We had them sell our house and help with a purchase on a new one. They had an open house the first weekend for us working around our bizzy schedule. We eve had an offer on the third day of listing our house near full offer. We took the deal and found a new house just in time.
The team was able to work out closing on both houses on the same day a week early from our initial closing date. I would highly recommend this team of great people to help you out. They truly care about your wish list and were able to make it happen. Give these two the chance they deserve and you won't regret it.
Rates are probably going up folks! https://www.reuters.com/…/feds-powell-nods-to-stronger-econ…
There have been many comments and questions in regards to the government shutdown. I can only address what will affect my profession, the real estate and mortgage industry. There could be some possible delays to loan closings.
This is not the first time a we have experienced a government shutdown. We, as Americans, have seen a shutdown twice since 2010. In the past, in regards to buying or refinancing a home, it mainly effected those loans needing the following-
•FHA Case #’s...
•VA Case #’s
•Case # assignments FHA or VA
•Tax Transcripts (although with the big changes made recently to requiring these this is less important)
•Social Security verifications.
I cannot speak to specifically on what will happen with this shutdown but again those 5 items were the primary areas of the industry affected the last 2 times that a shutdown occurred.
Title and Escrow services are not directly affected, at least not for the most part. Most of the work they do deals with the State Government, not the Federal government.
As a Real Estate Agent, my daily work is not directly affected beyond the loan aspect of a transaction.
What does it mean to have a government shutdown?
There will be government staff that will continue working as they are “essential” (FBI, Depart of Defense, Military) while government staff who work in the offices that handle social security or tax verifications, are considered “non-essential.” This is why the mortgage and real estate industry could see some delays in closing times.
Let me know if you have any questions or concerns.
A bit of insight from one of the leaders in my market. Shared with permission.
Welcome to 2018
We hope you all had a wonderful holiday season! Now that we are off to a fresh new year it makes sense to note where the market currently stand...s.
Undoubtedly our serial readers are already well aware that the 500K and under range has been in a “sellers” market for all of 2017. What most may not know is that inventory usually sees a build up in the fall as demand tapers off. Fall 2017 saw a very minimal increase in inventory and in the under 200k single family supply is so paltry as to seemingly be headed for extinction. Entering 2018, active Listings are down 12% from this time last year. There appears to be no relief on the horizon. As our favorite real estate market watcher the Cromford Report states:
“It is easy to get complacent about the low inventory and assume that this is somehow the "new normal". The long term decline in active listings just keeps going and we have now reached the point where days of inventory is the lowest we have seen for week 50 since 2004 (at the height of the bubble). ...To try to get a handle on what life is like in the regular market, let us focus on homes priced at under $500,000 in Greater Phoenix. The inventory for this segment is 52 days. If we use $250,000 as the price limit we have just under 40 days of inventory. These are not normal readings and we start to wonder how low can these numbers go.”
This means buyers are going to have an even tougher time buying than last year in any price range other than luxury. For most sellers, they should enjoy competition from buyers and stronger pricing.
Demand has remained relatively stable and unremarkable especially compared to its counterpart supply. Demand was on a weakening trend in the 3rd quarter but that seemed to shift upwards mid-November and certainly provided a busier than normal December. An interesting side note is that buyers are now primarily in-state buyers (i.e. local house changers) . The Cromford Report notes :
“… migration into Arizona is weaker than it was during the 2000-2007 era. In 2004 we saw 30,564 purchases by out of state buyers. 2017 year to date is 16,443 ...The total sales count is lower and the percentage of sales going to out of state buyers has dropped from 20% to 16%...The flip side of this is that in-state demand has increased from 80% to 84%. Areas that appeal most to in-state buyers have seen stronger appreciation.”
Supply and demand ultimately dictate appreciation. It should come as no surprise that appreciation was greatest in the lower price ranges due to low supply. Turning back to the Cromford Report we can see exactly how true this is:
”After peaking on July 28 at 8.6% the appreciation rate for all areas & types went into a declining trend until November 9 when it bottomed out at 3.6%. It then changed course and over the last 5 weeks has risen sharply to reach between 7% and 7.5%.... Such a rapid change in direction is quite unusual.
The overall appreciation rate based on annual sale price per square foot in Greater Phoenix is 6.2%. However, supply and demand are not the same by price range. The greatest appreciation rates are under $200K due to a lack of new construction that would typically balance out the supply shortage. Sales under $200K are 33% of all sales this year, so their rate has a large effect on the overall average. New multi-family and single-family homes are being added to the $200K-$500K price range to accommodate increased demand, but it’s still not quite enough. The market is balanced between $500K-$1M, while supply is still higher than demand over $1M despite a 10% rise in 4th quarter contracts. As a result, appreciation rates are as follows by price range:
• Under $200K: 7.7%
• $200K-$500K: 3.5%
• $500K-$1M: 1.7%
• Over $1M: 0.1%”
We rarely talk about real estate agents – although they certainly can impact the marketplace in subtle ways. It may be of interest that there was a 6.6% increase in the number of real estate agents since last year as rookies continue to enter the field. While agents certainly don’t set the marketplace (supply and demand does) they certainly can influence the buying and selling experience. Agent skill impacts the counsel clients receive on market behavior or not; negotiate the highest market value or not. They should be the client’s biggest advocate and legally in fact have a fiduciary relationship to the client. As the institutional investment companies are swarming the valley (Offer Pad, Open Door, etc.) sellers can learn the hard way the impact that a missing real estate advocate has in terms of reduced proceeds. Particularly disturbing is the institutional buyers’ offers of “no commission sale” while charging fees in excess of 9% - far beyond what might be charged as a commission. Add in the typically lower than market value and imaginary “repair costs” and sellers are paying dearly for that lack of representation. Lower than true market value sales can impact appraisals and subsequent neighboring sales – a sobering thought for all of us vested in defending neighborhood values.
As 2018 continues to progress we will endeavor to keep you apprised of the emerging trends. Of course every home sale has its own concerns, so please don’t hesitate to contact us for a customized analysis of your neighborhood. Here’s to a wonderful 2018!
Russell & Wendy Shaw
One last thing about the new tax law as it pertains to real estate: Home Equity Lines of Credit interest is NO LONGER deductible! The home-equity loan interest deduction was repealed through 2025 under the Tax Cuts and Jobs Act. My suggestion to anyone with a HELOC is to go ahead and refinance your home so that the interest becomes deductible for you again. Now remember that I am a real estate broker, and neither a CPA nor a Loan Officer, so you need to talk to professionals to make sure that is the right thing to do for you. If you need a reference to either one, I can give you referrals to some really good people who can help you with it, just click right here and send me a message.
You want a home warranty. As your buyer's agent, 9 times out of 10 I can negotiate one for you at the sellers expense. Remember, it's easy to become an agent. It's hard to become a good agent. PM me if you want to buy something.
Are property taxes still deductible? YES! Another bit of misinformation that is still floating around about the new tax law is that individuals can no longer write of the property tax on their home.
Under the Tax Cuts and Jobs Act, individuals are allowed to deduct up to $10,000 ($5,000 for married taxpayers filing separately) in state and local income or property taxes. This can be used as a combination of any and all of these types of taxes.
Yes, I get that in some p...arts of the country property taxes are very high, and some people pay more than $10,000 a year in just property taxes alone. This is not the case for everyone though, and saying that the middle class can no longer write off their property taxes is an incorrect statement.
Please make sure you talk to your CPA or EA in the next few weeks when you are doing your 2017 tax returns. You may be ahead by having a planning discussion for 2018 if you have any questions.
Here is a bit more on the new tax plan – For some reason I see a lot of people STILL claiming that because the standard deduction went up, they can no longer write off interest on their home mortgage. Nothing has changed in that respect; it was always the case that you were allowed one of the two; people took either the standard deduction or they itemized deductions, never both.
What changed is the amount of interest that can be itemized, and it has everything to do with ...the size of the loan, not even the amount of interest paid. The home mortgage interest deduction was modified to reduce the limit on acquisition indebtedness to $750,000 (from the prior-law limit of $1 million).
Loans already in existence are not affected by the new laws. A taxpayer who entered into a binding written contract before Dec. 15, 2017, to close on the purchase of a principal residence before Jan. 1, 2018, and who purchases that residence before April 1, 2018, will be considered to have incurred acquisition indebtedness prior to Dec. 15, 2017 under this provision, meaning that he or she will be allowed the prior-law $1 million limit.
Considering the vast majority of homebuyers do not have a loan with the initial borrowed amount greater than $750K, this change will have little impact. This law considers the loan only, home price has no bearing. For example, someone buying a $1 million home who puts down $300,000 can still deduct interest, whereas someone buying a $1 million home putting down $50,000 won’t be able to write the mortgage interest off like they used to.
Furthermore, the dollar amount of the interest has no bearing. If one person has a new loan for $700,000 at 5% and the next person has a new loan for $700,000 at 3% (made up interest rates for the sake of example) they will both get to write off their interest in full, regardless of the fact that the interest charged will be substantially different amounts.
This change shouldn’t have much impact, if any, on most of you reading this. Very few homebuyers have mortgages greater than that amount. In fact, the National Low Income Housing Coalition estimates that only 1.9% of mortgage originations from 2013 to 2015 exceeded $750K in value.
This one is a little bit trickier, so if you think you might be impacted in any way, please contact your favorite CPA or tax preparer for more details. IF you qualify for a $750,000 loan or more, I am guessing you probably have one you like already.
A bit more on the new tax law as it pertains to Real Estate – As of January 1, the moving expense deduction is repealed through 2025, except for members of the armed forces on active duty who move pursuant to a military order and incident to a permanent change of station. Not only are moving expenses no longer deducible, reimbursement from a company for moving expenses will become taxable income. The act repealed through 2025 the exclusion from gross income and wages for qualified moving expense reimbursements, except in the case of a member of the armed forces on active duty who moves pursuant to a military order.
A lot of misinformation is going around about the tax law that is being voted on right now in Washington DC. One item in particular I have been watching closely is in regards to taxes on the capital gains made by homeowners when they sell their primary residence. Rumor was that the law was changing. Currently, people who live in their home for a minimum of 2 of the previous 5 years are exempt from capital gains taxes on that equity up to a predetermined limit. The rumor w...as that the law would change to require a person to live in their primary residence for 5 of the previous 8 years, meaning that people who were selling a home that qualified as their primary residence for between 2 and 6 years were going to be exposed to a tax that they were not exposed to before. THIS IS NOT THE CASE. This was especially relevant to people with open escrows that might not close until after January 1, 2018. So, to be clear: Sale of a principal residence: The bill would not change the current rules regarding exclusion of gain from the sale of a principal residence.