The Trump Effect on the Real Estate Industry

How will President-elect Trump’s policies impact the real estate industry? I’ll go over a few important points that you need to know today.

Buying a home? Click Here to Perform a Full Home Search
Selling a home? Click here for a FREE Home Price Evaluation

Donald Trump will be the next President of the United States. What does that mean for the real estate industry?

First of all, since the election ended a couple weeks ago, interest rates have gone up half a point. Historically speaking, 4% is still a low interest rate, so home prices have not been affected that much so far.

“

Interest rates are still historically low.

”

Even if rates were to increase in the future, Trump’s views on regulation in the real estate industry would counter any effect interest rates might have on price. This past August, Trump said, “There’s no industry other than the energy industry that’s regulated more than real estate.” Right now, regulation costs make up 25% of building costs; Trump believes regulation costs should be closer to 2%. If that happens, more renters would be able to afford houses.

That said, inventory is still a huge challenge in the real estate market. As a result, our market has remained fairly stable. If you are thinking of selling your home, now is still a good time to get top dollar.

If you have any other questions about the real estate market, just give me a call or send me an email. I look forward to hearing from you!

The Financial Benefits of Homeownership

Did you know that homeownership is one of the best ways to build wealth? Here is a full breakdown of how homeownership can benefit you.

Buying a home? Click Here to Perform a Full Home Search
Selling a home? Click here for a FREE Home Price Evaluation

Though it’s a dream for many of us to one day own a home, there are a few financial benefits of homeownership that you may not have considered.

Saving money is one of the major benefits. You get to save the interest portion of your whole mortgage against your income for the year. Many people don’t realize that your monthly mortgage payment is broken down into two separate parts: mortgage interest and mortgage principal payment.

While the first part of your monthly payment is fully tax deductible, the second part includes property tax. When you own a house in California, you’ll pay property tax on it. That portion of your monthly payment can be held against your income as well.

In addition, during the first year you own a house, you’ll typically have origination fees from borrowing money with a loan. This can also be deducted against your income.

So when you’re deciding whether it’s better for you to rent or buy a home, you need to determine your net payment and compare that to what you’re paying your landlord.

“

Owning a home is like a forced
savings plan.

”

The other thing to consider about home ownership is that owning a home is like a forced savings plan. Remember when I said that your monthly payment is broken up into two parts—the principal and the interest? The principal part is the actual loan that you’re paying down.

Let’s take a look at an example mortgage. If you’re paying $2,000 per month against your principal and you own the house for five years, this would equal $24,000 in principal reduction per year or $120,000 over the course of five years. This is a lot of money, but you’ve saved a lot of money that you wouldn’t have if you had rented the property. When you add it all up, this is how you build wealth in real estate.

What happens at the end of this five-year period? If you own the house for more than two years, then in the state of California, you are eligible for a capital gains exclusion on your primary residence. If you’re single, this could mean up to $250,000 available for you to defer out in taxes, and if you’re married, you’re eligible for up to $500,000 in deferments per transaction.

If you have any other questions about the benefits of homeownership or you’re looking to buy or sell a home in the Bay Area, feel free to give me a call or send me an email. I’d be happy to help you!

How Does Brexit Affect Home Sellers?

The U.K.’s decision to leave the E.U. has had a big impact on our real estate market. Low interest rates have kept the demand for homes high.

Earlier this summer, the U.K. voted to leave the E.U., which has become known as the “Brexit.” This decision created heaps of uncertainty for our neighbors across the Atlantic, but here in the U.S., Brexit has been nothing but good news for our real estate market.

With so much uncertainty, foreign investors wanted a safer place to invest than in the U.K. One of these places was the U.S. housing market. This pushed our mortgage rates down even further to almost unseen lows. In fact, we are now in the middle of the second-longest run of cheap mortgage rates in history. What does this mean for you as a seller?

“

Low rates bring more buyers 
to the market.

”

These low rates are a big benefit if you are selling. They bring more buyers to the market, and the more buyers that are in the market, the greater the demand is for your home. This healthy demand will help you sell more quickly.

The combination of low mortgage rates, high rent, and tax savings keep our demand extremely high. These ultra-low rates won’t last forever and may rise as soon as after the election.

If you’re looking to take advantage of this unique situation while it lasts, let me know. Give me a call or send me an email and I would be glad to speak with you. I look forward to hearing from you soon.

How Does Brexit Affect Buyers?

Brexit has had a profound impact on our housing market. With lower rates, more and more people are deciding to make the leap and buy a home.

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE home price evaluation

Earlier this summer, the U.K. voted to leave the E.U., which has become known as the “Brexit.” This decision created heaps of uncertainty for our neighbors across the Atlantic, but here in the U.S., Brexit has been nothing but good news for our real estate market.

With so much uncertainty, foreign investors wanted a safer place to invest than in the U.K. One of these places was the U.S. housing market. This pushed our mortgage rates down even further to almost unseen lows. In fact, we are now in the middle of the second-longest run of cheap mortgage rates in history. What does this mean for you as a buyer?

“

The low rates make for
a lower payment.

”

If you’re looking to buy a house, now is a great time to do so. The low rates mean you’ll pay less per month. On a 30-year $800,000 mortgage, the total cost is $97,000 less over the life of the loan than it was last year.

With today’s rates, you could also afford a more luxurious home for the same monthly payment you could have had last year. Clearly, this is an awesome opportunity. If you are looking to buy or invest and are in need of some help, we can get you connected to some of the best lenders in the business.

If you have any questions, don’t hesitate to give us a call or send us an email. We look forward to hearing from you.

How Do We Give Home Sellers an Advantage?

When selling your home, you may be wondering what you should be looking for in a real estate agent or Realtor team. Today I’d like to provide you with some examples of the kinds of services and advantages that we provide to sellers so that you can better determine which features you need most.

1.    Economies of scale, resources, and expertise. Our team works hard to leverage technology and the information we have available to us when working with our buyers. Because of this, we have a great sense of the trends in the market. In addition, we do customized staging on all of our listings so that we know exactly what to highlight in your home in order to tell its special story.

“

Each home has its own
special story to tell.

”

2.    High-quality online marketing. All of our marketing is focused on our international buyers in China and India to reflect the buyer pool here in Silicon Valley.

3.    Negotiation tactics. For us, it’s no surprise that our negotiation expertise, in conjunction with our knowledge of technology and marketing, ultimately nets our home sellers a higher price on their homes than our competitors.

If you have any other questions selling your property or finding the Realtor team that’s right for you, don’t hesitate to send me an email or give me a call. I’d be happy to help you!

What Has Been Happening in Bay Area Real Estate?

A lot of people have been asking me lately about the Bay Area real estate market and whether we are in a market that’s better suited for buyers or sellers. The truth is, it depends on what price range you’re looking at.

“

The luxury market is great for 
buyers right now.

”

In the luxury market, anything over $1.4 million is in more of a buyer’s market. We are seeing less and less multiple offer situations, and people are no longer bidding 10% to 15% over list price like they used to. If you’ve been thinking of buying in this segment of the market, it’s a great time to get a deal.

For homes under $1 million, with how low interest rates are and how strong the rental market is, it doesn’t make sense for anyone to pay their landlord’s mortgage. It makes more sense to buy a home by taking advantage of low interest rates and investing in your own equity.

If you have any questions for me, don’t hesitate to give me a call or send me an email. I look forward to hearing from you.