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Archive for November 2015

Can We See Real Estate Trends by Media Headlines?

Media headlines have been a pretty good gauge on the overall mood and trends in the real estate industry.  During the big boom of 2005 and 2006, the headlines were screaming, “When is the bubble going to burst?” (A sage point to ponder as it turned out.) During the dark ages of 2008 – 2010, the media headlines took pains to emphasize just how much prices were down in so many markets – a good tip for the savvy buyer.
 

What does it look like these days?

 
Within the past couple of months here are a few headlines: October 20th in the Wall Street Journal, the headline to an article by Jeffrey Sparshott says, “Builder Optimism Hits 10-Year High.” I believe you can guess what the article is about. In any case due to the blessed internet – you can just look it up. Another headline, again from the Wall Street Journal, by Anna Louise Sussman and Laura Kusisto, says, “Home Sales Head for Best Year Since 2007.” Again pretty self-explanatory.
 
The above two articles convey good optimism and strong home sales. For real estate investors this may not always be the best news, as naturally, they hunt for bargains. Nevertheless having a strong real estate market in many cities lends itself to strong occupancy, builder (built) homes (always an attractive investor buy due to builder incentives, and new homes bode well for a long hold with minimal potential repairs, and usually the best financing). Having solid real estate markets is a strong backdrop for our tried-and-true-buy-and-hold-with-a-30-year-fixed-mortgage strategy. Add this to low rates still existing today and you have some very good opportunities to expand your portfolio, lock in super low rates forever and change your financial future.
 
And about those rates – isn’t the Fed just about to raise rates? Let’s look at this headline from November 24, 2015, San Francisco Chronicle article by Kathleen Pender, “Rate Hike Won’t Hit Too Hard – At First.” I concur—rate hikes will most likely begin by ¼ of a point for short term debt. In addition, this anticipation may already be baked in the current mortgage rates. It will most likely be a while before the needle moves on mortgage rates in a significant manner.
 
With that being said the Fed’s intention highlight yet again that we operate within a “golden window” of super-low mortgage rates. For new investors, this seems like the norm. For veteran investors, we recognize these rates as the lowest in decades. If anyone has the ability to fix these rates forever in a loan that never keeps up with inflation – now may be the time.
 
During our quarterly 1-Day Expo THIS SATURDAY – December 5, 2015, we will have a sophisticated asset protection attorney—back by popular demand—Brett Lytle, who will speak on asset protection. Brett always has the most cutting-edge information on protecting our assets and the pros and cons of the type of entities we form.  Ron Stempek, MS-Tax, CPA, will speak on optimizing your taxes for reporting 2015—important must-know information for optimizing tax dollars, and actions to take going into the new year. Christopher Orr, Director of Institutional Products at PENSCO will be speaking on retirement savings goals by using self-directed IRAs, buying properties from a self-directed IRA, and using this vehicle to further your wealth.  As always, we have cutting edge market teams, lenders, networking and lots of Q&A time. 
 
Anyone contacting us and mentioning this blog can attend free (email to info@icgre.com or call us at 415-927-7504). If you email us, put in the subject “I read your blog on Blogger” and give us your name and phone number so we can confirm with you.
 
Looking forward to seeing you, and Happy Holidays!
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