News From the Trenches   Trends, Laws, Taxation

Fast Facts by C.A.R. Fast Facts - C.A.R. Newsline Reprinted with permission of the CALIFORNIA ASSOCIATION OF REALTORS®

Released  April 30, 2008 Calif. median home price -  March 08: $413,980 (Source: C.A.R.) Calif. highest median home price by C.A.R. region March 08: Santa Barbara So. Coast $1,140,000(Source: C.A.R.) Calif. lowest median home price by C.A.R. region March 08: High Desert $210,660 (Source: C.A.R.) Calif. First-time Buyer Affordability Index - Fourth Quarter 07:  33 percent (Source: C.A.R.) Mortgage rates - week ending 4/24/08: 30-yr. fixed: 6.03%; Fees/points: 0.3% 15-yr. fixed: 5.62%; Fees/points: 0.3% 1-yr. adjustable: 5.29%; Fees/points: 0.5% (Source: Freddie Mac) Compare the present release above with the prior release below to see where the market is heading. Released  April 23, 2008 Calif. median home price -  February 08: $409,240 (Source: C.A.R.) Calif. highest median home price by C.A.R. region February 08: Santa Barbara So. Coast $1,295,000(Source: C.A.R.) Calif. lowest median home price by C.A.R. region February 08: High Desert $220,380 (Source: C.A.R.) Calif. First-time Buyer Affordability Index - Fourth Quarter 07:  33 percent (Source: C.A.R.) Mortgage rates - week ending 4/17/08: 30-yr. fixed: 5.88%; Fees/points: 0.4% 15-yr. fixed: 5.40%; Fees/points: 0.5% 1-yr. adjustable: 5.10%; Fees/points: 0.6% (Source: Freddie Mac)

NEW HOTLINE FOR HOMEOWNERS FACING FORECLOSURE The HOPE Homeowner's hotline is being managed by the Homeownership Preservation Foundation, and provides free, independent, bilingual, HUD approved counseling and advice 24 hours a day for homeowners who have questions about their mortgage loans, and may be in danger of losing their homes. The HOPE NOW Alliance was organized at the urging of Treasury Secretary Henry Paulson and members from the U.S. Dept. Housing and Urban Development (HUD) in November, and consists of consumer credit counseling organizations, mortgage service providers, lenders, investor groups, and 10 trade associations serving the housing industry, including NeighborWorks America. More info

Meet Roy Beck Immigration by Number Click image to view video Read what others say about him, then click the image above to watch this very enlightening video. "All sides can learn from Roy Beck" — Business Week "Roy Beck's gentle tone, sympathetic to native Americans and immigrants alike, is a welcome contrast to the strident approach taken by most commentators on both sides of the immigration issue"  — Norman Matloff, professor of computer science, University of California, Davis "Raises the moral and analytical level of the immigration debate" — Herman E. Daly, ecological economist Visit Roy Beck's web site: http://www.numbersusa.com

Over The Fence Newsletter  May 2008 Contents: May Dates:  11th is Mother's Day 17th is Armed Forces Day 26th is Memorial Day May is Deck Safety Month. Is Your Deck Safe? Save Money and Improve Air Quality with HVAC Cleaning Thinking of Hiring a Contractor? First Class Postage Goes up to 42 cents May 12, 2008 Celebrate Memorial Day and Kickoff the Barbecue Season Recipe: Garlic Marinated Steaks May 2008 View online or print a copy and take it along to read when waiting.  Prior Issues: April 2008  March 2008  February 2008  January 2008 December 2007 November 2007 October 2007 September 2007 August 2007 July 2007 June 2007 May 2007

Special Brochure Making Sense of the Mortgage Forgiveness Debt Relief Act  Click to View and/or Print Brochure

Did You Know... Facts and statistics to help keep you up to date on the market. • Homeownership is strongly related to age and socioeconomic status. The average age of first-time home buyers is 32, according to the National Survey of Families and Households (NSFH). Thirty percent of homeowners are under 31 years of age. Ownership peaks at 76.7 percent among those age 61 to 70, and then declines slightly to 68.5 percent for age 71 and older. • Owners say they are happier and have higher self-esteem than renters, according to the NSFH. • 86 percent of a national sample of Americans believe that people are better off owning than renting, according to the Fannie Mae National Housing Survey.

Welcome page Contact Joanne FIRPTA Law in CA Mold Q & A Property Tax Exemptions Property Tax Savings HVAC Duct Law Capital Gains on Residences Services Testimonials Featured Listings Rentals Buying Selling Your Credit and Finance Home Improvements Senior Services Mobile Home Living Coffee Break  Cyber Kitchen  Bay Area Interests  You and California Earthquakes Real Estate Glossary Hayward Power Plant Restoring the Wetlands Proposition 8 Decline in Value

Introducing A.R.M. Homes Upscale manufactured homes are now available to San Francisco Bay Area residents. The quality, design, and amenities usually reserved for luxury residential homes are attracting conventional home buyers to these semi-custom manufactured dream homes. Best of all, prices are a fraction of conventional homes.  The dealer will take trade-ins, too.

Need a break? Coffee Break Cyber Kitchen

Noteworthy Items that can keep you out of a heap of trouble You and California Tax Exemptions:  Here they are. Capital Gains on Residential Sales Proposition 90 a tax break for California homeowners age 55 and older. FIRPTA Withholding Tax affects the sale of investment property in California. Mold  What you need to know. Earthquake Preparedness Become a better prepared resident. Architectural Styles for Houses  Moving help  Tap the FREE services offered  by the National Association of Realtors®.  Home Improvements  Resources, life expectancies, etc.

Commonly known as the Beige Book, this report is published eight times per year. Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources. The Beige Book summarizes this information by District and sector. An overall summary of the twelve district reports is prepared by a designated Federal Reserve Bank on a rotating basis. U.S. Census Monthly Economic Indicators

Housing Statistics The Bay East Housing Reports are based in whole or in part on data supplied by the Bay East Association of REALTOR®S® or its Multiple Listing Service (MLS). Bay East MLS numbers reflect sales of homes located in Alameda, Castro Valley, Dublin, Fremont, Hayward, Livermore, Newark, Pleasanton, San Leandro, San Lorenzo, and Union City by members of any REALTOR®® association, not just members of Bay East. Housing Statistics

Richard's for "The Good Goods" Waterford, Howard Miller, and many other quality lines. Most items in Richard's online store can be purchased individually  Take a Look Richard has a new apparel site featuring quality items for men, women, and youths at discount prices. All items can be purchased individually.  Browse Richard's  Apparel Site

Latest Real Estate News Unless otherwise stated articles appearing in this section are from the C.A.R. Newsline Reprinted with permission of the CALIFORNIA ASSOCIATION OF REALTORS®

Do your homework before getting a reverse mortgage May 1, 2008 - While thousands of people are losing their homes to foreclosure, others are using their homes as a last resort, borrowing against the equity in their home - without making payments on the loan. Fewer people are getting reverse mortgages now because of the drop in home values, but many people who qualify (you must be at least 62) are sitting on a pile of equity. One final word of caution - even with the required counseling seniors are still getting duped into reverse mortgages that are not in their best interest. So be sure to ask questions, check facts and figures and contact the American Association of Retired Persons for tips that can help.  Click here to read the story or watch the video  Related information: How to Use a Reverse Mortgage - TheStreet.com On the Web: http://www.aarp.org/money/revmort/

FED LOWERS KEY INTEREST RATE 0.25 PERCENT April 30, 2008 - The Federal Reserve lowered its key interest rate by one-quarter percent today, pushing the federal funds rate down to 2 percent, its lowest level since 2004, in an effort to ease economic pressure coming from higher food and energy costs, a weakened dollar, and the ongoing housing slowdown and credit liquidity crunch. "Recent information indicates that economic activity remains weak," the Fed said in announcing the cut. "Household and business spending has been subdued and labor markets have softened further. Financial markets remain under considerable stress, and tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters." More info

C.A.R. REPORTS SALES DECREASED 24.5 PERCENT, MEDIAN HOME PRICE FELL 29 PERCENT IN MARCH April 30, 2008 - Home sales decreased 24.5 percent in March in California compared with the same period a year ago, while the median price of an existing home fell 29 percent, C.A.R. reported Friday. "Sales continue to be impacted by problems in the real estate finance sector, which by some measures have eroded since the start of the year," said C.A.R. President William E. Brown. Closed escrow sales of existing, single-family detached homes in California totaled 318,830 in March at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity decreased 24.5 percent from the revised 422,300 sales pace recorded in March 2007. More info

U.S. economy: Sales of existing homes fell in March April 24, 2008 - The national housing downturn continued in March as single-family home sales fell 2 percent in March – the seventh decline in the past eight months, the NATIONAL ASSOCIATION of REALTORS® (NAR) reported Tuesday. The NAR said the median price of a home fell from $217,400 a year ago to $200,700 this March, a 7.7 percent decline. The inventory of homes for sale increased by 40,000 units to 4.06 million homes. At the March rate of sales, it would take 9.9 months to deplete the inventory, up from 9.6 months in February. Keep this in mind… • The March results were in line with a Bloomberg survey of 72 economists, who projected a 2.3 percent decline in sales. Experts say buyers will likely stay on the sidelines until foreclosures, which are seen as driving prices down, level off. Since sales and price data lag a month or more, it is difficult to project when prices will level off and begin to rise. • The Midwest and South suffered the largest sales declines during March, falling 6.5 percent and 3.5 percent, respectively. However, the West (which includes California) and Northeast regions both experienced a 2.2 percent increase in sales. • Availability of credit is seen as a major barrier to improved home sales. On Tuesday, Bank of America reported it will limit the number of low-documentation loans it issues and further restrict credit to some borrowers after it reserved more than $6 billion to cover mortgage loan losses.

Home prices drop most in areas with long commute April 24, 2008 - Urban real estate markets featuring short commutes are faring better than those suburban neighborhoods where homeowners must drive a significant distance to work. It seems that the longer the commute, the greater the drop in existing home prices. Keep this in mind… • With gas prices skyrocketing, more buyers are taking driving distance and the time they spent commuting into consideration when they look for a home. Some who bought homes in distant suburbs during the real estate boom because that’s where they could afford to buy underestimated the cost of commuting and are suffering both a decline in their home value and a more expensive daily commute. • Builders are shifting gears and building closer to metro areas, where empty-nesters and younger singles are more likely to buy. This has created a renaissance in many downtown communities. With the percentage of couples with children declining, the trend toward suburban living is expected by some to continue to moderate even after the housing market recovers.  Hear The Full Story

Bargain hunters boost home sales in some markets With prices falling in many parts of the country and the number of foreclosures rising, a small yet growing number of bargain-hunting buyers are seeing an upside to the real estate market. Keep this in mind… • First-time homebuyers priced out of the market during the frenzied 2001-2005 market are among those most attracted to real estate today. In November 2007, 39 percent of buyers were first-timers, up from 36 percent in 2006, according to NAR. The key impediment to buying? Meeting tighter bank qualifying criteria. • International buyers increasingly are looking at opportunities in the U.S. real estate market. Declines in the value of the dollar against other currencies and lower prices translate into a discount of up to 30 percent for some foreign buyers. • Investors from other states also are seeking bargains in those markets hardest hit by the real estate downturn. Some are even buying properties sight-unseen for conversion to rentals until the market heats up again – a risky proposition, according to some observers. Click here to read the full story

Lenders derail plan to let bankruptcy judges modify mortgages The Mortgage Bankers Assn. says the measure would raise interest rates, but critics contend this claim is based on faulty data A congressional proposal to help struggling homeowners stave off foreclosure by permitting bankruptcy judges to modify mortgages is losing momentum and may not be voted on this year thanks to efforts by critics who claim it would do more harm than good. Keep this in mind… • The Mortgage Bankers Association, which opposes the legislation, says the proposed measure would increase the cost of all new mortgages by 2 percent, raising the monthly payment on a $300,000, 30-year, fixed-rate mortgage by $402 or about $5,000 a year if interest rates increased from 6 percent to 8 percent. • However, a study by a pair of Georgetown and Columbia University professors claims there is no reason to believe the legislative proposal would cause lenders to significantly increase mortgage rates. That’s because the proposal would only apply to subprime and other mortgages originated after Jan. 1, 2000. • The current proposal would allow bankruptcy judges to modify a mortgage when the appraised value has fallen below the loan balance. The additional principal owed would be reclassified as unsecured debt and the loan terms modified to give a homeowner a greater likelihood of repaying their debt. At the same time, the modification must allow the bank to receive the entire value of the remaining loan over time. • Currently, judges can modify loans secured by almost any type of personal property other than a residence. Proponents say the measure before Congress would increase the potential that mortgage loan servicers, who have been hesitant to voluntarily modify loans from their borrowers, would be more likely to agree to do so. To read the full story, please click here

Foreclosures jump 57 percent in last 12 months Foreclosures haven’t yet peaked despite a dramatic 57 percent increase in filings and a 129 percent increase in bank repossessions between March 2007 and March 2008, according to a report issued Tuesday by RealtyTrac.  Nevada, California and Florida, respectively, experienced the highest level of foreclosure activity for March 2008, the report said. MAKING SENSE OF THE STORY FOR CONSUMERS One of every 538 single-family households in the U.S. experienced some form of foreclosure filing during March, the report said.  RealtyTrac officials predict record foreclosure activity in the third or fourth quarter of 2008 as subprime ARMs adjust upward. In most states, foreclosure occurs in three phases:  a Notice of Default is filed after payments are missed, a notice of scheduled auction is filed if steps aren’t taken to remedy the default, and an REO filing occurs when the lender repossesses the property after failure to sell it at auction. Nevada, California and Florida experienced the highest foreclosure rates.  In California, one in every 204 homes was subject to a foreclosure filing in March for a total of 64,711 properties.  March filings were up almost 21 percent from February and approximately 106 percent from a year ago March. Click here to read the full story

Looming deficit impedes federal housing agency As the president and Congress propose extending the benefits of Federal Housing Administration (FHA) insurance to hundreds of thousands of homeowners in need of mortgage assistance, the FHA itself faces a deficit for the first time in its history due to problems with its seller-financed downpayment loan program.  If these problems continue, the agency could face a $1.4 billion deficit by 2009 MAKING SENSE OF THE STORY FOR CONSUMERS The seller-financed downpayment program today accounts for 35 percent of all FHA loans, up from 2 percent in 2000.  Under the program, sellers cover the buyer’s downpayment and typically add it to the total cost being financed through a mortgage.  These loans became more popular as homebuyers struggling to qualify for a home abandoned conventional FHA loans in favor of subprime mortgages.  Between 2002 and 2006, the number of conventional home loans insured by the agency plunged from 1.3 million to about 314,000.  Congress has been urged to take action to discontinue these loans, but opponents of such an action argue the program is necessary to help first-time buyers. Despite worries about FHA’s future, since September the agency has helped more than 150,000 homeowners refinance their mortgages.  The president hopes to increase that number to 400,000 by the end of the year, and Congress is considering legislation that would expand FHA programs to even greater numbers of Americans. For full story click here

Joanne L. Gardiner, Broker e-PRO Realtor® Serving the San Francisco Bay Area Advantage Realty Clock Tower Commerce Center 3205 Whipple Road Union City, California 94587 (510) 429-4800