Summer Desert Market Report – Mediam home prices rose for the 8th straight month. Up 9.6% from last year. The hottest cities for sales by volume were Palm Desert (233), Palm Springs (213), La Quinta (156), Indio (131), Rancho Mirage (97). Each city and each community has its own story some communities have seen huge growth, while others are relatively flat. The cities that had the largest price increases, have seen the number of sales flatten, which tells us that prices were getting ahead of the market.
Inventories are down again putting upward pressure on pricing. Overall the desert has seen a decline in the time it’s taking to sell, nicely presented homes in a good location and priced well are selling quickly. Currently there is a 3 month supply of homes for sale in the desert, which puts us in a “Sellers Market” as we head into season.
The Fed has indicated there will likely be two more interest rate increases before the end of the year, which could start to weigh on the market and slow sales until the shock is absorbed.
Southern California and specifically, the Coachella Valley continues to be a sought after destination for a second home get a way.
As we head into our “Season”, we expect to see continued strong home sales and price appreciation valley-wide.
How’s your neighborhood doing? Send me an email, I’ve got the details!
What is a 1031 Exchange and can it work for you?
Thanks to IRC Section 1031, a properly structured 1031 exchange allows an investor to sell a property, to reinvest the proceeds in a new property, and to defer capital gain taxes.
1031 EXCHANGE FOR REAL ESTATE INVESTORS – THE BENEFITS
Whether an investor’s property is owned free and clear or encumbered, the benefits of a tax deferred exchange can be significant. The tax dollars saved by doing an exchange can be used to buy additional investment property.
An investor who exchanges is able to defer the capital gain tax and buy a replacement property worth more than the investor who simply sells and reinvests with after tax dollars.
1031 Exchange for real estate investors provides one of the best tax strategies for preserving the value of an investment portfolio. By using an exchange, the investor is able to defer the recognition of capital gain taxes that would otherwise be due with the sale of an investment property. To qualify as an exchange the relinquished and replacement properties must be qualified “like-kind” properties and the transaction must be structured as an exchange.
1031 EXCHANGE FOR REAL ESTATE INVESTORS – NON TAX BENEFITS
In addition to deferring the capital gain tax, tax deferred exchanges provide the investor with a wide range of non-tax opportunities that may suit an investor’s portfolio
- Reposition assets
- Change property types
- Increase leverage
- Increase depreciation deduction
- Reduce management obligations
- Provide for estate and retirement planning
- Allow for relocation
- Improve cash flow
- Achieve property consolidation or diversification
- Eliminate or create joint ownership
THE EXCHANGE PROCESS
Most exchanges, involve three parties: the investor, (exchanger), who is doing the exchange, the buyer who is buying the exchanger’s old (relinquished) property, and the seller who is selling the exchanger a new (replacement) property. To create the exchange of assets and to obtain the benefit of the “Safe Harbor” protections of the tax code, it is wise to employ an Exchange Accomodator, or Exchange Facilitator. This qualified intermediary becomes a fourth party principal in both simultaneous and delayed exchanges.
The steps for completing an exchange are relatively simple with qualified intermediary:
- The exchanger signs a contract to sell a relinquished property to the buyer.
- Exchanger enters into an exchange agreement with a Qualified Intermediary and assigns rights in the sale contract to the intermediary, including the right to receive the exchange funds.
- At the closing of the relinquished property, the exchange funds are wired to the intermediary and the intermediary instructs the settlement officer to transfer the deed directly from the exchanger to the buyer.
- The exchanger has a maximum of 180 days in the exchange period to acquire all replacement property.
- Unless the exchanger can acquire all replacement property within the first 45 days from the close of the relinquished property, the exchanger must identify possible replacement properties in writing to the intermediary within the 45 day identification period.
- The exchanger signs a contract to buy the replacement property with the seller and the exchanger assigns the exchanger’s rights in the purchase contract to the intermediary.
- At the closing of the replacement property, the intermediary wires the exchange funds to complete the exchange and the intermediary instructs the settlement officer to transfer the deed directly from the seller to the exchanger.
As a general rule of thumb, to avoid paying capital gain taxes in an exchange, the investor should always attempt to:
- Buy a property of equal or greater value, (net sales price).
- Reinvest all of the net equity in replacement property
- Obtain equal or greater debt on replacement property.
*Exceptions: A reduction in debt can be offset with additional cash from exchanger, but increasing debt cannot offset a reduction in exchange equity.
Do you own an investment property and thinking about selling it to buy another that might have more cash flow or less management headaches? We can help. Give me a call or send me an email, let’s talk about what’s possible for your situation.
Cathi and Ben Walter
(760) 218 – 5752
Ever wonder how much income you need to buy an average home in other areas of the country?
@HowMuch.net just published a map showing How much income you need to buy the average home in each state in the U.S.
They collected average home prices for every state from Zillow and then plugged that information into a mortgage calculator to figure out monthly payments. The interest rates used varied from 4 to 5% depending on the market, a 10% down payment, and total cost of housing not exceeding more than 30% of gross income. Using this rule as the benchmark, they calculated the minimum salary required to afford the average home in each state.
The Top Three Places Where You Need the Highest Salaries to Afford the Average Home 1. Hawaii: $153,520 for a house worth $610,000 2. Washington, DC: $138,440 for a house worth $549,000 3. California: $120,120 for a house worth $499,900 Here’s a quick snapshot of housing affordability across the United States.
Home much income do you need to buy the average home in each state; Check it out!
Home Design Trends for 2018 – Each year Fixr conducts a national survey of home industry influencers in the US; those who are building, designing, manufacturing and publishing content relevant to the field, revealing single family home design and construction trends.
Gen X’ers are the most likely group to buy a single family home with Millennials representing the second largest group in the 2018 Fixr Survey. There are many reports that show Millennials are driving the current market.
In 2018 more home buyers are looking for single story homes with more than 2,000 sq ft with an open floor plan and they want to live in urban areas.
Smart home features and automation are gaining traction at an incredible rate and is the number one choice for popular home design trends going forward.
Green and Energy Efficient Design is important to both Gen X and Millennials, but more so for the Millennials with Smart Thermostats, Home Automation Security, Lighting Control Systems, Smart Appliances.
Artificial intelligence and voice control systems will start showing up in homes in 2018.
The open floor plan has been the most popular layout since 2013 and will continue to grow going forward.
For current homeowners, when it comes to affordable upgrades, energy efficient upgrades and style enhancements were popular.
Dimmable lighting allows the homeowner to influence the mood of a room at all times of the day and night. Wireless hubs and concealed components are considered to be integral in nearly every home.
Adding energy efficient windows were another popular trend for homeowners.
Adding outdoor living spaces will be a popular addition in 2018 with more Millennials looking for indoor / outdoor living.
Home Buyers are beginning to expect both function and aesthetics, while function is the primary goal, aesthetics go a long way toward providing comfort and personal expression.
There is a delicate balancing act for home builders between homes that are aesthetically pleasing to the eye vs energy efficient homes that may feel cold or impersonal.
Most designers agree that form should always follow function and the most successful home design blends the two attributes creating a cohesive design, enhancing the homeowners experience in the space.
Get more information about what today’s home buyers are looking for before you put your home on the market. Give me a ring, I’m happy to share my knowledge and experience to help elevate your home above the competition (760) 218 – 5752.
The 24th Annual Palm Springs International ShortFest boasts up-and-coming filmmakers featuring their finest flicks. Presented by the Palm Springs International Film Society, this event is the largest film festival of its kind in North America. Each year, approximately 325 short films are selected from over 4,200 submissions to be screened at the Camelot Theatre in the Oscar® and BAFTA®-qualifying festival, with over 100 of the past winners advancing to be nominated or even win Academy Awards.
Each screening will feature 4-10 short films, all curated and blocked together to cover a central theme. In addition to the film screenings, the festival features a ShortFest Forum with panel sessions, master classes, and roundtables. Working industry professionals will share their insights into the film industry and tackling the latest trends in the business, as well as provide networking opportunities.
Running June 19-25, the 24th Annual Palm Springs International ShortFest is an excellent appetizer until the Palm Springs International Film Festival returns in January 2019.
For more information, including a list of events, tickets, and more, visit the ShortFest website.
Passes, 6-packs, Opening & Closing Night tickets on sale now
Film & event tickets on sale June 13, 9am | Member ticket sales begin June 11, 9am
Monday, June 11 | Member ticket sales begin 9am
Wednesday, June 13 | General ticket sales begin 9am
Tuesday, June 19 | Opening Night
Wednesday, June 20-Sunday June 24 | Film Screenings
Thursday, June 21-Saturday June 23 | Forum
Sunday, June 24 | Closing Night
Monday, June 25 | Best of Fest
What the Dodd-Frank Rollback Means for Real Estate
On May 22nd, Congress passed reforms to the Dodd-Frank Act, the massive financial reform bill enacted in July of 2010 in the wake of the 2008 US financial crisis.
The current bill could have a big impact on the real estate and mortgage lending. Economists believe the rollback of the Dodd-Frank regulations could lend a hand toward partially solving the industry’s inventory crisis.
“This is a win for the financial industry,” said Chief Economist Nela Richardson, who worked on the bill as an economist for the Commodity Futures Trading Commission. “These are community banks, credit unions, a lot of them are in rural areas. They do a lot of mortgage lending. This will help consumers in that the banks will be able to free up some credit.”
National Association of Realtors Chief Economist Lawrence Yun echoed Richardson, adding that a loosening of Dodd-Frank rules may lead to a rise in regional construction.
“The regulations placed on small-size community banks were terrible because it hindered small-sized homebuilders from obtaining construction loans,” he said. “As the homebuilding industry has become more dominated by large corporations, now we have this relief, which means that, small-time homebuilders will have better access to capital to build homes.”
Economists seem to agree, that the economy is not on track to repeat the financial crisis of 2008, since big banks were at the center of the collapse a decade ago. Richardson explained that the only way to eliminate all risk is to make everything as onerous as possible.
The legislation will also require Fannie Mae and Freddie Mac to consider the use of alternative credit scoring models, which could help borrowers with thin credit files receive a mortgage. But Gardner said he’s concerned, ultimately, we need to remain aware of looser credit restrictions so the country does not repeat the acts of the last financial crisis, where homeowners were given loans they could not pay back.
Palm Springs Modernism Week 2018 – It’s cool, iconic and modern. The February festival is an exciting 11-day celebration of midcentury modern design, architecture, art, fashion, and culture. Events include the Modernism Show & Sale, tours of iconic homes, architectural walking and double-decker bus tours, a world-class lecture & film series, tours of the historic Annenberg Estate at Sunnylands, a Palm Springs Walk of Stars dedication, classic cars, garden tours, a vintage travel trailer exhibition, and much more.
The mission of the Palm Springs Modernism Week 2018 is to celebrate and foster appreciation of midcentury architecture and design, as well as contemporary thinking in these fields, by encouraging education, preservation and sustainable modern living as represented in the greater Palm Springs area
Located in North Palm Springs is one of the city’s best-kept secrets in Little Tuscany set on .57 acre with Stunning Mountain Views. Built in 1939 and remodeled in 2017.
Check out some of the Palm Springs Modernism Week 2018 upcoming events!
Rat Pack Playground – Modernist Homes in Vista Las Palmas
February 15, 2018 | 9:30 am – 11:30 am
Stars and Star-chitects in Deepwell
February 15, 2018 | 9:30 am – 12:00 pm
Preview Party at the 18th Annual Modernism Show & Sale
February 16, 2018 | 6:00 pm – 9:00 pm
The Big Reveal Party at the West Elm House 2018: The Pool House
February 16, 2018 | 8:00 pm – 10:00 pm
Modernism Week Showcase Home – Moroccan Modern
February 17, 2018 | 9:00 am – 1:00 pm
Sagewood: A Donald Wexler tour
February 17, 2018 | 10:00 am – 3:00 pm
Alan Hess Presentation on Frank Lloyd Wright
February 18, 2018 | 9:00 am – 10:00 am
Ask an Interior Designer
February 18, 2018 | 10:00 am – 4:00 pm
Thunderbird North Home Tour – Architects William Cody and Donald Wexler
February 19, 2018 | 9:00 am – 4:00 pm
Wexler Residence – Palm Springs Modern Committee Iconic Home Tour
February 19, 2018 | 10:00 am – 2:00 pm
Boom Town: The Story of Uptown Palm Springs
February 23, 2018 | 9:30 am – 11:30 am
Steel & Glass 2018 Home Tour
February 24, 2018 | 10:00 am – 3:00 pm
Premier Double Decker Architectural Bus Tour
February 25, 2018 | 9:00 am – 3:30 pm
The Palm Springs Modernism Week 2018 is staged and set to amaze, don’t miss this popular event!
2018 Home Design Trends –
What to Ditch and What to Look for
OUT – Chevron Patterns and Gray
Time to ditch the Chevron pattern that we’ve seen everywhere from wallpaper to lampshades. Muted gray and white is on the way out, making way for color.
IN – Color
Warm rich color is making its way onto walls, moldings, and furniture in a big way. Peacock Blues and Greens, Burnt Orange, and even pops of “Gen Z Yellow”
OUT – White Kitchens and Large Range Hoods
All white Kitchens are still popular, however, black, two tone cabinets, and wood tone cabinets are the trend for 2018 with Quartz counters.
IN – Warm Woods and Integrated Range Hoods
OUT – White on White Everything
Monochromatic white on white interiors are giving way to more realistic lifestyles that include kids and dogs. Look for rich warm colors to show up in 2018.
IN – Warm Color
OUT – Farmhouse Style
The Farmhouse look has been in style for about 4 years. 2018 Style trends are moving toward minimal design.
IN – Warm and Minimal
The Palm Springs International Film Festival is one of the largest film festivals in North America, welcoming over 135,000 attendees each year for its lineup of new and celebrated international features and documentaries. The Festival is also known for its annual Film Awards Gala, honoring the best achievements of the year in film by a celebrated list of talents. Produced by the Palm Springs International Film Society, the Festival offers 14 days of events and film screenings featuring over 180 films. Venues include Palm Springs and Cathedral City.
PARTIAL LIST OF EVENTS
January 2, The Palm Springs International Film Festival rolls out the Red Carpet to welcome Hollywood’s hottest industry players and A-list celebrities for the Awards Gala at the Palm Springs Convention Center. The Awards Gala is the Film Festivals showpiece event that kicks off the Festival each year with a dazzling celebration of old-school Hollywood star power, glamour, and talent. Grab a ticket for the event, or star gaze as top celebrities walk the red carpet.
January 4, The Post at Palm Springs High School. Steven Spielberg’s rousing, knuckle-biting account of the publication of the Pentagon Papers, Meryl Streep stars as Washington Post publisher Katherine Graham and Tom Hanks as editor Ben Bradlee, as they take on the might of Nixon’s White House.
DINNER AND A MOVIE
January 8, catch Constructing Albert, a behind-the-scenes glimpse of the life and ambition of a restaurateur, following Chef Albert Adrià as he puts his past with famed restaurant elBulli behind him and embarks on a new culinary adventure. Then join us at Bontá in Cathedral City, where Chef Hector Salvatierra of Bonta’ serves up an eclectic mix of Mediterranean, European and Argentinian dishes.
Film Screening begins at 4:00 pm at the Mary Pickford Theater followed by dinner.
Bontá is located in the same complex as theater
January 10, The Cakemaker, a story of a gifted pastry chef and the aftermath of his passionate, closeted affair with a married man. The chic and swanky Eight4Nine Restaurant and Lounge, the Uptown Design District’s Hot Spot is the featured Dinner and a Movie restaurant. This year they matchup with
Wednesday’s screening will be followed by dinner at Palm Springs’ chic and swanky Eight4Nine Restaurant and Lounge, the Uptown Design District’s hot spot. Eight4Nine’s very own pastry chef Albert Gonzalez has created an eclectic and colorful menu
Film Screening begins at 4:30 pm @ Camelot followed by dinner.
Eight4Nine is a short drive from the theater
January 14, The Last Movie Star at Palm Springs High School.
An invitation from a film festival affords an elderly movie star a trip down memory lane that stirs his long-dormant heart. An octogenarian Burt Reynolds shares scenes with his ’70s-era self and delivers a resonant performance in this poignant, often funny drama.
After attending the Palm Springs International Film Festival, check out this Little Tuscany Hacienda located in the heart of the Action in Palm Springs. Enter the gates into your own PRIVATE COMPOUND set on over 1/2 acre with Dramatic MOUNTAIN VIEWS that you can almost reach out and touch.
This exceptional property features over 2,200 SF, 4 bedrooms, 3 baths & has recently had an EXTENSIVE RENOVATION including all new Kitchen and Baths. Enjoy the Old World Charm of Palm Springs with state of the art conveniences including new ENERGY EFFICIENT windows & doors, CHEF’S KITCHEN with a full suite of VIKING stainless appliances, QUARTZ counters & Custom Cabinets with lighting. Each bath has been remodeled with stone showers, frame-less glass, QUARTZ, Custom Cabinets.
You’ve got lots of flexibility here; the property is zoned multi-family & can be used as one LARGE HOME with GUEST HOUSE, or locked off as TWO SEPARATE UNITS so you can live in 1 and rent the 2nd out for extra income. You can also build an additional home for more income potential. What a GREAT LOCATION, minutes from the Village in Palm Springs.
Home Buying Mistakes You Can Avoid
Home buying is an emotional process. Ideally, you should set aside your emotions when you’re evaluating a house. But in practice, keeping your emotions in check can be difficult at best.
Make a list of items to check:
One way to help make it easier is to sit down before looking and make a list of your
- Must Have’s – Your non-negotiables. You swim every morning, you need a pool.
- Nice to Have’s – it would be nice if you could have it, but not a deal breaker. A sink in the laundry room.
- Deal Breaker’s – A definite non-starter. The house backs to a busy street.
Take a copy of your checklist every time you visit a house. Take photos so you can cross each item off your list. If you fall in love with a house and it doesn’t have any of the Must Haves on your checklist it will at least make you pause and think.
Learn about the Neighborhood
If you’re retired and buying in a neighborhood with small children, school buses, and basketball hoops, will you be happy there?
Buying the View
Unless the land between the house and the view is already completely developed, or you will own the land between your house and the view, don’t buy a house for the view across a piece of vacant land that you do not own. There are too many unknowns that can make you regret your purchase. A new development with 2 story homes could be built in the future between you and the view. What if the land is rezoned commercial and a shopping center goes in? In either case, you’ve lost your view and the view premium you paid when you bought will no longer apply when you go to sell.
Look beyond Staging
Staging psychology does work. Staged houses look far better than houses that have not been staged. When considering a house, try to mentally remove the staging. Example; a room is beautifully staged with a sectional in the middle of the living room with end tables and lamps on each side. But there aren’t any electrical outlets where the lamps are! It would take a significant remodel to make that layout work. Pay more attention to the layout of the house and the structure itself. Ugly wallpaper and paint can easily be fixed later.
When you’ve narrowed your choices down to one property for consideration. Take a few minutes to chat with the neighbors, ask them about the neighborhood and the house, they’ll let you know if there are any problems you should be aware of – neighbors love to talk. What they say can cement your decision that this is the perfect home for you or it could save you from making a mistake.
Talk to the current Gardner and Pool Service; they can shed light on the condition of equipment and if there are any problems that may need to be fixed soon.
There are many things to consider when looking for the right home to buy; if you’re starting out on the journey to find the right home for you and your family, you’ll want to read our Guide to Home Buying, how to avoid common home buying mistakes.