Incline Village at Lake Tahoe, Nevada Real Estate and Community News

March 6, 2019

NEW-HOME SALES UP SLIGHTLY

New-home sales in the U.S. rose 3.7 percent in December, marking the third month of growth, according to the latest residential sales report from the Census Bureau and the Department of Housing and Urban Development (HUD).

But while single-family home sales have been rising since the fall, there were still fewer of them than there were a year ago. In total, 621,000 new units were sold in December, a 2.4 percent decline from the year prior (636,000 in December 2017).

Courtesy of U.S. Census Bureau.

Across the country, the average home sold for $377,000 while the median sales price was $318,600. The increased sales price is just slowly starting to catch up to the shortfall that occurred in mid-2018 — caused, in part, by growing home values and mortgage rates.

Regionally, the Midwest saw the steepest decline in the number of sales, with 15.3 percent fewer homes sold in December 2018 than in November.

The Northeast, on the other hand, saw a major spike. After November’s lull, 44.8 percent more homes were sold in the region in December. (The South and West saw modest gains of 5.0 and 1.4 percent, respectively.)

While monthly numbers are often inadequate forecasters of the annual trends ahead, the current numbers show that sales may finally be starting to pick up for the coming spring.

Posted in Community News
March 2, 2019

ARE YOU MISSING OUT ON THESE TAX BREAKS?

Are you maximizing all the tax benefits available to you as a homeowner?

Staying up-to-date on the latest tax rules is a smart move if you're interested in keeping more money in your pocket, but with the recent changes from the Tax Cuts and Jobs Act, you might be a little fuzzy on exactly which credits and deductions you can take advantage of. Whether you're a long-time homeowner or just bought your very first home, it helps to have a refresher. Let's brush up on some of the key tax perks of homeownership, so you can make the most of your benefits this tax season.* 

 

If you took out your mortgage after Dec. 15, 2017, the interest you pay on your first or second mortgage is generally tax deductible on home loans up to $750,000 (or $375,000 if married filing separately). For mortgages taken out on or before Dec. 15, 2017, the deduction applies to home loans up to $1 million (or $500,000 if married filing separately). If you took out a home equity loan or line of credit, the interest is only tax deductible if the loan was used to buy, build, or substantially improve the home that secures the loan. Exceptions, limitations, and restrictions apply, so talk to your tax advisor to see if you're eligible for the mortgage interest deduction.2 

This helps low- to moderate-income people afford homeownership by providing a credit of up to $2,000 on mortgage interest paid in a calendar year. Eligible taxpayers must obtain a Mortgage Credit Certificate (MCC) prior to purchasing their home. The MCC must be issued by a state or local governmental unit or agency under a qualified mortgage credit certificate program.3 

Mortgage Discount Points are something you can purchase to lower your interest rate when you buy your home; one point is typically equal to 1% of the loan amount. If you purchased discount points when you bought your home, you may be able to deduct them on your income tax return. Of course, the IRS has eligibility requirements for deducting points, so talk to your tax advisor to see if you qualify for this deduction.4 

State and local property taxes that you pay for any real estate you own are deductible up to $10,000 (or $5,000 if married, filing separately). Keep in mind the deduction limit is applied to your overall property tax payments, even if you own more than one property. For instance, if you own two or more properties and your total combined property tax bill was $15,000, you will only be allowed to deduct $10,000 total from your income taxes.2 

If you sell certain types of assets for more than their original cost, you may have a capital gain. Capital gains are normally taxable. However, an exception is made if you sell your home for more than the amount you paid (in other words, if you make a profit). The capital gains you get from selling your home are tax-free up to $250,000 (or $500,000 if married filing jointly). The caveat is that you must have lived in that property as your primary residence for two out of the past five years. This tax perk helps you keep more of the equity that you worked to build over the years — yet another example of just how powerful equity can be for growing your wealth.5 

Interested in making your home more energy-efficient? The federal government offers the residential energy efficient property credit for installing alternative-energy equipment in your primary or secondary residence. This includes qualified solar electricity and water heating, small wind energy, fuel cell, and geothermal heat pump systems. The credit is up to 30% of the cost for purchasing and installing these systems in 2018.6 

Being a homeowner comes with some pretty fantastic advantages, and tax breaks are one of the benefits you don't want to miss out on. Talk to your tax advisor to learn more about how you can max out your tax savings and get the most from your real estate investment.

 

*This information is not intended to be a comprehensive or exhaustive list, nor is it intended to be a substitute for expert advice from a professional tax advisor or preparer, or the Internal Revenue Service (IRS). Greater Nevada Mortgage and its loan officers are not tax preparers or advisors. Consult a tax professional for more information.

[1] IRS.gov, "Credits and Deductions for Individuals," November 2018.

[2] IRS Publication 5307, "Tax Reform Basics for Individuals and Families," Tax Year 2018.

[3] IRS Form 8396, "Mortgage Interest Credit," 2018.

[4] IRS Topic Number 504 - Home Mortgage Points, January 2018.

[5] IRS Topic Number 701 - Sale of Your Home, February 2018.

[6] IRS 2018 Instructions for Form 5695.

Posted in Community News
March 1, 2019

ECONOMIC UPDATE

Covering the Bases ~ March 1, 2019

Lots of housing news this week and it touched all of the bases; construction, sales, and home prices. It also ranged from pretty good to very bad with a bit of "we aren't quite sure."

Pending home sales were the good news. They have been, to put it kindly, sluggish for months, with negative reports from October through December. This week the National Association of Realtors (NAR) announced an abrupt and rather surprising turnaround. Its Pending Home Sales Index (PHSI) surged 4.6% in January, more than doubling the highest predictions of Econoday's analysts. It wasn't enough however to overcome the Index's annual deficit. The PHSI is down 2.3% from January 2018 marking the 13th month of year over year losses. Pending sales were up in all four regions compared to December, although three of them are still running substantially behind year earlier levels.

Lawrence Yun, NAR chief economist, said the increase reflected both the recent lower interest rates and increasing inventories. He cited big gains in listings in Denver, Seattle, San Diego, and Los Angeles.

The residential construction report released this week was December data, delayed for five weeks because of the government shutdown. It didn't improve with age. Both housing starts and unit completions were down, while permits eked out a slender 0.3% increase from November and 0.5% year-over-year. Completions were down 2.7% and 8.4% from the two earlier periods.

But the real concern was housing starts. They, along with the other two indicators, had a strong November, one of the few good months last year. But not only did a 11.2% nosedive in December wipe out the previous 3.2% gain, but November's reported annual pace was downgraded by 32,000 units. The single-family sector was especially weak for all three measures.

Depends on Who You Ask

Whether the continued slowdown in appreciation is good or bad news depends on whether you hope to buy or sell and increasingly on where you want to do it. In either case, it happened again in December. The S&P Case-Shiller National Index was up 0.3% on a seasonally adjusted basis from November and 4.7% annually. The annual gain in November was 5.1%. There was an identical 0.4-point deflation in both the 10- and 20-City Composites to 4.2% and 4.6%, respectively.

The annual increase in the Federal Housing Finance Agency House Price Index, based on Fannie Mae and Freddie Mac home purchase mortgages slipped 0.1% from November to December, to 5.6%.

The Case-Shiller report noted the regional changes in appreciation. Atlanta just became the third fastest growing while Seattle and Portland (Oregon), which led all metro areas for nearly two years, are now in 11th and 16th place. 

Key Indicators

S&P Case-Shiller 20-City Composite Dec

Up 0.2% MoM (seasonally adj)

Down 0.2% MoM (non-seasonally adj)

Up 4.2% YoY

 

FHFA House Price Index Dec

Up 0.3% MoM

Up 5.7% YoY

 

Factory Orders Dec

Up 0.1%

[Prior down 0.5% rev]

 

Pending Home Sales Jan

Up 4.6% MoM

Down 2.3% YoY

Index 103.2

 

GDP Q4

Up 2.5%

[Prior up 3.4%]

 

Coming Indicators

 

Monday, March 4

Construction Spending

 

Tuesday, March 5

New Home Sales

ISM Non-Mfg Index

 

Gold (Monex)

$1,320/ounce down

 

Crude Oil (Brent)

$66.39/brl down

 

U.S. Dollar to...

Euro                      0.8761 down

Japanese Yen x110.7900 up

Chinese Yuan      6.6848 down

Canadian Dollar  1.3167 down

Mexican Peso    19.1630 down

 

6-mo T-Bill Yield    2.53%

Up 2 bps  

10-yr T-Note Yield 2.69%

Up 4 bps

 

11th Dist Cost of Funds 1/31

1.056 down 4 bps

 

Freddie Mac 30-Year

Avg Rate 2/28

4.35% unchg

 

MBA - Mortgage Applications

Index Week ending 2/22

Overall           

Up 5.3%

[Prior week up 3.6%]

Purchase Money Loans

Up 6.0%

[Prior week up 2.0%]

Refinancing Loans

Up 5.0%

[Prior week up 6.0%]

 

Jobless Claims 2/23

225,000 new claims

[Prior week 217,000 rev]

4-week moving avg 229,000 down

 

Housing Permits Dec

Up 0.3% MoM

Up 0.5% YoY

1.326M units

 

Housing Starts Dec

Down 11.2% MoM

Down 10.9% YoY

1.078M units

Posted in Market Updates
Feb. 25, 2019

WEEKLY INCLINE VILLAGE MARKET CONDITION REPORT

Incline Village, NV 89451

Mon Feb 25 2019 

This week the median list price for Incline Village, NV 89451 is $1,695,000 with the market action index hovering around 26. This is an increase over last month's market action index of 25. Inventory has held steady at or around 31. Click here to stay informed with the Incline Village market!

Market Action Index

The Market Action Index answers the question "How's the Market?" by measuring the current rate of sale versus the amount of the inventory. Index above 30 implies Seller's Market conditions. Below 30, conditions favor the buyer.

Slight Buyer's Advantage

Home sales have begun exceeding new inventory. This is a Buyer’s market so prices are not yet moving higher as excess inventory is consumed. If the tightening continues and the market moves into the Seller’s zone, we may see upward pressure on pricing.

In the last few weeks we’ve seen prices in this zip code bouncing around this plateau. Look for a persistent down-shift in the Market Action Index before we see prices deviate from these levels.

Market Segments

Each segment below represents approximately 25% of the market ordered by price.

Posted in Market Updates
Feb. 24, 2019

ECONOMIC UPDATE

More Buyers on the Way ~ February 22, 2019

Existing home sales slipped again, but the phrase "its all relative" jumps to mind. So do the words "at least it's not as bad as last month." Sales were down by 1.2% from December. Disappointing, but hardly the 6.4% dive they took then.

Lawrence Yun, chief economist for The National Association of Realtors (NAR), said the annual rate of 4.94 million sales in January was the poorest showing since November 2015, but that they are likely to have reached a cyclical low. "Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months," he said.

Inventories increased from 1.53 million in December and 1.52 million a year earlier, to 1.59 million. Yun noted inventories have now increased year-over-year for six straight months. He also pointed out that the median annual home price growth of 2.8% in January was the slowest rise since February 2012.

Sales fell in every region but the Northeast. In the West they dipped 2.9% to an annual rate of 1.00 million and are now 13.8% below a year ago.

Cracking the Code

If 2019 turns out to be a good year for home sales, construction guru John McManus, editor of Builder online magazine, says he will have two explanations; 1) the long pent-up demand will begin to ease as Millennials move into the marketplace, and 2) homebuilders, developers, architects, and investors will have begun to crack the code for selling houses to them.

With average home prices approaching $400,000, he says the nation "has been telling young adults--in no uncertain terms--'we've got nothing for you'."

For this and other reasons, about 15% of Millennials are still living with their parents. Two-thirds of them have bachelor's degrees. They have been acting like smart consumers who have time on their side, McManus says. But given their age, not to mention the ticking biological clock, they may have run that course. Today they have improving job opportunities, growing flex-time and remote work options that expand their commuting range, and in some cases the "Bank of Mom & Dad" to help out with downpayments.

At the same time, he continues, builders and the others mentioned above "have been working on designs, product, density, operational processes, selling and data systems to make the present day's nearest facsimile to starter homes, in starter home neighborhoods, for people who want and need them."

Adding to what McManus said, and also helping the cause, interest rates dipped for the third straight week. The average 30-year fixed rate was 4.35%.

Key Indicators

Housing Market Index Feb

62

[Prior 58]

 

Leading Indicators Jan

Down 0.1%

[Prior 0.0% rev]

 

Coming Indicators

 

Tuesday, February 26

Residential Construction

S&P Case Shiller Indices

FHFA HPI

 

Wednesday, February 27

Factory Orders

Pending Home Sales

 

Thursday, February 28

GDP

Gold (Monex)

$1,341/ounce up

 

Crude Oil (Brent)

$67.08/brl up

 

U.S. Dollar to...

Euro                      0.8816 down

Japanese Yen   x110.7500 down

Chinese Yuan     6.71830 down

Canadian Dollar   1.3189 down

Mexican Peso     19.1990 down

 

6-mo T-Bill Yield    2.51%

Unchg  

10-yr T-Note Yield 2.65%

Down 6 bps

 

11th Dist Cost of Funds 1/31

1.056 down 4 bps

 

Freddie Mac 30-Year

Avg Rate 2/21

4.35% down 2 bps

 

MBA - Mortgage Applications

Index Week ending 2/15

Overall           

Up 3.6%

[Prior week down 3.7%]

Purchase Money Loans

Up 2.0%

[Prior week down 6.0%]

Refinancing Loans

Up 6.0%

[Prior week down 0.1%]

 

Jobless Claims 2/16

216,000 new claims

[Prior week 239,000]

4-week moving avg 235,750 up

 

Existing Home Sales Jan

Down 1.2% MoM

Down 8.5% YoY

4.940M units

Posted in Market Updates
Feb. 18, 2019

WEEKLY INCLINE VILLAGE MARKET CONDITION REPORT

Incline Village, NV

Mon Feb 18 2019 

This week the median list price for Incline Village, NV is $1,672,500 with the market action index hovering around 27. This is an increase over last month's market action index of 24. Inventory has held steady at or around 30. Click here to stay informed with the Incline Village market!

Market Action Index

The Market Action Index answers the question "How's the Market?" by measuring the current rate of sale versus the amount of the inventory. Index above 30 implies Seller's Market conditions. Below 30, conditions favor the buyer.

Slight Buyer's Advantage

Home sales have begun exceeding new inventory. This is a Buyer’s market so prices are not yet moving higher as excess inventory is consumed. If the tightening continues and the market moves into the Seller’s zone, we may see upward pressure on pricing.

The market is hovering around this plateau. Look for a persistent change in the Market Action Index before we see prices deviate from these levels.

Posted in Market Updates
Feb. 5, 2019

NEVADA TAX ADVANTAGES

Relocating to Nevada

Individuals and businesses are motivated to relocate to Nevada due to the fact that there is no state-imposed income tax. In order to take advantage of the income tax savings, several factors come into play. Evaluate your personal and corporate tax climate and use the following information to evaluate your potential for the Nevada tax savings.

Nevada tax benefits & advantages

In order to take advantage of Nevada’s tax hospitality, a taxpayer must make Nevada its principal place of residence, i.e. your primary home. Residency is the single most important factor in gaining Nevada’s tax advantages.

A “close connection test” is implemented and must be passed in order for a taxpayer to establish state residency. The “close connection test” identifies if Nevada is the state in which a taxpayer has the closest social and business contacts, and more. A corporation organized and domiciled in Nevada can also significantly reduce its state tax burden by shifting its corporate level of activity to the state Nevada.

Owning real estate in the state of Nevada is the key factor when considering tax advantages. To learn more about the potential tax advantages of Nevada residency for yourself of your business, visit tax.nv.gov. Contact an experienced CPA or financial advisor to plan and implement a successful change in residency.

Top reasons to Incorporate in Nevada

• No Corporate Income Tax

• No Taxes on Corporate Shares

• No Franchise Tax

• No Personal Income Tax

• Nominal Annual Fees

• Nevada corporations may purchase, hold, sell,

or trans shares of its own stock

• Competitive Sales and Property Tax Rates

Click Here to Download PDF Flyer• For capital, services, personal property, or

real estate, including leases and options.

The directors may determine the value of

any of these transactions. and their decision

is final.

• No Franchise Tax on Income

• No Inheritance or Gift Tax

• No Unitary Tax

• No Estate Tax

Click Here to Download PDF Flyer

Posted in Community News
Feb. 4, 2019

YOUR WEEKLY INCLINE VILLAGE MARKET REPORT

Incline Village, NV

Mon Feb 04 2019 

This week the median list price for Incline Village, NV is $1,645,000 with the market action index hovering around 25. This is about the same as last month's market action index of 25. Inventory has held steady at or around 30. Click here to stay informed with the Incline Village market!

Market Action Index

The Market Action Index answers the question "How's the Market?" by measuring the current rate of sale versus the amount of the inventory. Index above 30 implies Seller's Market conditions. Below 30, conditions favor the buyer.

Slight Buyer's Advantage

Home sales have begun exceeding new inventory. This is a Buyer’s market so prices are not yet moving higher as excess inventory is consumed. If the tightening continues and the market moves into the Seller’s zone, we may see upward pressure on pricing.

The market is hovering around this plateau. Look for a persistent change in the Market Action Index before we see prices deviate from these levels.

Market Segments

Each segment below represents approximately 25% of the market ordered by price.

Posted in Market Updates
Jan. 31, 2019

MISPLACED WORRIES OVER QUANTITATIVE TIGHTENING

MARKETS AND ECONOMY

Misplaced Worries Over Quantitative Tightening

As the Fed slowly removes accommodative monetary conditions that were put in place during the last recession, there’s some concern about tightening financial conditions spurring a new downturn. But financial conditions and monetary conditions aren’t the same, and the Fed’s recent actions shouldn’t be seen as restrictive.

JIM GLASSMAN, HEAD ECONOMIST, COMMERCIAL BANKING , JP MORGAN

JANUARY 23, 2019

As the top of the business cycle approaches, every action from the Federal Reserve seems to provoke anxiety. After all, the US economy has never held full employment for long until the start of the next downturn. Periods of strength always threaten to generate an overheating labor market, spiraling inflation, or financial imbalances that will eventually tip the economy into a new recession.

Every step of interest rate normalization has been subject to intense debate, with critics questioning whether the expansion can endure higher borrowing costs. However, December’s hike merely pushed short-term rates into a 2.25 to 2.5 percent window, barely ahead of inflation. Unless the true equilibrium for real interest rates in an economy operating near full capacity is negative, rates have yet to move into restrictive territory.

Worries Over Stealth Tightening

Interest rates are not the sole lever for making monetary policy. During the early years of the recovery, the Fed turned to quantitative easing to hasten the recovery. By purchasing large volumes of Treasurys and mortgage-backed securities, the Fed was able to push down long-term borrowing costs and spur a wave of private-sector capital investment. Now that the economy is back on solid footing, the Fed has begun shrinking its balance sheet, allowing its holdings to mature and effectively releasing a new flow of securities onto the open market.

This decision has led to worries that balance sheet normalization represents a stealth mechanism for monetary tightening. After all, quantitative easing brought long-term borrowing costs down, so it’s logical to think its reversal could push interest rates above their natural equilibrium. If rising yields cause monetary conditions to turn restrictive, higher borrowing costs could cut off capital investment and dampen economic activity.

Yields Remain Tranquil

The Fed’s balance sheet is shrinking by some $50 billion monthly, yet the market shows no signs of tightening. A year after the runoff of excess reserves began, the 10-year Treasury yield—often used as a proxy for long-term interest rates—has climbed to just 2.7 percent, less than one percentage point above inflation expectations. Despite the added flow of securities coming onto the market, long-term yields likely rest below their true equilibrium, which has historically held approximately two percentage points ahead of inflation.

It appears that the yearlong climb in yields that began in late 2016 was only partly driven by the Fed’s announcement of balance sheet normalization. Investors were likely also responding to the presidential election results, which brought the hope of tax relief, fiscal stimulus and business-friendly regulatory reforms.

Reducing Idle Liquidity

As the Fed’s balance sheet shrinks, the excess liquid reserves held at the central bank are also declining. This has led to concerns that monetary conditions will tighten as banks no longer have excess reserves to draw upon. However, just as hyperinflation did not follow the creation of these excess idle reserves, their removal should have little impact on monetary conditions for the broader economy. If a liquidity crunch were brewing, it would first become visible in steadily rising bond yields—a sign that is markedly absent today.

Why Aren’t Yields Rising?

No single factor can fully explain yields’ stability through the first year of balance sheet normalization. Central banks abroad are still engaged in quantitative easing, which may be suppressing yields for high-grade debt in the US. The 10-year yield on Japanese Government Bonds sits at virtually zero, and German bunds have climbed barely above 0.25 percent. This may be encouraging investment in US government debt, which is at least ahead of inflation.

However, overseas investors have purchased relatively few Treasurys in recent years—since 2014, international investment in US government bonds has been flat. Instead, foreign capital has been flowing into stocks and corporate bonds. Since 2014, foreign investors have acquired $3.5 trillion in US equities and another $1 trillion in corporate debt and dollar-denominated money market securities. Foreign inflows may have an indirect role in suppressing bond yields, but it doesn’t appear that the US bond market is serving as a refuge from quantitative easing programs in Europe and Japan.

Demand for government debt is broadly spread across the domestic market. Banks and investment funds have purchased $2 trillion of Treasurys since 2014; households and hedge funds have added another $1 trillion of government debt to their portfolios over this period. These purchases may have been driven by higher capital requirements for lending institutions, as well as investors fleeing volatility in the stock market.

Monetary Versus Financial Conditions

The debate over the Fed’s decisions often conflates monetary policy with the broader financial conditions facing consumers. The Fed’s ability to set short-term interest rates gives it great power over monetary conditions, but financial conditions—and the availability of credit to private borrowers—is a function of the free market. Issues like the impact of growing student debt are fundamentally endogenous; they can be affected by policymakers’ decisions, but market forces ultimately control the movement of capital within the private sector.

As the economy strengthens, financial conditions may grow tighter in an absolute sense. But that will reflect strengthening demand for credit as promising opportunities for investors proliferate. The Fed’s mandate is to maintain price stability, not to control the shifting balance of financial conditions as the top of the business cycle arrives.

Posted in Real Estate News
Jan. 28, 2019

WEEKLY INCLINE VILLAGE MARKET CONDITION REPORT

Incline Village, NV 89451

Mon Jan 28 2019 

This week the median list price for Incline Village, NV 89451 is $1,595,000 with the market action index hovering around 23. This is an increase over last month's market action index of 22. Inventory has held steady at or around 31. Click here to stay informed with the Incline Village market!

Market Action Index

The Market Action Index answers the question "How's the Market?" by measuring the current rate of sale versus the amount of the inventory. Index above 30 implies Seller's Market conditions. Below 30, conditions favor the buyer.

Slight Buyer's Advantage

The Market Action Index has been trending lower for several weeks while prices have remained relatively stable. If inventory continues to grow relative to demand however, it is likely that we will see downward pressure on pricing.

Again this week we see prices in this zip code remain roughly at the level they’ve been for several weeks. Since we’re significantly below the top of the market, look for a persistent up-shift in the Market Action Index before we see prices move from these levels.

Market Segments

Each segment below represents approximately 25% of the market ordered by price.

Posted in Market Updates