Rate of Return

We suppose there's a way to interpret this as something other than good news, but we sure can't think of one. Right now, low mortgage rates are just the thing to keep both buyers and sellers happy. Here's hoping...

Welcome to the Neigborhood

We've been touting the evolving Divisidero corridor for a couple of year now. It may still be a bit gritty for some folks, but the neighborhood has vitality and genuine diversity more reminiscent of Brooklyn than the Mission district. From a real estate perspective, we think values already reflect the area's future more than its past. In other words, it's probably too late to bet on the come. But if your goal is to live in an exciting, vibrant, true urban neighborhood with decent weather and access to Golden Gate Park, you'd be hard pressed to do better. So the next time you're cursing the traffic as you travel from the Marina to Noe Valley, consider just parking the car and walking. You may be pleasantly surprised by what you find.

Taxing Situation

Most people don't realize that there can be tax consequences to a short sale. Just when you think you've gotten out from under an unfortunate financial situation, you may find that you have a substantial tax bill. Today's Chron article spells out the pitfalls that may sellers are completely unaware of.

School of Thought

If you aren't raising children in San Francisco, this story might not seem like a big deal. But if you or someone you know has young 'uns in Baghdad by the Bay, then you know that the public school selection process is one of the single most important issues in town.

What's the real estate connection? The school board's decision to grant partial neighborhood preference could well have some impact on property values for homes near the most desirable schools. Of course, if the board had granted full neighborhood preference, the impact would have been huge.

In Marin, schools are a driving force behind property values. In San Francisco, schools are often a driving force behind people moving to Marin. Will the board's decision stem this tide? Time will tell. Did the board's decision only serve to further segregate SF's public school or did they not go far enough? We'd love to hear readers' thoughts (real estate-related or otherwise) on this very divisive issue.

Helping or Hurting?

Missed this one a few weeks ago, but it's worth a trip back in time. New appraisal guidelines are making it harder than ever to get financing for a home purchase. These days, anti-reform and anti-regulation stances are less popular than ever, but reform for reform's sake can backfire.

In our sphere, we've heard innumerable stories of local appraisals being done by out-of-area appraisers. (Mill Valley house, Sacramento appraiser. San Francisco condo, Morgan Hill appraiser.) We talk often about the importance of working with a Realtor who really understands a local market. Well, that wisdom gets severely compromised when an out-of-area appraiser can step in and blow up a transaction.

So is this a good thing or a bad thing? Are regulators protecting us from ourselves or are they preventing the market from recovering?

The Biggest Investment That Isn't

Apropos of today's earlier post, we were thinking about the conventional wisdom that one's home is usually one's largest investment. In light of the number of people walking away from their "largest investment," it's worth asking...if a person buys a home with zero down and an interest-only loan (as was the case for more than a few buyers during the boom time), is it really an investment at all? The only thing the buyer is risking is his credit score. There's no judgement or political statement implied by the previous sentence. Just an observation meant to spark debate.

Who's At (De)Fault?

An interesting article in today's Chron raises the questions about what happens when defaulting on debt no longer carries much of a stigma. Up to 25% of foreclosures are occurring because homeowners simply walked away from their home; something what was all but unthinkable for previous generations. For those with a talk radio viewpoint on this subject, the piece makes the notable point that it's not just individual homeowners who are walking away from financial obligations. Developers are abandoning multi-million dollar projects. And, of course, we all know about the Wall Street bailouts, which resulted from similarly reckless behavior, with consequences softened only by the government's golden trampoline. We'd be interested in hearing what readers think about everyone from homeowners to Wall Street brokerages getting into trouble from which they cannot recover. Has fiscal accountability become a national afterthought? And if so, is this a temporary phenomenon or a permanent shift in how Americans view debt and risk? Can the shame of being a welsher ever be recaptured? (I'm one quarter Welsh, so I think I can use that word.) Should it be?