Your April 2023 Letter From my Heart with the Good Bad n’ Ugly

Good morning to March – SPRING Buying Ahead

Don’t Wait – Prepare Today !!

Enjoy the Home Buying Experience

Real Estate News that Tracks Our Market.

Recent News and Expectations for 2023:

– Question: Are the banking troubles of SVB, First Republic, Signature, even Credit Suisse and Duetsche Bank, unique happenings or a systemic risk? Consider: Let’s say I bought a loan for 100 K, earning me 3,000 per year, at 3% interest. Now, due to inflation, let’s say the market wants to earn 6% per 100K – double what I receive, at 3%. Inflation does drive rates higher. Thus if forced to sell my investment, the new investor, wanting a 6% yield, will only pay half of what I paid – 50K – as 6% of 50K is the same $3,000. For me, I have a loss of $50K.

For a Bank, caught in the same game, such events puts the bank at risk of failure. Why? Because the investment securities that back the banks loans, in times of rapid inflation, can quickly become less than what the bank loaned out. What makes this worse is the harsh reality that these same type banks, also played “accounting” games (within the rule book, but just a bit more risk issues) not measured by the Banking Stress Test. This is scary. It could be a rough ride, as more facts becomes known. 

 Bottom line: 2008 debacle was from stupid lending practices. 2023 may well speak to poor Fed practices and policy? Both cases resulted from the over-educated, who should have know better. Time will tell if anyone is held responsible and accountable. . 

– Value of single-family homes: Recent headlines: ‘first year of value decline, in 11 years!’ Not quite correct as told. Both Case-Shiller and FHFA approximate near 6 %+ appreciation over the past year. Why the differences? The headlines reference “Median home prices” – 50 % sell above and 50 % below. The pricing model does not account for the fact higher end homes have slowed in sales, thus skewing the numbers they reference – not helpful. The C-S and FHFA puts focus on the individual home.

Stay with Mike Ryan & Associates and gain helpful knowledge, not empty headlines.

Start planning today for better buying and investing, tomorrow. Call today.

– Unemployment: There are some cracks in the job market. New Job Openings are beginning to decline. Those going more than 5 weeks collecting unemployment benefits is increasing. Further, CoVid brought shrinkage to the available Labor force with more and more Baby Boomers retiring. Outcome: 3 M less people working than the former trend line.

– Home remodeling: On the topic of home prices, the average homeowner sits on a $348,000 cushion of home equity – all-time high. Good News: Said declines in home values should have minimal impact on remodeling, with most homeowners feeling quite secure. 

Bottom Line: Start Preparing Today 

Interest Rates Are Likely nearing a Peak

Key to Success: Preparation and Readiness. Let your Realtor – and the Seller – know of your readiness and commitment to buy. It is a strong step in turning your dreams into reality. For certain, don’t let the “All Cash buyer” be of concerning. Most Sellers tend to prefer the real life experience of a traditional Home Buyer. Why? Because Homes are personal and family is key to the American heritage.

Let’s Talk Today

Be ready today. A strong loan application is a winning attitude.

It strengthens your Realtors efforts in selling you and your offer 

as the winning offer. Being “best” prepared is sound advice.

Interesting News We Can Use

Interest Rates: Likely remain stubbornly high, with rates following inflation. Of interest: Rents are a significant factor in determining our inflation numbers. As this component is a lagging indicator – with many months last year of large monthly increases – actual inflation, based solely on today’s numbers, would be near 2% lower.Good news: Mortgage rates are easing, just in time for the Spring Time Buying Season. Prepare today, by calling now.  Let’ talk.

Looking to Buy or Invest this Spring Season?

Call today and begin early preparation now.

This keeps you ready and flexible. It is key.

The Good, the Bad, And the Ugly

THE Good: Construction work in the United States has become much safer over the last few generations. Between 1970 and 2023, the occupational death rate – in construction – declined from around 70 per 100,000 workers to 15 per 100,000 workers – 80% improvement. During the same period, the injury rate declined seven-fold.  Construction Physics

THE BAD: The potential for “move-up buyers” in today’s real estate market, is crimped by the reality that 70 % of current mortgage holders have rate at 4 % or lower. Hard to move up, with potential Sellers loving their current mortgage vs today’s higher mortgage rates. The drag is real. 

THE UGLY: Home prices decline for the 5th month in a row, based on November data. Yet after of 120 months of price gains, it should be expected.  Prices are down just 3.6 % from the peak.  Overall, not all markets are down. Some markets are still up, as too, some product. Yet, these headlines may boost housing supply, as Sellers come off the sideline, fearing further price declines. So this month’s Bad may be offset by an increase in the number of homes for Sale. This Springtime should most insightful, as to the true nature of today’s real estate market.

Planning and Preparation 

Should one invest in stocks, bonds, real estate? Each person has a different view, often based upon comfort levels and sense of risk / reward. It is what we call the market place. It is key to one’s “planning and preparation”. It is here we bring our expertise and experience. Our efforts are to complement your perspective. Our goal: Bring a full range of meaningful options that enhance your vision, based upon todays market realities. Call today. Let’s set a time. 

Why call Mike

What We Do – Why We Are Here

We know how to explore and carefully examine the many available real estate options. We scrutinize for safety and prioritize the most feasible. It is how we build a trusted relationship with you, as you grow your wealth and secure a solid future – for you and your family. 

Small Business: We love small business and provide loans offering a full array of financing.

Residential / Commercial: We offer strong lenders and a complete package of lending options.

Tax-deferral strategies:  Investment portfolio tend to be dynamic in nature, subject to change and surprise. It is why it is important to keep updated, as to tax law. Herein, is a key question: Pay taxes today or keep your cash, working for you? How? By “deferring projected capital gains tax”? And if keeping your capital – working for you – sounds good, let’s talk. Let’s discuss the best available options and plans-of-approach. Best: We have the professional team who know how to bring it all together. Details matter and they know all the small details. 

Why: Why payout up to hundreds of thousands of dollars – even Millions – when there are tools to keep your hard earned money working for you – and your estate. Interested? If so, now maybe a good time to talk – to start planning for tomorrow. Tax planning is a good strategy, especially with new laws wanting to stop you from passing highly appreciated real estate, onto your heirs. Let’s talk. Your estate matters.

What We Do: Our role is to explain and bring clarity to time-tested strategies able to keep your money working for you. For me, this presents a solid opportunity to keep your cash and build wealth. One that is worthy and a profitable use of your valuable time. Let’s talk. 

Tools: We offer multiple tools and proven methods for highly appreciated holdings. The goal: Keeping your cash in your proven hands. Our team offers highly qualified and knowledgable professionals, are ready to make it happen. 

Retirement: Like myself, as we mature, real estate becomes more personal. If you agree, let’s talk. Together, we can help find answers and solutions to questions about a too soon, tomorrow. We can start today. We can address a range of questions, from working at home, to a multitude of retirement options. Our effort is to bring clarity to important real estate planning issues.

Our Purpose:

Be insightful and practical. 

To Work with you, finding the best answers and solutions.

Being Straight Forward with No Short Cuts. 

Success begins with solid preparation and a proven professional – Mike Ryan. I know the ropes and am a proven advocate. I offer time-tested insights and experience. Best, I love to see my clients achieve their goals. Call us – the professional team who stands with you. Call today. We are ready. 

Thank you and continued blessings.

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