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Here’s What You Can And Can’t Do Under The Stay At Home Order

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FROM LAIST/ UPDATED 3/20: Our friends at the Long Beach Post have put together this helpful list (which we organized into categories and made some additions to).

You can still go on walks. You can still go to the grocery store. You can still pick up food from restaurants (to-go orders only). Take your pet to the veterinarian. Visit your doctor or pharmacy. Help someone else get supplies.

Last night, Los Angeles County and state officials issued a stay at home order to help slow the spread of coronavirus. Under this new “safer at home” order — and the governor’s order given minutes later—gatherings of 10 or more people are banned.

For gatherings that aren’t prohibited, people must be separated by at least 6 feet, have a hand washing station or hand sanitizer available and post a sign notifying people not to come if they have a fever or cough.

Malls, shopping centers, playgrounds and nonessential retail businesses are ordered closed. Gyms, movie theaters, bars and wineries were ordered closed on Sunday. People can still exercise outside and go on walks or hikes.

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The order went into effect at midnight and is punishable by fines or imprisonment. Here’s how the City of L.A. puts it in an FAQ on the orders:

Q: Is this order mandatory? What happens if I don’t comply?

A: Yes. This is a legally enforceable order. It is against the law to violate this Order, and you may be punished by a fine or imprisonment for doing so.

That said, asked at yesterday’s news conference if you should call the police if you see someone violating the orders, L.A. Mayor Eric Garcetti stressed that the countywide goal was to have a “light touch,” not to to march people into jail:

There are never going to be enough county or cities workers to be able to quote unquote enforce this. This is on 10 million people to self enforce, and for us to look where there are those holes and make sure that those are closed quickly.

Residents can expect everything but “essential businesses” to be closed and for workers whose jobs don’t fall into that category to stop reporting to work. Let’s take a closer look at what that means.

ESSENTIAL BUSINESSES INCLUDE:

Places that sell or produce food:

  • Grocery stores, certified farmers’ markets, food banks, convenience stores, pet supply stores, farm and produce stands. This includes stores that sell groceries and sell other non-grocery products, and products necessary to maintaining the safety and sanitation of homes.
  • Restaurants and beverage facilities that prepare and serve food or beverages, but only for delivery, drive-through or carry out.
  • Food cultivation, including farming, livestock and fishing.

Places with medical purpose:

  • Home-based care for seniors, adults, people with a disability, or children.
  • Residential facilities and shelters for seniors, adults, people with a disability, and children.
  • Cannabis dispensaries with a medicinal cannabis license.

Media outlets:

  • Newspapers, television, radio, magazine, podcast and other media services.

Core life services:

  • Gas stations, and auto-supply, auto-repair and car dealerships.
  • Banks and credit unions.
  • Hardware stores, garden nurseries, building supplies.
  • Laundromats, dry cleaners and laundry service providers.
  • Personal grooming services.
  • Plumbers, electricians, exterminators, custodial/janitorial workers, handyman services, funeral home workers and morticians, moving services, HVAC installers, carpenters, landscapers, gardeners, property managers, private security personnel and other service providers who provide services to maintain the safety, sanitation, and essential operation to properties and other essential businesses.
  • Businesses that supply office or computer products needed by people who work from home.
  • Businesses that supply other Essential Businesses with the support or supplies necessary to operate.
  • Businesses that ship, truck, provide logistical support or deliver groceries, food, goods or services directly to residences, essential businesses, healthcare operations, essential infrastructure.
  • Airlines, taxis and other private transportation providers providing transportation services necessary for activities of daily living.
  • Businesses that provide parts and service for essential infrastructure.
  • Professional services, such as legal or accounting services, when necessary to assist in compliance with legally mandated activities.

Childcare for essential workers:

  • Childcare facilities providing services that enable employees exempted to work. To the extent possible, childcare facilities must operate under the following mandatory conditions: (1) Childcare must be carried out in stable groups of 12 or fewer; (2) Children shall not change from one group to another; (3) If more than one group of children is cared for at one facility, each group shall be in a separate room. Groups shall not mix with each other; (4) Childcare providers shall remain solely with one group of children.

Places that provide shelter:

  • Hotels, motels, shared rental units and similar facilities.
  • Homeless shelters and social services for economically disadvantaged people.

Places that educate:

  • Educational institutions (including public and private K-12 schools, colleges, and universities) for purposes of facilitating distance learning or performing essential functions, provided that social distancing of 6-feet per person is maintained to the greatest extent possible.

Military/defense contractors/FFRDC (Federally Funded Research and Development Centers).

  • Essential personnel may leave their residence to provide any service or perform any work deemed essential for national security including, but not limited to defense, intelligence and aerospace development and manufacturing for the Department of Defense, the intelligence community, and NASA and other federal government, and or United States Government departments and agencies. Essential personnel include prime, sub-primes, and supplier contractor employees, at both the prime contract level and any supplier levels at any tier, working on federal United States Government contracts such as contracts rated under the Defense Priorities and Allocations System (DPAS) and contracts for national intelligence and national security requirements.

Pocket Listings Will Soon Disappear in Many Parts of the Country

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FROM HOUSINGWIRE: The National Association of Realtors board of directors has banned the controversial practice of “pocket listings.” 

While the policy became effective on Jan. 1, 2020 NAR directors delayed implementation until May 1, to give the nation’s more than 800 multiple listing services time to make any technology changes and educate users.

It’s a practice that was surging in competitive markets such as New York, San Francisco, Los Angeles and Washington D.C. It allowed a listing agent to use a multiple listing service to let others know the property was for sale, usually with an informal “coming soon” notice, while not officially sharing the listing and often retaining a full commission.

In San Francisco, the share of homes selling via pocket listings increased 68% between 2010 and 2018, and the trend had been on the rise across the country, according to Redfin CEO Glenn Kelman.
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“We know that the policy is a crucial protection for consumers,” said Kelman, who supported the NAR decision, “especially members of minority groups who, research shows, are often the last to find out about pocket listings.”

The new NAR rule requires properties to be listed on the MLS within one business day of being marketed to the public. Specifically, the policy states:

“Within one business day of marketing a property to the public, the listing broker must submit the listing to the MLS for cooperation with other MLS participants. Public marketing includes, but is not limited to, flyers displayed in windows yard signs, digital marketing on public-facing websites, brokerage website displays, digital communications marketing (email blasts), multi-brokerage listing sharing networks, and applications available to the general public.”

FROM THE WASHINGTON POST:  These unlisted listings may never get to the public multiple-listing service if the broker has a ready, willing and able buyer waiting in the wings.

According to the National Association of Realtors, pocket listings exclude consumers because not everyone has access to the same information about a particular property. And by limiting eyeballs on a property, it’s possible (even likely) you will exclude prospective buyers and the home will sell for a lower price than it would if the largest number of people had a chance to view each property.


Of course, there are times when a pocket listing might benefit a seller. With the continued presence of sites such as Zillow, Trulia, Redfin and others, there appears to be a tug of war going on. These sites make it easy for home buyers to see the starting price for a home, what it previously sold for and how long the property has been on the market. Having said that, having that days-on-market clock start ticking immediately could be detrimental to a seller’s prospects.

At the end of the day, the Realtors are trying to decide whether a seller wants maximum exposure for a listing with all of the information that goes with it online or whether they want a listing to have a more limited audience, with little or no information available publicly. Which way will generate the most money for the seller (and, of course, the listing agent)?

Complicating all of this is the advent of iBuyers and companies such as Opendoor (Zillow and Redfin are also competing in this venue), which offer sellers the opportunity to sell instantly, on the seller’s timetable, for a larger chunk of cash.

We’ll see how things play out over coming months as the Clear Cooperation Policy gets implemented and real estate agents gauge how to work with it and around it.

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Written By Kathleen Howley for HousingWire / and Ilyce Glink and Samuel J. Tamkin  For The Washington Post

Are you waiting for house prices to drop during the next recession? Why you could have a very a long wait

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“The housing market could provide a cushion to the national economy in the next recession, economists say.”

FROM MARKETWATCH: It’s unclear when the next recession will come. But a recent report argues that when it does the U.S. housing market is unlikely to adversely affected in any major way.

Researchers at First American Financial Services FAF, -0.49%, a title insurance company, examined how the country’s housing market has fared historically during recessionary periods. Based on what’s happened in past recessions, the report argues that the next recession is unlikely to prompt a major downturn in housing.


“While the housing crisis is still fresh on the minds of many, and was the catalyst of the Great Recession, the U.S. housing market has weathered all other recessions since 1980,” wrote Odeta Kushi, deputy chief economist at First American and the report’s author. “In fact, the housing market may actually aid the economy in recovering from the next recession — a role it has traditionally played in previous economic recoveries.”

Using its own data along with information from Freddie Mac FMCC, -0.32%  and the National Association of Realtors, the report maps out how the housing market has traditionally fared in economic downturns. In most other cases, home price appreciation continued at an even pace, and existing-home sales growth only edged downward slightly, Kushi wrote.

So what made the Great Recession different? The housing boom that preceded the last recession was largely driven by an explosion in both home-building activity and mortgage credit. Home buyers were able to get mortgages with no documentation of their income and no down payment, and many loans had introductory 0% interest periods that made them cheap to start but more expensive as time wore on.

These homeowners were over-leveraged. “The housing crisis in the Great Recession was fueled heavily by the fact that job loss was paired with a significant share of homeowners who didn’t have much equity in their homes,” Kushi wrote.

While this has made the prospect of buying a home unaffordable for millions of Americans, it has also meant that those who are homeowners have seen their home equity grow substantially in recent years. That decreases the likelihood that they would be underwater on their loan if home prices were to dip in a recession.

“Were we to have a recession, I’d argue housing would provide a cushion because the shortage of supply at the entry-level suggests builders could actually continue to build,” Doug Duncan, Fannie Mae’s chief economist FNMA, +0.88%told MarketWatch in December.

There still are red flags that homeowners should be on the lookout for when it comes to how a potential recession might affect the housing market. For starters, many Americans have taken out cash-out refinance mortgages on their homes as their home values have grown. That’s whittled away the equity these people have in their property, leaving them more vulnerable to owing more than their home was worth in the potential event the home prices drop.

Another issue: Many Americans who fell behind on loan payments and modified their mortgages in the wake of the recession to avoid foreclosure have since redefaulted. Were these people to lose their jobs in a recession, they could easily fall into foreclosure. Research has shown that foreclosures exacerbate economic downturns — and they can have a ripple effect through a local market, causing other homes to drop in value.


And at the local level, certain local housing markets could prove more resilient in the event of recession, depending on the strength of the local economy relative to what’s going on at a national level.

And because developers constructed so many homes, their home values quickly sank when the bubble burst, exacerbating the situation further.

The growth in home prices seen during the current economic expansion has not been fueled by increased access to mortgage credit. Rather, it’s a simple reflection of supply and demand: Many Americans want to become homeowners, but the supply of homes available for sale is very low, pushing prices upward.

WRITTEN BY JACOB PASSY FOR MARKETWACH.COM

7 Tax Benefits of Owning a Home: A Complete Guide for Filing in 2020

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FROM REALTOR.COM: What are the tax benefits of owning a home? Plenty of homeowners are asking themselves this right around now as they prepare to file their taxes. You may recall the new Tax Cuts and Jobs Act—the most substantial overhaul to the U.S. tax code in more than 30 years—went into effect on Jan. 1, 2018. And as a result, last year likely brought big changes to your taxes, especially the tax perks of homeownership.

While not much has changed tax wise since then, an entire year has passed—so you might need a refresher as you sit down with your receipts.

Well, look no further than this complete guide to all the tax benefits of owning a home, where we break down all the tax breaks homeowners should be aware of when they file their 2019 taxes in 2020. Read on to make sure you aren’t missing anything that could save you money!

Tax break 1: Mortgage interest

Homeowners with a mortgage that went into effect before Dec. 15, 2017, can deduct interest on loans up to $1 million.

“However, for acquisition debt incurred after Dec. 15, 2017, homeowners can only deduct the interest on the first $750,000,” says Lee Reams Sr., chief content officer of TaxBuzz.

Why it’s important: The ability to deduct the interest on a mortgage continues to be a big benefit of owning a home. And the more recent your mortgage, the greater your tax savings.

“The way mortgage payments are amortized, the first payments are almost all interest,” says Wendy Connick, owner of Connick Financial Solutions. (See how your loan amortizes and how much you’re paying in interest with this online mortgage calculator.)

pen, notebook, and smartphone on table

Note that the mortgage interest deduction is an itemized deduction. This means that for it to work in your favor, all of your itemized deductions (there are more below) need to be greater than the new standard deduction, which the Tax Cuts and Jobs Act nearly doubled to $24,400 for a married couple. For individuals the deduction is $12,200, and it’s $18,350 for heads of household.

As a result, only about 5% of taxpayers will itemize deductions this filing season, says Connick.

For some homeowners, itemizing simply may not be worth it. So when would itemizing work in your favor? As one example, if you’re a married couple who paid $20,000 in mortgage interest and $6,000 in state and local taxes, you would exceed the standard deduction and be able to reduce your taxable income by an additional $2,000 by itemizing.

Tax break 2: Property taxes

This deduction is capped at $10,000 for those married filing jointly no matter how high the taxes are. (Here’s more info on how to calculate property taxes.)

Why it’s important: Taxpayers can take one $10,000 deduction, says Brian Ashcraft, director of compliance at Liberty Tax Service.

Just note that this year, property taxes are on that itemized list of all of your deductions that must add up to more than the standard deduction ($24,000 for a married couple) to be worth your while.

And remember that if you have a mortgage, your property taxes are built into your monthly payment.

Tax break 3: Private mortgage insurance

If you put less than 20% down on your home, odds are you’re paying private mortgage insurance, or PMI, which costs from 0.3% to 1.15% of your home loan. But here’s some good news for PMI users: You can deduct the interest on this insurance thanks to the Mortgage Insurance Tax Deduction Act of 2019. Also known as the Secure Act, it retroactively reinstated for 2018 and 2019 certain deductions and credits for homeowners.

“These include the deduction for PMI,” says Laura Fogel, certified public accountant at Gonzalez and Associates in Massachusetts. (This credit is retroactive for 2018, so talk to your accountant to see if it makes sense to amend your 2018 tax return.)

StockSnap_6XELVX8KANWhy it’s important: The PMI interest deduction is also an itemized deduction. But if you can take it, it might help push you over the $24,000 standard deduction. And here’s how much you’ll save: If you make $100,000 and put down 5% on a $200,000 house, you’ll pay about $1,500 in annual PMI premiums and thus cut your taxable income by $1,500. Nice!

Tax break 4: Energy efficiency upgrades

The Residential Energy Efficient Property Credit was a tax incentive for installing alternative energy upgrades in a home. Most of these tax credits expired after December 2016; however, two credits are still around. The credits for solar electric and solar water heating equipment are available through Dec. 31, 2021, says Josh Zimmelman, owner of Westwood Tax & Consulting, a New York–based accounting firm.

The Secure Act also retroactively reinstated a $500 deduction for certain qualified energy-efficient upgrades “such as exterior windows, doors, and insulation,” says Fogel.

Why it’s important: You can still save a tidy sum on your solar energy. And—bonus!—this is a credit, so no worrying about itemizing here. However, the percentage of the credit varies based on the date of installation. For equipment installed between Jan. 1, 2017, and Dec. 31, 2019, 30% of the expenditures is eligible for the credit. That goes down to 26% for installation between Jan. 1 and Dec. 31, 2020, and then to 22% for installation between Jan. 1 and Dec. 31, 2021.

Tax break 5: A home office

Good news for all self-employed people whose home office is the main place they work: You can deduct $5 per square foot, up to 300 square feet, of office space, which amounts to a maximum deduction of $1,500.

Understand, however, that there are strict rules on what constitutes a dedicated, fully deductible home office space. Here’s more on the much-misunderstood home office tax deduction.

The fine print: If you work from home occasionally but have an office to go to, you can’t take this deduction.

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Tax break 6: Home improvements to age in place

To get this break, these home improvements will need to exceed 7.5% of your adjusted gross income. So if you make $60,000, this deduction kicks in only on money spent over $4,500.

The cost of these improvements can result in a nice tax break for many older homeowners who plan to age in place and add renovations such as wheelchair ramps or grab bars in slippery bathrooms. Deductible improvements might also include widening doorways, lowering cabinets or electrical fixtures, and adding stair lifts.

The fine print: You’ll need a letter from your doctor to prove these changes were medically necessary.

Tax break 7: Interest on a home equity line of credit

If you have a home equity line of credit, or HELOC, the interest you pay on that loan is deductible only if that loan is used specifically to “buy, build, or improve a property,” according to the IRS. So you’ll save cash if your home’s crying out for a kitchen overhaul or half-bath. But you can’t use your home as a piggy bank to pay for college or throw a wedding.

The fine print: You can deduct only up to the $750,000 cap, and this is for the amount you pay in interest on your HELOC and mortgage combined. (And if you took out a HELOC before the new 2018 tax plan for anything besides improvements to your home, you cannot legally deduct the interest.)

WRITTEN BY MARGARET HEIDENRY FOR REALTOR.COM

Home Renovations That Are Worth The Cost (& The Ones That Aren’t)

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FROM CNN: Homeowners often spend a lot of money on renovations  expecting to recoup more than they likely will.
But some projects offer better returns than others.

What you get out of a renovation when you sell your home depends on the update’s universal appeal and how well it compares with similar properties, said Colleen Quinn, designer and owner of Red Bird ReDesign in Washington DC. For example, updated kitchens and master suites are often appealing to new buyers, she said.

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“It is important to make investments that will be the best use of your money,” Quinn said. “We don’t want to put in custom details that are only for your specific use. Think about things that will be valued by a range of people.”

With a full kitchen renovation, homeowners can recoup about 59% of the cost, and a new master suite will typically return 50%, according to a study from the the National Association of Realtors and the National Association of the Remodeling Industry. But the highest returns come from less flashy projects.

Installing hardwood flooring, for instance, will get you back even more money than you put into it, returning about 106% of your cost. Replacing the HVAC — or heating and cooling system — will recover 85% of its cost, while an insulation upgrade will recoup 84%.
How do you decide if a project is worth it?

Best projects for the price

Most existing homes can use some kind of work when they come on the market.
 
“Very rarely does a seller have a house in perfect condition to sell,” said Chris Highland, an agent at eXp Realty in Frederick, Maryland.
But an older home that needs work can be an opportunity when it comes time to sell.
 
Highland has a five-bedroom, two-story, brick Colonial on the market that, having been “lived in hard” by a family for 21 years, would list around $250,000. The owner was willing to do $50,000 in renovations, including a new kitchen, updated bathrooms and new flooring throughout. After the renovations were done, the home was listed at $415,000 and is now in contract.
“There was a lot of work done,” said Highland. “But it wasn’t over the top and it was done in a way that is appealing to many buyers.”
 
 
And while a $50,000 renovation may not be in the cards for everyone, Highland says some of the biggest bang for your buck comes from smaller projects.
“New carpet and paint are dirt cheap,” he said, “They are the easiest thing to do for the highest return.”
 
You get the best return on investment by focusing on the main living areas, the kitchen, bathroom and the master suite, followed by the flow of the house, said Shane Steele, vice president of marketing at Sundae, a California-based real estate investment company.
Keep the fixtures and finishes somewhat neutral, she said, so they will be more appealing for multiple buyers. “Add the flair with your decor that can be taken with you when you leave.”
 
And while a neutral palate and a universal appeal should be the goal when renovating, retaining original details can help a home stand out.
“Where possible you should try to preserve the bones of the house,” she said. “Any details like crown molding, arches, built-in shelves should stay, because there is demand for character.”

Too much renovating or not enough?

With some projects, you likely won’t get back all the money you put in. Creating an organized closet may improve your life, but it doesn’t go very far on the resale market.
 
Only 40% of a closet renovation is recouped, according to the study. The estimated cost of closet remodel is $6,300 and about $2,500 of that is recovered in a sale.
 
While renovations of additional living spaces like the attic or basement will recoup more than half their cost according to the study, Highland said they are less desirable than kitchens or bathrooms.
Avoid customization and focus on features that have mass appeal, said Quinn.
 
“People get their hearts set on a particular thing,” she said. “A spa shower. Imported lights. A particular kind of tile. Sure, if you’re going to be here forever. If not, the next person isn’t going to value that and you won’t get your money back.”
 
Similarly, she said, people can go too far with open concept. Taking out all the walls to improve flow may be appealing to future buyers, but they will still want to see a place where they can put their sofa and television.
 
Under-renovating can be a problem, too. Within a given price range or neighborhood, buyers expect a certain quality of materials and level of finishes, she said.
 
“In some areas there is an expectation that a new floor would be hardwood instead of laminate,” Quinn said. “If you put in laminate floors, that would be detracting for buyers. Better to not do the renovation, if you’re going to go so far low that a buyer would pull it right out or not buy because of it.”
 
WRITTEN BY ANNA BAHNY FOR CNN.COM

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