Wednesday, May 28, 2014

Moving in with parents - more common for the middle-aged.

Due to the effects of the sluggish economy, older people are quietly moving in with their parents at twice the rate of their younger counterparts. The number of Californians aged 50 to 64 who live in their parents' homes swelled 67.6 percent to about 194,000, according to the UCLA Center for Health Policy Research and the Insight Center for Community Economic Development.
Readthe article from the LA times   From Walter Hamilton (April 2014).


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Francis

Silicon Valley real estate
Smart local statistics

Tuesday, May 20, 2014

All cash buyers... some perspective

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Overall, all-cash purchases accounted for 42.1 percent of all U.S. residential sales in December, according to a new report from RealtyTrac, a company that collects and analyzes housing data.   Several factors are at play here, including the fact that institutional investors, more numerous, have bought up many homes with cash, and that many average buyers have remained constrained by unusually tight lending standards.

A few facts, from the January article of “PlanetMoney” (shared in a blog from NPR):
  • All-cash purchases accounted for 42.1 percent of all U.S. residential sales in December, up from a revised 38.1 percent in November, and up from 18.0 percent in December 2012.
  • States where all-cash sales accounted for more than 50 percent of all residential sales in December included Florida (62.5 percent), Wisconsin (59.8 percent), Alabama (55.7 percent), South Carolina (51.3 percent), and Georgia (51.3 percent).  - so, it's not only California... 
  • For all of 2013, 29.1 percent of U.S. residential sales were all-cash purchases, but the percentage
    trended substantially higher in the second half of the year. The 29.1 percent in 2013 was up from 19.4 percent in 2012 and 20.6 percent in 2011.
  • Institutional investor purchases accounted for 7.9 percent of all U.S. residential sales in December, up from 7.2 percent the previous month and up from 7.8 percent in December 2012.
  • For all of 2013, institutional investor purchases accounted for 7.3 percent of all U.S. residential property purchases, up from 5.8 percent in 2012 and 5.1 percent in 2011.
Thanks for reading!

Francis
Silicon Valley real estate
Local market: Smart graphs

Tuesday, May 13, 2014

Local real estate - some perspective.

Here is a simple summary of what real estate did lately, and in the past few years, in the Counties of the Bay Area of San Francisco.  Coming directly from the MLS (Multiple Listing Service):

















Francis Rolland

Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates
A place worth noting: Our Brother's Home in MountainView

Saturday, May 10, 2014

Five advantages to owning a home...

To piggy-back on my last blog, I thought this blog post from Redfin  from April 21, 2014 was interesting.  It says it very well.

Five advantages to owning a home:
Your home is your castle, but there are also many financial advantages of owning a home. Here are five ways that owning can be better than renting.
1. As a Hedge Against Inflation
Your rent will go up on a regular basis, while your payment on a 30-year fixed mortgage will always remain the same.
Let’s say your monthly rent is $1,800. Assuming inflation (your rent increase) is 3 percent, in five years your monthly rent will be $2,026. By then, you will have paid about $115,000 of your landlord’s mortgage.
2. To Build Your Personal Wealth
Stop paying your landlord’s mortgage. When you own your home, your mortgage amount is going down and your property value is going up.
No other investment, asset or debt is as misunderstood as a home. A home can be a wonderful and lucrative investment, but like any investment, it needs to be regularly reviewed, maintained and, when appropriate, sold. Even if your home is paid off, you still pay costs for repairs and upkeep, taxes and insurance. But like any investment, if you own it long term, take care of it and sell when the market is right, you stand to make a great gain.
3. Tax Savings (Federal and State)
Under Section 163 of the IRS code, interest on loans used to acquire, construct or improve real estate is deductible on up to a $1,000,000 mortgage.
Interest on loans tied to real estate for any reason is deductible on up to a $100,000 mortgage. For example, interest on the first $100,000 of a home equity line of credit (HELOC) is tax deductible.
Let’s say you make $100,000 per year and rent a home for $1,800 per month. You would have to pay taxes on your entire income of $100,000 when you are renting that home. If you purchase a home with a monthly payment of $1,800, you only have to pay taxes on $78,400 of your annual income because the interest you paid on your mortgage can be used as a tax deduction.
4. Asset Diversification
Unlike with a 401(k) or IRA, when you invest in a home you can live in it while the investment grows.
Owning a home over an extended period of time is usually more lucrative than renting. With good planning and execution, you can learn to minimize the cost of homeownership and maximize the ability to create real wealth. Many small business owners have a home office and can use the home office as a tax deduction while they are earning income. Other homeowners will rent out a bedroom and use the rent to pay down their mortgage and gain equity faster.
5. Forced Savings
Monthly mortgage payments lower your mortgage, essentially creating a forced savings account.
In five years with a $1,800 monthly mortgage payment, you will have paid $29,331 of the principal on your mortgage. That would be money in your pocket if you choose to sell. For this example we use a $345,000 mortgage loan amount at a 4.75 percent interest rate, 4.881 percent APR and use a standard amortization table to come up with the principal pay down.
To: view the original article.  
Thank you for reading!  Francis
Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates
A place worth noting: Our Brother's Home in MountainView