The Real Folsom Blog

Could a Vacation Home Be in Your Future? Think Fractional Ownership

Earlier this week, Joe Luchi, Folsom's economic development director, gave my office an update on different residential and commercial projects around our town. He started off his presentation with a snapshot of who we are as Folsomites. A few interesting facts came out. One we're getting younger! According to the 2000 Census, our median age was 35.9 years. Now, in 2006, it's dropped to 35.6. And, even better, as we're getting younger we are also getting wealthier. In 2000, the median Folsom household income was $73,175. And in 2006, it's up to $90,473. So we've managed to get younger and richer. No wonder we're considered to be of of America's best places to live, work, and play (Money Magazine, Newsweek, and Business Week Magazine). Which brings me to today's subject (keeping in mind that we seem to have all this extra money to invest): fractional ownership. The topic came up because one of my office's agents has a listing coming on line in Coloma that offers fractional ownership in a home there. So what is fractional ownership? Only one of the fastest-growing segments of the vacation home market. Here's how it works: You purchase a share of a vacation home that entitles you to say a one-eight share of a property. That translates to six weeks of use per year. One clear advantage of fractional ownership is you can buy into a nicer vacation home than you would otherwise be able to. Also, daily maintenance (under  HOA dues) is taken care of for you. And unlike a time share, with fractional ownership you have an actual deeded interest that you can sell, leave in your will, or put in a trust. If you'd like to learn more about the pros and cons of fractional ownership, drop me a line and I'll get you more info.

Recent Folsom Home Sales Jan 15

Where has this month gone? Here we are half way through January and I feel like the month just started yesterday. It's already been a couple of weeks since I last did an update on recent home sales in Folsom yet only six sales were recorded by MetroList, our local multiple listing service--the usual holiday slowdown. Here are details on these sales. The properties were listed and sold by various multiple listing service brokers. If you don't see a sale you've been wondering about, drop me a line at annerhea@kw.com and I'll look it up for you.

• 115 Kennerly Way (3 bedrooms/2 baths, 1352 sq feet) sold for $319K at 98.18% of list price, $236 per sq foot.
• 575 Hillswick Cir (3 bedrooms/2 baths, 1458 sq feet) sold for $341,500 at 100.47% of list price, $234 per sq foot.
• 7030 Folsom Auburn Rd (3 bedrooms/2 baths, 1517 sq feet) sold for $346K at 97.49% of list price, $228 per sq foot.
• 1545 Parkway Dr (3 bedrooms/2 baths, 2300 sq feet) sold for $435K at 102.96% of list price, $189 per sq foot.
• 1187 Burwick Ln (4 bedrooms/2.5 baths, 2492 sq feet) sold for $469K at 100.88% of list price, $188 per sq foot.
• 130 Chambersburg Wy (4 bedrooms/3 baths, 2550 sq feet) sold for $517K at 95.76% of list price, $203 per sq foot.

There are 305 homes currently on the market at a median days on the market of 69 and a median price of $489,000.

Folsom Doing OK in Economic Downturn

Even as we keep hearing bad news about the economy (see today's SacBee article about December retail sales), it appears Folsom will remain insulated from the worst impacts from the slumping economy. That's the news that Joe Luchi, City of Folsom's director of Intergovernmental Affairs and Economic Development, delivered this morning at my Keller Williams office's weekly meeting. Joe is invited to periodically update us on what's going on in the city so we in turn can be well informed for clients. Interestingly, even as the economy is expected to continue slowing and the sales tax revenue will likely flatten, property tax revenue in Folsom is still increasing at the single digit rate. We also heard that we are about five to six years from residential build-out and seven to eight years from commercial build out--so still some growing pains for a while. Joe noted that although it looks like there is still a lot of vacant commercial land in Folsom, most of it is already spoken for. He also updated us on the next big residential development, that of the South of 50 land. Construction is apparently about six months behind schedule and at this point won't start till the early part of 2010--so a few more years of enjoying the rolling hills and roaming cattle...

Good News for Interest Rates

This week guest blogger Barbara Van Duyn of First Priority Financial has some good news for us about interest rates. If you have any questions you can reach her directly at Barbara@VanDuynGroup.com. 

In a speech yesterday, Fed Chairman Ben Bernanke stated "We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks." That means we can expect to see another Fed Funds rate cut at their next meeting on January 30th. The question is … will it be a .25% or .50%? As we’ve said in the past, that’s good news for interest rates relating to home equity lines of credit, credit cards, and auto loans. Prime rate is currently at 7.25%. The next Fed cut will lower Prime as well. Regarding mortgage interest rates, they continue to trend lower. On December 3rd, we reached the lowest point for a 30-year fixed-rate loan in the past two years. Now we have improved from those levels by an additional 40 basis point (as of yesterday). In general terms, you can find a fixed-rate loan under 5.75% with no point. The reason for being general is the rate you qualify for is based on a variety of personal data, and of course, rates change daily. In spite of all the foreclosure news, real estate financing is favorable and as Anne has pointed out, the affordability factor in Folsom is growing. Most of the activity is in prices under $400,000. By the way… did you think 100% financing was gone? Come back next Friday and learn that it’s alive and well. All the Best! Barbara

Folsom December Numbers Are In!

Folsom December home sales stats are finally in and here's what we are looking at as far as market conditions. Let's start with price. In December, 48 homes sold for a median price of $385,000. That median price is down 27.9 percent from December '05 and down 16.55 percent from December '06. The number of units sold is down from 74 a year ago. Now, taking a look at the market from a supply and demand point of view: Interestingly the number of homes for sale in December has been relatively steady for the past three years--523 in December '05, 501 in December '06, and 504 in December '07. A truer picture of what's going on in our Folsom market shows up in the sold homes. In December '05, 71 sold; in December '06, 74 sold, and this December we have 48 homes sold, down an impressive 35.14 percent from a year ago.

So are we close to the bottom of the market? Are we seeing the light at the end of the tunnel? Those are the hot questions among realty professionals these days. Some are saying that numbers wise, we're there even though prices may soften some more. I'll take a closer look at what we're seeing in the real estate crystal ball next week. Until then, stay dry!

Qualifying for a Loan in This New Market

Here is this week's entry from guest blogger Barbara Van Duyn of First Priority Financial. If you have any questions you can reach her directly at Barbara@VanDuynGroup.com and tell her Anne sent you. 

Happy New Year! As you prepare for the upcoming tax season, I thought you would appreciate knowing about the latest changes affecting real estate financing that may affect you. 

Legislative Update:  Mortgage Relief Passed. On Thursday, December 20th, President Bush signed into law a bill passed by Congress: HR 3648 -Mortgage Forgiveness Debt Relief Act of 2007. The three major points are:

• Elimination of the "phantom tax" on foreclosures, short sales, or other discharges of debt on a primary residence.   Consider this scenario: A property is worth $250,000, and the mortgage balance is $300,000. Under the old rules, if a lender forgave the $50k difference as part of a foreclosure, short sale, refinance or loan modification, the borrower had to claim the $50k as income and pay federal income taxes on that amount. The new law eliminates this "phantom tax", and the forgiven debt is no longer treated as taxable income to the borrower as long as certain requirements are met, such as the discharged mortgage balance must be on the taxpayer's principal residence.
• The tax deduction for mortgage insurance premiums is now extended until December 31, 2010, instead of expiring at the end of 2007. The same rules apply as before in terms of the income limitations etc.
• The capital gains exclusion is now $500,000 instead of $250,000 for an unmarried individual who sells their primary residence within 2 years of the time their spouse has died.   This new guideline applies to sales after December 31, 2007, and provides relief for widows and widowers by giving them a 2-year window from the time their spouse has died to sell their home and receive the $500,000 exclusion. Of course, the same rules apply as before, where the individual(s) need to have lived in the home as their primary residence for 2 out of the last 5 years. You can read the full version of the bill by visiting the Library of Congress THOMAS web site and searching for HR 3648.  Version #6 (the enrolled/ENR version) is the final version that was passed by both the House and Senate.

And finally, an often overlooked tax deduction. If you refinanced a mortgage in 2007 that replaced a previous mortgage where points were amortized, any unamortized points should be fully tax deductible on your 2007 tax return. This is often overlooked because the previous mortgage may have occurred several years ago and we forgot that we paid points. Be sure to let your tax professional know if you have made any mortgage financing changes in 2007 to ensure you get all the tax deductions you are entitled to. 

All the Best! Barbara

Most Use Internet to Solve Government-Related Problems

Did you know that when people face common government-related problems, they turn to the Internet, this according to a recent study by Pew Internet and American Life Project. The phone survey showed that 58 percent of respondents used the Internet to get help for their government-related problems. These problems include health concerns; school financing; tax matters; and starting a business. By comparison, 53 percent said they turned to professionals such as doctors, lawyers or financial experts; 45 percent went to friends and family members; 36 percent said they consulted newspapers and magazines; 34 percent said they contacted a government office or agency directly; 16 percent said they consulted television and radio; and 13 percent said they went to the public library. I guess I'm not surprised so many turn to the Internet. I have certainly seen that movement in home searches. Somewhere around 80 percent of buyers start their search on the internet these days. All that said, I am grateful for living in Folsom where the city runs a decent Web site. I've used it for everything from checking out video casts of past city council meetings, finding information on local businesses, to making appointments online for hazardous waste pickup. I encourage you to check it out at www.folsom.ca.us. You'll find a wealth of information.

Until tomorrow, stay dry! It looks like we are in for a couple of whopper storms.

How One Home Can Spare the Air

On Sunday, my husband and I visited the Cosumnes River Preserve in Galt. We started out with a stop at the visitor center where I found a Spare the Air brochure with general information on major air pollutants, related health problems, and area resources on air quality. The brochure also had some tips on how each household can help improve air quality in the Sacramento area. I thought a good way to kick off 2008 would be to share their tips. Here goes:

• When enjoying a fire (on burn cleanly days), use a cleaner burning, low-emission hearth product. Or burn only dry, seasoned hardwood as it burns more efficiently.
• Cold engines pollute up to five times more than warm ones. So when possible, link all your errands into one trip. Also, make sure your tires are properly inflated as this will reduce your vehicle's emissions by saving fuel.
• Use water-based paints, coatings, and adhesives instead to oil-based formulas.
• Avoid the use of pesticides. Or, is you must use them, use either a granular or water-based solutions so you don't contribute to smog.
• Use an electric starter or chimney style briquette starter instead of charcoal lighter fluid. Even better, replace your charcoal BBQ grill with a propane grill.
• Avoid gas-powered yard tools such as mowers, blowers, edgers, and trimmers--and switch to electric powered tools.

Have a great 2008!