Fall 2010 Zephyr Real Estate Report: News and Updates for Homeowners

Lenders Continue to Steer the Housing Recovery

One of the interesting characteristics that we’re seeing in the economic recovery is the dramatic effect that lender policy and process has on how we handle the sale of property. Probably the most significant example of this is timing. The one immediate response to the financial meltdown of 2008 was a slowing of loan application review to a crawl. Although the time necessary for lenders to consider a loan application has improved, it’s nowhere near where it once was. Lenders are still picking through applications with extreme caution and they continue to request additional supplementary documentation through the late stages of the loan process.

Another example of lender control can be seen in the appraisal of properties. Properties that seem to have strong demand and fair pricing are still being scrutinized carefully. Lenders continue to knock off value based on a ‘declining market’ even though things have clearly improved. A significant factor for property sellers is whether the property will appraise at sale price. If the appraiser disagrees about value then the entire sale comes to a halt until somebody gives (the appraiser comes around on value, the seller reduces the sale price to meet the appraisal or the buyer is willing to make up the price difference with additional cash). This is never an easy issue.

The good news is that the volume of transactions is increasing and buyers seem to be sensing that the time to buy has arrived. The number of doom-sayers warning of the ‘double dip’ recession seems to be falling off and the consensus is that a long but steady road to recovery is underway.

SF is First in Nation to Start College Savings for Every Kindergartner

Citing the statistic that one in three San Francisco children is born into a family with no savings or assets, Mayor Gavin Newsom along with several city and school district officials recently launched the “Kindergarten to College” savings program.

For the 2010-11 academic year, the city will open a college savings account for every kindergartner — approximately 1,200 students — at 18 public elementary schools. Total enrollment numbers are expected to double next year.

Dubbed K2C, it is the first such program in the nation. The city of San Francisco will contribute the first $50 to each account, with lower-income students eligible for an additional $50. Local non-profit EARN will match the first $100 that families contribute on top of the initial deposit, and several other community groups have committed to further savings matches and incentives.

As noted by EARN President and CEO Ben Mangan, “We see every day that with the right tools and incentives, low-income families can and do save, often at higher rates than wealthier families.”

The Citibank accounts will provide more than seed money and inspiration for college-hopefuls; they will also be used to teach students financial management skills, making San Francisco the first city in the country to integrate financial education into the K-12 curriculum.

This is an incredible investment in our city’s future and yet another incentive for young families to stay rooted in San Francisco.

Participating schools for the 2010-11 academic year are: Bessie Carmichael, Cesar Chavez, Cleveland, Dr. George Washington Carver, Dr. William L. Cobb, Dr. Charles R. Drew, El Dorado, Francis Scott Key, Gordon J. Lau, Guadalupe, John Muir, Junipero Serra, Malcolm X, Sanchez, Sunnyside, Sutro, Tenderloin, and Yick Wo Elementary Schools.

Property Tax Advice from City Assessor Phil Ting

Phil Ting, Assessor-Recorder for the City & County of San Francisco was kind enough to speak at one of our recent company wide sales meetings, where he addressed questions regarding property tax assessment and appeals.

Many homeowners are concerned about how market value decline may impact their property taxes. According to Ting, the Assessor is required to enroll the lesser of either the factored base year value (assessment) or the market value. For example, if the amount you could sell your house for as of January 1, 2010 is $500,000 and the assessed value is $200,000, the Assessor would enroll the $200,000 as your taxable value. You would not qualify for a lowered assessment.

Property owners have two ways to appeal the assessed value of their property. If they believe that the market value is less than the assessed value, they may file an informal appeal by filling out a basic form at www.sfassessor.org.

The informal review process is limited to single family dwellings, residential condominiums, townhouses, live-work units, and residential cooperative units. This year, the Assessor-Recorder’s office granted temporary reduction to over 18,000 properties which included proactive reduction and informal review requests.

If a property owner receives a Notice of Assessed Value and disagrees with the amount, they may file a temporary one year reduction through a Prop 8 appeal. Or if they disagree with the purchase price, they can file a Base Year/Supplemental appeal to permanently adjust it. Information on initiating these appeals can be had by calling 415.554.6778. Note: According to state law, this process may take up to 2 years.

Ting assured Zephyr’s agents that the San Francisco Assessor’s office is committed to processing all appeals in an expeditious manner. There are more than 6,000 appeals in the queue; although the process is labor intensive, Ting said he and his staff are committed to processing all requests in a timely fashion.