Billionaire tax cheat Leona Helmsley loved a good bargain. So, were she still around, the late hotelier might appreciate recent happenings at her Greenwich, Conn. estate.
The 14-bedroom, 13 1/2-bathroom mansion, which came on the market priced at $125 million two years ago, has been reduced to $60 million. That’s a 52% price chop for the 21,897-square-foot manor on 40 rolling acres.
The Southern California real estate landscape, likewise, has been littered with its share of high-profile price drops. Nicolas Cage’s 11,817-square-foot English Tudor in Bel-Air has been reduced 50% to $17.5 million from $35 million when it first hit the market in 2006. The home of Suzanne Somers and Alan Hamel, started at $35 million more than two years ago and was eventually slashed to a reported $12.9 million—a 63% reduction.
When the housing bubble popped, the most dramatic declines hit the mid-priced and low-end markets, where home sellers had to compete with cheap foreclosures. Now, even the wealthy are facing the new reality as some luxury homes’ prices have dropped—and dropped again—over the last few years and agents are begging sellers to be realistic in setting an asking price.
The high end market here on the peninsula has seen larger than 50% drops in prices over the past few years so now generally sellers are getting the big picture and pricing their homes closer to value which is lessening days on market and even causing some bidding wars in Carmel by the Sea.
KRXA Radio Show #160 April 30, 2010
Friday, April 30, 2010
Friday, April 23, 2010
Relief arrives for some distressed homeowners in California with the lifting of state income tax on debt forgiveness
Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law last week, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.
"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to pay off a previous loan that would have qualified.
The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.
Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.
Of course, always talk to your tax advisor.
(KRXA Radio Show #159 April 23, 2009)
"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to pay off a previous loan that would have qualified.
The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.
Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.
Of course, always talk to your tax advisor.
(KRXA Radio Show #159 April 23, 2009)
Friday, April 16, 2010
Carbon Monoxide poisoning and your home - What you need to know
This is a topic I really never gave too much thought to until I had a houseguest last week who told me she almost died from it.
Carbon monoxide (CO) is an odorless, colorless, poisonous gas. You cannot see, taste or smell carbon monoxide which makes it almost impossible to detect. For this reason every home should have a carbon monoxide detector. When inhaled, carbon monoxide enters the lungs and bloodstream where it eventually replaces your body's oxygen, resulting in suffocation. Exposure to high levels of carbon monoxide can cause death within minutes. Symptoms of carbon monoxide poisoning include headache, dizziness, lightheadedness, nausea, weakness and shortness of breath.
Should your carbon monoxide detector go off, or you suspect the presence of carbon monoxide, get outside into fresh air immediately. If you cannot get outside be sure to open as many doors and windows as possible. Then go to the hospital emergency room or call 911 for medical attention. Carbon monoxide can be produced by both wood and gas fireplaces and can be caused by blocked chimneys, leaking chimney flues, cracked heat exchangers or improper venting.
On average, about 170 people in the United States die every year from CO produced by non-automotive consumer products. These products include malfunctioning fuel-burning appliances such as furnaces, ranges, water heaters and room heaters; engine-powered equipment such as portable generators; fireplaces; and charcoal that is burned in homes and other enclosed areas.
In 2005 alone, CPSC staff is aware of at least 94 generator-related CO poisoning deaths. Forty-seven of these deaths were known to have occurred during power outages due to severe weather, including Hurricane Katrina. Still others die from CO produced by non-consumer products, such as cars left running in attached garages.
The Centers for Disease Control and Prevention estimates that several thousand people go to hospital emergency rooms every year to be treated for CO poisoning. With power outages being so common here on the Monterey Peninsula, this should be a concern for all. PGE will come out for free and check your house so give them a call.
(KRXA 540AM Radio Show, April 16, 2010)
Carbon monoxide (CO) is an odorless, colorless, poisonous gas. You cannot see, taste or smell carbon monoxide which makes it almost impossible to detect. For this reason every home should have a carbon monoxide detector. When inhaled, carbon monoxide enters the lungs and bloodstream where it eventually replaces your body's oxygen, resulting in suffocation. Exposure to high levels of carbon monoxide can cause death within minutes. Symptoms of carbon monoxide poisoning include headache, dizziness, lightheadedness, nausea, weakness and shortness of breath.
Should your carbon monoxide detector go off, or you suspect the presence of carbon monoxide, get outside into fresh air immediately. If you cannot get outside be sure to open as many doors and windows as possible. Then go to the hospital emergency room or call 911 for medical attention. Carbon monoxide can be produced by both wood and gas fireplaces and can be caused by blocked chimneys, leaking chimney flues, cracked heat exchangers or improper venting.
On average, about 170 people in the United States die every year from CO produced by non-automotive consumer products. These products include malfunctioning fuel-burning appliances such as furnaces, ranges, water heaters and room heaters; engine-powered equipment such as portable generators; fireplaces; and charcoal that is burned in homes and other enclosed areas.
In 2005 alone, CPSC staff is aware of at least 94 generator-related CO poisoning deaths. Forty-seven of these deaths were known to have occurred during power outages due to severe weather, including Hurricane Katrina. Still others die from CO produced by non-consumer products, such as cars left running in attached garages.
The Centers for Disease Control and Prevention estimates that several thousand people go to hospital emergency rooms every year to be treated for CO poisoning. With power outages being so common here on the Monterey Peninsula, this should be a concern for all. PGE will come out for free and check your house so give them a call.
(KRXA 540AM Radio Show, April 16, 2010)
Monday, April 12, 2010
Rental Markets are back!
Real estate investors can buy foreclosures, of course, and they can also benefit from the displaced owners of the foreclosures. They now have "tenants" for their new purchases and their existing properties.
For the most part, from 2000 until early 2007, if you could fog a mirror you could qualify for a mortgage. This easy qualification process lead to two things:
1. The tenant base decreased causing higher vacancy rates and lower rental rates
2. It put so many people in a situation they couldn't afford
Many people had no savings and barely squeezed into a home with minimal down. Many people got put into the interest only adjustable rate mortgages. They qualified when it was interest only or a negative amortization loan, but when it adjusted, they found themselves way over their heads financially.
Also, now many renters are looking for a new place as the home they are living in is suddenly being pulled out from under them because the owner is in foreclosure. Many of them have little or no time to move. Some have only a few days notice, since they didn’t know the owner was even in foreclosure.
I ran into a lady at the carwash who told me she just bought a house in Soledad for $150,000 as an investment. With 20% down, her payments are $650.00 a month, rent is $1200. Nice profit.
So what does all this mean? It means that now is the time to invest in rental properties and we have some great ones, even for first time buyers to look at today.
Subscribe to:
Posts (Atom)