Harvest Begins for Schramsberg Vineyards

Crews harvested 10 tons of Pinot Noir from the Richburg Vineyard and 12 tons of Chardonnay grapes from the Sisters Vineyard early Tuesday as harvest 2019 began for Calistoga’s Schramsberg Vineyards.

Mid-morning on Tuesday, Emrys Davies, 15, and his brother Hughie, 10, were on the crushpad with their young cousins and their father, Schramsberg vintner Hugh Davies, for the winery’s annual celebration marking the beginning of the harvest. It’s a tradition that Schramsberg founders Jack and Jamie Davies, Hugh’s parents, first began in 1965, just weeks before Hugh was born.

When asked, young Hughie couldn’t remember anything about prior harvest parties, although his cousin, Matthew Nelson, said he remembers a lot of people celebrating. And Emrys added he remembers stomping on the grapes when he was little. He also remembers his grandmother, Jamie Davies, who died in February 2008.

Later, after Hugh Davies spoke in English and Spanish to the crowd of about 50 people, Hughie was on top of the Pinot Noir grapes and jumped up and down, with his blue shoes on, crushing the grapes, while Brandy, a Golden Retriever, watched.

“This harvest will be a little smaller than last year, because the yields are expected to be smaller,” Hugh Davies said, adding that 2018 was “a monster year.” The 2019 harvest, judging by the picks done early Tuesday, will be “definitely lighter than last year, but closer to normal,” he said. “We’re planning to make a little less wine than we did last year.”

In 2019, Schramsberg is planning to harvest some 1,800 tons and is targeting 90,000 cases or maybe 95,000 cases, Davies said. “We selling about that much, so we should be making a little more to build a library, if nothing else,” he added.

Sean Thompson, director of winemaking, said he is expecting fruit from 10 new vineyards this year, thanks to the efforts of viticulturist Sam Rubanowitz, and for the first time will be crushing Chardonnay grapes from Anderson Valley. He introduced five of the six interns for this year, including Jack Davies, Hugh’s nephew and son of Bill Davies, Georgia Dale, Brian Hurley, Gita Mallya and Nathan Sneller. Michael Barrett was not present.

Hugh Davies addressed the interns and other vineyard workers present: “Thanks again for the hard work you’re about to do,” adding he expects the harvesting of grapes to go on for 10 weeks.

He also thanked the workers present, many of whom have worked for Schramsberg Vineyards for more than 40 years.

Davies admitted the start of harvest was about the same as last year, adding that both years were late. “Aug. 20 is a little late. Typically, I would say it is Aug. 14, so maybe we’re a week behind what would be normal.” In 2011, the first grapes were picked the first week of September, which he called “an extremely late harvest,” and in 2015, the first grapes were picked at the end of July. “It was a very low crop and the fourth year of drought conditions. It was early,” he said.

The grapes are brought in half-ton plastic bins, which Davies said are gentle with the grapes. “For the most part, the berries are unbroken and the juice won’t come out of the skins until it is inside the press,” he said, adding, though, that it’s impossible to have no juice at the bottom of the bin. Looking at the press, Davies added that even though it’s bigger than ones used in the past, it is part of a gentle process.

“We extract the juice fairly slowly,” with the press that was put in use in 1999, and “the amount of solids we get in our free-run juice today is minimal. It’s pretty nice and there’s a very crisp, polished feel to that free-run juice that is an improvement over where we would have been all those years ago,” Davies added.

The Pinot Noir and Chardonnay were picked at 20 Brix, which is higher than normal for winegrapes used for making sparkling wine, but Davies said last week’s heat spike raised the sugar in the grapes. “We’ll be picking more tomorrow from the Richburg Vineyard,” he said.

Part of the harvest celebration tradition includes a group of winery employees using sabers to open bottles of Schramsberg Querencia Brut Rose. On Tuesday, seven people took sabers to the bottles of 2015 wines: Hugh Davies, Sean Thompson, Sam Rubanowitz, Jessica Koga, associate winemaker, intern Jack Davies and two enologists, Shawn McIlvenna and Mara Ambrose.

After the bottles were opened, they were poured onto the picked Pinot Noir grapes, seeking good luck for the harvest.

And, so harvest 2019 begins. As the back of one of the workers’ T-shirts said, “Eat. Sleep. Crush. Repeat.”

By: David Stonberg, editor@sthelenastar.com

National Senior Citizens Day: Seniors are on the Move in the Real Estate Market

Did you know August 21st is National Senior Citizens Day? According to the United States Census, we honor senior citizens today because,

 “Throughout our history, older people have achieved much for our families, our communities, and our country. That remains true today and gives us ample reason…to reserve a special day in honor of the senior citizens who mean so much to our land.

To give proper recognition, we’re going to look at some senior-related data in the housing industry.

According to the Population Reference Bureau,

The number of Americans ages 65 and older is projected to nearly double from 52 million in 2018 to 95 million by 2060, and the 65-and-older age group’s share of the total population will rise from 16 percent to 23 percent.”

Seniors Believe in Homeownership

In a recent reportFreddie Mac compared the homeownership rates of two groups of seniors: the Good Times Cohort (born from 1931-1941) and the Previous Generations (born in the 1930s). The data shows an increase in the homeownership rate for the Good Times Cohort because seniors are now aging in place, living longer, and maintaining a high quality of life into their later years.

Historical Home Ownership.jpg

This, however, does not mean all seniors are staying in place. Some are actively buying and selling homes. In the 2019 Home Buyers and Sellers Generational Trends Report, the National Association of Realtors® (NAR) showed the percentage of seniors buying and selling:

Buyers and Sellers by Generation.jpg

Here are some highlights from NAR’s report:

  • Buyers ages 54 to 63 had higher median household incomes and were more likely to be married couples.

  • 12% of buyers ages 54 to 63 are first-time homebuyers, 5% (64 to 72), and 4% (73 to 93).

  • Buyers ages 54 to 63 purchased because of an interest in being closer to friends and families, job relocation, and the desire to own a home of their own.

  • Sellers 54 years and older often downsized and purchased a smaller, less expensive home than the one they sold.

  • Sellers ages 64 to 72 lived in their homes for 21 years or more.

Bottom Line

According to NAR’s report, 58% of buyers ages 64 to 72 said they need help from an agent to find the right home. The transition from a current home to a new one is significant to undertake, especially for anyone who has lived in the same house for many years. If you’re a senior thinking about the process, work with a local real estate professional who can help you make the move as smoothly as possible.

Do I Need a Permit for That? - Don't jeopardize a future sale.

When undertaking a remodel or home improvement project, how do you know when you need a building permit from your city government?

Cities require permits to ensure that the changes on a home go on record. The changes also are reviewed by an inspector to ensure they’re up to code. For example, if you decide to rewire your electricity panel , exposed wires could represent a safety issue to you and your home.

When homeowners sell their home, buyers and lenders will want to know if any remodels they did complied with building codes. So the permit could salvage a sale too.

“The general rule of thumb is that structural, electrical, plumbing, or mechanical work will require a permit,” notes Redfin at a recent blog post.

The Home Inspector’s File

A fence installation or repair, window installations, plumbing and electrical work, replacing the water heater or changes to the ventilation system, as well as gas and wood fireplaces all will likely require a permit for the work. Also, any additions or upgrades made to the home, typically of $5,000 or more, will likely require a permit.

On the flip side, permits likely won’t be needed for painting, installing floors or faucets, or landscaping work.

Permit requirements vary by city. Check with the local building department to be on the safe side.

Americans Have Never Felt This Good About Real Estate

Fannie Mae’s Home Purchase Sentiment Index surged to a new high as consumers became more upbeat about buying and selling, mortgage rates, and their jobs. Five of the six components measured by the index rose month over month.

“Consumer job confidence and favorable mortgage rate expectations lifted the HPSI to a new survey high in July, despite ongoing housing supply and affordability challenges,” says Doug Duncan, Fannie Mae’s senior vice president and chief economist. “Consumers appear to have shaken off a winter slump in sentiment amid strong income gains. Therefore, sentiment is positioned to take advantage of any supply that comes to market, particularly in the affordable category. However, recent financial market events following when the survey data were collected could weigh on consumer views looking ahead.”

Overall, the HPSI, based on a survey of 1,000 Americans, rose 7.2 points compared to a year ago to a record-high reading of 93.7 in July. Here are some highlights from the index’s latest readings:

  • Buying: The net share of Americans who said now is a good time to buy a home rose 3 percentage points from June to 26%, up 2 percentage points from a year ago.

  • Selling: The net share of consumers who say it’s a good time to sell rose 1 percentage point to 44%, up 3 percentage points from a year ago.

  • Home prices: The share of Americans who say home prices will go up over the next 12 months fell 1 percentage point to 37%, down 2 percentage points from a year ago.

  • Mortgage rates: The share of consumers who believe mortgage rates will drop over the next year rose 1 percentage point and is up 24 percentage points from a year ago.

  • Job stability: Americans are more confident about their job situation, with the share who say they’re not concerned about losing their job over the next year rising 8 percentage points to 81%. This is up 16 percentage points from a year ago.

  • Household incomes: The share of Americans who say their household income is significantly higher than 12 months ago rose by 1 percentage point to 21%, essentially unchanged from a year ago.

Source: “Home Purchase Sentiment Index,” Fannie Mae (Aug. 7, 2019)

Bottom Line

Consumers are feeling good about the real estate market. Since Americans are not worried about their jobs, see mortgage rates near an all-time low, and believe it is a good time to buy, the housing market will remain strong for the rest of the year.

5 Real Estate Reality TV Myths Explained

Have you ever been flipping through the channels, only to find yourself glued to the couch in an HGTV binge session? We’ve all been there, watching entire seasons of shows like “Property Brothers,” “Fixer Upper,” and “Love It or List It,” all in one sitting.

When you’re in the middle of your real estate-themed TV show marathon, you might start to think everything you see on the screen must be how it works in real life. However, you may need a reality check.

Reality TV Show Myths vs. Real Life:

Myth #1: Buyers look at 3 homes and decide to purchase one of them.
Truth: There may be buyers who fall in love and buy the first home they see, but according to the National Association of Realtors, the average homebuyer tours 10 homes as a part of their search.  

Myth #2: The houses the buyers are touring are still for sale.
Truth: Everything is staged for TV. Many of the homes shown are already sold and are off the market. 

Myth #3: The buyers haven’t made a purchase decision yet.
Truth: Since there is no way to show the entire buying process in a 30-minute show, TV producers often choose buyers who are further along in the process and have already chosen a home to buy. 

Myth #4: If you list your home for sale, it will ALWAYS sell at the open house.
Truth: Of course, this would be great! Open houses are important to guarantee the most exposure to buyers in your area, but they are only one piece of the overall marketing of your home. Keep in mind, many homes are sold during regular showing appointments as well. 

Myth #5: Homeowners decide to sell their homes after a 5-minute conversation.
Truth: Similar to the buyers portrayed on the shows, many of the sellers have already spent hours deliberating the decision to list their homes and move on with their lives and goals.

Bottom Line

Having an experienced professional on your side while navigating the real estate market is the best way to guarantee you can make the home of your dreams a true reality.

New FHA Rule Will Ease Condo Approval Process

The long-waited Federal Housing Administration (FHA) rule regulating condominium lending was finalized Wednesday afternoon.  The Department of Housing and Urban Development (HUD), the parent agency of FHA, published the final regulation and the policy implementation guidance establishing a new condominium approval process.

As a way of background, under existing rules, to obtain an FHA mortgage a borrower must not only satisfy the lender and the FHA that he or she is a qualified buyer but must purchase a unit that is itself qualified for financing. 

According to the National Association of Realtors®, FHA has put its stamp of approval on many complexes, but given the universe, not nearly enough. Of the more than 150,000 condominium projects in the U.S., only 6.5 percent are approved to participate in FHA's mortgage insurance programs.   

To be approved under existing rules, condo communities must submit a pile of paperwork, be vetted by the administration, make any improvements specified by FHA, and then submit to a reexamination. Specified requirements cover the percentage of owner-occupied units, budgetary reserves, insurance coverage, and HOA dues collections. There are also location requirements related to transportation access.  FHA said its requirements were intended to "make sure that the property remains in good standing and will be desirable."

These requirements often left buyers selecting a condo only to find they could not obtain an FHA mortgage for which they were otherwise qualified. This has had implications for homeownership, especially for low-income borrowers, those with less than perfect credit scores, or with downpayments below the minimum level to obtain other financing.  This has become increasingly problematic as prices for single-family homes have escalated, making condo purchases more important as an option for entry-level buyers.

The new rule, which becomes effective on October 15, will allow a homebuyer to obtain an FHA mortgage for an individual condo unit in an unapproved condominium project if that project is completed and meets the following criteria:

  • In a development with fewer than 10 units, no more than two can be insured by FHA.

  • In a development that exceeds 10 units, a maximum of 10 percent can be insured by the FHA.

  • A minimum of 50 percent of project units must be owner-occupied.

The rule change also extends the certification period from two to three years and expands the eligibility criteria for mixed-use units.

HUD estimates the new rules will make an additional 20,000 to 60,000 condo units eligible for FHA insured loans each year.

HUD Acting Deputy Secretary and FHA Commissioner Brian Montgomery said, "Today we are making certain FHA responds to what the market is telling us. This new rule allows FHA to meet its core mission to support eligible borrowers who are ready for homeownership and are most likely to enter the market with the purchase of a condominium."

BY: JANN SWANSON

Busting the Myth About a Housing Affordability Crisis

It seems you can’t find a headline with the term “housing affordability” without the word “crisis” attached to it. That’s because some only consider the fact that residential real estate prices have continued to appreciate. However, we must realize it’s not just the price of a home that matters, but the price relative to a purchaser’s buying power.

Homes, in most cases, are purchased with a mortgage. The current mortgage rate is a major component of the affordability equation. Mortgage rates have fallen by over a full percentage point since December 2018. Another major piece of the affordability equation is a buyer’s income. The median family income has risen by 3.5% over the last year.

Let’s look at three different reports issued recently that reveal how homes are very affordable in comparison to historic numbers, and how they have become even more affordable over the past several months.

1. National Association of Realtors’ (NAR) Housing Affordability Index:

Here is a graph showing the index going all the way back to 1990. The higher the column, the more affordable homes are:

housing affordability index.png

We can see that homes are less affordable today (the green bar) than they were during the housing crash (the red bars). This was when distressed properties like foreclosures and short sales saturated the market and sold for massive discounts. However, homes are more affordable today than at any time from 1990 to 2008.

NAR’s report on the index also shows that the percentage of a family’s income needed for a mortgage payment (16.5%) is dramatically lower than last year and is well below the historic norm of 21.2%.

payment as percentage of income.png

2. Black Knight’s Mortgage Monitor:

This report reveals that as a result of falling interest rates and slowing home price appreciation, affordability is the best it has been in 18 months. Black Knight Data & Analytics President Ben Graboske explains:

“For much of the past year and a half, affordability pressures have put a damper on home price appreciation. Indeed, the rate of annual home price growth has declined for 15 consecutive months. More recently, declining 30-year fixed interest rates have helped to ease some of those pressures, improving the affordability outlook considerably…And despite the average home price rising by more than $12K since November, today’s lower fixed interest rates have worked out to a $108 lower monthly payment...Lower rates have also increased the buying power for prospective homebuyers looking to purchase the average-priced home by the equivalent of 15%.”

3. First American’s Real House Price Index:

While affordability has increased recently, Mark Fleming, First American’s Chief Economist explains:

“If the 30-year, fixed-rate mortgage declines just a fraction more, consumer house-buying power would reach its highest level in almost 20 years.”

Fleming goes on to say that the gains in affordability are about mortgage rates and the increase in family incomes:

“Average nominal household incomes are nearly 57 percent higher today than in January 2000. Record income levels combined with mortgage rates near historic lows mean consumer house-buying power is more than 150 percent greater today than it was in January 2000.”

Bottom Line

If you’ve put off the purchase of a first home or a move-up home because of affordability concerns, you should take another look at your ability to purchase in today’s market. You may be pleasantly surprised!

Luxury Home on the Madison River in Ennis, MT

317 Riverview Dr, Ennis, MT 59729

Asking: $1,390,000

We saw this home while fishing on the river and I wanted to share to give you an idea of the luxury market in other parts of the country.

This 4526SF, 3BR/6BA home sitting on 163 ' of Madison River in the charming town of Ennis. It was tastefully renovated in 2008 with an open living area with a wood burning fireplace that opens to river facing deck and a gourmet's dream kitchen. Luxurious master suite opens to river and has large walk in closet and travertine bathroom. Lots of options for the 1000SF main level bonus room + 450SF unfinished guest area. Lots of parking & storage on this .739 acre lot only 3 blocks from downtown. Must See!The incredible Madison Valley remains one of the most attractive places to be in Montana. It features wide open spaces, jaw dropping mountain panoramic, miles of back country trails and terrific trout fishing on the world famous Madison River. Find a variety of quality dining, shopping and other amenities in the progressive small town of Ennis, MT. Fly commercially into Bozeman Yellowstone International Airport (BZN) or privately to the Big Sky Airport in Ennis, MT. You are a quick drive away to Yellowstone National Park or skiing at Big Sky Ski and Summer Resort.

If you are interested please contact the listing agent: Dawn Myrvik @ PureWest Christie's Ennis.

317-river view-dr-ennis-mt
317-riverside-dr-kitchen
317-riverside-dr-fireplace-living-room

Earthquake Lake Montana

I’m taking a vacation in Montana, fly fishing on the Madison River, and in route to the lodge stopped by Earthquake Lake. Quake Lake is a lake in southwestern Montana. It was created after an earthquake struck on August 17, 1959, killing 28 people. Today, Quake Lake is 190 feet deep and 6 miles long. The story is saddening and amazing…visiting the lake and seeing the cabins that were lifted and moved by the fast waters, the slide and still standing dead trees was chilling and awing. Below are some pictures I took and here is a link to learn more: https://www.visitmt.com/listings/general/lake/quake-lake.html

Earthquake-Lake-Visitor-Center
Quake-Lake-The-Slide
Quake-Lake-Montana

Appreciation is Strong: It Might Be Time To Sell

There’s no doubt that today’s housing market is changing, and everything we see right now indicates it is time to sell. Here’s a look at why selling now is likely to drive the greatest return on your largest investment.

Home values have been appreciating for several years now, growing at a strong, steady, and impressive pace. In fact, the average annual appreciation rate since 2012 has nearly doubled the average rate from the more normal market of the 1990s (think: pre-bubble).

Average Annual Percentage Appreciation.png

Appreciation, however, is projected to shift back toward normal, meaning home prices will likely keep climbing over the next few years, but they are not projected to continue to increase at such a high rate.

Here’s What That Means for Homeowners:

As noted in the latest Home Price Expectation Survey (HPES) powered by Pulsenomics, experts forecast an average annual appreciation rate closer to 3.2% over the next five years, which is more in line with a historically normal market (3.6%). The good news is, there’s still time to take advantage of the current strength of home prices by selling your house now.

Mean Percentage Appreciation.png

Looking at the projections as they stand today, 2019 is slated to drive the strongest appreciation as compared to the upcoming few years. With average home prices still on the rise, the pace at which they are predicted to continue increasing will likely soften by 2020.

Bottom Line

If you’re thinking about selling your house, now is a great time to make your move. Don’t get stuck waiting until projected home price appreciation rates potentially re-accelerate again in 2023. You’ll likely earn the greatest return on your investment by selling now before the prices start to normalize next year.

Rising Affordability in Purchasing Real Estate

BY: JANN SWANSON

Black Knight has good news for potential homebuyers, especially those in the market for their first home. The new edition of the company's Mortgage Monitor says the recent decline in mortgage interest rates has made home affordability the best it has been in 18 months.

With the 30-year fixed-rate mortgage hovering around 3.75 percent, it now takes 21.3 percent of the nation's median monthly income to make a mortgage payment on the median priced home. This is down from 23.3 percent in November of last year and more affordable than the long-term ratio of around 25 percent that was in-play during a time when the market was generally considered to be "normal," 1995 to 2003. It is also much lower than the 34.5 percent ratio at the height of the housing boom.

The rising payment-to-income ratio, as it hit its recent peak last November, appeared to trigger a strong reaction in both sales and home prices.  Given its relatively modest historical position, Black Knight suggests there may be heightened sensitivity to affordability concerns in today's market. Both existing and new home sales have been ragged since then and, although home prices continued to rise, that rate at which they did so slowed considerably.

The average home price has gone up by more than $12 thousand since interest rates peaked last November, but the monthly payment has declined by $108 for an average home purchased with a 20 percent down payment.  Black Knight says this is the equivalent of a 15 percent increase in buying power and means a homebuyer could pay $45,000 more for a home without seeing an increase in the monthly payment.

payment to income ratio.jpeg

Of course, with lower rates and higher affordability, demand is growing again.  The company notes that, the 15-month pattern of price deceleration it had been tracking seems to have leveled off. The annual home price appreciation rate held steady in June at 3.78 percent.

Black Knight cautions that it takes time for impacts for interest rate changes to show up in housing market numbers; even after homebuyers react, there is a time lag due to contract, offer, closing, and recording times.  Therefore, the flat appreciation rate from May to June could be just the beginning and the 3.75 interest rate that hit at the end of June may not show up in home sale and price changes until August or September.

There is a large spread of payment to income ratios across the states, but affordability is improving.  Where nine states were less affordable than their long-term norms back in November, only California and Hawaii remained so as of July.

payment to income ratio by state.jpeg

Housing is least affordable along the western U.S. and parts of the northeast, while the Midwest and parts of the South are home to some of the lowest payment-to-income ratios.  Not only is housing in the Midwest the most affordable, but it is also the furthest below its own long-term average, as income growth there has been more in line with home price growth than in other areas.

july 2019 vs long term.jpeg

Even in California, however, affordability has improved.  The state went from having one of the top five home price growth rates of any state (8.6 percent) one year ago to second-to-last as of June 2019, with home price growth slowing to just 1.3 percent year-over-year.  The payment ratio in the state is now 34 percent, down 4 percentage point from November. That is, however, 2.5 points above its long-term ratio.  Growth declines in several of the West Coast's largest markets has been significant up; prices in the last 12 months have increased by 1.1 percent or less in Los Angeles, San Francisco, San Diego and Seattle. 

Price growth among condominiums have been experiencing greater slowing over the last 12 months than have prices of single-family homes. Up until then the two sets of prices had been rising in lockstep, but now condos are appreciating at 2.2 percent compared to single-family homes at 3.9 percent.  That is a 40 percent differential.  The company points out that condo prices are historically more volatile, they had a faster appreciation rate in the late 1990s and early 2000s, experienced a sharper downturn during the financial crisis and then recovered faster in 2012 to 2014.  Now the tide may be turning again.  The company said this could be due to a number of factors and it worth keeping an eye on.

Black Knight also provided an update on the prepayment rate which had been seeing some dramatic increases as rates declined. That, however, ended in June as activity fell by 7.5 percent.  It was the first monthly decline since January and the company calls it surprising "given that refinance incentive continues to rise, and home sale driven prepayments typically increase from May to June."


prepayment rate by investor.jpeg

 The declines were evident across servicing portfolios, investor classes, interest type and vintages but the strongest reductions were among portfolio held loans, high credit score mortgages and loans originated last year.  Those were the cohorts that had seen the largest increase in prepayments previous to June.  Black Knight says the pullback may be due to sluggish refi-driven prepayments in June rather than (or potentially in combination with) lackluster home sale driven prepays

Barneys Files for Bankruptcy, Plans to Close Most Stores

Barneys New York Inc. filed for bankruptcy protection with plans to close most of its stores and a $75 million financing package that would give the luxury retailer time to find a buyer.

The restructuring plan, filed early Tuesday morning, has Barneys, which operates 13 department stores and 9 warehouse stores, shutting down stores in Chicago, Las Vegas and Seattle. The retailer will continue to run seven stores, including its flagship Manhattan store, the company said.

The chapter 11 filing in the Southern District of New York indicates the company has more than $100 million in assets and more than $100 million in debts. The creditors include fashion houses such as Yves Saint Laurent, Balenciaga and Gucci.

The retailer, controlled by the New York hedge fund Perry Capital, struggled to navigate the rise of e-commerce and increase in rent which nearly doubled this year to $27.9 million from $16.2 million for their store in Manhattan. Barneys fought the rent increase but lost during an arbitration proceeding earlier this year, prompting the retailer to hire restructuring advisers.

The Wall Street Journal went on to say:

“Barneys Chief Executive Daniella Vitale said Barneys had been hurt by a broader downturn in retail as well as “excessively high” rent. Bankruptcy protection “will provide the company the necessary tools to conduct a sale process, review our current leases and optimize our operations,” she said.

The Wall Street Journal reported Monday the company was close to filing for bankruptcy and near a financing deal with Gordon Brothers and Hilco Global, firms specialized in selling assets for distressed companies. The loan was expected to fund the company’s stay in bankruptcy for 60 days while it attempted to clinch a deal with a buyer, according to people familiar with the matter. If Barneys cannot reach a deal, it would liquidate, they said.

Barneys is much smaller than rivals Saks Fifth Avenue and Neiman Marcus, which each operate about 40 department stores. Barneys was carrying approximately $200 million in debt, the people said.

Barneys’ existing lenders Wells Fargo & Co. and TPG Sixth Street Partners, a credit investor partly owned by private-equity firm TPG, allowed the company to take the junior loan from Gordon and Hilco.

A number of potential buyers have expressed interest in the iconic chain but need time to complete their due diligence, some of the people said.

In recent months the company hired restructuring advisers and lawyers M-III Partners LP, Houlihan Lokey Inc. and Kirkland & Ellis to negotiate a restructuring and prepare a bankruptcy filing.

The filing marks the second trip through bankruptcy court for the retailer, which filed for protection from creditors in 1996. It avoided another bankruptcy in 2012 when Perry Capital, one of its lenders at the time, took majority ownership of the company in an out-of-court deal.

Barneys’ travails come as traditional retailers are struggling with the shift to online shopping and facing off against a host of technology-driven startups like Net-a-Porter, an online fashion seller, and The RealReal Inc., which lets consumers buy or sell secondhand luxury goods.

Department stores, in particular, have struggled to bring shoppers into their cavernous locations. Chains from Macy’s Inc. to J.C. PenneyCo. have closed hundreds of stores, and others, including Sears and Bon-Ton Stores, have resorted to bankruptcy filings.”

—Andrew Scurria contributed to this article.

Write to Soma Biswas at soma.biswas@wsj.com and Juliet Chung at juliet.chung@wsj.com

Millionaire to Millennials: The Costly Mistake of Not Buying Now

On his personal website, self-made millionaire David Bach makes a striking statement:

 “Not prioritizing homeownership is the single biggest mistake millennials are making.” 

He further stated, “Buying a home is an escalator to wealth.”

Bach explains:

“Young adults in particular aren’t hopping on this escalator, and it’s a costly mistake…If millennials don’t buy a home, their chances of actually having any wealth in this country are little to none.”

He then elaborates on the game of homeownership:

“Start by crunching the numbers…actually do the math...This way, you’re really clear on your goals and you won’t just say to yourself, ‘I’ll never afford this!'

A good rule of thumb is to make sure your total monthly housing payment doesn’t consume more than 30 percent of your take-home pay.”

Bach concludes by saying,

“Oftentimes, buying your first home means you’re not buying your dream home…You’re just getting into the market.”

Bottom Line

Whenever a well-respected millionaire gives investment advice, listeners usually clamor to hear it. This millionaire shares some simple and straightforward insights: “The fact is, you aren’t really in the game of building wealth until you own some real estate.”

Who is David Bach?

Bach is a self-made millionaire who has written nine consecutive New York Times bestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek, and USA Today bestseller lists.

He has been a contributor to NBC’s Today Show, appearing more than 100 times, as well as a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS. He has also been profiled in many major publications, including the New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, Washington Post, Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes.

Top 25 Best Places to Retire

Curious as to the best places to retire? According to Forbes, these are the top 25. Click here for the full article.

Athens, Georgia

Bella Vista, Arkansas

Boise, Idaho

Brevard, North Carolina

Charlotte, North Carolina

Clearwater, Florida

Columbia, Missouri

Delray Beach, Florida

Fargo, North Dakota

Green Valley, Arizona

Iowa City, Iowa

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Housing Affordability in California: The Breakdown

Ability to purchase a median-priced home: According to the State Legislature in Q1 of 2019 only 28% of the population in Napa County can afford to purchase a median-priced home compared to Lassen county with 63% (the highest affordable county). A couple of others: San Francisco and Santa Cruz - 20%, Santa Clara - 23%, San Diego - 26% and LA and Mendocino - 27%. For any other counties of interest please contact me.

1 out of 4 homeless people live in California. The states with the largest increases from 2016-2017 are:

California - 16,136 (13.7%)

New York - 3,151 (3.6%)

Oregon - 715 (5.4%)

Nevada - 435 (5.9%)

Texas - 426 (1.8%)

The Minimum Annual Income Required During Affordability Peak (Q4 2012) vs. Current.

Region 2012 Q1 2019 Q1 %CHG

CA Single Family Housing $ 56,320 $ 114,860 103.9%

CA Condo/Townhomes $ 44,440 $ 94,690 113.1%

Los Angeles Metro Area $ 53,780 $ 107,110 99.2%

Inland Empire $ 35,170 $ 76,810 118.4%

S.F. Bay Area $ 90,370 $ 186,230 106.1%

US $ 32,000 $ 53,620 67.6%




















Existing Home Sales Point Toward a Good Time to Sell

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Some Highlights:

  • Existing Home Sales dropped 1.7% from May to a seasonally adjusted annual rate of 5.27 million in June.

  • Low inventory levels are still a factor in the market. The current supply of homes for sale is at 4.4 months, which is less than the optimal 6-month supply.

  • Median home prices were up 4.3% from June 2018, hitting $285,700. This marked the 88th consecutive month with year-over-year price gains.

New Tenants Moving Into Ben Franklin Building in St. Helena

Four local tenants are moving into the newly renovated building between Sunshine Foods and Wells Fargo Bank.

A fitness studio, real estate office, physical therapy office and an unannounced food concept will occupy four spaces in the former Ben Franklin building.

What's Happening in Napa Valley in August & Hotel Deals

If you are going to be in Napa Valley or are interested in staying even just for a night or so here are some highlights of Wine Tasting, Festivals, & More:

How to Increase Your Equity Over the Next 5 Years

Many of the questions currently surrounding the real estate industry focus on home prices and where they are heading. The most recent Home Price Expectation Survey (HPES) helps target these projected answers.

Here are the results from the Q2 2019 Survey:

  • Home values will appreciate by 4.1% in 2019

  • The average annual appreciation will be 3.2% over the next 5 years

  • The cumulative appreciation will be 16.8% by 2023

  • Even experts representing the most “bearish” quartile of the survey project a cumulative appreciation of over 6.7% by 2023

What does this mean for you?

A substantial portion of family wealth comes from home equity. As the value of a family’s home (an asset) increases, so does their equity.

Using the projections from the HPES, here is a look at the potential equity a family could earn over the next five years if they purchased a $250,000 home in January of 2019:

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Based on gains in home equity, their family wealth could increase by $42,000 over that five-year period.

Bottom Line

If you don’t yet own a home, now may be the time to purchase. Owning or moving up to your dream home could allow you to ride the increase in equity of a growing asset.