Finding the perfect home is a challenge. Some homebuyers have their preferences when it comes to suburbs or cities, quiet neighborhoods, or busy one. Today, we are going over the pros and cons of purchasing a house close to a school. If you have kids at school or college-aged, this is for you!
Pros
Affordability
Many neighborhoods that have schools nearby have low-cost properties. This is because a lot of them are rented by students who can’t afford something expensive. This results in the value of the houses not being so high, so if you are looking for something more affordable, this could work for you.
Playground Nearby
This is a huge advantage for parents that have young kids. You are not going to need to pack a car to go to a park, as it is walking distance to your home. Some of them have fences, which allow kids to stay safely by themselves, and they may even have basketball courts and other amenities.
May Increase Property Value
Houses near a school — especially a good school — have increased value due to demand from parents that want to live closely. Many of them are willing to pay more for a property that is close to a prestigious school. Homebuyers might have to increase their budget by 10 – 20% to live in these places, so it is important for sellers to know this.
Kids can walk to school
The good news here is that parents who live close to their child’s school can avoid the pick-up/drop-off lines. Another good point is kids can exercise by walking to school, the parents will save money with bus passes, and they won’t need to wake up so early.
Cons
Increased Traffic
During the hours for drop-off and pick-up, the traffic could be heavy in the area. Additionally, if the school is really big, it can change the quality of the air and increase pollution. There may be some parking inconveniences as well.
Noisy Neighborhood
A place near a school will have many kids playing together and will be very noisy. For those who like a quiet and peaceful area, this may not be for you. Usually, the sounds cease after school ends, but these places generally have many extra-curricular activities for the kids after school.
May Be Harder to Sell
Some homebuyers don’t consider buying homes close to schools, even if they are good properties. Another point is that the value of the house can change depending on how good the school is, and a school can either increase or decrease the value of your property, depending on its reputation.
These are the pros and cons of living near a school. Now you have the know-how to choose what fits best for you and your family!
The real estate market can make it easy or hard to sell a house. Many factors can contribute to that, like government incentives in the industry, the number of home buyers increasing or decreasing, and inventory available on the market. Additionally, how the economy is and how the purchasing power of the population is are other huge components in this equation. However, even though the market may be on your side, some people can not sell their house.
We’re going to find out which mistakes you’re making that are preventing you from selling your home. Don’t worry, this is more common than you think among sellers and agents.
1. Poor images
We’re in the digital era! So you have to put high-quality pictures of your house as a priority. If you don’t know how to take them, hire a professional photographer. It is nice to have some vídeos as well, and this way, it will be more fun for potential home buyers. For sure, this will make a huge difference in your sale.
The pictures should be clear, not dark. They should show the best angles of the house, and remember people like to see beautiful places. This connects us to another point — stage the house! You don’t want to take pictures of a dirty kitchen, a messy playroom, or pets on the couch. It’s important to know that people are different, but everybody loves a tidy place.
2. Withholding information
Sellers generally just write the address, value, and say that it is open for visits, but it’s not going to sell your house. What you should do is describe all parts of the house as much as possible — how many rooms, bathrooms, if it has a backyard, front yard, pool, how the kitchen is, etc. It’s crucial to tell potential buyers everything about the house to make them curious about the property.
Here is some information you could write about: What makes the house unique? What was your motivation when you bought the house? What is the architectural style? Mention every detail that makes the house amazing.
3. Hire a Broker/Agent
We all know sometimes we want to do it all by ourselves, but in some situations, hiring a professional is the best thing we can do when selling a house. An agent has the experience and the time to sell your house properly, which will make both the seller and buyer happy. The commissions that these agents get are worth it for you to get excellent service.
4. Restricting Access to the Property
If you want to sell the house, let people feel free to go there whenever they have time. It’s a big mistake to restrict hours, and do not forbid people from walking in some areas in the house, which can be perceived as rude or creepy.
5. Not Advertising
These days, everybody should know the power of advertising. If you’re putting your house out on the market, this is a step you must take if you want to succeed. Some of the options you can use for that are putting your house on various websites, such as classified ads, real estate, and social media.
6. Not Making Virtual Tours
This might not look so interesting at first, but since the COVID pandemic, virtual tours are more common than ever. People are first seeing homes online, and if they’re really interested, they will schedule a time to see the house. Making a nice video is fundamental to get more attention and offers from potential buyers.
Knowing about all these mistakes will make it is easier to avoid them. Now you can have a successful open house!
Going to open houses is a part of house hunting and a very exciting one. However, something that should be a fun part of your next step in life can be transformed into a nightmare if you don’t know how to act in these places.
Some of the common questions homebuyers ask are: Do I walk straight in? When do I ask questions? Is there a dress code? Can I bring the kids with me? We are going over these questions today, and we’re going to help you figure out how to deal with that, what you should do, and what you shouldn’t do.
What should a homebuyer do
1. Ask questions
That’s obvious advice, we know! But very frequently, when people are visiting houses, they get so excited with the houses that they forget to ask questions. It’s kind of funny but true! Remember, the agent is there to sell the house, so ask as many questions as possible. If you leave and still have questions, feel free to send them questions by email or phone.
2. Take pictures and videos
Even though nowadays the open listings have more images and videos, ask if you can take your own photos. It’s considered acceptable for would-be buyers to have some images from the house they are thinking about buying.
3. Check if something is broken
Check if everything is working in the house. Look around and see if there is anything broken, like doors, windows, open kitchen cupboards, and check the pressure in the faucets.
4. Make yourself at home
This is the house you’re envisioning to buy, so feeling comfortable is very important. Make yourself at home, imagine living in the place with your family, and feel free to sit down on the couch or at the counter in the kitchen. However, laying down on a bed is definitely off-limits.
5. No dress code
Our tip here is to dress in whatever you feel comfortable with. But remember, you’re going to see a house you want to buy, so it is nice to dress like someone who can afford a house, of course within your style.
What you shouldn’t do
1. Careful with kids
Usually, open houses are on weekends when families are relaxed and taking kids out for activities. There isn’t a rule, but it is polite to ask the agent if you can bring your kids for the open house, but only if you can watch them! It’s very rude to let kids mess around while people are looking at the house, remember that it’s not yours yet.
2. Criticizing the property loudly
It is very normal that the property won’t meet your expectations, but do not criticize it out loud. That is very impolite and makes everybody around feel uncomfortable. If the property is not what you want, check with the agent if they have another property, or you can use the faults to negotiate the price.
3. Don’t bring drink or food
It’s common courtesy not to bring drinks like coffee or eat snacks inside the house that could spill and get dirty. Some open houses have coffee breaks, but limit yourself to the area where there is food and drink.
4. Snooping around
It may seem unnecessary to say, but don’t snoop around people’s houses. You can look at the closets, and see how deep the bathroom cupboard is, but it’s unacceptable to snoop around people’s personal possessions.
To conclude, it is smart to bring your ID in case you need to register at the door of the open house. Ask as many questions as you need, and be nice, as the agents are representing the owner of the house. Always remember, being polite is the key to success!
While there has been uncertainty around the future of office real estate as a result of the pandemic, the asset class is performing better than some have expected. As the vaccine continues to become more widely distributed, utilization rates in office space continue to steadily increase. More than 95 percent of employers are anticipating a nearly full-return to office, which is significant considering occupancy was less than 50 percent in June of 2020. Life science and medical office space in particular, which provide the most stability during times of economic downturn, have been helping to bolster office performance. IIn this article we will cover:
The office industry and the case for investment in this asset class
The progression of modern office space
Life sciences and the impact Covid-19 has had on the industry
The evolution of the life science industry since the early 2000s
The future of office and the life science industries
COUNTERINTUITIVE: WHY YOU SHOULD INVEST IN OFFICE RIGHT NOW
During the pandemic, companies around the world had to switch from collaborative office environments to remote working. An estimated 62(1)percent of employed Americans worked at home during the crisis, compared to 31 percent prior to the pandemic. The resulting rise in U.S. office vacancy rates and the declining average gross asking rent caused concern for the future of office real estate.
According to CoStar, office-using employment fell 7.8 percent from February to April of 2020, but then increased by about 5.5 percent during the summer. The result was that office-using employment was only down about 2.8 percent from the February peak. Despite widespread fear of vacant offices, as of Q2 2021, the office vacancy rate exceeded 12%, up 2% year-over-year.
The reality is that while there has certainly been an impact on occupancy, the office sector is not only a safe bet, but continues to be a strong investment option. It is predicted that employees will be returning to office space earlier than anticipated. During his discussion with Willy Walker in Q4 2020, Owen Thomas, CEO and Director of Boston Properties, predicted that occupancy of his own buildings could be up to 20 percent by the end of the first quarter 2021, 50 percent by Labor Day, and up to 75 percent by the end of the third quarter.
Additionally, niche office sectors, such as life science and medical office which remain stable even during economic downturns, have bolstered the office market’s strength.
EVOLUTION OF OFFICE SPACE: NEW OPPORTUNITIES
Studies have shown that employees are eager to return to the office, but changes will need to be made to accommodate the evolving needs of tenants. According to a survey conducted by Deloitte, 68% of employers plan to implement some type of hybrid workplace model in 2021, while only 1% will remain fully virtual. With hybrid work schedules and increased flexibility, there will need to be more incentive for employees to make the trek into the office.
Additionally, the role of office space is shifting toward community and collaboration. Employees will re-enter the office as a means to build personal and professional relationships and connect with the culture, purpose, and mission that the company has to offer.
Investors and developers have an opportunity to reposition office space and gravitate toward a space that reflects the needs of the future. Physical and virtual experiences must be fully integrated into office space to ensure connectivity among all employees. Just as new technology must be integrated into the office space, companies need to invest in home tools and resources so that collaboration is seamless regardless of physical or virtual presence.
93% of people believe that a sense of belonging drives organizational performance (Deloitte 2020 Human Capital Trends). The future of office space will require a design that encourages reconnection, community, and inclusivity. The most successful office spaces will be ones that fully embrace the collaborative environment that corporate America is gravitating toward.
LIFE SCIENCE
COVID-19 ’S IMPACT ON THE LIFE SCIENCE INDUSTRY
Life Science companies are now at the forefront of public interest because of Covid-19 and the rush to develop a vaccine. As the life science industry continues to display remarkable resilience amid the economic downturn, investors and developers have a heightened interest in the space. As a result, institutional investment in the space has been growing at 15 percent per year, totaling more than $6 billion in 2020.
The need for more life science space also creates the need for new construction, as not all office buildings are capable of housing life science tenants due to the demanding lab requirements including high floor loads to handle equipment, proper ventilation, and safety infrastructure.
Buildings are constructed for a specific use, and traditional office structures have a predetermined capacity of weight the building can withstand. While traditional office spaces tend to use lighter materials and can therefore easily accommodate a variety of tenants, life science lab materials include heavy equipment, specific electrical wiring, complex systems, and more. If a building can structurally withstand the load bearing requirements, they can potentially redevelop space to fit a life science tenant’s needs. Still, significant capital expenditures would also need to be invested. If the life science company requires a more traditional or medical office space, such improvements are easier to accommodate.
Although it may seem as though investors and developers are now hopping on a hot trend, the life science industry has been experiencing exponential growth since the early 2000s.
LIFE SCIENCES SINCE THE EARLY 2000’S
An emphasis on individualized and preventative treatment has been a powerful driver of the life science industry for nearly two decades. The sector has also benefitted from technological advances in medicine, changes in healthcare delivery mechanisms, and an aging population. As this demand has grown, so has employment. Since the end of 2013, the number of life science jobs has increased by 70,000 jobs per year.
Life science tenants have proven to be resilient. Even during both economic downturns since 2000, life science industry employment has continued to increase. The powerful drivers of life science industry growth support lab space even during a recession. A high importance is being placed on life science employees, as their average salary has experienced more than 19 percent growth in the last five years. In this same time span, the total number of life science institutions has increased by more than 13 percent, further solidifying the industry’s value (1).
OUTLOOK ON LIFE SCIENCE
The world population continues to grow and age, and there is no shortage of diseases that plague the human population. As the need for treatment, cures, and innovations continues to grow, venture capital investment in the space will continue to increase as well. Investment from government grants and large pharmaceutical companies will also help stimulate the sector and stabilize it during turbulent cycles.
Since custom buildout for life science space requires significant capital, landlords can command higher rents compared to traditional office. As a result, there are high barriers to entry within the life science market. The recent modernization of zoning regulations throughout the U.S. have led to an increase in life science developments. From 2009 to the end of 2019, the amount of lab space in the United States grew from 17 million to 29 million square feet (1). To put that in perspective, the New York office market alone contains 1.4 million square feet.
There is a high demand from institutional capital looking to get into these high-demand markets. From a capital perspective, there will continue to be a massive flight of investment capital from real estate ownership to invest and own properties in the space.
Life science industry growth is aligned with global healthcare expenditures which are expected to rise at a rate of 5.4 percent annually, from $7.7 trillion in 2017 to an anticipated $10.1 trillion by 2022 (2). Additionally, revenue in the industry has been growing at a steady pace throughout the past decade.
Based on the trajectory that the life science industry has had since the early 2000s, along with the newfound recognition of its true necessity post Covid-19, industry growth is expected. Consult with our New York Capital Markets experts for your life science or office industry questions or transaction needs.
The intense and prolonged seller’s market has had a profound impact on Americans buying and selling homes this year. An incredibly low supply of available homes has persisted throughout the U.S. and historically low mortgage rates continue to encourage new potential buyers to enter the market – despite the competition. If homeowners thinking about selling their home, now is absolutely the time to do so.
Housing
Listings are still down, despite the market conditions that are incredibly favorable for selling a home.
Comparing year-to-date Bright MLS cumulative listings hitting the market in 2020 and 2021 (covering most of the mid-Atlantic region and the entirety of Houwzer’s Philadelphia, Baltimore and DC region footprint), both years started out on a fairly similar trajectory, but starting in February 2021, listings fell behind.
By early April 2021, though, listings picked up pace and exceeded the year to date listings total of the same period the year before. This is not too surprising given how much real estate activity fell off during the early days of the pandemic.
PROMOTED
What is somewhat surprising is that 2021 so far has not seen significant listing gains compared to 2020, especially because the market conditions to sell a home have never been better and this is in comparison to the worst periods of the pandemic shutdowns.
It is somewhat shocking that more homes are barley coming to market vs. what occurred during a (hopefully) once-in-a-lifetime pandemic, despite massive year-over-year increases in buyer demand and the pandemic winding to an end. It’s worth mentioning that this could be due, in part, to the prolonged period at home and the shift to remote work in 2020. Many who planned to move this year might have already done so.
Cumulative New Listings Jan-Apr 2021 vs. Jan-Apr 2020
Cumulative New Listings Jan-Apr 2021 vs. Jan-Apr 2020 HOUWZER
Market Performance Breakdown
Philadelphia, PA: Median sale prices are up 16.7% year over year in Philadelphia and inventory is at 1 month (down from 4.8 months same time last year)
Washington, D.C.: Median sale prices are up 10.1% year over year in DC and inventory is 0.8 months (or ~24 days, down from 1.9 months same time last year)
Baltimore, MD: Median sale prices are up 10% year over year in Baltimore and inventory is 0.9 months (or ~27 days, down from 3.2 months same time last year)
Orlando, FL: Median sale prices are up 13.5% year over year in Orlando and inventory is 1 month (down from 4 months same time last year)
Tampa, FL: Median sale prices are up 18% year over year in Tampa and inventory is 0.8 months (or ~24 days, down from 3.7 months same time last year)
At this point, there is double digit year-over-year median list price appreciation in the Mid Atlantic and Central Florida markets, and inventory is at almost the minimum levels mathematically possible across the board.
Anecdotally, increasingly desperate tactics from would-be buyers are becoming the norm: “love letters” from prospective buyers to owners of homes not on the market persuading them to sell, buyers waiving all contingencies including inspection, and buyers submitting multiple offers concurrently on multiple homes knowing they will most likely miss out on all of them.
The buyers/sellers housing market chart HOUWZER
The good news is that this is not in stagnant market, so listing inventory only needs to tick up in order to get to optimal conditions. The current market situation is kind of a form of a Prisoner’s Dilemma. One of the reasons listing inventory is so low, is that homeowners are stuck in their homes because it’s so difficult to purchase a new one. However, this is a circular problem that requires cooperation to solve. If those “stuck” homeowners all listed their home at the same time then the inventory problem would be solved, and they’d also be able to easily buy in a healthy market with a balanced amount of buyers and sellers.
It is–without a doubt–the best time in history to be a home seller in any of these markets. And if homeowner does decide to sell, and others decide to do the same–it will also help them buy a home by increasing inventory.
Mortgage
The other silver-lining: after briefly ticking up, mortgage rates are trending back down toward historic lows, slightly increasing home buyer purchasing power versus a month ago:
While this is good news for anyone hoping to keep their monthly mortgage payments down, it will do little to cool the white-hot market. If and when mortgage rates finally begin to rise significantly, there will likely be some reduction in demand.
Conclusion
If homeowners are in a position to buy and sell a home, now is an ideal time to do so. Despite the difficulties buyers may encounter, there are two important factors working in their favor: extremely low interest rates, and a strong seller’s market in which to sell the existing home.
Renting an apartment can be a little tricky, so paying attention to details in this process will make the difference when you close the deal. Some of the common issues that tenants have are with parking, rules, and terms in the building, or too thin walls. Checking the building, the apartment, the neighbor, and the noise in the building are some of the things you should be careful with to avoid having future problems.
Here are some of the most important points to consider when you’re renting an apartment.
Set your budget
The first priority when you’re looking to rent a place is to set your budget. Looking at your financial situation is the first step to take. Our tip here is to write down your income, realize what you can afford — remember your rent should be one-third of your income or less —, and then start searching for what type of apartment you want.
Research the building
When looking for apartments, make sure to search online about them, and see what kinds of reviews or issues they have. If there is anything wrong with the complex, you can find that information on google. If there is any problem with the electricity or water pressure, you should know before signing the lease.
Parking space
If you are a car owner, having all the information about parking is very important. Some buildings don’t have a garage or parking space for every renter, so make sure you get all the information you need at this point to avoid unwelcome surprises when you park your car.
Negotiate
Negotiating terms and prices is a smart move to make when you’re renting an apartment. Get fully informed about the place — issues, how long the place has been on the market, how the neighbors are, all this can help you get a discount on the rent.
Check how thin the walls are
Living in an apartment, you’re going to have neighbors all around you — to the left, to the right, above and below, so if you appreciate quieter places, this tip is for you. Some modern buildings have soundproof walls, but old ones don’t. So if this is an issue for you, our tip here is to schedule an open house during the morning, when everybody is getting ready for work or school, and you will experience the normal level of noise. Another good time is on the weekends when people are usually at home.
Now you have the knowledge you need to rent an apartment and not have any unexpected surprises!
Potential tax reform and rising inflation may slow down the booming market. Assessing the proposed tax legislation and current market conditions, our crystal ball will help you plan for what’s next.
Right now, trying to predict the impact of federal tax changes on the residential real estate market is a guessing game. “Since no bills have been introduced yet, it’s hard to speculate on some of the effects without details,” says Selma Hepp, Ph.D., Executive, Research and Insights and Deputy Chief Economist, CoreLogic. That said, by assessing the proposed tax legislation in The American Families Plan (AFP) plus current market conditions and possible inflation through the lens of historical market trends, housing economists and Realtors have come up with some solid predictions. Read on for their prognoses regarding various aspects of potential tax reforms.
Increase in Personal Income Taxes and Capital Gains for Higher-Net Worth Individuals
The Tax Cuts and Jobs Act (TCJA) of 2017 reduced the top income tax rate from 39.6% to 37%. Reversing this change (for the top 1%) is a central aspect of the Biden administration’s proposed tax changes, as is ensuring that capital gains are taxed at the same rate as wages (39.6%) for households making $1 million plus.
“There was a real estate boom, and it could end with this type of tax change,” says Daryl Fairweather, Chief Economist at Redfin. “Right now, the housing market is dominated by the wealthy,” she explains. “If we change the structure to tax the wealthy more, they will have less money to spend on real estate and won’t compete as much with middle class buyers.” Investor profits could decrease, as could the rate of home value growth. “Right now, there’s not enough supply,” says Jack Fry, broker-owner of RE/MAX of Reading in Pennsylvania. “However, when demand shuts down and if capital gains taxes increase, investors will find other places to put their money.” On the pro side, though, this type of tax reform could level the playing field for the middle class, says Fairweather.
Reversal of the SALT Deduction Limitation
At this point, the Biden administration has offered no indication that they plan to reverse the $10,000 state and local property and income tax (SALT) deduction cap, which punitively affects states with higher taxes (such as California, New Jersey, and New York). According to Dr. Hepp, “The SALT deduction cap did end up having an impact on sales activity of homes that were on the margin, such as those priced between $1 million and $1.5 million in the Bay Area, as those households saw a material impact on their tax bill and had relatively ‘limited’ income [for that area]. The same could be said for some markets in the Northeast, such as Connecticut.” On the slim chance that the Biden Administration does reverse this deduction limitation, the migration from high to low tax states (such as Florida and Texas) might abate, says Fairweather.
Elimination of Stepped-Up Basis for Gains from Estates
The Biden administration aims to eliminate a provision that allows heirs to rebase inherited assets, thereby avoiding capital gains tax. Specifically, limiting the practice for gains over $1 million ($2.5 million for couples), this could encourage heirs to hold on to inherited homes instead of selling them, says Fairweather, though she doesn’t foresee a major impact on the market.
End of 1031 Like-Kind Exchanges
Moreover, the current administration proposes to end another tax break, which lets real estate investors put off paying capital gains taxes when they exchange one property for a similar property (proposed legislation would apply to gains greater than $500,000). “This would have an extremely negative effect on commercial investments,” says Cathy Kennelly, co-owner and Certified Distressed Property Expert, Signature Realty Associates. “It could be disastrous for a real estate sector that is just starting to recover.” This could encourage investors to hold onto real estate longer instead of selling and buying again, which would reduce inventory at a time when inventory is already reduced, says Fairweather. It could also decrease incentives to become an investor, she adds.
Closing of the Carried Interest Loophole
Many private equity firms invest in real estate — and have been benefitting from a tax break that allows them to reduce capital gains taxes, explains Fairweather. By closing this loophole, such firms might decrease their investment in real estate, which could reduce values of high-end homes and decrease competition for homes, making them more accessible to middle- and lower-income individuals. “Overall, this could be good for middle-class homebuyers who want to live in these homes and not that great for investors and the wealthy,” she says.
The Big Unknown: Inflation
Upping taxes should give some headwind to inflation, says Fairweather, who feels that the price increases we’re seeing are more of a one-time adjustment. As an example, despite the large increase in home prices, there are already signs that housing price increases could slow down, she adds. Plus, wages are rising, which would balance out increasing prices. So, inflation may impact real estate.
Housing has been a relatively good inflation hedge, according to Dr. Hepp. She points to a CoreLogic blog post, which compared home prices with the consumer price index over a long period of time. According to CoreLogic’s Chief Economist, Frank Nothaft, in general, stock market values have grown more than home prices since 1946 and home prices have increased slightly faster than inflation.
While higher inflation would probably increase the rate of home price appreciation, Dr. Hepp continues, it could also mean higher mortgage rates. Indeed, “Inflation can be a double-edged sword,” says Kennelly. “Your house is worth more, but it would cost more to purchase, which could hinder ‘move-up’ buyers. If interest rates trend higher, it would be an additional concern.” Still, she adds, “There is currently strong demand for homes, which could remain for some time due to the huge population of Millennials, who need homes.”
Cindy Ariosa, senior vice president, regional manager, Long & Foster Real Estate, Chantilly, Virginia; liaison for large firms and industry relations, the National Association of REALTORS® (NAR): For a variety of reasons, the coronavirus pandemic put vast numbers of Americans on the move. March 2021 existing-home sales were up more than 12% compared with March 2020. How long the upward trajectory will last is debatable. But one thing is certain: REALTORS® are fiercely alert to any legislative changes that could impact the industry. Six months into the Biden administration, we’re exploring a few of the issues that matter most to individuals and investors. High on the list is the 1031 exchange, so let’s start with that.
Shannon McGahn, chief advocacy officer, NAR, Washington, D.C.: The 1031 exchange allows investors to defer paying capital gains on the sale of a property if the proceeds are reinvested in another similar property. It has been part of the IRS code since 1921, and for decades, it has brought immeasurable revenue, jobs, investment and economic benefit to the U.S. President Biden’s plan would limit the tax deferral to transactions less than $500,000, and if wealthier investors choose not to sell, it could temporarily keep properties off the market. It’s important to remember that it’s a deferral, not a tax cut or loophole, and when we educate lawmakers on its impact on real estate and community development, they understand its importance very quickly.
Chris Trapani, co-founder/CEO, Sereno Real Estate, Los Gatos, California: Historically, more restrictive and excessive taxes on real estate disincentivize people from selling, which contributes to the lower inventory condition. Lower inventory then adds pressure, causing values to rise, thereby negatively impacting affordability. The 250K/500K exclusion for primary residences, which replaced the rollover of any level of gain provided a primary residence of equal or greater value was purchased within two years rule in 1997, is a perfect example. In the Bay Area, any owner looking at profits exceeding $250,000 for singles and $500,000 for couples is disincentivized to sell, which has contributed to the problem of low inventory and lack of affordability overall. Therefore, if the 1031 exchange goes away, fewer people would sell, and we’d have even less available properties for sale.
Jon Coile, vice president, MLS and Industry Relations, HomeServices of America, Annapolis, Maryland: There have been rumors for decades about the demise of the 1031 exchange, but there’s too much resistance for that to happen. Yes, it helps the affluent, but there are plenty of average people out there who own a couple of rental properties or maybe a little strip mall, and it helps them, too. In any case, coming out of COVID may not be the best time for a lot of investors to change where their money is invested. I don’t see much happening on this until after the pandemic is over.
CA: And the larger issue of capital gains?
JC: If you learn from history, you know that everything is doomed to repeat. In past years, when the capital gains tax went from 20% to nearly double that, there was little impact on any but the richest Americans. Today, we again have a 20% rate, which Biden proposes to double. But once again, there will be little or no impact on anyone earning less than $1 million a year—and only 0.03% of Americans earn that much.
CT: The administration has repeatedly said that the president does not intend to raise taxes on anyone earning less than $400,000 a year, and this capital gains tax plan kicking in at $1 million seems to honor that.
SM: If you double the capital gains tax for sellers, the wealthiest can afford to wait. We educate lawmakers as to the fact that raising the capital gains tax could actually reduce revenue, not bring more in.
CA: What about the first-time homebuyer credit?
SM: Biden’s call to provide a $15,000 tax credit for first-time homebuyers, or up to 10% of the purchase price, is now a bill in Congress that would clearly incentivize more millennials and minorities to jump into the market. In addition to increasing affordability, it could help increase inventory if new tax incentives encourage investors to convert unused commercial properties into residential.
CT: Any time supply is suppressed, values appreciate faster, which we are seeing today—and which prices people out of the market. This tax credit will increase affordability. It’s a great solution for leveling the playing field for buyers.
JC: We are excited about it because it’s cash that turns up on the settlement table to make the home purchase possible. Buying a house is the single biggest investment for most people, and we are in the enviable position of helping them get into the homes that will help them build a nest egg. What I love about Biden’s goal is that increasing affordability extends the opportunity to build wealth for so many more people, especially the underserved—and we can help make it happen. What a noble profession we are in.
Nowadays, the housing market is full of unprecedented opportunities for those who want to sell or buy a house. We’ve seen a high demand of buyers and a record-low inventory, which means it is the perfect time for those who want to sell a house. Enjoying this wave is a smart decision. However, it is important to set things up before you put your house on the market, since no one wants mistakes to happen in this phase.
1. Pricing Correctly
This step is one of the most fundamental. Even with the housing market having low inventory, this does not mean the house is going to sell at the price we want. Having the right price for the house will save time in the selling process, and for sure, you will find the perfect buyer. Another smart idea is to get more bids for the house to create a competitive environment and increase the final sale price of the house. To make sure the house is evaluated correctly, call a real estate agent to help you set the right price and achieve your financial goals.
2. Stage the House
Here is the step to make the house look incredible, and putting in the right decoration will help sell the house. It’s important to stage with a buyer mind and not with a seller mind, which means you should decorate the house the way the future buyers will step in and visualize themselves living in that place.
The buyers want to see a place they can imagine, so it is important to not have personal items like pictures of the family, kid’s toys, etc. Leave the place organized and neat so that whoever enters can envision their desires there. A real estate agent can help with that as well.
3. Let the Emotion Out
Sometimes, it is not so easy to sell the house we’ve been living in for many years, and of course, we’re going to be emotionally attached to the place we have spent with our family or raising the kids. For some homeowners, it’s quite difficult to separate the emotional value from the market value of the house. In this case, it is necessary to hire a real estate agent to help you set the right price for the house.
After you follow these steps, your sale is going to be successful. We are sure that you are going to have the right price for the house and achieve your goals!
An East Hampton property that has been off the market for 75 years has just been listed for a whopping $69 million.
Named Cima Del Mundo, which translates to “Top of the World,” the Spanish-Colonial estate was initially built in 1925 and underwent design renovation in 1994, according to the Real Deal.
Made up of eight bedrooms and 7½ bathrooms, the compound sits on 2.7 acres of land and boasts 400 feet of ocean frontage on Georgica Beach.
The home was designed for indoor and outdoor living. Upon entry, a tiled foyer with a curved staircase can be seen with redefined finishes, the listing states. Interior features include an expansive eat-in kitchen, a study, a double-height living room and five fireplaces.
The home is listed for the first time in 75 years.
The foyer. Via RealtorA hallway with a series of perfectly designed Spanish doors for easy outdoor/indoor access. Via Realtor
Interior balconies are seen from the living spaces. Via RealtorThe kitchen. Via RealtorThe study. Via RealtorBedrooms have sweeping oceanfront views. Via Realtor
A dressing room. Via Realtor One of 7½ bathrooms. Via Realtor
Exterior amenities include an oceanside pool, a pool house and extensive terraces.
The estate is just one of many Lily Pond Lane addresses that have hit the market in recent years. Businessman Ron Perelman listed his home on Lily Pond Lane last summer, and actress Candice Bergen listed her Hamptons home on the same street in December.
In 2016, hedge-funder Scott Bommer, who founded SAB Capital and is currently the senior managing director of Blackstone, sold three Lily Pond Lane properties in the Hamptons for $110 million in an off-market deal.
Ed Petrie of Compass has the listing.
The driving trail leading up to the property. Via Realtor
Cindy Ariosa, senior vice president, regional manager, Long & Foster Real Estate, Chantilly, Virginia; liaison for large firms and industry relations, the National Association of REALTORS® (NAR): 
Shannon McGahn, chief advocacy officer, NAR, Washington, D.C.:
Chris Trapani, co-founder/CEO, Sereno Real Estate, Los Gatos, California: 
Jon Coile, vice president, MLS and Industry Relations, HomeServices of America, Annapolis, Maryland:
