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Market Trends Category

Owning a Home may be a wise Investment

Homeownership as an Investment

by THE KCM CREW on DECEMBER 12, 2012 · 0 COMMENT

In Real Estate: Today’s Golden Opportunity we compared the current housing market to the market for gold about a decade ago. Some commented on the fact that you can’t compare gold to real estate as an investment as gold is a very liquid asset and it would take more time and effort to sell a house. We were not trying to make the case for real estate vs. gold as an investment in our blog. We were just showing that all investments go through cycles and that the best time to buy any investment may be when everyone is saying not to.

However, since the subject of comparing real estate to other investments has come up, let’s take a closer look. There are two major advantages to investing in a home of your own rather than another option:

You Can’t Live in Your IRA

When you buy your own home you are not taking available dollars away from another investment. You are replacing one housing expense (rent) which has no potential for a return on investment with another (mortgage payment) that does give you an opportunity for a return. We realize that there has been research showing that over the last 30 years renting has been less expensive than owning. That research also says that if you invested the entire difference between the rent payment and mortgage payment you may have done better financially.  There are two challenges with this conclusion:

  1. Today, in the vast majority of the country, renting is actually more expensive than owning a home.
  2. History has proven that tenants DO NOT invest the difference in their rent and mortgage payments.

Today,studies show that owning a home is no more expensive than renting a home. However, even if this wasn’t the case, history shows that owning a home creates greater wealth.

Paying a mortgage creates what financial experts call ‘forced savings’. The Joint Center for Housing Studies at Harvard University released a study last year titled America’s Rental Housing: Meeting Challenges, Building on Opportunities. In the study, they actually quantified the difference in family wealth between renters and homeowners:

“[R]enters have only a fraction of the net wealth of owners. Near the peak of the housing bubble in 2007, the median net wealth of homeowners was $234,600—about 46 times the $5,100 median for renters. Even if homeowner wealth fell back to 1995 levels, it would still be 27.5 times the median for renters.”

There Are Tremendous Tax Advantages to Investing in a Home

There is no doubt that selling an investment such as gold is easier than selling your home. However, this liquidity comes at a price. The price is called capital gains. That is the tax you pay on any financial gain you receive from the investment. This tax doesn’t apply the same way when you sell your primary residence:

Theresa Palagonia, a CPA and the Accounting Manager for the firm G.S. Garritano & Associates, was good enough to explain the Home Sale Exclusion Rules:

“You may qualify to exclude from your income all or part of any gain from the sale of your main home. 

Maximum Exclusion

You can exclude up to $250,000 of the gain on the sale of your main home if all of the following are true:

  • You meet the ownership test.
  • You meet the use test.
  • During the 2 year period ending on the date of the sale, you did not exclude gain from the sale of another home.

If you and another person owned the home jointly but file separate returns, each of you can exclude up to $250,000 of gain from the sale of your interest in the home if each of you meets the three conditions listed above.

You may be able to exclude up to $500,000 of the gain on the sale of your main home if you are married and file a joint return and meet the requirements. (Special rules apply for joint returns.)

Ownership and Use Tests

During the 5 year period ending on the date of the sale, you must have:

  • Owned the home for at least 2 years, and
  • Lived in the home as your main home for at least 2 years

Certain exceptions exist in which you may qualify for the exclusion without satisfying the tests listed.”

Bottom Line

Every investment has pros and cons. That is why there is such an assortment of great opportunities. Real Estate has been, is and always will be one of those opportunities.

Confidence in the economy will help Real Estate Sales

As consumers get more confident in the economy, this will bring buyers and sellers into the market.  Many people have been on the fence waiting to make a move until they feel good about their financial condition and the economy overall.

According to KCM   “The Reuters/University of Michigan’s consumer sentiment index rose to 83.1 in September – the highest level since September 2007 – from 74.3 in August. Analysts had forecast a rise to 78.3.”  Read more here

If you are thinking of making a move, call me today at 770-354-0243, now might be the right time!

Rory, gotta love the humble superstar!

It was golf at it’s finest.  Rory yesterday in the PGA tour just walking away with the lead with incredible golf, full composure, and humility.   We all love a humble superstar, they don’t come around very often, and when it does, especially in golf, it is a nice change.

I think its the same in real estate, in the boom years of the market, many agents did not have to do anything for their clients and homes would sell. Today agents that are active and making a full time living in the market we have had since 2007 are some of the best in the business.  The others got out when times got tough and it wasn’t easy anymore.

I never knew the boom times, the “easy” market, where anyone could be a superstar.

Honestly, I felt the same way about agents that probably many of you did at the time as well. They make too much money for the effort they put in. They don’t know what they are doing and worst of all they seem a bit arrogant.

I really believe that I am a better agent for you because I have been successful in a tough market, I understand this market and it’s very cool now because it is starting to turn—finally.

I am excited about what I am seeing out there and it is a happier news when I am talking with sellers these days.  If you are thinking of moving, call me today, I promise to be humble and honest with you, not arrogant or all knowing, I will listen to your needs and advise you on how I can help you in this transitioning market place to help you benefit the most.  It’s not about me, it’s about you!  Call me today at 770-354-0243!

 

 

 

Positive News in Atlanta Real Estate as 2nd Quarter Stats are in!

Here we are in August and the numbers from the end of 2nd quarter are in and they are the best we have seen in a long time.

The overall Atlanta market is better than this time last  year and part of the reason is that inventory levels are the lowest they have been since 2008.

 

 

 

 

 Other Highlights from June 2011 to June 2012

There has been an increase in sales of 13.1%  and Distressed Sales were lower at 44.7% of  sales BUT they were a whopping 74.6 % of sales in the 100K and under price range.

Median Sale Prices increased by 5.9%

Median days on market down -27.3% to 80 days

Supply decreased by -42% and 4 months of supply in June 2012

Homes that are non distressed priced below 500k are now in a sellers market.

Will this last? It’s hard to tell,  if banks release too much foreclosure inventory into the marketplace slowing down sales and keeping prices low then it may reverse some of our recent positive trends. However with interest rates at incredibly low rates and prices at very affordable levels, may buyers will continue to purchase  homes at one of the best times in history, which is great for sellers and buyers!

If you are thinking of moving give me a call at 770-354-0243 or email me  to get you started or just simply click the link above to search for homes.

We have buyers in Atlanta who can’t find homes, time to sell yours!

Yes it’s true.  There are areas of Atlanta that are short on inventory and we need your home to sell!!

Specifically, East Cobb, Johns Creek, Sandy Springs and Dunwoody, Buckhead.  We have buyers right now that would like to buy but the inventory levels are low and there are few choices.

 Inventory levels are down in all of Atlanta by 50% from this time last year.  We have a nice window of opportunity right now for sellers, don’t miss out!

So, call me today  at 770-354-0243 to discuss selling your home! Even if you are “underwater” we can help you with the short sale process.

 

 

 

Will homes ever return to the bubble values?

The market is doing better now, inventory levels are down so there fore homes are selling.  This is great news for sellers, but some sellers are still having a hard time with the value of their home today.  Homes are selling but prices have not increased yet, and in my opinion it will be a while before they  do increase.  I don’t have a crystal ball but we may see values increase slightly over the next few years but it will never be again the peak of the “stinky ” loan era.

So if you are thinking of selling, now is the time, this is a nice window of opportunity where interest rates are low, inventory levels are down 50% from this time last year and you have a much better chance of selling fast and for top dollar.  Call me today to get your home sold and then you can take advantage of this market for your purchase!

Sellers asking prices in Atlanta were up in May!

Sellers in the Atlanta area saw a 2.5 % increase in May from over a year ago.  This is directly related to the number of homes available for sale in the Atlanta area.  Sellers are feeling more confident these days to go ahead and get their homes on the market.   According to Wall Street Journal article, unsold inventory is down and prices are up slightly.  Read more here.  It is nice for sellers to have this news, its been very hard on sellers the last few years in this buyers market.  However with that being said that no matter what the market is, the homes in the best condition, staged and ready for market and priced right will sell fast in any market. I can show you how to do that.  Beat the competition and get sold quick for the highest dollar possible.  Call me today 770-354-0243 or email me to get started.

150 Million Dollar Starter Home? For these young women –Yes

These two Heiresses  Petra is 23 and the oldest is 27, are Formula 1 Racing boss Bernie Ecclestone  daughters.  They are spending their trust money to buy up some of the most expensive ultra high end luxury real estate on the market.   Very interesting,  well when you have it all at 23 and 27 , what do you have to look forward to on your “move up” home. 🙂   Take a look.

15 Year Mortgage Rates hit all time low, 3%!!

If you have been putting off buying a house, do it now! Mortgage rates hit an all time low this week which means you can afford more house for the money!

I cannot stress enough if you have been on the fence, now is the time to get off! It is time to take advantage of the best market to buy real estate in decades.

Call me today at 770-354-0243 or email me and lets get started on your home search today! And if you are thinking of selling, it is a great time, inventory levels are lower and buyers are ready to buy!

 

The Stats are in, We are in a Changing Market!

The 1st quarter in real estate was the best quarter in 4 years.  The numbers are showing that it looks as if we hit the bottom of the market in January 2010.

Inventory levels are down 30 % over this time last year!  Less homes for sale creates more demand and homes are selling faster.  In one price point –under $200,000  in all areas of metro Atlanta we are officially in a sellers market! This means that we have less than 4 months of inventory on the market and buyers are actually competing for homes!

There are pockets of Atlanta such as the Walton High School district that is in a sellers market from  under $500, 000

Another interesting stat is that short sales now make up 26%  of the market and foreclosures are down and represent 16% of the market.  Distressed homes represent 42% of the market overall, this is across all areas of metro Atlanta.

What does all this mean to  you?  If you have been thinking about selling, now very well be the time.  And if you are a buyer, there is going to still be  a window of opportunity to get some great prices and interest rates are at an all time low.  However this window will be closing, buyers have been on the fence for a long time and it will not last.  This market is in transition and then it will seem a slow one at first and then before you know it, buyers will be COMPETING  for houses.  So don’t wait, get into this market today.  Call me at 770-354-0243 if you are thinking of buying or selling, we can discuss your goals and see if this is the right time for you to sell or buy!

Don’t wait, Warren Buffett  says In the business world, the rearview mirror is always clearer than the windshield 🙂