Saturday, December 14, 2013

Does Solar Increase your Home's Sale Price?

Lawrence Berkeley Lab asks the question, but then ignores a key element!  See this story in today's Chron for details--

According to LBL, solar generates about $6,000 in added value at sale per kilowatt of production capacity (most houses generate between 2 and 5 kW they say; we generate 2.6 kW).  Of course you might generate that capacity on the roof of a $400,000 home, or on the roof of a $4 million home.  But the analysis ignores the ongoing savings resulting from the installation itself--in our case a promised $115/mo in electric bill savings, which has turned out to be about $300/mo in practice [perhaps due to more drought/more sun this year compared to most].

My biz school background says you need to reflect the installation charge, capitalize the value of those savings, and add them to the net present value of the incrementally higher sale price in the future.

It drives me nuts that so many analysts of, for instance, double-paned windows, look only at utility bill savings, but ignore incremental sales price premiums while others look at the sales price premium and ignore the utility savings.  The former tend to be environmentalists and the latter tend to be contractors.

Start talking to each other guys!

Tuesday, November 12, 2013

Finally, The Solar Graphic

For new readers, I've been reporting on our experience with new solar panels on our southwest-facing roof these last few months.  I'm having a bit of trouble managing the graphic transfer from PGE's website to this newsletter, but see below:

The blue line is our electric consumption; red is the ''typical home,'' and yellow is ''the typical efficient home.''   The college students left at the end of this data series, so that's not the explanation for the rather steep drop!  Our electricity consumption has dropped precipitously since the solar panels finally got connected (about six months after we signed up, by the way).  Their use pushes us from the expensive 36 cents a kilowatt hour marginal rate to the 13 cents a kilowatt hour rate, so we're using less net electricity, and that which we're using is much cheaper on a unit basis.

We need more months with the numbers, but so far, so good!  This last month, we saved quite a bit more than the promised $135/mo on our bill--and that represented a 4% risk-free (?) return on our investment.  See the last page of for the graphic.

The Health Care Act

My nurse practitioner sister sent this <a href=''''>link</a> to the family (there are nine of us kids and about 35 grandchildren).  It's a nice useful primer, and of course everyone who already has insurance sees no change.

(If you're dying to find out more about my unusual past, <a href=''''>click here</a>.)

Government Shutdown Impacts on Housing

Some of you may not know that I was working for the federal government during the last shutdown.  After serving as Deputy Assistant Secretary for Policy under HUD Secretary Cisneros, I moved over to run the Administration's rural housing and community development loan programs as head of “Farmer's Home,” managing 5,000 staff, 1,700 local offices and a $4 billion loan portfolio for single- and multi-family housing and community development loans.  We cut the agency's appropriation by about 40% by centralizing loan servicing, closing many offices, and shifting from a 1% loan for all eligible homebuyers to a sliding scale loan ratea shift long overdue.  Our entire staff--from top to bottom--was on hiatus for those weeks.  I could not get into the building.

These days, nearly all loans (and re-fis) require some government involvement before closing.  Buyers assert net income based on tax returns, but the lender has to check with the IRS, which is on hiatus, for accuracy before closing a loan.  So for now, most loans that Fannie Mae or Freddie Mac will buy are on hold, any FHA (low downpayment) loan is on hold, and many jumbo loans are on hold.  And all those home sales are correspondingly on hold, along with any other sales which depend on these sales closing.  Home sales are abstract when they don't involve you, but know that some of your friends and neighbors are really feeling the pinch during this shutdown.  When the IRS gets back in business, they'll have a backlog; we'll need to be prepared for some delays then as well.

Gutters Clear? Furnace Filter Changed?

I talk to my buyers about ''the small chance of a big problem.''  Stucco houses without deep roof overhangs and with clogged up downspouts can sometimes shift rainwater back behind the stucco and down the ''inside'' of the house's skin.  Over the course of 80 years, the framing can rot.  And you have to take all that stucco off--and put more back on--as you fix that problem.  Bills in the 40k-100k range are not as uncommon as you'd like to think.  Best way to avoid that small chance of a big problem is to clear your gutters of leaves from surrounding trees.

Right now is a perfect moment--that windstorm last weekend brought down a bunch of debris, and you'd like to get rid of it before the first rain shoves it down the downspout.

Two of my ;local favorites are Mr. Sparkle, and Gorilla Gutters.  Mr. Sparkle is offering $20 off right now.  They'd suggest you get the job done twice a year, but I bet for many of us, it's been a decade since the gutters were cleared.  Do it now!

And don't forget <a href=''''></a>--it's the Costco for your furnace's air filters, and you don't have to deal with the Costco ''thing'' to get them.

They show up on your doorstep.

And you get friendly reminders to change out your filters every 90 days or so (don't tell anyone that I change mine every year, though it does fill up with dog hair.....).

I spent 2 minutes ordering a dozen two weeks ago, and they arrived like affordable magic on my door step last week. Again, I bet for many of us, the air filter hasn't been changed since you moved in.  A furnace serviceperson told me recently that really dirty filters can make your furnace work harder to do the job, shortening its lifespan.  So really, order several, take 30 seconds to change it out (I'll even come over to show you where!), and get with the program.

Those Nest Folks Just Don't Stop!

You've followed our experience with a <a href='' ''>Nest</a> thermostat installation.  When you open the box, you feel just as you did when you opened the box containing your first Apple laptop.  I still love holding the screwdriver they included (hey, it comes in handy!).  And I look forward to lots of energy savings this coming heating season.

Well, they sent us all a preview of their newest product--a combined smoke and CO monitor.  Not inexpensive ($129), it can be turned off (when burning toast) with a wave.  Gotta like that.  But the big ah-ha is that it links to your laptop or iPhone.

I'm less confident about the value of that functionality, but I swear to god that if my communication skills ever rival theirs, based on this <a href=''''>video</a> on the product, I'll die and go to heaven.

By the way, CA requires a CO monitor on each floor and a smoke detector on each floor and in each bedroom at sale, so relying on these Nest monitors would not be not inexpensive.  But for an older home without good coverage, or in other parts of the country, an integrated CO/smoke detector is a really good thing.

The Plant Sales Are Coming Up

The Merritt College sale was last weekend, but there are still a few Bay Area non-profit plant sales around the corner.  See <a href=''''>here</a> for more events coming up--a great way to get new and unusual plants--marionberries or olallieberries anyone?

The Big Picture

I represent buyers as well as sellers, so I've seen the craziness of this year's market on both sides.  (And we sold our Pala Avenue home this spring--for 25% over the asking price [I took my agent's advice to the letter....].)

As discussed in the last newsletter, my sense is that we had tremendous pent up demand, which was released once the received wisdom was that the crisis had ended.

Buyers flooded into the market and sellers, who typically take longer to get in gear and get a house on the market, did not flood the market with offerings.  Cautious savers, who had banked cash preparing for the worst, wanted to put their money to work again, and the beaten down real estate market looked like a great opportunity.  Buyers bid prices up dramatically.

Because appraisals are backward looking, sellers stayed cautious and took the fast-closing and slightly lower all-cash offer rather than risk that an appraisal might come in below the contract price, leading to another round of price negotiations and disappointment.  Homes were sold and now those high sales prices are the new comps for today's transactions.

There still are more buyers than sellers, and all-cash offers still represent about 15 to 20 percent of all sales.  It's still a seller's market.  But we're seeing 3 offers rather than 13, and successful buyers are increasingly able to retain an inspection contingency (which in turn leads to a round of negotiations if the seller didn't cover the inspection bases adequately in advance).

I'm hearing various friends say that our respective college grads are now finding jobs, finally--if the economy is recovering more broadly, those boomerang kids (and their 30s-something elders) will begin moving up the housing ladder again.  And maybe once we feel confident those boomerang kids won't be back, and the house feels more permanently empty, we'll feel more comfortable about “moving down” to a smaller house.--that means more supply.  It's all a balancing act. But this fall (until mid-November) and again next year, just after the Super Bowl when all those young families focus like a laser beam on getting a Piedmont home before school starts, may be great windows to put your home on the market.  Give me a call so we can start planning!

The Piedmont Update

After a few quarters of rapid price increases in Piedmont, we saw an appropriate pause this last quarter--the average home sold for $1.486 million in the 3rd quarter (compared to $1.647 million last quarter and $1.66 million a year ago--the median was quite stable compared to 2Q13).  The average price per square foot was $574 (compared to $630ish/sf over the last few quarters).  Thirty-four homes sold in an average 19 days on the market--still very high market velocity.  The average sales price was 4% over the average asking price.

Homes sold all along the price spectrum--from $675k to $2.93 m.  But several homes priced above the $2.5 million range have languished, or left the market, suggesting real resistance at those high-altitude price levels.   Three homes (as reported by the MLS) have sold above $3 million since the beginning of the year, all larger than about 6,000 sf, and all at $650/sf and below.

As noted last time, increasing interest rates in the late spring have certainly exerted a bit of downward price pressure.  Buyers qualify based on the mortgage payment-to-income ratio, and those mortgage payments now buy less house than they used to.  A couple with $200,000 in downpayment could afford a house worth $1 million at the beginning of the year, but they can afford only a $870,000 house today, if everything except interest rates stays the same.  That's a 13% price drop right there if the seller  were to ''bear'' the entire effect of the rate change.  And we haven't seen price drops of that caliber by any means.

Berkeley has seen very stable prices--the average home sold for $852k (compared to $851k in 2Q13), in about 20 days.  Sales prices were about 12 percent above the asking price, as they were in the ''hot'' spring market.  Median prices were likewise very consistent over the period as was the number of homes sold.

Oakland saw slow continuing improvement between the spring and summer quarters--the average sales price was up about 2.5%, from $515k to $527k, about 8% over the asking price.  The 94610,11, and 18 zip codes surrounding Piedmont, saw even stronger recoveries:  Together, their average prices were up by 6% compared to last quarter, and the average sales price was 10% over asking.  Homes consistently sold in about 20 days, on average, across all of Oakland and in our surrounding areas.

We've talked in the past about how the data would have been skewed by underwater but financially strong owners staying out of the market--if only households more on the edge were forced into selling in the down market, then the average price would reflect their lower price points.  Likewise, we're not clear how these data today are affected by a disproportionate flood of higher income/higher home-price sellers moving into the market.

The Perfect Move-Down Option, Near the Village Market!

Mid-century architecture at its best!  5560 Country Club Drive affords great privacy, level living, quiet radiant heat, easy commutes, plenty of light throughout the day, and calming borrowed views of the Claremont Country Club golf course.

The home radiates out from the light-drenched vaulted central living room--two bedrooms and two baths in one wing; the kitchen (with breakfast nook) and two-car garage in the other wing.  Behind the living room itself is a large private den with half bath and built in wardrobe, perfect for guests.

The combination of boomerang shape and corner lot location creates several large and private courtyards and patios, each with floor-to-ceiling windows.  Organize cocktail parties that spill out of the living room onto the patios on either side! Or relax in the living room, fireplace to the side, facing the southerly bank of windows, oblivious to life's hub bub.

A more convenient location would be hard to find!  Because you're just two blocks from the upscale Village Market, Broadway Terrace Nursery, and Terrace Cafe and Gifts, grabbing dinner or a gallon of milk on the way home (or a latte on the way to work!) is a breeze.  College Avenue's shops and restaurants start just over a half mile down the slope, anchored by the California College of the Arts.  A Wi-Fi equipped express bus to San Francisco's financial district stops right around the corner.  Route 13 is just up the hill, and there are no more exits before the Caldecott  Tunnel.  Continue north a half mile and drop down into Berkeley at the Claremont Hotel, or loop west on Route 24 to Emeryville, Oakland and San Francisco beyond.  The home is in the highly coveted Hillcrest School catchment area (check with OUSD for availability).

See <a href=''''> </a> for lots more info and photos.
2 bedrooms plus large private den, 2.5 baths
1942 sf on a nearly quarter acre lot
2-car garage and plenty of storage
Open Saturday and Sunday 10/12-13, 2-5 pm, Monday from 10-1 (come for the morning buns) and next Sunday from 2-4:30.

Wednesday, May 1, 2013

Home Mortgage Deduction Concentrated in Few Locations

Today's front page story in the Chronicle on the concentration of benefits from the home mortgage interest deduction WAY understates the effect.  If you go to the Pew Trust's report, you find that the researchers spread the total amount of deductions across not just all homeowners, but all tax filers in the metro area--whether homeowners or renters.  So while the story says that San Jose residents received an average $7700 in 2007, once you pull out the renters (37%) and those that take the standard deduction, and thus adjust the denominator, the "average" will shoot way up.  

Tuesday, April 30, 2013

And Now for the Quarterly Report--

Piedmont real estate was back in the game this quarter, if you can rely on insights from 15 completed sales reported by the Multiple Listing Service.  The average price per square foot across all sales, well in the low $500s for the past few years, stood at $614/sf, just a tad higher than the $612/sf we saw during all of 2006.  And the sales price averaged $1.576 million, a bit less than the $1.685 million average from 2006 (the two metrics can diverge if, for instance, the average sold home size were larger back then).    While about one-third fewer in number than at the top of the market, this quarter's sales cover the waterfront from a low of $635,000 to a high of $3.45 million.  The typical home sold for about 10% over the asking price and in 20 days (though if you pull out three sales that took much longer to find a willing buyer, the average drops down to just eight days--only one open house weekend before offers were considered).

Comparing 1Q13 to 1Q12, the difference is striking:  Last April I reported an average sales price of $1.275 million on 19 sales, one of which was over $2.5 million.  The average price per square foot was $517/sf, even though the houses, in the main, tended to be a bit smaller than this quarter's crop (a small three-bedroom home will typically sell for more on a price-per-square-foot basis than will a roomy three-bedroom home, because both have the same basic functionality (adjusting for condition, etc.)).

Looking at currently pending homes--that is, those that went into contract during the quarter but have not yet closed--the trends appear to continue:  Excluding one home on the market for nearly six months, the other pending homes in Piedmont sold promptly in an average nine days, suggesting multiple offers and over asking-price sales.

In fact across the East Bay's six cities and since the beginning of the year, homes in which my office was involved (on the buyer or seller side) sold for an average 13% over the asking price, in an average 13 days.  Twenty percent of the transactions sold for all-cash. (I'd love to say that Pacific Union's stellar market acumen accounts for those stats, and we certainly have been representing a disproportionate number of successful buyers this quarter, but I presume that each of the East Bay's major offices are seeing similar results.)

Clearly low interest rates and a broadening sense that the crash has passed are bringing buyers into the market <I>en masse.</I>  Other neighborhoods are seeing this same strength, including Glenview, Crocker Highlands, El Cerrito, Kensington and Berkeley.  Montclair and Piedmont Avenue, together with the condo market and homes south of Fruitvale Avenue have not made up their losses, in part because of the low down payments that predominated in those neighborhoods at the top of the market, and the correspondingly large proportion of homes that remain “under water.”

So sellers:  Now may be an excellent time to put your home on the market.  It appears that, except perhaps at the highest end, Piedmont homes have regained their pre-crash value.  When interest rates begin their climb, and at some point they will climb, prices will inevitably see downward pressure (as higher interest rates bring higher and marginally less affordable mortgage payments).  The question is whether pent up demand from the no-longer-underwater folks and from new entrants into the housing market will keep demand strong enough in the face of higher monthly costs to keep prices stable.

Buyers:  Link up with a local agent and be prepared to move fast, and with confidence.  In this market, sellers and sellers' agents will go with the offer that appears most buttoned up and from professionals they trust, even if it's not the absolute highest.  (I heard this week about an offer that was out of the ballpark, but from buyers who had not even been in the house and clearly had not processed the typically voluminous disclosure package--a great offer is not a great offer if it won't close.)

A look at other local markets:

Across all of Oakland, the average sales price increased between 1Q12 and 1Q13 from $301,000 to $320,000, an increase of nearly 7%, though still well below the 2006 average of $515,000.  Crocker Highlands (94610 single family homes) saw sales price increases of 28% from 1Q12 to 1Q13, from  $647,000 to $832,000 (which in turn was an average 8% over the asking price this quarter).

For more details about other areas in the East Bay, and in the Bay Area more broadly, see Pacific Union's report.

By the way, the PacUnion blog is a great resource.  And while I'm at it, here  is the link to the Christie's magazine this month, including stories on polo, Ottawa, and living near a national park, among others.

104 Pala Avenue on the Market

The Quintessential Piedmont Brown Shingle!

[This blog is not about me, but some may not have heard that we moved from the Pala Avenue house up to 312 Pacific Avenue (still in central Piedmont) about 18 months ago.  Our tenants just bought a home, so now the Pala house is going on the market....]

The British would call it a “heritage” home; the New Zealanders a “character” home.  Under construction at Piedmont's founding, 104 Pala Avenue is a centrally located brown shingle uniting original handcrafted details with modern amenities, great flow, and the oh-so-rare five bedrooms up!

Can a New House Change your Life?

When a Piedmont home is within just a few blocks of:

-a recently rebuilt elementary school in addition to middle/high school,
-after school care,
-the town's emergency services,
-parks and playgrounds,
-casual carpool & WiFi-equipped express buses to downtown SF, and
-Piedmont Avenue shops, restaurants and theater,

your life becomes manageable again.

This house is in the Golden Rectangle, a six-block neighborhood just above Highland Ave. whose streets have no through traffic or parking problems, just sport basketball standards, games of catch, and bikes with training wheels.

Take time for that extra cup of coffee. Marvel at the century-old redwood in the backyard.  Revel in the East Bay's famous sunshine and warmth as it pours through the home's many windows. Invite a neighbor over to discuss the news.

A Unique History

Originally built in 1908 by Judah Magnes's cousin Irving, an East Bay attorney, the house offers unique Edwardian architectural details.  From the dining room's dramatic barrel ceiling to the coffered ceiling and original wainscot in the spacious entry and living room, the fine detail and honest materials are evident and honored.  The home's side garden entrance is a feature common in the neighborhood:  It emphasizes the transition from the hub-bub of public life to the privacy and tranquility of “home.”  Newer french doors, floor-to-ceiling windows, and slider visually and physically link the home's bright interior with the sunny outdoors.

The house more than doubled in size in the late '70s and early '80s.  Today, it offers the hard-to-find five large bedrooms upstairs as well as formal dining and living rooms, butler's pantry, library/office, large rumpus with wet bar, tons of storage, garage with interior access, and a dog-friendly fenced yard.

A Great Entertaining Home

Whether sit-down dinners for 18 or cocktail parties for 100, the well-organized kitchen, butler's pantry, staging area on the rear patio, and circular room flow support your entertaining.  Host anything from the soccer team's end-of-year celebration to fundraisers for your alma mater or favorite charity.  Wow your colleagues with the artisanry and history of the house, and the tree-lined streets for which Piedmont is so famous.  And on-street parking is never an issue--except on the 4th of July as the city's famous parade organizes across the street!

Eco-friendly Improvements

The current owners [that would be The Spouse and me] have carefully updated the home during their tenure--from money-saving dual-pane windows to added insulation to low-flow fixtures to electrical upgrades to occupancy- and vacancy-sensor switches to flash water heater to asbestos remediation and duct replacement to attic furnace installation--it's all been done with design-sense.  Relax in the spa-style Carrara marble master bath--the heated floors make morning routines so much less  routine! Relish the spacious and well-organized master closets.  Prep breakfast in the updated kitchen while the kids stay toasty in the adjacent family room, whose fireplace you can light at the touch of a button.  Manage music or the news from controls in the media closet.  And do it all while appreciating the original architectural details of this 1908 home.

See for photos and more--

958 Kingston Avenue on the Market

Filled with graceful proportions and gorgeous original architectural details, this four bedroom Piedmont home tucked between Beach Elementary and Piedmont Avenue was handcrafted in 1926.  

Architectural Details Abound

Built with yesterday's attention to detail, 958 Kingston Avenue offers the mahogany woodwork, high-style fireplace tilework and classic crown molding you'd expect from the Roaring '20s.  The current owner expanded the size of the living room, carefully matching the original architectural features, while creating a more spacious and expansive feel.  And the rebuilt entry and main floor is now level-in from the street! A gorgeous garden, complete with an unusual catalpa tree and roses blooming on all sides, completes the picture.

Move-In Ready

The current owner installed a number of upgrades, from new appliances in the kitchen to a number of dual-paned windows to an energy-efficient flash water heater.  Seismic work was completed by a previous owner.  There's over 300 sf of storage on the lower level, in addition to the garage.  Just move in and begin enjoying the Piedmont lifestyle!

Location, Location

A more convenient location would be hard to find!  Kingston Avenue sees little through traffic, and guest parking is plentiful.  Beach Elementary School (and after-school care at Schoolmates) is just two blocks away, and Piedmont Avenue (along with the Piedmont Avenue Library) is just two blocks in the opposite direction.  Drop off the kids at school, and grab a latte at one of Piedmont Avenue's many coffee shops before hopping on a WiFi-equipped express bus to San Francisco's financial district.  San Francisco, Berkeley, Emeryville and the Lamorinda/Tri-Valley area are all a convenient commute on Rt. 580/80, Rt. 13 or Rt. 24, as are SFO and OAK.    Playdates and games of catch are easy to organize--imagine a streamlined life!

Stroll to Piedmont Avenue for a Michelin-star meal at Commis, followed by an arthouse movie at the Piedmont Theater.  Restaurants and shopping in Rockridge, Montclair and the Elmwood are just a short distance away.

Both 958 Kingston Avenue and 104 Pala Avenue will be open during the hours of the CSL Tour (10-4 pm Friday and Saturday) as well as 2-5 pm on Sunday.

See for photos and more--

Wednesday, April 17, 2013

Solar Update

We'll, Sungevity came and went.  It was a super-fast interaction.  Most of their analysis is done on the web rather than on our roof.  Here's the deal--

If your electric bill is high, it's likely that you're paying the highest price per kilowatt out there.  PG&E's electric rates are progressive, so the first x kilowatts are priced affordably, and as you go up the "tiers" of tier pricing as your consumption increases (due to larger house and/or less efficient appliances), your price per kilowatt for that electricity reaches nearly three times the unit cost of the baseline rate.  Instead of 13 cents a kWh you're paying 34 cents a kWh if you're a big consumer.

Sungevity makes sense for those who would use solar to offset that highest tier of consumption.  (And who have a place for the panels facing south and/or west--we have a roof slope that no one can see that faces SW.) Let's say that solar panels cost about 20 cents a kWh--if you had a smaller house and consumed only the baseline amount (50-60% of average consumption in the "turf") at 13 cents a kWh, it would not make sense to install solar.  But if you're paying 34 cents/kWh for the second half your usage, then installing solar at 20c/kWh makes a lot of sense.

Read more about tier pricing (oh, that reminds me of my stint representing consumers before the Alaska Public Utilities Commission back in the mid-80s!  PURPA and all that.....) here.

The firm has three basic options to think about:

-They'll install the panels and guarantee electricity production, and will charge you monthly "rent" for the panels.  This rent is more than offset by your guaranteed electric bill savings.

-Or you can pre-pay the lease agreement in a lump sum, and then your bill savings are your bill savings.  We're paying about $8000 upfront for the system in exchange for a guaranteed $105/mo in electric bill savings (at today's current electricity rates; as the rates increase over time, the savings, and thus the return on investment, increase).

-Or you can buy the system outright, fuss with the state and federal rebate processes, take care of repairs yourself, and hope that the electricity generated is what Sungevity estimated.  More risk, and more paperwork.

We went with option 2.

More when they get on the roof--

Au Pair Anyone?

For years we hosted foreign students in the summer (mostly French, since my Spanish is fluent).  But we never had an au pair--and never will as the youngest is as we speak checking out his final college options!  But my organizing maven Nina Johnson is branching out her business.  She's now a consultant for Cultural Care Au Pair.  Check out her firm and site here if you see an au pair in your future.

Tuesday, March 19, 2013

Onto Solar?

Longtime readers of this blog know we're a bit maniacal about saving energy.  It's those years in Alaska, the energy-efficiency demo I did with the DOE while running the Farmer's Home Administration in the Clinton Administration, and my fundamental thriftiness (note:  I'm thrifty with my money, and thrifty with yours as well....).

At the Pala Avenue house, we installed a panoply of energy-saving devices...occupancy- and vacancy-sensor switches, insulation, double paned glass, low flow bath fixtures, a second furnace to replace the baseboard heat upstairs, and so on (I'll tell you a little secret--the Pala house is going on the market at the end of April!).

Here at our Pacific Avenue house, we've reworked the ducts, installed a Nest thermostat, and are installing double-paned glass in the original windows and skylight in the former artist's studio, which today act as a flue to drive warm air up and out of the house.  Meanwhile, our electric bill is huge because there are way too many halogen lights in the house, and the Remaining Son's room can get chilly, so he turns on the baseboard heat in his office alcove (and doesn't turn it off as he leaves for school).

We have so much low-hanging fruit that we haven't gotten serious about solar, and for me at least, "waste as much electricity as you want on those lights because you can get it for cheap from solar panels" is not a compelling argument.

But the Sungevity folks stopped by today and we'll talk again on Friday about what solar could do for our situation.  They're the company (run by a Kennedy, btw) that leases solar panels.  I'll let you know how it goes.

Integrity First

Mark McLaughlin, the owner of Pacific Union, has just finished his 2013 "road show" presentations around the region (we're now a dozen offices with 550 talented, deeply experienced agents, with the capacity and resources that such a sizeable, yet locally owned and managed firm can offer).

He reiterated our history:

"Pacific Union was founded in 1975 to be a different kind of real estate firm. We preferred to create industry standards rather than follow legacy or convention. To act with absolute integrity. To base our success on ethics and results. "

I continue to be struck by how consistently Pacific Union hews to the high road--

  • how consistently agents resist the urge to try to represent both the seller and buyer in a transaction (because let's face it, you can't, even though it's technically legal);
  • how consistently leadership reiterates the need to disclose disclose disclose, whether the condition of a home, or innocent prior relationships between agents and buyers; and
  • how effectively our agents are advised by our legal team about cutting edge issues, or the complications that a frantic market like the current one can generate.
We act this way because it's the right thing to do, but also because it creates a fundamental sense of trust between agent and client.  If your agent tells you in advance that one competing buyer is her tenant, or if your agent tells you in advance that she has a second listing coming to market at a different price point at the same time as yours, or if your agent tells you in advance that she has a second buyer interested in the same property so can't represent you, and is happy to refer you to another agent in her firm or in another firm if you prefer, does your sense of trust increase?  


Tuesday, March 5, 2013

Piedmont's "Selling a House in Piedmont" Flyer

Stopped into the City offices a week or so ago and noticed a new brochure on selling a home here.  It focuses on three things:

-The mandatory sidewalk inspection ($30)
-The mandatory permit history and distribution to buyers ($50), and
-The mandatory compliance with EBMUD on your private sewer lateral.

I always go over and order/pay for these for my clients--like the natural hazard disclosure ($99), it's a mandated disclosure report, so ought to be paid for by the seller, but I have a hard time nickeling and diming about $179 in this market......

If the City says your sidewalk needs repairs, you get it repaired before closing, or more typically pay the City in escrow to do the repairs when they are next in your neighborhood.  (Sometimes buyers cover this cost as part of a campaign to get sellers to take their offer, but typically the seller is responsible.)

If your permit history notes any un-finalled permits, it's typically the seller's job to get them "closed" before closing (though again, sometimes buyers will take this on).  Now that I'm a broker, I have a take-no-prisoners attitude about closing permits, and you should too! Don't give your contractor or hot water heater installer their final check unless you have the finalled permit in hand!

Here's how it goes:  You call the installer when your hot water heater fails (hopefully it didn't involve a gush of water all over your rumpus room carpet....).  The installer says "$1395!" (because a more reputable installer will tell you, "well, this should be done with a permit [and your vent is wrong and your flue is transite and Piedmont doesn't allow that anymore, and the tank needs to be double strapped for earthquake safety] so the total cost to do all this is $2200," and this installer thinks you'll go with him if he says "$1395!"  Worse yet, in some ways, is when the installer says "$1395 and I'll get a permit too!"

Many years later, when you go to sell the house, you'll find that the installer didn't close the permit and the inspector will "ding" you for the incorrectly hung vent and the transite flue.  So you then have to pay a penalty, and pay to renew and then close the permit.  But before the Piedmont inspector will close the permit, they'll force you to fix that vent and replace the transite flue.  And double strap.

So much better to tell the installer, "get a permit and close it; I'm not paying 'til you do."

And when your brother offers to re-do your bathroom, say "only if you'll get a permit and close it."  Closing permits many years later, especially after code requirements have changed yet again, is an expensive and very frustrating process (often you'll have to open up walls, or god forbid, shower tiles, to prove there is proper plumbing underneath, and then close it up again.  As you can imagine, the buyer doesn't think this is their problem.).

And then on to sewer laterals.  Your sewer lateral is the "lateral" pipe from your house's drain lines out to the City sewer main, usually in the street, but sometimes at your rear property line, or sometimes through your rear neighbor's yard and down to the street behind you (been there, done that).

Recall that EPA settled with East Bay cities a couple of years ago regarding our leaky and cracked clay sewer lines.  All homes need to have their sewer lateral "compliant" at sale.  The buyer or seller can do it, and they can even delay for up to 180 days if there's a $4500 performance bond paid by someone.  All these issues typically get resolved in the purchase contract, and are negotiable.

If you're lines are clogging, pull the trigger and replace your lateral.  You'll avoid the mess in the intervening years, and you'll be eligible for a 20-year exemption from the testing requirement.  If you replaced it within the past 10 years, as we did, you can file for a no-cost 10-year exemption.

And managing all these details is the job of your realtor!  It's a lot to contemplate, but if you bit it off in bits, or ask your realtor to feed you these items in bits, it's easier to digest.  Don't forget, this is all in exchange for getting you closer to that new stage of your life!

Wednesday, January 30, 2013

A Blog after my Own Heart-- gets my eyeballs every week or two.  And today, just after I ordered a new gasket for my 25 year old blender on Amazon, I see the post on fixing things.  It's here.  Here's to fixing things rather than throwing them out.  Gotta go pick up the wool blanket with new binding tape at the dry cleaner's........

Tuesday, January 29, 2013

Why Sell Now?

You may have lots of reasons to wait a year or two to sell. But if you've been thinking about it for a couple of years and are still on the fence, here's some bullet points discussed at my staff meeting this morning:

Reasons to Sell Now Rather Than Wait Til Next Year

*We don't know what next year will bring (9/11?); we do know that right now prices are up, competition for the few listings is fierce, and nearly three-quarters of listings are selling in multiple offers, which typically means fewer post-contract demands and negotiations for sellers.

*Interest rates remain low. As they rise--and they will, sometime--affordability and purchasing power will decline. A buyer with a $600,000 mortgage pays $2000 a month (at 4%) in interest today and can afford a home costing $750,000. When rates rise to 6%, than same buyer can afford a house costing only $500,000. their $2000 a month will cover only a $400,0000 loan. As interest rates rise, buyers can afford less, leaving fewer buyers competing for your home.

*In accelerating markets, the less expensive homes tend to appreciate in value more quickly (see above). Thus, a move down buyer may or may not garner more if they wait til next year, but it's likely your move down house will be disproportionately more expensive later.

*Waiting until next year is not cost-free: If you're ready to move now but choose to wait, you'll pay additional interest, taxes and insurance in the meanwhile (principal will reduce your outstanding loan amount). Sell now and those funds go into your new home; if you are downsizing, your "PITI" may well be lower during the coming year.

Saturday, January 26, 2013

183 Somerset--Private, Versatile, Level-In w Killer Bay Views!

Five bedrooms, four and a half baths arranged artfully around the big patio and pool, split between a 3-suite mid-century by Ostwald and a 2/1 cottage, all on nearly a half-acre property.  All renovated.  See for all the details.  Open Sat & Sun afternoons.  Piedmont!

Friday, January 25, 2013

Piedmont Upward Trend Endures

Piedmont’s real estate market continued its strengthening trend through the end of the year, and year-over-year compared to 2011.
The average sale price for a Piedmont home in 2012 (per the Multiple Listing Service) was $1.457 million, about 2.4% over the asking price, on average.  The typical home sold in 21 days on the market.  Prices ranged from a high of $6.5 million to a low of $510,000.  In contrast to other parts of the regional market, more homes sold this year than last:   131 homes sold compared to 121 in 2011.  On a price per square foot basis, prices in 2012 are up 9.5% compared to 2011.  Because the range of home prices is relatively consistent over these two years, this is probably a good indicator of pricing trends—in other areas the trend is affected by a sudden influx of higher-end homes going to market, dragging the average price up.
The fourth quarter of 2012 say a firing of these trends, despite the usual slowness of the holiday market:  The average price of a Piedmont home sold was $1.48 million, or $544/sf.  The typical home sold in 27 days, and prices ranged from $4 million to $800,000. 
We’re increasingly seeing homes selling off market, and those prices are not necessarily included here (realtors can report prices to the MLS “for comparable purposes only” after the fact, but some sellers prefer to maintain confidentiality, for an array of reasons).  These sales often see a number of bumps on the road to the final sale, as sellers think they might have gotten a better price if the house were more widely marketed, and buyers feel they should get a discount for bringing a “good” price to the seller with what they perceive to be little effort. There are certainly good reasons for some sellers to close without a more public sale, but agents in the field typically understand that this approach does not bring the highest and best offer, and often leaves sellers wondering what they missed out on.

Wednesday, January 9, 2013

Nest Installation--Check

Yep, we did it today.

I'm busy, so Yelped for assistance, and found recommended local contractor Tom Wright ((510) 710-3310).  He and his colleague installed the second generation Nest, bought at Amazon for $249.  It took about 10 minutes of actual work, but several additional minutes waiting for the system to connect to the house's WiFi, to upload updates, and to accept my minor input.  It's insanely elegant and insanely simple to orient.  In fact it feels way too simple for a programmable thermostat.  I'm casting about for the way to input the full week's schedule and engage, but the eye is essentially saying back "no Maureen; you just live your life and punch me a couple times in the coming week or two, and I'll figure it all out. Really.  Go to yoga class."   

Tom charged $75, which we should make back in energy savings in about a month or so, based on various Nest info out there.  The Amazon review site has lots and lots of user feedback and insight ("does it think dogs are people?" "what if I have this kind of furnace?" "can thermostats on different floors talk to each other?") and the Nest site at and the blog at are choc a bloc with info.  The second generation even has a wall plate that covers up the schmutz left by your old  '90s thermostat (the original "eye" is the same shape as the old non-programmable round one we all grew up with, and clearly the Nest folks heard back from non-professionals saying "you said it was deeply perfect, but I had to hire a painter to come and patch and paint the 1962 paint color newly revealed when we reverted from '90s thermostat to Gen1 Nest..."  So they quietly added a nice piece of optional 3x6 plastic to the kit.)

For more on the Nest vs. Honeywell mudbath, see  

Anyone want a very nice 2008 programmable thermostat for free?  Let me know and I'll drop it off--you just need to figure out how to hook up the wires.

Food Bank Says Thanks!

Thanks for all your contributions to the Alameda County Food Bank over the holiday season.  Whether you gave through the Scouts, or through Pacific Union's site, it makes a huge difference.  Our firm outdid itself--we raised 134% of our goal, or nearly $11,500!  Thank you!

Tuesday, January 8, 2013

A Nice Summary of the Tax Changes Last Week

From Citibank:

On January 2, 2013, President Obama signed the American Taxpayer Relief Act of 2012 (“the Act”) into law.  The Act gives clarity, for the present, to the Federal tax system.  Outlined below are some of the key changes for 2013. 

Transfer Taxes

·         Under the Act, the gift, estate, and generation-skipping transfer (GST) tax exemptions are permanently set at $5,000,000 (indexed for inflation since 2010).  The inflation-adjusted exemption amount in 2012 was $5,120,000. The inflation-adjusted exemption for 2013 has yet to be announced. 

·         The highest marginal gift, estate, and GST tax rates were increased from 35% to 40%. 

·         The Act makes “portability” a permanent part of the estate tax regime.  Portability allows a surviving spouse to use any unused portion of the first spouse to die’s exemption for transfers during the surviving spouse’s lifetime and at death. 

·         All other transfer tax provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 are permanently enacted.

·         In addition, although not related to the Act, the annual gift tax exclusion amount was increased to $14,000 per donee for 2013.  The amount that can be gifted transfer tax free to a non-citizen spouse was also adjusted for inflation and increased to $143,000 for 2013.

Income Taxes

·         The maximum marginal income tax rate was increased to 39.6% for individuals earning $400,000 or more and married couples filing jointly with combined incomes of $450,000 or more in 2013.  For all other taxpayers, the previous maximum rate of 35% remains in place.

·         The tax rate on long term capital gains and qualified dividends was also increased to 20% for individuals with incomes of $400,000 or more ($450,000 for married couples filing jointly).  For all other taxpayers, the previous maximum rate of 15% remains in place.

·         The Pease limitation on itemized deductions was reinstated for individuals earning over $250,000 ($300,000 for married couples filing jointly).  The Pease limitation reduces the amount of allowable itemized deductions by 3% of the amount by which the taxpayer’s adjusted gross income exceeds a specified threshold, up to a maximum reduction of 80% of itemized deductions.

Medicare Tax

·         Under the Patient Protection and Affordable Care Act, taxpayers earning more than $200,000 ($250,000 for married couples filing jointly) are subject to a 3.8% additional tax on Net Investment Income. 

·         There is also an additional Medicare tax of 0.9% for all taxpayers earning wages and compensation more than $200,000 ($250,000 for married couples filing jointly).

Social Security Payroll Tax

·         The payroll tax cut that had been in place for the past two years expired, raising the rate from 4.2% to 6.2% on the first $113,700 of wages. 

Monday, January 7, 2013

The SF Market--2012 Summary Here

A colleague in San Francisco was first to produce a year-end report and get it out, so if you're interested in the SF market, click here.

Relatedly, Michael Krasny's first hour today (of which I missed much) was on the Bay Area housing market.  If you'd like to hear it, click here to start the audio.

My market summary will be out shortly!

Friday, January 4, 2013

Heat Going Up and Out the Attic?

Recently read about PG&E's new incentives to reduce gas consumption (yay Russ).  Our problem is that the prior owners of our home went overboard with lighting.  So we need serious incentives to pull out energy-hog kitchen lights and replace them with the now-mandatory energy-sippers.  But lots of us are losing large amounts of heat through poorly insulated attics (or in our case, original 1913 single pane glass skylights....).

This Old House comes to the rescue with a nice piece,,20645175,00.html on home insulation.  Don't forget, it makes your house warmer in the winter AND cooler in the summer.  Insulation also regularly comes out at the top of the list for bang-for-the-buck energy efficiency improvements.

Dwell's Six Ways to Keep Costs Down

I always tell my renovating clients "the best way to stay on budget is to resist the urge to change the plan."

Change orders often involve returning items, paying restocking fees, paying contractors to take out what's there and then put in something new, new architectural or engineering drawings (because the change is not as straightforward as you think, and unless you make it clear that you're concerned about the all-in costs, no one is particularly anxious to let you know that),  added permit costs or even new requirements for design review or public hearings.  It all requires more time, which means more personal disruption, and of course more money.

And "money" includes labor, materials and carrying costs (your mortgage (PITI) for those extra couple of months you're unexpectedly not getting full use of the house).  In fact, I had a brief chat with a plumber recently and he threw out an nice example--snazzy wall-hung toilets (vs. the usual kind that sit on the floor)--"yeah, the price for the toilet is not much more than the usual, but they'll pay me three times as much to install it, with all the added wall bracing and repatching it requires."

Dwell's February issue focuses on budget renovations, but in a very thoughtful way--not just "buy Ikea," but rather "be smart from the get-go."  Their six meta-suggestions:

"--Haste makes waste--Getting your design just right isn't a race against the clock, and taking your time just might save you a few bucks along the way.

--Rein it in--Building small means building less.  And building less means saving more.

--Expert moves--Whether designing affordability into the structure or driving a hard bargain for those countertops, budget-conscious architects and builders know what it takes to minimize costs.

--High-impact splurge--Inexpensive needn't mean uninspiring:  These are the bold, big-ticket flourishes that really make the space.

--Sweat equity--A little DIY ingenuity and some deftly applied elbow grease keep costs low.

--Material intelligence--From a well-placed pop of color to a cleverly installed wall of curtains, these moves make the most of the materials at hand."