Friday, February 29, 2008
Nation: Structured Sales Provide Alternative To 1031 Exchanges
A 1031 exchange is a way of deferring capital gains tax on investment property by 'exchanging' it for another investment property with the exchange going through the hands of a qualified intermediary and not your own hands). If that lake cabin doesn't qualify as an investment property under the IRS regulations or if your gains on an apartment building are more than your new property is worth, or if you don't want your money in real estate again, what can you do? "Structured sales are not for everyone but it's a tremendous strategy for people with highly appreciated properties" says Niel Friedman of Investment Property Exchange Services Inc. Patterned after structured settlements that are common in liability law, both are ways to break a large lump-sum payment into an annuity or installment payments over several years or a lifetime. The option has been around for a few years but it is just being introduced into the local market. Friedman says that a classic situation for a structured sale is one in which someone may have owned a lake property for 21 years but it doesn't qualify as an investment property under the 1031 exchange rules. The couple might sell the cabin and create annuities for themselves and their children. The result is to earn a return, spread out the tax burden and lock in payments to their children.
Monday, February 25, 2008
Ignore the Headlines! Except this one
Let's say you are emotionally ready to be a homeowner. You have good credit, plan to stay put for five years and have been waiting for the perfect entry point. It's time to get serious--before an inevitable rise in interest rates wipes out your advantage...Risks always seem most acute when the headlines give you ulcers. But that's exactly when you should think long term--and get off your thumbs.Contact us today to gain your advantage!
Monday, February 18, 2008
Homes Are More Affordable Now Than Ever!
Forget the negative hype about the housing market. Homes in the Twin Cities metropolitan area are more affordable than ever. If you are wondering whether you should purchase a home, consider these facts:
• The Minneapolis Area Association of REALTORS® (MAAR) recently reported that we are experiencing a “massive upswing in housing affordability” in our area. The MAAR Housing Affordability Index grew seven points in November to 138, the highest November mark since 2004.
• Forbes magazine recently ranked Minneapolis the number one “Most Affordable Place to Live Well” out of the 50 largest metropolitan areas in the country. The ranking was based on housing affordability; cost of living; access to arts and leisure activities; and a quality of life index that measures the strength of the schools, quality of health care, and crime and poverty rates. Forbes noted that the most important criteria in the number one ranking was housing affordability. In the last quarter, 61 percent of the area’s homes that were sold were available to the median household earner, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index. Compare that to one of the least affordable cities San Francisco where only 5.7 percent of the area’s homes are available to the median income earner.
• One important factor contributing to housing affordability is the historically low interest rate, which was 6.X percent as of (Date).
• In addition, home prices in the Twin Cities metropolitan area are moderating, with more and more motivated sellers willing to make positive adjustments to their original asking prices.
• Rents are increasing, and first-time homebuyers’ mortgage payments may be only slightly more than their apartment rent after considering tax advantages. In addition, studies show that homeowners accumulate significantly more wealth than renters. A study by the Federal Reserve found that homeowners had a median net worth of $184,400 compared to renters’ median net worth of $4,000 in 2004.
• Real estate is one of the best and safest long-term investments. Over 10 years, a $10,000 investment in the stock market at a normal 10 percent market rate of return would yield nearly $16,000. Compare that to a 5 percent ($10,000) down payment on a $200,000 home at a normal appreciation rate of 5 percent over the same 10 year period. Through the power of leverage, your return would be $125,000—nearly eight times the stock market return.
• In addition, homeowners benefit from favorable tax laws, including deductions on mortgage interest and property taxes and up to $500,000 in capital gains tax exemptions on personal residences at the time of sale.
• There is a wide variety of high quality homes available in all price ranges and communities in the Twin Cities. You can choose from new construction, existing homes, starter homes, move-up homes, luxury properties, condominiums, co-ops, townhomes, and lofts.
Don’t miss this real estate window of opportunity.
• The Minneapolis Area Association of REALTORS® (MAAR) recently reported that we are experiencing a “massive upswing in housing affordability” in our area. The MAAR Housing Affordability Index grew seven points in November to 138, the highest November mark since 2004.
• Forbes magazine recently ranked Minneapolis the number one “Most Affordable Place to Live Well” out of the 50 largest metropolitan areas in the country. The ranking was based on housing affordability; cost of living; access to arts and leisure activities; and a quality of life index that measures the strength of the schools, quality of health care, and crime and poverty rates. Forbes noted that the most important criteria in the number one ranking was housing affordability. In the last quarter, 61 percent of the area’s homes that were sold were available to the median household earner, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index. Compare that to one of the least affordable cities San Francisco where only 5.7 percent of the area’s homes are available to the median income earner.
• One important factor contributing to housing affordability is the historically low interest rate, which was 6.X percent as of (Date).
• In addition, home prices in the Twin Cities metropolitan area are moderating, with more and more motivated sellers willing to make positive adjustments to their original asking prices.
• Rents are increasing, and first-time homebuyers’ mortgage payments may be only slightly more than their apartment rent after considering tax advantages. In addition, studies show that homeowners accumulate significantly more wealth than renters. A study by the Federal Reserve found that homeowners had a median net worth of $184,400 compared to renters’ median net worth of $4,000 in 2004.
• Real estate is one of the best and safest long-term investments. Over 10 years, a $10,000 investment in the stock market at a normal 10 percent market rate of return would yield nearly $16,000. Compare that to a 5 percent ($10,000) down payment on a $200,000 home at a normal appreciation rate of 5 percent over the same 10 year period. Through the power of leverage, your return would be $125,000—nearly eight times the stock market return.
• In addition, homeowners benefit from favorable tax laws, including deductions on mortgage interest and property taxes and up to $500,000 in capital gains tax exemptions on personal residences at the time of sale.
• There is a wide variety of high quality homes available in all price ranges and communities in the Twin Cities. You can choose from new construction, existing homes, starter homes, move-up homes, luxury properties, condominiums, co-ops, townhomes, and lofts.
Don’t miss this real estate window of opportunity.
Thursday, February 14, 2008
Your opportunity is now.
Forget the negative hype about the housing industry. If you’re waiting to purchase your first home or to move up to an even nicer home, you should note that all of the conditions are favorable now. Consider these facts:
• Kenneth R. Harney, who writes a nationally syndicated newspaper column on housing, said, “Despite the impressions you might get from the network news, the U.S. economy continues to churn out solid, even encouraging, numbers—and that’s important for anyone interested in real estate. Last week the federal government reported retail sales up by 1.2 percent in the past month, and strong growth in new jobs, exports and household incomes. These are the very economic fundamentals that create an underlying base for a national recovery in housing and real estate.”
• David Blitzer, chairman of the S&P Index Committee, said, “People willing to hold properties for a long time could be well served by starting to look at potential purchases now, because over the long term, home appreciation usually pays off.”
• Housing affordability in the Twin Cities metropolitan area has recently experienced a “massive upswing,” according to the Minneapolis Area Association of REALTORS® (MAAR). The MAAR Housing Affordability Index (HAI) increased to 141, the highest rate in nearly three years and the healthiest December HAI figure since 2003.
• Forbes magazine recently ranked our area the number one “Most Affordable Place to Live well” in the country. Forbes noted that the most important criteria in the number one ranking was our housing affordability.
• As of Dec. 26, there were 28,651 homes for sale in the Twin Cities metro area compared to 25,020 at this same time last year, according to MAAR. That’s 14.5 percent more choice for home buyers!
• There is a wide variety of well-priced, quality homes for sale in all communities of the Twin Cities. You can choose from new construction, existing homes, starter homes, luxury properties, condominiums, co-ops, townhomes, and lofts. No matter what type of house you’re looking for or what your budget is, you’re sure to find a home to fit your needs.
• Interest rates on fixed-rate mortgages are at historic lows. Fixed-rate conforming home loans with no points are being offered by area lenders with rates near 6 percent for 30-year loans and in the mid-5 percent range for 15-year loans. Compare that to what the previous generation faced—an average interest rate of 9 percent in the 1970s and 13 percent in the 1980s.
• Home prices are moderating in our area, which is good news for prospective buyers. Home sellers have a better understanding of the changing housing market and are being realistic with their original asking prices, as well as making positive adjustments to their original prices when necessary. Buyers who are interested in a house should make an offer and negotiate with the seller, or they may be disappointed to learn that the house was sold to another buyer.
With all of these favorable conditions, it’s clear that your opportunity to purchase a great home is now.
• Kenneth R. Harney, who writes a nationally syndicated newspaper column on housing, said, “Despite the impressions you might get from the network news, the U.S. economy continues to churn out solid, even encouraging, numbers—and that’s important for anyone interested in real estate. Last week the federal government reported retail sales up by 1.2 percent in the past month, and strong growth in new jobs, exports and household incomes. These are the very economic fundamentals that create an underlying base for a national recovery in housing and real estate.”
• David Blitzer, chairman of the S&P Index Committee, said, “People willing to hold properties for a long time could be well served by starting to look at potential purchases now, because over the long term, home appreciation usually pays off.”
• Housing affordability in the Twin Cities metropolitan area has recently experienced a “massive upswing,” according to the Minneapolis Area Association of REALTORS® (MAAR). The MAAR Housing Affordability Index (HAI) increased to 141, the highest rate in nearly three years and the healthiest December HAI figure since 2003.
• Forbes magazine recently ranked our area the number one “Most Affordable Place to Live well” in the country. Forbes noted that the most important criteria in the number one ranking was our housing affordability.
• As of Dec. 26, there were 28,651 homes for sale in the Twin Cities metro area compared to 25,020 at this same time last year, according to MAAR. That’s 14.5 percent more choice for home buyers!
• There is a wide variety of well-priced, quality homes for sale in all communities of the Twin Cities. You can choose from new construction, existing homes, starter homes, luxury properties, condominiums, co-ops, townhomes, and lofts. No matter what type of house you’re looking for or what your budget is, you’re sure to find a home to fit your needs.
• Interest rates on fixed-rate mortgages are at historic lows. Fixed-rate conforming home loans with no points are being offered by area lenders with rates near 6 percent for 30-year loans and in the mid-5 percent range for 15-year loans. Compare that to what the previous generation faced—an average interest rate of 9 percent in the 1970s and 13 percent in the 1980s.
• Home prices are moderating in our area, which is good news for prospective buyers. Home sellers have a better understanding of the changing housing market and are being realistic with their original asking prices, as well as making positive adjustments to their original prices when necessary. Buyers who are interested in a house should make an offer and negotiate with the seller, or they may be disappointed to learn that the house was sold to another buyer.
With all of these favorable conditions, it’s clear that your opportunity to purchase a great home is now.
Monday, February 04, 2008
St. Paul: $4 Million Set Aside To Revive Six Neighborhoods
The Housing and Redevelopment Authority approved more than $4 million for strategic purchases of vacant buildings in need of rehab in six areas. The hope is that by focusing on a few blocks and removing blighted properties, or fixing them up so people can move in, other neighbors will be encouraged to improve their houses. The money comes from the Invest St. Paul program, a $25 million initiative to improve four struggling neighborhoods Frogtown, North End, Lower East Side and Dayton's Bluff. The recent $4 million will be used to improve Frogtown, North End, Lower East Side and Dayton's Bluff, Payne-Phalen, North End, Thomas Dale/Summit University, West Seventh and the West Side.
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