Buying a house can be terrifying. Selling a house can be equally as difficult. The entire process is stressful, but the end result is often worth every second of the struggle. Bob Schwab, a mortgage lender in our office, often shares great information, and points out this is because investing in real estate is a solid decision!
For the fifth year in a row, a Gallup poll showed that real estate is the best long-term investment out there. This year, 34 percent of Americans chose real estate as the best long-term investment, followed by stocks (26 percent). You can see the chart, stolen from Bob’s blog, below:
Just five years ago, gold was the most sought-after long-term investment with 34 percent of votes. Even back then, real estate was in second place, though the economy was recovering from the economic crash that preceded it. Overall, the real estate market is in good shape and people seem to agree that it’s a stable, long-term investing option. Rates are rising, so now may be a good time to buy check out this graph that shows how much buying power you lose as rates go up.
You can always give me a call to help you make that investment – it is, after all, my job!
The GOP finally pushed through its tax package, and the reaction has been interesting to say the least. While some seem to love it (The Wall Street Journal said the bill is the best thing to ever happen to our economy), many others hate it. Regardless of how you feel about the bill, it is signed in now and it’s time to see how it affects you, as a homeowner, seller or buyer.
My friend Jay Vorhees at JVM Lending put together a blog detailing some main points about the GOP tax bill and how it may affect real estate. Here are the main thoughts:
1. Current homeowners will be grandfathered in and still allowed to deduct interest against $1 million of mortgage debt. In 2018, buyers will be limited to $750,000 and interest against home equity lines will not be deductible.
2. State and local tax deductions will be capped at $10,000. This will be difficult for people in California.
3. Standard deductions are doubling to $12,000 for single filers and to $24,000 for married filers, so many homeowners won’t have to deduct their interest and property taxes anymore.
4. We have no idea what exactly the bill will do for the market when all is said and done, but for now, we can expect the low-inventory, high-demand market to suffer in high-end areas down the road, while remaining neutral in the short term.
5. To fully understand the bill’s impact on you, see a CPA. Defer your commissions. And if you’re planning an out-of-state move, consider relocating to a low-tax state like Florida, Texas or Nevada.
I’d like to expand on #5 quickly – as Jay mentioned, there will be a new $10,000 cap on tax deductions starting in 2018. If you paid off your property taxes before January, you should be able to save thousands of dollars on that by avoiding the new rule for a year. And if you are planning a move out of the Bay Area to another part of California or another state, you should be consulting a realtor or a CPA to see what kind of savings you can get!
According to an Inman.com article, Kevin Thorpe (Global Chief Economist at Cushman & Wakefield) says we are going to have a very long economic expansion.
At the National Association of Real Estate Editors conference, Thorpe said, “The U.S. will not be going into recessions anytime soon. Recessions don’t just happen. First, we need to see imbalances somewhere in the economy — too much credit, too much exuberance in any particular sector.”
A frequent speaker in the local real estate arena, Carol Rodini and some Bay Area economists agree that some changes Donald Trump’s Republican cabinet will make – redoing the tax code, trying to replace Obamacare, etc. – will be good for the economy.
Carol recently noted the top 10 tech companies in Silicon Valley are sitting on about $3 trillion in cash between their domestic and foreign accounts. Those companies grew about 7 percent last year and they believe that will continue this year.
So, if and when we end up in a recession, she believes it will be about a 4 percent dip. The Bay Area, because of Silicon Valley, will not feel it like the rest of the nation. For those buyers who are hoping for a dip so housing will be more affordable, you might want to buy now, before interest rates go up. For sellers: now and the near future is a good time to list!
About 1 1/2 years ago, I joined Just Be Yoga after I went on a Just Be and Dragon Fly Yoga retreat to Nosara, Costa Rica. I went with my favorite yoga teacher who I originally met at Forma Gym, named Kelli.
The owner of Just Be Yoga, Jenny Wendell, has created an amazing community. The people and the instructors there are incredible. The yoga studio itself has a 2-door glass garage that opens and shuts whenever necessary. They have heated classes, a little courtyard outside of the studio, and multiple yoga retreats per year from Yosemite to Hawaii, among other domestic and international locations. Another of my favorite instructors, Malia Hill, even offers an occasional SUP (stand-up paddleboard) yoga class in Alameda! This summer she is headed to Croatia for a SUP/Yoga retreat.
I think my favorite thing about going to Just Be Yoga and the retreat in Costa Rica, were meeting all the great people and instructors and just feeling like I belong. The benefits of learning to breathe, sweat and get that afterglow/relaxed feeling is a big release from the stress of daily life as a real estate agent.
A big benefit to yoga, in general, is that they really get you in touch with your body. I had no idea how much I lacked in range of motion and flexibility. Kelli’s classes often focus on areas I never knew I could stretch like hips, IT bands and sides. These tend not to be the Deep Yoga class, but they have some great Vinyasa flow and I love the Yin classes. Just Be Yoga is located right behind Wish downtown. Check them out, try them out and come be part of this wonderful community. You can do an introductory trial month for $39.
As for the retreat, we stayed at Blue Spirit and I stayed in the Eco Hut. I thought it meant “eco-friendly hut,” but I was wrong. Oops! It had no A/C, it was a shared room, and it was more than 100 uphill steps to get to the yoga studio and it meant economy hut ;-).
Despite all that, the experience was unforgettable! There was evening meditation, yoga twice a day and plenty of time to enjoy the beach (which was right next to our resort), horseback riding, surfing and more. Check out this slideshow below!