good considerations from bankrate.com
7 must-do’s before buying a home
“Wanting” to buy a home and “being ready” to buy a home are two completely different things.
A Bank of the West study found that 56 percent of Millennials believe owning a home is more important than paying off debt or retiring comfortably. They may want to buy a home but they might not be ready for it.
Even as many are still hoping to achieve their American dream of buying a home, that doesn’t mean everyone is financially prepared.
Here are seven things you need to do before you buy your home.
Pull your credit report and check your score
Review your budget
Get preapproved
Beef up your down payment
Get an agent
Don’t skimp on an inspection
Make a plan B (and C)
1. Pull your credit report and check your score
Your credit report and corresponding score are your golden tickets to buying a home. They showcase your credit responsibility and worthiness. Your credit score can seriously impact your mortgage rate. The higher your credit score, the lower your interest rate will be. This means you’ll end up owing a lot less money over the life of the loan.
our credit score is broken down by:
Payment history: 35 percent
Credit utilization: 30 percent
Length of history: 15 percent
Types of credit: 10 percent
New credit: 10 percent
You can pull your credit report for free from Bankrate to go over your credit history. Cleaning up your credit report is one of your first steps to pre-buying a home. If there are errors, call one of the three major credit bureaus — Equifax, Experian, and TransUnion — to have them removed.
If you’re noticing a high credit utilization, start chunking away at your debt. See if you can consolidate your debt, refinance for lower interest payments, or transfer a big credit card balance to another card with friendlier repayment terms. Keep your utilization below 30 percent of your total limit.
Avoid getting new credit within a year of buying a home since it can cause a temporary dip in your score. The length of your credit history matters, too. The longer your credit history, the more credit-responsible you look.
2. Review your budget
If you’re working on a clean bill of credit health, give your budget a hard assessment. Use the 28-36 rule to see where your money is going. This is when your maximum household expenses shouldn’t exceed 28 percent of your gross monthly income. Your debt, like credit cards and loans, shouldn’t exceed 36 percent.
Your debt-to-income ratio, or DTI, is important to lenders for determining how much home you can afford and if you’re a good candidate to receive a mortgage. You might discover you need to make some adjustments, like spending less on travel and clothing, for example, to make room for a mortgage payment.
Fine-tuning your budget pre-homebuying will allow you to put extra cash towards a down payment, closing costs, or potentially higher home costs than you’re paying right now.
3. Get preapproved
With a stellar credit score and a solid down payment built up, you might feel confident in buying the house of your dreams. But until you get preapproved, that house will stay in your dreams.
Getting prequalified is nice, but it’s not the same thing. A prequalification is only based off information you give a lender. A preapproval is completing a mortgage application that pulls all your financial records.
Lenders base how much money they’re willing to give you based on your entire financial existence: your income, debt, and credit history all pay a crucial role. But it’s also there to show you how much home you can afford. If you know you can only get a $200,000 loan, you won’t waste your time looking at half a million-dollar homes.
It’s important to remember that you don’t need to settle on the first lender you find. Browse through different banks, online lenders, and credit unions to see which ones offer the best terms. Compare interest rates, fees, and the terms for paying back your loan. Consider working with a mortgage broker to help you weed through your options.
4. Beef up your down payment
Down payments for homes and cars are very similar: the higher the down payment, the less each monthly payment will be. But homes are much more expensive, which means the more you can put towards your down payment, the better off you’ll be every month.
It can be difficult to keep stashing money away for a down payment when you’re trying to afford basic necessities right now. Try cutting back on things you can manage, like dining out, grocery spending, unnecessary purchases, and travel.
Your debt might be holding you back as well. Try making larger debt payments every month until it’s completely paid off. Then the money you were putting towards your debt can now go to your down payment fund.
5. Get an agent
Whether you’re looking for a home 300 miles away or three, it’s a good idea to find someone who knows the neighborhoods better than you.
A real estate agent is on the hunt for your best interest because they want you to find the right home and buy it. Agents get their commission after a home is sold, so you don’t have to worry about costs up front.
Not all realtors do the same great job. So if you’re on the hunt for a great one, do your research. Look for one with top-notch credentials that has a proven track record. It’s similar to interviewing someone for a job, so talking to a potential agent’s former clients through may help you determine if they’re the right fit for you.
6. Don’t skimp on an inspection
You might think getting a home inspection is unnecessary. After all, you toured the home yourself and you would’ve seen major issues. True, maybe you can spot the big problems, but what about the small ones?
Home inspections go over every single detail of your home, from walls and appliances to the roof and drainage. Getting an inspection is a major part of buying a home because if there is, say, a water leak, you can take this issue back to the seller for negotiation. Either they fix the problem before you buy it or they lower their asking price of the home to accommodate the new cost of fixing the leak.
7. Make a plan B (and C)
As you’ve diligently prepared for your future home, you might not have considered what might happen if it doesn’t work out. What if your down payment is a little low? What if you don’t get the lender with the best terms? What if your dream home has an old roof?
Regardless of the setback, build the “just in case” options into your plan. If your down payment is too low, maybe you get an FHA loan instead of a conventional one. If you don’t get the lender with the best terms, maybe you get the second-best terms. That old roof may save you a lot if you talk the seller down, but you’ll need to make sure you can afford to replace after you close on the home.
Throughout the entire home-buying process, you will face different options for every single step you make. It’s important to remember how your choices are impacted along the way.
Monday, January 14, 2019
Buyers in Denver follow trend of wanting hidden doors, secret rooms in custom homes
fun article excerpts from Denver Post.com on houses with hidden doors and rooms...
Buyers in Denver follow trend of wanting hidden doors, secret rooms in custom homes
Custom builders say that it’s common for wealthy clients to want secret rooms in addition to giant kitchens, indoor pools, media rooms, home gyms and 11 bathrooms.
"The woman stepped out from the shower in her Denver home — built between 1930 and 1933 — and started to slip on the wet tile. She grabbed a towel rack for support but instead got a surprise: The rack swiveled down and clicked, activating a segment of the wall. It swung open and revealed a small, dark room. Inside was a bar, fully stocked, dusty.
She surmised that it was likely untouched since Prohibition.
The woman — not named for obvious reasons — lives near the Denver Country Club in an iconic mansion. She had discovered by accident what more people are designing by intent.
Secret rooms are only slightly newer than rooms themselves. The builders of the pyramids famously created hidden rooms and passageways and ensured their secrecy for centuries by killing the workers who built them. (Today’s contractors usually just have to sign non-disclosure agreements.) Hidden rooms and passages have long been used to protect valuables and hide crimes, such as El Chapo’s secret escape tunnel or the mansion of H.H. Holmes in Chicago."
"Today, secret rooms are enjoying a new-found appeal. Custom builders say that it’s common for wealthy clients to want secret rooms in addition to giant kitchens, indoor pools, media rooms, home gyms and 11 bathrooms. The motivations vary between fun and fear, and perhaps mask an even deeper motivation: an innate need for privacy.
“In the late 16th century, English hiding places protected Roman Catholics (Recusants) and those to be sequestered in cabinets and cupboards,” according to Elizabeth Goodenough, a professor at the University of Michigan, editor of “Secret Spaces of Childhood,” and an advocate of getting away from it all. (The spaces are called “priest holes,” and were common.) “Today, we hear the expression ‘to recuse oneself.’
“In our own country, we recall the dark places where Abolitionists hid runaway slaves on the Underground Railroad,” Goodenough wrote in an email. “Global surveillance threatens privacy even further today. Secret spaces allow adults to grow inwardly in a noisy, fragmented and chaotic environment of cellphone and computer distraction.”
Steve Humble, whose Gilbert, Ariz.-based company, Creative Home Engineering (CHE), specializes in installing hidden doors and secret passageways, said that the impetus for hidden rooms is changing. “Ten years ago, 70 percent of our customers wanted hidden rooms for fun. They wanted smoking rooms, bars, that sort of thing. Thirty percent wanted them as protection from home invasion or to store their valuables. But over the years, the motivation has shifted more to storage for valuables.”
“What people want is security and invisibility,” Humble said. “Hidden rooms protect your valuables and they’re fun. They make people feel like James Bond. But they protect your valuables in a way that a safe can’t. A big house – and a big safe or a vault door – attracts a thief. And people in these homes don’t necessarily want a big metal box on their wall. Besides, safes aren’t that secure. You can go onto You Tube and see how easy it is to crack one.”
Denver realtor Dan Polimino said that many of his clients who are looking for houses in the $2 million-plus range are attracted to ones with hidden rooms, which are a selling point. He’s sold houses with hidden rooms that owners have used as panic rooms and as places to conceal computers and servers. Some professional athletes like hidden rooms to store athletic memorabilia, he said.
Adding a hidden room to a house starts at about $10,000, Humble said (although his company is developing more affordable, do-it-yourself kits). Humble seems especially qualified to design and build secret spaces. A mechanical engineer by education, he has worked in aerospace, on medical devices and in robotics. He started CHE after he couldn’t find anyone to build a hidden passageway in a house, so he decided to build one himself.
And designing and building hidden rooms is a specialty. Humble has designed and patented a special hinge system that makes many of his company’s doors possible, allowing tiny adjustments to the door to make all the reveals absolutely perfect and that even compensate for a house settling or sagging.
Humble also has designed “really cool secret switches like wine bottles that contain a secret transmitter that causes a door to open when the bottle is twisted, or a kit for piano that will open a secret door when a certain melody is played.”
Humble said his most elaborate job involved designing a number of secret rooms for a bomb shelter. One of the 10 secret doors was big enough to drive a car through. Some doors look like bookcases, some like full-length mirrors. One included a false floor that dropped away to allow a hidden door built to withstand a nuclear blast to close. Hiding Christmas presents from the kids would be a breeze.
For secret rooms to stay secret, homeowners can’t tell anyone about them. One contractor said he had a client who waited for his adult children to go on vacation before he had a hidden room built.
But as secret as they’re supposed to be, a lot of people have stories about secret rooms. Denverite Juliet Hindahl said her grandfather lived in a house near Alameda and Downing where he discovered a secret room. Juliet herself grew up in a house with a hidden room that the family used to store canned goods. She has friends who now use 1950s-era bomb shelters as hiding places.
And while most people with secret rooms tell someone about them, not all do, as the woman in the Country Club home has attested.
It makes you want to jiggle the towel racks."
What to Do When Your Property Tax Bill Increases
it's about that time of the year again where you start getting property tax assessments in the mail, here's a helpful article from usnew.com below...of course, feel free to let me know if I can help you appeal any of your property tax assessments by providing comparable home sales....
What to Do When Your Property Tax Bill Increases
If you have a higher bill than expected, consider following these expert-backed strategies.
Property tax bills can increase for a variety of reasons. Your local, state or federal government laws may change, causing property taxes to spike. The value of your neighborhood could rise, a sign of the real estate market starting to recover. Or, once your county reassesses the value of the land in your area, you could see an uptick in your property taxes.
The average tax bill in 2017 was $3,400, 3 percent higher than 2016, according to a recent report from Attom Data Solutions, a property data company. What's more, the recent tax cuts from Congress are expected to cause property tax bills to climb in many metropolitan areas.
Fortunately, homeowners have a few options to trim costs – or file an appeal – if their property tax bill increases. Read on to learn how to deal with higher property taxes.
Don't procrastinate. Depending on where you live, you may not have much time (think: two weeks to a few months) to contest a higher property tax bill. To file an appeal, you'll need to fill out legal paperwork from your county and evaluate the value of comparable homes in your neighborhood.
"Every state has a different procedure and timeline for appealing property tax assessments. It's important to be aware of the procedure and follow the timeline, or your appeal will be barred," says Bruce Ailion, an attorney and realtor with Re/Max Town and Country in Atlanta.
In Georgia, a homeowner typically has 120 days to appeal an assessment of your property, Ailion says.
"The county can accept, reject or propose a different value. Typically, the county rejects your value and schedules a hearing before a board of adjustment," he says. A board of adjustment has the power to make important zoning decisions. If you do not have a board of adjustment in your district, your county seat will have some sort of assessor's office, where property values are determined.
"In Georgia, you will present your case, and the assessor will present their case to an impartial panel of citizens. They will determine the value of the property. If you are still unhappy with the value, you can file suit and have a judge decide," Ailion explains.
Do your homework. While you may contend that your property values have been improperly raised, you need to offer up some reasoning behind your appeal.
"You can also go about researching your neighbors and your town by looking at similar homes. Many times, info regarding other assessments is public knowledge, so it's important to compare other residences with yours," says David Hryck, a New York City-based tax lawyer and partner at Reed Smith, a global law firm.
There is a chance you could find a discrepancy, which could help lower your property tax rate. If you do [find a discrepancy], bring this info to your assessor's attention and you may qualify for a reassessment," Hryck says.
Ralph DiBugnara, president of HomeQualified.com, an online guide for homebuyers, and vice president of Residential Home Funding, a mortgage lender, who's based in New York City, echoes similar advice.
"All tax assessments are of public record and are easily available on sites such as Zillow.com," DiBugnara says.
Make sure to be accurate, Ailion stresses. "The assessor will be prepared," he says. "They will have photos of your home showing it in its best condition." He quips, "I almost think they are photoshopped."
Seek help from a property tax abatement or exemption program. Levar Haffoney, a financial planner and principal at Fayohne Advisors in New York City, suggests giving either a shot.
"Your city, town or county may offer tax abatement and exemption programs to help you reduce your property taxes. Abatements help property owners reduce or eliminate property tax increases on new construction, rehabilitation or other improvements. Exemptions help property owners reduce the taxable portion of your property assessment," he says. For instance, some cities offer exemptions for disabled homeowners and others for veterans.
You might also get what's often called a homestead exemption, where your property taxes won't go up if your spouse has died and was the main breadwinner.
Get an appraisal. "The home appraisal will also show values of neighboring homes and their current property taxes," DiBugnara says.
A typical home appraisal, according to Angie's List and HomeAdvisor.com, is about $300, but expect to pay hundreds more, particularly if your house is in a major metropolitan area or if your home is especially spacious.
Consider hiring a third party to represent you. You could find a property tax services company to make your appeal for you or hire someone such as a realtor or an attorney who specializes in property tax appeals. As for pricing, it's hard to predict how much a third party will cost you. While some companies will charge a flat fee of $300 or $500, others will take a percentage of what you save in property taxes.
For example, Ailion will sometimes file an appeal for clients for a $75 fee and receive 30 percent of the savings on a residential home. "That's a little lower than the firms that only do tax appeals," he says. "I'll review anyone's property and tell them if they stand a good chance or not of winning."
When your house is being assessed, work directly with the assessor, Hryck says. This isn't the time to tell him or her to check out your house while you're at work. "Don't let them inspect your property without you being present," he says. "This will ensure that they don't overlook anything such as outdated appliances, which could lower your rate. It's on you to point out the good as well as the bad parts of your property."
And if you're going to go through the trouble of appealing your property taxes, follow through. "Over 50 percent of the appeals filed by owners result in no-shows by the owner," Ailion says.
What to Do When Your Property Tax Bill Increases
If you have a higher bill than expected, consider following these expert-backed strategies.
Property tax bills can increase for a variety of reasons. Your local, state or federal government laws may change, causing property taxes to spike. The value of your neighborhood could rise, a sign of the real estate market starting to recover. Or, once your county reassesses the value of the land in your area, you could see an uptick in your property taxes.
The average tax bill in 2017 was $3,400, 3 percent higher than 2016, according to a recent report from Attom Data Solutions, a property data company. What's more, the recent tax cuts from Congress are expected to cause property tax bills to climb in many metropolitan areas.
Fortunately, homeowners have a few options to trim costs – or file an appeal – if their property tax bill increases. Read on to learn how to deal with higher property taxes.
Don't procrastinate. Depending on where you live, you may not have much time (think: two weeks to a few months) to contest a higher property tax bill. To file an appeal, you'll need to fill out legal paperwork from your county and evaluate the value of comparable homes in your neighborhood.
"Every state has a different procedure and timeline for appealing property tax assessments. It's important to be aware of the procedure and follow the timeline, or your appeal will be barred," says Bruce Ailion, an attorney and realtor with Re/Max Town and Country in Atlanta.
In Georgia, a homeowner typically has 120 days to appeal an assessment of your property, Ailion says.
"The county can accept, reject or propose a different value. Typically, the county rejects your value and schedules a hearing before a board of adjustment," he says. A board of adjustment has the power to make important zoning decisions. If you do not have a board of adjustment in your district, your county seat will have some sort of assessor's office, where property values are determined.
"In Georgia, you will present your case, and the assessor will present their case to an impartial panel of citizens. They will determine the value of the property. If you are still unhappy with the value, you can file suit and have a judge decide," Ailion explains.
Do your homework. While you may contend that your property values have been improperly raised, you need to offer up some reasoning behind your appeal.
"You can also go about researching your neighbors and your town by looking at similar homes. Many times, info regarding other assessments is public knowledge, so it's important to compare other residences with yours," says David Hryck, a New York City-based tax lawyer and partner at Reed Smith, a global law firm.
There is a chance you could find a discrepancy, which could help lower your property tax rate. If you do [find a discrepancy], bring this info to your assessor's attention and you may qualify for a reassessment," Hryck says.
Ralph DiBugnara, president of HomeQualified.com, an online guide for homebuyers, and vice president of Residential Home Funding, a mortgage lender, who's based in New York City, echoes similar advice.
"All tax assessments are of public record and are easily available on sites such as Zillow.com," DiBugnara says.
Make sure to be accurate, Ailion stresses. "The assessor will be prepared," he says. "They will have photos of your home showing it in its best condition." He quips, "I almost think they are photoshopped."
Seek help from a property tax abatement or exemption program. Levar Haffoney, a financial planner and principal at Fayohne Advisors in New York City, suggests giving either a shot.
"Your city, town or county may offer tax abatement and exemption programs to help you reduce your property taxes. Abatements help property owners reduce or eliminate property tax increases on new construction, rehabilitation or other improvements. Exemptions help property owners reduce the taxable portion of your property assessment," he says. For instance, some cities offer exemptions for disabled homeowners and others for veterans.
You might also get what's often called a homestead exemption, where your property taxes won't go up if your spouse has died and was the main breadwinner.
Get an appraisal. "The home appraisal will also show values of neighboring homes and their current property taxes," DiBugnara says.
A typical home appraisal, according to Angie's List and HomeAdvisor.com, is about $300, but expect to pay hundreds more, particularly if your house is in a major metropolitan area or if your home is especially spacious.
Consider hiring a third party to represent you. You could find a property tax services company to make your appeal for you or hire someone such as a realtor or an attorney who specializes in property tax appeals. As for pricing, it's hard to predict how much a third party will cost you. While some companies will charge a flat fee of $300 or $500, others will take a percentage of what you save in property taxes.
For example, Ailion will sometimes file an appeal for clients for a $75 fee and receive 30 percent of the savings on a residential home. "That's a little lower than the firms that only do tax appeals," he says. "I'll review anyone's property and tell them if they stand a good chance or not of winning."
When your house is being assessed, work directly with the assessor, Hryck says. This isn't the time to tell him or her to check out your house while you're at work. "Don't let them inspect your property without you being present," he says. "This will ensure that they don't overlook anything such as outdated appliances, which could lower your rate. It's on you to point out the good as well as the bad parts of your property."
And if you're going to go through the trouble of appealing your property taxes, follow through. "Over 50 percent of the appeals filed by owners result in no-shows by the owner," Ailion says.
How Tax Reform Impacts Homeowners
some homeowner considerations from US News and World Report....
How Tax Reform Impacts Homeowners
Current and aspiring homeowners should know the impacts tax reform will have on their 2018 tax returns.
For many, homeownership represents one of the biggest milestones in life. Few are thinking about the tax implications of exciting moments like buying their first home or even remodeling it, but with the historic tax reform that passed in late 2017 and Tax Day right around the corner, it's important to understand your tax situation and how it will impact your current and future home-buying decisions.
One important thing to remember: For the majority of taxpayers, the new tax reform law does not impact your tax year 2017 taxes (the ones you're filing now). The majority of the changes will be reflected on your 2018 taxes, which you file in 2019.
Whether you're just beginning to tour homes or you've already signed the deal, here are the major tax reform provisions that potential and new homeowners should be aware of for their 2018 taxes.
Mortgage interest deduction cap. For those home shopping in areas with high housing costs, be aware that starting in 2018, you can deduct home mortgage interest secured by your principal residence on acquisition indebtedness – the outstanding amount incurred in acquiring or improving your property – of up to $750,000. If you purchased your home before 2018, you will still be able to deduct home mortgage interest based on $1,000,000 in home acquisition indebtedness. If you find yourself drawn to areas with high housing costs, consider paying a bigger down payment if you can to keep your loan under the new tax reform law's $750,000 loan threshold, so you can still deduct all of your mortgage interest at tax time.
State and local property tax deduction limits. If you are searching for a home in a high property tax area, keep in mind that the new law limits the amount of state and local property, income and sales taxes that can be deducted to $10,000. In the past, these taxes have generally been fully tax deductible.
Moving expenses. Did you move for a new job in the last year? Take advantage of claiming your unreimbursed moving expenses this year before the new tax reform law eliminates this deduction on your 2018 taxes. You qualify if you started your new job and have worked full time for at least 39 weeks within the first 12 months after your move. Your new place of employment must also be at least 50 miles or farther away from your old home and place of employment.
Beginning on tax year 2018 taxes, which you'll file in 2019, only members of armed forces on active duty are allowed to take advantage of these tax breaks.
While it may seem like several things will be changing for homeowners this year, there are techniques to increase your tax refund or reduce your tax bill. Here are several tax tips that you should be taking advantage of when filing 2018 taxes.
Adjusting your withholding. If your new home will increase the size of your mortgage interest deduction or make you an itemizer for the first time, you don't have to wait until you file your tax return to see the savings. You can start collecting the savings right away by adjusting your federal income tax withholding at work, which will boost your take-home pay.
Penalty-free IRA payouts for first-time buyers. Did you know that at any age, you can withdraw up to $10,000 penalty free from your individual retirement account to help buy or build a first home for yourself, your spouse, your kids, your grandchildren or even your parents? To qualify, the money must be used to buy or build a first home within 120 days of the time it's withdrawn. Although the 10 percent penalty is waived, you will be taxed on the distribution based on your tax bracket.
Using Roth IRA distributions for your first home purchase. If you use Roth IRA distributions to buy your first home, you may be able to withdraw up to $10,000 from your Roth IRA tax free and penalty free. That's if you had your Roth IRA for at least five years before taking the distribution.
How Tax Reform Impacts Homeowners
Current and aspiring homeowners should know the impacts tax reform will have on their 2018 tax returns.
For many, homeownership represents one of the biggest milestones in life. Few are thinking about the tax implications of exciting moments like buying their first home or even remodeling it, but with the historic tax reform that passed in late 2017 and Tax Day right around the corner, it's important to understand your tax situation and how it will impact your current and future home-buying decisions.
One important thing to remember: For the majority of taxpayers, the new tax reform law does not impact your tax year 2017 taxes (the ones you're filing now). The majority of the changes will be reflected on your 2018 taxes, which you file in 2019.
Whether you're just beginning to tour homes or you've already signed the deal, here are the major tax reform provisions that potential and new homeowners should be aware of for their 2018 taxes.
Mortgage interest deduction cap. For those home shopping in areas with high housing costs, be aware that starting in 2018, you can deduct home mortgage interest secured by your principal residence on acquisition indebtedness – the outstanding amount incurred in acquiring or improving your property – of up to $750,000. If you purchased your home before 2018, you will still be able to deduct home mortgage interest based on $1,000,000 in home acquisition indebtedness. If you find yourself drawn to areas with high housing costs, consider paying a bigger down payment if you can to keep your loan under the new tax reform law's $750,000 loan threshold, so you can still deduct all of your mortgage interest at tax time.
State and local property tax deduction limits. If you are searching for a home in a high property tax area, keep in mind that the new law limits the amount of state and local property, income and sales taxes that can be deducted to $10,000. In the past, these taxes have generally been fully tax deductible.
Moving expenses. Did you move for a new job in the last year? Take advantage of claiming your unreimbursed moving expenses this year before the new tax reform law eliminates this deduction on your 2018 taxes. You qualify if you started your new job and have worked full time for at least 39 weeks within the first 12 months after your move. Your new place of employment must also be at least 50 miles or farther away from your old home and place of employment.
Beginning on tax year 2018 taxes, which you'll file in 2019, only members of armed forces on active duty are allowed to take advantage of these tax breaks.
While it may seem like several things will be changing for homeowners this year, there are techniques to increase your tax refund or reduce your tax bill. Here are several tax tips that you should be taking advantage of when filing 2018 taxes.
Adjusting your withholding. If your new home will increase the size of your mortgage interest deduction or make you an itemizer for the first time, you don't have to wait until you file your tax return to see the savings. You can start collecting the savings right away by adjusting your federal income tax withholding at work, which will boost your take-home pay.
Penalty-free IRA payouts for first-time buyers. Did you know that at any age, you can withdraw up to $10,000 penalty free from your individual retirement account to help buy or build a first home for yourself, your spouse, your kids, your grandchildren or even your parents? To qualify, the money must be used to buy or build a first home within 120 days of the time it's withdrawn. Although the 10 percent penalty is waived, you will be taxed on the distribution based on your tax bracket.
Using Roth IRA distributions for your first home purchase. If you use Roth IRA distributions to buy your first home, you may be able to withdraw up to $10,000 from your Roth IRA tax free and penalty free. That's if you had your Roth IRA for at least five years before taking the distribution.
Thursday, December 27, 2018
The Dome Home
fun property with functionality from cnbc.com
Take a look inside Charleston's weirdest mansion — it's $5 million and it's hurricane-proof
While Charleston, South Carolina might be known for its charming historic architecture, one of the city's most unique mansions is for sale for more than $4.995 million.
Dubbed the "Eye of the Storm," the domed home, located on Sullivan's Island in Charleston, just 230 feet from the beach, was designed to withstand deadly hurricanes. It's the brain child of George Paul, a designer and builder of dome structures, who erected the house for his parents after they lost their summer home to category 5 Hugo in 1989. The architect of the home was X Dilling, who lives in the Charleston area.
For the first time ever, the dome home is listed for sale, Patero Group confirms to CNBC Make It.
Built in 1992, the house is encased by a white shell that is monolithic (meaning there's no separate roof) and thermospheric (meaning it's energy efficient).
The side of the shell that faces the beach features large, glass windows inset from the dome shell, with views of the water and sandy shores as well as a maritime forest.
Built in 1992, the house is encased by a white shell that is monolithic (meaning there's no separate roof) and thermospheric (meaning it's energy efficient).
The side of the shell that faces the beach features large, glass windows inset from the dome shell, with views of the water and sandy shores as well as a maritime forest.
"The interior design, inspired by the curves of shells found on the beach, leads the eyes through the Great Room to every custom and thoughtfully planned area in the home," its website states.
Eye of the Storm also has an elevator, a wet bar, a skylight, an 889-square-foot deck and even a bank vault room.
The design represents "home as sculpture" and "peace of mind," Michael Royal, the listing broker and nephew of George Paul, tells CNBC Make It. "But mostly, it is — just 20 minutes from downtown Charleston — a front-row seat in a spectacular show of nature on one of the Lowcounty's most beautiful beaches, starting every morning with sunrise over the Atlantic."
There's also 526 square feet of ground-floor space in the home, with an enclosed storage room, a bathroom and two shower rooms. The Eye of the Storm is made of concrete and steel and weighs an estimated 650 tons (that's 1.3 million pounds).
Currently, there's an Instagram contest featuring the home; the first real estate licensee to correctly predict who will buy the home is eligible to win up to $50,000.
Cameran Eubanks Wimberly, a real estate agent and star of Bravo's "Southern Charm," which takes place in Charleston, recently showcased the house on her Instagram.
"This futuristic design was constructed to withstand a category 4 hurricane and give owners total peace of mind," she wrote on the post. "The views from almost 900 sqft of deck space are incredible. I have always called it the 'Star Wars' House."
Take a look inside Charleston's weirdest mansion — it's $5 million and it's hurricane-proof
While Charleston, South Carolina might be known for its charming historic architecture, one of the city's most unique mansions is for sale for more than $4.995 million.
Dubbed the "Eye of the Storm," the domed home, located on Sullivan's Island in Charleston, just 230 feet from the beach, was designed to withstand deadly hurricanes. It's the brain child of George Paul, a designer and builder of dome structures, who erected the house for his parents after they lost their summer home to category 5 Hugo in 1989. The architect of the home was X Dilling, who lives in the Charleston area.
For the first time ever, the dome home is listed for sale, Patero Group confirms to CNBC Make It.
Built in 1992, the house is encased by a white shell that is monolithic (meaning there's no separate roof) and thermospheric (meaning it's energy efficient).
The side of the shell that faces the beach features large, glass windows inset from the dome shell, with views of the water and sandy shores as well as a maritime forest.
Built in 1992, the house is encased by a white shell that is monolithic (meaning there's no separate roof) and thermospheric (meaning it's energy efficient).
The side of the shell that faces the beach features large, glass windows inset from the dome shell, with views of the water and sandy shores as well as a maritime forest.
"The interior design, inspired by the curves of shells found on the beach, leads the eyes through the Great Room to every custom and thoughtfully planned area in the home," its website states.
Eye of the Storm also has an elevator, a wet bar, a skylight, an 889-square-foot deck and even a bank vault room.
The design represents "home as sculpture" and "peace of mind," Michael Royal, the listing broker and nephew of George Paul, tells CNBC Make It. "But mostly, it is — just 20 minutes from downtown Charleston — a front-row seat in a spectacular show of nature on one of the Lowcounty's most beautiful beaches, starting every morning with sunrise over the Atlantic."
There's also 526 square feet of ground-floor space in the home, with an enclosed storage room, a bathroom and two shower rooms. The Eye of the Storm is made of concrete and steel and weighs an estimated 650 tons (that's 1.3 million pounds).
Currently, there's an Instagram contest featuring the home; the first real estate licensee to correctly predict who will buy the home is eligible to win up to $50,000.
Cameran Eubanks Wimberly, a real estate agent and star of Bravo's "Southern Charm," which takes place in Charleston, recently showcased the house on her Instagram.
"This futuristic design was constructed to withstand a category 4 hurricane and give owners total peace of mind," she wrote on the post. "The views from almost 900 sqft of deck space are incredible. I have always called it the 'Star Wars' House."
6 Reasons Why Winter Is Actually the Most Chill Time to Buy a Home
considerations on buying during the winter from realtor.com
6 Reasons Why Winter Is Actually the Most Chill Time to Buy a Home
When the weather outside is frightful, trudging door to door to look at houses might seem like a fool's errand. Everybody knows spring and summer are the home-buying seasons, and winter is the time when you—and sellers—cool it for a bit and take a break, right?
While it's true that things do slow down in the winter, that's not necessarily a bad thing. Yes, it's cold. Yes, fewer homes are for sale. Yes, moving in a snowstorm is a pain no one should experience. But there are quite a few darned smart reasons to buy a home in the winter. In fact, we'd argue that this might even be the best time to buy a home—if you can. Here's why.
1. There's less competition
Not everyone's willing to look at homes in single-digit temperatures. The months of May, June, July, and August make up 40% of existing-home sales, while January and February account for less than 6%.
For sellers, that's not-so-hot news. But buyers should rejoice.
"Buying in the winter knocks out a large chunk of the buyer competition, allowing you to be a bit more selective with your home purchase," says Cincinnati real estate agent Eric Sztanyo.
Sure, more summer inventory means there's a better chance of finding your dream home. But your chances of successfully buying any home are higher when it's chilly. Fewer buyers mean fewer all-cash, over-asking offers—making your traditionally financed offer more appealing.
2. Sellers are motivated—and willing to make a deal
Most likely, sellers listing their home in the depths of winter seriously want to sell. That gives buyers the upper hand.
Many people place their homes on the market at this time of the year because they need to," says Lauren McKinney, a Realtor® in Asheville, NC. "Many sellers are looking to get out fast and will be more willing to work with you."
You'll also want to keep an eye on each home's "cumulative days on market," which you'll find on the home's listing details page. It's possible that the house has been lingering on the market—giving you more leverage to land a fantastic home for a fraction of the price you would have paid six months earlier.
"If you are buying in the winter, you may want to target houses that have been on the market for a few months, because you might just find a seller who is more motivated to accept a lower offer," Sztanyo says.
But remember: Just because a seller's eager doesn't necessarily mean you should dramatically lowball or make unreasonable demands—you can sabotage yourself if you get cocky. Instead, work with your agent to determine an appropriate negotiation strategy.
3. You can put the house through its paces
In most climates, winter puts stress on the home. That gives you the perfect opportunity to evaluate the property under the worst conditions possible. A home that might seem perfect during the temperate spring could look wholly different in the winter.
"You'll never know how drafty the windows may be or how weak the insulation is when previewing a house in the spring and the summer," Sztanyo says. "Buying a house in the winter allows you to put the furnace's ability to keep you warm to the test."
Plus, you'll get a better idea of what you're in for on the home's worst days: Is that driveway going to be a pain in the you-know-what to shovel? Do you spot ice dams on the roof? How does the home look with barren trees and shrubs? Just as you'd judge a first date who shows up wearing a track suit, this is your chance to be extra critical of a house you're thinking of committing to.
4. Hiring movers is usually easier
No one can claim that it's easier to move in the winter. If you've ever done it, you know it's sheer misery to move all of your possessions in inclement weather. But the logistics are simplified when you aren't competing with a hundred other moving households.
"Movers aren't booked solid like in the spring and summer months," McKinney says. "It's not a bad time to move."
You might even be able to negotiate a lower price because of the chilled demand. Just make sure to be flexible and allocate a few days' window for moving—if your moving day falls during the next bomb cyclone, you might have to reschedule.
5. You can enjoy last-minute tax savings
If you're purchasing your first home, buying in the winter gives you a few extra months of potential tax deductions.
'The holidays are your last chance to buy that home and use it as a write-off for your 2018 taxes," says mortgage banker Ralph DiBugnara.
Depending on your local laws, you can deduct mortgage interest, taxes, and points—although you should consider talking to a professional before getting too excited. The new tax law might affect your mortgage interest deduction.
6. Homes close faster
In the busy spring and summer months, your mortgage broker might be backed up days or even weeks—which is beyond frustrating when your closing is planned around your lender's schedule. But during the holidays, DiBugnara says, things slow down by 25% to 30%.
"You will be able to close your loan much faster, as wait times are much shorter during the holiday season," he says.
That means you'll be cuddling up in front of that fireplace sooner than expected. Nothing wrong with that, right?
6 Reasons Why Winter Is Actually the Most Chill Time to Buy a Home
When the weather outside is frightful, trudging door to door to look at houses might seem like a fool's errand. Everybody knows spring and summer are the home-buying seasons, and winter is the time when you—and sellers—cool it for a bit and take a break, right?
While it's true that things do slow down in the winter, that's not necessarily a bad thing. Yes, it's cold. Yes, fewer homes are for sale. Yes, moving in a snowstorm is a pain no one should experience. But there are quite a few darned smart reasons to buy a home in the winter. In fact, we'd argue that this might even be the best time to buy a home—if you can. Here's why.
1. There's less competition
Not everyone's willing to look at homes in single-digit temperatures. The months of May, June, July, and August make up 40% of existing-home sales, while January and February account for less than 6%.
For sellers, that's not-so-hot news. But buyers should rejoice.
"Buying in the winter knocks out a large chunk of the buyer competition, allowing you to be a bit more selective with your home purchase," says Cincinnati real estate agent Eric Sztanyo.
Sure, more summer inventory means there's a better chance of finding your dream home. But your chances of successfully buying any home are higher when it's chilly. Fewer buyers mean fewer all-cash, over-asking offers—making your traditionally financed offer more appealing.
2. Sellers are motivated—and willing to make a deal
Most likely, sellers listing their home in the depths of winter seriously want to sell. That gives buyers the upper hand.
Many people place their homes on the market at this time of the year because they need to," says Lauren McKinney, a Realtor® in Asheville, NC. "Many sellers are looking to get out fast and will be more willing to work with you."
You'll also want to keep an eye on each home's "cumulative days on market," which you'll find on the home's listing details page. It's possible that the house has been lingering on the market—giving you more leverage to land a fantastic home for a fraction of the price you would have paid six months earlier.
"If you are buying in the winter, you may want to target houses that have been on the market for a few months, because you might just find a seller who is more motivated to accept a lower offer," Sztanyo says.
But remember: Just because a seller's eager doesn't necessarily mean you should dramatically lowball or make unreasonable demands—you can sabotage yourself if you get cocky. Instead, work with your agent to determine an appropriate negotiation strategy.
3. You can put the house through its paces
In most climates, winter puts stress on the home. That gives you the perfect opportunity to evaluate the property under the worst conditions possible. A home that might seem perfect during the temperate spring could look wholly different in the winter.
"You'll never know how drafty the windows may be or how weak the insulation is when previewing a house in the spring and the summer," Sztanyo says. "Buying a house in the winter allows you to put the furnace's ability to keep you warm to the test."
Plus, you'll get a better idea of what you're in for on the home's worst days: Is that driveway going to be a pain in the you-know-what to shovel? Do you spot ice dams on the roof? How does the home look with barren trees and shrubs? Just as you'd judge a first date who shows up wearing a track suit, this is your chance to be extra critical of a house you're thinking of committing to.
4. Hiring movers is usually easier
No one can claim that it's easier to move in the winter. If you've ever done it, you know it's sheer misery to move all of your possessions in inclement weather. But the logistics are simplified when you aren't competing with a hundred other moving households.
"Movers aren't booked solid like in the spring and summer months," McKinney says. "It's not a bad time to move."
You might even be able to negotiate a lower price because of the chilled demand. Just make sure to be flexible and allocate a few days' window for moving—if your moving day falls during the next bomb cyclone, you might have to reschedule.
5. You can enjoy last-minute tax savings
If you're purchasing your first home, buying in the winter gives you a few extra months of potential tax deductions.
'The holidays are your last chance to buy that home and use it as a write-off for your 2018 taxes," says mortgage banker Ralph DiBugnara.
Depending on your local laws, you can deduct mortgage interest, taxes, and points—although you should consider talking to a professional before getting too excited. The new tax law might affect your mortgage interest deduction.
6. Homes close faster
In the busy spring and summer months, your mortgage broker might be backed up days or even weeks—which is beyond frustrating when your closing is planned around your lender's schedule. But during the holidays, DiBugnara says, things slow down by 25% to 30%.
"You will be able to close your loan much faster, as wait times are much shorter during the holiday season," he says.
That means you'll be cuddling up in front of that fireplace sooner than expected. Nothing wrong with that, right?
2019 Real Estate Forecast: What Home Buyers, Sellers And Investors Can Expect
interesting considerations from a forbes.com article...
There’s no doubt about it: the 2018 housing market has seen its ups and downs.
The year started with sky-high home prices, historically low mortgage rates and a definitive upper hand for sellers. In recent months though, home price growth has faltered, rates have risen to their highest point in nearly eight years, and favor has started to shift from seller to buyer.
Will these trends continue? Will housing experience the same wild ride in the new year? Here’s what experts predict will happen in 2019 real estate market:
Mortgage rates will continue rising.
“Despite steady climbing for the past two years, mortgage rates remain lower than they were during most of the recession and below average for the type of strong economic growth we’ve been experiencing. That will change in 2019, as the 30-year, fixed rate mortgage reaches 5.8% — territory not seen since the dark days of 2008 when rates were racing downward in response to the housing crisis.” — Aaron Terrazas, director of economic research for Zillow
Millennials will keep buying homes — despite those rising rates.
"The housing market in 2019 will be characterized by continued rising mortgage rates and surging millennial demand. Rising rates, by making housing less affordable, will likely deter certain potential homebuyers from the market. On the other hand, the largest cohort of millennials will be turning 29 next year, entering peak household formation and home-buying age, and contributing to the increase in first-time buyer demand.” — Odeta Kushi, senior economist for First American
“Millennials will continue to make up the largest segment of buyers next year, accounting for 45% of mortgages, compared to 17% of Boomers, and 37% of Gen Xers. While first-time buyers will struggle next year, older Millennial move-up buyers will have more options in the mid-to upper-tier price point and will make up the majority of Millennials who close in 2019. Looking forward, 2020 is expected to be the peak Millennial home buying year with the largest cohort of millennials turning 30 years old. Millennials are also likely to make up the largest share of home buyers for the next decade as their housing needs adjust over time.” — Danielle Hale, chief economist for Realtor.com
Home buying power will decrease, but that could be a good thing.
“Most homebuyers budget a monthly payment. As rates rise, a fixed monthly payment translates into less borrowing capacity and buying power is down about 10% since the same time last year. As there are less buyers at each price point, the appropriate market response is a slowdown in sales and an easing in price momentum.” — Tendayi Kapfidze, chief economist for LendingTree
Overall home sales will drop.
“As we look toward 2019, we are anticipating home sales to decline around 2%. We’re expecting it to be another slightly slower year as buyers continue to wrangle with higher mortgage rates after contending with several years of rapid price growth.” — Ruben Gonzalez, chief economist at Keller Williams
Inventory troubles will ease — not too much, though.
“The wave of first-time home buyer demand will be met by somewhat higher inventory levels than in 2018. However, while the days of multiple offers and bidding wars may be history in some markets where inventory is increasing, inventory will likely still remain tight nationally through 2019." — Kushi
“In the majority of markets, the number of homes being put on the market or newly constructed has increased slightly, while the pace of sales has slowed slightly, which has helped stop the inventory decline. But the inventory increases or slowing price increases necessary for a more widespread sales gain are not forecasted to happen in 2019. While the situation is not getting worse for buyers, it’s also not improving notably in the majority of markets.” — Hale
Home price growth will continue to slow.
“Right now, for 2019, we believe home price appreciation will likely slow to near 3%. This is based on the assumption that the recent pattern of increasing inventory levels will be sustained in the upcoming year.” — Gonzalez
Buyers will see less competition, but that might not help first-timers.
“Buyers who are able to stay in the market will find less competition as more buyers are priced out but feel an increased sense of urgency to close before it gets even more expensive. Their largest struggle next year will be reconciling wants, needs and budget versus the heavy competition of 2018. Although the number of homes for sale is increasing, which is an improvement for buyers, the majority of new inventory is focused in the mid- to higher-end price tier, not entry-level.” — Danielle Hale, Realtor.com
National rents will rise, but apartment construction could ease renters’ pains.
“As higher rates limit the number of homes that potential buyers can afford, some would-be buyers will be too financially stretched to buy and will continue renting. As a result, recent (and very slight) drops in rent will reverse and turn positive again. The shift will be muted, however, by continued steady investment in apartment construction, which will prevent rent growth from shooting too far above income growth.” — Terrazas
NYC rent hikes will continue — thanks to Amazon.
“Overall, I think the beginning of 2019 will be relatively flat, with price increases in Q3, Q4 and into 2020. The period between the old 421A and the beginning of affordable New York was a window of time where there wasn’t a tremendous amount of rental development. During that time it was difficult to build rental developments due to the escalating land and construction costs, no tax incentives, etc., creating a shortage of new product. Today, not only have some regulations changed, but the economy is doing well, unemployment rates are down, a lot of jobs are being created here in New York – not only by Amazon but everything that comes along with Amazon and all of the corporations looking to be close proximity to their headquarters. When we see the economy doing well, we can expect rental prices to increase.” — Andrew Barrocas, CEO of MNS
Individual and institutional investors will battle it out.
“Well-funded institutional buyers have tremendous advertising budgets and their spend makes it impossible for the average real estate investor to compete. It takes a serious financial investment to fund a marketing campaign that accurately targets and identifies acquisition opportunities.
That alone gives institutional investors an instant advantage. Additionally, interest rates are increasing, which not only impacts buyers who cannot afford to move, but also individual investors looking to borrow money to buy and hold rental properties. Their cost to borrow increases while inventory decreases and competition grows. This type of combination middle-market is one individual investors do not want to see.” — Brian Spitz, founder of Big State Home Buyers
Commercial property managers will hop on the shared space bandwagon — or bring in top amenities to make up for it.
“As co-working continues to be a disruptor in commercial real estate, the largest traditional landlords have opened their own flexible and co-working options to compete, such as Sage Realty's Swivel and Boston Properties' Flex. Landlords who are remaining or returning to the traditional commercial office space are facing increased demand for amenities like sleek lobbies, tech services, etc. To meet these demands and gain a competitive edge, landlords
are opening up to fintech/insurtech solutions like replacing security deposits with surety bonds to make tenants lives easier.” — Julien Bonneville, CEO of The Guarantors
Technology will continue to disrupt the industry.
“Technology disruption of the real estate industry driven by Silicon Valley and institutional investors will reach a point where it’ll threaten the traditional real estate industry. Technological innovation is here and rapidly advancing in the real estate industry and preparing for disruption. iBuying, blockchain, artificial intelligence and machine learning are changing the ways buyers, sellers and investors interact with each other and the properties they are interested in.” — Spitz
The Moral of the Story
All in all, housing is set for a slow-down next year, but as Kapfidze explained, that’s not necessarily a bad thing.
“The medium and long-term prospects for housing are good because demographics are going to continue to support demand,” he said. “With a slower price appreciation, incomes have an opportunity to catch up. With slower sales, inventory has an opportunity to normalize. A slowdown in 2019 creates a healthier housing market going forward.”
There’s no doubt about it: the 2018 housing market has seen its ups and downs.
The year started with sky-high home prices, historically low mortgage rates and a definitive upper hand for sellers. In recent months though, home price growth has faltered, rates have risen to their highest point in nearly eight years, and favor has started to shift from seller to buyer.
Will these trends continue? Will housing experience the same wild ride in the new year? Here’s what experts predict will happen in 2019 real estate market:
Mortgage rates will continue rising.
“Despite steady climbing for the past two years, mortgage rates remain lower than they were during most of the recession and below average for the type of strong economic growth we’ve been experiencing. That will change in 2019, as the 30-year, fixed rate mortgage reaches 5.8% — territory not seen since the dark days of 2008 when rates were racing downward in response to the housing crisis.” — Aaron Terrazas, director of economic research for Zillow
Millennials will keep buying homes — despite those rising rates.
"The housing market in 2019 will be characterized by continued rising mortgage rates and surging millennial demand. Rising rates, by making housing less affordable, will likely deter certain potential homebuyers from the market. On the other hand, the largest cohort of millennials will be turning 29 next year, entering peak household formation and home-buying age, and contributing to the increase in first-time buyer demand.” — Odeta Kushi, senior economist for First American
“Millennials will continue to make up the largest segment of buyers next year, accounting for 45% of mortgages, compared to 17% of Boomers, and 37% of Gen Xers. While first-time buyers will struggle next year, older Millennial move-up buyers will have more options in the mid-to upper-tier price point and will make up the majority of Millennials who close in 2019. Looking forward, 2020 is expected to be the peak Millennial home buying year with the largest cohort of millennials turning 30 years old. Millennials are also likely to make up the largest share of home buyers for the next decade as their housing needs adjust over time.” — Danielle Hale, chief economist for Realtor.com
Home buying power will decrease, but that could be a good thing.
“Most homebuyers budget a monthly payment. As rates rise, a fixed monthly payment translates into less borrowing capacity and buying power is down about 10% since the same time last year. As there are less buyers at each price point, the appropriate market response is a slowdown in sales and an easing in price momentum.” — Tendayi Kapfidze, chief economist for LendingTree
Overall home sales will drop.
“As we look toward 2019, we are anticipating home sales to decline around 2%. We’re expecting it to be another slightly slower year as buyers continue to wrangle with higher mortgage rates after contending with several years of rapid price growth.” — Ruben Gonzalez, chief economist at Keller Williams
Inventory troubles will ease — not too much, though.
“The wave of first-time home buyer demand will be met by somewhat higher inventory levels than in 2018. However, while the days of multiple offers and bidding wars may be history in some markets where inventory is increasing, inventory will likely still remain tight nationally through 2019." — Kushi
“In the majority of markets, the number of homes being put on the market or newly constructed has increased slightly, while the pace of sales has slowed slightly, which has helped stop the inventory decline. But the inventory increases or slowing price increases necessary for a more widespread sales gain are not forecasted to happen in 2019. While the situation is not getting worse for buyers, it’s also not improving notably in the majority of markets.” — Hale
Home price growth will continue to slow.
“Right now, for 2019, we believe home price appreciation will likely slow to near 3%. This is based on the assumption that the recent pattern of increasing inventory levels will be sustained in the upcoming year.” — Gonzalez
Buyers will see less competition, but that might not help first-timers.
“Buyers who are able to stay in the market will find less competition as more buyers are priced out but feel an increased sense of urgency to close before it gets even more expensive. Their largest struggle next year will be reconciling wants, needs and budget versus the heavy competition of 2018. Although the number of homes for sale is increasing, which is an improvement for buyers, the majority of new inventory is focused in the mid- to higher-end price tier, not entry-level.” — Danielle Hale, Realtor.com
National rents will rise, but apartment construction could ease renters’ pains.
“As higher rates limit the number of homes that potential buyers can afford, some would-be buyers will be too financially stretched to buy and will continue renting. As a result, recent (and very slight) drops in rent will reverse and turn positive again. The shift will be muted, however, by continued steady investment in apartment construction, which will prevent rent growth from shooting too far above income growth.” — Terrazas
NYC rent hikes will continue — thanks to Amazon.
“Overall, I think the beginning of 2019 will be relatively flat, with price increases in Q3, Q4 and into 2020. The period between the old 421A and the beginning of affordable New York was a window of time where there wasn’t a tremendous amount of rental development. During that time it was difficult to build rental developments due to the escalating land and construction costs, no tax incentives, etc., creating a shortage of new product. Today, not only have some regulations changed, but the economy is doing well, unemployment rates are down, a lot of jobs are being created here in New York – not only by Amazon but everything that comes along with Amazon and all of the corporations looking to be close proximity to their headquarters. When we see the economy doing well, we can expect rental prices to increase.” — Andrew Barrocas, CEO of MNS
Individual and institutional investors will battle it out.
“Well-funded institutional buyers have tremendous advertising budgets and their spend makes it impossible for the average real estate investor to compete. It takes a serious financial investment to fund a marketing campaign that accurately targets and identifies acquisition opportunities.
That alone gives institutional investors an instant advantage. Additionally, interest rates are increasing, which not only impacts buyers who cannot afford to move, but also individual investors looking to borrow money to buy and hold rental properties. Their cost to borrow increases while inventory decreases and competition grows. This type of combination middle-market is one individual investors do not want to see.” — Brian Spitz, founder of Big State Home Buyers
Commercial property managers will hop on the shared space bandwagon — or bring in top amenities to make up for it.
“As co-working continues to be a disruptor in commercial real estate, the largest traditional landlords have opened their own flexible and co-working options to compete, such as Sage Realty's Swivel and Boston Properties' Flex. Landlords who are remaining or returning to the traditional commercial office space are facing increased demand for amenities like sleek lobbies, tech services, etc. To meet these demands and gain a competitive edge, landlords
are opening up to fintech/insurtech solutions like replacing security deposits with surety bonds to make tenants lives easier.” — Julien Bonneville, CEO of The Guarantors
Technology will continue to disrupt the industry.
“Technology disruption of the real estate industry driven by Silicon Valley and institutional investors will reach a point where it’ll threaten the traditional real estate industry. Technological innovation is here and rapidly advancing in the real estate industry and preparing for disruption. iBuying, blockchain, artificial intelligence and machine learning are changing the ways buyers, sellers and investors interact with each other and the properties they are interested in.” — Spitz
The Moral of the Story
All in all, housing is set for a slow-down next year, but as Kapfidze explained, that’s not necessarily a bad thing.
“The medium and long-term prospects for housing are good because demographics are going to continue to support demand,” he said. “With a slower price appreciation, incomes have an opportunity to catch up. With slower sales, inventory has an opportunity to normalize. A slowdown in 2019 creates a healthier housing market going forward.”
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