In the past week, San Mateo County property owners have been blanketed with solicitations from private companies that are luring people to spend money to reduce their property taxes. These companies cannot guarantee a reduction in property taxes to anyone. The law establishes which properties are eligible for this property tax relief program known as a “Decline in Value.”

A “Decline in Value” request is FREE to any homeowner. We need your help to get the word out–tell your constituents, employees, friends, neighbors and family NOT to get ripped off–do NOT pay for these services. If anyone should ask, this is how the Decline in Value program works:

First, a property owner requests a Decline in Value review by filling out a simple form and sending to the Assessor’s office (online, by fax, mail or in person). It only takes a couple of minutes to complete.

Second, our offices review the request. If a property’s assessed value is more than its market value as of Jan. 1, the property owner will be eligible for a temporary reduction in assessed value. We will start the process that will lower their property tax bill or earn them a property tax credit.

Third, if the property is ineligible for relief, we will advise the owner as to why their property did not qualify for a reduction.

Where can someone get a form? Decline in Value request forms are available online and in downloadable paper formats from our web site at www.smcare.org. We will also mail them to a property owner and forms are available in our office if a person stops by.

And lastly, properties that are reduced are reviewed by the office on an annual basis. If the property continues to qualify, it will remain on the program in future years until the property’s value is regained.

Please help us spread the word. I’ve attached the press release that we sent to the media and samples of the solicitations. You will note that is very professional looking and that is why it may snare unsuspecting property owners into this scam.

Thank you,
Warren Slocum

4 Bedrooms, 3 full Bathrooms, appx. 1.62 acres
 

4 bedrooms, 3 bathrooms, 2 family rooms, pool, over 3,000 sq ft, private cul-de-sac location

448 Emerald Ave – $818,000

3 bedrooms, 1 bathroom, updated kitchen, White Oaks Neighborhood

923 Elm St – $1,050,000

3 bedrooms plus den, 2 bathrooms, great location within walking distance to downtown, remodeled kitchen

LandAmerica has been hit hard by the 2-year housing slump and falling home values across the country. Business for the underwriting company was booming last summer and its market value was at $1.6 billion. Last June stock shares were selling for $106 and since then have dropped to 20 cents.

From San Jose to San Francisco there are 10 LandAmerica/Commonwealth Title offices and there is no word yet if all of these offices will remain open.

    20 Quickest Pending “Sales”             20 Longest “Actives”                20 latest “Solds”
      D.O.M.     Price change                  D.O.M.     Price Change           D.O.M.     Price Change

      3 days            $ 0                        673 days         $0                      35 days     <$14,000>
      6 days            $ 0                        428 days   <$100,000>            19 days          <$0>
      8 days            $ 0                        256 days   <$197,000>              8 days          <$0>
    10 days            $ 0                        232 days   < $50,000>               0 days          <$0>
    10 days            $ 0                        215 days   <$120,000>            17 days          <$0>
    10 days            $ 0                        159 days   <$150,000>            30 days      <$26,000>
    12 days            $ 0                        155 days   <$150,000>            34 days          <$0>
    15 days            $ 0                        146 days   <$75,000>              25 days          <$0>
    15 days            $ 0                        144 days        <$0>                  35 days          <$0>
    16 days            $ 0                        139 days        <$0>                  38 days          <$0>
    17 days            $ 0                        129 days   <$80,000>                5 days          <$0>
    17 days            $ 0                        123 days   <$50,000>                6 days          <$0>
    17 days            $ 0                        116 days         <$0>                   7 days          <$0>
    18 days            $ 0                        112 days   <$40,000>              44 days      <$44,000>
    22 days            $ 0                        110 days   <$100,000>            32 days     <$100,000>
    22 days            $ 0                        110 days   <$50,000>              20 days          <$0>
    24 days            $ 0                        103 days   <21,000>                  8 days          <$0>
    28 days            $ 0                          92 days   <$350,000>            12 days          <$0>
    35 days            $ 0                          83 days   <$90,000>              18 days          <$0>

 For many San Carlos sellers, everything is fabulous in the City of Good Living. For others, they just can’t stand the thought of another open house.

“As Written by NPR…”

If you spend hours watching HGTV, dreaming of remodeling your kitchen, or checking the value of your neighbors’ houses online, you may be suffering from “house lust.”

Rachael Brownell, a homeowner in Bellingham, Wash., says she looks at a real estate Web site every day. She calls it a “relaxing little ritual” for someone who is “fantastically fascinated by the ups and the downs of the housing market.”

Brownell is profiled in a new book called House Lust. It looks at the psychological side of the housing boom, which has now come to a crashing halt. But author Dan McGinn says the obsession with homes hasn’t faded.

“Americans have always been somewhat fascinated with homes,” he tells Renee Montagne. “But something really different really did happen over the last 10 years or so. We had many, many people buying not just the house they want to live in but [as] an investment property.”

Giant homes are a prime example of “how people went a little bit crazy for houses,” the author says. McGinn says a woman that he met, who lived in a 9,000-square-foot “McMansion,” couldn’t remember offhand how many bathrooms she had.

“If you think your house is going to go up by 10 percent a year, which some people started to think, it only makes sense you buy as much house as you can,” McGinn says.

And “house lust” doesn’t stop with home purchases.

“Renovations really became over the top the last few years,” McGinn says. “You saw people spending hundreds of thousands of dollars and months, even up to a year, adding really lavish kitchens, family rooms, master suites.”

McGinn even encountered “renovation therapists,” hired to help people deal with the stresses of such projects.

Although the real estate market has tanked, “there are a lot of homeowners who are still ahead of where they were, not two years ago but 10 years ago [and] still have a lot of equity in their homes.”

“People seem to always be thinking about their next house and doing things to try to maximize the value of the house they live in now, whether prices are going up or going down,” McGinn says.

“Having lived through a time when we thought our houses were going to make us rich has changed the way we think about them,” he says.

Our financial system is the foundation for operating a sound functioning economy. American business, consumers and international partners rely on loans with financial institutions for daily operations. Businesses typically take out short term loans to manage cash reserve depletion for items like payroll, acquisitions, and emergencies. Consumers use credit cards, home loans, car loans, student loans and various other types which in turn produce income for businesses to grow. The free flow of lending money must occur at four levels or an immediate stop to our economy occurs;

Banks Lend to Banks

Banks Lend To Consumers

Banks Lend to Business

Consumers Buy Business Products and Good

Recently bank to bank loans have frozen. Banks have seen a significant number of depositors shifting funds to treasuries and other government back programs, therefore straining the cash reserves of banks. When this occurs banks ask other banks to free up cash with short term loans to prevent cash depletion and ultimately a bank failure. Since most banks are seeing cash depletion from depositors shifting funds out, they are now refusing to lend to other banks in fear that they too might deplete their cash and also become a victim to financial insolvency. Thereby forcing them to sell, merge or close down (i.e. Wamu, Wachovia, etc.).  The end result is a freezing of bank to bank loans and therefore clogging the system.

A clogged system eventually means banks stop lending to consumers and businesses, or at least reduce their exposure in those areas. Eventually this means consumers will not be buying as much. The final result is that business income start reducing and layoffs take place. Consumers have less money to spend when unemployed, making a further business downturn and even more layoffs. Ultimately a recession or depression takes place.

THE SOLUTION

Government intervention and economic downturn prevention is controlled with two government tools; a. regulation or b. liquidity. Regulation is a good way to solve future problems but it does little to result in immediate relief to the problem. Liquidity is when the federal lending rates are reduced, thus allowing banks to take more cash at nominal rates. Lower rates typically are shared by the bank to its consumers and business when they take a loan out. Unfortunately since banks require more liquidity and are in a state of fear, both consumers and business loans have not resulted in lowered rates. Instead banks are trying to maximize returns and reserve cash. The government liquidity is not helping the consumer or business since banks are unwilling to pass the savings on in the form of a lending rate. Therefore the stimulus is only partly functioning. Banks need more confidence to ensure that the cash crisis can be averted by them. The only way this happens is when they have more confidence in present balance sheet holdings. The bulk of the holdings that are the root cause for bank fear is the mortgage back securities (home loans). Until banks feel comfortable with their financial position and consumers have confidence in placing their savings in banks economic turmoil will continue.  

Thus our Washington leadership is attempting to provide a new temporary relief solution to provide liquidity for banks (in the form of buying their bad mortgages) and therefore free up banks to resume business as usual (i.e. lend to each other, and start free up funds for lending to businesses and consumers possibly with lower rates). 

A bailout appears necessary and critical to allow the flow of money in the banking, private and international sectors. However, what is inside of the bailout is the source of argument. Some argue that if we just wait this will all work its way out. This argument is true however the consequences would likely result in one of the worst recessions ever seen since the Great Depression. Few want to see a prolonged economic crisis. To alleviate and possible reduce the depth of a crisis; the recent 750 billion dollar bailout package was presented to Congress.

Unfortunately approving a package with a group of congressional people where few have economic backgrounds makes the details incomprehensible to most. Voting on such a package, along with influences of a November election, has made our legislature pause. And why not?  How can they know if this will really provide relief to the financial markets without understanding the economics behind the package?  Further crash courses on economics are necessary so that our representatives can make a sound decision for the American public. Or at a minimum it will require trusting those who have the knowledge. Unfortunately little trust exists these days, especially just before an election.

The good news is that this will all eventually shake out. It is only a matter of time. Whether we have a light or heavy handed recession is what lies in the balance. The bailout in its present form certainly is not a cure to solve our economic woes. But it is a start. I for one am glad that this is taking a little longer and hope that the extra time will be used to ensure the best results for the American public.

HOUSING EFFECTS