Saturday, May 30, 2009

Available New Home Purchase Tax Credit Funds Dwindle

In March the California State Legislature passed a law establishing a personal income tax credit for purchasers of a qualifying principal residence. The tax credit is capped at the lesser of $10,000 or 5 percent of the purchase price for the purchase of a principal residence that has never been occupied between March 1, 2009 and March 1, 2010.

Over the past two months homebuyers have reserved over $65 million in tax credits, with only $35 million in available credits remaining, according to the California Franchise Tax Board. It is important for buyers to be aware that the seller must file paperwork with the state within seven days of the sale for the buyer to qualify for the credit.

The credit provides in equal amounts ($3,333 for the $10,000 credit) over the three successive taxable years beginning with the year in which the purchase is made.

Qualifying residences must never have been occupied and must be eligible after purchase for the Homeowner's Property Tax Exemption. The taxpayer must live in the home as his principal residence for at least two years, or be subject to payback for any tax credits received.

Unlike the federal tax credit, the state has limited the total amount of credits that may be claimed to $100 million. Because of this provision buyers must make a tax credit reservation, and credits will be allocated on a first come first served basis.

The California Franchise Tax Board (FTB) is accepting applications (via form 3528-A) for allocation (reservations) of credit by fax only (916-845-9754). For more information about the credit reservations, applicable forms and the number of credits still available, please see this California Franchise Tax Board Web page.

Thursday, May 28, 2009











Andy and Christine -- lovely!

Andy leaves tomorrow for USC to study for a Master's in Real Estate Development.

We will miss him so much...

Wednesday, May 27, 2009

Atherton Meet Focuses on High-speed Rail

Source: by Andrea Gemmet Almanac Staff

If it's a hot topic in town, chances are that the Atherton Civic Interest League is working on it. The group's annual meeting, at 7 p.m. on Thursday, May 28, will feature a panel of experts discussing high-speed rail.

The meeting is open to the public, and will be held at the Jennings Pavilion in Holbrook-Palmer Park, 150 Watkins Ave. in Atherton. Atherton officials, and many of the town's residents, have grave worries about the local effects of the state plan to run high-speed trains along the Caltrain corridor that bisects the town. If the high-speed rail line can't be rerouted to avoid the town, Atherton officials would rather have the train run through a trench or tunnel, instead of on an elevated berm.

The scheduled speakers at the meeting are: Mike Garvey and John Litvinger, public outreach consultants working for the California High Speed Rail Authority; John Townsend, executive vice president of Hatch Mott Macdonald, a leading tunnel-engineering and construction firm; Duncan Jones, Atherton's public works director; Gary Patton, attorney and former director of the Planning and Conservation League; and Jim McFall, who will present a digital model of elevated high-speed rail tracks going through Palo Alto.

The meeting kicks off with a roll call and election of new ACIL officers, followed by presentations from the speakers and a half-hour Q&A with the audience. The Atherton Civic Interest League, open to all residents, is a nonprofit organization that aims to improve the quality of life in Atherton and assure effective town governance. It was founded in 1946.

Tuesday, May 26, 2009

Why Buy Now, Why Buy Ever?

Excerpted from
Change, Logic and Money
by Eric Trailer, Absolute Mortgage Banking

Want another compelling reason why the smart, savvy buyers are acting sooner than later? Because they know that average appreciation rates in California are 8.8% over the last 40 years (yes we all know that the Peninsula is much greater), and today provide an opportunity for both tremendous value and cheap financing. Let’s think about real value for a moment. The last year we had average appreciation in California, it was the year 2001 (8.7%). If we strip out the overbuilt areas of California.., and concentrate specifically on areas where housing expansion is extremely limited, like the Peninsula, one can simply take the median price of comparable homes in 2001, add 8.8% appreciation per year, depreciate appropriate improvements to the property and a value may be derived. Thus, if a would-be buyer can obtain a home at that value or better, and combine the cheap cost financing, that’s an ideal move on a fundamental basis, whether the purchase is for shelter or for investment.

Want more? OK. How about the fact that, since 1968, there have only been four real periods of decline: 1984 (0.1%, so not really), 1990 (only 1.2%, despite the Loma Prieta earthquake in October 1989), 1992-1996 (Average of 2.44% despite a major recession following a major earthquake) and today (yes, believe it or not, there was NO decline for CA as a whole in 2001 when the stock market crashed; in fact, it was up 8.7% in 2001 and up over 20% in 2002. All the more reason why 2001 is a good basis to use.

Wednesday, May 13, 2009

Towns Look to Influence High-speed Rail Design

Source: by Sean Howell Almanac Staff


As the agency that oversees the high-speed rail project begins to plan how high-speed trains will pass through the Peninsula, local cities and towns are trying to figure out how best to get the agency's ear.

Seeking strength in numbers, Menlo Park and Atherton have signed an agreement to formalize an ad hoc group that has been meeting weekly to discuss issues related to the project. A majority of council members say the cities will have more sway if they work together to lobby the High-Speed Rail Authority, and that they will be better able to share resources and ideas.

Rail agency plans
The main question in the minds of local officials has been, and continues to be: In designing the rail, will officials pay attention to how it will affect local communities?

Rail officials have said repeatedly that they plan to work with local jurisdictions throughout the process, though local officials have said they're skeptical that the agency will do more than state law requires. At an April 30 meeting, a state Senate subcommittee that included Sen. Joe Simitian (D-Palo Alto) expressed concern over the rail agency's outreach efforts, holding off on granting the agency its next wave of funding until it showed a better program for "outreach and oversight.

"The rail agency has laid out a plan to meet quarterly between May 2009 and April 2011 with "working groups" from Peninsula counties and agencies.

Mike Garvey, a former San Carlos city manager who's heading up outreach efforts in San Mateo County for the engineering company contracted to design the rail line, said he's sympathetic to the concerns of local residents.

"The (environmental review) process is a formal, ritualized process," he said. "Some people had the impression that that specific, fixed process would be the only opportunity for comment, and it's not. This will be an ongoing, informal attempt to involve grassroots organization, and to hear from every community.

"In convincing local officials that the rail agency is serious about working with local communities, Mr. Garvey has his work cut out for him. Count Menlo Park Councilman Rich Cline among the skeptics.

"Our point is that there needs to be a dialogue. We need to work together to plan this thing successfully," Mr. Cline said. "The work group (plan) doesn't necessarily make it better, because we have to see that there's a proper input and reaction process.

"Mr. Cline characterizes the rail authority as an organization that's still oriented toward promotion of the concept of high-speed rail, rather than the logistics of how trains will pass through the state. He has joined a rising number of people calling for a restructuring of the organization.

The rail agency expects to issue a draft of its analysis of the various design possibilities in January 2010, according to Mr. Garvey. He said it's too early to say whether that report will identify a preferred configuration.

The agency plans to make portions of its analysis available to the public throughout the course of its analysis in the coming months, according to Mr. Garvey. He said he doesn't yet know exactly how that information will be presented, but that "everyone will have access to it.

Local strategy
The group of Peninsula jurisdictions, dubbed the "Coalition of Cities," would include one council member from each constituent jurisdiction. In addition to Menlo Park and Atherton, the ad hoc group has included representatives from Palo Alto, Mountain View, Burlingame, and Sunnyvale.

The group is separate from the "working groups" set up by the rail agency. That group is divided along county lines.

The coalition of cities would likely only take positions on broad issues that affect most of the member communities, Menlo Park council members say.

Menlo Park Councilman John Boyle said he supports the cities working together, but fears that formalizing the group would clog an already complicated bureaucratic process. The rail agency is legally required to listen to each city throughout its design process, he said. And if the group takes a stance on an issue that Menlo Park opposes, the city runs the risk of having its position misinterpreted in the press.

In an interview, Councilwoman Kelly Fergusson said she thinks a "formalized communication strategy" would make it easier, not harder, for news outlets to interpret the stance taken by Peninsula cities.

Peninsula counties would seem to have built-in leverage with the rail agency, because they own the Caltrain corridor. The agency will negotiate to lease the corridor from the joint powers board that oversees it, in order to run trains along it. But some local officials think the board is more focused on securing benefits for the Caltrain system than it is on the impacts to the communities along the rail line.

Mr. Boyle disputed the notion that the board's interests are by definition inimical to those of the jurisdictions it represents.

"They are responsible to their member cities," he said of the Peninsula Corridor Joint Powers Board at a recent council meeting. "I think they would represent our interests, if we asked them to."

INFORMATION
As part of its outreach efforts, the High-Speed Rail Authority has set up a hotline for people to get general information on the project: 510-597-8640. For questions specific to San Mateo County, call outreach coordinator Mike Garvey at 596-9047, or e-mail him at garveycgs@yahoo.com. The project's Web site is cahighspeedrail.ca.gov.

Monday, May 11, 2009

The Basics: 2009 First-Time Home Buyer Tax Credit

Bringing the Dream of Homeownership Within Reach
Source: National Association of Realtors

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.

Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.

Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.