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Jeffrey Corman

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With nearly three months left in 2015, jumbo-mortgage borrowers can make tweaks to cut their tax bill in April!

Autumn chores: raking leaves, weatherproofing, storing the patio furniture and preparing for next year’s tax returns.

With nearly three months left in the year, jumbo-mortgage borrowers still have time to make tweaks that can lessen what they owe in April. Here are some tips from tax experts—but be sure to consult a tax professional for specifics on your return. 

First, the tax rules are tricky for home sellers who have claimed a home-office deduction. On the tax return for the year of sale of a primary residence, the seller can exclude as much as $250,000 in capital gains for a single person or $500,000 for a couple. But sellers who claimed a home-office deduction for depreciation have to pay capital gains taxes on the amount deducted, says Janet C. Hagy, president of accounting firm Hagy & Associates in Austin, Texas. This “recaptured depreciation” is taxed at a 25% rate (unless the seller’s income-tax bracket is lower than 25%). To view full article click link below.

Tips for Tax-Savvy Homeowners

This Isn't a Housing Bubble: Here's Why

by Jeffrey Corman

Home prices are rising rapidly, but economists are deflating concerns that another "housing bubble" is brewing.

A recent report from CoreLogic shows that twice as many metro markets are considered "overvalued" – prices are inflated relative to incomes -- in the second quarter of this year compared to the first three months of the year. But economists say it's not a housing bubble because bubbles eventually burst and home prices this time around aren't likely to fall.

"Just because you're overvalued doesn't mean that you're in a bubble or there is an impending crash," says Sam Khater, CoreLogic's deputy chief economist. "Some markets are overvalued because of strong fundamentals."

The National Association of REALTORS® reported that the national median sales price is now above its 2006 peak. The median existing-home price for all housing types reached $236,400 in June – 6.5 percent above year ago levels and surpassing the peak median sales price set in July 2016 at $230,400, according to NAR.

CoreLogic's recent report shows that home prices in 14 of the largest 100 markets have now risen above its long-term fundamental values – with six of these markets in Texas alone. Housing demand is strong and supply has been near record lows, which has paved the way for price increases among the state's strong economy.

About 10 years ago, a housing bubble was being fueled by free and easy mortgage credit – not the case today, CNBC reports. Today, strong demand and weak supply is driving the rise in prices.

"Agents continue to highlight buyers' growing frustration with rising prices, but see current levels largely supported by tight inventory conditions," according to a monthly survey of real estate professionals by Credit Suisse.

Buying your primary home is like achieving an essential piece of the American dream. And once you’ve experienced the satisfaction of homeownership, you might be tempted to purchase another. Hey, who wouldn’t want a leisurely vacation getaway spot—especially if you can turn it into a cash cow by renting it out?

While vacation homes can be an excellent source of income, managing them isn’t as easy as washing the sheets and posting a listing on VRBO. Avoid these mistakes, and you’ll soon be on the road to vacation home heaven. And, hey, maybe we can come stay once in a while?

1. Not checking the local regulations on renting

You’d think this would be obvious—but just ask Christine Karpinski, author of “How to Rent Vacation Properties by Owner,” how often it gets overlooked.

“It’s a big gotcha for a lot of people,” says Karpinski, who also owns vacation homes in Austin, TX.

Before committing to a purchase, check homeowners association rules and city or municipality regulations. Your real estate agent should be able to help—but make sure you’ve picked a pro who’s familiar with vacation rentals.

You might be tempted to skip this step, because you see other folks renting out their homes nearby. But beware—if you’re caught, you could face hefty fines.

2. Not being picky about your management company

Guests are paying their hard-earned money to stay at your place instead of the traditional hotel down the block, says Matt Landau, a vacation rental marketing expert.

That means it’s your responsibility to keep the place clean and manage the arrival and departure of guests—as well as any problems that arise along the way. And while you certainly can manage those details yourself, you might want to consider outsourcing them.

“A lot of people get into and find out it’s way more work than they thought,” Karpinski says. “It’s a pseudo part-time job.”

That’s where a management company comes into play. But don’t choose a company based on which takes the lowest percentage cut, and be wary of the ones that charge a ridiculously low rate, Karpinski says.

They might be absentee, unskilled marketers, or maybe just dirty. When evaluating potential managers, Karpinski recommends asking to see five more of their properties—on the spot, with no warning. That way, you’ll be able to see how clean they keep each home, without giving them a chance to scrub beforehand.

3. Being thrown off by a furnished home

Many vacation homes are sold furnished, so don’t be turned off by one that needs a makeover.

More than once, Karpinski got an excellent deal on a vacation home because the seller’s decorating taste was iffy.

“I’ve paid a low price just because they were butt-ugly,” Karpinksi says.

Think of that garish wallpaper as a gift: It might throw off other buyers and nudge the price down, while you—the smart buyer—can just peel it off.

4. Buying to please yourself

We know the idea of having your own personal getaway, surrounded by all the things you treasure, is basically living the dream. But we’ve got some bad news: If you’re looking to rent out your property, your tastes simply don’t matter.

You want something that aligns with the market and that renters are likely to be searching for. For instance, one- or three-bedroom homes rent better than two-bedroom ones, Karpinski says.

Pay attention to what works in the vacation rentals nearby: Are buyers gaga for lake views or furnished porches? Spend your money on that, instead of making the home comfy according to your own standards.

5. Viewing it as a hobby

Sites such as Airbnb and HomeAway have made renting out vacation homes a relatively painless process—while being fun at the same time. But that doesn’t mean you can treat managing your vacation home as a hobby

 

Sure, you could post some photos and get up and running right away. But you’ll be better off taking your time and making sure you didn’t miss anything that could throw your would-be vacationers for a loop. Quite simply: You’ll want to go above and beyond—providing amenities, guidebooks, and around-the-clock service.

“If you charge a nightly rate that is competitive with a hotel, you’re responsible to deliver a hotel-like service,” Landau says. You’re “running your vacation rental like a business and not a lemonade stand.”

“The housing market, any way you look at it, can’t lose"

by Jeffrey Corman

About two years ago, It was declared that the U.S. housing market had “officially” recovered.

And now, with some indicators showing that real estate is the healthiest it’s been in a decade, I hope I can now officially declare the previous declaration as spot-on.

I know, I know … all of you who recently bought a home are asking me to find the nearest wooden object and knock vigorously on it. But current and prospective homeowners shouldn’t let the epic pain of the previous housing crisis color their expectations forever. With each passing month, the recovery in housing looks to be not only sustainable, but even gathering steam.

 

But all that said, there are good reasons to expect home values to keep rising.

Here’s why:

Prices

Yes, the pace of increases in home prices has cooled, but given past experiences with an overheated housing market, that’s not a bad thing. According to the latest Case-Shiller data from the end of May, home values rose 5% from a year earlier in the 20-city index. Separately, real estate data firm FNC tallied a 5.3% increase in its larger 100-city price survey. So prices still are rising, albeit at a more moderate pace.

Equity

Digging deeper into prices and home values, CoreLogic just released a report that revealed another quarter of a million U.S. homes had equity that topped mortgage debt in the first quarter. The slow but steady trend of homeowners moving back into the black has quietly become an impressive story, with 44.9 million homes now reporting equity, or 90% of all mortgaged properties, according to CoreLogic data. Not only does this kind of environment breed confidence, it also creates stability as homeowners are not struggling to make payments on an underwater home or biting off more than they can chew.

Loans

The Mortgage Bankers Association reported in its latest weekly survey that applications from prospective borrowers were up 8.4% on a seasonally adjusted basis. The American Bankers Association said in its recently released annual survey that loans to first-time homebuyers have ticked up to 14%, the highest level in the history of the 22-year-old survey. More applications and loans are great, but it’s also crucial to note that the quality of those loans is strong, too. Consider the number of loans in foreclosure are at the lowest level since November 2007, with just 1.4% of mortgages in distress.

Construction

While housing starts pulled back a bit in May, it’s important to remember that came after a red-hot April that shows big optimism on the part of homebuilders as they broke ground on new homes at an impressive clip. The latest numbers showed upward revisions to the past two months, too, after impressive numbers previously. Also, permits surged 12% to the highest level since summer 2007 to show strong momentum that should carry this trend of robust construction through the coming months

It’s reductive but fairly true: The health of the housing market is a reflection of the health of American family budgets, with the two waxing and waning together. And as I noted recently in my bullish assessment of the U.S. economy and stock market, consumers are doing very well, thanks to a better job market, and upward movement on wages, as indicated in the May unemployment report. Retail sales have reflected this strength, too, with better numbers lately. And according to the Federal Reserve, American families’ net worth has surged to a new record, owing to a rebound in the economy, stock market and home values. That all adds up to a bright outlook for consumer confidence, and for the housing market as a result.

Wineries See a Sweet Future in Nevada

by Jeffrey Corman

Nevada vintners are celebrating , perhaps with a glass of wine. A new law signed by Governor Sandoval will allow for commercial wineries in Washoe County. Up until now those counties were excluded due to population. But that ban has been lifted. So has the ban on tasting rooms. 

"Tasting rooms are critical to successful wineries," said Dr. Danny Hopper, a biochemist at the University of Nevada who has been working with a group called Wines and Vines. He also says there are more vines growing here than most people realize. 

"We did a survey and found that there are about 25,000 vines already growing here in people's backyards. And we found a lot of support. There are definitely people here interested in commercial wineries right here in Reno," Hopper said. 

There are already acres of experimental vines growing on the Nevada campus. Hopper says our weather is good for wine grapes with warm days and cool nights. And he says they are amazingly drought-tolerant.

The recent legislative changes relating to tasting rooms on site in Washoe County and other Nevada Counties is a sign of things to come.  Think Napa Valley over 100 years ago, fertile and prolific climate and growing conditions for the European root stock to take hold.  Now enter, the Carson Valley at the base of the majestic Eastern Sierra.  Very fertile and a perfect match for the organically engineered cold hearty vines.  These American Varietals, although lacking the sugar content needed for certain wines, are robust and hearty and survive subzero temperatures.   Another benefit....less water consumption and no pesticides needed as they flourish at over 5000' elevations.  

How does this affect our local real estate economy?  Well… take a look at the Napa Valley.  A hub of fine wines, restaurants and elegant housing.  However, having grown up in Napa when it was a small little town, the charm has given way to the hustle and bustle of a big city style town. Although still incredibly beautiful, the Napa and Sonoma Valleys, along with other former charming quasi agricultural towns have been hit by the heavy California taxation burdens as well as massive growth and congestion.  It's certainly not for everyone.  Bring on the Carson Valley, a long stretch of fertile valley that quietly boasts some of the best growing conditions for high altitude vines and other hearty crops.  Expansive open valleys and minutes from Lake Tahoe. And very tax friendly from an agricultural and residential standpoint.   The Nevada Wine Coalition has predicted that Vines in Nevada will be the top agricultural crop in the next 5 years, replacing Alfalfa.

Tesla isn't the only big news in the State, the Wine Industry is quietly making a charge in Nevada. More commerce, more tourism and a healthy real estate market.

Give me a call for more information on how this exciting time touches you and your personal goals. If you’re thinking of buying, selling or investing in Northern Nevada, now’s the time!

News Release

by Jeffrey Corman

News Release

 

JEFFREY CORMAN ATTENDS SPECIAL TRAINING,

BUILDS EXPERTISE IN LUXURY HOME MARKET

 

(Incline Village,Nevada 3/21/15) --  Jeffrey Corman with Sierra Sotheby’s International Realty recently completed a luxury home marketing training course offered by The Institute for Luxury Home Marketing

 

The course - which covered such topics as demographics of the affluent, lifestyle segmentation, trends and amenities in today’s luxury home product, and creating a marketing plan for the multimillion dollar property – was taught by Laurie Moore-Moore, President of the Dallas-based Institute for Luxury Home Marketing and author of the book, Rich Buyer, Rich Seller! The Real Estate Agents’ Guide to Marketing Luxury Homes.

 

“The course is a step towards earning the prestigious Certified Luxury Home Marketing Specialist (CLHMS) designation which The Institute awards internationally to sales professionals who meet performance standards in the upper-tier residential market,” said Moore-Moore. Jeffrey Corman is an example of a sales associate who works to hone the special skills and competencies necessary to provide exceptional service in the fine homes and estates marketplace.”

 

Corman is an award-winning sales associate who has been in real estate since 2012 and specializes in the Luxury Home market. Jeffrey is also proud to be the #1 Top Dollar Amount Producer at his Incline Village Sierra Sotheby’s Office for the first quarter of 2015. Also, Jeffrey represented the buyer in the highest-dollar sale in Incline Village for the first quarter of 2015.

 

“The training provided new insight about the upper tier market, helped me polish my skills, and provided valuable networking contacts with other agents across the country who specialize in luxury properties,” said Corman.In addition, I discovered new and creative tools for promoting expensive homes and estates and new resources for finding buyer prospects.  Home buyers and sellers will benefit from my new knowledge.”

 

For insights into the current state of the luxury market, contact Jeffrey Corman at Sierra Sotheby’s International Realty or email TahoeJeffrey@gmail.com

 

Don't Panic, but Mortgage Rates Are Rising

by Jeffrey Corman

So here we are, smack in the middle of the busiest season for the residential real estate market. With all the activity, shoppers are already facing challenges in finding their ideal home. Now, they’re starting to face a new one: rising mortgage rates.

Although the health of the real estate market has much improved this year, thanks to a better labor market and the end of the foreclosure crisis, the situation isn’t as good for the home buyer. The number of people looking for homes is outpacing the growth in inventory of both new and existing homes. In April, the No. 1 problem in home buying reported by active shoppers on our site was simply finding a home that met their needs.

Mortgage rates have remained low since the housing crisis of 2008, but we’ve been warning consumers since the end of 2014 that rates would go up in 2015. Fixed-rate mortgages are now 30 to 40 basis points higher than the lows for the year. But “I told you so” doesn’t help someone trying to determine what to do.

A basis point is 0.01 percentage point. That may sound confusing, but it’s an easy way to discuss the difference between two rates. For example, if the rate for a certain type of mortgage was 3.50%, and it went up to 3.75%, the difference would be 25 basis points.

The financial math is straightforward: A higher mortgage rate will increase the monthly payment when all other factors remain the same. An increase of 10 basis points (0.10) in an interest rate adds 1.2% to the monthly payment. And a higher payment will affect qualification ratios, potentially limiting what you can buy

The increase in fixed rates that we’ve seen so far would result in about $40 added to the monthly payment on the purchase of a median-price home with 20% down.

That increase is not minor, especially for a median- or lower-income household. Home buyers could limit the increase, or avoid any increase, by doing a bit more research and considering financing alternatives.

One tactic for lowering the monthly payment is paying upfront for a discount point, which is knocked off your mortgage rate. Economists like to say “there’s no such thing as a free lunch,” and that’s true here, too. By paying a discount point, you are basically buying a lower rate but increasing your upfront fees. The cost of a point varies depending on your market, but 1% of your mortgage amount is not uncommon. But this approach could be worth it if you have the funds for closing and you intend to hold the mortgage long enough to recoup the upfront investment.

 

Another approach would include taking advantage of alternative hybrid mortgage products with lower rates. Indeed as rates have been rising, the share of adjustable and hybrid mortgages that only have fixed rates for a defined period, such as one year or up to 10 years, has been on the rise.

But you also might be able to get a lower rate just by shopping around. Realtor.com’s mortgage rate page and mobile app can get you started. An expert local mortgage broker would be of great help in working through options and the financial trade-offs between various products that are available to you.

Also, take heart that the reported average rates are not necessarily what you can get on the market. Mortgage rates are very personal and very local. The rate you end up with is a function of the market overall, local market conditions, the type of property, the type of mortgage, and the financial profile and credit history of the borrower.

To give you a perspective of rate differences around the country, even though the average 30-year fixed conforming mortgage across the U.S. is now above 4% again, in Washington, California, Illinois, Georgia, and Massachusetts the average is still under 4%.

We are forecasting even higher rates by the end of the year, so what you’ve seen in recent days is likely just the beginning. By knowing your options and staying informed, you can still take advantage of what are still very low mortgage rates.

This spring buying season is off to a strong start—in fact, prices are going up faster than they were just a few months ago, according to nearly every recent metric. So does that mean we’re in a bubble?

Nope, that’s just what happens when demand increases faster than supply. After all, existing-home sales were up 9% year over year in March, according to the National Association of Realtors®. Inventory is also increasing, but not as fast as sales, resulting in a tight supply getting even tighter.

An equilibrium level of supply on the market is considered to be six to seven months; supply has been under five months since December. Looking at every quarter since 1988, when supply was under five months, prices rose 8% year over year on average. When supply was in the equilibrium range, prices went up only 4% on average.

The median existing home price in March was $212,100, up 8% over last year, according to the NAR. The median list price in March on realtor.com® was $220,000, which was up 11% over last year.

During the peak years of the housing bubble, from 2003 to 2005, the data on supply versus price appreciation looked very similar to what we are seeing now. But there are key differences, which is why I’m confident that on the national level, this is no bubble.

Here’s why, this time, the price increases should stick:

The level of the current price appreciation is not like the bubble. Prices went up 7% and 12% in 2012 and 2013, respectively, as the market corrected for too-severe price declines in the prior years. Last year, the appreciation level moderated. Even factoring in the one-time bounce from the prior overcorrection, median prices have grown less than 8% on a compounded annual basis over the past three years. Median prices, by comparison, grew 10% on a compounded annual basis from 2002 to 2005, without any bounce from a prior decline.  On an inflation-adjusted basis, we are 30% beneath the peak set in 2005.

Likewise, relative to rents or incomes, median home prices are not “unhinged” from long-term averages. The price-to-rent ratio is similar to the rate in the mid-1990s. It was 35% higher in 2005. The price-to-income ratio is now where it was in 2001, and it was about 30% higher in 2005.

During the housing bubble, we saw both prices and sales grow to historical levels fueled by a rapid expansion in mortgage financing. We are clearly not experiencing record sales or record mortgage originations now.

As a result, we are not seeing vacancies increase like they did at the end of the bubble. In 2005, vacancies started to rise before sales and prices reached their peak as a result of flipping activity and overleveraged speculative investing. On the contrary now, vacancies have slowly trended back to more normal levels.

So, today’s higher prices are only to be expected as the economy improves and first-time buyers gradually return to the market. Eventually, those higher prices should encourage more owners to list their homes and builders to start construction on new housing—which in turn should solve the problem of supply

First Quarter 2015 - Micro Market Reports

by Jeffrey Corman

Spanning 72 miles of Lake Tahoe shoreline, two state lines, a handful of California and Nevada counties and various multiple listing services, Tahoe / Truckee market trends can vary dramatically from neighborhood to neighborhood. Sierra Sotheby’s International Realty compiles quarterly and year-end reports that drill down the region's different micro-market statistics to help you make informed real estate decisions.

Click on the link below to view the reports

http://sierra.rezora.com/public/2462470

Should I Buy a Home Now?

by Jeffrey Corman

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall down the road, while others are convinced that home prices will go up.

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have fluctuated, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, a one point rise in interest rates could cost tens of thousands of dollars over the life of your mortgage!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates while they are still available.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

Displaying blog entries 171-180 of 180

Contact Information

Photo of Jeffrey Corman Real Estate
Jeffrey Corman
Sierra Sotheby's International Realty
570 Lakeshore Blvd.
Incline Village NV 89451
775-339-1144
775-832-4900 ext. 330