Well folks, could this be the bottom? Low housing prices and attractive interest rates make this market, according to Yahoo Finance, “the Best Buyer’s Market in 40 years.” Despite continued bad press about housing, the engine keeps chugging along. Why?

For starters, Generation X outnumbers Baby Boomers by 6 million people. Housing continues to be in demand for young people in the workforce. Secondly, China has just banned purchasing investment property so from the international viewfinder, the US is an excellent place to put money into housing. Third, those homebuyers who suffered foreclosures in round one can now get back into the market, if they’ve played their cards right. Finally, homebuilding has ground to a halt so you can bet that we will see even more demand in years to come.

1002 Larkwood CT, Concord CA 

According to a New York Times article published earlier this week, politicians are tempted to let the Real Estate market crash and burn, then level out once the smoke clears. Washington sponsored Homebuyer’s Tax Credit may have only scratched the surface of what is needed to prop up a market which

 ”expired last spring, and paid first-time buyers as much as $8,000 and buyers who were moving up $6,500. The cost to taxpayers was in the neighborhood of $30 billion, much of which went to people who would have bought anyway.”

Some say that if the stimulous is pulled back, it will continue to demoralize the already demoralized and create an even deeper abyss. What say you?

Impeccably maintained town home in quiet North Pleasant Hill.

Buying a home in any market can be daunting. No matter how left brain you are, most people buy emotionally, then justify logically. Here are ten tips to make your home buying adventure a little less “adventurous”…

1)      Pre- Qualify: Don’t forget to work closely with a qualified Loan Agent before you find the house of your dreams. Banks are currently demanding more documents such as tax returns, pay stubs and bank statements. Be sure to hold off on large purchases which may affect your credit. 

2)      Keep Closing Costs in Mind: Remember to set aside funds for closing costs. Loan points, escrow fees, appraisals, inspections and other fees will need to be addressed at the time of closing on your new home. 

3)      Make Use of Technology: Although nothing beats an actual walk through of the home of your dreams, great websites, email updates, voice activated IDX systems and virtual tours can save you time with your search. Even if you have a clear picture of what you want in a home, you may turn a corner and surprise yourself. 

4)       Look for Incurables: Deficiencies such as power lines, freeways, commercial areas and busy streets can all affect the marketability of a home, even in the best of times. Pay attention to the incurable aspects or most expensive items first (lot position, floor plan), then work your way to the least expensive (carpet, paint, touch up). 

5)      Work with an Experienced Agent: Nothing replaces experience. A good Real Estate agent, whom you preferably find by referral, will pay great dividends. The 3 questions to keep in mind are: (1) Can I trust you? (2) Are you good at what you do? (3) Do you care about me? 

6)      Don’t Major in the Minors: Every home has defects and deficiencies – even brand new ones. Once in escrow, do your best to focus on what the home has to offer in the long run (neighborhood, quality of life, utility), not on all the minutia that turns up on the home inspection. Avoid getting caught up in the “process” as it can be taxing, stressful and somewhat anticlimactic. Keep your eye on the prize and always retain a “business” mindset. Resist the temptation of making it a “personal” shootout with the Seller.

7)      Count on Repairs: Although most home sales have a home warranty negotiated, have a few dollars set aside after closing for unexpected repairs. 

8)      Look into the Future: Even though you haven’t even closed on the home yet, you will most likely sell it someday. When searching,  focus on location, neighborhood and the amenities that get you excited. Chances are your next buyer will feel the same way.

Heritage oaks, towering redwoods, majestic pines and fragrant bays are all part of the magical Lamorinda landscape.  Early photos of Lamorinda reveal that indigenous oaks were some of the only trees that dotted this hilly terrain.

According to local lore, Sunset Magazine published a reforestation issue in the 1960’s which prompted well meaning boy scouts to plant tree after tree after tree in every corner of the area.  Some say thousands of Monterey Pines were planted among the existing oak trees.

“You could walk into any store and buy them, they were so plentiful,” says one resident. 

Sixty years later, the pines that were planted by the boy scouts are near if not at the end of their 50-60 year life cycle.  Many of these trees have become hazards and are now being removed, sometimes 5-10 at a time. 

When purchasing a home, be sure to observe, notate and if necessary, hire the services of a certified arborist to inspect the trees on the lot.  When we purchased our home 6 years ago, we had two Heritage California Coastal Live Oaks inspected by an arborist.  Both were hanging over living areas.  One of them was diseased and needed to be removed.  We had to go to the planning department and obtain a permit to do so.  Also, remember to check with city or town officials – when you remove a large oak tree, even if diseased, you may be required to plant multiple saplings in its place. 

Once you move in, it’s important to have trees inspected annually or bi-annually.

Don’t forget to check with the City Planning Department before you close on that picture perfect lot with a small home on it, having visions of grandeur for expansion.  Like any other city, Orinda, Lafayette and Moraga have their unique set of rules & regulations.  So, if you automatically assume that you can remodel, think first about your plans and take the time to pay a visit to the planning department. 

According to the Lafayette Planning Department, please consider the following if you are in the process of envisioning a remodel, tear down or add-on: 

“Many people underestimate two specifics when purchasing a home that needs remodeling or renovation (1) Familiarity with the process and how long it can take from start to finish.  For instance, if you buy a 2 bedroom 1 bath home and want to expand it to a 4 bedroom 2 bath house, you may not be able to live in your investment for some time.  The process can take awhile depending on architectural review, county compliance, etc. (2) Limitations based on zoning & design review.” 

In addition, the county has jurisdiction over compliance requirements such as, building codes, fire department regulations, utilities, etc.  So, before you pull the trigger on that view lot you have in your sights, do a little homework – the payoff will be worth it.      

Just east of Berkeley, CA, lies a group of communities that is shielded from the San Francisco Bay Area fog, has top ranked schools, rolling oak studded hills and a small town feel.  I am referring to Lafayette, Moraga and Orinda otherwise known as it’s nickname, Lamorinda, CA.  

As a resident for almost six years, I have gotten a chance to experience this wonderful hamlet, a mere 20 minutes from downtown San Francisco.  Additionally, BART or Bay Area Rapid Transit, offers a short public transportation option to the “City by the Bay.”

You may have been perusing several Bay Area communities if you are relocating from out of the area and found pluses and minuses in the North Bay, SF proper and the South Bay.  As far as value goes, the East Bay can’t be beat.  Summer days are a little warmer than other Bay Area communities, but Real Estate has definitely more bang for the buck. 

When purchasing a home in the Lamorinda area, be aware of the clay-adobe soil in the valleys and mantling the hillsides.  This type of soil shrinks in the summer months and swells during the rainy season, potentially resulting in seasonal movement of patios, decks and even foundations that have not been designed to mitigate the movement.  Have a qualified home inspector thoroughly check the foundation, exterior stucco or siding, interior drywall and flooring for signs of previous movement, cracks or out of plumb windows and doors.  If possible, find out which type of foundation the home has, such as shallow footings or deeper drilled piers. 

Soil creep, hilly terrain, weak bedrock and soil, poor drainage around the foundation, and lack of rain gutters as original equipment can all be contributing factors to general instability in buildings and structures throughout the Lamorinda area.  In addition, check with city officials for any past geologic issues in the location in which you are purchasing.  If questions are raised, you may want to contact and engage the services of a registered geotechnical  engineer or certified engineering geologist to further evaluate the problem. 

According to John Dye, Principal Geotechnical Engineer with Cornerstone Earth Group in Walnut Creek, he says,

 “Generally there is no cause for alarm as thousands of residents have purchased and lived in Lamorinda for decades, but conduct due diligence by carefully reviewing all disclosures and noting any history of past soil movement or slides.  Most Buyers do not conduct a geo-tech inspection chiefly because of the cost involved…a due diligence evaluation can range from several hundred to several thousand dollars depending on the complexity of the property.”  

When was the last time anyone offered you $8000 to buy a home???  Well, here it is folks.  The American Recovery and Reinvestment act of 2009 provides an $8000 federal tax credit for first time buyers who have not owned a home within the last three years.  Purchasers who close on a principle residence between January 1, 2009, and December 1, 2009 are entitled to a tax credit equal to 10% or a maximum of $8000.

Keep in mind, this is NOT a tax deduction, but an ACTUAL CREDIT paid to you from the federal government.  If you owe $2000 in taxes at the end of the year, you will receive a check for $6000.  Conversely, if you are owed $2000, you will receive a check for $10,000.

Time is running out and with the current delays in obtaining financing through most lending institutions and the lack of inventory in many areas, it is imperative to secure a property into contract by no later than October 15, 2009, to have a chance at getting your piece of the stimulus package.

Since I cannot give you direct tax advice, always confirm any tax information with a qualified specialist such as a CPA or EA.

Click image for larger version

Here are some of the ways to use your $8000 tax credit:

1. Go on a cruise or second honeymoon to Venice Italy
2. Improve that tired bathroom you’ve been meaning to for years
3. Take almost 4 ½  years worth of piano lessons
4. Buy over one year’s worth of groceries for your family
5. Purchase a really cool motorcycle
6. Fly to Paris for lunch 5 times
7. Try your luck in Vegas without caring
8. Take eight friends on an exotic scuba diving excursion
9. See how many live sports events you can attend until the money runs out
10. Buy a small experimental airplane and an insurance policy for your spouse

Resources for tax credit buyers:

www.irs.gov/pub/irs-pdf/f5405.pdf

http://taxes.about.com/od/deductionscredits/qt/homebuyercredit.htm