How Will Housing and Real Estate Be Affected After the Election?

Housing and real estate related initiatives and plans are dominating the state and national conversation around affordability, availability and plans for the future. Below is  the outcome of the California and national elections are as it pertains to housing and real estate. Results of California Housing Initiatives  Of the three California real estate related propositions only one passed. Good news is that residents over 55 and residents who lost their homes to wildfires will be able to get a property tax incentive. We hope in the long run, this change provides more inventory in the East Bay housing market as homeowners who have stayed in their homes for years due to their favorable tax base, can now move anywhere in California and take their tax base with them. The outcome of the 2020 election on all three of the real estate related propositions.  Proposition 15 – Change Tax Assessment For Commercial Property – Failed  The ballot measure to partially dismantle California’s longtime system of tying property taxes to the last sales price failed to pass. The measure would have reassessed commercial and industrial properties every three years. Residential property would have remained under current rules. Proposition 19 -Tax Assessment Tranfers -Passed Proposition 19 will give Californians 55 or older a big property tax break when buying a new home. To fund the new tax break, the measure would curtail a separate tax break Californians may receive on homes inherited from parents and grandparents. Only inherited properties used as primary homes or farms would be eligible for property tax savings. The Proposition also allows homeowners who lose their homes in a wildfire or natural disaster to transfer their property tax base to a replacement home anywhere in the state. That’s important because in California, homeowners pay their property tax based on the value of a home when they buy it, therefore, buying a new home could cause a family’s property tax bill to skyrocket.The Proposition also establishes a fire protection services fund. Proposition 21- Expand Local Government Authority To Enact Rent Control on Residential Property – Failed  The initiative would have modified the 25-year-old law to allow cities to control rents on apartments built after 1995, or earlier in cities that had rent control laws before Costa-Hawkins passed. The initiative would have allowed cities to limit rent hikes when eligible apartments became vacant. Opponents argued against Proposition 21 contending that rent control would slow homebuilding and hurt the investments of small landlords. National Election Outcome- Biden’s Plan For Housing  Affordable Housing The Biden campaign’s housing proposal pinpointed the issue of lack of housing supply as the driving force behind the affordability crisis. In response, Biden has pledged to invest $640 billion in housing over the next 10 years. Among other things, the plan would provide “financial assistance to help hard-working Americans buy or rent safe, quality housing.” The plan also calls for increasing supply via “investments in resilience, energy efficiency, and accessibility of homes.” Moreover, it promises more construction and the refurbishment of affordable housing units through the establishment of a $100 billion Affordable Housing Fund, which will include a $20 billion investment in the federal government’s Housing Trust Fund, among other investments.   Rentals and Evictions Biden’s plan for rentals and renters calls for local “eviction diversion programs” that will include mediation, payment plans and financial literacy education programs. He also wants to pass legislation put forward by Majority Whip James E. Clyburn and Senator Michael Bennet that would help tenants facing eviction get legal assistance. In an earlier version of his plan to beat COVID-19, Biden also stated that “no one should face foreclosure or eviction because they are affected by the COVID-19 crisis,” calling for mortgage and rental relief for people impacted by the outbreak.   Housing-related Taxes Biden has said that if elected he will roll back Trump’s tax cuts, presumably including deduction rules for things like mortgage interest and local and state taxes. His plan also specifically states that his overall $640 billion investment in housing will be “paid for by raising taxes on corporations and large financial institutions.” Berkeley Hills Realty  is an active proponent in housing issues, as we believe that homes create the backbone of our community. Read More

Fire Season Is Underway – Resources to Protect Your Home and Loved Ones in the East Bay

East Bay residents are still reeling from a horrific wildfire season where since the beginning of the year, there have been over 8,100 wildfires which have burned well over 3.8 million acres in California. Everyone is now very familiar with the term AQI and most likely have personal photos of orange skies and red sunsets. Read More

We’re Here To Help!

Dear Valued Clients and Neighbors, Our offices will remain closed to the public during this time of SiP and social distancing surrounding the Covid-19 pandemic.  We are however actively working from home.  Please visit our “Agents” page to meet agents virtually. Read More

How could CoronaVirus Affect Real Estate in the East Bay?

There is a significant amount of fear and genuine concern around the coronavirus/COVID19 lately, as it continues to spread around the world and now, here, in the East Bay. People are increasingly affected by the illness and worry for their loved ones. Our hearts go out first and foremost to families that have experienced a loss. We also feel for our communities suffering from the emotional or economic impacts of the virus. If you are feeling fearful, we find the following facts useful: (source: Coronavirus: How to Keep Things in Perspective, by Ignacio López-Goñi for World Economic Forum)       We know what it is We know how to detect the virus The situation is improving in China 80% of cases are mild People heal Symptoms appear mild in children The virus can be wiped clean Science is on it, globally There are already vaccine prototypes Antiviral trials are underway Health and emotional concerns notwithstanding, Berkeley Hills Realty is here to be your real estate resource and we provide the following economic points for your consideration: 1. Real estate is a long game, the virus will have a short tail. If you are wondering if you should continue your home search, remember, real estate is a long game. Whether you ascribe to the optimism of a seasonal virus or carry the concern of a worldwide pandemic, this hardship will end. Although not soon enough for the 5% most severely afflicted, a vaccine will come. The median duration of homeownership in the United States is 13.3 years. The world and local economies will be back on track before your next move. Don’t put off life entirely for a short term fluctuation. 2. Forecasts have been downgraded, but economy may still expand. From the California Association of Realtors, “Last week, the International Monetary Fund (IMF) cut its forecast for global economic growth by 0.1%, but is still calling for an expansion in 2020, albeit at a slower pace. Similar orders of magnitude have been forecast for the domestic economy, with groups like Wells Fargo and others expecting GDP to grow by 10-20 basis points slower than their pre-Coronavirus forecast. Growth is expected to be slower, but the economy is still expected to grow.” 3. Stay calm and carry on. Shelter in place still needs a shelter. Whatever the circumstance, people need housing and will continue to need housing. Homeownership is the safest way to establish a permanent shelter. We see this necessity manifest in the throngs of people still attending weekend open houses. 4. Amid stock market woes, real estate provides a safe harbor for funds.  The Dow Jones stock index dropped 12% in value last week illustrating the fact that there is plenty of dread surrounding the potential impact from the virus. However, even though the overall stock market had its worst weekly declines since the 2008 financial crisis during the week of February 24-28, it rebounded on March 2 to 1,294 points or 5.1%— with its largest one-day point gain ever. Then it fell at the beginning of the next week, rallying some again by March 10th as world leaders developed a global plan. The stock market is volatile. We have seen this before, and know where savvy investors moved their funds. They moved towards real estate. Losses in the stock market may sideline some buyers who have lost liquidity. Others may look toward moving money out of the stock market entirely and place it into real estate holdings until the world economic dust settles. 5. Interest rates are dropping! The Federal Reserve issued an emergency 50 basis point cut to their target interest rates, and guidance suggests that the Fed may be open to future reductions in order to counteract the negative impacts to financial markets. This week, mortgage rates fell to an all-time low level of just 3.13%. That is down from 3.80% at the start of the year and represents significant cost savings over the life of a 30-year loan. Lower interest rates don’t just lower monthly payments. Lower interest rates can increase the amount of house and square footage you can purchase to meet your family’s needs. As the California Association of Realtors stated, “Short-run risks to the economy exist but are arguably offset by long-run benefits of lower rates at the individual level.” 6. Local economies will be hurt, but real estate is likely resilient. From event producers to gig workers, our local East Bay economy will experience an economic blow from shuttered doors and CDC recommendations to avoid crowds. Unfortunately, our lowest-paid workers from Uber drivers to wait staff may feel the brunt.  This puts homeownership further out of reach for some members of our community, but may not do much to decrease real estate values. The sad truth is that we have already seen our market price out pace most hourly employees. Other sectors will be more resilient. Tech jobs, for instance, will be more flexible and allow workers to work remotely from home. There may be a small short term blip as people adjust to the new normal of caution in crowds and increased handwashing. However, this won’t be an affordability equalizer as those who have been able to buy homes are likely to have more resources to weather this storm. 7. Foreign investment may be curtailed. Per the California Association of Realtors, “Reduced economic growth in China, specifically, could stifle demand for California real estate this year. However, foreign buyers represented just 3.9% of California’s home sales last year, so the impacts statewide will be muted compared to 6 years ago, when foreign buyers represented 8.0% of the market. In addition, because domestic buyers typically finance their homes in much larger proportions to their foreign counterparts, low rates could stimulate more domestic demand that would help to offset the impact to foreign buyer demand.” 8. It is an election year and local and federal politicians are motivated to protect the economy. This is an election year.  Local economies will be […] Read More

Adding Value to Your East Bay Home And Helping The Housing Crunch

As you know, the East Bay is dealing with a lack of available housing and plans for high rise developments in the downtown areas of Oakland and other East Bay cities will only slightly be able to alleviate the need. Opportunities for individual homeowners to build ADU (accessory dwelling units) on their properties is gaining popularity as a way to increase the “infill” housing stock AND as an avenue for homeowners to create a passive income stream, add to the value of their homes right in their own backyards and create lifestyle flexibility. Read More

#REKindness – East Bay Kindness and Fun for the Holidays

Many of our neighbors are struggling with food insecurity, along with housing affordability and availability issues making putting gifts under the tree a struggle this Christmas. Our local food banks are always in need during this time of year, and Berkeley Hills Realty invites you to join us in helping fill the pantries while also filling your heart knowing you can help a person or family enjoy a full meal during the holidays. Read More

Continued Strong Market In East Bay Has Pros and Cons

As Berkeley Hills Realty has noted before, the solid economy, mixed with strong job growth combined with desirability of the East Bay combine forces for a continued strong market. Read More

Strategies for Dealing With Selling Your House During A Divorce

We all know that a divorce is an emotionally draining process and it can be a financial mess if a couple owns a home and makes mistakes when trying to sell it. During the past 20 years of being in business as a brokerage, we have worked with many couples going through a divorce and have learned a few valuable lessons along the way to share with anyone searching for advice. Read More

Empty Nesting in the East Bay

When Back to School Gets Personal (The Owner of a Real Estate Company Contemplates an Empty Nest)   It’s September and it’s that time when kids are going back to school. After over twenty years of coaching homeowners through the options of empty nesting, this year feels personal.  As mom of a sophomore student/athlete, we are already looking at colleges. With a kid who was born mature beyond her years, I expected this. What I didn’t imagine was how this reality has accelerated conversations with my husband about our own future as empty-nesters. Read More
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