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California Real Estate September 2012 : Page 6

INDUSTRY NEWS | News, Information & Hot Issues [ PR OP ER TY T AXE S ] [ GO VERNMENT HELP ] As Prices Rise, So Do Taxes s the housing market improves, many California homeowners will see the downside of the recovery: an increase in their property taxes. Many homeowners believe their property taxes are limited to increases of no more than 2 percent annually because of Proposition 13, the landmark voter initiative approved in 1978. However, Proposition 8, a companion bal-lot measure that passed the same year (not to be confused with the 2008 ballot measure that banned gay marriage in California), allows assessors to [ CAR T OON temporarily reduce property assessments when real estate values go down, and it also al-lows increases of greater than 2 percent when values go back up. The 2 percent limit set by Proposition 13 doesn’t ap-ply until the property’s value reaches the level it would have hit if the real estate market never dropped. The San Jose Mercury News reported that more than Smoke-Free Homes A 37,000 homeowners in Santa Clara County alone are seeing their property taxes rise by more than 2 percent this year because of the region’s rebounding real estate market. About 15,000 property owners in Alameda County and about 3,350 in San Mateo County are in the same position, offi cials said. The trend is helping those counties fi nan-cially by allowing them to collect more proper-ty taxes, but is an unpleasant surprise to home-owners, who were happily watching their prop-erty values rise. OF THE MONTH! ] >> U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Health and Human Services (HHS), and health advocates re-cently launched a new set of tools to encourage and guide private owners of federally assisted multi-family housing and public housing authorities to adopt smoke-free poli-cies. These new policies are intended to protect residents from the dangers of second-hand smoke and to reduce property maintenance costs. Newscan Business Briefs & Bottom-line Boosters >> The Consumer Financial Protection Bureau recently an-nounced its intent to overhaul the home mortgage market as a fi rst step toward improving its fairness and clarity. Over the next several months, its goal will be to remake the process of getting a mortgage, making it easier for Mortgage Market Overhaul borrowers to understand the kind of loan they are getting and its cost. Director Richard Cordray said he wanted to show that the bureau could help consumers without drowning banks in red tape. In an interview with the New York Times , he explained that the mortgage market is at the top of the agenda because “It’s the market where consumers have the most at risk and they have the most at stake. I expect that the mortgage market in the fairly near term will look different in the sense that, fi rst of all, it will be a clearer and more straight-forward place for consumers, and second, it will be a more reliable market.” >> Local homeowners and title insurance companies are being warned about bogus short sale approval letters from Bank of America. In July, Attorneys’ Title Fund Services, Florida’s largest title insurance underwriter, Short Sale Scams sent an alert saying scammers are mimicking the lending gi-ant’s approval letters, including similar language and the bank’s logo. In response, Bank of America is asking those who receive letters to verify their authentic-ity by calling (866) 880-1232, option 1. The notice follows the arrest and indictment in June of three California men who were accused of schemes involving short sales. 6 CALIFORNIA REAL ESTAT E • SEPTEMB ER /EX PO 2012 ©Randy Glasbergen/glasbergen.com

Industry News

[ PROPERTY TAXES ]<br /> <br /> As Prices Rise, So Do Taxes<br /> <br /> As the housing market improves, many California homeowners will see the downside of the recovery: an increase in their property taxes<br /> <br /> Many Homeowners believe their property taxes are limited to increases of no more than 2 percent annually because of Proposition 13, the landmark voter initiative approved in 1978.<br /> <br /> However, Proposition 8, a companion ballot measure that passed the same year (not to be confused with the 2008 ballot measure that banned gay marriage in California), allows assessors to temporarily reduce property assessments when real estate values go down, and it also allows increases of greater than 2 percent when values go back up. The 2 percent limit set by Proposition 13 doesn’t apply until the property’s value reaches the level it would have hit if the real estate market never dropped.<br /> <br /> The San Jose Mercury News reported that more than 37,000 homeowners in Santa Clara County alone are seeing their property taxes rise by more than 2 percent this year because of the region’s rebounding real estate market. About 15,000 property owners in Alameda County and about 3,350 in San Mateo County are in the same position, officials said.<br /> <br /> The trend is helping those counties financially by allowing them to collect more property taxes, but is an unpleasant surprise to homeowners, who were happily watching their property values rise.<br /> <br /> [ GOVERNMENT HELP ]<br /> <br /> Smoke-Free Homes<br /> <br /> U. S. Department of Housing and Urban Development (HUD), the U.S. Department of Health and Human Services (HHS), and health advocates recently launched a new set of tools to encourage and guide private owners of federally assisted multifamily housing and public housing authorities to adopt smoke-free policies. These new policies are intended to protect residents from the dangers of second-hand smoke and to reduce property maintenance costs.<br /> <br /> Newscan<br /> <br /> Mortgage Market Overhaul <br /> <br /> The Consumer Financial Protection Bureau recently announced its intent to overhaul the home mortgage market as a first step toward improving its fairness and clarity. Over the next several months, its goal will be to remake the process of getting a mortgage, making it easier for borrowers to understand the kind of loan they are getting and its cost.<br /> <br /> Director Richard Cordray said he wanted to show that the bureau could help consumers without drowning banks in red tape. In an interview with the New York Times, he explained that the mortgage market is at the top of the agenda because “It’s the market where consumers have the most at risk and they have the most at stake. I expect that the mortgage market in the fairly near term will look different in the sense that, first of all, it will be a clearer and more straightforward place for consumers, and second, it will be a more reliable market.” <br /> <br /> Short Sale Scams <br /> <br /> Local homeowners and title insurance companies are being warned about bogus short sale approval letters from Bank of America. In July, Attorneys’ Title Fund Services, Florida’s largest title insurance underwriter, sent an alert saying scammers are mimicking the lending giant’s approval letters, including similar language and the bank’s logo.<br /> <br /> In response, Bank of America is asking those who receive letters to verify their authenticity by calling (866) 880-1232, option 1. The notice follows the arrest and indictment in June of three California men who were accused of schemes involving short sales.<br /> <br /> [ GREEN IS GOOD ]<br /> <br /> Green Homes Worth More!<br /> <br /> A New study conducted by the University of California Berkeley and the University of California Los Angeles shows that a “green label” home—a home labeled by Energy Star, LEED for Homes, and GreenPoint Rated—sells for 9 percent more than comparable, non-labeled homes. The Value of Green Labels in the California Housing Market is the first study to provide statistical evidence that, holding other factors constant, a green label on a single-family home in California provides a market premium compared to a comparable home without the label. The research also indicates that the price premium is influenced by local climate and environmental ideology. To reach these conclusions, researchers conducted an economic analysis of 1. 6 million homes sold in California between 2007 and 2012, controlling for other variables known to influence home prices in order to isolate the value-add of green home labels.<br /> <br /> This study yields two key insights into the effect of green labels on property values, and why these effects can be so significant. This is especially important in light of the fact that the price premium for a green-labeled home far exceeds both the estimated cost of adding energy efficiency features to a home and the utility-bill savings generated by those improvements. Clearly, other factors are in play in producing this premium:<br /> <br /> • The results show that the resale premium associated with a green label varies considerably from region to region in California, and is highest in the areas with hotter climates. It is plausible that residents in these areas value green labels more due to the increased cost of keeping a home cool.<br /> <br /> • The premium is also positively correlated to the environmental ideology of the area, as measured by the rate of registration of hybrid vehicles. In line with previous evidence on the private value of green product attributes, this correlation suggests that some homeowners may attribute value to intangible qualities associated with owning a green home, such as pride or perceived status.<br /> <br /> [ LEGAL NEWS ]<br /> <br /> Must Report Wrongdoing!<br /> <br /> The DRE recently issued an advisory to provide clarifications to licensees on the new legal requirement for the self-reporting of felony charges, convictions of any felony or misdemeanor, and any disciplinary actions taken by another licensing authority. As of January 1, 2012, SB 706 requires licensees to report to the DRE when he or she has been indicted or charged with a felony, convicted of a crime, or had license disciplinary actions taken by other licensing entities or authorities of this state within 30 days. Failure to report such actions would result in cause for disciplinary action. The DRE has developed a Notification Form, RE 238, but other written notifications will be accepted as well. Form RE 238 can be found at //dre.ca.gov/ files/pdf/forms/re238.Pdf.<br /> <br /> TALK BACK! We’d love to hear your comments about this issue and the types of articles and subjects that you’d like to read in upcoming issues: Send them to heathers@car.org.

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