Where to put your cash? A house or a stock

Where to put your cash? A house or a stock

 

A new article came out today trying to indicate whether to put your money in a home or stock.

They try to go back to the late 1890’s to give their advice but looking since the 1980’s it seems to me that that there are conflicting reports. The home values have gone up and taking into account you can live in your investment and receive a tax deduction for your interest paid on your home; and after 2 years you can declare a tax free gain of $250,000 per person ($500,000 per couple) this is a much better investment return than putting your money into stocks.

That being said, you never want to place all your eggs in one basket, less you drop that basket and break your eggs.

If you kept your home investment, even though you received a paper loss, you will end up with a true capital gain. Real estate always goes up, but you cannot say that about all stocks if you hold on to them.

The government is pushing home ownership as an investment. Which is good, interest rates are low, and home owners get a tax deduction which is not received if you are a renter.

 

Also if you live in Orange County, your values have really returned strongly and had you held onto your home, you would have a nice equity growth, much better that the stock market.

 

A house can also offer greater returns if the owner chooses to rent it out and not to live in it; and if you sell it within 3 years of renting it you can still receive your tax free capital gains.

It’s a riskier choice, given the current volatility in home prices, but it may be the best way to build wealth.

Before doing anything you should check with your Professional for advice, your tax accountant for taxes and your Real Estate Agent for Real Estate

MarleneDietrich@Realtor.com

Feds May Hike Interest Rates Next year

According to sources, the Feds may hike Rates in 2015, not because of any fear of inflation or fears but just because they want to test the waters. They want to raise because they are expected of them.

It has also been predicted that oil prices will go down even further. If it goes to $75 a barrel this would suggest a near Zero inflation in the economy.

With both of these indicators and a number of other important facts, there may be a higher interest rate to buy your home with next year. Even if the homes go down in price, the fact that the interest rate is higher you will not be able to buy the same home for less money monthly unless you are an all cash buyer.

Take advantage of the Holiday Real Estate Market slowdown and negotiate a good price, capture a great interest rate that has just dropped again, and write off the non recuring closing costs on the 2014 tax year so that you can enjoy your new home NOW.

Contact us anytime at 949-400-1021 or MarleneDietrich@Realtor.com

Visit us at www.MarleneDietrichRealEstate.com or www.MarleneDietrichNewportCoastRealtor.com

 

 

The Real Estate Market will also have it’s own BLACK FRIDAY

The Real Estate Market will also have it’s own BLACK FRIDAY 

According to Forbes.com:

Usually sellers are doubtful that the end of the year will be the best time to sell, since most people are busy with Thanksgiving, Christmas, Hannukah and bad weather. However, due to the end of the year and a rush for tax purposes, etc… homes have been selling and closing more quickly.

More serious buyers will look at the end of the year as they believe it is an opportune time. This makes it an ideal time for sellers to put their home on the market.

Buyers may take a last minute look at their tax status and want to write off points, interest, property taxes and all non recuring closing cost this year. Some buyers face a capital gains tax and want to offset with another purchase required within 180 days.

With rates so low and holding, there are lots of opportunities to buy your dream home this year.

Contact us for any assistance you may need

MarleneDietrich@Realtor.com  www.MarleneDietrichRealEstate.com  949-400-1021

Million-Dollar Home Sales Are on the Rise

 

Million-Dollar  Home Sales Are on the Rise

Based on an article in the Daily RE News, the wealthy are now buying million-dollar homes again, as sales of homes priced at $1 million or more climb while lower-priced properties are taking longer on the market to sell.

Homes that sold for $1 million or more rose by 8 percent this year, while homes at every other price point dropped by 4 percent, according to National Association of REALTORS® research.

Million-dollar homes climbed out of the Great Recession much faster than those at other price points. Homes in the Million plus bracket fell in 2008 as did the rest of the market but in the last 2 years have almost reached the 2007 peak levels, according to CoreLogic.

Currently there are lenders who will loan upto $1.5 million with only a 10% down, with great rates and with NO PMI.  That is a big help for professionals with great income, great FICO scores and less than the normal 20% down payment.

“The opportunities for wealthier borrowers are now better than they’ve been in a decade as far as rates and terms.”

A Quote that may make you buy a home in the next year

“Given the appreciation of the dollar and the deflationary pressure coming out of Europe and Asia, I think it’s going to cause the Fed to wait longer before they start taking action,” he said. “We’ve always believed this was going to be a fourth quarter 2015 event. I think we may be looking at something in 2016, and you can’t rule out the possibility that we could get pushed out even father.”

Noone knows that the future will bring but all looks hopeful and you will never lose if you stay in Real Estate

New Social Security changes for 2015

“Social Security recipients will receive 1.7 percent bigger checks in 2015, the Social Security Administration announced last week. And some groups of workers will begin receiving benefit statements in the mail with a list of taxes paid and an estimate of their future retirement benefit. Here’s a look at the new Social Security benefits, taxes and services workers and retirees will experience in 2015:

Bigger payments. The 1.7 percent cost-of-living adjustment is expected to result in the typical retiree getting about $22 more per month. This change will increase the average monthly benefit for retired workers in January 2015 from $1,306 before the cost-of-living adjustment to $1,328 after. The average benefit for retired couples who are both receiving benefits is projected to increase by $36 to $2,176 per month.

Social Security payments are automatically adjusted each year to keep up with inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers. Previous cost-of-living adjustments have ranged from zero in 2010 and 2011 to 14.3 percent in 1980. The 1.7 percent increase retirees will receive in January is similar to the 1.5 percent adjustment for 2014 and 1.7 percent increase in 2013.

Higher tax cap. Most workers pay 6.2 percent of every paycheck into the Social Security system until their earnings exceed the tax cap. The maximum taxable earnings will increase next year from $117,000 in 2014 to $118,500 in 2015. About 10 million of the 168 million workers who pay into Social Security are expected to face higher taxes as a result of this change. People who earn more than the taxable maximum do not pay Social Security taxes on that amount or have those earnings factored into their future Social Security payments.

Larger earnings limits. Social Security beneficiaries who are under age 66 can earn as much as $15,720 in 2015, before $1 in benefits will be withheld for every $2 earned above the limit. Retirees who will turn 66 in 2015 and have signed up for Social Security can earn up to $41,880 before every $3 earned above the limit will result in one benefit dollar being withheld. However, once a retiree turns age 66 there is no limit on earnings and Social Security payments are recalculated to give the retiree credit for the withheld benefits.

Your statement might be in the mail. If you will turn age 25, 30, 35, 40, 45, 50, 55 or 60 next year and don’t have a Social Security online account, you can expect to receive a paper Social Security statement that lists your earnings history, taxes paid and expected benefit about 3 months before your birthday. And after age 60 workers will receive a statement annually. The SSA expects to send nearly 48 million Social Security statements each year. These mailings, which were sent annually to all workers age 25 and older between 1999 and 2011, were suspended in April 2011 to save money. Statements are also available online at any time via socialsecurity.gov/myaccount, and 14 million people have created personalized accounts using this service.

The maximum benefit increases. The maximum possible Social Security payment for a worker who signs up at full retirement age will be $2,663 per month in 2015, up $21 from $2,642 in 2014”

Know your benefits and plan ahead and if you are in your 20’s and 30’s start an IRA or join 401K, don’t plan on SSA being there

What Wall Street really believes is why the Stock Market is so unstable

Stocks, and bonds fluctuate based on a lot of these items below. It really shouldn’t bounce around so much but it is all based on fear and uncertainty.

1. Falling gas and home heating prices are a bad thing.

2. Layoffs are great news, the more the better.

3. Billionaires from Greenwich, Connecticut, can understand the customers of JC Penney, Olive Garden, Kmart and Sears.

4. A company is plagued by the fact that it holds over $100 billion in cash.

5. Some companies have to earn a specific profit—to the penny—every quarter but others shouldn’t dare even think about profits.

6. Wars, weather, fashion trends and elections can be reliably predicted.

7. It’s reasonable for the value of a business to fluctuate by 5 to 10 percent within every eight-hour period.

8. It’s possible to guess the amount of people who will get or lose a job each month in a nation of 300 million.

9. The person who leads a company is worth 400 times more than the average person who works there.

10. A company selling 10 million cars a year is worth $50 billion, but another company selling 40,000 cars a year is worth $30 billion because it’s growing faster.

 

The only true stable long term value increase has been in REAL ESTATE. Even though it fluctuates, if you stay in Real Estate you will always make money, and have great security.

The Scales have tipped to a buyer’s market

The scales have tipped to a buyer’s market

With houses staying on the market in Orange County an average of 10 days longer in July 2014 than in July 2013, more housing inventory to choose from, and an increase in the number of sellers dropping prices, buyers should assume that every house has a motivated seller behind it.
If you’re in the market for a new home, here are some ways to leverage the buyer’s market to your advantage:

Don’t be shy
Ask the seller to pay the first year of HOA fees, ask that the carpet or wood floors be replaced or professionally cleaned, ask for the landscaping to be updated… even ask for the luxurious pieces of furniture you’d like to have. The WORST they can say is no. You might end up getting more than you thought possible. Simply TRY asking for it since many sellers are ready to negotiate in order to get under contract.

Name your price
When you see the sales comps of surrounding homes, don’t be afraid to throw out an offer that’s below the average. Now, don’t have the false hope actually getting the home at this price. Instead, use your low offer as a tool to gauge the seller’s motivation. Again…the worst they can say is no.

Partner with your loan officer
If you’re going to be taken seriously by the seller, you need to have your ducks in a row before even looking at the home. With mortgage rates at one-year lows, it’s a GREAT time to buy. Especially when you can maximize the benefits of a buyer’s market.

Start by working with your loan officer to determine how much home you can afford and what types of loan programs are best for you. Then make sure you have your letter of pre-approval in hand. A seller is much more likely to lend an open mind to negotiations and requests from a well-prepared, serious buyer than one who is not.

Contact us and we will introduce you to a great lender
MarleneDietrich@Realtor.com www/.MarleneDietrichRealEstate.com

Homes Sales up due to Job Market & RE Inventory

 

Home Sales up due to Job Market and RE inventory

According to the  Association of REALTORS®   Sales of homes have risen for the 4^th month in a row. Smaller price increases, lower interest rates and rising apartment rents.

The Job Market has gotten better, and even though there have been claims of housing affordability declining, Homes used to sell for $325,000 at 10% and you can still get the same home for about $650,000 to $700,000 at 4.125% so where is the loss of affordability.

There are loans available for 5% down conventional, and if you are moving or moving up in the next 5,7 or 10 years you can bet an even better interest rate. Some buyers want to pay off they home in 7-10 years so they use this to keep their interest rates down and pay the Principal off much quicker to become debt free, which is what Dave Ramsey Preaches.

Distressed homes have dropped from 15-9% which is a big fall from October 2008s tracking. In 2009 35% of all sales were distressed home sales and now it is down to 9%. We are moving in the right direction.

Homes here is the West have risen 2.6% with a 6.3% medium price increase. Don’t forget we are talking about the West, Orange County is much better.

For a knowledgeable agent who will get the job done, contact

MarleneDietrich@Realtor.com 949-400-3099 www.MarleneDietrichRealEstate.com

3 Reasons to Buy in Orange County Now

 

3 reasons for buying homes now.

 

There are 3 reasons todays buyers are moving to purchasing a home.

1. Real Estate ownership is considered a great long term investment for their future
2. They are tired of throwing away money on rent
3. It is the right time to buy.

About 33% of all home purchases last year have been made by single buyers according to the, National Association of REALTORS® and of those 75% of those are between the ages of  25 and 50.

Single Females desire Proximity to Family and Safety, and for Baby Boomer singles it is a symbol of success and roots. They want low maintainence and home entertaining even dual masters for nonromantic roommates.

The choices of homes for consideration were largely square footage & yards with proximity taking a close 3^rd in importance.

Home ownership is a major life decision. Even though many were intimidate by the process of the home search, negotiating, obtaining a mortgage, buying and closing escrow they knew it was the right thing and the right time.

Many also said they dined out & entertained less often and most spent less on vacations but felt it was well worth it to achieve Home ownership at this time.

Whatever you do the most important thing to do is start with a good agent and a good lender

Contact us anytime 949-400-1021 MarleneDietrich@Realtor.com www.MarleneDietrichRealEstate.com