Remember, you are spending your childrens’ inheritance when you take out a Reverse Mortgage.  And you just might be creating problems for your children after you are gone, beyond what you had expected.

I recently closed a transaction, wherein both parents had passed away.  A few years ago, they had taken out a Reverse Mortgage on their property.  When it came time to sell, we discovered that after paying closing costs, the family was left with no equity in the house.  And beyond that, the house had to sell as a Short Sale.  The kids had to pay utilities, legal fees, upkeep on the house during the listing AND remove all the personal property from the residence, which in the case of this sale, was a sizable job!

So although the extra cash for Mom and Pop was helpful, I am certain that they believed their children would still inherit the “estate”.  Instead, they inherited a big problem.  Living out of the area, numerous trips for clean up, estate sales, yard sales and trips to the Goodwill.  It added up to a huge task for this family..

The better route might have been careful financial planning on the part of the parents, or even better, selling the house they could no longer afford and purchasing a smaller, less expensive property.  They could have budgeted their cash and left their children a nice little inheritance.  At least they could have left them time to grieve the loss of their parents, rather than having to plunge into a huge additional problem.

The Reverse Mortgage can be a true help for some people, but much family planning should accompany this decision.  Also, beginning in 2015, the lending  requirements for taking out this type of loan has been increased to more stringent financial requirements.  My guess is that too many of these loans are being paid back “short”.  Our residences simply can’t be expected to solve our financial problems in the future.

“Always Expect the Best”

2014 3^rd Quarter North County Real Estate

This report is a look back at North County Real Estate to date. We will review both pricing and sales activity with comparisons on a year to year basis. North County is a dynamic community with a number of factors that influence real estate trends.

Perhaps the most significant statistic for the residential single family home sector is that there are 20% more houses for sale today versus 2013. Early in 2014 Sellers were bullish on pricing and listed properties hit the market based on this optimistic price outlook. By mid-summer it became apparent that the Buyers had a more restrained opinion on pricing.

Morro Road House, Atascadero

Actual unit single family home sales remained on par with 2013 and prices did rise almost 8% on a year to year basis. The average North County single family home is now selling at $362,000. After a couple years of double digit percentage price increase the Buyers have decided to take a break. There is no sense of urgency amongst Buyers today, especially with continual low interest rates and a good choice of options when house shopping.

The number of million dollar home sales increased significantly in 2014 but the average sale price did not change on a year to year basis. The number of million dollar property listings dropped a bit on a year to year basis. One could surmise this category is somewhat balanced on these numbers. Buyers are very selective in these purchases and there remains plenty of supply in the pipeline.

40 X 20 Shop, Jardine Road

Commerical properties have steadily recovered over the past few years. Retail and industrial rents are stable and vacancies are slowly being absorbed. This market is not robust but the trend line is positive. Well located properties get all the action while the secondary locations are much less in demand. There are a number of new hotel rooms coming on line in 2014. Multi-family properties have strong rents and investor demand at market prices.

Vineyard on Indian Valley Road, San Miguel

Tourissm and agriculture are the twin towers of our North County economy. The foundation of these two industries is our wine and grape growing business. Despite the drought and world-wide competition for wine sales. North County has held its own and then some. We seem to be like the “Little Engine That Could.” These industries are popular with people that are creative, competitive and above all resilient. There are plenty of places to grow grapes and make wine in the world. It’s the local people in our industry that make this particular place so special.

Real estate investors and farmers are looking to acquire large existing vineyards. Within the industry the participants understand that the drought has created a whole new set of costs and restrictions in regard to planting new vineyards. Investors are also buying existing wineries. These aforementioned Buiyers are well financed and have longer term perspectives.

Trail riding in the Salinas Riverbed

Has the drought had an impact on real estate in North County? This is a difficult question to answer but I believe the impact of the drought will be more long lasting because of local and state governments are gaining control of the water resource that was previously unrestricted. Government restrictions will have the most adverse financial impact on new development. Existing built and planted properties are better values based on new restrictions and costs that will inevitable be imposed on new development.

Today Buyers lack a sense of urgency which has stalled the nationwide housing recovery. We see the same thing happening in North County. Interest rates are low. Gas is getting cheaper which helps destination locations like North County. When we get a big rainfall this year the party will be on! 2014 shows just how strong North County can in the face of adversity.

For more articles and information about our area you can buy my blog at www.joaniewilliams.net and my website is at www.joaniewilliams.com.

Buy it all Now!         

Buyers often come to me with a wish list. There’s the usual list of size of the house, number of bedrooms, floor plan and of course location. But very often, I am asked to buy a house with a shop, a pool, a horse barn, horse set-up or even an existing vineyard.

And that is what I like to hear. A list of what you really need and want.

However, sometimes a buyer will give me that list and say that they can build it or install it later. Unfortunately, “later” often never comes.

It is much easier and cheaper to buy a property with what you need all ready there, rather than try to buy the funds later on to install it all. And when you purchase a house with a shop or a pool, you are financing that amenity at a much lower interest than if you had to borrow money to install it yourself. Plus, the price that you are paying for existing amenities today is in general, less than half of what it originally cost to install.

I currently have for sale a house with 2 shops on one acre, a house with a shop and a pool on a ½ acre, and a house on 20 acres built above a shop. 

Actually, I’m amazed at what you can buy today for far less than replacement value.  The cost of a new nice workshop can range from $80 to $100,000, and to install  a pool can easily cost from $40,000 on up.

So don’t build it, buy it! You will be so glad that you moved in with those amenities in place that might cost you 10’s of thousands in the future.

Always Expect the Best!