State of the Real Estate Market

Right now, the economy is charging along and moving forward. There is positive economic growth. This was the message reported at the California Association of Realtors® meeting of the MenloPark/Atherton and Palo Alto districts last week. The nation’s GDP is at 2.4 percent, up from 1.9 percent in the beginning of 2013. Personal consumption, the biggest component of GDP, hinges on consumer confidence, which is factored on jobs and income. The country lost 8.8 million jobs in the recession, but has gained back 8.1 million since January 2010. In California, employment is up 2.1 percent. It’s even better in the Bay Area, especially in the San Jose metro area, which has experienced a 3.4 percent job growth, adding 110,000 jobs in the area. The Bay Area, particularly Silicon Valley, is charting a stronger course compared to other parts of the state.

Here’s what’s ahead. Please contact me if you would like a link to the complete report.

• Interest rates have begun tapering off. Expect to see them rise to the 5 percent range.
• Financial reforms stemming from the Dodd-Frank Act are reining in lenders to ensure they make a good faith effort to verify a borrower’s ability to repay their mortgage.
• Talk of dissolving Fannie Mae and Freddie Mac threatens home ownership since these government-sponsored enterprises are the cornerstone of housing.
• The proposed draft legislation on federal tax reform could significantly impact home ownership because it lowers the capon the mortgage interest deduction, seeks tighter requirements on the capital gains exclusion, repeals the deduction for property taxes paid in connection with an owner-occupied home, along with all other deductions for state and local income taxes.
• The number of international buyers, many of them purchasing properties with all cash, has grown.
• The forecast is for statewide home sales to decline about 3.1 percent this year, and the median price to rise about 8.2 percent from last year.

Around Town

Master Sinfonia Chamber Orchestra was established in 1965 to provide classical music of a high caliber to the communities of the San Francisco Peninsula. We are fortunate to have them perform on Saturday, April 26 at 8:00 pm at Valley Presbyterian Church(945 Portola Valley Road, Portola Valley) and on Sunday, April 27 at 2:30 pm at the Los Altos United Methodist Church (655 Magdalena at Foothill Expressway, Los Altos). Because of my continued supportof Master Sinfonia, if you mention my name at the door you will beadmitted for free. Go to www.mastersinfonia.org for moreinformation.