Discover Your Dream Home
Stories from the Pulse Newsletter
Al's take on purchasing a second home.
As a fulltime active realtor in one of the most exiting cities in the world I can be busy almost 24/7. To relax I need to escape the city and just chill. Trips to Utah, Palm Springs and Las Vegas can work however they are too far from the Bay Area. If something goes wrong with a transaction I want to be able to hop in my car and get back to San Francisco in less than two hours. The solution: a vacation home in the Northern California wine county.
I have been concentrating on the Russian River community of Guerneville, which is an hour from the Golden Gate Bridge if you step on it. It is also 20 minutes way from the Santa Rosa Coldwell Banker office if I need anything that involves an office. Perfect!
After my last circuit to Palm Springs, Las Vegas and Utah in May I felt the time had come to make the decision to find a vacation home, no matter what.
The problem is scarcity. Once the medium price of a home in San Francisco hit one million dollars the real estate market became very heated throughout the Bay Area. Even Guerneville is suffering from inventory shortages. Two years ago when I was toying with the idea of purchasing a country home in the Russian River area there were over 60 homes on the market, many of them very affordable. Now there are less than 20 and prices are rising.
With that in mind Casper, my faithful mutt, and I jumped in the car and drove to Guerneville to re-examine some of the properties I had turned down in the past as too quirky or too dilapidated. I was that determined to get something.
Some of the homes we saw that Friday were nice. One of them has a live redwood tree in the middle of the bathroom, which I though was interesting if a bit over rusticated. My problem, however, was that all I saw were very close to other homes. I wanted something in the middle of the redwoods with few neighbors.
Casper and I had lunch at Armstrong Woods after which, on a whim, I traversed the streets in the areas I liked, hoping to encounter a “For Sale” sign. We drove this way then that, up and down the hills, through the flats and next to the river. I decided to ascend Summit Rd. where one of my pals once had a cabin. Returning down the steep road I turned onto Old Monte Rio Road, which skirts the mountain and is parallel to Highway 116 for several miles. No chance of flooding here.
We had gone about 1 1/2 miles on this tiny, winding road when out of the corner of my eye I saw "For Sale by Owner." In 100 feet the house appeared and I parked in front. This could be it, I thought. Just one house to the left and then nothing to the rear the side and in front. A real fixer-upper. I walked up the stairs, viewed the second floor balcony and the ground floor deck before realizing someone lived there so I descended the stairs grabbed my cell and called the number on the sign. A week later I was in contract to purchase the property.
Al's Take on San Francisco Proposition G
There they go again. Once again well-funded special interests are asking voters to stick it to property owners. This time around the latest outrageous money grab is a blatant plan to implement legalized extortion. Proposition G, the so-called anti-flipping proposition, is on the November ballot and will affect most properties in San Francisco. Proponents claim it will exempt single family home owners. The truth, however, is that those single family homes with in-laws are indeed intended to be a large slice of the shakedown.
Proponents claim Proposition G curbs what they call abuses of the Ellis Act, a state law that allows owners of buildings to get out of the rental business. The proposition imposes a heavy tax on those selling their building within the first five years of ownership. The surtax starts at 24% and is lowered every year until it disappears at the end of the fifth year. In San Francisco the medium price of a home is approximately $1,000,000 so the surtax would $240,000. From what I understand this tax goes into the City’s general fund for the policos to do whatever they want with it, nothing goes to housing.
Couple that gouging with the last money grab where a landlord must pay the difference between the evicted tenant’s old rent and the rent paid for the new abode for two years. That particular law is in litigation with a federal judge asking the City of San Francisco how it came up with such a preposterous formula. Proposition G could also be in litigation for years but the surest way to kill this lasted attempt at property theft is to defeat it at the ballot box.
I foresee the disappearance of single family in-law rental units should Proposition G pass, reducing dramatically the housing stock in San Francisco. The large investors can afford to wait out the five-year limitation but mom and pop cannot. Look at The Vann, a large new building on Market Street. The completion of this building was delayed until the economy got better. Even the tall crane looming on the vacant lot remained in place until the better times started to roll. I was always scarred to drive under it.
In San Francisco where prices are very high developers and house flippers will just add that surtax to the price of the property, making properties more expensive. Vote as you see fit but be informed. Don’t just vote to follow the pack. Get the facts at www.stopthehousingtax.com.