A one-bedroom, one-bathroom houseboat in Sausalito is called the “fortune cookie” because of its shape.

May 10th, 2019

With a swooping roof, a floating home in Sausalito listed for $450,000 is known as the “fortune cookie” due to its shape.

“That’s what people who live on the dock have been calling it for a long time,” says listing agent Nathalie Kemp of Engel & Volkers.

The cozy abode on the water at 4 Liberty Dock has one bedroom and one bathroom tucked into 330 square feet. Beamed ceilings in the main living space, natural pine cabinets in the kitchen and walls paneled in white-washed planks in the bedroom give the space charm.

Firefighter rescues cat near Paradise debris, and now she won’t leave him alone

November 19th, 2018

A firefighter surveying debris in Paradise discovered an unlikely companion near the wreckage: an exceptionally friendly, very fluffy cat.

Ryan Coleman with the Fairview Valley Fire Inc. encountered the gray cat and not long after, she appeared to not want to leave his side. Coleman snapped a few photos and took a video of the feline perched on his shoulders while he walked around.

By A Pereira , SFGate

Rising mortgage rates may have repercussions beyond the housing market

September 20th, 2018

The ultralow mortgage interest rates that fueled a revival of the housing market after the Great Recession are moving higher, posing a potential threat to the economic boom.

The 30-year, fixed-rate mortgage, a popular one held by millions of Americans, is now at 4.6 percent, only slightly below the five-year high of 4.66 percent set in May. It is significantly higher than the all-time low of 3.31 percent six years ago, according to data from Freddie Mac. Data from other analysts suggests that new homeowners could be facing even higher rates.

Even a modest rise in the mortgage rate can raise monthly payments, causing a broad rippling effect throughout the economy.

“Rising rates, combined with home price increases in most markets in the U.S., are causing more affordability issues, especially for first-time home buyers,” said Eric Schuppenhauer, president of home mortgage at Citizens Bank.

Mortgage rates began the year on the most sustained increase in the 40 years Freddie Mac has been tracking the data, rising in 15 of the first 21 weeks of 2018. Rates went from 4 percent to 4.66 percent before plateauing during the summer.

Increases in mortgage rates are both good and bad. They can eventually dampen housing prices, making more homes affordable to more people. For someone buying a home now, high rates reduce the cash they have available to spend on expenses such as dinners, trips, appliances and clothes.

“Last year, if you had a median (priced) existing home costing $250,000 and you put down 20 percent, you borrowed $200,000,” said Brett Ryan, an economist with Deutsche Bank. “At 4 percent, that payment was around $950 a month. Fast forward to today, and median existing home price is around $260,000 and the interest rate you are paying on the loan is 4.6 percent, which means that your monthly payment is roughly $1,060, a little over $100 a month more than last year.”

That eats up a good chunk of the $2,000 or so that the Republicans have said is the annual savings from last year’s tax cut for a typical family of four.

The strong economy can withstand the pressure, for now at least, some analysts said.

“We don’t believe, at these levels, it should really impact consumer spending,” said Craig Holke, an investment strategy analyst at the Wells Fargo Investment Institute. “If rates continue to rise, at some point that could become a head wind.”

Record-low unemployment, government borrowing and trade rhetoric between the United States and China are largely responsible for the increase in mortgage rates.

“At some point each one of these could potentially cause a ripple that leads to some kind unexpected deterioration in the economy,” said Sam Khater, Freddie Mac’s chief economist. “All these factors . . . are risky.”

Experts are quick to point out that the market is not headed toward a repeat of the 2008 housing crash. For one thing, there are fewer real estate speculators. Lending standards have tightened to help ensure that people can afford the purchase.

Khater expects mortgage rates to continue to move higher, probably above 5 percent in 2019.

“We should see consistent or persistent forces pushing rates further up the rest of the year, probably not at the same pace as earlier this year,” he said.

The upswing in rates has not had much of an immediate effect on the housing market.

“My buyers are eager to get into a new home before the year is up due to unpredictable interest rates, but their goals are being thwarted due to the lack of housing supply,” said Gitika Kaul, a real estate agent at Wydler Brothers. “So while buyers are cognizant of the impact of rising rates on purchasing power, the larger looming issue continues to be the squeeze on supply in the marketplace.”

Derrick Swaak, a real estate agent at TTR Sotheby’s International Realty, also said supply is having more of an influence on the housing market than rates. But he warned that if rates continue to go up, they would have an impact.

“If they go north of 5 percent, then we’re going to start hearing that,” Swaak said, but the rising rates are not “making a measurable effect on people’s decisions.”

On the other hand, Ryan of Deutsche Bank said that the housing market is not as integral to the economy as it was in the early 2000s, before the financial crisis.

The homeownership rate has declined five percentage points from its peak in 2004, and home equity lending is roughly 40 percent lower than its peak in 2009.

Despite the swift climb, rates are still at relatively low levels. To anyone who bought a home back in the 1970s or ’80s, when mortgage rates were in double digits, hitting an all-time high of 18.63 percent in 1981, rates remain reasonable.

“They’re extremely low,” Khater said. “The monthly payment is still affordable. I think the obstacle for many buyers is not the monthly payment. The hurdle is a down payment. As prices continue to go up, that gets worse.”

Published by Kathy Orton, Washington Post

why do experts foresee a recession in 2020?

June 11th, 2018

The skies of the U.S. economy are clear and sunny, but many analysts see storm clouds on the horizon.

By many measures, the economy is in its best shape since the Great Recession of 2007 to 2009. Unemployment hit an 18-year low of 3.8% in May. Average wage growth is widely expected to reach 3% by the end of the year. And the economy is projected to grow nearly 3% in 2018 for just the second time since the downturn.

Yet the economic expansion is the second-longest in U.S. history, leading many economists to forecast a recession as early as next year. Half the economists surveyed last month by the National Association of Business Economics foresee a recession starting in late 2019 or in early 2020, and two-thirds are predicting a slump by the end of 2020.


Precisely because things seem to be going so well.

The late stage of an economic expansion is most vulnerable to a popping of the bubble. It’s typically when unemployment falls, inflation heats up, the Federal Reserve raises interest rates to cool the economy down — often going too far — and investors and consumers pull back.

Paul Davidson, USA Today, June 11, 2018

A Charmer in Berkeley

March 21st, 2018

In the bucolic enclave of North Berkeley sits a 1922 humble abode the recently benefited from a gentle yet modern makeover.

Coming in at two beds and one bath, 1534 Edith features period window casings, fireplace, and hardwood floors repainted in designer neutral tones with white trim. The arched windows are especially delightful.

By Brock Keeling @ SF.Curb

Bay Area home prices continue to rise in record streak

February 28th, 2018

Richard Rogers looks at the kitchen at an open house at 5893 Taormino Avenue in San Jose, Calif. on Sunday, Feb. 25, 2018. (Randy Vazquez/ Bay Area News Group)

Bay Area housing demand and prices continued a record-setting streak in January, as aggressive buyers pushed up year-over-year median sale prices for the 70th straight month.

A deepening shortage of homes for sale in the region drove up bidding for scarce supply. The median home price in the region rose to $710,000 in January, up from the median price of $628,000 a year ago, according to a report released Wednesday by real estate data firm CoreLogic.

Over the last six months, median home prices in the nine-county region have gained an average of 12.6 percent from the previous year.

But rising prices also meant a drop in home sales, particularly in entry-level units. The 4,884 home purchases last month represented a dip of nearly 8 percent from last year and the lowest January sales mark since 2008, according to CoreLogic.

CoreLogic research analyst Andrew LePage said the drop “has a lot to do with the continuing mismatch between housing supply and demand, especially in the lower price ranges.”

By Louis Hanse, Bay Area News Group

Quick move higher in interest rates could be warning for 2018

December 19th, 2017

Markets will be watching to see if interest rates continue to climb Wednesday, as the tax bill makes its way through Congress.

The stock market’s tax party took a breather Tuesday, just as Treasury yields snapped higher.

While not many traders were tying the two moves, the markets will be watching those yields again Wednesday, with concern that the volatile year-end streak higher is a sign of what could be ahead for 2018. The Dow slipped 37 points to 24,754, while the S&P 500 lost 8 points to 2,681.

The 10-year Treasury yield touched 2.47 percent Tuesday. While it was at that same level in October, the move had an unexpected ferocity, gaining more than 11 basis points in two days in one of the biggest such moves this year. The 2-year note yield was also as high as 1.87 percent, before trading at 1.85 percent.

“It kind of started [Monday] out of nowhere,” said Peter Boockvar, chief market analyst at Lindsey Group. “I’ve been noticing upticks in inflation expectations.” He also said investors may be considering that the tax package, expected to be approved by both the Senate and House by Wednesday, could result in more economic growth but also a bigger deficit, two things that could drive yields higher.

Boockvar said the stock market could have been moving lower on a ‘sell the news’ reaction to the congressional votes on taxes. The House passed a bill, but because of a procedural glitch, the body will have to vote again Wednesday.

Bond strategists said Treasury yields were also responding to rising yields in Europe on Tuesday, after Germany expanded the amount of debt it will issue next year. That drove bund yields higher, and Treasury yields also rose, breaking some key technical levels in the process. Yields move inversely to price.

Treasury strategists say they expect to see volatile trading as investors make year end moves end in a very illiquid trading environment. But Boockvar said the market may be anticipating less easing by the world’s central bankers in the new year.

“That will be the thing to keep in mind all through 2018. Trump and tax reform dominated 2017. Central banks and their removal of accommodation will dominate 2018,” he said. Boockvar said the Fed in January begins to pare back another $10 billion of its bond purchases, bringing the total decline in purchases to $20 billion a month. He added that the European Central Bank is also cutting its $70 billion in monthly bond purchases in half.

“There’s $55 billion less liquidity from December to January,” he said. “I think it matters. There’s going to be $1 trillion less liquidity in 2018.” The Fed’s reduced purchases of what are mostly Treasurys is expected as the U.S. is expected to increase debt issuance.

Michael Schumacher, head of rate strategy at Wells Fargo, said trading could continue to be volatile into the year end, but he does not expect a sharp move higher in yields next year. His target for 10-year in 2018 is 2.95 percent.

“You’ve got two big changes on Jan. 1 and it’s a cumulative thing,” he said of the reduced central bank asset purchases. “I don’t think it’s a light switch kind of thing. This is the first year in a while the Fed has delivered on the dots. So it’s got the market nervous about the Fed coming through again next year. ”

The Fed forecasts three interest rate hikes for 2018, and it presents its forecast on a chart with anonymous ‘dots’ on a timeline to represent each individual official’s view.

“The Fed’s got three hikes for next year. The market’s got two. I think people have too comfortable a view about Jerome Powell’s stance on monetary policy. There’s a lot we don’t know about him yet. The idea that he’s a clone of Janet Yellen is too simplistic,” he said. Powell takes over from Yellen in February.

Bob Sinche, global strategist at Amherst Pierpont, points out that the Treasury market has made curious moves at this time of year in the past, like 2016 when the 10-year note contract reached its low of the year on Dec. 21.

Note contract reached its 2016 low on December 21, followed by an irregular rally over the following 9 months, so important moves in late December are not unprecedented.

“A break lower in price, if sustained through the week, would be interesting as the key PCE deflator report is out Friday. So while this could be a false break, significant fiscal stimulus, 3 plus percent real GDP growth, a market that appears to be underestimating Fed hikes next year and the increasing net supply as the Fed ramps up balance sheet reductions certainly appears to be a recipe for higher yields,” he wrote. The PCE deflator is the Fed’s preferred measure of inflation.

The markets have been concerned about a “flattening” in the Treasury curve, where long end yields were moving closer to the short end, which was rising in anticipation of Fed rate hikes. Investors keep an eye on that trend since a flat curve can signal economic trouble ahead, and if it inverts, it would be taken as a recession warning. But that trend relaxed Tuesday as yields on the long end moved higher.

Brian Levitt, senior investment strategist at OppenheimerFunds, said he does not see a problem with the curve flattening for now, but it could be if the Federal Reserve tightens policy too much. That is his big worry for stocks, which he expects will have a positive 2018, but with a more normal 10 to 12 percent correction, after barely a sell off in 2017.

“All cycles are going to end with too tight a policy in one of the major economies of the world,” he said.

Levitt said he doesn’t believe the tax bill has been the big driver of stocks, which he says have been benefiting from synchronized global growth.

“I worried maybe the tax law becomes a little bit of a sugar rush to the economy, but not enough investment in productive assets to make it sustainable,” he said. He said he expects businesses to make some investment but much of their savings will go to dividends and buybacks.

“If you bring forward a little of the growth, the Fed could become more aggressive and paradoxically it could shorten the cycle,” he said.

Existing home sales data is expected at 10 a.m. ET Wednesday, after Tuesday’s new home sales rose more than expected. Earnings are also expected from General Mills, Blackberry, Winnebago, Bed Bath and Beyond and Herman Miller.

Patti Domm, CNBC

Renting is better than owning to build wealth — if you’re disciplined to invest as well

November 18th, 2017

Millennials, take note: If you’re looking to build up your nest egg, home ownership isn’t really all it’s cracked up to be. In fact, a new study published on Thursday shows that renting may very well be the best way to go about it.

The numbers, crunched by Florida Atlantic University, Florida International University and the University of Wyoming, determined that the property appreciation most homeowners expect doesn’t necessarily stack up in terms of wealth building.

Hence, FAU economist and co-author of the study Ken Johnson says that while the American Dream is alive and well, it needs a revision.

“When considering buying and building wealth through equity appreciation versus renting and reinvesting in a portfolio of stocks and bonds, property appreciation does not change the results,” he said. “On average, renting and reinvesting wins in terms of wealth creation regardless of property appreciation, because property appreciation is highly correlated with gains in the traditional financial asset classes of stocks and bonds.”

Shawn Langlois at Marketwatch

Gary Cohn: ‘People don’t buy homes because of the mortgage deduction’—or do they?

September 29th, 2017

In the midst of the mad selling and explaining and quantifying and qualifying of potentially the biggest U.S. tax overhaul in decades, President Donald Trump’s chief economic advisor stood at a White House podium and made a bold declaration: “People don’t buy homes because of the mortgage deduction.”

He said that, even though members of the Trump administration have repeatedly said they will “protect” the popular tax break.

There are a lot of reasons people buy homes—financial, practical and emotional. For the vast majority of those who make that choice, it is by far their single largest investment. Until the financial crisis, the common belief was the home prices always rise, and a home was therefore a proven way to build wealth, but that was proven wrong.

More than 6.5 million homeowners lost their homes to foreclosure in the past 10 years, according to Attom Data Solutions, and 2.8 million current homeowners still owe more on their mortgages than their properties are worth. This after home prices plummeted nationally for the first time since the Great Depression.

Most consumers, at least according to several recent surveys, still believe that a home is a good investment. The majority of renters still aspire to home ownership, despite the fact that millennials have been deemed the “renter generation.” That designation is likely more due to high student loan debt and lower initial employment for this generation than anything else. Millennials have also been slower to marry and have children, which are the primary drivers of homeownership.

“I think people buy homes because it represents security and a way to build wealth and a sense of stability,” said Laurie Goodman, co-director of the Housing Finance Policy Center at the Urban Institute. “I don’t think the mortgage interest deduction plays a large role in that decision.”

For a great many homeowners, the deduction isn’t even a financial factor. A taxpayer can only take the deduction if he or she itemizes, and just one third of taxpayers itemize, but about 64 percent of Americans own a home (and just over one third of homeowners have no mortgage). Three quarters of those who do itemize take the deduction, but if the standard deduction were raised, fewer taxpayers would itemize, and therefore the mortgage deduction would be used even less.

“Gary Cohn is probably right about that,” said Richard Green, director and chair of University of Southern California’s Lusk Center for Real Estate. “It does absolutely encourage people to buy bigger houses than they would, but does it flip the switch between buying and renting?— maybe half a percent in home ownership, very little.”

Green notes that the deduction is most important to those living in states like California, which has both high tax rates and high home prices. Home prices there, he said, could drop without the deduction. As for overall homeownership, he points to other nation’s like Canada and Australia, which have no mortgage deduction but have very high homeownership rates.

The National Association of Realtors, one of the most powerful lobbying organizations in Washington, vehemently opposes any change to the deduction. Even though there has been no change so far, they came out against the current plan, claiming that because it would result in fewer taxpayers itemizing, it would weaken the power of the deduction.

“This proposal recommends a backdoor elimination of the mortgage interest deduction for all but the top 5 percent who would still itemize their deductions,” wrote NAR president William Brown in a release. “When combined with the elimination of the state and local tax deduction, these efforts represent a tax increase on millions of middle-class homeowners.”

By CNBC Diana Olick


How tax reform could hit charitable giving

August 6th, 2017

Plenty of factors can motivate charitable giving: Moral obligation, religious tithing, a desire to improve the world or leave a legacy.
But another factor — the tax benefits for giving — could soon change if lawmakers push through tax reform.
Few people donate simply because of the tax breaks and are unlikely to stop giving altogether if they don’t get any. But analyses from the Congressional Budget Office and others have found that tax incentives typically increase how much you choose to donate — whether in life or at death.
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That’s why Republican proposals to reduce or eliminate key tax breaks for giving has charity experts a little concerned. Specifically, President Trump and House Republicans have proposed to nearly double the standard deduction, lower income tax rates and repeal the estate tax.
Though it’s assumed the charitable deduction would remain in place, increasing the standard deduction would mean far fewer people would itemize and be able to claim the break, while lowering tax rates would make the deduction worth less for those who still take it.
Related: The deductions that could be killed by tax reform
The double whammy of doubling the standard deduction while lowering the top rate to 35% from 39.6% could reduce giving by between $5 billion and $13 billion a year, or up to 4.6%, according to a recent study by the Lilly Family School of Philanthropy at Indiana University.
Of those two changes, increasing the standard deduction has the greatest negative effect because it would reduce those who itemize to just 5% of filers, down from 30% today. That’s because the only reason to itemize is if your deductions combined exceed the value of the standard deduction.
“The 25% who used to itemize will probably give some but not as much,” said David Thompson, vice president of policy at the National Council of Nonprofits.
How much does it save
Here’s how the charitable deduction works:
If you itemize deductions, how much you save in taxes from your contributions is determined by your top income tax rate. If, for example, you’re in the 28% bracket, you’ll save $28 in taxes for every $100 you donate.
And if you are fortunate enough to have an estate worth more than $5.5 million (or $11 million for married couples), anything above those amounts would be subject to the federal estate tax after you die. Whatever you give in your lifetime or bequeath to your heirs upon death can reduce that taxable portion.
Related: The most controversial tax reform proposal has been nixed
Many charity groups have urged lawmakers to make the charitable deduction “universal” — meaning everyone can take it whether they itemize or not. “Our nation has a rich history of charitable giving. By making it a universal deduction we think that it recognizes this important value,” said Sean Parnell of The Philanthropy Roundtable.

By Jeanne S @ CNN Money