Friday, October 17, 2014

Property Taxes & Household Income Growth

Well, today we're going to look at a couple of items that should be of interest to both homeowners and those considering becoming homeowners. Usually, this type of info pops up on the pages of the Wall Street Journal, or on a financial website. But, as both subjects are important to anyone owning or thinking of owning a home, we're giving the latest, "right off the presses" as it were, on both the rate of household income increases and property taxes.  The first goes toward how much house someone can purchase and maintain, while the latter gives some detailed information about what your property taxes on that home really are, in comparison to other states, and why.

Household income growth in the Bay Area is the highest rate of growth in the nation. 
The Bay Area leads the nation in median household income growth according to new data from the U.S. Census Bureau, the latest indicator of our region’s remarkable economic strength.
Photo of hundred-dollar billsThe median household income rose an estimated 5.1 percent from 2012 to 2013 in the San Francisco metropolitan area, which includes San Francisco, Alameda, Contra Costa, Marin, and San Mateo counties. The San Francisco region outpaced both the U.S. (0.6 percent) and California (1.7 percent) in terms of annual income growth.
Households in the San Francisco metro area earned a median income of $79,624 in 2013, the second-highest in the U.S. behind the Washington, D.C. region. The Census Bureau estimates last year’s U.S. median household income at $52,250 and California’s at $60,190.
Median income is the midpoint in the range of household incomes, from the very wealthy to those with no income.
The income data was released as part of the Census Bureau’s annual American Community Survey, which measures income and poverty levels across the country. San Francisco has placed second in median income among the nation’s 25 most-populous metro areas for at least three years.
Household income is a barometer of purchasing power and is closely tied with real estate activity. The latest Census Bureau results suggest that the Bay Area’s real estate markets will continue to strengthen along with the regional economy. Sounds like a pretty good reason to buy a house and live here in the area, particularly in Marin County, which, within the greater Bay Area, has in its own right, one of the highest income growth rates in the state.

As for property taxes, the following may surprise you, especially given the cost of housing here.  The National Association of Home Builders (NAHB) this week released a report on state real estate taxes across the nation, citing data from the U.S. Census Bureau’s latest American Community Survey. Living in high-tax California, we would absolutely expect to see the Golden State way up on the list of largest real estate taxes paid.
And sure enough, California had the 11th highest annual median real estate tax bill among the 50 states and Washington, D.C. in 2013 — $3,015.
Northeast states tended to have the highest tax bills, with New Jersey No. 1 in the nation at $7,331. The lowest taxes paid were in the South — Alabamans (they ranked 51st) paid $532. So California was solidly on the side of big-tax states.
But wait. Number-crunchers at the NAHB went on to note that it would also be useful to compare real estate tax rates. Most counties sets their own real estate tax rates, but dividing taxes paid statewide by the aggregate value of homes within a state reveals an effective real estate tax rate for each state.
By that calculation, the picture changes dramatically.
California, it turns out, has an effective tax rate of 0.77 percent, owing to its expensive real estate. It ranked 34th among the states.
To be sure, New Jersey is still No. 1 when it comes to real estate tax rates, at 2.09 percent, and Alabama was only one step above the bottom, at 0.39 percent. (Hawaii’s rate was 0.29 percent.) But California, in fact, sits quite comfortably among the low-tax-rate states.
Of course, this may be scant consolation for Bay Area homeowners who still pay hefty taxes for their high-value homes, but it’s worth noting a more accurate source of the pain.
For a look at the complete state rankings, including median home values, click here
Finally, if you want to get an estimate of what your home is worth, or are thinking of buying, give us a call. We can provide you with the latest up-to-the-minute information. Peter: (415) 279-6466; Jane: (415) 531-4091.

Friday, October 10, 2014

Unemployment Drops Again--Are You Ready to Sell?

Well, once again, a strong reason for those of you considering listing your homes for sale has popped up. It's the unemployment rate. Obviously, when folks are not working, the last thing they're thinking of is buying a home. However, conversely, when they are working, it's a lot more likely they'd be thinking of buying a new home!

Well, here's the latest good news on that front!  As in July, every Bay Area county posted a lower unemployment rate that the California average of 7.4 percent on a nonseasonally adjusted basis, which was unchanged from the preceding month. Bay Area counties were the only ones in the state to boast unemployment rates of less than 5 percent, which many economists believe indicates that a market has reached full employment.
Marin County continued to have the state’s lowest percentage of unemployed workers, at 4.2 percent. This is by far the lowest level since the recession began in late 2007.

The EDD’s recent Labor Day briefing says that California has regained all of the 1.33 million jobs it lost during the Great Recession in June of this year. July marked the 53rd consecutive month of statewide employment growth, and California now has about 43,000 more nonagricultural jobs than it did at its prerecession peak in July 2007. This means that there is a greater pool of potential buyers for your home.  Obviously, not all of these employed folks will be buyers. But, for those who are, it's a perfect opportunity to get your house ready to sell, and then get it on the market!

Not sure how to proceed or what may need doing to have your home in perfect shape for that potential buyer? That's OK. We've been handling exactly such situations for many years, and we'd be happy to assist you ready your home so that you get the most money in the shortest possible amount of time! Call us! We'd be happy to help: Peter: (415) 279-6466; Jane: (415) 531-4091.