food for thought when it comes to buying in 2016 from reuters.com
Growing concerns about weak global growth and inflation are unlikely to deter the U.S. Federal Reserve from tightening policy, according to a Reuters poll that suggested two interest rate hikes are likely this year.
The Fed's December decision to raise rates for the first time in nearly a decade has been under scrutiny recently, with some market players suggesting it was a mistake and that Chair Janet Yellen may have to backtrack.
But most economists disagree.
The poll of over 80 analysts predicted another hike would come in the second quarter and penciled in one more towards the end of the year, which would leave rates between 0.75 and 1.00 percent.
That would be one less rate hike than they forecast in a survey taken last month but still more than financial markets expect, further underscoring the growing divide between the two groups.
"Unless the economy rolls over, there is still a very high likelihood of at least one rate hike this year," said Sam Bullard, senior economist at Wells Fargo.
Analysts who answered an additional question assigned a 75 percent chance of at least one hike this year, in contrast with markets pricing in just a 1-in-3 chance.
Markets predict no move until mid-2017, by which time economists expect the Fed to have raised rates four times to 1.25-1.50 percent.
In her testimony before U.S. Congressional panels last week, Yellen also indicated the Fed is likely to stick to its plan of gradually raising rates this year, despite persistent worries over slowing growth in China and volatile financial markets.
At the December policy meeting the Fed's dot plot, a colloquial name for a chart in the central bank's quarterly "Summary of Economic Projections", suggested four rate rises in 2016. That, however, looked too aggressive for economists who assigned a less than 10 percent probability to that path.
"The Fed dots are very likely to come down again in March. The question is whether the Fed dots remain relevant at all," said Thomas Costerg, senior U.S. economist at Standard Chartered.
Costerg is the only forecaster in the survey who expects the Fed to cut rates by the end of the year and said the risk of a recession is high.
According to the poll median there is a 20 percent chance of a U.S. recession over the next 12 months, up from last month's 15 percent and December's 10 percent.
Annual growth and inflation forecasts for 2016 were also downgraded from last month with growth expected to average 2.2 percent and CPI inflation 1.3 percent, down from January's 2.5 and 1.6 percent respectively.
Core PCE prices - the main inflation gauge monitored by the Fed - will average only 1.5 percent this year and 1.8 percent next, largely unchanged from January's predictions.
"This is as good as it gets and if the Fed wants to have a buffer in the form of higher interest rates ahead of the next recession, now is the time to act," said Handelsbanken's U.S. economist Petter Lundvik.
Tuesday, February 23, 2016
4 Real Estate Moves With Surprise Tax Implications
a good read during tax time, from trulia.com
Don’t sweat the small stuff: Understanding the tax advantages and disadvantages of homeownership can save you thousands.
It’s no secret that some of the major perks of homeownership are the tax write-offs and advantages that follow the purchase. In fact, according to a 2015 survey by the National Association of Realtors, 80% of homebuyers see homeownership as a good investment, and 43% think it’s better than investing in the stock market. Reaping the rewards of mortgage interest and property tax deductions is just one way to think of your home as an investment. But there are even more real estate–related tax advantages and disadvantages that can slip under a new homeowner’s radar.
It can be relatively easy to trigger tax liabilities or perks (and then fail to claim them) on that new piece of Atlanta, GA, real estate. This is why it’s essential to touch base with your tax pro before every real estate transaction, no matter how minor a question you may have. Sometimes planning and timing make a major difference in the financial impact of a real estate–related tax; other times, just knowing the size and scope of the tax implications will impact the real estate decision you make.
Here’s a short list of real estate moves that trigger surprising tax issues, both pro and con.
1. Refinancing
When you refinance into a lower interest rate mortgage, the motivation tends to be the lower monthly payment or the ability to pay off your home loan faster with the same payment every month. But don’t forget to calculate the potential tax deduction based on your mortgage interest, which is the largest tax perk of homeownership. Most homeowners are eligible to deduct 100% of the interest they pay on a mortgage, up to $1 million, on their primary residence. So if you reduce the interest you pay, you also reduce your mortgage interest deduction.
Here’s some perspective: Fewer than 30% of homeowners take their mortgage interest deduction every year. This may be because at lower income and home price levels, the standard deduction is higher than the itemized deductions for which many homeowners would be eligible. But if you do itemize every year and/or you have a relatively high (or growing) adjusted gross income, you might be surprised at your tax bill the year after you refinance to a lower interest rate. The best practice is to loop in your tax professional so they can help you plan for this and adjust your withholdings, if necessary. This way, you’ll avoid big surprise tax bills post-refi.
2. Becoming a landlord
Smart real estate investors know the complicated tax triggers that come with holding onto, renting, and selling rental properties. But what happens if you become an “accidental landlord?” There are tax implications for being a landlord even when you rent out a room for a few nights here or there, or decide to rent out part or all of your own home for a long period.
For example, rental income is subject to all the regular income taxes, both federal and state (if applicable). In some cities, you might also be required to obtain a business license and pay business taxes as a landlord. Additionally, some municipalities are cracking down and requiring people who rent their home or portions of it for very short time frames to pay hotel taxes, which might be a cost you can pass on to your tenants.
3. Remodeling
The conventional wisdom is that when you remodel your home, whatever you do, for the love of all that is sacred, save your receipts. And this is not a “save them until tax time” recommendation; it’s a “save them until you sell the place” mandate! The money you invest into improving your home over time gets added to your purchase price, or cost basis, when you sell, bringing down the amount the IRS considers to be profit or gain and reducing your chances of incurring capital gains tax. (Single homeowners can realize $250,000 of “gains” above the cost basis of their home tax-free; married couples, $500,000.) This is no surprise to most homeowners.
Here’s where many homeowners go wrong: Remodeling projects can trigger local and state tax credits. This is especially true for home improvements that increase your home’s energy efficiency, from low-flow toilets and showerheads to dual-paned windows and insulation, even solar systems and tankless water heaters. If you’re remodeling and improving your home’s energy efficiency at the same time, visit your state, county, and city websites to see what tax credits or other financial incentives you might qualify for. If you use a home equity credit line to finance your improvements (whether or not they are ecofriendly), chances are, you can deduct the interest from that loan (up to $100,000) on top of your home mortgage interest deduction. Again, don’t forget to mention this to your tax professional.
4. Renting
Renting usually isn’t thought about as an intentional decision; it’s something many people do until they can afford to buy a home or know where their career will take them, geographically speaking. But there are people who have sufficient income, savings, and stability to own a home, but haven’t purchased one yet, for various reasons.
Someone who truly doesn’t want to own a home shouldn’t buy one simply for tax reasons, but if you’ve been ambivalent about it or have been thinking about it and procrastinating, you should at least be aware of the tax implications of your fence-sitting. Some personal finance experts estimate that the average American renter works through the end of April just to earn enough income to pay taxes (federal, state, local, and sales). As you move up the income ranks, consult with your tax professional about whether homeownership might get you some tax relief.
Don’t sweat the small stuff: Understanding the tax advantages and disadvantages of homeownership can save you thousands.
It’s no secret that some of the major perks of homeownership are the tax write-offs and advantages that follow the purchase. In fact, according to a 2015 survey by the National Association of Realtors, 80% of homebuyers see homeownership as a good investment, and 43% think it’s better than investing in the stock market. Reaping the rewards of mortgage interest and property tax deductions is just one way to think of your home as an investment. But there are even more real estate–related tax advantages and disadvantages that can slip under a new homeowner’s radar.
It can be relatively easy to trigger tax liabilities or perks (and then fail to claim them) on that new piece of Atlanta, GA, real estate. This is why it’s essential to touch base with your tax pro before every real estate transaction, no matter how minor a question you may have. Sometimes planning and timing make a major difference in the financial impact of a real estate–related tax; other times, just knowing the size and scope of the tax implications will impact the real estate decision you make.
Here’s a short list of real estate moves that trigger surprising tax issues, both pro and con.
1. Refinancing
When you refinance into a lower interest rate mortgage, the motivation tends to be the lower monthly payment or the ability to pay off your home loan faster with the same payment every month. But don’t forget to calculate the potential tax deduction based on your mortgage interest, which is the largest tax perk of homeownership. Most homeowners are eligible to deduct 100% of the interest they pay on a mortgage, up to $1 million, on their primary residence. So if you reduce the interest you pay, you also reduce your mortgage interest deduction.
Here’s some perspective: Fewer than 30% of homeowners take their mortgage interest deduction every year. This may be because at lower income and home price levels, the standard deduction is higher than the itemized deductions for which many homeowners would be eligible. But if you do itemize every year and/or you have a relatively high (or growing) adjusted gross income, you might be surprised at your tax bill the year after you refinance to a lower interest rate. The best practice is to loop in your tax professional so they can help you plan for this and adjust your withholdings, if necessary. This way, you’ll avoid big surprise tax bills post-refi.
2. Becoming a landlord
Smart real estate investors know the complicated tax triggers that come with holding onto, renting, and selling rental properties. But what happens if you become an “accidental landlord?” There are tax implications for being a landlord even when you rent out a room for a few nights here or there, or decide to rent out part or all of your own home for a long period.
For example, rental income is subject to all the regular income taxes, both federal and state (if applicable). In some cities, you might also be required to obtain a business license and pay business taxes as a landlord. Additionally, some municipalities are cracking down and requiring people who rent their home or portions of it for very short time frames to pay hotel taxes, which might be a cost you can pass on to your tenants.
3. Remodeling
The conventional wisdom is that when you remodel your home, whatever you do, for the love of all that is sacred, save your receipts. And this is not a “save them until tax time” recommendation; it’s a “save them until you sell the place” mandate! The money you invest into improving your home over time gets added to your purchase price, or cost basis, when you sell, bringing down the amount the IRS considers to be profit or gain and reducing your chances of incurring capital gains tax. (Single homeowners can realize $250,000 of “gains” above the cost basis of their home tax-free; married couples, $500,000.) This is no surprise to most homeowners.
Here’s where many homeowners go wrong: Remodeling projects can trigger local and state tax credits. This is especially true for home improvements that increase your home’s energy efficiency, from low-flow toilets and showerheads to dual-paned windows and insulation, even solar systems and tankless water heaters. If you’re remodeling and improving your home’s energy efficiency at the same time, visit your state, county, and city websites to see what tax credits or other financial incentives you might qualify for. If you use a home equity credit line to finance your improvements (whether or not they are ecofriendly), chances are, you can deduct the interest from that loan (up to $100,000) on top of your home mortgage interest deduction. Again, don’t forget to mention this to your tax professional.
4. Renting
Renting usually isn’t thought about as an intentional decision; it’s something many people do until they can afford to buy a home or know where their career will take them, geographically speaking. But there are people who have sufficient income, savings, and stability to own a home, but haven’t purchased one yet, for various reasons.
Someone who truly doesn’t want to own a home shouldn’t buy one simply for tax reasons, but if you’ve been ambivalent about it or have been thinking about it and procrastinating, you should at least be aware of the tax implications of your fence-sitting. Some personal finance experts estimate that the average American renter works through the end of April just to earn enough income to pay taxes (federal, state, local, and sales). As you move up the income ranks, consult with your tax professional about whether homeownership might get you some tax relief.
Make sure your home is ready for its listing photos with these tips
good reminders for getting ready for photos for listing your home from trulia.com
Make sure your home is ready for its listing photos with these tips.It’s true that you have only one chance to make a first impression — and that could not be more relevant than when you’re selling a home. As soon as a potential buyer scans your online listing, you have only a couple of seconds to impress them before they click to the next home. If your home isn’t staged properly in those listing photos, you could lose a sale without ever knowing it. “According to the National Association of Realtors, over 90% of homebuyers search for their next home online,” says Krisztina Bell, a professional home stager with Virtually Staging Properties Inc. in Atlanta, GA. “Eighty-five percent of those buyers say it’s the photos that are the most important factor in deciding which homes to go view.” What’s more, explains Jared Seligman, a real estate broker with Douglas Elliman in New York, NY, “the benefits of staging can be enormous, and the return on investment can be very impactful. If you invest even a small amount into the staging, you can often garner a much higher price than you were originally intending on listing it for.” Follow these real estate photography tips to stage your home for sale in Columbia, SC, or Seattle, WA, as if it were going in the next issue of Elle Decor.
Accessorize smartly
One of the easiest ways to update a room is to accessorize it well. A small stack of design books on the coffee table or some new pillows can really refine and update a space. “Appropriately display art on walls or above a fireplace, and make sure it is in the photograph to add color to your background, which adds wow factor to pictures viewed online,” advises Bell. Just remember, groupings look best in odd numbers and at varying sizes, so ditch those four identical candlesticks on your mantle.
But make sure not to over-accessorize
Just like Coco Chanel advised to always take off one accessory before you leave the house, so too should you pare down your house’s knickknacks. Accessorizing is important, but it needs to be tastefully — and minimally — done. “Overstuffed shelves with various books and decor can create a visual nightmare,” adds Bell. “Organize them by coordinating the books or magazines by colored sleeve or by height.” Of course, you might have loads of “edited out” items from your house once you’re done decluttering. This is normal: When professional home stagers get to work, they often edit out half of homeowners’ furnishings — and the home looks much bigger because of it. Store your stuff in a storage unit, your new home, or a friend’s basement.
While you’re at it, ditch the props
Yes, magazine spreads frequently have gorgeous bowls of fruit on display, but it’s probably best to leave the artful arranging and styling to the design experts. You can certainly hire a stager or interior designer, but for the rest of us, Bell recommends skipping the oversized bowl of lemons and that cheesy bottle of wine and wine glasses, which can become more of a distraction than an enhancement.
Pay attention to the bathroom
Along with kitchens, attractive and clean bathrooms are an important selling feature in a home and will be scrutinized when viewed online. Even if your bathroom is a little outdated, you can spiff it up for a minimal cost: Clear everything off your sink top except for soap, roll up some towels and put them on an available shelf for display, buy a fresh, bright shower curtain, and (perhaps most important) make sure the toilet seat lid is closed. That last item makes a huge difference in photos.
Don’t forget the small stuff
Don’t just shrug at those boxes you thought were hidden under your bed but are definitely visible in photos of your master bedroom. Move them and reshoot. “Remember, it’s those first impressions that are most important when buyers are viewing hundreds of photos of homes online,” explains Bell. A few other photo prep tips: Hide your wires. TV cords and other cables are unsightly in photos. You can always plug them back in after the photo shoot. Avoid taking photos with the TV on in the background. Move any vehicles in the driveway out of the photograph or away from the front of the home. Same goes for trash cans (indoors and out). Avoid taking photos on bright days; shooting at dusk or on overcast days gives spaces a much more balanced light without looking washed out.
Clean everything
We’re not just talking about the counters and floors here. Everything in your home should get a scrub, from muddy siding or dingy carpeting to wood furniture and curtains. Again, make sure to view your home with a critical eye: You may be visually immune to your scuffed-up garage door, but buyers won’t be. Don’t let them get distracted by a grimy door, walls, or windows — they might start to wonder what other home-upkeep tasks have been neglected.
Make sure your home is ready for its listing photos with these tips.It’s true that you have only one chance to make a first impression — and that could not be more relevant than when you’re selling a home. As soon as a potential buyer scans your online listing, you have only a couple of seconds to impress them before they click to the next home. If your home isn’t staged properly in those listing photos, you could lose a sale without ever knowing it. “According to the National Association of Realtors, over 90% of homebuyers search for their next home online,” says Krisztina Bell, a professional home stager with Virtually Staging Properties Inc. in Atlanta, GA. “Eighty-five percent of those buyers say it’s the photos that are the most important factor in deciding which homes to go view.” What’s more, explains Jared Seligman, a real estate broker with Douglas Elliman in New York, NY, “the benefits of staging can be enormous, and the return on investment can be very impactful. If you invest even a small amount into the staging, you can often garner a much higher price than you were originally intending on listing it for.” Follow these real estate photography tips to stage your home for sale in Columbia, SC, or Seattle, WA, as if it were going in the next issue of Elle Decor.
Accessorize smartly
One of the easiest ways to update a room is to accessorize it well. A small stack of design books on the coffee table or some new pillows can really refine and update a space. “Appropriately display art on walls or above a fireplace, and make sure it is in the photograph to add color to your background, which adds wow factor to pictures viewed online,” advises Bell. Just remember, groupings look best in odd numbers and at varying sizes, so ditch those four identical candlesticks on your mantle.
But make sure not to over-accessorize
Just like Coco Chanel advised to always take off one accessory before you leave the house, so too should you pare down your house’s knickknacks. Accessorizing is important, but it needs to be tastefully — and minimally — done. “Overstuffed shelves with various books and decor can create a visual nightmare,” adds Bell. “Organize them by coordinating the books or magazines by colored sleeve or by height.” Of course, you might have loads of “edited out” items from your house once you’re done decluttering. This is normal: When professional home stagers get to work, they often edit out half of homeowners’ furnishings — and the home looks much bigger because of it. Store your stuff in a storage unit, your new home, or a friend’s basement.
While you’re at it, ditch the props
Yes, magazine spreads frequently have gorgeous bowls of fruit on display, but it’s probably best to leave the artful arranging and styling to the design experts. You can certainly hire a stager or interior designer, but for the rest of us, Bell recommends skipping the oversized bowl of lemons and that cheesy bottle of wine and wine glasses, which can become more of a distraction than an enhancement.
Pay attention to the bathroom
Along with kitchens, attractive and clean bathrooms are an important selling feature in a home and will be scrutinized when viewed online. Even if your bathroom is a little outdated, you can spiff it up for a minimal cost: Clear everything off your sink top except for soap, roll up some towels and put them on an available shelf for display, buy a fresh, bright shower curtain, and (perhaps most important) make sure the toilet seat lid is closed. That last item makes a huge difference in photos.
Don’t forget the small stuff
Don’t just shrug at those boxes you thought were hidden under your bed but are definitely visible in photos of your master bedroom. Move them and reshoot. “Remember, it’s those first impressions that are most important when buyers are viewing hundreds of photos of homes online,” explains Bell. A few other photo prep tips: Hide your wires. TV cords and other cables are unsightly in photos. You can always plug them back in after the photo shoot. Avoid taking photos with the TV on in the background. Move any vehicles in the driveway out of the photograph or away from the front of the home. Same goes for trash cans (indoors and out). Avoid taking photos on bright days; shooting at dusk or on overcast days gives spaces a much more balanced light without looking washed out.
Clean everything
We’re not just talking about the counters and floors here. Everything in your home should get a scrub, from muddy siding or dingy carpeting to wood furniture and curtains. Again, make sure to view your home with a critical eye: You may be visually immune to your scuffed-up garage door, but buyers won’t be. Don’t let them get distracted by a grimy door, walls, or windows — they might start to wonder what other home-upkeep tasks have been neglected.
3-D models show what downtown Denver will look like in the next few years
interesting predictions from imfromdenver.com article....
The Mile High City keeps growing as more people move in. The city’s skyline is changing fast and will look different even in a couple years.
A user on Reddit, Ryan Keeney, who wrote of being in a geography master’s program, created images with 3-D models of planned construction in Denver.
The images from Google Maps add buildings that will go up in the near future. All of the images are sourced to specific details of construction projects.
The Mile High City keeps growing as more people move in. The city’s skyline is changing fast and will look different even in a couple years.
A user on Reddit, Ryan Keeney, who wrote of being in a geography master’s program, created images with 3-D models of planned construction in Denver.
The images from Google Maps add buildings that will go up in the near future. All of the images are sourced to specific details of construction projects.
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