Whats up in California
Jan. / 2018
After a deep recession in which we lost approximately eight million jobs, America’s economy has been quite consistent with regard to the creation of jobs during the past several years. For example, during the period of 2013-2017, just over 10 million jobs were created. That comes to just over 200,000 jobs per month. Though the numbers are still preliminary, the December jobs report indicates that we have added 2.1 million jobs in 2017, which is slightly below, but very close to what we have created in the past four years.
That is why our country’s unemployment rate has fallen from 10% to December’s reading of 4.1%, a number most economists consider close to full employment. This is quite a dramatic drop, and the next question is – where do we go from here? But, there is still room to add more jobs and better paying jobs-with the economy being beset by inflation.
(Long Term Interest Rates are projected to reach 4.9% by the end of 2018…)
Millennials would rather live in cities. Not so fast, says Zillow Inc., Seattle. The company predicted a shift toward suburban living next year as low inventory and rising construction costs reach a tipping point, forcing builders and buyers to consider new options – “old” options such as suburban living. Next year, Zillow said, current homeowners will look to remodel their homes rather than sell, further limiting inventory, and with limited space to add new homes in city centers, suburban sprawl will make a return. Newly built homes will be designed with both millennials and aging adults in mind, as both generations are looking for similar features. “We’re on the other side of the housing recovery, and the real estate market looks quite different than it 15 or even five years ago,” said Zillow Chief Economist Svenja Gudell. “We have a huge generation entering the market.”
The rental market’s decade-long boom may soon reach its finale, as fewer new renter households are forming, rental vacancies are rising, and rent increases are slowing, according to the 2017 America’s Rental Housing Report, released by the Joint Center for Housing Studies of Harvard University. Still, rents remain high and continue to take a significant chunk out of households’ monthly incomes – more than what most experts consider “affordable.”
“This year’s report paints a complicated picture of the rental market, “says Christopher Herbert, managing director of the Joint Center. “We’re finally seeing the record growth in renters slow down, but while the market has responded to rental housing needs for higher-income households, there are alarming trends that suggest a growing inability to supply housing that is affordable for middle-and working-class renters, let alone those with very low incomes. Addressing these changes will require bold leadership and hard choices from both the public and private sector”…..
CALIFORNIA ASSOCIATION OF REALTORS…NOVEMBER 22, 2017 ISSUE
C.A.R. SPEARHEADING EFFORT TO CREATE MORE HOUSING INVENTORY.
“The CALIFORNIA ASSOCIATION OF REALTORS is embarking on an historic effort to increase homeownership opportunities, one that C.A.R. - KNOWS REALTORS can feel good about supporting.
C.A.R. is going to qualify an initiative for the November 2018 ballot which will allow senior homeowners (55 years of age and older) to keep all or most of their proposition 13 property tax savings when they move.
This measure is important because seniors, who are often on a fixed income, fear they will not be able to afford a big property tax increase if they sell their existing home and buy another one, discouraging them from ever moving. As a result of this “moving penalty” almost three-quarters of homeowners 55 and older haven’t moved since 2000.”
C.A.R feels so strong about this, that they have billed every REALTOIR in California an extra $100.00 this year to cover this initiative.
CALIFORNIA ASSOCIATION OF REALTORS…DECEMBER 28, 2017 ISSUE
“Accessory Dwelling units are adding much needed housing in San Francisco. Source: CNBC
In 2014, San Francisco passed legislation allowing property owners to add accessory dwelling units, or ADUs, to their homes and buildings.
The law was then expanded in late 2016 , the San Francisco Chronicle reports.
As property owners take advantage of the new law, the city has seen explosion of ADUs over the past year. “There are now 1,046 ADUs in the pipeline, with building permits approved for 531 of them,” according to the Chronicle.
“These units, often called “granny flats,” typically consist of converted garages or basements. You’ve got all these property owners that realize they are sitting on “dead equity. “ That means everything from a boiler room to basement storage has the potential to become a new housing unit….”
C.A.R. DECEMBER 28, 2017 ISSUE
Three California housing issues to watch in 2018: Source Los Angeles Times
“Rising rents and home prices forced California’s housing crisis to the front of Gov. Jerry Brown’s and Lawmaker’s agenda in 2017.
Legislators passed the most comprehensive package of housing bills in recent memory designed to increase spending on low-income development and encourage more construction in general. Expect more focus on housing issues at the capitol and on your statewide ballot in 2018.
Here are three to watch;
1) A rent control battle
2) The future of Proposition 13
3) How lawmakers will follow up on this year’s housing efforts.
C.A.R. January 11, 2018 issue
“All REALTORS were alerted and urged to contact their Assembly members and urge them to oppose AB 1506, which would have repealed C.A.R.,’s co-sponsored Costa-Hawkins Rental Housing Act.
AB 1506 was considered by the Assembly Housing and Community Development Committee, and we are happy to inform REALTORS, working in concert with other ally industry groups, successfully defeated the bill this time…AB 1506 failed to obtain the necessary votes in Committee.
AB 1506 would have repealed the landmark Costa Hawkins Law that limits the ability of local governments to impose aggressive rent control. C.A.R successfully co-sponsored Costa Hawkins in 1995.”
Looking back for a moment…
December 2017 saw women who wouldn’t be silenced in the year of reckoning with Sexual Harassers… Lots of Chaos and Disruption in Washington D.C…. A total Solar Eclipse, Upsets and Disasters - Man made and Nature Created in many Areas, Tax Bill turmoil… And on-ward
EQUIFAX JUST CHANGED THE REST OF YOUR LIFE-Source: Associated Press.
“Adding freeze to your credit reports is an appropriate response to the massive Equifax database breach that exposed the private information of 143 million Americans. Don’t make the mistake of thinking those freezes will keep you safe, however.
Credit freezes lock down your credit reports in a way that should prevent “new account fraud,” or bogus accounts being opened in your name. But there are so many other ways the bad guys can use the information they stole, which include Social Security numbers, birthdates, addresses and driver’s license numbers. Other includes:
1) Stealing your tax refund and preventing you from filing returns by submitting fake ones.
2) Using your information to get health care, which can result not only n medical collections on your credit reports, but a stranger’s health information getting mixed in with your records.
3) Giving your identification to the police when they get arrested, creating criminal records that could land you in jail or prevent you from getting a job.
4) Filing for bankruptcy in your name or transferring deeds of property you own. You can’t prevent any of these bad things from happening. The best you can do is remain as vigilant as you can and try to clear up the messes as they happen.”
C.A.R November 2017 issue
HOMEOWNERS, APPRAISERS BETTER ALIGNED ON HOME VALUE
“Opinions of home values from appraisers and homeowners continue to converge, with the gap between the two viewpoints narrowing for a fifth-straight month. Appraisals were an average of 0.99 percent lower than the homeowners thought they would be on average scale, according to the Quicken Loans Home Price Perception Index (HPPI)…”
C.A.R October 2017-Issue
HAUNTED HOMES DON’T ALWAYS HAVE TO BE A DEAL BREAKER
“Many people are open to living with ghosts year-round, especially when a few bumps in the night lead to more home for their money or the chance to live in a better neighborhood, according to the results of a Haunted Real Estate survey by Realtor.com” I could not resist adding that last one!
Los Angeles Times December 31, 2017.. By John Myers and Priya Kruishnakumar
NEW YEAR OF LAWS
“State legislation taking effect in 2018 runs the gamut from immigration to dinosaurs. From higher minimum wage and new vehicle fees to legal sales of recreational marijuana, an abundance of new laws awaits Californians in 2018.
Most take effect on New Year’s Day, though a substantial number are scheduled to kick in as late as early summer.
Governor Jerry Brown signed 859 new California laws, a slight decrease from 016. 2016 Many were inspired by events of the year, including new punishment for violent attacks broadcast live on social media platforms such as Facebook. Others were a direct response by the Legislature’s majority Democrats to policies of President Trump, most notably on immigration.
LANDLORD/TENANT-FLOOD DISCLOSURE-Source-CAR-January 2018
“Effective July 1, 2018, landlords or agents will be required to disclose in writing in every lease or rental agreement entered on or after July 1, 2018, information regarding flood hazards including the landlord’s “actual knowledge.“ Specifically, the law requires disclosure of 1) Pre-printed language concerning floods, emergency services, and renter’s insurance, and 2) The owner’s actual knowledge of whether the property is located in a flood zone. The flood zones that must be disclosed include both the special hazard area in which flood insurance is required and also flood inundation areas at risk because of dams. The owner or agent will be deemed to have actual knowledge of these flood areas if the owner has or is required to carry flood insurance or if the owner has received written notice from a public agency stating that the property is in one of these zones.”
Crimes and Courts…
Health and Wellness…
*California’s lowest –paid workers are getting a raise, as the 2016 law to phase in a minimum-wage increase has raised that pay to $11.00 an hour for most business. Workers at the smallest companies will see their minimum wages rise to $10.50 per hour.
*Owners of gasoline-or diesel-fueled cars must pay a new annual fee to help pay for road repairs. This fee ranges from $25.00 to $175.00, depending on the vehicle’s value.
*Californians will pay a new $75.00 fee to refinance a mortgage and make other real estate transactions, money to be spent on providing more low-income housing in the state. Capped at $25 per transaction, and will be dedicated to Affordably Housing…
*Local law enforcement officials across California have new, strict limits on how much they can help federal immigration authorities – a law that pushes back against Trump’s policies on illegal immigration.
*A landlord can face civil penalties for threatening to report a renter to federal immigration authorities.
*It now takes a warrant from a judge for federal agents to come to someone’s workplace on an immigration raid, and employers can be fined for not giving workers a 72-hour notice that those agents will be inspecting employer’s records.
* State agencies that provide help to juveniles and the developmentally disabled no longer have to report immigration violations to the federal government.
Education-meals and safety requirements for buses to have seat belts.
Work and Lifestyle…
*New parents at small businesses of at least 20 employees will be able to take up to 12 weeks of unpaid leave to care for the child and won’t lose their health coverage while away
*When you apply for a new job in California, you can no longer be asked, “How much did you make at your last job?”
*California’s equal pay law has been expanded to government jobs in an effort to remove any gender-biased pay rates.
*Beginning in September, Californians can choose a gender-neutral option on their birth certificate for those who are transgender, intersex or don’t identify as male or female. That change will be allowed on a driver’s license in 2019.
*More parents taking high school equivalency or English-Language courses will be eligible for subsidized child care.
Water Cooler talk…
*All landlords in the state must provide information about bedbugs-how to identify them and how to report them-to apartment renters and must follow new rules if an infestation is found.”
New Laws for Motorists – Auto Club January 2018
“Transportation Funding: Senate Bill 1 (SB 1) increases gas and diesel taxes and creates a new annual tax on vehicles to generate more than $50 billion during the next ten years to repair and improve roads and other transportation facilities.
On November 1, 2017, gas and diesel taxes were increased 12 cents and 20 cents a gallon, respectively.
Starting January 1, 2018, a new annual vehicle tax, paid with annual registration, ranging $25.00 to $175.00, will be charged on vehicle values. And beginning July 1, 2020, a fee of $100.00 will be assessed on all zero-emission vehicles, mostly electric cars. This ZEV fee applies at renewal of registration for ZEV’s with a model year of 2020 or later.
Assembly Constitution Amendment 5 (ACA 5), a companion measure to SB1, will appear on the June primary election ballot to protect the new funding from being diverted or borrowed away from transportation.
• Marijuana-Impaired Driving…
• Disabled Placards…
• Smog Fee…
NATIONAL ASSOCIATION OF REALTORS 12/26/17 ISSUE
CALIFORNIA ASSOCIATION OF REALTORS
L A. Times late 2017
The is a compilation of various information from respected sources
“Congress Passes Tax Bill & President signs it!
Capital Gaines Exclusion: Current law left in place, $250,000 for individuals and $500,000 for married couples on the sale or exchange of their principal residence if lived in for 2 of last 5 years.
1031 Like-Kind Exchanges – Limits non-recognition of gain to real property
Mortgage Interest Deduction: The mortgage interest deduction for existing mortgages of up to $1 million taken out before December 15, 2017, will not be affected. Homeowners may also refinance mortgage debts existing on December 14, 2017, up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount of the mortgage being refinanced.
For new loans, however, the cap for deductions will be $750,000. Deduction of interest on lands secured by a second house will still be allowed subject to the $1 million and $750,000 caps.
The maximum mortgage amount for households deducting their mortgage interest has been decreased to $750,000 from the current $1 million limit.
The final bill repeals the deduction for interest paid on home equity debt through 12/31/25. Interest is still deductible on home equity loans (or second homes) if the proceeds are used to substantially improve the residence.
State and Local Tax Deductions: Both property taxes and state and local income taxes remain deductible, although with a combined limit of $10,000.00. The $10,000 limit applies to both single and married filers and is not indexed for inflation.
About 44 million taxpayers claimed the deduction in 2014, including 6 million in California, according to the Tax Policy Center. The break has been in the tax code since the U.S. began collecting income taxes in 1913. If taxpayers have enough deductions to itemize, they could deduct without limit what they pay in state and local real estate, personal property and income taxes. The deduction lowers taxable income but only partially translates into less taxes paid. Still, it reduces federal tax revenue nationwide by $96 billion this year, according to the Treasury Department. That makes it one of the most costly breaks in the individual tax code. Eliminating it would increase federal revenue by about $1.3 trillion over 10 years, the Tax Policy Center said”
“The Republication tax outline would slash business tax rates, nearly double the standard deduction for individuals and married taxpayers filing jointly, and compress the current seven tax brackets to three.
Standard Deduction increases it from $6,350 for individuals to $12,000 and for married from $12,700 to $24,000. Edward Kleibard, a USC professor and former chief of staff to Congress’ Joint Committee on taxation said” We don’t know what the effect will be on lower-income Americans vs middle-income Americans. higher-income Americans except that we know that the highest-income Americans come out way ahead,” he said. “That’s the only thing we know for sure.”
“Moving Expense Exclusion and Deduction-eliminated except for members of armed forces on active duty that move pursuant to military orders.
Child Tax Credit increased from $1,000 to $2,000 for each child.
Deduction for Qualified Business Income of Pass-Through Entities including independent contractors from none to 20% deduction of taxable income phased out above $157,000 ($315,000 if married) for brokerage services.
Depreciation Recovery Period for Real Property (Residential Rental) - -recovery period 27.5 – no change
Depreciation Recovery Period for Real Property (nonresidential) Recovery period is 39 years-no change
Depreciation Recovery Period for Real Property (leasehold improvements) –Recovery period is 15 years – no change
The proposed reduction of the top marginal tax rate to 35% from 39.6%, along with the elimination of the estate tax and the alternative minimum tax, would help California’s wealthiest residents, analysts said.
And the huge reduction in the corporate tax rate, to 20% from 35%, would be a boon to major California companies such as Apple Inc., Chevron Corp., Wells Fargo, Alphabet and Disney. The state is home to 53 Fortune 500 companies, second only to New York’s 54”.
C. A. R 12/28/17- Issue
“New Home sales hit post-recession high in November Sales of newly built, single-family homes in November rose 17.5% to a seasonally adjusted annual rate of 733,000 units from a downwardly revised October reading, accordingly to newly released data by U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This is the highest sales pace since July 2007. Year-to-date, new home sales are 9.14 above the level over the same period last year….”
Real Estate Report – AmeriFirst Financial, Inc. January 16, 2018
“Believe it or not, we are halfway through the first month of the new year…these are very exciting times, Americans are reacting to a new tax plan, stocks have already broken records…Existing home sales increased more than expected in November, hitting their highest level in nearly 11 years, the latest indication that housing was regaining momentum after almost stalling this past year.
America’s seniors are increasingly opting to stay in their own homes as they get older, which will generate home refinances and HELOCs. A survey by HomeAdvisor found that aging homeowners are taking steps…to make their homes more efficient and easier to live in…”
Well… that is the general information heading with us into 2018…Good luck to all of us in this New Year!
ABMC believes all data is correct from information obtained in articles listed, however, ABMC does not guarantee this information, please verify with the appropriate agencies.