Your June 2023 Letter From My Heart, with the Good Bad n’ Ugly

Good morning to June – Cool summer, matching our economy;

Don’t Wait – Prepare Today !!

Enjoy the Spring Home Buying Experience

How We Can Help

The end of our letter offers more specifics. Here I want to bring to light the challenges within the banking sector as a whole. Please call us with any challenges you may encounter or hear about. The heart of lending is and has always been the creation of flexible connections between you – and your friends – and the multitude of our lending partners.

Our role is to specialize in the nuances connecting you with a lending partners best able to advance your home buying experience – home or an investment. Our advocacy is for you alone.

Real Estate News – Tracking Our Market.

Recent News and Expectations for 2023:

Perspective: A helpful insight into the challenges of mid-size bank and their investment strategies. Over the past few years, the challenge was how to maximize yield on bank deposits. The trouble: Saving savings rates below 2 %. Consumers wanted more. But to do better often meant investing in riskier investments, needing careful, constant review.

But know Banks had their own internal challenge. For a very long time, Banks were allowed to convert 10X bank deposits, into other assets – mostly loans. Thus deposits of a million dollars meant $10 million in loans. Many of those loans made – or purchase of Treasury bills – were set at very low interest rates. During CoVid years, many home loans were written between 2 or 3%. But the book value of such investments then drop dramatically, as Fed rates rose dramatically and DC deficit spending surged. A mathematical rule = ouch.

This “ouch” caused depositors to take their money elsewhere. This triggered the Banks to sell assets to meet legal requirements. Selling in a falling market, leaving fewer loans on the books. This also meant great performing loans were now of the bank books. Banks got a military haircut. Lesson: Tricks and risks of leverage, a train wreck that had to happen.

Then there are the issue of bank management, stock holders, and lack of watchdogs able to act on a timely basis. What was coming should have been seen and acted upon. Instead they believed it would not happen, but it did and they were caught and Big Banks won. .

Questions: Are the ripple effects over and what impact as Regional banks are taken over by the Big 5? For certain the best of Regional banks will survive, but there is more to come. Do your home work and talk to your Regional bank. At least that is my present perspective.

– Value of single-family homes: Overall, values of homes are increasing. Not a surprise, though many talking heads prefer to sell this fear, year after year. Though not the blistering pace of the past few years, it remains in the low single digits not seen in the last few years. This may help Sellers fearing a dramatic downturn in values to now add their property to the market. Regardless, I see a lack of supply of homes with good demand from working families, to continue to underpin a positive market. Start to prepare today. Call us now.

– Employment / Unemployment: Confusing the Federal Reserve is the continued steadiness of our employment marketplace. Yes, slight increases in unemployment filings, yet “continuing claims” continues to hold steady. This is not what the Fed wants to read. They want increased unemployment, less consumer spending, and falling of demand, meaning lower inflation. This does over-simplifies a very complex situation. Yet the goal is to offer a “feel” of the market place, while avoiding the quagmire of DC deficit spending vs. with Fed policy and objectives.

Bottom Line: Start Preparing Today With Mike Ryan & Associates

Key to Success: Stay disciplined, prepared and ready to act. 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 concern. 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: The May 10th report on inflation, is here. It came in as we expected. Unfortunately other economic events will keep rate high – and maybe higher. The challenges: Government deficit spending, supporting the US dollar, and regional bank struggles with lender deposit ratios, are offsetting improving inflationary numbers.

We are hopeful the interest rate continuum will stabilize and return to standard fundamentals. Let’s hope government funding and bank management challenges are resolved. Good news: Mortgage rates are holding steady. Prepare today. Call us now. Let’s 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 – hat tip: John Burns group: 

John Burns Group – a $490 billion repair and remodeling business – just got a 2.5% ($12 billion per year) boost. This, thanks to The Inflation Reduction Act’s Federal Tax Credits for energy-saving building products. This is the first major change, in over a decade, to federal energy efficiency tax credits available to households. Good News: It will boost demand for home remodels focusing on energy efficiency upgrades. For Group details, check out their Building Product Analysis and Forecast report.

Here’s relevant changs:

  1. Substantial raise to maximum tax credit: Cap raised to $1,200 per year, for qualifying property on or after January 1, 2023. This compared to a previous  lifetime cap of $500.
  2.  Now an annual limit, not a lifetime limit.  Energy efficiency tax credits are now available annually for up to $1,200 per year. Savvy households can spread qualifying home improvement spending over a 10-year period, receiving up to $12,000 back in taxes, compared to $500 previously.
  3. These tax credits will materially boost remodeling spending on building product categories specifically designed to improve the energy efficiency of the home.

The Bad – Before Covid, revolving credit card debt to GDP, was flat at 6.5%, far below the staggering Housing Boom level of 9%. During Covid, numbers sank to 5.5% and remained there through late 2021. Since then it’s been steadily rising to 6.2%, yet remains below pre-Covid level. This partly explains why households continue spending above expectations. It also suggesting it may soon slow, noticeably. Lets hope the Fed is watching.

The Ugly – Keep disciplined thoughts about the debt ceiling debate in Washington DC. Less spending is an absolute, but it will take honesty, free of outside influence, to make this needed determination. It is a deep seated issue, made worse over the years. It would be easy to delay with no action, bringing a direct challenge to US dollar continuing as the reserve currency.

Keep in mind, higher taxes, higher interest rates, and higher inflation can become a serious risk to family finances. Let’s hope this reality becomes the common truth for all.

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 portfolios 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.

Work with you, finding best answers and solutions.

Always 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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