Buyers Drive Hard Bargains in a Tough Market

Unrealistic buyers are ruining the deal for sellers who are unwilling to make extreme concessions, some real estate practitioners complain.

''We see buyers who must have learned their moves from the World Wrestling Federation,'' says Glenn Kelman, CEO of the online brokerage Redfin. ''They think the final smack-down occurs at the inspection, where the seller will be reluctant to refuse any demand because the alternative is putting the house back on the market as damaged goods.''

But buyers say they're simply being smart.

''We had the position, 'If the seller is willing to come down enough, we will buy this home.' If they weren't willing, we would have just moved on. In this market, you have a lot of options,'' says Chris Dunn, a consultant in Chicago, who sought a 10 percent reduction on a property priced at more than $500,000.

Source: The New York Times, David Streitfeld (06/17/2010)

California Economy

California’s economy to see sluggish recovery this year, UCLA economists say East Bay Real Estate.

Los Angeles Times

California’s unemployment rate, currently at 12.4 percent, will not return to single-digit levels until 2012 and the state’s inland areas will continue to be impaired by excess housing inventory and state budget cuts, according to a forecast released Tuesday by UCLA’s Anderson School of Business.

KEEP THIS IN MIND

• California’s economic recovery is contingent on consumer shopping behavior nationwide, as retail spending drives traffic at California’s ports and logistics centers, which are both substantial employers throughout the state, the report said. However, consumers are unlikely to increase spending until businesses begin hiring again, which many economists believe will only happen gradually over time.

• The coastal areas of the state will benefit from growth in health care, education, and technology, while inland areas will be constrained by excess housing inventory and state budget cuts, impacting rural inland areas where government workers account for a significant percentage of the workforce, according to the forecast.

• The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) recently issued its mid-year housing market forecast. Based on C.A.R.’s forecast, the median home price in California is expected to rise 9.1 percent this year compared with last year, while sales of existing, single-family homes will decline 4.7 percent. Rates on 30-year, fixed-rate mortgages will rise to 5.3 percent compared with 5.1 percent in 2009 and 15-year mortgages will average 4.2 percent compared with 4.7 percent last year, according to the forecast

To read the full story, please click here:

http://www.latimes.com/business/la-fi-ucla-forecast-20100615,0,6824904.story

Stop Point-of-Sale Requirements in Hayward

The Hayward Sustainability Committee is studying a Residential Energy Conservation Ordinance that would requite energy efficiency audits and retrofits when a home is sold. Homeowner education, voluntary programs and incentives are better ways to make homes more energy efficient.

If you're a Hayward REALTOR® or resident, Bay East needs your help.

We need your perspective on the Hayward residential real estate market and how point-of-sale requirements are ineffective and would have a negative impact on home sales.

Please attend the Hayward Sustainability Committee meeting on Wednesday, June 2 at 4:30 p.m. in Hayward City Hall, Room 2A, 777 B Street.

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NO MORE STATE TAX ON FORGIVEN DEBT

Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.

"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.

The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.

Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.

For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.

Information provided by California Association of REALTORS®