A California Real Estate Newsletter
Edition 9, February, 2016
2016 New Real Estate Laws
- A NEW, EASY, INEXPENSIVE WAY TO TRANSFER PROPERTY UPON DEATH: REVOCABLE TRANSFER ON DEATH DEED (AB 139):
- California creates "Transfer Upon Death" Deed. To avoid probate and having to create a trust, both timely and costly processes, individuals whose estate consists primarily of the home can now use a Revocable Transfer on Death Deed (TOD Deed). It's simple and inexpensive.
- If you want to leave your property to a lifelong partner, a family member, a friend, or a loved one upon death, and cannot afford to set up a trust, the TOD Deed is your legal vehicle.
- The owner simply records a revocable TOD Deed. Upon the demise of the owner, the deed transfers ownership of that property to the recipient on the deed.
- Basic features:
- 1-4 residential dwelling units, condominium units, agricultural land of 40 acres or less with a single family residence.
- The Revocable TOD Deed MUST be signed and dated before a Notary Public and notarized.
- The TOD Deed does not need to be delivered to the beneficiary.
- The TOD Deed must be recorded 60 days or less from the time it is signed.
- The TOD Deed may be revoked by the transferor at any time.
- See link for a TOD Deed and answers to frequently asked questions: http://tinyurl.com/zn3okm7
- NEW: MOLD HABITABILITY STANDARDS FOR RENTALS (SB 655):
- Mold is now an enforceable, substandard housing condition to the Health and Safety Code, part of the habitability problems.
- Local Enforcement Agencies can require owners to fix mold problems.
- There is no obligation to repair until:
- There is a notice to repair from a governmental agency.
- Or, the tenant has failed to keep the property clean and sanitary.
- SMOKE ALARM REMINDER FOR LANDLORDS:
- Beginning 1/1/2016:
- Landlords must install smoke alarms, as needed, to ensure that the smoke alarms are located in compliance with current building standards:
- One in each bedroom,
- Centrally located outside each sleeping area, and
- On every floor including the basement regardless of whether there is a sleeping area on the floor.
- Landlords are not required to replace existing alarms unless they are inoperable.
- DISCRIMINATION DEFINITION EXTENDED (Unruh Civil Rights Act, SB 600):
- No discrimination based upon:
- Primary language
- Immigration status
- This does not require the provision of services or documents in a language other than English, beyond that which is otherwise required by law.
- USE OF CLOTHESLINES - LANDLORDS AND CONDOMINIUM/TOWNHOME OWNERS (AB 1448):
- Landlords must permit clotheslines or drying racks in the tenant's "private area":
- It cannot interfere with maintenance.
- It does not violate reasonable time or location restrictions.
- It must approved by the landlord.
- Common Interest Developments (Condos and Townhomes)
- This makes any provision of a governing document void and unenforceable if it effectively prohibits clotheslines or drying racks in owner's backyard.
- HOA reasonable restrictions are enforceable.
- The backyard must be designed for the exclusive use of the owner, otherwise no clothesline right is granted.
2016 Real Estate Market: Optimism and Concern
- Point: Reasons for Optimism in Housing This Year
- Expanding Economy in the US
- Strong Job Growth
- Rising Consumer Confidence
- Pent-Up Demand
- Cheap to Low Mortgage Rates
- Economist at Core Logic Predict:
- 4 - 5 % rise in home sales
- 13% gain for new home sales
- South and West have strongest predictions for sales volume and growth.
- Counter Point: Reasons for Concern
- Cost and availability of developed lots and labor for builders
- Price of building materials for builders
- Federal environmental regulations for builders
- Inventories remain low
- Lack of affordability is putting a damper on the growth of the housing market.
- Drop in oil prices causes trouble for many housing markets
11 Amazing Real Estate Facts to Entertain your Brain ☺
Click on the link below to read 11 random and amazing facts about Real Estate!
Chinese Real Estate Buyers in California
- California is the most popular place for the Chinese to invest their real estate purchases.
- They spent $7.7 billion dollars on real estate in California from March, 2013 - March, 2014.
- Chinese like to send their children to schools in America.
- The median price Chinese nationals paid for U.S. homes in 2013 - 2014 was $523,148.
- Chinese buyers prefer coastal regions like California.
- Chinese nationals emigrating to the U.S. like suburban single-family homes with yards and garages. Otherwise, they prefer new condominiums in urban areas.
- 36% of all international buyers were Chinese according to the California Association of Realtors.
- San Francisco is the most popular city for Chinese buyers, with Los Angeles and San Diego as the 2nd and 3rd choices, respectively.
- Their buying is having an impact on home prices. For example:
- In Arcadia, CA in 2007 the median sales price was $659,000. In April 2015, the median sales price was $1,050,000 due in part to a large percentage of Chinese buyers.
- The majority of Chinese purchases are all cash sales.
- Many of the homes are left vacant ("ghost houses") as some are purchased for future use.
Chinese Population and Immigration
- Take note: a policy change in China will likely affect your real estate. In December 2015, China officially announced the abolishment of its 35-year-old "one child" policy. All married couples can now have two children.
- How will China evolve?
- This could mean a demographic boom of 2.5-8 million additional births per year beginning in 2017 according to the state-funded Chinese media site, The Paper.
- This could bring in as much as $35 billion in annual investment to United States sectors, including housing and education, according to Ctrip (a Chinese travel agency).
- Regardless of how many more births occur, the following will likely transpire:
- A shift in housing needs with a demand for bigger houses. It's not just about two children, it's about the grandparents as well. Grandparents hold great importance in China as they are closely involved in taking care of the children while both parents work.
- Many Chinese parents with means may be more inclined to consider a larger home overseas. With already inflated prices in China, investors can get better values for their money in other countries.
- There will be in increase in education expenditure.
- The Chinese Academy of Social Science reveals the costs for Chinese parents to raise a child:
- $77,165 in an average city from birth to age 16,
- $304,162 in a Tier-1 City from birth to university age.
- Education expenditures, very important to the Chinese, result in increased demands on the pocketbook.
- The high cost of education in China will increasingly motivate Chinese parents to look to the U.S. for better education opportunities, many aspiring to an Ivy League education.
- Continued growth in China's outbound tourism:
- Travel remains the number one leisure activity for China's super-rich.
- The two child policy will likely benefit the travel, technology and services industries in the long run.
- There have been visa relaxations by the U.S., U.K., Canada, Australia, Japan, and many European nations, all of which are favorite destinations for deep-pocketed Chinese.
- Chinese buyers tend to property hunt while on holidays abroad.
- More sustainable economic growth:
- The two-child policy will help China move toward higher domestic consumption, helping it to achieve a more balanced development.
- Its consumer economy is projected to continue burgeoning to eventually hit $6.5 trillion by 2020.
- The numbers go on and on, suffice it to say a robust Chinese economy and consumption could translate into strong spending and property investment overseas by cashed- up Chinese.
Schneider Estates, Inc.
Christine Schneider, Broker