Archive for February, 2009
CASH FOR GRASS
LOCAL GOVERNMENT, REDDING LIFESTYLES, SHASTA COUNTY
Last week, I was driving to the airport listening to The Garden Compass Show on KQMS when the host mentioned a program sponsored by the City of Roseville. In response to the ongoing drought, Roseville initiated a pilot program last July offering residents $1 for every square foot of water-thirsty lawn they removed and replaced with less thirsty landscaping such as native plants and shrubs.
Americans have been in love with their expansive green lawns but now is the time to rethink this love affair. European settlers brought the practice of planting lawns to America from their homeland. In fact, many subdivisions in Redding have covenants requiring a certain amount of lawn be planted in the front yard.
I have been a retired lawn mower for a dozen years now. Not one blade of grass on my large city lot. I don’t miss it one bit. Gone are the days of watering, mowing, fertilizing and weeding. My lot now is planted with low maintenance trees and shrubs with bark mulch.
I have advocated in other posts that the City of Redding should encourage developers to eliminate lawn from their landscaping plans as a means of conserving water, eliminating air pollution from lawn mowers and edgers, and keeping fertilizers and weed killers out of our waterways.
I am violating the C,C,& R’s of my West Redding neighborhood by not having 1000 square feet of lawn but would vigorously defend my right to landscape with native plants and shrubs on drip irrigation if any neighbors brought action. Fortunately, some of my neighbors have followed my lead and replaced their lawns with low maintenance and water saving landscapes. I think California should follow Roseville on this matter as we face another drought and critical cutbacks in water allocations.
Here’s the link to Roseville’s pilot program: http://www.roseville.ca.us/eu/water_utility/water_conservation/for_home/cash_for_grass/default.asp
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
FED TAKES ACTION TO STOP FORECLOSURES
HOME LOANS, INDUSTRY NEWS, TIPS FOR SELLERS
When the Federal Reserve bailed out Bear Stearns and AIG they assumed responsibility for a large portfolio of toxic mortgages. According to a recent article in the Washington Post, Chairman Ben Bernanke is poised to renegotiate the billions in mortgages it now owns to prevent an avalanche of foreclosures.
One key element of the plan is to forgive a portion of the loan to aid the borrower if the home’s value has declined below the loan balance by 25% or more. Estimates are that nationwide 14% of homeowners are “underwater” when it comes to their home value vs. their mortgage balance. Previous efforts to modify loans have failed because mortgage holders have only adjusted interest rates and/or loan term but rarely forgave any mortgage debt.
Now that the Fed is in charge, they have indicated a willingness to consider debt relief to help homeowners keep their homes, if doing so is in the best interest of taxpayers . Bernanke hopes this strategy will be a model for other holders of mortgages to emulate.
It is unknown what portion of the assets held by AIG and Bear Stearns are mortgages, but estimates place it in the tens of billions of dollars. Homeowners are unlikely to know if their mortgage is owned by the Fed because they will deal only with their mortgage servicer.
Assuming the Federal Reserve follows through on this promise, it will be a step in the right direction to address the housing crisis.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
2008 FORECLOSURES TOP 236,000 IN CALIFORNIA
The Los Angeles Times reported that the number of homes lost to foreclosure in California exceeded the previous nine years combined. Another 404,000 homeowners are in default on their payments – a record high.
The tide of foreclosures began with the subprime loan crisis but now lenders and industry analysts blame rising unemployment, currently at 9.3% in California, for deepening the crisis.
Job losses and cutback in hours are to blame, not home buyers acting financially irresponsible. Evan Wagner, communications director for IndyMac Bank , stated 80% of borrowers seeking loan modifications cite job loss or reduced income as the reason they can no longer afford their mortgage payments.
The pain has spread to prime loans. The rate of default increased 340% in the third quarter of 2008 compared to the same period in 2007 according to numbers recently released by the Mortgage Bankers Association. The next area of concern is many Alt-A loans and Option Arm loans are scheduled to begin re-setting in 2009-2011.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
HOMEBUYERS ON THE FENCE DETAIL WHAT THEY WANT
INDUSTRY NEWS, TIPS FOR BUYERS, TIPS FOR SELLERS
An article recently published in the San Fransisco Chronicle listed 
incentives that would need to exist before buyers waiting on the sidelines will make the plunge into home ownership. A poll of more than 700 “on-the-fence” buyers finds that:
- 44% are holding out for lower interest rates
- 41% are uncertain they would be approved for a loan
- 38% are waiting for lower home prices
A tax credit of up to $22,000 for home buyers being pushed by a builder trade group lobbying the Obama administration would not be enough to motivate buyers. The most effective incentive that would persuade buyers 
to get off the fence is mortgage rates: specifically a 3% rate on a 30-year fixed-rate mortgage. Lenders I’ve spoken with don’t see this in the cards. They say there is no profit at that interest rate level.
Guarantees that a lender will approve a buyer’s loan with “fair” credit also ranked high in the survey. Price concessions of
about 10% would also be a high motivator.
Incentives of little value to new home buyers include:
- Free upgrades and amenities
- “Green” features such as energy efficiency certifications
The bottom line, according to writer Kenneth Harney, is a combination of incentives of “special financing, price concessions, lower down payments and perhaps application guarantees.” Is that asking too much?
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
TAGGERS HIT PARK MARINA DRIVE AREA
REDDING LIFESTYLES, SHASTA COUNTY
The former Montgomery Wards building recently was hit by taggers taunting those that frown upon such artistry. Most of the building is occupied by Shasta County Child Support Services but a sectioned off portion of the building, with a long wall facing Park Marina Drive, is the canvas of choice for these particular taggers.
The Graffiti Task Force is generally prohibited from cleaning or removing 
graffiti from private property. Fortunately, this mess was painted over yesterday. Based on the messages scrawled by the graffiti artists they, will be back.
It is important, in my opinion, to aggressively fight graffiti to prevent gang-banger wannabes from getting a foothold in our community. Many other cities have lost this battle by giving up on eradicating graffiti and prosecuting taggers. Let’s not let that happen in our town!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIE
HOMEOWNERSHIP TRUMPS RENTING ONCE AGAIN!
HOME LOANS, SHASTA COUNTY, TIPS FOR BUYERS
Significant drops in home prices and interest rates have made home ownership attractive compared to renting once again. This has not been the case for the past 7 years or so due to a run up in home prices. Now that prices have dropped nearly 50% from the peak, and interest rates falling to historically low levels, mortgage payments are in line with rental rates.
In Redding, the median price has dropped to $190,000 according to a recent article in the Record Searchlight. Assuming a buyer can tender a 20% downpayment to avoid mortgage insurance and secure the lowest interest rate for a 30-year fixed rate mortgage, the monthly payment will be $816. Add $200/month for property taxes and homeowners insurance for a total PITI payment of $1,016. This home would rent for about $1100/month.
Factor in tax advantages of home ownership and owning has a distinct financial advantage over renting. The homeowner will have about $7,600/year in mortgage interest deduction and $2000 in property tax deductions for a total of $9,600. Assuming a buyer is in the 28% tax bracket, and has income to write these deductions off, the buyer will save about $225/month in federal income taxes. I have not figured the additional tax benefits of state income tax deductions for this analysis. This means the net monthly housing expense is just under $800/month. Clearly, owning beats the heck out of renting in today’s housing market!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCA REAL ESTATE EXPERIENCE
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