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 Real Estate e-Newsletter
Coldwell Banker Previews International
Coldwell Banker Co.
166 N. Canon Drive
Beverly Hills, CA 90210
by Cynthia S. Radom Award-winning Certified Seniors Specialist REALTOR®
                                                          Since 1994
              NEWS & ISSUES for BABY BOOMERS to GOLDEN-AGERS
         April-June 2014   ·   Cynthia@RealtorRadom.com   ·   (310) 288-0479  CalBRE #01184864

                                     ** Writer and Publisher since October 1999 **

 BOOMERS RESHAPE HOUSING MARKET
Boomers Boost Demand
Seventy-seven million people were born in the U.S. between 1946 and 1964, thus tagged the Baby Boomer generation.  Every seven seconds one Boomer turns 50, more than 12,500 every day.  The last Boomers turn 50 this year and now, for the first time, are the largest Senior age group in terms of size and percent of the U.S. population.  How Boomers will, and can, reshape the demand for housing is apparent.  Is L.A. ready?

Excerpts from an article in Economic Review
The single-family residence (SFR) is not obsolete, yet.  But, aging Baby Boomers could reshape the U.S. housing market and the economy in coming years.  As Boomers get older, many will move out of the house where they raised families, and move into a cozier apartment, condo or townhome (aka multi-family housing - MFH).  This is a normal transition for individuals, but a huge shift in the country's housing demand.  

A senior economist wrote that based on demographic trends the U.S. should see a stronger rebound in multi-family housing construction than in single-family homes.  He also notes that the slowing U.S. population growth will put significant downward pressure on both types of housing.  By the end of the decade, multi-family housing construction is likely to peak at a level nearly two-thirds higher than its highest annual level during the 1990s and 2000s.

The shift will have implications for fiscal policy (tax subsidies for home ownership), monetary policy analysis and local zoning codes. Areas seeking to retain aging households may need to enact some rezoning to encourage multi-family housing.  Furthermore, the shift will put downward pressure on SFRs relative to MFH prices.  Consumer demand for goods and services that complement SFR indoor and outdoor space will be geared toward living in an apartment.  Similarly, a possible shift toward city living may dampen demand for cars, highways and gas, but increase demand for restaurants, city parks and high quality public transit.

Households, governments and firms that correctly anticipate these changes are likely to benefit.  Is L.A. getting ready?

     Seminar for Seniors
Moving Made Easy for Seniors, join an informative discussion with your peers and learn how easy moving can be, Saturday June 7th at 10:30 am. Call Cynthia, (310) 288-0479 to pre-register. 
New Caregiver Law
Effective in January, the cost of in-home care just became more expensive.  Regulated by the State of CA, the fixed-rate paid per day was eliminated for every caretaker over the age of 18, excluding family members.  Any caregiver who works more than nine hours a day, or 45 hours a week, must be paid time and half for overtime.  One way agencies are managing this is to create 8-hour shifts for those who need 24-hour care.  That means three different people in and out of the home daily.  Be prepared for another price increase next year when Federal mandates take effect in lieu of State laws.

       FREE Placement Looking for a Senior residence can be more complicated than buying a new home or condo.  There are differences in what each community offers and what entry fees are required.  If you are a Golden-ager, or responsible for an older Senior, you might take note for future reference.

Hire a placement specialist whose livelihood is to know all the nuances, costs and locations of Senior housing personalized to individual needs.  The service is free to the client.  For example, companies like Concepts for Living; A Place for Mom (and dad) and Heart Light are some of the providers that get their fee from the residence when they help to relocate a Senior. 

When a longtime homeowner decides to move, a replacement home must be identified first.  Before visiting a few residences, determine your current monthly living expenses.  NOTE: this exercise is also helpful when considering a condo, which has a monthly Association fee.  

Next, consider your current and future needs, like daily living assistance.  Make a list of what you want to gain from a new residence:
- meals provided
- camaraderie; socializing
- safety
- medication management
- less living expense, etc.

Finally, discuss with a placement service the various residence options in your desired area.  In Orange and San Diego counties, where land is plentiful, there are communities with golf and tennis for active Seniors.  Others offer more vertical housing with hotel-like apartment living.  Be assured, there is a place for you.
Staging Study Results
A recent study was conducted at The College of William & Mary, School of Business about the merits of staging a home for sale.  The debate is whether or not paying to have a home staged (ex: renting upscale furniture and/or repainting walls a neutral color) results in a marginally higher sale price sufficient to cover the cost of staging the home.

Results indicated that staging conditions do influence the process; however, Buyers' rationality does not significantly differ in their valuations based on staging conditions.  A neutral wall color and good furnishings do significantly influence a Buyer's perceived livability and overall opinion of the home.  While these are not a necessary condition for purchase, staging is not enough to result in a higher selling price. 

Staging efforts do appear to impact potential Buyers, but the effect does not carry through all the way to the bottom line for Sellers.  Because home Buyers do not get to keep the furniture and because paint is relatively inexpensive, this failure of staging to impact opinions of home values is contrary to what many agents believe.  The study indicates that furniture quality and color choices do not appear to have a significant effect on the actual revealed market value of the property, but they do have a strong impact on the perceived livability and overall impression of the home.

          Boomer Facts
- Boomers control more than three-fourths of America's wealth
- Between 2000 and 2010, the 65-plus population increased at a faster rate (15.1%) than the total U.S population (9.7%)
- By 2015, those aged 50 and older will represent 45% of the U.S. population
- By 2030, the 65-plus population will double to about 71.5 million
- In 2050, the number of Americans aged 65 and older is projected to be 88.5 million, more than double its projected population of 40.2 million in 2010
- Boomers' median household income is 55% greater than post-Boomers and 61% more than pre-Boomers  

      NEW L.A. MANDATE
Homeowners must replace toilets and faucets to low-flow before selling a home, even if the house will be torn down in the City of LA.  A Certificate of Compliance is required.  No more allowing the Buyer to take responsibility.  Call me for info.
Luxury Home Buyers Set Trends
According to Better Homes and Gardens, the upscale consumer magazine, luxury home Buyers are considered trendsetters in most industries.  Here are five fresh trends resulting from a survey of recent luxury home Buyers:
 
1. Tech-friendly homes: 87% prefer a smart home (technology efficient) over a green (ecologically) one.  Example:
turning on the heat or opening a garage door with a smart phone or tablet
2. Amenities in, grandiose out: McMansions are out in lieu of amenities.  Ninety-four percent said they would down-size to live in a house with "character", a larger lot, a shorter commute to work or easy access to dining and entertainment
3. Multiple homes: 58% prefer and own multiple homes to support their life-style activities, warm or cold weather interests
4. Increased personalized service: while their REALTOR® guides them through all aspects of acquiring a home, luxury Buyers want more detailed information than ever: neighborhood life-style; advance listing notices, advice on housing trends and personal support during the process (so does every Buyer!)
5. Great outdoors: outdoor space is vital with the top three essentials including: a garden oasis, a fireplace/fire pit and a separate guest house

Added finding: 93% surveyed believe their house is the best one on the block, proving that pride of home ownership is alive and well.
Residence Corner

Three New Condo Sites in B.H.
Opening Summer 2014 is a 22-unit condo complex located on North Palm Dr. at Civic Center Dr.  Also, South of Wilshire, at 309 S. Elm Dr., is a new project  with 30-units set to open Spring 2015.  Finally, the mega complex on the former Robinson-May site is set  for demolition this summer.  Plans include two 14- or 16-story towers with 235 condos and ground floor retail space.  If you want to be contacted for specs and prices, just click on the link and send an e-mail request to: Cynthia@RealtorRadom.com.  

 

      Buy Before Selling
In this fast-paced housing market where homes sell quickly, a Seller must know where they are moving before listing their home for sale.  A contingency offer, "I have to sell my house before buying" is unacceptable because there are too many Buyers ready to close now.  But, here is the catch, how do you buy a replacement home before selling?  Use OPM - other people's money!  Personal money lenders offer short-term financing which enables you to borrow, buy and then pay-off the loan when your home sells.  This is not a personal referral, but Cervenka & Lukes loans up to $2.5 million: call Shane at (310) 779-4554 for info: 
         Tidbits of News
- A comprehensive Web site for age 55+ U.S. communities: Click here
- Biggest homes for sale in U.S.
65 Photos - click here
- Most expensive home in the world is for sale in London, asking: £300million ($498M) boasting 45 bedrooms in seven stories

 Get a Written Appraisal
When your spouse passes away, you need to get a written market valuation on the real estate that you own for tax purposes.  The price you paid for your property is called the "basis" from which capital gains is computed.  The appraisal will increase, or step-up, the basis to the current property value on date of passing...from the price you paid many years ago.  This will save you $$$$ in taxes when you or your estate sells the property.  Ask your CPA, then call me for a written valuation.
  
Change E-mail Address
Please notify me when your e-mail address changes to ensure that you receive listing notices and the Real Estate e-Newsletter.  FYI - listing notices are automatic e-mails that you can receive of new and sold listings in your specified area.  To start this service, call Cynthia: (310) 288-0479.
Confession of an Ex-hoarder
Savers, hoarders, pack rats...the issue is clutter.  Stockpiling, saving or collecting unused "just in case" stuff with an inability to keep it organized is an issue for 5% of the total population.  Here is some insight from a former hoarder about letting go of possessions that may be helpful.

Confessions from Marty Kaplan:
I've run out of excuses for hanging on to stuff, but I am no longer on the road to "Hoarding: Buried Alive".  It was easiest to get rid of the piles of unread magazines.  The fear that had made me their custodian was the chance I'd miss something important.  The reality is, that if I do overlook some essential journalism, I'll hear about it from a friend or online and saving a link to my computer for later reading requires no real estate.

Clothes were harder to let go.  It was easy for me to mistake my closet for a scrapbook, to treat old clothes like souvenirs of where, when and who I was when I got them.  Now, I remind myself that it is less punishing to put a selfie (cyber self-portrait) on my hard drive than curating my personal wardrobe museum. 

Book-hoarder has been an even tougher role to jailbreak.  I still can't throw books away, but I can drop off cartons of books at the public library and if they end up in the dumpster, my hands are clean.

My big problem, the ball I've chained myself to for decades, is the stack of boxes in my garage.  It was a wonder I was able to confine this monument to me...in just 33 boxes.

Today, I am on the road to recovery.  Marvels like document scanning and cloud storage (ask your grandchildren to explain) are enabling my rehab.  I am now throwing away more stuff than I'm converting to PDFs.  The truth is that no one is going to need this stuff I've saved, least of all me.  There is no mystery why I've saved so much stuff: to prove that I'm alive, that I'm someone, that my trail on this earth is worth preserving.  My fear of letting go of those boxes is the fear of mortality, the fear of not having become worthy enough to investigate or document.  What's taken me too long to recognize is that the present moment is more than enough time to manifest and appreciate that worth; that its meaning and poignancy derive not from the fear of death, but the love of life.

109 yrs. 6 mos. 20 days
That is how old Betty German was when she passed away in January.  Betty was an initial condo owner at Century Towers when the complex opened in 1964 and where she lived for almost fifty years.  Betty's longevity feat was amazing. However, I know of another lady who is 107.
Eminent Domain Battles
Cities across the nation are considering the use of eminent domain to seize properties that are underwater.  The legal definition of eminent domain is: The power to take private property for public use by a state, municipality, or private person or corporation authorized to exercise functions of public character, following the payment of just compensation to the owner of that property.  

Despite threats from Wall Street and various organizations, more cities are considering a contro-versial plan to help prevent hundreds of foreclosures within its jurisdiction.  Property owners who owe more on their mortgage than the property is worth are seen as money makers for financially troubled cities.  So, the plan is not totally altruistic to help its citizens.  Some statesmen dubbed the process "friendly condemnations" using incentives to persuade owners to turnover their properties to the city instead of to the lender.   

Richmond CA, in the San Fran Bay Area, was the first city in the U.S. to adopt a plan to seize mortgages.  First, the city identifies and approaches financially strapped property owners with an offer to buy the mortgage and then reduce the debt on the loan.  If the owner refuses the city's offer, it can use eminent domain to take ownership although Richmond has yet to deploy that method. 

Critics argue that the plan is a breach of individual rights and that investors who own many of the targeted homes will not receive fair market value for the mortgages.  FHFA (Federal Housing Finance Agency) is threatening legal action against cities that use eminent domain in this manner.  NAR (National
Association of REALTORS®) also opposes the plan.

Some cities have retreated from similar plans, but more continue to weigh the eminent domain option including Pomona and Oakland CA.
 
Prices to Rise thru 2018
A recent survey of economists, real estate investment and market strategists has predicted that nationwide home prices will rise an average of 4.5% in 2014 with steady slowdown in appreciation rates each year through 2018.   
                          
Historically, normal annual appreciation is about 3%.  In 2015, price increases are expected to be about 3.8% and 3.3% by 2018 according to the 110 surveyed.  Also, based on current expected home value appreciation, prices could exceed the April 2007 peak by the first quarter of 2018. 
After five months of construction,
about 200 displaced agents and staff have a newly remodeled office. 

Coldwell Banker B.H. South 
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©2014 Coldwell Banker Real Estate LLC.  Coldwell Banker® is a registered trademark licensed to Coldwell Banker Real Estate LLC.  An Equal Opportunity Company.  Equal Housing Opportunity.  Owned By a Subsidiary of NRT LLC.  This is not intended as a solicitation if your property is already listed.