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

Good morning to Springtime, with a call for rain!

Home sales are healthy – Home refi’s responding to inflation – Don’t Wait

The Good News: Confidence in Real Estate is steadfast. Don’t miss out.

The real estate market remains a frenzy. Call today. Let’s prepare for the fun.

Recent News

 – Ukraine: Putin ignores calls for peace. Yet few understand the historical, cultural complexities called the Ukraine or appreciate its logistics, as it stands between Europe and the old Soviet Union. It has deep religious roots. It is a land rich in food productions, mineral production, and is a primary provider of the EU. Yet, the USA needs to move carefully and let those closest to the situation, lead. There maybe cause, but it is truly a deep quagmire. 

 – Federal Reserve: Are they good predictors? Dating back to 2012, they have only predicted the fed funds rate – a rate they directly influence – 37% of the time. As for core inflation, 29% of the time, as to unemployment 24%, and as to Real GDP growth, 17%. At the same time, the Fed shows a consistent bias towards faster growth and higher rates than what comes to pass. Further only 7% of the time was the Fed dovish. Such data helps bring balance to what the Fed says, or does, whether inflation, growth, or rate forecasts. Be skeptical. 

Big Question: Inflation – domestic and foreign. We expect the numbers to continue to increase through March, then flattening, with some retracing to follow. The Feds are watching the gas pump, we hope.

Bottom Line: 

Interest Rates ARE Hedging Upwards – Act now

Key to Success: Being well prepared is key to letting the Realtor and Seller know your readiness and commitment. It is the first step in turning dreams into your reality. Also, Buyers often express concerns about the “All Cash buyer”. Yet most Sellers like – even prefer – the hands-on experience of the more traditional Home Buyer. Homes are personal and families are part of the American heritage.

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

It strengthens your Realtors efforts in selling you, and best helps

your offer to be the winning offer. Being best prepared is sound advice. 

Bottom Line:

Call today and let’s prepare for the Spring Buying Season Today.

Interesting News We Can Use

New Loan Limits: With the continued increases in property values, we have new conforming – conventional loan limits.  $ 647,200 for conforming, single family residences. This number goes up to $ 970,800, in higher cost Counties. Lets talk now. A great window of opportunity for Spring buying. 

Forbearance and Foreclosures: Good News. The numbers remain very low – great for homeowners. And if you are or might be entering foreclosure, we can still make new loans. Not always pretty, but the priority is preservation – Saving your home. Let’s talk.

Interest Rates: The short answer is interest rates are up. We have another month of increasing inflation numbers – without trying to out guess the Ukraine situation.  After meeting pent-up demand for homes last year – a torrid pace – the coming year should be interesting, for both residential pricing and interest rates. From our resources, here is a running consensus:

1) Fed rate plans in response to inflation and liquidity, will play a significant role.

2) The timing for running off the Fed balance sheet is important and needs to be carefully monitored.  Based upon 2022 Fed Board review of inflation, their response will likely be less accommodative, than previous. Watch carefully to see if “rates and inflation” move more and more, in lock step. The unmentioned reality – importance of sustaining market liquidity.

3) Keep in mind: The Fed typically does not want to be blamed for election outcomes. With November elections, words may become more important than hard hitting actions. Keep in mind, high rates impacts our US debt and restricts GDP growth needed for tax revenue.

Conventional loans: Tracking high 3’s to low 4’s. Cash-out refinance and investor loans run a bit higher. 

VA rates and FHA ratesIf a Vet? Call today.  Fixed in the low 3’s. Plus Veterans refi special: 1) Refi from conventional loan into a VA loan, and 2) Rate-reduction refi’s have NO income, NO asset documentation.  NEW rule for Veterans, even a 1 % service related disability = NO VA funding fee !

Housing: 2022 Preview.  Supply vs Demand is key to home pricing. Short supply is with us and will continue.  Q: Will higher rates effect market value?  Answer: Early in the cycle, people often panic about rising rates, bringing a short term bump in demand and values. What follows is what provides a clear picture about future events. My best estimate, marginal impact if employment stays healthy.

The Good, the Bad, And the Ugly

THE GOOD: MacKenzie Scott donated $133 million to Communities in School, a non-profit organization focused on dropout prevention across America. The organization supports 1.6 million kids struggling with their studies. It provides local schools the resources needed to help more kids finish their education. 

THE BAD: Ukraine – Europe – Russia. Who knows the mess better. Ask the Orthodox Church – asks the Roman Catholic Church about the religious cross-fire across the ages. Yes, a definite and defined response is needed. One denouncing violence and cheap talk of a nuclear response. But note, even the Russian people speak against such needless violence and destruction. Yet few recognize the pride and paranoia of Russia. Some even recall the Soviet Iron Curtain. Consider this first: Putin knows that in the end, any land victory will be costly and more than Russia and its people can absorb.  The Bad: To enter a war without grasping what the fight is about, nor what victory looks like. Russia had Afghanistan, we had Vietnam, and China knows the same is true for Taiwan. All losers.

THE UGLY: Various cities in California pushing back on a new State law allowing ADU’s. Cities do not like the service impact of increasing housing density. Some are denying permits that meet legal requirement for adding an ADU – or secondary unit.  The Ugly: Court time, energy and expense, to determine and clarify the priority of State rules vs. City rules. Likely a long struggle, with broad reaching impacts.  Trouble with broad-brush ideas, that lack specific details, to get the full picture.

Planning and Preparation 

Are our markets peaking? Stocks, bonds, real estate? Each of us has a different view and this is what makes the market. It presents opportunities and keys to our planning and preparing for your tomorrow. With this, we strive to meet you where you are. Our goal is to bring to you, a full a set of solutions, ones meant to enhance your view of the market, with a full array of choices.

What We Do – Why We Are Here – Why call Mike

We know how to explore and carefully examine the many options open to real estate. We scrutinize for safety and prioritize what is most feasible for you. It is how we build a trust relationship with you, as you set your goals on building wealth and a secure future for you and your family. 

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

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

Tax-deferral strategies:  Most investment portfolio are dynamic in nature, subject to change or even surprise. Herein, a solid suggestion is to keep updated, as to changes in tax law. This comes with a key question: Pay taxes now or keep your cash working working for you by, “deferring projected capital gains tax”? 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 details. 

 So: Why payout up to hundreds of thousands of dollars – even Millions – today, when you have the ways and means to keep your hard earned money working for you and your estate. If it is time to talk, to plan ahead, let start today, I am ready. Call today, planning income tax strategy is more important today, than ever. With new laws to stop you from passing highly appreciated real estate onto your heirs, to no longer benefit from low Prop 13 tax basis, it is time act. Time to be prepared.

 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 proven tools and methods for highly appreciated holdings. These strategies-of-success help keep your cash, in your proven hands. With this, we offer our highly qualified and knowledgable professionals. This combination is the defining key to your success. 

Retirement: Like myself, as we age, 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. 

Straight Forward and No short cuts. 

Success begins with solid preparation and a proven professional – Mike Ryan. I know the ropes and am a proven advocate. I have the needed insight and experience for success. 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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