New Home Sales

New home sales are up and down. Builders have a half full or half empty glass, which probably means that things are getting back to normal.



New home sales in the Capital Region for the first quarter are down 57 percent from the first quarter of 2005. But first quarter sales are also up 33 percent from the last quarter of 2005. According to the Folsom based market research firm the Gregory Group, that makes a good living keeping track of such number, 2,800 new homes were sold during the first three months of 2006.



The increase in the number of sales was good news to the building industry but the median price isn’t moving in any direction. The net median price in the region for a new home after incentives and discounts ended up at $484,000 for the quarter only $1,500 higher than last year.



A new home is taking about 12 weeks to sell and unsold available inventory has increased consistently for four quarters. This was the first quarter in a year that sales increased.



“This market is in transition from a robust one to a more normal one,” said Greg Paquin, president of the Gregory Group.



Builders have more competition this year than in the past, which is slowing sales and cutting profits. There are increased number of almost new residential resales units available. Many investors and flippers who purchased a new home a year or two ago are now turning them over. Total available residential resale units in the region has increased from 3,000 homes in March of 2005 to 10,000 last month. Much of the increasd resale inventory is under 3 years old.


Have a great day!

Property Taxes

If you elected not to have an impound account set up with your lender and haven't mailed your second half of your property tax bill into the county tax collector, you will need to walk the payment into the county office today. Property taxes are payable in two installments due on December and April 10th.

Property taxes are usually limited to 1.25 percent of the value of the property established by the purchase price. The property tax system favors long-term owners of property thanks to Prop. 13.

Ten years ago Jim & Mary purchase their 2,500 square foot home in El Dorado Hill for $200,000. Their annual property taxes are $2,500 a year. The identical size house recently sold down the street. The sales price was $700,000 and the annual property tax is $8,750. Both families have the same number of children in school and use the same public services. Is that fare?

Yes, according to the California Supreme Count. Since the amendment to the state’s constitution withheld the challenge it is the law of the land.

If you're over 55, you are allowed to transfer a lower property tax valuation to another home in the same county, providing the other home is the same price or less than the home you are selling. So Jim & Mary can retire to a smaller home in El Dorado County and retain their low property tax base.

Supplemental Property Taxes are a one time “catch-up” tax assessment invoiced to new property owners. The tax is for the difference in the assessed valuation between the old assessed value (under the previous owner) and the new. If a home is purchased in the spring of 2005 the 2005-2006 property tax bill will be based upon the old assessed value. Once the Tax Assessor discovers that the property has been sold, the Assessor adjusts the value and the tax and mails the new owner a Supplemental Tax Bill. Most new property owners are surprised at the additional tax invoice. Supplemental Taxes have been so confusing that last year the California Legislature passed a bill that requires new homebuyers to be provided with a Supplemental Property Tax Disclosure. The confusion could be eliminated if the new assessed value was calculated upon closing and county records changed upon recordation of the deed. We have the technology what we don’t have is the incentive to make an antiquated system more efficient.

Have a good week.