Wednesday, January 17, 2018

2018 Tax Reform and You

I wanted to take a few minutes and address the concern and misinformation as it relates to Real Estate and the new Tax Bill. There has been a lot of speculation that the provisions of the bill will reduce the desirability of home ownership.
The reality is that Real Estate faired quite well in the FINAL BILL with some positive changes literally occurring on the last night. The key points are as follows:
  • Interest is still deductible on loans up to $750,000 on BOTH first AND second homes (not up to $500,000 and on primary residences only, as first proposed).
  • We retained the Exclusion of Gain on the sale of a Principal Residence for owners who have lived in their homes for 2 out of the last 5 years (not 5 out of the 8, as initially proposed).
  • The 1031 Exchange structure was retained as-is with no loss of benefits for Investor Clients.
  • The Bill also retained Mortgage Credit Certificates in full.
There are a lot of provisions in the Tax Bill that will help lower-income and middle-class taxpayers as well as additional provisions that will benefit corporations. Some upper-income taxpayers will pay more, particularly in California, but none of these provisions will directly impact Real Estate.
In conclusion, people buy homes because they need a place to live or vacation. Tax benefits are not the primary reason for most buyers. With the provisions we retained in the Bill, I expect to see little-to-no negative impact for Real Estate investors & home buyers. In fact, if the Tax Bill does stimulate employment and higher-incomes, it could have a huge positive benefit for Real Estate! We are projecting another strong year in 2018 and look forward to the opportunity to serve you.
– Daniel Jacuzzi, President of the Select Group

Friday, January 12, 2018

Understanding credit a little better

Understanding your credit a little better!
Just some basic information:
1. Credit scores are built as follows:
35% is based on your payment history (How well you have done in paying your bills on time, etc.)
2. 30% Amount of Debt
3. 15% Length of credit
4. 10% New inquiries (Usually done within several days of each other.)
5. 10% Mix of credit (Between Revolving/Installment) More weight is put on your revolving because based on your credit line it can go up very quickly. Keeping your revolving balance at or below 30% of your credit line strongly effects your credit score in a positive way..

Besides your credit score here are some of the things that can effect your credit negatively when buying a home:
1. Paying off accounts and/or closing accounts. This may cause you to have a 0 credit score and can take up to 6-12 months to repair it.
2. Paying off old credit that is not currently being shown as a collection/charge off. Once you agree and pay it off it could end up showing up again on your credit report and lower your score.
3. Being late on payments (Many people think that if they don't receive a bill they don't need to make that payment until they do receive one. Not true, most companies will consider you late if not payed by the the delinquent dated stated in their terms of lending. (They may report that as a late payment or slow payment based on the length of it being late.)

Things that hurt your credit, ability to purchase a new home, etc:
1. Judgments and Liens (Usually stay on your credit report until they are paid off. You usually can't sell a home or get a mortgage for a new home until those are paid off.)
2. On government liens (taxes, student loans, etc.) you usually can't get a government loan to purchase/refinance a home until they are paid off
3. Auto collections can hurt you you harder than some.
4. If you are cleaning up your credit anytime you make agreement to pay something off or settle a debit get that agreement in writing from the company first and then ask for a letter in writing saying it has been paid off. This is very important so you have something to back you up if they delay in reporting it.

This is just general information and may differ from state to state, lender to lender, etc. Anytime your credit is in question you should call a lender or credit repair person to get the correct answers based on your individual situation. I am not a lender or a credit repair person, so please verify this information before assuming it applies to you. If you are purchasing a home always check with your lender before making any changes to your credit.

Monday, January 8, 2018

3 Best Reasons to Hurry and Buy a Home in 2018

I am always being asked what I think the housing market is going to do in the next year or two.  I wish I had the answers, but the housing market is much like the stock market, some of it will be determined by the political environment and how it is effecting peoples feeling of security, some will be determined by interest rates, mostly it will be determined by you the buyers and sellers.  So as much as I would love to give you the answers I just don't have a crystal into the market.  However, I did find this article that I thought had some good this to think about. 

Hope it gives ou some ideas to consider:   Sandy Borchelt

Yes, home prices have been going up and in some areas they are sky-high and choices limited. But market conditions are changing, and this could be your year to buy—as long as you do it soon.

Figuring out when to plunge into the real estate market can be quite intimidating—especially when prices are high, choices are limited, and history urges restraint.
"We’ve seen two or three years of what could be considered unsustainable levels of price appreciation, as well as an inventory shortage that resulted in a record-low number of homes for sale across the country," says Javier Vivas, director of economic research for®. "When you factor those together, you have a market that has to either explode or see some relief."
New predictions for 2018 forecast more moderate gains in home prices and rising inventory levels, while low unemployment and record levels of consumer confidence mean more buyers are feeling good about their finances.
A lot depends on where you live (and how much you plan to finance), but these factors combined could mean 2018 will be your year to take the buying plunge.

1. Rates are going up

After years of record-low interest rates (hello, 3%!), the Fed is finally making some noticeable increases: The rate for a 30-year fixed mortgage broke the 4% mark last year. And with economic growth continuing to carry momentum, Vivas predicts we'll see at least two to four more rate increases throughout 2018. Rates are anticipated to hit 5% by the end of the year.
"The big story there is that those increases will further constrict affordability," Vivas says. "The more buyers wait, the more expensive it will get to buy—not just because of home prices, but because of inflationary pressure."
In other words, if you want in on the American dream, now might be the time.

2. Prices are climbing, but not crazily fast

Home prices have soared over the past few years, pricing otherwise well-positioned buyers out of high-cost areas and leading some experts to cry "bubble". But in 2018, price increases are expected to moderate.
Vivas forecasts a home price increase of 3.2% year over year, after finishing 2017 with a 5.5% year-over-year increase. Existing-home sale prices are predicted to increase 2.5% year over year.
Of course, it all depends on where you live. While red-hot markets such as San Francisco are predicted to finally lose some steam, sales numbers and home prices are poised to climb in Southern states such as Texas and Florida, where economic momentum continues chugging along and new construction is happening in the right price points.
So what does that mean? Basically, home prices will still increase, but not at the same pace as they have over the past few years.

3. Inventory levels will begin to increase

An inventory shortage has plagued the U.S. housing market since 2015, forcing some buyers to settle (a tiny house with linoleum floors for $1 million, anyone?) and keeping others out of the buying game entirely. But by fall 2018, the tides will begin to turn, with markets such as Boston; Detroit; and Nashville, TN, recovering first.
The majority of inventory growth will happen in the middle- to upper-tier price point, in the ranges of $350,000 and $750,000 and above $750,000, Vivas predicts.
New home construction is also expected to expand. But that will happen slowly, thanks to a constricted labor market, limitations on the amount of lots and land that's available, tight bank financing for building loans, and a run-up in building material prices, says National Association of Home Builders chief economist Robert Dietz.
"It's been a slow climb back from the recession, and now we're confronting all of these limiting factors and supply-side constraints," Dietz says.
It's particularly tough, he says, for builders to break ground at the entry level for first-time buyers, particularity in high-cost coastal markets such as California. That means it will take longer for those inventory levels to recover.
But there's a bright spot: Builder confidence is at its highest level since 1999, according to the NAHB. And that means hope is on the horizon.
"As we head into 2019 and beyond, we expect to see the inventory increases take hold and provide relief for first-timers and drive sales growth," Vivas says.

The wildcard: Taxes and politics

When the Republican tax plan was introduced, the proposed elimination of the mortgage interest deduction was all anyone could talk about: While the new limitations on the deduction will affect only 2.5% of all existing mortgages in the U.S., it will have a disproportionate effect on Western markets, where 20% to 30% of mortgages are above the new threshold, according to Vivas.
Across the board, experts agree that the new tax plan decreases incentives for homeownership and reduces the tax benefits of owning a home—particularly in highly taxed, expensive markets such as California, Illinois, New York, and New Jersey. But on the flip side, that means that if fewer folks are motivated to buy, then there’s less competition for those who want in the game. Plus, some taxpayers—including renters—will see a tax cut. That increase in buyers' disposable income could spur demand from folks who are looking to build equity as a homeowner, rather than flushing away their savings in rent.
"Buying remains the more attractive option in the long term—that remains the American dream, and it’s true in many markets where renting has become really the shortsighted option," Vivas says. "As people get more savings in their pocket, buying becomes the better option."
 | Jan 4, 2018

Friday, January 5, 2018

Dine Downtown Restaurant Week 2018 Participating Restaurants

Experience the best of Downtown Sacramento’s flourishing culinary scene during the 13th Annual Dine Downtown Restaurant Week. From January 12–21, 2018, enjoy a gourmet three-course prix fixe meal for $35 from some of the finest eateries in the city. One dollar from every Dine Downtown meal is donated to social services and food literacy programs, and $4.11 provides a week’s worth of food literacy education for one child. So a party of four participating in Dine Downtown can make a significant impact in a child’s life!
Plus, the program provides a substantial boost for local restaurants during an otherwise slow period for the industry. Since its inception in 2005, Dine Downtown has generated an estimated $5 million in restaurant sales with nearly $400,000 generated last year.
This year, Dine Downtown is featuring 30 of Sacramento’s top restaurants, including four eateries new to downtown, including Sauced BBQ & Spirits, Punch Bowl Social, Bennigan’s and La Cosecha. As the dining scene continues to grow and thrive in Sacramento, the economic and philanthropic benefits of Dine Downtown are expected to continue an upward trajectory.
To see participating restaurants clike here: 

Tuesday, September 19, 2017

Fall Home Maintence

The days are getting noticeably shorter, and maybe there's a nip in the air - sure signs that fall is on its way. Now is the perfect time to get your home in shape before winter rolls in, while the weather is still pleasant enough for spending time outdoors.

Seal it up: Caulk and seal around exterior door and window frames. Look for gaps where pipes or wiring enter the home and caulk those as well. Not only does heat escape from these openings, but water can enter and may eventually cause mold problems and even structural damage.

Look up: Check the roof for missing or damaged shingles. Winter weather can cause serious damage to a vulnerable roof, leading to a greater chance of further damage inside the home. Although you should always have a qualified professional inspect and repair the roof, you can do a preliminary survey from the ground using binoculars.

Clear it out: Clear gutters and eaves troughs of leaves, sticks, and other debris. Consider installing leaf guards if your gutters can accommodate them - they are real time savers and can prevent damage from clogged gutters. Check the seams between sections of gutter, as well as between the gutter and downspouts, and make any necessary adjustments or repairs.

Warm up time: Have the furnace inspected to ensure it's safe and in good working order. Most utility companies will provide basic inspections at no charge, but there can often be a long waiting list come fall and winter. Replace disposable furnace air filters or clean the permanent type according to the manufacturer's instructions. Using a clean filter will help the furnace run more efficiently, saving you money and energy.

Light that fire: If you enjoy the crackle of a wood-burning fireplace on a chilly fall evening, have the firebox and chimney professionally cleaned before lighting a fire this season. Creosote, a byproduct of wood burning, can build up to dangerous levels and cause a serious chimney fire if not removed.

Pillers to Post    Happy Fall!

Monday, September 11, 2017

California Housing Crisis

More and more people are being priced out of the California Housing Market Place when it comes to buying homes (downsizing, up-sizing, first time and even renters)  Prices are increasing in all these areas and with the shortage of available homes on the market for sale or for rent it only promises to get worse.

There has been fewer and fewer new home starts based on several things, the down turn in the market in 2006-07 (builders often left sites unfinished, cities putting restrictions on new starts.  ( a lot of restrictions being put into place with land use, when, where, and how many homes, condo's, etc. can be built.  Housing of all types are being effected.

Over 230,000 homes needed to be built per year over a several year period and that was a drastic difference over what was built.  (About 120,000 per year) According to the current demand we need to build about 200,000 per year and that is a far cry from the figure currently being built of about 100,000 per year.

This housing shortage is hurting people at every economic level, but made it very difficult for lower income and first time buyers. There have been more cuts in affordable housing funding which has also contributed to the crisis.  Cost of building has risen drastically as well.  All in all it means less homes on the market, even as many people are leaving the state many more are moving in.  California needs to take action to protect it's housing market and provide more affordable housing for people  needing mid range housing to lower income families.

We can all help by encouraging our cities to take actions that will attract more builders, with more reasonable costs for building.

Monday, August 21, 2017

What is happening on the market front?

Signs that the economy is doing well are good, consumer spending went up higher than expected in July over June. June was at 0.3 and July was 0.6. Spending makes up about two-thirds of the economy so this is good news.

Housing starts fell by about 4.8% from June due to lack of land available for building and material prices rising. The state needs about 180,000 new housing starts per year to keep up with the population growth and it is building less than 80,000 on average annually.

Feds are concerned about low inflation, no start date for the reduction in the Fed's $4.5 trillion balance sheet, and the housing starts falling which all added up to an increase in bond rates. The increase in bond prices helps the mortgage interest rates stay lower.

All of this adds up to it being a good time to sell as home prices have jumped considerately and interest rates are staying at all time lows. We are starting to see a few more homes coming on the market as people are beginning to sell.

All of the above information is from different reports I have been reading. I have not verified it personally.