Insurance crisis resources, Impactful and purposeful giving, Albany gift shop
Dear Friends,
There’s a favorite folksong of mine, The Cuckoo, in which we hear of the increasing singing of the cuckoo as summer approaches, and then she flies. Our East Bay real estate market has been much like a cuckoo this year, with lots of activity in the past weeks, and then a change:
“In May I’ll sing both night and day,
in fragrant June, I’ll change my tune”
in July far, far I’ll fly
Then in August away I must, for the summer will die.”
Our market is already heading into a likely slowdown as summer approaches and summer officially begins June 20th, the day that this newsletter will go out to you! Indeed, already we are seeing changes of tune: fewer offers per property is a strong indicator for Berkeley properties. While just a few months ago charming homes in very desirable locations were getting more than 10 offers each, that picture has mostly changed over the past few weeks. In many parts of Oakland we are seeing more price reductions, and homes not receiving offers on stated offer dates. Always there are exceptions, but I am sensing a definite change.
We saw lots of new inventory appear over the past month, with buyers finally having more choices. But perhaps because buyers get spoiled to the increased options, they become less willing to compromise. This year especially, many buyers want not only updated kitchens and bathrooms, convenient locations and that elusive feature of “charm”, but now they are hesitant to take on properties that have factors that will be difficult to insure. You’ve heard me speak of those in my last newsletters, and you can read a summary in my May newsletter if you missed it.
By now we all know that key systems need to be updated, including removing knob and tube wiring, updating plumbing from galvanized to copper, having earthquake retrofitting, and having “modern roofs” which can mean changing out shake roofs, or having a recent-vintage composition shingle roof. While much varies neighborhood by neighborhood, and carrier by carrier, these four items are now universal challenges regarding obtaining a reasonable insurance quote, and in some cases a quote other than from the California FAIR plan, which covers fire and identifiable risks, but not liability, nor any form of umbrella coverage.
The insurance crisis is inspiring sellers to make pre-marketing changes that we would never have considered necessary until this year. On one of my listings we have already removed all knob & tube wiring, and are currently making foundation improvements, before making the aesthetic changes that would previously have been our focus. On another listing we are updating the kitchen and bath, but are also improving the foundation and retrofitting. Not only are sellers having to invest considerably more money than before, they are also having to invest more time. One of these listings should make it to fall market, but the other may be delayed until early 2025. This is a year of making substantially more significant structural changes than I have ever experienced.
Two weeks ago the Vice Mayor of Berkeley, Susan Wengraff, hosted a webinar on the insurance crisis, which included comments by a number of resident experts. I found it very informative, and hope you will as well. You can access the recording here. It reinforced the fact that there are no standard definitions within the industry about defines “high fire risk” and what is meant by “density” other than that for any given carrier, they feel that their risk is too high in a certain area. But how areas are defined (by zip code? by some map?) is known only to the carrier.
We should all agree that taking measures to improve the fire safety of our homes is wise. A quick checklist is available here. But there does not appear to be agreement about what level of fire hardening measures will guarantee that insurance carriers will cover your home. Just this week more carriers reduced their coverage within California, amid a new set of wildfires. But we all must be prepared for changing our ways: removing flammable materials away from our homes, keeping our roofs updated and clear of debris, and aware that inspections of our properties are going to become standard.
Last month I shared that my home, in 94707, is in a zip code or area that appears to be “too dense” for quite a few carriers to continue coverage, include State Farm which had insured my homes for decades. Some of you took me up on my offer to share a list of less well-known carriers who may still be offering coverage, and I am happy to share that with you; just drop me an email message.
So let me end on a couple of happier notes! First I’ll share one of my favorite ways to celebrate the Independence Day holiday, and that’s by attending the Marin County Fair. For years my husband David and I have made this an annual outing. It’s not a huge fair (which we like), and the weather tends to be relatively mild. Some of our favorite features have always been a very high-quality juried art show, a display by master gardeners, and some of the closest and best viewing of fireworks anywhere (they shoot them from a barge in a small lake, and you can sit right on the water’s edge!) We also really enjoy sheep dog trials (this year on July 7th), a dressage show on July 3, and dogs doing acrobatics on July 4 – 6, as well as racing pigs each day. One of the real highlights for us is returning this year after an absence: the Marin County Fair International Film Festival. They show a juried selection of about 90 minutes, twice daily. Check https://marinfair.org/ for a schedule (and you may need to check closer to the date). July 3rd admission is free for folks 65 and older!
The photos I’m sharing this month are from a recent trip to the Pacific Northwest. I have been a remote part of choir in Victoria, and David and I decided to go up so that I could be physically part of their spring concert, which was great fun! We also got to have tea at the Empress Hotel to celebrated our anniversary, and spend an entire day at Butchart Gardens (definitely one of my happy places!) as well as visiting with friends and former clients whose home I sold so they could move to Anacortes. We saw so many amazing poppies, peonies, roses, huge dogwoods, as well a gorgeous views of the water and mountains, with great clouds. It is certainly true that they get an abundance of water in Washington State and in BC!
Enjoy this early summer, and again get out and smell the roses! You may not make it to Butchart, but Filoli is lovely, and our own Berkeley Rose Garden is a real treat!
Enjoy!
Arlene
Purposeful giving: A strategic approach to philanthropy
We all want to make a significant difference to our communities, but have you taken a step back to think more strategically about your charitable giving to ensure you’re making the biggest impact possible?
Beyond the Collection Plate: A Well-Thought-Out Approach to Philanthropy
Philanthropy can be more than just a series of one-off donations. By taking a tactical approach, you can ensure your generosity truly addresses the issues you care about. This involves asking yourself some key questions:
- What matters most to you? Identify the causes closest to your heart and the issues you want to help. We recommend you consider ROOF’s recent grant recipients.
- What should your plan look like? Determine a comfortable and sustainable giving level that fits your budget.
- Are you donating to a reputable cause? Research to confirm your donations support effective organizations. Consider factors like transparency and efficiency.
- Should you give beyond cash? Explore alternative ways to donate, such as appreciated stock or volunteering your time and skills.
Smarter Giving and Tax Benefits
Building an impactful philanthropic plan requires careful consideration. It should also be integrated with your overall financial and tax planning strategies. Attorney Michael Blacksburg and Wealth Advisor Mark Mitamura suggest that the following tools could be relevant to you:
- Donating Appreciated Assets | Reduce capital gains taxes by donating stocks or other assets that have increased in value.
- Optimal Donation Timing | Bunching donations in high-income years can optimize tax benefits.
- Low-Basis Stock Gifts | Donating stock that you’ve owned for a long time but hasn’t appreciated allows you to deduct the fair market value from your taxes while avoiding capital gains taxes on any minimal increase.
- Donor-Advised Fund | Think of this as a charitable savings account. You contribute assets, receive an immediate tax deduction, and then recommend grants to your favorite charities over time. This offers flexibility and allows for the future involvement of family members in your philanthropy.
- Charitable Remainder Trusts (CRTs) | This type of irrevocable trust is designed to provide you or another beneficiary with income for a set period. After that time, the remaining assets are passed to a designated charity. CRTs offer tax deductions on your initial contribution and potentially bypass capital gains taxes on donated assets.
- Charitable Lead Trusts (CLTs) | Unlike CRTs, CLTs pay a fixed amount to a charity for a set period. Then, the remaining assets go to your chosen beneficiaries. CLTs can be useful for reducing your estate tax burden while supporting a cause you care about.
- Estate Plan Revisions | Update your estate plan to incorporate charitable giving into your legacy and potentially minimize taxes on your estate.
Let’s discuss how you can make an impact on the communities of the East Bay.
