New Listing in Albany! www.1225BrightonAve.com

JUST LISTED: 1225 Brighton Ave. in Albany!

This immaculate and sunny home is located in Albany, CA, where the schools rule, the weather is superb, and the location couldn’t be more convenient. 

With three bedrooms and two baths, this home was built in 1937 by the renowned Charles “One Nail” MacGregor and has all the charm and quality of its early years.  Three blocks to Albany Middle School and two blocks to El Cerrito Plaza and BART, this home has beautiful match stick hardwood floors, an eat-in kitchen that has been tastefully updated to include black-on-black granite countertops, a new range/oven, new floors, and new paint.  The master bedroom has sliding glass doors into the backyard and a private bath.  Lemon and apple trees in back yard and plenty of space and separation for adults and kids to find their spot.  Move right in and get ready for school - in Albany, the city with outstanding schools!

I made this really cool guided video tour of the house, check it out here: http://www.youtube.com/watch?v=0ENA34uV9No

Need more information?  Contact the listing agent, Liz Stevens, Windermere Bay Area, (510) 409-6977

Open Thursday, 7/2/09
Open Saturday, 7/4/09
Open Sunday, 7/5/09

Berkeley Market Stats

                               21-Jun          28-Jun
New Listings           28                 23
Price Reductions     2                   5
Avg. Listing Price   $905,520       $906,811

Analysis of Current MLS Inventory

These numbers include single family residences, condos, townhouses and duets.  The first number represents activity via Foreclosure Radar, a site which tracks the status on properties that are either heading into default, in default, or foreclosed; the second number is the level of inventory on the MLS.  Data is as of June 1, 2009.
                                           FR         MLS
El Sobrante & Pinole        298           68
Richmond                       1320        339
El Cerrito                         33            50
Albany                             26            29
Kensington                      5              11
Berkeley                         103           103
Oakland                        2370          919
Piedmont                        12             59
San Leandro                   601           106
Hayward                        1443          361
San Francisco                1146         1572
TOTAL                       7357       3612

What this is telling me is that there is a lot of inventory that is being held up in the system.  Even cities such as Piedmont and Kensington are experiencing homes in default. 

WIth the new moratorium in place (lenders now must send a notice 30 days in advance of sending out the notice of default) it will take even longer for us to start seeing these REO’s hit the market, if we do at all.  I keep hearing that banks are holding back their inventory until the market moves up, some rumors are even saying banks may hold inventory for 2-3 years.

Until we start seeing more inventory be released we will continue to see multiple offers.  It just makes sense: prices are low, tax credits are being offered, and rates are low…all good reasons for people to buy.

Some Short Sales Are Still Taxable Events

Disclaimer: I am not a lawyer.  I am not a CPA.  I am a Realtor.  Therefore, if you have any questions about any of this, do not ask me.  I am merely a funnel for information that was provided to me by Old Republic Title.

Taxpayers Beware: Zero Profit Doesn’t Mean Zero Capital Gains Taxes!

In this difficult market, many taxpayers are selling property in short sales or other transactions with no profit. Unfortunately, what many taxpayers do not understand is that property may be sold with no profit, but still be subject to significant taxable capital gain.
 
How is this possible? It is possible simply because gain results not just from appreciation in value, but also results from depreciation deductions taken during ownership of the property, gain deferred from previous transactions, and from borrowing against appreciated equity in a declining market. These adverse tax consequences can be avoided by engaging in a Section 1031 tax deferred exchange.

How to Determine Gain
The formula to determine taxable gain is: Basis (original sales price) less adjusted basis (basis plus improvements less depreciation)= taxable gain

Three Situations Resulting In No Profit, But Taxable Gain
1. Depreciation Recapture If a taxpayer takes depreciation deductions, those deductions reduce the taxpayer’s basis, thereby resulting in gain.

Example: Taxpayer acquires investment property A for $200,000. Taxpayer’s basis is therefore $200,000. During taxpayer’s ownership, taxpayer takes $138,500 of depreciation deductions, thereby reducing taxpayer’s basis to $61,500. Taxpayer sells Property A for $180,000.00. Even though taxpayer sells the property for $20,000 less than what he originally purchased it for, he still has a taxable gain of $118,500 ($180,000-$61,500=$118,500) which will result in approximately $41,500 in federal and state taxes. This adverse tax result can be avoided by exchanging the property in a tax deferred exchange rather than selling the property.

2. Carryover Gain If a taxpayer sells property previously acquired in an exchange - at no profit or even at a loss - the taxpayer may still be faced with significant taxable gain.

Example: Taxpayer originally acquired Property A for $20,000. Taxpayer disposed of Property A in a tax deferred exchange for $100,000 and acquired Property B for $150,000, thereby deferring taxes on $80,000 of gain. Taxpayer’s adjusted basis in Property B is $70,000 ($150,000 purchase price-$80,000 carryover gain=$70,000). Taxpayer now proposes to sell Property B for the same price as he purchased it for - i.e. $150,000. Although Taxpayer is not making a profit on this transaction, he will still have significant federal and state taxes of approximately $28,000 on his gain of $80,000.

3. Excess Borrowing If a taxpayer borrows against appreciated equity in their property, tax consequences can also result if the property thereafter declines in value and the taxpayer is forced to sell the property for little or no profit.

Example: Taxpayer acquired property A for $1,000,000, paying $200,000 cash and borrowing $800,000. Taxpayer’s basis is $1,000,000. During Taxpayer’s ownership, the property appreciates in value to $1,400,000, enabling Taxpayer to refinance the existing loan of $800,000 with a new loan of $1,120,000. Taxpayer now sells, but since property values have declined, his selling price is $1,120,000. Although Taxpayer will receive no cash from the sale, he will still have taxable gain of $120,000 ($1,120,000-$1,000,000=$120,000), with combined federal and state taxes of $42,000.

As illustrated by the foregoing examples, sales of property that yield little or no cash can still result in taxable gain. Before selling in a down market, taxpayers and their advisors should first determine the taxpayer’s basis in the property to be disposed of and thoroughly discuss upfront the potential tax consequences. Taxpayers can avoid any of the tax consequences noted in these examples by engaging in a IRC §1031 tax deferred exchange.

Taxpayers contemplating an exchange should always consult their tax or legal advisor.

Fourth of July Happenings

EL CERRITO
El Cerrito hosts the 11th Annual WorldOne Festival featuring live reggae, dub and world music. On Saturday from 10am to 6pm there is a family festival with games for children, food, arts and crafts as well as live entertainment on two stages, Circus Imagination will amaze young children with an interactive animal-free circus show and Carnival Rides.  This is one of my FAVORITE festivals in town and I look forward to it each year.  Click here for the line up http://www.el-cerrito.org/recreation/july4lineup.html.

BERKELEY MARINA
It’s a day full of fun starting at noon on the 4th of July. The south shore of the Berkeley Marina at the bottom of University Ave. is filled with great stuff to do all day. Adventure Playground, always a favorite, is open 11am-8pm. Sign up for an old-fashioned sack race or get your face painted. Try the giant slide or splash in the water at the beach!  Plenty of fun stuff for adults, too! No need to cook - lots of international food booths. Live entertainment from noon until 9PM on the main stage. There’s art & craft booths, massages, free sailboat rides from 1-4pm, dragon boat rides from 2-6pm, and much more including the grand fireworks off the end of the Berkeley Pier at 9:30pm.  http://www.anotherbullwinkelshow.com

JACK LONDON SQUARE
4th of July 2009 Festival with music & fireworks @ Jack London Square (Oakland). Five hours of live music, plus kids entertainment and a 20 minute fireworks show at dusk Saturday, July 4, 2009 4:00 pm to 9:35 pm. The Port of Oakland and the City of Oakland will present a 20 minute fireworks show over the Oakland and Alameda estuary. Jack London Square provides a prime viewing area for watching this spectacular event. The fireworks will begin at 9:15 PM and end at 9:35 PM. Jack London Square will celebrate the holiday with live music beginning at 7:00 PM. Enjoy the big band sounds of the Ben Oni Orchestra and the Rhythm and Blues of the Blues Burners. Free bike valet will be available at 7:00 PM at Jack London Square’s newest shop, Bay Area Bikes. Jack London Square will operate during the day as usual, providing canoe and kayak rentals as well as bike rentals and retail shopping. Cost: FREE -  http://www.jacklondonsquare.com/newscenter/oakland-july-fireworks.html