Estate Planning and Financial Planning are essential in real estate
I had a number of declines from a seniors group who I included in the Blog mailing list. Too many came back with a "no interest, I'm going out in a box". Yes, that is true. Selling a home that is highly appreciated with a low property tax is quite foolish. Even if you need the money. A reverse mortgage will help for tight cash strapped home owners.
The greatest fault I can lay on the male spouse is they leave their partner holding a bag of assets without any knowledge or training in how to proceed and know the market for their most valuable asset, their home. The belief, "my children will take care of (her) him when I am gone", is a false assumption.
It is my hope and prayer for those who do have highly appreciated real estate they have a trust. Then when a partner and spouse pass away, the property has a step up in basis from cost to market value. It is essential for the surviving spouse to know the market beyond that of hear say and local papers and media. There is a general tendency of the media to over stress the positive and under stress the negative. Of course, who will buy newspapers with negative comments and subscribe to media with the same down in the mouth remarks.
It is also important for the surviving spouse is not taken. There is a real estate investor type that runs obituaries and calls the surviving spouse with the promise of paying all cash, as is and immediate close, no commission! 6 months later the house is on the market refurbished and remodeled for a substantially higher price. The children of the surviving spouse are not much better. They don't want to care for the parent and reach into their pockets when that real estate is there. In a snap Mom or Dad is in a nursing home and 14-24 months later an obituary.
If there is anything this blog will do is to be of interesting reading to the female spouse and hopefully the male spouse. Their knowledge of the market is up to date and current. So when the eventful day comes the surviving spouse knows the approximate value the need to update and the value achieved by the update.
Every day I look over the recent changes in the real estate market. The big change is lowering of list price. The small cuts have given way to 8,9,10,11 & 20% cuts, from Menlo Park to Palo Alto to Redwood City, Portola Valley and Woodside. These are not low priced areas either. It is not surprising either. California's virus cases jump, late payments of mortgages triple, Home-Mortgages delinquencies have reached their highest level since 2011. The once Booming San Francisco Apartment market had gone into reverse with a vacancy rate of 6.2% and s drop in rent of 9.2%. Rather than stay, the option of renters has been to move. The Exodus from the Bay Area is causing rental price drops all over the Bay Area, not just San Francisco.
It is worth being optimistic when the virus is dropping, but it is not. The economic toll will most likely take the biggest toll on the rental market as the service industry will have no income to cover rent, car payment and daily expenses. The only option for them is to move out of the area. Added to that are the work from home high tech people who look at open spaces with lower costs of living.
The Office market is no better off . The San Francisco Office Market has cooled and Startup are retrenching. That is occuring in New York city and any of the big city markets.
The Bay Area News states that the new home building target set for the Bay Area will double in the next decade. That is a great way to get the homeless off the streets. But, who will pay for that. Taxes on an already high tax rate state....more movers out to Nevada, Texas and no tax states.
So, buyers now is the time to begin looking in earnest. There are very few homes for sale. Those that are will be moving out of state or contractors caught with a home that at best they can break even. Homes for sale with plans approved for a new home indicate builder do not see a profit incentive. They are looking to break even and will give the buyer the approved plans
This is a time of price adjustment. Just as the stock market went up to historically high levels. This is a time of adjustment. Too much emotion and not enough fundamental reasons for prices.
Gary
The greatest fault I can lay on the male spouse is they leave their partner holding a bag of assets without any knowledge or training in how to proceed and know the market for their most valuable asset, their home. The belief, "my children will take care of (her) him when I am gone", is a false assumption.
It is my hope and prayer for those who do have highly appreciated real estate they have a trust. Then when a partner and spouse pass away, the property has a step up in basis from cost to market value. It is essential for the surviving spouse to know the market beyond that of hear say and local papers and media. There is a general tendency of the media to over stress the positive and under stress the negative. Of course, who will buy newspapers with negative comments and subscribe to media with the same down in the mouth remarks.
It is also important for the surviving spouse is not taken. There is a real estate investor type that runs obituaries and calls the surviving spouse with the promise of paying all cash, as is and immediate close, no commission! 6 months later the house is on the market refurbished and remodeled for a substantially higher price. The children of the surviving spouse are not much better. They don't want to care for the parent and reach into their pockets when that real estate is there. In a snap Mom or Dad is in a nursing home and 14-24 months later an obituary.
If there is anything this blog will do is to be of interesting reading to the female spouse and hopefully the male spouse. Their knowledge of the market is up to date and current. So when the eventful day comes the surviving spouse knows the approximate value the need to update and the value achieved by the update.
Every day I look over the recent changes in the real estate market. The big change is lowering of list price. The small cuts have given way to 8,9,10,11 & 20% cuts, from Menlo Park to Palo Alto to Redwood City, Portola Valley and Woodside. These are not low priced areas either. It is not surprising either. California's virus cases jump, late payments of mortgages triple, Home-Mortgages delinquencies have reached their highest level since 2011. The once Booming San Francisco Apartment market had gone into reverse with a vacancy rate of 6.2% and s drop in rent of 9.2%. Rather than stay, the option of renters has been to move. The Exodus from the Bay Area is causing rental price drops all over the Bay Area, not just San Francisco.
It is worth being optimistic when the virus is dropping, but it is not. The economic toll will most likely take the biggest toll on the rental market as the service industry will have no income to cover rent, car payment and daily expenses. The only option for them is to move out of the area. Added to that are the work from home high tech people who look at open spaces with lower costs of living.
The Office market is no better off . The San Francisco Office Market has cooled and Startup are retrenching. That is occuring in New York city and any of the big city markets.
The Bay Area News states that the new home building target set for the Bay Area will double in the next decade. That is a great way to get the homeless off the streets. But, who will pay for that. Taxes on an already high tax rate state....more movers out to Nevada, Texas and no tax states.
So, buyers now is the time to begin looking in earnest. There are very few homes for sale. Those that are will be moving out of state or contractors caught with a home that at best they can break even. Homes for sale with plans approved for a new home indicate builder do not see a profit incentive. They are looking to break even and will give the buyer the approved plans
This is a time of price adjustment. Just as the stock market went up to historically high levels. This is a time of adjustment. Too much emotion and not enough fundamental reasons for prices.
Gary
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