Wednesday, March 31, 2010

Menlo Park to Hire High-speed-rail Lobbyist

Source: Sean Howell, Almanac Staff

The city of Menlo Park has hired a lobbyist to make the city's case to Sacramento when it comes to the California high-speed-rail project, and has devoted $200,000 for the upcoming fiscal year to rail issues.

The expenditures highlight the importance of the issue to city officials, as Menlo Park strains to balance its budget following the economic recession. The upcoming year will be a particularly crucial one for the rail system, with a decision pending on how high-speed trains would make their way through the city.

Ravi Mehta, the lobbyist in the city's employ, also advocates for Palo Alto on the issue. He works on a retainer of $5,000 per month, plus expenses. Mehta will represent the city to the rail agency board and to legislators, and will report to city officials on new developments, according to Mayor Rich Cline.

"It's not really equitable," Cline said. "The High-Speed Rail Authority has the ability to call a public hearing pretty much whenever they want. ... We have to schedule who's going to Sacramento, and most of the time it ends up being a resident. It's a great disadvantage for the city."

City officials spend a lot of time drafting and revising letters to the rail agency that end up going "straight into a file" once they reach Sacramento, Councilwoman Kelly Fergusson said, adding that the city needs an advocate who's present at the meetings if it wants to be heard.

Fergusson sits on the city's high-speed rail subcommittee with Cline, who chairs a regional advocacy group made up of representatives from five Peninsula cities. Cline estimates that he spends 15 to 20 hours per week in his role on the committee, almost as much time as he devotes to other city business issues.

Part of the city's rail-related budget will go to hire experts who will help to interpret technical documents released by the rail agency. It's scheduled to publish an analysis in April of how the Caltrain corridor would accommodate high-speed trains.

Opportunity Exists at the Moment to Take Advantage of up to $18,000 in Tax Credits

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010. Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied. The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)). California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)). Other terms and restrictions apply to both tax credits.

Monday, March 22, 2010

Mortgage Rate Update -- Wells Fargo

Weekly Rate Update

All programs quoted are with zero points.

30 Year Fixed

To $417,000 - 5.000%
To $729,750 - 5.125%


Jumbo to $2,000,000 - 5.625%

5 Year Fixed

To $417,000 - 4.000%
To $729,750 - 4.375%
Jumbo to $2,000,000 - 5.250%


Rates have stabilized over the past few weeks and remain extremely buyer friendly. Fears that the Feds pulling out of the mortgage backed securities markets have been unfounded. Investors have not reacted to losing the largest purchaser on mortgage backed securities the way the markets had predicted. There is some sense of comfort to the markets that there are buyers waiting in the wings to pick up where the Feds leave off. Good news for buyers who are still on the fence. It appears that the markets will remain range bound for the next few weeks until the real impact of the Feds ending the MBS purchase program can actually be felt.

Economic News

Three economic releases this week—industrial production, the Philadelphia Fed index and the leading economic index—all support the view of continued economic growth. Meanwhile the housing starts data suggest that this recovery will be more modest than other recoveries.

Inflation remains low as measured by the Consumer Price Index. The details of this report highlight the slow pace of inflation, which partly reflects the ongoing housing correction. Medical price inflation continues to outpace the overall price index.

Thursday, March 11, 2010

Nab a Deal!

Source: CNN Money
Nab a real estate deal – while you still can

The combination of affordable home prices, low interest rates, and the federal tax credit for home buyers have created an opportune time for many buyers to purchase a home. Many real estate analysts also believe that most housing markets have stabilized, but that some markets may decline further.


Buyers should keep in mind that housing markets are local and can vary greatly from one neighborhood to the next. Working with a REALTOR® familiar with the area in which the buyer is searching can help the buyer select a house that best suits their needs.

California’s housing market has shown signs of stabilization since early last year. Sales of existing, single-family homes bottomed out in August 2007, and the median home price reached its trough in February 2009. In January, California’s median home price was 17.2 percent above the low for the current cycle.

The federal tax credit for home buyers was extended and expanded late last year. Qualified first-time buyers may be eligible to receive a tax credit of up to $8,000 on homes purchased before April 30, 2010. Repeat buyers may be eligible for a tax credit of up to $6,500. Visit,,id=187935,00.html for more information about the federal tax credit for home buyers, including eligibility requirements.

The Federal Reserve has helped maintain low interest rates, which, in turn, has assisted home buyers. However, the agency plans to stop purchasing mortgage-backed securities at the end of this month, which likely will increase rates on 30-year fixed mortgages. Buyers may be able to lock in a low interest rate by working with their lender.

Monday, March 8, 2010

Mortgage News -- Updated 3/8/2010

Source: Peter Pham, Private Mortgage Advisors


People are talking. The Fed's have been know to be very accommodative to the markets sentiment. As we learned with Chairman Greenspan, surprising the market, good or bad can lead to wild speculation and mood swings in the markets behavior. The "market" assumed last fall that rates would be rising in 12 to 18 months. This is still within line of the expectations. This article from the Washington Post summarizes where economist predict rates will go in the next six months.

Most U.S. business economists expect the Federal Reserve to raise benchmark interest rates within six months by between a quarter and a half percentage point, according to a survey released on Monday.

A majority of economists in the National Association of Business Economists' semiannual survey found the Fed's current stance of rates near zero percent is appropriate. A growing number, however, believe the U.S. central bank's policy's are too simulative, according to a poll of 203 members taken February 4-22.

"A majority believes that a rise in interest rates is both likely and appropriate in the next several months," said NABE President Lynn Reaser.

The Fed has said continued high rates of unemployment and low inflation warrant holding rates exceptionally low for an extended period. Still, reports show the economy is recovering gradually, and some policy makers believe the Fed should begin to prepare markets for the beginning of the process of tightening financial conditions.

Economic News

Employment and consumer spending are important indicators as the market looks for signs of recovery.

Employment losses have steadily declined over the past six months. In fact, private sector jobs (ex-construction) have risen over the past two months. There is a cyclical recovery in private sector jobs while the structural problems in real estate limit the recovery. Job gains have also appeared in manufacturing sectors such as machinery, primary metals and electrical equipment. Meanwhile the index of hours worked has risen over the last three months, consistent with sustained economic growth. Combining hours worked and average hourly earnings, our income proxy has broken into positive growth territory. This suggests positive income and therefore spending gains in the months ahead.

Retail sales continue to post respectable gains, considering the continued drag on household spending power due to high unemployment and slowing wage growth. Consumer balance sheets, while healing, remain severely impaired from continued high debt levels and reduced wealth, while access to affordable bank credit remains difficult for many. Still there appears to be real pent-up demand for necessities like clothes since many consumers delayed purchases of these items during the worst of the recession last spring. Moreover, stabilizing employment and steady stock market gains have helped more fence sitters to go ahead with their purchase plans, especially among the higher income bracket households. We expect February retail sales to advance another 0.2 percent following a 0.5 percent increase in January. Retail sales less autos could advance even more, rising 0.6 percent in February.

First Time Homebuyers Tax Credit

The first-time homebuyer tax credit of up to $8,000 and the move-up homebuyer tax credit of up to $6,500 expire at the end of April. The home has to be under contract by the end of April, and the deal has to close by the end of June. The maximum home price is $800,000 according to the link below. As a reminder for clients who want to take advantage of the tax credit before it expires, I have provided the link with answers for your clients.

Wednesday, March 3, 2010

The State of the Markets

Source: Cirios Real Estate

This post first appeared in the March edition of: Cirios Trends: In Search of Real Estate Opportunities.

Last month, we discussed the role confidence plays in the housing market. The better Americans feel about the economy (using the stock market as a barometer of the country’s economic fortunes), the more likely they are to go out and buy a house.

Sticking with the theme of market psychology, let’s now examine the other side of the transaction: Sellers.

In today’s market, sellers basically fall into two categories: Those who can, and those who can’t. In other words, if you still have equity, you can sell. If you are underwater on your house, you can’t.

The decision for the latter of whether to sell is, unfortunately, pretty simple. So let’s consider the former, those fortunate homeowners who still have equity left in their homes.

Selling into a weak market is a drag. With so many homes to choose from, buyers can drive a hard bargain. And thanks to unrealistic expectations and bad advice from Realtors trying to win clients with lofty promises, thousands of sellers over-listed their homes and subsequently chased the market down throughout 2007, 2008 and 2009.

Very few voluntary sellers dipped their toes into the market because it was just so bad. The only true sellers were those who had to sell for some reason or another.

So what now? Housing isn’t nearly as bad as it was this time last year, and in many markets the worst of the price declines are likely over. Stocks rallied fiercely last year, rebuilding many damaged nest eggs. And even though there are looming threats out there to our nascent - and very governmentally influenced - economic recovery, things are not nearly as dire as they once were.

We wrote back in May 2009 that “Willing and able buyers are pouring back into the market. And as they do, sellers - buoyed by newfound confidence - are prepping their homes for the market.” Although inventory remained constrained throughout 2009, the percentage of distressed sales relative to regular sales is slowly dropping.

Recent data is seeping out that supports our view, and the trend is picking up steam so far in 2010. The graph below, courtesy of SocketSite, shows active listed inventory in the city of San Francisco. Notably, the black line representing 2010 has reached to the orange 2008 line … and check out that slope!

Anecdotal evidence supports the data. Sellers are trying to get in ahead of the summer buyer season, particularly with the (latest) expiration of the homebuyer tax credit just around the corner in June.

Monday, March 1, 2010

Brookside Orchids in Menlo Park -- Hiding in Plain Sight

A hyper-local Blog by Chris Gulker, Linda Hubbard and Associates

There they sit, row after row – the boarders whose owners have put them under the care of Mark Pendleton, manager of Brookside Orchids Boarding Department. “We have about 250 boarding customers,” says Pendleton. “We take care of the plants year round, delivering them to their owners when they bloom. How much of the year they’re in our care depends on the plant and the customer.”

Brookside Orchids is a Menlo Park enterprise that’s been hiding in plain sight for almost 30 years. Its seven greenhouses, packed with every orchid variety imaginable, sits on an acre of land behind the Webb Ranch produce market on Alpine Road. The business, founded by Jim Heierle in 1981, was the main supplier to Smith & Hawken, the specialty garden store that recently went out of business. That prompted Brookside to put on a more public face, including a new sign on Alpine Road welcoming visitors (Monday-Friday from 7:30 am to 3:00 pm and Saturday from 10:00 am to 3:00 pm). An e-commerce website is also in the works.

Brookside grows popular orchid species as well as a few rare flowers outside of the orchid family, including Bat Lily and Ornamental Ginger. Every flower is hand-cultivated, and special care goes into ensuring the plants receive the perfect balance of water, fresh air, and indirect sunlight. Orchids are grown in a mixture of fir bark, charcoal, and perlite and treated with a synthetic fertilizer.

In addition to his boarding manager duties, Pendleton is Brookside’s hybridizer – there are currently a half dozen or so hybrids on display – and resident orchid expert (with a caveat). “There are a lot of orchid experts,” he notes with a smile.

He lends his service to orchids in distress, brought in by their worried and anxious owners. “I can resuscitate an orchid but I can’t resurrect one!” he says.