Gen X, Y Know They Must Save to Buy a Home

Wendy Silver-Hale, President, and David WalkerSouthland Regional Association of Realtors®

Members of the so-called Genera-tions X and Y have a deeper under-standing of how the housing market operates and the level of work, savings, and commitment needed to buy a home.Indeed, while the Great Depression and WWII shaped “The Greatest Generation” and the Vietnam War and oil crises of the 1970s molded Baby Boomers, Gen X and Gen Y had their own wars to endure while receiving a hard-knocks primer on investing and homeownership as the worst economic and housing crash since the 1930s unfolded over the last decade.

Instead of discouraging them from owning a home, those tribulations taught

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Wendy Silver-Hale2012 SRAR President

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Conforming Loan Limits Unchanged in 2013The Federal Housing Finance Agency announced recently that the maxi-mum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2013 will remain at existing levels. In high-cost states such as California, the loan limit is $625,000 for one-unit properties, although rules push it to $625,500 in some regions. The limits are established under the terms of the Housing and Economic Recovery Act of 2008 and are calculated each year.

The law sets loan limits as a function of median home values in local areas. While some counties saw increases in home prices in 2012, no loan limit increases were evident after other HERA terms, such as the statutory ceiling and floor, were taken into account.

A list of the 2013 maximum conforming loan limits for all counties and county-equivalent areas in the country can be found online at www.fhfa.gov/Default.aspx?Page=185. The maximum conforming loan limits for one-unit properties, which generally have applied to loans originated since Oct. 1, 2011, are $417,000 in most loca-tions, throughout the nation, but are as high as $625,500 in certain high-cost areas in the contiguous United States. That includes Los Angeles and Orange counties and the Los Angeles-Long Beach-Santa Ana Metropolitan Area where the limit is $625,500. Ventura County, including the Oxnard-Thousand Oaks-Ventura Metropolitan Area, has a loan limit of $598,000.

A detailed description of how the 2013 loan limits were determined can be found online. Questions regarding loan limits should be emailed to LoanLimitQuestions@fhfa.gov.

new california Real estate laws for 2013During its 2011-12 legislative session the California Legislature enacted about 80 laws that relate to multiple areas of real estate. Many of the laws are in the landlord-tenant arena, but other new laws involve foreclosures, homeowner associations, settlement agreements, smoke alarms, mobile home parks, and much more. Realtors may turn to the Southland Re-gional Association of Realtors and the California Association of Realtors for the details and information on each new law that they need to effectively serve clients. Here’s a brief sum-mary of just a few of the measures taking effect in 2013:

• Restructuring the Department of Real Estate: Ef-fective July 1, 2013, the Department of Real Estate will be restructured as part of Governor Brown’s efforts to consolidate governmental entities under the Government Reorganization Plan of 2012. The DRE will become the Bureau of Real Estate under the Department of Consumer Affairs. The DCA will, in turn, be part of the newly estab-lished Business, Consumer Services, and Housing Agency (previously the State and Consumer Services Agency), which will be responsible for licensing and oversight of businesses. Governor’s Reorganization Plan No. 2 of 2012 (as amended by Senate Bill 1039).

• Landlord Must Disclose Notice of Default to Pro-spective Tenants: Starting Jan. 1, 2013, every landlord who offers for rent a residential property containing one-to-four units must disclose in writing to any prospective tenant the receipt of a notice of default that has not been rescinded. This disclosure must be made before executing a lease agreement. This law will expire on Jan. 1, 2018. Senate Bill 1191.

• Restrictions Against Cancellation Fees for HOA Documents: Beginning Jan. 1, 2013, a Homeowners As-sociation cannot collect a cancellation fee for HOA sales disclosure documents in either of two situations: (1) a request is cancelled in writing by the party who placed the order and work had not yet been performed on the order; or (2) a request is cancelled in writing and the HOA had been com-pensated for any work performed. Moreover, an HOA must refund all fees collected for HOA documents if a request is cancelled in writing and work had not yet been performed on the order. Assembly Bill 1838.

• Landlord May Dispose Abandoned Personal Property Less Than $700: Commencing Jan. 1, 2013, the total resale value of personal property left behind by a tenant after termination of a tenancy that the landlord must sell at a public auction (rather than dispose of or retain for his or her own use), has been increased from $300 to $700, if certain procedures are followed. This law, however, also prohibits a landlord from assessing any storage cost if the tenant reclaims personal property within 2 days of vacating the premises. Assembly Bill 2303.

valuable lessons about what must be done to achieve home ownership, according to a recent national survey conducted by Better Homes and Gardens. The survey found that the 111 million Americans in Gen X, born between 1966 and 1976, and Gen Y or Millen-niums, born between 1977 and 1994, want to own a home, with fully 75 percent of all respon-dents regarding a home as a key indicator of success.

The survey determined that a super ma-jority of Gen X and Gen Y respondents — 71 percent — understand homeownership is not something they deserve, but something that they must earn.

Nearly all of those surveyed were willing to take dramatic steps to make owning a home a reality. That included adjusting their lifestyle to save for a home by, for example, eating out less, 62 percent, working a second job, 40 percent, or even moving back home with their parents, although only 23 percent of the respondents considered that viable. Their parents were not queried.

Fully 69 percent of respondents felt the crash made them more knowledge-able about homeownership than their parents were at the same age. Gen X and Y

members also do their homework, learning about interest rates, prices in a desired neighborhood, and their chances of landing a loan.

As a measure of success, 75 percent favored homeownership over taking extravagant vacations, desired by 12 percent, owning an expensive car, 9 percent, or own-ing designer clothing, 5 percent.

In short, homeownership is the new bling for Gen X and Gen Y.The Southland Regional Association of Realtors® is one of the largest local trade associations in the na-tion with more than 9,000 members serving the San Fernando and Santa Clarita valleys.

A super majority … under-stand that homeownership is … something they must earn.