Monday, May 15, 2006

May 2006 Marin Real Estate Newsletter

Here is the link to view the entire May Real Estate Newsletter: May 2006 Marin Real Estate Newsletter


Marin Home Sales Statistics – Is there a bubble in Marin?
Mortgage rates return to four-year high
Internet Home Buyers versus Traditional Home Buyers
Realty Tax Tips
Should I fix up my home or just sell it?
What do Liz’s Clients Say?
Fast Facts

Marin Home Sales Statistics – Is there a bubble in Marin?

To view the chart of May Home Sales Stats: click here: May 2006 Marin Real Estate Stats

The overall Marin home sales market has cooled a bit from last month according to the following statistics.

These statistics show how many homes are available for sale in Marin, and of those how many are currently in contract (either pending or contingent). The average overall Marin market shows it is a Balanced Market, but just barely (as it is closer to a Buyers Market), as the % of homes in contract just hit 31%. (30% would be a buyers Market) It is very important to look at the specific category of house that fits your home or home that you’d like to either sell or purchase.

Homes priced under $500,000 (is there such a thing in Marin?) are in a “Buyers Market”; Homes priced from $500,000 to $1Million are in a “Sellers Market”; And homes over $1Million are all in a ”Buyers Market”.

Additionally, Belvedere, Fairfax, Kentfield, Ross, San Rafael, Sausalito and Tiburon are all in a “Buyers Market”; Corte Madera seems to be very hot currently and is in an “Extreme Sellers” market where 62% of all homes on the market are currently in contract.

I’m going to start tracking 2 new statistics: Days on Market (DOM) and price changes when sold. The first, DOM shows how many days homes are sitting on the market until they enter into a “Pending” status (meaning all contingencies are removed). Sold price changes as compared to the original list price based on DOM. Both of these stats will help better understand what is currently going on in the Marin Home Sale Market Place.

If you know of anyone who would like to receive this monthly newsletter or is thinking of either buying or selling a home please let me know. I’d love your referrals!

Mortgage rates return to four-year high

NEW YORK ( - Mortgage rates returned to four-year highs, after dipping slightly in the prior week, Freddie Mac said Thursday.

The average rate on 30-year fixed-rate mortgages floated up to 6.60 percent, for the week ending May 11, from the prior week's 6.58 percent. In the year-ago period, the 30-year mortgage rate averaged 5.71 percent.

The average rate hasn't been higher since June 2002, when it averaged 6.63 percent.

"While financial markets try to decipher the spate of recently released economic reports, mortgage rates drifted slightly higher," said Frank Nothaft, Freddie Mac vice president and chief economist. "The current debate is between rising inflation and slower consumer spending. Until the market finds out which influence will be the strongest, mortgage rates should continue to fluctuate as they have the last couple weeks.

The average rate on 15-year fixed-rate mortgages jumped to 6.20 percent from 6.17 percent last week. A year ago, that loan averaged 5.27 percent. Five-year adjustable-rate mortgages averaged 6.23 percent, up 0.01 from last week. The five-year ARM averaged 5.07 percent last year. The average one-year adjustable-rate mortgage remained at 5.62 percent. At this time last year, the one-year loan averaged 4.26 percent.

In spite of this week's stability, all rates are up for the year. For homeowners using adjustable rate mortgages (ARMs), a rise in interest rates can mean ballooning payments.

The Mortgage Bankers Association estimates that some $330 billion worth of ARMs will adjust in 2006 and $1 trillion worth will reset by the end of 2007. With a $200,000 loan adjusting upward from 4 percent to 6 percent, the monthly bill would increase to about $1,200, from $955.

Internet Home Buyers versus Traditional Home Buyers

Did you know that Liz McCarthy is ePro Internet Certified by the National Association of Realtors and that 70 percent of home buyers today use the internet in their home search? Why are you still working with a Realtor who isn’t a technology expert?

LOS ANGELES (May 18) – The Internet buyer has become the “typical” home buyer over the last few years, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ “2006 Internet Versus Traditional Buyer Survey,” released today. Since 2001, the share of home buyers using the Internet as an integral part of the home-buying process has nearly doubled to 70 percent. There are important distinctions between the two segments.

According to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) report, Internet buyers were younger, wealthier, better educated and more likely to be married than traditional buyers. Internet buyers also reported greater satisfaction with the home-buying process compared with traditional buyers.

“The Internet is changing the dynamics between buyers and their agents, as well as the way business is conducted throughout the real estate industry. However, while the Internet has become an important research tool for home buyers, it has only enhanced the REALTOR®’s role in the transaction,” said C.A.R. President Vince Malta. “Buyers continue to rely on their REALTOR® for help with interpreting the information gathered from the Internet and to guide them through the home-buying process.”

According to the survey, more than nine out of 10 Internet buyers indicated that the Internet helped them better understand the process of buying a home. Additionally, Internet buyers are accustomed to receiving more frequent communication and faster response times from their REALTORS®.

“More and more consumers have high-speed Internet access at home, enabling them to gather information on all types of products and services both quickly and easily,” said Malta. “This trend has carried over to the process of buying a home. As a result, home buyers are more informed, have a greater sense of control over the process, and hold high expectations concerning how quickly they receive information.”

Internet buyers and traditional buyers expressed significant differences in how they conducted their home-buying research. Internet buyers conducted more research at the onset of the home-buying process, while traditional buyers relied more on their agent as their source of information.

What this means to you:

Home Buyers: Liz is an expert in helping save you time by using the internet, email and other technology resources to help save your valuable time and money. She knows how busy you are!

Home Sellers: Liz will market your home extensively on the internet: a personal property website (see or for samples), she will post your home on over 50 websites, including Wall Street Journal, AOL, SF Chronicle,, and many other sites.

FREE…..You can search for Marin listings directly on Search for Homes

Realty Tax Tips
By: By Robert J. Bruss

It's difficult for most of us to get very excited about income taxes. But when it comes to earning up to $250,000 tax-free (up to $500,000 for a qualified married couple), have I got your attention yet?
EASY QUALIFICATIONS FOR THIS TAX BREAK. Of course I'm referring to the Internal Revenue Code 121 principal residence sale tax exemption. To qualify, you must have owned and occupied your primary home at least 24 of the 60 months before its sale.
Only one spouse's name need be on the title but each spouse can qualify for up to $250,000 ($500,000 total) tax-free profits if both meet the 24-month occupancy test and file a joint tax return in the year of sale.

The method of holding title doesn't matter even if title is held in a living trust. Of course, if two individuals not married to each other both hold title and each owns and occupies the principal residence at least 24 of the 60 months before its sale, then each co-owner qualifies for up to $250,000 tax-free capital gains.

Your 24-month principal residence occupancy need not be continuous. However, if you bought and occupied your primary home as recently as 24 months ago before selling it, you meet the 24 out of the last 60-month ownership and occupancy test.

Watch out if you acquired your home in an Internal Revenue Code 1031 tax-deferred exchange. The reason is for such home sales after October 22, 2004 you must have owned the property at least 60 months although you only need 24 months of principal residence occupancy during that time.

The property need not be your principal residence on the date of sale. For example, if you occupied your home for at least 24 months during the 60 months before sale, you could rent the house to tenants as long as 36 months before losing your entitlement.

Home sellers of any age can qualify. There is no need to buy a replacement principal residence. This generous tax break can be used over and over without limit. However, it cannot be used more frequently than once every 24 months.

WHERE IS YOUR PRINCIPAL RESIDENCE? If you own and personally use more than one home, such as a Florida winter home and a summer Michigan home, this tax break only applies when you sell your "main home" as the IRS calls it. Occupancy time alone doesn't determine your principal residence.

In addition to meeting the occupancy test, the IRS says principal residence indicators (when you own more than one home) include (1) place of employment; (2) principal place of abode for the taxpayer's family members; (3) address on taxpayer's federal and state tax returns; (4) location of taxpayer's banks; (5) location of automobile and driver's license registrations; and (6) civic affiliations, such as taxpayer's religious organizations and recreational clubs.

Read more in next month’s issue.
FREE…..You can search for Marin listings directly on Search for Homes

Should I fix up my home or just sell it?
By: Paul Bianchina

Making the decision to sell your home is always a tough one. There are financial and emotional decisions to make, and any number of factors that can tip the balance one way or the other. The emotional decisions are ones that only you can answer, but as to the financial side of things, there are some common sense questions that may make the decision a little easier.
What Is Your Home's Condition?

If you are faced with large home improvement repairs such as a new roof, dryrot repairs, or major plumbing or electrical system overhauls, you need to weigh that carefully. If your home has substantially appreciated in value over the years and the needed repairs would create a financial burden for you, it may be wise to consider selling – you'll have to ask a little less than you would if those repairs weren't necessary, but you may still make a sizeable profit on the sale.

On the other hand, perhaps the housing market is down, or you haven't had the house that long and your equity is not substantial. It may be wise to refinance or secure other funding, and make the repairs now before the situation worsens.

Can You Expand?
Quite often, the reason people want to move is because the house is simply too small to meet their current needs. If that's the case, and if you like the neighborhood and like the house in general, you might want to consider adding on.

Room additions can make a huge difference in the size, layout and livability of any home, provided they are done correctly. Take a good look at your needs, and what you have to do to meet them. Do you have the room to add onto the side or rear of the house? Can you add a second story? Are their city, county or homeowner's association restrictions that will limit your ability to expend sufficiently?

Remember that as much as you love a house and a neighborhood, and as much as you would like to stay in it, remodeling is not always the answer. No matter how good your contractor is, remodeling will not increase the size of a small lot, it won't add a wood shop in a neighborhood that doesn't allow them, and it probably won't be able to alleviate major flaws in room layout.
Beware Of Overbuilding

Suppose you are considering adding 500 square feet to your 1,000-square-foot home. If your entire neighborhood consists of 1,000-square-foot homes, you may be overbuilding for that neighborhood. For some people, overbuilding is a serious consideration, since part of the reason for the improvement is to make the house more valuable, and to hopefully see a return on your home improvement investment. For others who are primarily interested in creating a home that meets their needs and that have no plans to sell the house in the foreseeable future, overbuilding may be very much a secondary consideration.

Overbuilding is not limited to additions – it can apply to everything from upgraded roofing materials to kitchen remodels to extensive landscaping. You need to take the neighborhood into consideration, the general housing market, your future plans, and even your relationship with your neighbors.

Get That Homework Done
If the time seems to be drawing near for making the decision to move or improve, do your homework first. Look at what your neighborhood is doing, and what housing prices are. Talk with a trusted real estate agent, and consider an independent market appraisal of your home. Consider paying a general contractor a consultation fee to discuss your home's general condition, and the cost of potential improvements. And be sure you don't ignore municipal and homeowner's association requirements and restrictions as part of your fact-finding.

What do Liz’s Clients Say?
"We are a young couple and had been living on a sailboat with a toddler - we desperately needed space. We wanted to buy a small house in Marin and it needed to have the impossible: water boat dock for our 44’ sailboat! Liz found the perfect house and suggested we waste no time in seeing this new listing. We had an excepted offer within 3 days! Liz was there for us every step of the way. Thank you Liz!” -Leila & Brock Wells

If you would like to have Liz help you sell your Marin home or help you in finding a home, just send her an email:

Fast Facts

Calif. median home price - Feb 06: $ 535,470 (Source: C.A.R.)
Calif. highest median home price by C.A.R. region Feb 06: Santa Barbara So. Coast $1,160,000 (Source: C.A.R.)
Calif. lowest median home price by C.A.R. region Feb 06: High Desert $ 328,690 (Source: C.A.R.)

Mortgage rates - week ending 5/18/06: (Source: Freddie Mac)
· 30-yr. fixed: 6.6%; Fees/points: 0.5%
· 15-yr. fixed: 6.2%; Fees/points: 0.5%

FREE…..You can search for Marin listings directly on Search for Homes

If you are thinking of selling your home, I would be more than happy to give you a free home evaluation. I also create property specific websites for all of my listings: visit: for an example

Be sure to check out all the other great content & features of my website:

View the newsletter archives

The Bay Area Real Estate Newsletter is provided to you by:

Liz McCarthy
Real Estate Broker, e-PRO certified
415-250-4929 (cell)