Posts Tagged as Future Real Estate Trends

The real estate industry and homeowners have benefited from substantial tax deductions for decades. However in the latest real estate news, changes to these deductions are coming into the light now that the proposed tax plan has been signed into law. What will the fallout to the industry and home ownership be?

The Proposed Tax Change and Potential Impact to Home Buyers

The real estate industry and homeowners have benefited from substantial tax deductions for decades. However in the latest real estate news, changes to these deductions are coming into the light now that the proposed tax plan has been signed into law. What will the fallout to the industry and home ownership be?

Introducing ‘The Realtor Party’
In efforts to ‘save home ownership’ and leave homeowners as a favored class in the tax code, realtors nationwide protested, lobbied legislators, and warned clients about the threat of unfavorable real estate market impacts under the new tax law.

How the Changing Tax Codes Could Reduce Home Prices
According to real estate news, the new tax law could make home ownership less attractive, raising the cost and potentially depressing property values. What tax changes could bring this to pass?

– Property Taxes
The new law places a cap on the combined state and local income/property taxes with a single deduction limited to $10,000.

– Mortgage Interest
Under the new law, the standard deduction is almost doubled, so fewer homeowners will itemize, losing the full benefit of the mortgage interest deduction.

– Capital Gains
The qualification time for capital gains exclusions could increase, likely reducing transaction volume as sellers wait longer to list.

– Mortgage Rates
The $1-trillion+ the new law may add to the federal deficit could result in more rapidly rising mortgage rates according to economic theory, raising the cost of financing.

Big Winners… & Big Losers
According to some economists, smaller markets could feel little-to-no effect, while those in high-cost, high-tax areas like NY and NJ could see significant declines in home values: As much as 14% by 2019. Other real estate news analysts expect little effect, however, as many households already choose not to itemize. Rising demand/limited supply are expected to continue to drive the market upwards.

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Keep Your Public Relations Good

The Data’s In, 2017 Looks Like It Will Be a Seller’s Market!

Still bitter with the real estate industry following the market’s 2008 downturn? Real estate selling in 2017 and beyond may offer some karmic retribution. A seller’s market is predicted, though a buyer’s market is not too far off on the horizon.

What “the experts” are saying
Most economists agree 2017 will be a strong seller’s market, though buyers are expected to have their day in 2018 or 2019.

• Matthew Gardner, chief economist at Windermere
Gardner expects inventory to rise in 2017, but not to sufficient levels to support the currently stretched market. Inventory will take a little longer to sell, but as the job market continues to tighten, demand will continue to outstrip supply.

• Mark Fleming, chief economist at First American
Assuming a market with modestly and predictably rising mortgage rates, Fleming believes first-time buyers will drive the market, pointing to a demographic that’s young (millennial), diverse, technologically savvy, and predominately college-educated.

• Jonathan Smoke, chief economist at realtor.com
Smoke sees market potential for a high volume of first-time buyers, but with geography playing a role: Some markets will be above-average in price expectation or sales expectation – but few will be above-average in both. In seller’s markets, supply constraint will be driving the price; In buyer’s markets, “great buys” are pushing sales growth. The good news? Either is good for the real estate selling business.

• Svenja Gudell, chief economist at Zillow
Gudell sees a market skewing to sellers, with more purchases on the outskirts of the city compared to the urban center, with its much higher price tags. She warns to expect higher cancelation rates and lower conversion rates in today’s challenging financing environment, with pent-up demand declining, in favor of more organic activity as interest rates rise.

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Things You Don’t Know About Mold that Could Land You in Hot Water

What to Look for in Real Estate Trends in 2017

As the 2016 presidential election has proven, anything can happen – even in real estate selling. Don’t get blindsided this coming year; circumvent surprises by staying aware of changing trends.

Be on the lookout for dramatic changes in 2017:

Drones
For everything from seller listing photos to fly-by home inspections for overeager buyers, the FAA’s decision to clear drones for commercial use pending flight certification (not the ejector-seat kind) will likely lead to the dramatic (overuse) of drones in 2017.

• ‘Surban’ settings
Bye-bye ‘Brangelina’ and ‘mixed-use…’ Hello ‘surban.’ Dense communities of varied housing types (apartments, townhomes, single-family) alongside urban amenities allowing residents to live, work and play within walking distance of their residences are now a popular and affordable alternative for the working class, especially compared to the ultra-exclusive nature –and price tag – of comparative urban settings.

• Money-backed millennials
Millennial home purchases will continue to be a driving trend, however all those years staying in mom’s basement are leading to purchases over-and-above the typical starter home milieu. Those not buried in student loan debt may be on the lookout to buy more house than you think.

• Gen Z
Gen Z, on the cusp of home buying, will be coming of age with less student loan debt, higher wages, and lower interest rates. Growing up amidst recession, war, terrorism, and stock market collapse, they value home ownership. Over 97% want to own a home – and they’re looking for space.

• Post-election shenanigans
Just before voters went to the polls, Dennis Lockhart, Federal Reserve Bank of Atlanta president, stated only election turmoil could forestall December interest rate hikes. Then Trump literally trumped election expectations, tossing a wildcard on the table which is expected forestall interest rates at least another season. The future, however, is anyone’s guess.

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Video Usage in Real Estate, the Stats Are In

Commercial Real Estate Delinquency Rates Climb – Watch Out In 2017

Commercial real estate trends point to prices falling by as much as 5% in the next 12 months.

What gives?

A storm is brewing, creating a tsunami of issues for the commercial sector. The global surge in U.S. property investments that drove record values in years passed is expected to wane alongside lower oil prices and disjointed debt markets. Property sales by publicly traded landlords, debt maturities, and tightened regulations are furthering the trend. The instability is creating a volatile commercial real estate selling atmosphere, with uncertainty about U.S. policies following the presidential election worsening matters.

Let it rain

Commercial mortgage-backed securities (CMBS) float amidst a tumultuous market in which borrowing costs for landlords are higher, inhibiting future price growth. Properties in small cities, dependent on Wall Street banks for funding, have been hit especially hard – a global market rout in February sent prices plummeting after Wall Street dealers were unable to provide liquidity when hedge funds were forced to sell CMBS holdings. Regulations such as Dodd-Frank are also not helping the situation, making it increasingly expensive for banks to hold securities.

Cold front

The market has shown signs of cooling since the start of the year, with commercial property values in big cities declining 3% in just the past 3 months. New York, the biggest market, is forecasted to decline as much as 30% over the year. Even REITs (real estate investment trusts) are being affected, with shares trading at prices that undervalue holdings (shopping malls, office buildings, hotels, etc.), leading them to become net sellers.

Bailing out

Despite the expected downturn in commercial real estate trends, the sun could break through the clouds, presenting new opportunities in the form of bargain prices for investors, and opening opportunities for investors to bail out borrowers who’ve come up short.
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What is Compass and Why Is It In the News?

What Will a Trump Presidency Look Like for Real Estate?

In his next 4 years as president, Donald Trump could have a major impact on real estate selling across the U.S. Licensed real estate brokers and agents nationwide are looking to Trump and how his time in office could change their industry.
What are some possible outcomes of the Trump presidency?
Trump has centered his platform around deregulation to further the recovery of the financial market, and there are a host of changes that could be made that would affect real estate sales…
• Lower premiums.
While Trump hasn’t articulated much on his housing platform, he has expressed interest in boosting home ownership and cutting fees for Fannie Mae and Freddie Mac. Lowering premiums for FHA loans could offer the boost consumers need to make owning a home an affordable reality.
• Potential reforms.
Fannie and Freddie could also be on the chopping block for cutbacks, alongside such programs as the Low Income Housing Tax Credit and Section 8 housing vouchers.
• Loosening lending regulations.
Trump, alongside the Republican party, have been vocal about changing banking regulations, including significantly altering the Consumer Financial Protection Bureau (CFPB) and the Dodd-Frank Act’s regulations on lenders to replace it with something else that would allow for easier securement of home loans.
• Preservation of mortgage interest tax deductions.
Trump explicitly stated his desire to preserve mortgage interest deduction in a tax plan he shared last year. However, his current plan has yet to detail this issue.
• Construction deregulation.
In Trump’s August meeting with the National Association of Home Builders, he pointed to over regulation in the industry, with some 25% of costs to build a home tied to regulations, and announcing his desire to get that down to 2%. This alone could greatly lower the costs of real estate selling and home ownership.
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