Diablo Valley & Contra Costa Real Estate Blog

Over 55? Selling your home? Do you know about Prop 60?

Here in this San Francisco Bay area - Contra Costa County to be exact - if you are over 55 and thinking of moving this year, you need to know about Proposition 60.   Typically when a person buys a home, the property taxes are reassessed based upon that new purchase price.  It sure discourages some people from making that move if you've been in your home a long time.  Just think....  You bought your home for $53,000 in the 1970's and your property taxes are just $1,200!  Your home now will yield you over $650,000.  Here comes 2005 and you're ready to retire to golf course living and you find the home of your dreams for $550,000.   You can essentially buy that new home outright.  No mortgage, no payment... ahhhh, what a life.. BUT WAIT... taxes... you now might expect to pay over 6 times your current tax amount! $6000 or more per year on taxes based on that purchase price! Proposition 60 allows you (within certain guidelines) the ability to transfer that original $1,200 tax to your new house.  How cool is that?  Buy your dream home, no mortgage, $1200 a year taxes and now your only care in the world is your golf score.  Well so what are the parameters?

1. You must stay in Contra Costa County**
2. You must purchase or construct a home worth the same or less than the original property (sometimes hard to do in our area to be sure).
3. The original property must be sold for consideration (i.e. no giving it or transferring to family members), must be an "arms-length" transaction.
4. Just one person on title (husband or wife) needs be over 55.

**A related proposition (90) allows you to move outside of Contra Costa County. Not many counties participate in this - only Alameda, Los Angeles, Orange, Santa Clara, San Diego, San Mateo, Ventura.  Definitely some promising destinations within those counties, but some of the local popular retiree places are noticeably not included i.e. Placer County (Lincoln), El Dorado County (Serrano) - bummer.  But Somerset in Brentwood, Rossmoor in Walnut Creek are winners!

Contra Costa Median Home Price SOARS!

Can you believe that the "median" home price in Contra Costa County as a whole has hit $680,690 in the end of 4Q2004!  For "attached" homes it is a whopping $476,520!  Affordability in our county is ONLY 10%.  I grew up here, how many of OUR children can afford to live here now? Well clearly the stats show us only 10% of ALL people can afford to live here.  Do the math, what does one have to earn to afford a median priced home of nearly $700,000!?!?! A phenomena certainly more popular now than when I first struck out on my own is that more and more families are helping with downpayments and even buying into the homes with their family members as an equity share.  What a great investment vehicle though.  Can you go wrong in this area? What about the "bubbles" you hear about... does a bubble exist here in our area? Ever hear of a "bubblette?" Supply and demand is driving our market - low supply = high demand.  Will that change?  Who knows?   

Contra Costa is HOT!

Wow!  Seen the recent Contra Costa Economic Profile? I can e-mail you the whole thing if you want it, but suffice it to say our market is hot, hot, hot.  I know, you always hear "us Realtors" say those kinds of things, but let me show you . . .

Median Homes Sale Prices from January 2004 to January 2005:

1. Walnut Creek - UP 54.2%
2. Pleasant Hill - UP 17.9%
3. Concord - UP 23.2%
4. San Ramon - UP 16.6%
5. Danville - UP 4.8%
6. Brentwood - UP 35.3%

Is it any wonder people are cashing out?  And with prices going up like that people often want to start thinking about their personal residence exemptions.  Are you close to a "profit" of over $500,000 if married? $250,000 if single?  Is it time to plant your equity in a new home before the tax man cometh to take a chunk of your equity profits?   Do you know how to figure your "profit?"

Think ahead!

If you're thinking of selling your home later this spring and into summer take photos now! Flowers bursting, trees in bloom, green hillsides - makes for some spectacular photos in a property brochure.  It's never to soon to plan for selling.  Ordering reports ahead of time allows you to fix any suprises, getting a design consultation will give you advice on items to repair, improve or declutter, and letting your real estate agent know allows for planning in advertising - especially in those publications with LONG lead times. 

Walnut Creek, Lafayette, Danville, Alamo, Concord, Clayton - are all such desirable areas that it is without a doubt a fantastic sellers market.  Most homes are selling with multiple offers, but does that always guarantee you the best price? Maybe, maybe not.. more on that later.