The Oakland Berkeley Journal

This chart shows the number of properties that were purchased between 2004 and 2007 with Adjustable Rate Mortgages.  This chart breaks down the data by zip code.  The 94608 zip code an area that contains parts of West Oakland, North Oakland and Emeryville.  During the peak, (years 2004-2007) 30% of buyers purchased properties, (with 1-4 units) with an adjustable rate mortgage.  This equates to 1305 properties.

This is not to forecast that all of these mortgages will go into default, but in this zip code home prices have declined making it incredibly difficult for one to refinance.  (When you refinance a home, the bank wants you to have equity in the property – at least 20%.  Meaning, if your home is worth $300,000 the bank wants you to owe no more that $240,000 in loans.)  If these homeowners mortgages adjust to an increased rate, it could make paying the mortgage tough. This coupled with job loss could affect the up coming short sale and bank owned property inventory.

The data in this chart is provide by Old Republic Title Co.  Information is deemed reliable, but is not guaranteed.

The lush garden entry of 1500 Park Street in Emeryville

Down the street from Pixar Studios is the David Baker designed lofts at 1500 Park Street.  This is one of my favorite loft spaces in the East Bay.  This building is in an ultra urban area of Emeryville and boasts the most lush, secluded garden as the entry.  Once inside this building you will feel like you are in Eames territory.  With a maple plywood mailbox area to the floor to ceiling windows, the modern space gives a nod to mid-century modernist.

Currently listed in this building is unit 223 offered at $249,300. (Listed with Jason of All Emeryville Properties) This is a below market rate unit for moderate household incomes making $75,000 per year as a single person or $85,700 combined for a couple.  Click Here for more information regarding the City of Emeryville and below market rates.  The first time home buyer coordinator for the City of Emeryville is Janet Peterson, 510-596-4316.  It is important to note that if you purchase a home at a below market rate, you will have to sell your property at a below market rate, unless you own this unit for 25 years.  (From my understanding, below market rates are set by the county of Alameda, and prices change with the economy.  Please call Janet if you have more questions.)

Loft space with exposed cement pillars and built- in mod sofa.

cool cooper lights patinated to an oxidized green, line the outdoor garden.

I love hearing what mortgage professionals think about the future of mortgage interest rates.   Chet Gohd of RPM Mortgage in Berkeley recently gave me his opinion of what is next.

Sketch by Virginia Perl

June 24th:

“The Federal Reserve concluded their meeting today with leaving interest rates unchanged and offering a few remarks about their view of the current status of our economy. Recent economic reports have offered positive signs in that our economy is slowing down at a milder rate. This is a good sign as in the following oversimplified example;

Picture yourself driving a car up a steep street in San Francisco. Then, as you near the top, the car stalls, engine turns off and the car begins to go backwards AND your brakes aren’t working. Now, after a few yards, your brakes begin to work and the speed in which your car is going backwards is slowing down, thus giving you hope that it will eventually stop(without you hitting anything) and then you can fix the car and begin to go up the hill again..(Wouldn’t this make a great cartoon for the cover of Newsweek so everyone in the US could have an idea of what our country is going through?)

Unfortunately, understanding the state of our economy won’t have an affect on our friends who have been laid off or a program cut from our kid’s school but it is helpful for those who wish to follow the bouncing Bernanke...

As for the technical stuff, I could cut and paste from all the financial sites but instead, I’ll just throw in a little flavor…

Chairman Ben Bernanke is watching to see how quickly the economy can recover from the deepest recession in five decades. The report showing orders for durable goods unexpectedly rose in May, while unemployment continues to climb. The Federal Reserve also wants to quell concerns that the $1 trillion expansion in its balance sheet will fuel inflation, pushing bond yields and (MORTGAGE RATES) higher and crippling any rebound in the economy. I’ll offer the explanation of how inflation is bad in a later writing.

In my opinion, the Fed is not going to be raising rates anytime soon. As for their current initiative to bring down borrowing costs for consumers, they are choosing to stick with their plan and not add to it at this time. I’ll bet that this will change if we see the economy begin to get worse again (slide backward faster) over the coming months and they call the Fire Captain to bring in more Fire Trucks and Air Tankers…”

Chet Gohd – www.rpm-mtg.com/cgohd

*Chet is a highly regarded mortgage professional.  Neither Deidre Joyner or Red Oak Realty can guarantee what mortgage rates will do in the future.

Lili, Deidre, Kimberly, Tim with Betty, Michael and Hazel of BakeSale Betty

The Redwood Heights district of Oakland is located in the Oakland foothills between Highway 13 and Highway 580, and recently has been overlooked by many buyers.   This neighborhood is comprised of Tudor, Mid-Century, and Meditterean homes,  with a great group of homeowners ranging from people who have lived here from the 1950’s to people just moving in.  Being that I live in this community, I love walking my neighborhood and waiving at the familiar faces.  One of the big assets of my neighborhood is the public elementary school, Redwood Heights.  At this school parents  are active, the school is beautiful and I personally enjoy sending my children to the school that both my mother, aunt and I attended.  Every year the PTA hosts, The Harvest For Learning Auction, the biggest fundraiser for the school.  The beauty of this auction is the parent participation.  Parents host all sorts of parties and folks who attend the auction can purchase tickets on a first come first serve basis.  This past auction, I purchased tickets to the second annual Redwood Heights Oaktown Scavenger Hunt.  This was a well organized scavenger hunt in which participants  where divided into teams of 4 members each.  Each group was given the same list  of approximately 40 clues or tasks, (For example, one of the tasks was to take a picture of a couple kissing.  We thought it would be fun to get Bakesale Betty’s proprietors, Betty and Michael to kiss, as Bakesale Betty is an Oakland icon. See the photo above and remember we have to be in the picture!)  Each team had one digital camera and two hours to obtain photos at as many locations as possible from the list of tasks.  There were strict rules, points would be deducted if you returned beyond the designated two hours, absolutely no cell phones or internet access to give you aid in finding obscure locations, and each photo had to have at least 3 out of the 4 team members in the photograph.  Teams would get extra credit if all four members were in the picture, so aggressive teams asked strangers to take their photo.

Equipped with sneakers, a water bottle and my three teammates, Lili, Kimberly and Tim, we were driven to win this competition.  We had such a great time, saw many places in Oakland and were crowned the champions!

The Second Annual Redwood Heights Oaktown Scavenger Hunt Champs!

Last weekend I made a point of getting out and enjoying my community.  Friday morning I headed to Brown Sugar restaurant, a cute soul food eatery on Mandela Parkway in West Oakland operated by chef  proprietor, Tanya Holland. I had a “screaming”, (that means unbelievable, over the top) piece of brown sugar peach coffee cake, a fantastic latte and I loved the corn waffles with brown sugar butter.  (I suggest you upgrade to the real maple syrup.)  I absolutely love the upscale diner decor with mounted photography of Oakland.  Brown Sugar Kitchen is open for breakfast and lunch Tuesday – Sunday.  Check out Brown Sugar Kitchen online, brownsugarkitchen.com.

House-made baked goods line the cashier area and folks watch their meal as it is prepared in the open kitchen

Brown Sugar Kitchen

Saturday, St. George Spirits in Alameda had their bi-annual open house.  Here fans of fine spirits were able to learn how this boutique distillery handcrafts their small batches of the best Eau de Vie, Hangar One fruit infused vodka, absinthe, whiskey and more.  With live music, snacks and bartenders everywhere mixing up fresh liquid concoctions, this was the best party along the Bay.  Visit St. George Spirits online, St.GeorgeSpirits.com.

This cool warehouse is the home of St. George Spirits and Hangar One Vodka

General Antagonist, Dave Smith is teaching eager St. George Spirits fans the distilling process.

Sunday afternoon, I visited Linda Joseph’s gorgeous Crocker Highland home for a casual art show featuring the work of  Oakland artist Jess Wainer.  Jess’s medium is glass, clay and watercolors.  I really love that Jess embraces vivid color!  Splashes of color really make a wall pop.  Jess’s work ranges in price, but I was able to score a handle blown glass paper weight and a set of beetle notecards for $60. Check out Jess online at www.jesswainer.com.

Artist Jess Wainer showcasing her art in Linda Joseph's handsome dining room.

Beetle by Jess Wainer. Photo from JessWainer.com

Unbelievable Produce!

Berkeley Bowl West has arrived!  This is great news for foodies and folks who live in West Berkeley and North Oakland. (Berkeley Bowl West will also service the North Oakland community as it is a few blocks from the North-West Oakland and Emeryville areas.)  The 140,000 square foot warehouse style building is filled with the most comprehensive array of produce for the most intricate and exotic of recipes.  As I walked down every aisle, I felt like a kid in a toy store.   The quality and the prices are superior to Wholefoods and you have to love that Berkeley Bowl is locally owned!

Berkeley Bowl West has a huge cheese, deli, hot prepared food section, bakery, bulk organic foods, produce,  seafood – (including sashimi grade ahi and more.), grass-fed meat and aisles of national and local brand groceries.
Berkeley Bowl West anchors the cool San Pablo West neighborhood of Berkeley and is walking distance to Sea Salt, Cafe Treiste, Scharffen Berger Chocolate and more.  Fresh and healthy,(locally produced food), just what the doctor ordered!

Local Fresh at Berkeley Bowl. Deidre Joyner, The Oakland Berkeley Journal

This video clip features my son Miles with friends, Aeriel, Isabella, Jack, Antonio and Elijah, as they  bring the 1970’s back with the hustle. This performance was part of the 61st annual Variety Show sponsored by the Dad’s Club at Redwood Heights Elementary School.

roses from my garden

Ten years ago when my husband and I purchased our home, I decided to plant a cutting garden.  I loved the idea of fresh flowers in my house and I planted 14 hybrid tea rose bushes.  For nine months out of the year I have blooms to brighten my house and spirit.  What I love about roses is their ability to live for decades.  The other day I complimented a neighbor on a rose bush and she told me that she did not plant the shrub.  She told me that it was already planted when she purchased her home over 30 years ago.

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: Sales price less adjusted basis1= 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.

1. 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.

1. 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.

*Thank you Old Republic Exchange Company for this information!  Information is deemed reliable, but not guaranteed.

Preserve the old!  I love these vintage mid-century signs in Oakland and Berkeley, a quick reminder of yesteryear.  Signs that have withstood the rain, earthquakes, wind, and decades of life in the Bay Area.

Kasper's in the Dimond district of Oakland. Photo by Deidre

Fratellanza Club in North Oakland. Photo by Deidre

South Berkeley Church on the corner of King and Alcatraz. Photo by Deidre

Children's Hospital Oakland directional sign on the corner of 51st and Broadway in Oakland. Photo by Deidre

The old G & G Hardware Store sign in Temescal, Oakland. Photo by Deidre