How Cryptocurrency is Impacting the Real Estate Industry

Real estate is the largest asset class in the world, with residential real estate alone valued at $162 trillion. The median price of a new home in the U.S. reached $323,000 in January 2018, according to 2017 U.S. Census data, and the value of housing stocks continue to rise. If you’re looking to invest, or are considering getting into house-flipping, the cost alone can be a huge barrier—but cryptocurrency may make it easier.

How Cryptocurrency Is Changing Investing
When Bitcoin was first introduced in 2009 it was the first of its kind, but now, 1,500 cryptocurrencies (and counting) exist on over 200 exchanges. Cryptocurrencies continue to grow in value and are branching out to more industries, including real estate.

Transactional currencies like Bitcoin are designed to be used as money, and can be exchanged for other currencies—either different cryptocurrencies or fiat money; however, a new type of crypto coin called security tokens offer users a way to invest and share profits with the anonymity and security of cryptocurrency, but backed by real-world assets like real estate.

With the decentralized security of blockchain technology, transactions, titles and all other records are public and safe from error or misrepresentation. Fraud is much less likely, and ownership shares become more accessible to small investors from all backgrounds. Blockchain is even being tested as a way to prove ownership of real estate assets, in lieu of a traditional title or deed.

Diversify With Cryptocurrency
Cryptocurrencies can offer investors a chance to diversify their portfolio. Cryptocurrency funds that are backed by real estate assets experience less price volatility than other cryptocurrencies, thanks to the relative stability of the housing market. By supporting fractional ownership, investors are able to enter the real estate market without needing to make large investments.

In 2017, 207,088 single-family homes and condos were flipped in the U.S., for a total $46.3 billion. Two-thirds of Americans believe flipping houses is a great way to make money, and even more wish real estate investment was easier, according to a 2017 RealtyShares Real Estate Investing Survey. With crowdfunding through cryptocurrency, it’s easier than ever before.

How to Invest With Cryptocurrency
An ICO, or initial coin offering, is a means of crowdfunding. When investing in an ICO, investors use fiat money or other cryptocurrencies to purchase coin at a predetermined, static value. Once the ICO period has ended, the value of the coin may rise or fall.

When a real-world asset, like a house, is funded through cryptocurrency, its value is converted into security tokens that prove each holder’s fraction of ownership in the asset. Investors can purchase these tokens during the ICO period to crowdfund a house flip or other investment purchase. Whether you’re investing in a pool of assets or a single home purchase through cryptocurrency, the tokens may be traded at any time, once the ICO has ended.

Token-ization of real-world assets makes it fast and easy to split the shares among many investors and removes the hassle of making legal agreements and organizing many different transactions. If you choose to invest in token-ized real estate, you can still get the benefits of a professionally managed portfolio, along with the relative stability of the housing market. These asset-backed pools are safe for hands-off investors, because they combine the stability of real-world assets with the security of blockchain and cryptocurrency.

Source, Rismedia.com by Brian Wallace

Posted on May 16, 2018 at 8:17 am
Christopher DiLorenzo | Category: Uncategorized

Home Prices Relax Ahead of Spring

The brakes are on growing home prices, with appreciation at 6.7 percent—the lowest rate since November 2016, according to the January Zillow® Real Estate Market Report. Appreciation hit 7.6 percent in May 2017 but tempered through the year.

The deceleration could give homebuyers hope this spring, says Aaron Terrazas, senior economist at Zillow.

“Home values are still growing very quickly relative to historic norms,” Terrazas says. “After years of intense competition, some buyers may be more willing than previously to take more time with the process and to wait until the right home at the right price comes on the market, even if it’s not for several months. Removing a lot of this frenzy, especially as inventory remains incredibly tight, may prove to be good news for beleaguered buyers.”

The median, nationally, is $207,600, with 10 percent fewer inventory than in January of last year, the report shows.

“The pace of home value appreciation we experienced during much of last year was not sustainable, and a slow glide path down to a more normal appreciation rate has been expected for some time,” says Terrazas. “This slowdown is nothing to be overly concerned with—demand from homebuyers remains very high, and inventory remains tight. New-home construction is growing, providing some relief to buyers who can afford the generally high price point of new homes.”

Source: rismedia.com

Posted on February 27, 2018 at 8:03 am
Christopher DiLorenzo | Category: Uncategorized

10 U.S. Housing Markets That Will Rule 2018

Everyone loves predicting the future. What awesome surprises will the coming year hold for us in high-profile political scandals or wildly inappropriate workplace behavior? Who’s going to win the Oscars, the Super Bowl, or Miss America (go, Connecticut!). When on earth is the final season of “Game of Thrones” going to start, anyway? But truth be told, we’ve got all of this soothsaying beat by a mile: We’re setting our sights on prognosticating which housing markets will soar to new heights in 2018.

Because you care! Americans breathlessly track the up-and-down trajectory of the nation’s housing markets these days, the way previous generations obsessed over stock prices, NBA rankings, or Furby sales. Give the credit (or blame) to skittishness over the last decade’s housing crash, or the roller-coaster ride of home pricing, or maybe even the ascension of HGTV flipping shows. But real estate matters: The fortunes of cities rise and fall, sometimes quickly, other times in agonizing slo-mo. And the last thing you want to do with the biggest investment of your life is buy into a housing market that is heading in the wrong direction.

What are the hot markets where you can still afford to buy? Which are ones where home prices are almost certain to appreciate? The ones with burgeoning economies and lots of job growth? The ones where you actually want to live?

To determine our predictions for the best real estate markets of 2018, realtor.com’s® economic data team took a look at the number of sales of existing homes and their prices, along with the amount of new home construction in the 100 largest markets. We also analyzed the local economies of each area, along with population trends, unemployment rates, median household incomes, and other factors.

“People are going to continue to seek out pockets of affordability that remain in the market,” says Danielle Hale, chief economist of realtor.com. “A lot of these places are more affordable than surrounding areas, yet still have strong economies. Even though prices are expected to grow, most of these markets will still remain relatively affordable in 2018.”

So which will be the hottest markets in 2018? Be prepared for some surprises.

1. Las Vegas, NV

Median home price: $285,045
Predicted sales growth: 4.9%
Predicted price growth: 6.9%

Residential Las Vegas neighborhood in view of the Strip
Residential Las Vegas neighborhood in view of the Strip

The future of Las Vegas is eye-searingly bright—and it’s not just because of all those lights on the Strip.

The economy of the once-downtrodden Sin City is expected to grow about 8.7% in 2018—compared with 6.4% for the rest of the top 100 markets, according to realtor.com. That means a lot of people moving in, moving up, and looking for places to live.

Things weren’t always so rosy. Vegas was devastated by the financial crisis of the late 2000s and the wave of foreclosures that followed.

“We like to say we were ground zero for the Great Recession: We fell further than many other metros,” says Stephen Miller, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas. “So we had more ground to cover to catch up.”

One of the things drawing folks to settle down and stay in Vegas, long after their 72-hour bender has become a distant memory, is the city’s still striking affordability.

“Our [home] prices are lower than nearly every major Western metro area,” Miller says. “People in California are retiring and selling their houses and moving [in]. … They want a lower cost of living.”

With the influx of new residents and the return of buyers who lost their homes to foreclosures, well-priced homes in good neighborhoods are practically flying off the market, says local real estate broker Bryan Kyle of First Serve Realty. Low interest rates are also luring more buyers.

“What keeps this market as hot as it is right now is the lack of inventory,” Kyle says. Those shortages may be exacerbated by still-underwater homeowners reluctant to plant a For Sale sign in their yard until their equity recovers. But there are fewer of those properties today as prices continue to nudge up.

2. Dallas, TX

Median home price: $339,300
Predicted sales growth: 6%
Predicted price growth: 5.6%

Apartment complex in Dallas
Apartment complex in Dallas

This oil town is pumping, thanks to a steady flow of companies relocating, expanding, or opening up in the region. Those firms are attracted to the low taxes and cost of living. And that’s brought busloads and planes filled with new residents searching for For Sale signs.

For example, Toyota recently moved its North American headquarters to nearby Plano—and asked about 4,000 of its California, Kentucky, and New York employees to come along for the ride. Those transplants and their families all need roofs over their heads.

“Most of the houses that are being sold right now are new-built, and the builders can’t keep up,” says Yolanda Dittmar, a local real estate broker at Dittmar Realty. With the rising prices, existing homeowners are reluctant to part with their abodes and trade up.

“It’s going to cost them a lot more money to sell their house and buy another in the same area they’re living in,” she says.

Existing homes in good shape in good neighborhoods will set buyers back about $500,000 in the city limits, she says. New homes run between $700,000 and $2 million. In the suburbs, they’re a bit less, about $350,000 for an existing abode and over $400,000 for a new one.

However, prices are beginning to dip about 10% to 15% for a mid-priced residence, she says. Simple reason: Some of these properties may have been overpriced.

3. Deltona, FL

Median home price: $275,050
Predicted sales growth: 5.5%
Predicted price growth: 6%

Deltona’s location, sandwiched about 30 minutes between Orlando and Daytona Beach, is tough to beat.

In fact, many folks work in Orlando and commute from Deltona, where prices are still significantly cheaper. The median home price in Deltona’s city limits (as opposed to the greater metro area referenced by the figure above) is $159,000, according to realtor.com data, vs. $269,000 in Orlando.

The city is still clawing its way back from the recession. The metro’s economy is expected to grow about 8.3%, while employment is to increase by about 2.9%, according to realtor.com.

Investors have helped boost this market. When prices were their lowest, they scooped up whatever single-family houses they could get deals on, fixed and flipped them, or rented them out. More of those redone rentals are now going on the market, says Stephanie Agosto, a local real estate agent at NextHome Professionals. Those homes, with their many renovations, are selling at a premium.

But it’s only in the past year or so that Agosto has seen prices begin to rise.

“You can still get more for your money in Deltona,” she says.

4. Stockton, CA

Median home price: $385,050
Predicted sales growth: 4.6%
Predicted price growth: 6.4%

Waterfront in Stockton, CA
Waterfront in Stockton, CA

Crime-plagued Stockton, far from the California coast, doesn’t exactly have the best rep. It’s not known for being an economic powerhouse. But it’s becoming the place to be.

Buyers can get score a home in Stockton proper for a median $285,000—less than a quarter of what they’d pay in San Francisco, about an hour-and-a-half away. (The median price in SF is a head-spinning $1.3 nmillion.) Priced-out Bay Area denizens are moving in for deals like this four-bedroom, two-bathroom fixer-upper for $250,000.

“Stockton is going through a revitalization,” says Jerry Patterson, a real estate at Cornerstone Real Estate. Many of the downtown’s historic buildings are being restored, and new neighborhoods are in development. “Stockton has a lot to offer, and it’s very reasonably priced.”

The area is also helped by its proximity to vineyards, near Lodi. Homes typically receive multiple offers, and the best of the bunch sell within just a few days.

“It’s pretty competitive,” Patterson says.

5. Lakeland, FL

Median home price: $224,950
Predicted sales growth: 3%
Predicted price growth: 7%

View of downtown Lakeland, FL
View of downtown Lakeland, FL

Like Deltona, Lakeland’s allure lies in its location. It’s about 40 minutes east of Tampa and an hour southwest of Orlando, making it a desirable place to be for cost-conscious commuters.

The city’s now growing, with a downtown revival and new subdivisions going up outside of the city. What a difference a few years can make: Lakeland, like many other metros on this list, was clobbered by the financial crisis.

“During the recession, there were a lot of [vacant storefronts,]” says Michelle Schaal, a local real estate agent at Keller Williams Realty. But now, she adds, the city is “starting to revitalize a lot of the old buildings on the major thoroughfares. It’s opening it up for more small businesses to move in.”

“We have a lot of fine dining restaurants, things that didn’t exist before,” she says.

These new amenities, along with lower prices, have been a draw for home buyers. In Lakeland’s city limits, the median home price is $180,000. There are also down payment-assistance programs in the area for qualified buyers that have helped to give the market a boost.

“Mostly, it’s people transferring because of job opportunities and downsizing,” she says of her clients. “Millennials are [also] starting to purchase in a big way.”

6. Salt Lake City, UT

Median home price: $360,828
Predicted sales growth: 4.6%
Predicted price growth: 4.5%

Residential neighborhood in Salt Lake City
Residential neighborhood in Salt Lake City

Salt Lake City is so hot that potential home buyers will likely need to duke it out with competitors.

Buyers in the city, which entered the global spotlight in 2002 when it hosted the Olympic Games, are now offering 20% to 25% above the asking price, says Kenny Parcell, real estate broker at Equity Real Estate Utah.

“You’re seeing people who are tired of paying higher taxes, or they’re tired of dealing with traffic and congestion [elsewhere]. They can sell their house in Silicon Valley and get four times the house in Salt Lake or the surrounding suburbs,” Parcell says. “We have a lot of corporations coming in, which means good-paying jobs, a good tax base, and good schools.”

Many of his clients are college students who stick around after graduation or who move back to the area after working elsewhere for a few years.

7. Charlotte, NC

Median home price: $325.045
Predicted sales growth: 6%
Predicted price growth: 3%

Similar to Dallas, much of the boom in Charlotte’s housing market is thanks to all of the out-of-staters moving in. Many of them are relocating for work, as Charlotte is a big financial hub. Others are coming there to retire, attracted by the low cost of living.

“A lot of people are wanting to move here,” says Scott Hartis, a local real estate broker with Keller Williams Realty. “We have a great climate, strong business tax incentives.”

Employment is expected to grow about 2.5% in 2018, while the population will shoot up 2.2%, predicts realtor.com’s economic team. Continued growth has made buying a home challenging.

“Sometimes properties are going under contract within a matter of hours, with multiple offers,” Harris says.

8. Colorado Springs, CO

Median home price: $375,000
Predicted sales growth: 3.1%
Predicted price growth: 5.7%

Residential area with view of Garden of the Gods in Colorado Springs
Residential area with view of Garden of the Gods in Colorado Springs

Home prices aren’t the only thing in Colorado Springs getting higher and higher. The entire state’s economy has been getting a buzz since Colorado legalized recreational marijuana in 2012. And the prices show no signs of coming down.

“I’ve met a lot of people who moved here for the marijuana,” says local real estate agent Monique Allison-Vollmer of Williams Partners. “That’s put our rental market in demand too.”

The city’s proximity to Denver, about 70 miles away, has also been a boon to its economy. Folks can work in the state capital and live in Colorado Springs for a fraction of the cost. The median price in the Denver area is $511,200—about 36% more. Builders have been capitalizing on that.

“There’s a lot of new construction,” says Allison-Vollmer. Over the summer, she would receive four to six offers per property, with offers promising $10,000 to $25,000 over the asking price. But it’s slowed down considerably since then, with prices falling just a little.

“People only make so much money,” she says.

9. Nashville, TN

Median home price: $358,501
Predicted sales growth: 1%
Predicted price growth: 7.7%

Things are looking up in Nashville.
Things are looking up in Nashville.

The headlines coming out of Nashville these days have little to do with which country music star dumped whom. The area has become the “It” city for the far-less famous as of late. And that’s pushing home prices to new heights.

List prices skyrocketed 89% in the last five years. Prices jumped 10.8% just this year. And the population is also rising, as more folks are moving in.

“It’s crazy,” says Lisa Peebles-Chagnon, an affiliate broker at Benchmark Realty in Nashville. Single-family homes in the best suburbs of Nashville can go for multiple offers above asking—”overnight,” she says. But homes with ambitiously high price tags are sitting on the market longer.

“We have a lot of cranes dotting the landscape. We’re joking that it’s the state bird of Tennessee,” Peebles-Chagnon says of all of the city’s new construction.

10. Tulsa, OK

Median home price: $199,586
Predicted sales growth: 7.5%
Predicted price growth: 1%

2018 looks bright for Tulsa, OK.
2018 looks bright for Tulsa, OK

Those who dream of owning a home but have limited means shouldn’t overlook Tulsa. The Oklahoma city is the most affordable on our list, with a median price well below the nearly $275,000 national average.

Buyers can score gems like this three-bedroom, 1.5 bathroom, single-family home for a whopping … $99,900. Or they can snap up this three-bedroom, two-bathroom condo for just $72,000.

The local economy is expected to increase by an impressive 7%, but employment will only rise by a measly 0.2%, according to realtor.com predictions. Rising sale prices, growing about 10.3% in the first eight months of this year, are what helped to put this metro on the list.

“It’s just a good place to live, with low crime, low cost of living, steady job availability,” says Jake Salyer, a local real estate agent with Keller Williams Preferred.

Most of his clients are older millennials and Generation Xers with families buying up homes, particularly in the suburbs. Folks can score a single-family house in a nice subdivision for far less than $250,000—without having to contend with bidding wars and multiple offers well over asking.

“It’s simply not that kind of market,” Salyer says.

Source:  | Realtor.com

Posted on January 21, 2018 at 12:30 pm
Christopher DiLorenzo | Category: Uncategorized

How will new tax changes impact current and prospective home-owners?

The National Association of REALTORS® (NAR) worked throughout the tax reform process to preserve the existing tax benefits of homeownership and real estate investment, as well to ensure as many real estate professionals as possible would benefit from proposed tax cuts. Many of the changes reflected in the final bill were the result of the engagement of NAR and its members, not only in the last three months, but over several years.

While NAR remains concerned that the overall structure of the final bill diminishes the tax benefits of home-ownership and will cause adverse impacts in some markets, the advocacy of NAR members, as well as consumers, helped NAR to gain some important improvements throughout the legislative process. The final legislation will benefit many homeowners, home-buyers, real estate investors, and NAR members as a result.

The final bill includes some big successes. NAR efforts helped save the exclusion for capital gains on the sale of a home and preserved the like-kind exchange for real property. Many agents and brokers who earn income as independent contractors or from pass-through businesses will see a significant deduction on that business income.

As a result of the changes made throughout the legislative process, NAR is now projecting slower growth in home prices of 1-3% in 2018 as low inventories continue to spur price gains. However, some local markets, particularly in high cost, higher tax areas, will likely see price declines as a result of the legislation’s new restrictions on mortgage interest and state and local taxes.

The following is a summary of provisions of interest to NAR and its members. NAR will be providing ongoing updates and guidance to members in the coming weeks, as well as working with Congress and the Administration to address additional concerns through future legislation and rulemaking. Lawmakers have already signaled a desire to fine tune elements of The Tax Cuts and Jobs Act as well as address additional tax provisions not included in this legislation in 2018, and REALTORS® will need to continue to be engaged in the process.

The examples provided are for illustrative purposes and based on a preliminary reading of the final legislation as of December 20, 2017. Individuals should consult a tax professional about their own personal situation.

All individual provisions are generally effective after December 31, 2017 for the 2018 tax filing year and expire on December 31, 2025 unless otherwise noted. The provisions do not affect tax filings for 2017 unless noted.

Major Provisions Affecting Current and Prospective Homeowners

  • Tax Rate Reductions

    • The new law provides generally lower tax rates for all individual tax filers. While this does not mean that every American will pay lower taxes under these changes, many will. The total size of the tax cut from the rate reductions equals more than $1.2 trillion over ten years.
    • The tax rate schedule retains seven brackets with slightly lower marginal rates of 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
    • The final bill retains the current-law maximum rates on net capital gains (generally, 15% maximum rate but 20% for those in the highest tax bracket; 25% rate on “recapture” of depreciation from real property).

Tax Brackets for Ordinary Income Under Current Law and the Tax Cuts and Jobs Act (2018 Tax Year) Single Filer

Current Law Tax Cuts and Jobs Act
10% $0-$9,525 10% $0 – $9,525
15% $9,525 – $38,700 12% $9,525 – $38,700
25% $38,700 – $93,700 22% $38,700 – $82,500
28% $93,700 – $195,450 24% $82,500 – $157,500
33% $195,450 – $424,950 32% $157,500 – $200,000
35% $424,950 – $426,700 35% $200,000 – $500,000
39.6% $426,700+ 37% $500,000

 

Tax Brackets for Ordinary Income Under Current Law and the Tax Cuts and Jobs Act (2018 Tax Year) Married Filing Jointly

Current Law Tax Cuts and Jobs Act
10% $0 – $19,050 10% $0 – $19,050
15% $19,050 – $77,400 12% $19,050 – $77,400
25% $77,400 – $156,150 22% $77,400 – $165,000
28% $156,150 – $237,950 24% $165,000 – $315,000
33% $237,950 – $424,950 32% $315,000 – $400,000
35% $424,950 – $480,050 35% $400,000 – $600,000
39.6% $480,050+ 37% $600,000+

 Exclusion of Gain on Sale of a Principal Residence

    • The final bill retains current law. A significant victory in the final bill that NAR achieved.
    • The Senate-passed bill would have changed the amount of time a homeowner must live in their home to qualify for the capital gains exclusion from 2 out of the past 5 years to 5 out of the past 8 years. The House bill would have made this same change as well as phased out the exclusion for taxpayers with incomes above $250,000 single/$500,000 married. 
  • Mortgage Interest Deduction

    • The final bill reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/17. Current loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap. Neither limit is indexed for inflation.
    • Homeowners may refinance mortgage debts existing on 12/14/17 up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount of the mortgage being refinanced.
    • The final bill repeals the deduction for interest paid on home equity debt through 12/31/25. Interest is still deductible on home equity loans (or second mortgages) if the proceeds are used to substantially improve the residence.
    • Interest remains deductible on second homes, but subject to the $1 million / $750,000 limits.
    • The House-passed bill would have capped the mortgage interest limit at $500,000 and eliminated the deduction for second homes.
  • Deduction for State and Local Taxes

    • The final bill allows an itemized deduction of up to $10,000 for the total of state and local property taxes and income or sales taxes. This $10,000 limit applies for both single and married filers and is not indexed for inflation.
    • The final bill also specifically precludes the deduction of 2018 state and local income taxes prepaid in 2017.
    • When House and Senate bills were first introduced, the deduction for state and local taxes would have been completely eliminated. The House and Senate passed bills would have allowed property taxes to be deducted up to $10,000. The final bill, while less beneficial than current law, represents a significant improvement over the original proposals.
  • Standard Deduction

    • The final bill provides a standard deduction of $12,000 for single individuals and $24,000 for joint returns. The new standard deduction is indexed for inflation.
    • By doubling the standard deduction, Congress has greatly reduced the value of the mortgage interest and property tax deductions as tax incentives for homeownership. Congressional estimates indicate that only 5-8% of filers will now be eligible to claim these deductions by itemizing, meaning there will be no tax differential between renting and owning for more than 90% of taxpayers.
  • Repeal of Personal Exemptions

    • Under the prior law, tax filers could deduct $4,150 in 2018 for the filer and his or her spouse, if any, and for each dependent. These exemptions have been repealed in the new law.
    • This change alone greatly mitigates (and in some cases entirely eliminates) the positive aspects of the higher standard deduction.
  • Mortgage Credit Certificates (MCCs)

    • The final bill retains current law.
    • The House-passed legislation would have repealed MCCs.
  • Deduction for Medical Expenses

    • The final bill retains the deduction for medical expenses (including decreasing the 10% floor to 7.5% floor for 2018).
    • The House bill would have eliminated the deduction for medical expenses.
  • Child Credit

    • The final bill increases the child tax credit to $2,000 from $1,000 and keeps the age limit at 16 and younger. The income phase-out to claim the child credit was increased significantly from ($55,000 single/$110,000 married) under current law to $500,000 for all filers in the final bill.
  • Student Loan Interest Deduction

    • The final bill retains current law, allowing deductibility of student loan debt up to $2,500, subject to income phase-outs.
    • The House bill would have eliminated the deduction for interest on student loans.
  • Deduction for Casualty Losses

    • The final bill provides a deduction only if a loss is attributable to a presidentially-declared disaster.
    • The House bill would have eliminated the deduction for casualty losses with limited exceptions.
  • Moving Expenses

    • The final bill repeals moving expense deduction and exclusion, except for members of the Armed Forces.
    • The House-introduced bill would have eliminated the moving expense deduction for all filers, including military.

Major Provisions Affecting Commercial Real Estate

  • Like-Kind Exchanges

    • The final bill retains the current Section 1031 Like Kind Exchange rules for real property. It repeals the use of Section 1031 for personal property, such as art work, auto fleets, heavy equipment, etc.
    • The exclusion of real estate from the repeal of 1031 like-kind exchanges is a major victory for real estate stakeholders, who had fought hard to preserve the provision for several years, and against long odds.
  • Carried Interest

    • The final bill includes the House and Senate language requiring a 3-year holding period to qualify for current-law (capital gains) treatment.
    • Again, real estate stakeholders prevailed against long odds to preserve the incentive of capital gains treatment for carried interests in the final legislation.
  • Cost Recovery (Depreciation)

    • The final bill retains the current recovery periods for nonresidential real property (39 years), residential rental property (27.5 years) and qualified improvements (15 years). The bill also replaces separate definitions for qualified Restaurant, Leasehold, and Retail improvements with one definition of “Qualified Improvement Property.”
  • Qualified Private Activity Bonds

    • The final bill retains the deductibility of qualified private activity bonds used in constructing affordable housing, local transportation and infrastructure projects and for state and local mortgage bond programs.
    • The House bill would have eliminated the use of private activity bonds.
  • Low Income Housing Tax Credit

    • The final bill retains current law. However, a lower corporate rate will negatively impact the value of the credits in the future, and will result in less low-income housing being developed.
  • Rehabilitation Credit (Historic Tax Credit)

    • The final bill repeals the current-law 10% credit for pre-1936 buildings, but retains the current 20% credit for certified historic structures (but modified so the credit is allowable over a 5-year period based on a ratable share (20%) each year).
    • The House bill would have entirely eliminated the Historic Rehabilitation Credit.

Provisions Not Included in the Final Bill

  • Rental Income Subject to Self-Employment Tax

    • The House-introduced bill would have subjected rental income to self-employment taxes. This provision was dropped from the House (and final) bill.

Source: National Association of Realtors

Posted on December 20, 2017 at 12:59 pm
Christopher DiLorenzo | Category: Uncategorized

Housing Starts Rise in Surprise November

Home-building activity rose in a surprise November, with housing starts up 3.3 percent to a rate of 1,297,000, according to the latest data from the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). Single-family housing starts increased 5.3 percent to 930,000. Starts for units in buildings with five units or more came in at 359,000.

Permits, however, decreased, 1.4 percent from October to 1,298,000, according to the data. Single-family permits, still, were up 1.4 percent to 862,000. Permits for units in buildings with five units or more came in at 395,000.

Completions totaled 1,116,000 in November, falling 6.1 percent. Single-family completions decreased 4.6 percent from October to 752,000. Completions for units in buildings with five units or more came in at 353,000.

 “A welcoming trend is developing in the housing sector as builders are able to bring more supply to the market on a consistent basis,” said Lawrence Yun, chief economist of the National Association of REALTORS® (NAR), in a statement. “The latest monthly figure of near 1.3 million annualized housing starts is solid, and the growth is mostly coming both in the West and for single-family homes.”

“Single-family permits were up and housing starts reached a 10-year high in November, which points to continued economic strength since beginning of recovery,” said Joseph Kirchner, senior economist for realtor.com®, in a statement. “Conversely, housing completions were down last month, but this is a temporary phenomenon as the increase in permits and starts will lead to more home completions. While we are seeing continued movement in new construction, we still have a long way to go begin to meet the needs of homebuyers, especially in starter homes, where inventory levels have become significantly depleted.”

“There is still more room for improvement, as the latest figure is still not yet at the long-term 50-year average of producing 1.5 million units per year,” Yun said. “If this rising trend continues, the worst of the supply shortage could soon end, which would help slow price appreciation in 2018. That would be a huge, welcoming relief for renters seeking to become homeowners.”

Source: rismedia.com

Posted on December 20, 2017 at 10:10 am
Christopher DiLorenzo | Category: Uncategorized

Sales Up Despite Years of Rising Prices, Falling Inventory

November became the sixth month of 2017 to post an increase in year-over-year home sales, bucking prolonged trends of home price increases and inventory declines, according to the December RE/MAX National Housing Report.

“The end of the year is typically a slower selling season with low inventory, but our numbers are telling a different story,” says Adam Contos, co-CEO of RE/MAX. “We don’t see any sign of homebuyers slowing down their house-hunting; in fact, many are taking advantage of lower competition for available homes in the ‘slow season.’ Until we begin to see new homes being built, we won’t see much growth in available homes on the market.”

REMAX_Dec_2017

Closed Transactions 
Of the 54 metro areas surveyed in November 2017, the overall average number of home sales decreased 7.3 percent compared to October 2017 but increased 1.1 percent compared to November 2016. Thirty-six of the 54 metro areas experienced an increase in sales year-over-year, including Trenton, N.J., +21.3 percent, Augusta, Maine, +14.5 percent, Honolulu, Hawaii, +14.1 percent, and Manchester, N.H., +14.0 percent.

Median Sales Price
In November 2017, the median of all 54 metro median sales prices was $227,500, up 1.7 percent from October 2017 and up 3.7 percent from November 2016. Only five metro areas saw a year-over-year decrease in median sales price, including Anchorage, Alaska, -5.3 percent, Trenton, N.J., -4.2 percent, and Honolulu, Hawaii, -3.4 percent. Nine metro areas increased year-over-year by double-digit percentages, with the largest increases seen in San Francisco, Calif., +13.8 percent, Cleveland, Ohio, +12.9 percent, Orlando, Fla., +11.6 percent, and Seattle, Wash., +11.4 percent.

Days on Market
The average days on market for homes sold in November 2017 was 54, up three days from the average in October 2017, and down five days from the November 2016 average. The four metro areas with the lowest days on market were San Francisco, Calif., at 25, Omaha, Neb., at 27, Seattle, Wash., at 29, and Nashville, Tenn., at 30. The highest days on market averages were in Augusta, Maine, at 116, and Miami, Fla., at 86. Days on market is the number of days between when a home is first listed in an MLS and a sales contract is signed.

Months Supply of Inventory
The number of homes for sale in November 2017 was down 9.2 percent from October 2017, and down 14.5 percent from November 2016. Based on the rate of home sales in November, the months supply of inventory increased to 3.6 from 3.3 in October 2017, but decreased compared to the 4.0 of November 2016. A 6.0 months supply indicates a market balanced equally between buyers and sellers. In November 2017, 49 of the 54 metro areas surveyed reported a months supply at or less than six, which is typically considered a seller’s market. The metro areas that saw a months supply above 6.0, typically considered a buyer’s market, were Augusta, Maine, at 8.4, Miami, Fla., at 7.6, and Fargo, N.D., at 6.5. The markets with the lowest months supply of inventory continued to be in the West, with San Francisco, Calif., at 1.0, Seattle, Wash., at 1.3, and Denver, Colo., at 1.4.

Source: Rismedia.com

 

Posted on December 19, 2017 at 10:22 am
Christopher DiLorenzo | Category: Uncategorized