Your June 202 Letter From My Heart

Good morning to Summertime gatherings,

Untold stories – New Expectations 

Expected News: Voiced concern of reopening and risk of social mixing – even after vaccine.

Washington DC loves spending. How about more money for children? May sounds good, but do they ask, Is this responsible? How does it get paid back? Is this better than a tax cut whereby we keep money in the hands of those who actually own it? Consider what is called the velocity of money – higher the better. Guess what? The private sector is far better at turning money into actual goods and services, than DC spending. The bureaucratic cost of “giving money away”, is staggering. For me, let the individual decide how to spend and invest. They know better than the politics of DC bureaucracy, special interests, and pork barrel spending. 

Why should DC decide, when you know you can do better and what’s best for your family? Government has proven to be the slippery slope of unmatched and unintended consequences.

The Bottom Line: Good News

For Home Buyers, with the lifting of many of the restrictions, the simple joy of actually viewing and walking inside of homes, is again possible. I believe this will be beneficial to both the Buyer and the Seller, particularly in today’s market, where preparation is a good discipline.

Don’t Wait – Let’s Talk – Be Prepared

Hope to buy in June? Early Preparation is key – Now is the time to call.

Bay Area Buyer Alert:

As we begin putting the fears of CoVid behind us, there are lingering effects and impacts. This is particularly true for commercial real estate, employment, and various types of schools re-opening. For some, it has proven a time of reassessment as to how they view the future. If you have such thoughts, let’s talk as you consider your financial alternatives. We can help.

Current market is good news for Sellers: We are in a period of price appreciation above norms. And more Good News: Even when price begin to moderate, even slow, there will not be a crash. Most Homeowners are disciplined. They have excellent loans, have built up equity, and will simple say NO to selling speculations. This is not the crazed market of 2005 – 2007 where idiotic Lender loans put good Buyers in harms way. For me, they knew, yet denied the speculative risk of a short-term bubble. These crazy loans are gone. Good news for all. 

How Best to Be Ready: Be well prepared – Be ready early – Even today. It’s the best way to let a Seller know your committed and ready. “Cash buying” is nice, but most Sellers prefer the hands on experience of traditionalHome Buyers. 

Housing Stats:

First: Inventory and Sales. One word – crazy. 

Used-homes inventory continues tracking historical lows. Except in certain markets and property types. Locally condo’s, following historical trends, lag the market. Otherwise the market is very active and Sellers know they can be very selective in saying Yes. Be prepared today. 

New home building is on fire with the number of contracts, on homes yet built, suggest a 10% appreciation potential. Unheard of historically, and speaks to our great rates, improving employment, and innovative significance of the Bay areas, to the global economy. 

Second: This includes the rehabbing of existing properties, in need of upgrades and restoration. And the KEY To SUCCES in this fast moving market of very low rates:

Being ready today, with a strong loan application in hand.

It strengthens your Realtor’s efforts in selling you and being sure 

your offer becomes the winning offer. Being best prepared is critical.

Third: Future ProspectsReal estate remains a good, solid long-term investment, regardless interest rates, inventory, or builder demand. Call today. Prepare Now. Don’t miss out. It is golden.

Bottom Line:

Call today and let’s prepare for Summer Buying Now.

What’s new for Real Estate 2021:

1) Loan Limits for Conforming Loans, has taken a helpful bump upwards. Let’s talk how these new limits will directly impact your buying options – based upon where you live. Conventional to $ 548,250 and Hi-cost up to $ 822,375, depending on your location. 

2) Rates: Recently easing, a bit: VA / FHA are back to the low 2’s. Conventional running high 2’s, and Jumbo loans running low 3’s, and up for 30 year fixed rates.

3) Inflation: Remains manageable, though headline numbers continue to cause worry. As an offset, increasing productivity helps control oil costs and wage pressure.  Looking ahead, experts suggest two possible outcomes: A) inflation sticks and rates follow upwards coupled with the Federal Reserve stopping the money printing machine. Or, B) inflation ‘kind of’ sticks and the burden of our debt (being deflationary) helps to keep things on a more even keel with downward pressure on interest rates. For me, free America.

4) New construction: Entry level housing holds strong and is good news.

Keys – what to keep an eye on as potential leading indicators to interest rate direction1) oil prices and its wide-spread impacts, 2) cost of re-regulation, 3) corporate taxes, 4) stimulus debt deal, and 5) possible massive infrastructure porkbarrel. Keep an eye on the strength of the US dollar. 

Good News: Data suggests a favorable 2021 for Bay area Real Estate – the global heartland. 

The Good, the Bad n the Ugly

The Good: CoVid Vaccines – For the US, quite good. India, China and Middle East still resist wide-spread vaccine due to quality, shortages, and religious beliefs. In the US, most States are opening up, following the lead of Florida and Texas.  Nationwide infection rates are down to 9 per 100,000 tested in the US. GREAT news ! 

The Bad: Congress has yet to find a spending bill it doesn’t like. Each one calls for more taxes, with the growing illogic of just printing more money, because we can. This is not being responsible and if we re-elect this in 2022, the mess grows more disastrous with no escape route. It is time to govern by facts, and not lead by feelings. 

The Ugly: Infrastructure is needed and a high priority. What is not needed – the Ugly – is calling social spending Infrastructure; calling climate change, Infrastructure; calling Greening of America Infrastructure; or calling pork barrel spending, Infrastructure. No one knows the true cost, the time it takes to have an actual impact on the economy, or most important – the unintended cost and the consequence, if rates go up, even 1/2 %. Sigh, where is the leadership and experts to guide a full and open discussion, as bragged and promised in 2020? Ugly.

planning and preparation This year

Consider Proposition 19 and its impacts on your budget. Consider the expectation of increasing taxes on Capital Gains tax. Together, this become a “planning must”, especially if in a higher tax bracket.  Few understand Prop 19 is a tax on owning real estate or its effect, when selling your property. Few know the full benefits of tax-deferral on real estate sales. 

Together we can discuss beneficial changes to your estate planning. We can discuss 

the potential benefits of deferring Capital Gains tax liability – State and Fed. 

Good News: We have good tools and many options to minimize – even avoid – paying tax on your appreciated properties – this year or in the immediate future. There is even a golden handshake – built into the real estate tax code. This benefit is not available to stocks. With stocks, you must pay taxes the year you sell. With real estate, we have options and choices. Call us, we would love to share this conversation and opportunity with you. Call today. 

Considering real estate – today or tomorrow – call us.

We help you explore the many options and see which are safe and feasible for you. Building wealth for a more secure future for you and your family. 

For Small Business – whom we love – we provide loans offering a full array of financing.

Residential and Commercial – with a full package of lending options.

Tax-deferral, for those seeking tax-advantages with their current real estate and businesses. We are proud to offer several proven tools and alternatives, designed especially for highly appreciated holdings. Helping you keep your cash working for your future. 

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

Our Goal:

Be insightful and practical. 

Working with you, to find best answers and solutions. 

No short cuts. 

Success begins with strong preparation and with me – as your professional – you have a proven advocate with the insight and experience needed for success. And I do love success and I know the ropes. Call us – the professional team who loves your success. Call us. We are ready.

Thank you and continued blessings.