Wednesday, December 21, 2016

Home Sales Expected to Grow Modestly in the Coming Year

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According to new consumer survey results and a National Association of Realtors 2017 housing forecast, existing home sales are expected to make a small gain in 2017. Mortgage rates are increasing while consumer confidence that now is a good time to buy a home may be decreasing. The Housing Opportunities and Market Experience (HOME) survey found that a majority of households (78%) do believe now is a good time to buy a home. Renters, however, retreat slightly in their market confidence. 

Weakening morale among renters may be caused by declining affordability in many parts of the country. NAR's chief economist, Lawrence Yun says, "Rents and home prices outpacing incomes and scant supply in the affordable price range has been a prominent headwind for many prospective buyers this year. Making matters worse, the unwelcoming reality of higher mortgage rates.."

Even with this year's slow dip in buyer excitement, existing sales are still predicted to close 2016 3.3% above last year - the best year since 2006. Next year, sales are forecast to grow by about 2 percent to around 5.52 million. Interestingly, the national median home price is predicted to go up by 4 percent next year.

Yun is hopeful that the continued job growth, any economic stimulus from the new administration and more millennials reaching their prime buying years will keep demand steady for the most part. Ultimately, what the housing market needs is more inventory. 

Almost all of those surveyed believe that prices will stay the same or rise in their community in the next six months.  Respondents from suburban areas, renters, and those living in the West are most likely to believe prices will go up in their communities.

Kohan and Associates Real Estate Team is ready for 2017. How may we help you?

Thursday, December 1, 2016

Four Key Tax Strategies to Implement Before the Year End

It's the most wonderful time of the year. Celebrations and parties galore. All good times unless you have taxes on your mind!  Apply the following strategies to your business or real estate holdings and then go get yourself another glass of eggnog.

1. Document everything and get your books in order. Proper documentation is a must. Make certain to have a system for organizing receipts so you can substantiate expenses on your tax returns. Utilizing technology will improve efficiency. You might even consider a mileage tracking app. Using various expense recording apps on your smart phone can ensure you don't lose information along the way.
2. Review your entity structure. When running an active business it is a good plan to set up an LLC. It is generally simple and cost effective. Without an entity structure in place, any profit can be subject to self employment taxes. You might end up paying around 50% of your earned income to federal and state governments. Don't do it! Transact all business through your LLC if your state allows this. Also, when staking claim in a partnership entity, don't use your own name, use that of your LLC. This way you can choose to have your personal LLC taxed without affecting your partner's tax position.
Utilizing these ideas just may help you save enough money so you can buy a new property next year.
3. Before the year's end, make wise investments. What products or services can you buy now that will help in the future? What items are key to your growth? Maybe a new computer , truck or software subscription can help. Buying these items before the new year will allow you to write off the cost in 2016.
4. Establish and use retirement accounts. When flipping, developing or selling a home, retirement accounts can become a powerful tax planning tool.  Business owners can contribute up to $53K per year. Make sure you are taking the appropriate steps now to minimize your tax liability. Talk with a CPA, lawyer and finance professional to get the best tax strategies to help put more money in your pocket before the year is up.

Call the Kohan & Associates Real Estate Team when your nest egg is ready!