mortgages, those whose credit scores have improved since they took out their original loans, and those who have adjustable loans that recently (or will soon)reset.
If you have a loan of over $417,000, it would make sense to wait until the higher conforming rates kick in...sometime this spring. But if you can match the new, tighter guidelines... a credit score of 680 or better, at least 5 to 10% equity in the house, refinancing may make sense, especially if you can save a full percent on the interest rate and intend to stay in the house for five years or more.

Great Financial Websites

I like to share tips that I pick up from Newsweek Magazine, and this month, they list some really helpful websites that can help us all.
For Retirement Planning:
Taxadmin.org: Useful for planning retirement to a low tax state, or vacation in states with low (or no) state sales tax.
For Daily Spending:
Pfadvice.com: Shared money-saving tips on everyday expenses such as groceries, pets and gardens.
Retailmenot.com: Easy couponing, with discount codes for nearly every online and retail store.
For Mortgage Holders:
Hsh.com/usnrcalc.html: Should you refinance? Here is a really useful calculator for comparing the loan you have now and the one you're considering.

Sunnyvale Town Center...Redwood Square

Sand Hill Properties, the developer of the new Sunnyvale Downtown Development, is refining plans for Redwood Square, which will be the centerpiece of the plan. They are adding new lighting designs, a larger stage, and more lawn, sloping up to the five historic redwoods that serve as the focal point of the square, which covers nearly a full acre of land near South Murphy and McKinley Avenues.
Besides preserving the beautiful trees, Sand Hill has also saved 50,000 square feet of tiles and thousands of linear feet of redwood timbers from the old mall, and they hope to reuse these materials in the new Redwood Square.
Last week, I spent a wonderful lunch hour dining outdoors at Santana Row, enjoying the sunshine, the atmosphere and the people watching. I can't wait until I can do this in Sunnyvale's Redwood Square!

Naglee Park, a Small Town in a Big City

Yesterday, my clients and I met the property inspector at their new purchase, which they describe as a "turn of the century-eclectic." It's the architectural equivalent of a mixed breed dog that has more personality than one with a pedigree. The Naglee Park neighborhood in San Jose where it is located is like a small town in the Midwest instead of part of a major California city.
I was sitting on the front porch to get some sun...the house was very cold inside before the inspector turned on the heat...and while I was out there, several neighbors stopped by to meet the new owners, so I called for them to come outside, too. One man was walking his dog, another couple was pushing a baby carriage, and a third family was accompanying a little girl who was selling Girl Scout cookies. (My clients bought two boxes of thin mints.) The street in Palo Alto where my son Daniel lives with his family is very much like that, too. Block parties, get-togethers, etc. What a great place to live!