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Aptos Life June Update - 2018

June 20 2018
June 20 2018

CALIFORNIA PROPOSITION 13 TAX TRANSFER INITIATIVE

If you are over 55 or disabled, pay close attention. The California Proposition 13 Tax Transfer Initiative will be on the ballot on November 6, 2018. A “yes” vote  supports amending Prop 13 to allow homebuyers who are age 55 or older or severely disabled to transfer their tax assessments (with a possible adjustment) from their prior home to their new home no matter (a) the new home’s value; (b) the new home’s location in the state; or (c) the buyer’s number of moves.

The significance of this new bill is huge!  Example: Fred and Irma have owned their home in Rio Del Mar since 1975. In 2018 their tax basis is $123,505 and they pay $973/year in property taxes.

  • Without this bill, they retire to San Diego to be closer to the grandchildren; they sell their Rio Del Mar home for $1.2M net, and buy an $800,000 condo. Their new property taxes are about 1.25% of purchase price = $10,000/year versus the $973 they are currently paying. Not much incentive to move.
  • With this new law, they can sell in Rio, buy in San Diego and keep the $973/year tax basis, and the $400,000 gain from selling their home tax free (up to $500,000 for a couple), which is current law.

FEDERAL RESERVE – INTEREST RATES

The Feds have already increased the interest rate twice this year, and are now hinting that they may do a total of four hikes in 2018. Average 30-year mortgage rates (bankrate.com) are now 4.54%, up from 4.10% in 2017 and 3.65% in 2016

Rising interest rates do make home-buying more difficult. Example: Buyer Bob has 20% down ($100,000) on a $500,000 condo, so his loan is $400,000. Monthly payments on $400,000 at 4.10% = $1,933, at 4.54% = $2,036 and at 5.0% = $2,147!

 

APTOS REAL ESTATE

Since January, 129 homes have sold in Aptos. The high sale is 1106 Via Malibu - $5.5 Million, followed by two new ocean front builds at 658 Bayview - $4,975,000 and 110 New Brighton - $4,495,000. The low sale is 8067 Aptos Street - $451,000, a 2 bed, 1 bath, 1080 Sq. Ft. home. Mix is: 5 homes>$3M, 11@ $2-3M, 5@ $1.5-$2M, 48@$1.0-$1.5M, 25@ $800K-$1.0M, 26@ $600-$800K and 9 sold for <$600K. The average days on market is increasing at 40. The Average Sales Price through 6/18 is $1,247,884 and the Median Sales Price is $1,050,000, up from the $1,000,000 in 2017.

19 Town homes sold. High sale is $899,500 for 3114 Corte Cabrillo, 3 bed, 2.5 bath, 1926 Sf, and low sale is $480,000 for 3003 Corte Cabrillo, 2 bed, 2bath, 918 Sq.Ft. Median sales price is $680,000. 15 Condos sold. High is $1,278,880 for 260 Rio Del Mar #24, ocean view 3 bed, 2 bath, 1311 Sq. Ft. Low is $518,000 for 2601 Willowbrook #10, 2 bed, 1 bath, 1048 Sq. Ft. Median sales price is $675,001.

Currently there are 56 Active Home Listings in Aptos, with 69 days on market (DOM) on average. In comparison, Santa Cruz area DOM are 14- 21 days and Sellers are receiving multiple offers and homes are selling for over list price. I had buyers who did not win the bid on a Santa Cruz home listed for $949,000 which sold for $1,050,000 with 9 offers. I have buyers in escrow on a Seabright property that listed for $1,149,000 – our offer was $1,226,000 – and we got it. In Aptos, the summer market is not as robust as the spring market was for sellers and homes are not selling as quickly or for list price. I receive a lot of feedback these days at Open Houses that the commute is impacting buyers’ decisions to purchase in Aptos.

That said, Aptos is a fabulous place to live, work, and serve in the community; and more changes are on the horizon. Stay tuned….


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