No, We're Not in a Housing Bubble, and Yes, Home Prices Could Keep Soaring -- Here's Why Housing bubble 2.0 is probably more myth than reality.

Sean Williams

(TMFUltraLong)

Nov 7, 2016 at 6:02AM

IMAGE SOURCE: GETTY IMAGES.

If you own a home and you've visited real estate information websites Zillow, Trulia, Redfin, or any of the like recently, you've probably noticed an interesting trend: Your home is increasing in value at a rate that's far and away higher than the national rate of inflation.

Is housing bubble 2.0 around the corner?

According to the S&P Case-Shiller Home Price Index, which tracks residential real estate prices nationally, as well as within 20 large metropolitan regions, residential real estate prices rose 5.3% between Aug. 2015 and Aug. 2016. By comparison, the national measure of inflation, the Consumer Price Index, has moved higher by a little more than 1% over the trailing 12-month period.

If we back the data out a bit further, the outperformance of housing prices becomes even more apparent. Real housing prices -- essentially home price increases with inflation backed out -- have risen by 25% just since 2012, and are now sitting at their highest point since the Great Recession. This is noteworthy considering that in the 107 years between 1890 and 1997, housing prices generally tracked the national inflation rate very closely, at least based on data from Robert Shiller in the book Irrational Exuberance. Only over the past two decades have we witnessed a diversion from the mean, with the first diversion leading to a massive housing bubble that's still fresh in the minds of many homeowners.

This latest outperformance in housing prices, as well as the fresh memory of the recent housing collapse less than one decade prior, has some pundits predicting that housing bubble 2.0 could be right around the corner. A Dec. 2015 interview with 66 industry experts conducted by Zillow found that more than 10 believed the Boston, Los Angeles, and Miami markets were at risk of entering a bubble, while even more pundits believed New York and San Francisco were already there.

Home prices can continue to soar

However, it's possible these industry experts could be completely wrong. Based on the evidence available at the moment, I'd contend that we're not even close to a bubble in housing prices, and that home prices could very well outpace the national rate of inflation for many years to come.

Let's have a closer look at why home prices could keep soaring.

1. Supply constraints

The biggest factor that could push home prices continuously higher is the trade-off between homebuilder supply and homeowner demand. According to Jesse Edgerton, an economist at J.P. Morgan, most national markets simply don't have the homebuilder supply to meet demand, and that's unlikely to change anytime soon.

In an interview with Yahoo! Finance, Edgerton had this to say:

One might wonder if these high prices reflect growing demand that could soon elicit a wave of construction that would prove our forecasts wrong. We find, however, that high prices are concentrated in markets where supply is constrained by geography or regulation, suggesting there may be little room for additional construction.

Data from J.P. Morgan indicates that while housing prices are rebounding rapidly from their recessionary lows, homebuilders appear content in increasing their supply at only a modest pace. Furthermore, the areas where an expansion of construction would appear to be beneficial -- San Jose, Los Angeles, San Francisco, and so on -- are also the areas that are the most limited in their ability to respond to an increase in demand.

It's tough to predict how homebuilders will respond if prices continue to climb. For some builders, the allure of profits may be too great to ignore. However, if homebuilders can prudently manage their supply growth, they'll likely encourage home prices to head higher at a rate that handily outpaces inflation.

IMAGE SOURCE: GETTY IMAGES.

2. A continuation of the low-lending-rate environment

Secondly, the ongoing low-lending-rate environment should continue to spur demand for new homes.

A home is arguably the largest purchase Americans will make during their lifetimes, and historically low mortgage rates could be the catalyst that coerces prospective homeowners to pull the trigger. Even more appealing is the fact that many Americans have far better FICO credit scores than they had a decade prior, meaning they'd probably qualify for sweeter deals from lenders.

Based on data released by FICO last year, the national average FICO score of 695 was an all-time high. Comparatively, the national average FICO score in Oct. 2005 was 688. FICO's data showed a 3% increase in the number of consumers with a FICO score above 800 compared to the prior decade (FICO scores max out at 850), with a 2.1% decline in consumers with a FICO score under 550. Long story short, Americans appear to be in better shape than ever when it comes to getting a mortgage.

Though the Federal Reserve is the "X factor" here, and it can be completely unpredictable, the case for raising the federal funds target rate isn't that strong. Inflation remains below the Fed's target level, job creation has been up and down in 2016, and external factors, such as Brexit and China's slowing GDP growth, could weigh on the growth outlook in the United States. After aiming for four interest-rate hikes in 2016, it's quite possible the Fed ends the year without making a single move, which favors the continuation of a low-lending-rate environment.

IMAGE SOURCE: GETTY IMAGES.

3. The "rent" vs. "buy" trade-off

Over the longer term, the trade-off between renting and buying a home would also seem to favor rising housing prices.

If interest rates do normalize over the long term and head back to around 3%, it would presumably work in favor of the rental market. Higher interest rates mean higher mortgage rates, which in turn should push on-the-fence homebuyers back into renting. When this happens, landlords become privy to significant rental pricing power and are able to increase rental rates well above the national rate of inflation. Just the expectation of rising interest rates at some point soon has been pushing rental prices around the country higher, at a pace that's well above the national inflation rate.

However, there comes a tipping point in the renting vs. buying trade-off where rental prices increase enough that buying a home actually becomes the cheaper option on a monthly basis. It happened to me in 2007, and it could very well happen to millions of Americans as rental inflation increases.

While rising home prices might be a bit concerning, given the recency of the last housing bubble, the data would appear to suggest that home prices could continue to advance for many years to come.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of and recommends Zillow Group (A and C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

It's tax time! - Property Tax Facts

     Every year, millions of homeowners deal with property taxes. In most situations, when the tax bill comes, if it seems reasonable, most people would pay it and move on with their lives. That being said, to make sure that you are not being overcharged on property taxes, it's important to understand how they are calculated and how property values are determined.

 

Property Tax 101

Determining Property Taxes
The property taxes that are being accumulated by the states and the federal governments serve as a major source of income. In most cases, these taxes come in the form of a percentage, where many different councils, boards and legislatures will decide the appropriate amount of tax revenue that needs to be raised. They will have a hearing on the budget to decide the amount of money that will be needed so that the government can cover its expenses with no financial challenges in the year ahead. The services that are normally funded by property taxes include: education, emergency services, transportation, libraries and parks as well as different recreational activities.

Calculating Property Taxes
The way that property taxes are calculated would be through the use of the mill levy and the assessed property value.

Mill Levy or Millage Tax
The mill levy is simply the tax rate levied on your property value, with one mill representing one tenth of one cent. So, for $1,000 of assessed property value, one mill would be equal to one dollar. Tax levies for each tax jurisdiction in an area are calculated separately and then all the levies are added together to determine the total mill rate for an entire region. Generally, the city, county and school district each have the power to levy against the properties in their boundaries. So each entity would calculate its required mill levy and it would all be tallied up to equal the total mill levy.

As an example of a mill levy calculation, suppose the total assessed property value in a county is $100,000,000, and the county decides it needs $1,000,000 in tax revenues to run the county. The mill levy would simply be $1,000,000 divided by $100,000,000, and equals 1%. Now, suppose the city and school district calculated a mill levy of 0.5% and 3% respectively. The total mill levy for the region would be 4.5% (1+0.5+3) or 45 mills.
Assessed Value of Property

Property taxes are calculated by taking the mill levy, like we've determined in the previous example, and multiplying it by the assessed value of your property. The assessed value is a yearly estimation performed to decide the reasonable market value for your home based upon prevailing local real estate market conditions.

The assessor will review all relevant information surrounding your property to make an estimate of the overall value. To provide you with the most accurate assessment, the assessor must look at what similar properties are selling for under the current market conditions, how much the replacement costs for the property would be, the maintenance costs for the property owner, if any improvements were completed, the amount of income you are making from the property, and the amount of interest charged to purchase or construct a property comparable to yours.

After the assessor has this information, there are three ways that your property will be valued:
Performing a Sales Evaluation

The assessor will value your property based on similar sales which have taken place in the area. As this method is being used it is important to look at overpricing, underpricing, the location of the property and the overall state of the property.

The Cost Method
This is when the assessor determines your property value based on how much it would cost to replace your property. If the property is not new, assessors determine the amount of depreciation that has taken place and how much the property would be worth if it was empty.
The Income Method

This method is based on how much income you would make from the property if it were rented. Using this method, the assessor must be sure to consider factors such as: costs for maintaining the property, cost to manage the property, insurance, taxes and the return that you could reasonably anticipate from the property. After determining market value for the property, the assessed value will be determined by taking the actual value of the property and multiplying it by an assessment rate. The assessment rate is a uniform percentage and varies by tax jurisdiction, and could be any percentage below 100%. After getting the assessed value, it is multiplied by the mill levy to determine your taxes due.

For example, suppose the assessor determines your property value is $500,000 and the assessment rate is 8%. The assessed value would be $40,000. Now taking the mill levy of 4.5% we calculated previously, the tax due would be $1,800 ($40,000 x 4.5%).
The Bottom Line

Property taxes can be very confusing for many homeowners. To ensure that you are paying the right amount in property tax, you must understand how the property is valued and how the taxes are calculated.

 Question: How to lower my property tax?

     Here’s how to challenge the assessment, boost your odds of success, and ultimately put more money in your pocket:

–– ADVERTISEMENT ––

Understand the process

On your assessment notice, you’ll see instructions telling you who to contact if you disagree with the assessment, how to make an appeal, and other pertinent details, says real-estate expert Sid Davis, author of six housing books (including The First-Time Homeowner’s Survival Guide, which contains an entire chapter on property taxes). You will also be given a specific time frame in which to make your case. Take note because while in some areas you may have a full six weeks to appeal (from the time you receive the assessment in the mail), in other areas, you’ll have as little as two weeks. “If you miss this window, you’ll have to wait until next year to protest,” says Davis.
Review your property card

Your property card — which is often included with the assessment notice, but is also typically available online — contains all the information the assessor used in determining your home’s assessed value: square footage, the number of bedrooms and bathrooms, and features such as a garage or finished basement, for example. Look this over carefully. Very carefully. Does this card indicate that you have three bedrooms when you only have two? That you’re sitting on 3.0-acre lot when it’s only .30? Is your house closer to 2,500 square feet than the specified 3,500? Errors like these are more common than you think, according to Pete Sepp, president of the NTU. The good news is that simple discrepancies can often be corrected right away and you can avoid a formal hearing. “You’d be surprised how much can be settled with your first try; if the adjuster has no reason to disagree with you — for example, if your property card says you have four bedrooms and you clearly only have three — it’s a slam dunk,” says Davis.

Gather evidence
Your ammunition: comps. Find out what 5 to 10 comparable homes in your neighborhood have recently sold for (in the last 6 months) — comparable in terms of age, size, and district. “Use a site like Zillow or just have a friendly real-estate agent in the area pull these up for you,” says Davis. “Most will do it for free because they want to build good will; plus, it only takes them 10 minutes and they can just email this to you or give you a print out.” Back up your case with any relevant photos. “Preparation for this process can go a long way in helping your case,” says Mitch Roschelle, a partner at PwC, and the firm’s U.S. Real Estate Advisory Practice leader. “Towns are inundated with appeal applications and those that are well organized and well supported stand the best chance of being considered.”
Submit your package
While some areas allow you to email your packages and others require you to call in and make your case in person, most appeals are submitted in written form to the county boards, along with a statement explaining why you feel the evaluation is inaccurate. Claims must be supported with the aforementioned evidence (comps and pictures).
Go it alone
While there’s no shortage of professionals — from attorneys to real-estate agents to consultants and appraisers — available to help you make your case, here are two reasons to go it alone, says Sepp. First, legitimate third party experts, while they can save you a lot of time, energy, and frustration, are going to pocket a big chunk of your tax savings — a flat percentage of up to 50% of your first year’s reduction. Second, some appeals boards are more sympathetic to homeowners who represent themselves. “There’s the ‘believability’ factor,” says Sepp.
Be professional
As you’re sitting in your designated room, or cubicle, one-on-one with the adjuster assigned to your case, “don’t plead poverty, get angry or belligerent; just present your case as to why your taxes need to be lower, and then shut up,” says Davis. Then, reap the rewards. “Over 30% of researched, prepared homeowners have some kind of success appealing,” says Sepp. “And it can make a dramatic difference in your bill, especially if you live in a jurisdiction that will allow that new assessment to stay in place for several years.”
















Resource from: Property Taxes: How They Are Calculated | Investopedia http://www.investopedia.com/articles/tax/09/calculate-property-tax.asp#ixzz4Ngi61YIw

http://www.marketwatch.com/story/6-ways-to-lower-your-property-taxes-2015-05-06

Family Pumpkin Activities Here We Come! | The Ultimate Map of Pumpkin Patches in Bay Area

The Ultimate Guide of Pumpkin Patches in Bay Area

The Autumn Season is finally here!

For kids,

Halloween is full of the sweet of candy corns,

crisp of apples,

 aroma of pumpkins,

spice of cinnamon sticks...

more importantly,

they like the thrills and excitements that Halloween has brought them.

Dear Parents,

Are  you ready to bring your kids to choose some pumpkins to decorate your house?

There are plenty of pumpkin patches in the Bay Area... No matter you want to walk in the Hay Maze, to enjoy the Hay Ride and Pony Ride, or make a Jack'o' Lantern, to have fun playing the Pumpkin Blaster, in our article we will provide you an ultimate guide for your pumpkin adventure! 

1. How to pick the right pumpkin?

- If the pumpkin is for carving use, you probably should print out the image that you want to carve, then bring the image to the pumpkin patch, which would help you find the right pumpkin fast.
- See if the pumpkin could stand still on the ground, because you want your pumpkin standing still after you have done your beautiful artwork on it!
- The fresh pumpkins ALWAYS have super green rattan. 
- Avoid bumpy and rough surface.

 2. How do I take PERFECT photos in the patch?
 THE TIME:
Early morning or late afternoon time. The light is soft and dim, creating the romantic and dreamy feelings. 

TRY TO:
wear bright and light colored clothes, and try denim to swag out the country style~

TAKE PHOTOS:
from the bird eye's view 

AVOID:
weekend peaks if you really want perfect photos, because there would be a lot less people appeared in the background.

OKEY DOKEY!
HERE WE GO!




1. Nicasio Valley Organic Farms | Marin, CA

Nicasio Organic Farm is 35 minutes from the north of San Francisco. The farm is the rare organic pumpkin patch in the Bay Area.  
There are live concerts, Hay Ride, Little Train Ride, Hay Maze, Jumpy House, Rock Climbing. They also have a small Zoo! There are also local well-known food truck and BBQs.

Opening hours: October 1 ~ 31, 10 AM ~ 6PM

Garden Activities: 
Face Painting, 
BBQ food truck, 
live music, 
Corn maze, 
Hay rides, 
Farm activities with animals, 
Rock Climbing, 
and Jumpy houses.

Price: children's entertainment is ranging from $ 1 - $ 6, 
pumpkin is also based on weight pricing.

Parking: Free

Address: 5300 Nicasio Valley Road Nicasio, CA 94946

Note:
    Credit Cards (Visa / Master) can use some of the activities, but Children Activities, Pony Rides, Train Rides, BBQ, Ice Cream are cash only. (There are ATM machines in the park)

    Most children's entertainment is only available on weekends!
The Farm also offers Birthday Party service~

    People can go to the Nicasio Cheese Store nearby to pickup some fresh organic cheese as well! 


2.McClelland's Organic Farm | Petaluma, CA

McClenlland's Farm is 1 hour's drive from north of San Francisco. The farm is a family owned, which produces organic milk and feeds organic chicken. This year is opened for to the public for entertainment in October. Admission is free and allows you to visit the milking process, small farms, hay maze, pumpkin seeds / seed sandboxes, and tire swings. Of course, there are some paid items: small train rides, the haunted house, slides, the most important is the "pumpkin cannon" (pumpkin blaster), this project is simply irresistible! Children's farm tour, become the parents' rejuvenation trip.

Opening hours: October 1 ~ 31 every Saturday and Sunday 10 PM ~ 5PM 
Park activities: 
Visit the milking process, 
Visit the small farms, 
Hay maze, 
Pumpkin seed bunker/seed sand box, 
tire swings, 
mini-train,
 haunted house, 
trampoline, 
 Slides, 
"pumpkin cannon" (pumpkin blaster) 
Price: admission is free, you can visit the process of milking, small farms, straw maze (hay maze), pumpkin seeds bunker / corn sand bunker (seed sand box), tire swings (tire swings) are free. Other activities can be purchased through: $ 6 / adult, $ 10/4 to 13-year-old children, (4 years old children free of charge). Pumpkin cannons $ 10/8 counts.Address: 6475 Bodega Ave., Petaluma, Ca. 707-664-0452

Note:  McClelland's dairy products are also very famous, make sure to pickup some dairy produces when you go home. 
  
3. Clancy's Pumpkin Patch | San Francisco, CA

Clancy's is in the city of San Francisco, which is convenient for people who is living in SF. Although it is in the city center, the Clancy's pumpkin market is not ambiguous; it contains plenty of activities: mini maze, small tractor rides(Hay ride). But since the area is relatively small, every little space is carefully arranged: Scary Scarecrows and other lovely props are decorated in the field, so that the process of picking up pumpkin maximize the fun. Recommended for families under 2 years of age.
 
Opening hours: October 1 ~ 31 every day 9 AM ~ 9PM

Garden activities: 
Pumpkin Picking, 
Hay Maze, 
Hay Ride

Price: Pumpkin prices will be higher compares to other farms, but I heard that the variety of pumpkins are a lot more than the other farms. They also accept credit card.

Parking: Free parking is available, and there is a bus stop too.

Address: 1620 7th Ave. San Francisco, CA 94122

Note: 
this site start selling high-rated Christmas trees in November. 

  4. The Clayton Valley Pumpkin Farm | Clayton, CA

The Clayton Valley Pumpkin Farm is designed to appeal to kids: LITTLE CARVER'S BARNYARD, Farm Zoo, BBQ on weekends, and Witty Quiz with a special designed child graffiti paper.

Opening hours: October 1 ~ 31 every day 9 AM ~ 8PMPark Activities:
Maze,
Pumpkin Playland,
Duck race,
Farm animals,
BBQ stand,
Farm IQ Contest,
Train Ride

Price: $ 12 ~ $ 30 / person

Parking: Free

Address: 1060 Pine Lane, Clayton, CA 94517-9706

Note:
     Download graffiti Color Sheet, and let the children do their art creations~ Bring their artworks to the pumpkin garden to participate in sweepstakes!
     The park also has a fresh popcorn booth!
     BBQ is only available on weekends.

 5. Joan's Pumpkin Patch | Livermore, CA

The Patch is located in the wine country of Livemore, is more like a miniature of life in the American West. In addition to the traditional maze, tractor rides, animal farms, and pumpkins, they have the American Cowboy Museum! There are a number of Western-style model of chuck wagons in the park. 

 
Opening hours: October 1 ~ 31 every day 9 AM ~ 6PM

Activities:
Mazes,
The Old West Town,
Hay Ride,
Farm Animals,
Gem Panning,
Antique Museum,
Pumpkins,
Corn Patches,
Gift Shop

Price: part of the free, pay separate items and then buy a ticket

Parking: Free

Address: 4351 Mines Road, Livermore, CA 94550-9525

Note:

  Cash Only