Market Snapshot

Homeownership: Making Forward Progress in the Short Run

Following the Great Recession, homeownership in California is down. After peaking at more than 60%
at the height of the last cycle, it now sits below 55%. Notably, the Census Bureau estimates that
Los Angeles and Orange County have dipped below 50% homeownership, meaning that it’s a
majority-renter region now.

Much of the decline is cyclical: many homeowners lost their previous home to short sale or
foreclosure during the downturn. However, there is also a structural component to homeownership, as
evidenced by a particularly low homeownership rate amongst minorities. This will have an increasing
impact on overall homeownership as California becomes more diverse. This is a long- term challenge,
but also a potential opportunity for the housing market and the California economy over the short

Currently, there are over 1 million households that earn more than the minimum qualifying income,
yet continue to rent. Even without addressing the larger structural issues, simply getting more of
the income-qualified households into homes would largely erase California’s gap with the rest of
the U.S.—boosting ownership to more than 60% again. The effects would be especially important for
Hispanic and black households. For example, roughly 277,000 additional Hispanic renters who earn
enough to purchase the median priced home in their county would be enough to push Hispanic
homeownership to almost 50%. Black households would see homeownership rise from the low 30s to more
than 40% as well.

This would be good for the buyers, who could take advantage of today’s low interest rates, enjoy
the tax benefits of homeownership, and begin

generations. It would also be good for the state’s economy by generating all the consequent
economic activity that comes with a new home purchase. The housing market would obviously benefit
as well—a win-win-win.

Of course, some “income-eligible” renters may not qualify for a mortgage because of bad credit, no
credit, previous bankruptcy or foreclosure, no formal documentation of income, or a myriad of other
reasons. However, many may just lack the knowledge about the buying process. Others may be unaware
of FHA and other low-downpayment loans. New programs have even sprung up to help finance buyers who
don’t have traditional credit profiles. Still others may have simply never considered the benefits
or thought homeownership was possible for them. Thus, some sizeable portion of that 1+ million
households could become owners. For those families, education, marketing, and effort could play a
big role in making the difference on the homeownership decision.

There is still a ton of work to do with respect to boosting incomes and providing equality of
opportunity for Californians over the long haul. However, there’s a lot that can be done in the
interim, With rates still incredibly low by historical standards, let’s help more of our neighbors
take advantage of the current environment and the

accumulating wealth for themselves and future
benefits of becoming a homeowner.

Brought to you by:

Ricardo Thomas REALTOR®
Realty World Golden Gate 1300 Clay St., Ste. 600
Oakland, CA 94612

Office: (510) 632-8100
Cellular: 510-632-8100 Email: BRE License: 01407688

Assurant Committed to Harvey Relief Efforts

Assurant Committed to Harvey Relief Efforts

shutterstock_531750412The devastating aftermath of Hurricane Harvey has Assurant, a risk management solutions company, responding to the extensive homeowner and flood insurance claims from Texas and Louisiana.

According to Assurant, the company’s First Response Team is prioritizing claims and inquiries from areas impacted by Harvey, with an emphasis on property and flood insurance policies.

“Since Harvey made landfall, our employees have been working to support customers with property damaged by this unprecedented hurricane, always focusing on how we can best help them navigate the many hardships storms like this can bring,” said Michael Campbell, President, Global Home, Assurant.

The company noted it wants its customers to know that it is committed to assisting clients through the recovery and rebuilding process, as inside adjusters have been working with policyholders since Harvey’s first impacts. Also, mobile claims teams are in the field and will be participating in state-run insurance claim locations.

In addition, the Assurant Foundation, the charitable arm of Assurant, Inc. announced a $100,000 contribution to the American Red Cross for its Hurricane Harvey relief efforts.

“All of us at Assurant appreciate the extensive work the American Red Cross does to help those impacted by natural disasters like Hurricane Harvey, and we remain committed to supporting their mission,” Campbell said.

The Ten Things Buyers Must Avoid When Getting A Loan

As a Realtor, when I meet with first-time buyers, we discuss what they need to do – get pre-approved for a mortgage, evaluate priorities, sometimes save money. And we go over what they MUST NOT DO. We’ve created a tongue-in-cheek set of commandments, things like “Thou shalt not become self-employed, change jobs or quit your job.”


Most buyers sort of laugh at this. I’ve never had a buyer actually do something like that. But I have to believe that not every Realtor covers this information with their buyers because this week we had not one but two buyers break the commandments on our listing, sending the loan approvals into a downward spiral. One buyer apparently thought he could still getting a loan after taking a leave of absence, suing his employer and then quitting a job.


And with many buyers purchasing short sales (sometimes a long” process), there’s enough time that buyers’ financial situation can change dramatically from the time of pre-approval to the time of final underwriting. Some situations – devastating illness, death of a spouse – are unpreventable. Others are definitely in the buyers’ control.


Here are the 10 commandments for getting a mortgage:

  1. Don’t buy or lease a new car or you may find yourself living in it
  2. Don’t quit your job to change industries or start a new company
  3. Don’t switch from a salaried job to a heavily-commissioned job or 1099 independent contractor position
  4. Don’t transfer large sums of money between bank accounts. If you need to do so, check with your loan officer to ensure what kind of documentation will be required BEFORE you make the transfer
  5. Don’t forget to pay your bills — even the ones in dispute
  6. Don’t open new credit cards — even if you’re getting 20% off. (And yes the offers at some of the department stores are tempting but resist the temptation!)
  7. Don’t make big purchases on the existing credit cards. The time to buy the new furniture and appliances on credit is AFTER you own the home, not before
  8. Don’t close any credit card accounts. This may change your ratios, which help determine how much mortgage you qualify for
  9. Don’t accept a cash gift without filing the proper “gift” paperwork. Ask your lender what documentation is required.
  10. Don’t make random, undocumented deposits into your bank account

If circumstances dictate that you might need to engage in some of these behaviors, always talk to your loan officer first. And then follow their advice. If you need a referral to a good loan officer who can help you through the process, I’d be happy to provide one.

The Secret To Great Relationships

The 100/0 Principle
The holidays have finally arrived. And with them, come family gatherings—a chance for all of us to share the joys of the season with those closest to us. But, sometimes, as we all know, family gatherings can magnify issues which may go unresolved the rest of the year.

Brian Tracy said…”Eighty percent of life’s satisfaction comes from meaningful relationships.” Think about it…when you look back at the end of your life what will really matter?

Five words…the quality of your relationships

An excerpt from
The 100/0 Principle
by Al Ritter
What is the most effective way to create and sustain great relationships with others? It’s The 100/0 Principle: You take full responsibility (the 100) for the relationship, expecting nothing (the 0) in return.

Implementing The 100/0 Principle is not natural for most of us. It takes real commitment to the relationship and a good dose of self-discipline to think, act and give 100 percent.

The 100/0 Principle applies to those people in your life where the relationships are too important to react automatically or judgmentally. Each of us must determine the relationships to which this principle should apply. For most of us, it applies to work associates, customers, suppliers, family and friends.

STEP 1 – Determine what you can do to make the relationship work…then do it. Demonstrate respect and kindness to the other person, whether he/she deserves it or not.

STEP 2 – Do not expect anything in return. Zero, zip, nada.

STEP 3 – Do not allow anything the other person says or does (no matter how annoying!) to affect you. In other words, don’t take the bait.

STEP 4 – Be persistent with your graciousness and kindness. Often we give up too soon, especially when others don’t respond in kind. Remember to expect nothing in return.

At times (usually few), the relationship can remain challenging, even toxic, despite your 100 percent commitment and self-discipline. When this occurs, you need to avoid being the “Knower” and shift to being the “Learner.” Avoid Knower statements/thoughts like “that won’t work,” “I’m right, you are wrong,” “I know it and you don’t,” “I’ll teach you,” “that’s just the way it is,” “I need to tell you what I know,” etc.

Instead use Learner statements/thoughts like “Let me find out what is going on and try to understand the situation,” “I could be wrong,” “I wonder if there is anything of value here,” “I wonder if…” etc. In other words, as a Learner, be curious!

Principle Paradox

This may strike you as strange, but here’s the paradox: When you take authentic responsibility for a relationship, more often than not the other person quickly chooses to take responsibility as well. Consequently, the 100/0 relationship quickly transforms into something approaching 100/100. When that occurs, true breakthroughs happen for the individuals involved, their teams, their organizations and their families.

Inspiratinal Quote of the Day

Inspirational Quote of the Day 

The way to happiness: keep your heart free from hate, your mind from worry. Live simply, expect little, give much. Fill your life with love. Scatter sunshine. Forget self, think of others. Do as you would be done by. Try this for a week and you will be surprised.

Norman Vincent Peale

Clock Tickting on short Sale tax break…

Clock ticking on forgiven-debt tax break


Carolyn Said

Updated 8:28 p.m., Monday, September 17, 2012

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  • Greg Annis just got approval to short-sell his Pleasanton condo, seven months after he applied. He was concerned about the year-end expiring of the "forgiven debt" tax exemption. Photo: Michael Short, Special To The Chronicle / SF
    Greg Annis just got approval to short-sell his Pleasanton condo, seven months after he applied. He was concerned about the year-end expiring of the “forgiven debt” tax exemption. Photo: Michael Short, Special To The Chronicle / SF
    Greg Annis just got approval to short-sell his Pleasanton condo,…

  • Greg Annis poses for a portrait at his Pleasanton condo that he bought for $390,000 in 2007 and is now worth about $200,000.  He wants to sell it in a short sale, and is concerned about closing the sale before year end when a tax break for "forgiven debt" is supposed to expire.  Pleasanton, CA Thursday September 13th, 2012 Photo: Michael Short, Special To The Chronicle / SF
    Greg Annis poses for a portrait at his Pleasanton condo that he bought for $390,000 in 2007 and is now worth about $200,000. He wants to sell it in a short sale, and is concerned about closing the sale before year end when a tax break for “forgiven debt” is supposed to expire. Pleasanton, CA Thursday September 13th, 2012 Photo: Michael Short, Special To The Chronicle / SF
    Greg Annis poses for a portrait at his Pleasanton condo that he…

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Greg Annis bought his downtown Pleasanton condo for $390,000 in 2007. Today, its value has fallen to about $200,000, while his income was cut 20 percent when his company instituted a weekly furlough day this year.

“It just doesn’t make financial sense to keep the condo,” he said.

Like many homeowners in similar situations, Annis tried to work with his lender and eventually decided to do a short sale – selling the condo for less than the $270,000 he still owes on it.

Annis felt an extra impetus to make it happen: A law that exempts “forgiven debt” from taxes is expiring at the end of this year.

“I heard through the grapevine about this law expiring,” he said. “I want to go ahead and do the short sale as soon as possible to make sure it happens in 2012 to take advantage of the law, in case it does not get extended.”

Before the housing downturn hit, “forgiven debt” on home mortgages could be taxed as income. For instance, if your lender lopped $50,000 off what you owed (a type of loan modification called principal reduction), if you short-sold the property for $50,000 less than your mortgage or if your lender foreclosed on a property worth $50,000 less than you owed, the $50,000 would be treated as income, adding up to a potential big bill for state and federal taxes.

But with millions of struggling homeowners in such situations, both the Congress and the California Legislature passed bills to exempt forgiven home debt from taxes.

But now the Mortgage Forgiveness Debt Relief Act of 2007 is due to expire on Dec. 31. The election-year Congress, already famously fractious, is not expected to act on it in 2012, although industry experts hope it could get extended next year.

“When the law expires at the end of this year, a lot of people could get hurt,” said Eva Rosenberg, an enrolled agent who runs in Northridge.

Not everyone eligible

Even if the act eventually gets renewed, it doesn’t cover all homeowners.

“It applies only to the mortgage you originally got to acquire the home or to a refi used to improve the home,” said Stephen Moskowitz, a tax attorney in San Francisco.

Homeowners who did cash-out refinances and used the money for any other purpose than fixing up their house could still be on the hook for forgiven debt. The legions of people who refinanced during the boom days, using their homes as piggy banks, are not covered by the act, for instance.

For people in that situation – and for everyone if the act does not get renewed – one way to still avoid taxation is the insolvency exception, Moskowitz and Rosenberg said.

“Insolvency means your debts exceeded your assets the day before and the day after the foreclosure” or short sale or principal reduction, Moskowitz said.

“For example, assume that the day before the foreclosure (or other debt forgiveness), your home’s fair market value was $1 million, your mortgage was $2 million and your other debts, such as credit cards, were $8 million. Now we remove the asset and the liability of the house – and your debts still exceed your assets, so you are insolvent.”

Bankruptcy is also an option to dissolve the tax obligation, he said.

People with second homes used as vacation property who undergo foreclosure, short sale or principal reduction also are on the hook for forgiven debt with or without the law, Rosenberg said. Those with second homes rented out as investments should be able to offset the debt cancellation with their loss on the investment.

Extension possibilities

If Congress does extend the law for federal income taxes, California is poised to follow suit for state taxes, said Alex Creel, senior vice president of governmental affairs at the California Association of Realtors.

“Clearly nothing will happen on the extension this year,” he said. Even if Congress waits until well into 2013 or even 2014 to extend the bill, it could easily make the bill retroactive to Jan. 1, 2013, so no one would be left out in the cold.

“Admittedly that would put people in an awkward spot if they’re trying to do transactions in 2013 and Congress hasn’t acted,” he said. “They would be out there wondering if the extender would go through.”

There is another twist on the tax issue for California homeowners. Original purchase loans in California are “nonrecourse,” meaning the lender can’t pursue the mortgage holder for unpaid balances. Some refinances for the same amount as well as cash-out refinances where the money is used for home renovations, are also nonrecourse.

Debt forgiven on nonrecourse loans is already exempt from taxation.

As it turned out, Annis, the Pleasanton man doing a short sale, still has his original mortgage loan, so he would be off the hook for tax purposes with or without the debt relief act.

His bank finally approved the short sale late last week, seven months after he first applied.

“It’s a long process,” he said.

Carolyn Said is a San Francisco Chronicle staff writer. E-mail:

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Positive Attitude Adjustments Ideas

3 attitude adjustments everyone should make now

Book Review: ‘Get Your Shift Together: How to Think, Laugh, and Enjoy Your Way to Success in Business and in Life’

By Tara-Nicholle Nelson, Wednesday, December 5, 2012.

Inman News®

Book cover image courtesy of <a href="" target=blank>McGraw-Hill</a>.Book cover image courtesy of McGraw-Hill.

Book Review
Title: “Get Your Shift Together: How to Think, Laugh, and Enjoy Your Way to Success in Business and in Life
Author: Steve Rizzo
Publisher: McGraw-Hill Professional, 2012; 224 pages; $25

A friend of mine has two remarkable little girls, ages 5 and 8, and they have very different personalities. The youngest is spritely, whimsical and exuberant. The oldest is brilliant, methodical and mightily capable. She taught me how to tie a square knot. She’s wont to say things like, “Tara, I can row from this side of the bay to that one, in a boat the size of a bathtub. By myself.” And she can.

But she’s young and well-parented, so she has not let her pragmatism dim the high priority she places on fun — not in the least. In fact, she’s somehow managed to find a perfect marriage between the two. After she pulled me out of some brooding moment with a silly story about a caper she pulled off with her schoolmates, she took the occasion of my laughter to say: “You know, every time you laugh, it adds two months to your life.”

I don’t know whether that’s true. Research uncovered in my Google search says that it does boost your immune system and your chances of survival, should serious disease strike — it also suggests that laughter adds life to the years we do have.

Article continues below

But in any event, there’s one person I’m certain would agree with my little friend’s assessment: comedian-turned-motivator Steve Rizzo, whose new book “Get Your Shift Together: How to Think, Laugh, and Enjoy Your Way to Success in Business and in Life” launches right after Christmas.

Rizzo starts out by telling a series of stories — one about his own life as a Hollywood comedian opening for the likes of Eddie Murphy, Rodney Dangerfield and Jerry Seinfeld before he had the epiphany that his true calling was to motivate people, not “making it big” in the traditional sense. He tells another about his brother, who lost nearly all his intestines in Vietnam and has lived a full, wonderful life despite doctor’s foreboding prognoses.

Rizzo’s stories remind us that our circumstances impact our lives, but our attitudes and our responses create our final outcomes.

The rest of the book is broken into three parts, broken down to cover buckets of the “shifts” referenced in the title, laughter-drive attitude adjustments Rizzo says hold the potential to change your business and your life:

1. The shift to a happier mindset. Rizzo encourages readers to adopt the viewpoint that happiness is a choice, one they must consciously and constantly make if they truly want to have happy lives. He also makes a good case that most of us who are on a success path fail to enjoy the process — of achieving our goals and of daily living — and, thus, fail to enjoy the bulk of our lives.

The stress and other chronic negative emotions so many people live with on their way to reaching distant goals also hinder productivity and creativity, according to Rizzo, who prescribes personal choice as the key to shifting into everyday happiness and achieving your goals and dreams.

Advocating that happiness is a “personal right” we should simply, aggressively claim all through every day, at work and at home, Rizzo proclaims that “there is absolutely no reason why you can’t plan for the future, set goals, undergo your daily routine, deal with the unexpected and still make conscious choices to enjoy yourself while you do so.”

2. The instant shifting power of humor. Here, Rizzo focuses on helping readers practice their most important superpower: the power of choosing to think about the things that take place in their lives in a way that is positive, optimistic and happiness-promoting. He provides methodical guidance for learning how to shift your beliefs and feel better any time you need to.

Finding and focusing on the humor in tough situations is one of the key cures for negativity that Rizzo recommends, here and throughout “Get Your Shift Together.”

3. Shifts away from fear and the “big mouth in your head.” Rizzo, whose motivational stage name is The Attitude Adjuster, devotes the last section of the book to his insights on how to conquer fear (“the emotion from which anger, worry, guilt, self-doubt and all other negative emotions derive”) and something he calls the “Big Mouth in Your Head,” an “inner voice” that “plays off your deep-rooted fears and keeps you in a state of constant turmoil.

Laughter is, again, Rizzo’s go-to cure for these darkest emotions. He writes that “the moment you become aware of the deceiving ways of the Big Mouth and allow yourself to laugh in the face of fear, you enter into a higher state of consciousness.”

“Get Your Shift Together” is not a hard-hitting, step-by-step, chart-laden, personal growth book. Rather, it’s an entertaining, easy, yet inspiring read for those who are ready to start taking their happiness seriously.

Tara-Nicholle Nelson is a real estate broker, attorney and the author of two critically acclaimed books on real estate. Tara also speaks and writes on the art and science of life transformation at

Contact Tara-Nicholle Nelson

Should you buy a home during holiday season?

Once Thanksgiving is over, the real estate world starts to wind down for the holidays and it typically reawakens after the Times Square ball drops and resolutions come to life.

But if you’re a potential homebuyer who’s prepared to close in today’s competitive market, you may want to keep shopping while everyone’s waiting for spring, some real estate agents suggest.

That advice may be especially relevant this year for consumers who have repeatedly lost out on deals because of a limited and continually decreasing supply of homes, but remain persistent. Buying intensity typically cools down at the start of fall through early January, which could increase the odds for those with more patience.

Related: Report: We’re in the midst of a housing recovery

Home sales have increased from October to November only four times since 1988, when DataQuick began to track home sales and prices locally.

In the other years, transactions have fallen from anywhere between 0.2 percent and nearly 26 percent. Home listings have dropped off from 3 percent to 11 percent during those months in the past three years.

“During Christmas, people will be focused on the holidays and nothing really happens,” said Ken Pecus, co-founder of San Diego-based Ascent Real Estate and 20-plus-year real estate veteran.

“The first week of January, the new mindset kicks in, resolutions kick in, and in the second and third week, people look at their taxes, and almost overnight, by the end of January, you have almost twice the buyers in the market,” Pecus added.

Would-be buyers historically have bowed out during the winter season because they are overwhelmed by holiday spending and commitments. There’s also the aversion of moving in the middle of a school year. Consumer interest typically picks back up again in the New Year and peaks in the spring.

Related: Demand for homes stays strong during the fall

Certain buyers may be well-served to buy during the winter because of sellers who must move because of:

• A job change or transfer.

• The possible sunsetting of the Mortgage Forgiveness Debt Relief Act, said Donna Sanfilippo, president of the San Diego Association of Realtors. The potential expiration of the law, which lets certain home sellers get tax relief on mortgage debt forgiven by lenders, has pushed home sellers scrambling to list and short sell their homes before the end of the year.

In some cases though, the rush to do that is unwarranted. Consult a tax pro to determine if short selling is right for you.

• The fact they’ve been waiting to sell their home for a long time and need to buy something quickly. If you can wait a little longer to sell your home and want to maximize your profit, then wait until the peak spring months.

Even with the expected holiday homebuying slowdown, buyers should know that the inventory level may still be a challenge.

Right now, there are more than 4,700 active listings in the county, down 11 percent from October and down more than half from the same time a year ago, based on numbers from the San Diego Association of Realtors. The current level marks at least a three-year low.

 Buyers also may deal with the challenges of bidding against cash buyers and investors, who can look more attractive than traditional buyers.

Their share of the homebuying market has remained strong. Almost 28 percent of total homes sold in October were purchased by absentee buyers, many of whom are investors. That’s up from 27 percent logged a year ago and in September.

Hovering near the peak, almost one-third of buyers bought with cash in October.

“I’m expecting 60 to 70 people at my open house,” said San Diego Realtor Miguel Contreras before a recent Wednesday showing at a property in La Mesa. “The property is a fixer, so it’s mostly investors.”

Related: Another hurdle for short sales

Contreras, who worked during Thanksgiving week, said he’ll make himself available throughout the holidays to cater to what he expects to be a continued interest from investors, cash buyers and traditional buyers.

The same goes for Cherilyn Jones, another local real estate agent. Last week, she was preparing for two new listings to come online. Her most common clients are first-time homebuyers and investors.

“The investors have not slowed down,” Jones said. “We get holiday freeze, but not for investor clients. It’s hard to find them properties because their criteria is very, very specific … and the deals are not as good as they used to be.”

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