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Selling Your Home This Winter

We all know that winter is traditionally real estate’s slowest season for a multitude of reasons – the cold weather, holidays, and school is usually in full swing… just to name a few. But what if we said it may be a little different this year? Lawrence Yun, Chief Economist at the National Association of Realtors, predicts “it will be one of the best winter sales years ever”. If you’re thinking of selling your home this winter, here are things to prepare for.

Online Listings

Regardless of the weather, people are looking online for listings. According to the NAR, 52% of buyers found the home they purchased through the internet in 2020. Make sure you are doing your due-diligence in making sure your listing is up to par. Virtual tours are a great feature to add to really get buyers interested in your home. They allow buyers to view many homes in a short span of time and get a better feel for the layout; this means that when the buyers reaches out to you, they likely have some genuine interest in purchasing. If you aren’t doing a virtual tour, be sure to take high resolution pictures and take the pictures strategically to show off all the angles of your home.

Work from home is more important

Working from home is more important than ever this year, and the trend seems to be impacting home preferences as well.  As remote work grows, some Americans who once used to work in offices are in greater need of a home office space. This could lead to the latest trend in moving to the suburbs to remain even after the pandemic. Make sure to really accent your office space, if you have one. Even if you don’t have an extra room to stage as an office, try finding a space in your home where you could make a spot for a desk. If you aren’t staging your home, make sure to mention an office room or space in the description of the listing to help buyers envision themselves living and working there.

Keep it Simple with Decorations

If you are trying to sell your home around the holiday season and you’re an ardent holiday decorator, make sure the decorations are accentuating, but not overpowering. Some real estate professionals will say to forego the decorations altogether, but if your neighborhood is festive and everyone participates, you may actually be doing yourself a disservice by being one of the only houses in the dark – and that’s not very inviting. For showings, you can light the fireplace if you have one, play relaxing holiday music, and prepare fresh baked goods and serve cider and hot chocolate to guests to increase the ambiance of your home.

More Exterior Advice

When taking pictures of your home to sell, make sure to take them when there’s not a blanket of snow covering the property. Buyers may think you are hiding something like a weathered roof, cracked pathways, or a yellowed and unkempt lawn. Try to take pictures for your listing on a clear and sunny day. If avoiding the snow is not an option, clean off all pathways, driveways and brush off trees or bushes with a broom. Also keep in mind how much earlier it gets darker at this time of year; it’s a good idea to keep your home illuminated for potential buyers to look at when they drive by.

By our Preferred Vendor, Choice Home Warranty.

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Trees- Are They Affecting Your Property Value?

Did you know that the trees in your yard could actually have an effect on your property value? It’s not just the fancy interiors and neighborhood extras that factor into an appraisal. But how do you know if your trees are adding value or if you should be scheduling removal? Whether you’re a home owner, buyer, or seller, we’ve provided you with some tips on how to detect if your trees are an asset or something to get rid of.

Is it an Old Tree?

Big trees are usually old trees. Therefore, they often have wandering roots that may go beyond the human eye. Tree roots search for water and nutrients, and in turn they expand and grow – which may cause problems throughout the surrounding property. Tree roots on average can extend up to two to three times farther than the tree’s foliage, also known as the tree’s crown.  This can cause an array of problems if the root emerges through the ground or grows into structures, pavement, pipes, or utility service lines. So, it’s a good idea to get to know your trees and how long they’ve been there. Inspect the area surrounding the tree for these warning signs. If your old tree is in healthy condition and poses no risks, it is likely no risk, and possibly a boon, to your property value.

Are you Prepared for a Mess?

The healthiest of trees will often times result in a mess in your yard. Are you prepared for the task and the associated cost of the tools needed? Whether you are raking or leaf blowing, this type of maintenance takes time and or money to pay someone to do it – so be aware about the kinds of trees you have in your yard and what kinds of debris they shed throughout the year. Remember that when big storms roll in, branches big and small will be falling in the yard and require cleanup. Speaking of branches, trees that hang over driveways pose a big risk as well. Consider the scenario of dead or even healthy branches falling and blocking the driveway, falling on people, cars, or the garage. For many homeowners, this may not be a dealbreaker – but it is still something to prepare for.

Are all Trees the Same?

There is not actually one specific tree species that is proven to increase property value. The more important factors concern the overall quality of the tree – is it disease resistant? Is it suited for your planting zone? Planting zones are an indication of your average minimum temperature and will help you determine what species of trees will survive and flourish in your area. You can also speak to a local arborist about choosing the right trees for your property if you’re interested in planting new ones and are unsure.

What Are Good Tree Qualities?

Trees are essential to our collective effort for a more sustainable environment. Big, hearty, and healthy trees provide warming effects of the sun in the winter, maximize shade during the summer, and deflect heavy winds. Signs of a good tree that will add property value will come down to the appropriateness of the tree species for the area, the location of the tree in proximity of your home, and the tree’s overall condition. When looking at the overall condition of your tree, check for growth each year by measuring the trunk and inspecting its branches to compare this year’s bloom to last years. With the exception of some trees, the bark of your tree should not be coming loose or peeling. The bark should also be free of moss or fungi as well. Check for proper leaf color, shape, and size to ensure it is growing properly and staying healthy. Even healthy trees need to be trimmed and pruned, so make sure to also keep up with this type of maintenance every year to ensure your tree is at its best health.

By our Preferred Vendor, Choice Home Warranty.

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What a Biden Tax Plan Might Hold for Commercial Real Estate

With one of its own in the White House, the commercial real estate sector was treated well by the Trump Administration. The property industry benefited from generally pro-business policies and as well as more relaxed banking and environmental regulation. Investors benefited from President Trump’s signature legislative achievement, the Tax Cuts and Jobs Act (TCJA) enacted in late 2017. The new tax code provided some new special benefits for the industry, including opportunity zones, a 20 percent pass-through deduction for certain types of qualified business income, and bonus depreciation for certain assets. The TCJA also lowered tax rates on both corporate and individual income, reducing tax liabilities for commercial property owners. And perhaps more importantly, the law preserved several significant benefits that already existed—notably tax-free 1031 exchanges and carried interest—that had been targeted in earlier versions of the legislation.

Winter outlook dominated by the pandemic

How might CRE fare under a Biden Administration? The most important factor will be the strength of the economy, which at least initially will depend primarily on containing the pandemic. Until COVID-19 is under control, property markets cannot revert to “normal” performance—whatever that new “normal” looks like in the future.

Fortunately, several vaccines recently have been shown to be highly effective in preventing COVID-19 symptoms, an essential step in the economic recovery, but even optimistic predictions do not anticipate widespread distribution before the spring. The Biden Administration promises a more aggressive federal response to limiting the virus’s spread and treating the afflicted but, of course, does not take office for another two months.

In the meantime, the best hope for the economy and the property sectors may be a robust stimulus package, which Biden just announced is his top priority—even prior to his inauguration. Congress has been at an impasse for months over the size and contours of this next pandemic relief bill, though a new bipartisan proposal might offer hope. Among other provisions, the bill would provide assistance to jobless workers by extending federal unemployment benefits at $300 per week for 16 weeks, and would provide additional funding for small businesses via the Paycheck Protection Program. Though there seems to be widespread  support for the compromise, the White House and Senate Majority Leader have offered competing proposals offering less aid for unemployed workers, and the prospects for the passage of any stimulus package remains uncertain.

The Biden tax plan

Eventually, the virus will be contained, and consumers and businesses will get back to whatever they used to do. What then? What would the Biden plan mean for the property sector? No policies have been formally proposed, but we know much of what the administration would like to implement based on Biden’s campaign statements and speeches, though much of the detail must still be fleshed out.

And even then, much will depend on the outcome of the upcoming runoff elections in Georgia for the two undecided Senate seats. Biden can’t unilaterally enact his plans; it’s up to Congress to ratify the legislation that coverts the campaign ideas into practice. Should these seats remain in Republican hands, as conventional wisdom expects, Republicans almost certainly would retain control of the Senate, which would likely doom, or at least dilute, many of Biden’s proposals.

But for the sake of analysis, let’s review Biden’s central positions. As a candidate, Biden proposed a variety of tax policies that collectively would raise some $2.1 trillion in revenue over the next decade, according to recent analysis by the nonpartisan Tax Policy Center. Few of the provisions specifically target real estate, but some do, and others would directly impact property investors and real estate companies. Among the key proposals:

Tax rates and income classifications

Raise tax rates on corporations and high-income individuals: Biden promises to hold or reduce taxes on anyone making less than $400,000 a year, but wealthy taxpayers and corporations would pay more. Biden wants to roll back some parts of the TJCA tax cuts by increasing the corporate tax rate back up to 28 percent (from 21 percent) while individual income tax rates would revert to their pre-TCJA values for taxable incomes above $400,000, raising the top rate from 37 to 39.6 percent. In isolation, these measures would have little direct impact on property sector operations but would reduce investors’ after-tax returns.

Phase out qualified business income (QBI) deduction above $400,000 of income: The 20 percent QBI deduction authorized by the TJCA effectively lowered the top tax rate from 37 percent down to 29.6 on flow-through income for certain types of non-corporate small businesses and partnerships. Eliminating this deduction would further depress real estate returns for property investors.

Treat capital gains and dividends like ordinary income for households earning over $1 million: The Biden plan calls for “asking those making more than $1 million to pay the same rate on investment income that they do on their wages,” though many details remain sketchy. Currently, the top tax rate on long-term capital gains is 20 percent (for investors with an income of at least $441,451 in 2020), plus a net investment income tax (NITT) of 3.8 percent (for married couples filing jointly earning at least $250,000), for a total of 23.8 percent. The proposed tax increase would nearly double the tax rate to 43.4 percent for households earning more than $1 million (39.6 percent rate on ordinary income plus the 3.8 percent NITT).

The treatment of carried interest could also change. “Carried interest” is the profit share received by general partners in a fund as part of their compensation. Currently considered to be investment income by the tax code, it is thus taxed at the capital gains rate. Though the current plan does not expressly propose changing the treatment of carried interest, Biden has proposed this change in the past, and treating all investment income as ordinary income for high-income households would effectively accomplish the same objective.

If enacted, these proposals would be present a much greater hit to real estate investment returns than the relatively nominal increases in personal tax rates. The blow to private equity firms and real estate partnerships would be greater still, affecting both the investors and employees of these firms.

Asset treatment

Eliminate the step-up basis for inherited assets: The Biden plan proposes to change the tax basis of inherited assets from the fair market value at the time of inheritance (the “stepped-up” value) to the original acquisition price before all the accrued appreciation. For example, if you inherit a property from your parents that they acquired for $1 million that is now worth $3 million, under current law your tax basis is $3 million, but Biden plans to revert the basis to the original purchase price of $1 million.

Such a change would negatively impact property values by reducing the total returns to owners. However, it is unclear whether the tax would be due in the year the asset is inherited or only upon sale. If the latter, the tax liability theoretically could be pushed to the next generation, and perhaps indefinitely, if the asset is retained and not sold.

Limiting Use of 1031 Exchanges to Households Earning Less than $400,000: Property investors may defer paying capital gains taxes on investment sales if they reinvest the proceeds into a “like-kind” property within certain time limits. Although there are no specific value limits on properties that can be exchanged, for practical reasons, the assets tend to be smaller investment properties and not larger institutional-quality assets.

Although not explicitly mentioned in the Biden tax plan language, campaign officials have alluded to restricting the use of these exchanges to households with less than $400,000 of income. The impact of this limitation could be significant, particularly in the market for smaller investment properties and vacation homes ( cannot be used for primary residences and thus would not be affected). The annual volume of 1031 exchanges is substantial but unknown as property transfers are not publicly available in every state. However, a recently updated academic study identified over $30 billion in 1031 exchanges for each of the last five years, topping out at $37.2 billion in 2019, though these figures understate the total volume in several important respects.

This same study concluded that “We conclude that elimination of real estate exchanges would likely lead to a decrease in transaction activity in most CRE markets as well as price declines in some markets, at least in the short run. These price declines would be more pronounced in states with high income tax rates. Elimination would also likely produce a decrease in capital investment on acquired properties, an increase in investment holding periods, and an increase in the use of leverage to finance acquisitions.” While the objectivity of this analysis could be questioned given its funding by the Real Estate Like-Kind Exchange Coalition, the study is widely cited, rigorous, and well documented.

Reduce the estate tax exemption and raise the estate tax rates: Biden proposes to restore the estate and gift tax rates and exemptions to their 2009 levels, increasing the top rate for the estate tax to 45 percent and reducing the exemption amount from the current $11.58 million down to $3.5 million. These changes would reduce the value of inherited assets for their new owners. As with limiting the use of 1031 exchanges, raising the estate taxes could ultimately depress asset prices though the impact on property investment levels would be less clear.

Bonus depreciation changes: The TJCA doubled the bonus depreciation deduction from 50 percent to 100 percent for eligible assets, enabling firms to immediately write-off these assets—a key benefit for real estate companies. The Biden tax plan does not specifically target this provision, but a proposed minimum 15 percent tax on the book income of large corporations could limit the value of these deductions. Moreover, this deduction will phase out starting in 2022. President Trump was proposing to extend the deduction while Biden may be less likely to. Thus, the Biden tax plan could effectively limit and eventually eliminate the bonus depreciation deduction, reducing after-tax income for real estate corporations.

Other programs

Reform Opportunity Zone (OZ) program: Another key benefit in the TJCA for the property sector, the OZ program allows for tax-free capital gains for investments held at least ten years in designated areas, among other provisions. Biden seeks to reform the program to provide more community benefits. His ideas include greater transparency about investments, encourage investors to partner with community groups, and conduct a regulatory review to better target OZ funds. Biden also proposes to expand the separate New Markets Tax Credit and make it permanent, providing more opportunities and incentives for community development groups to invest in lower-income neighborhoods.

Expand renewable-energy tax credits: The commercial real estate sector could benefit from Biden’s desire to expand funding for various sustainability programs, including tax credits for carbon capture, emission reduction, and restoration of the Energy Investment Tax Credit (ITC).

Net impact

After four years of business-friendly tax policies under Trump, the incoming Biden Administration is certain to be not as directly supportive. Most of the known and likely tax policies would raise taxes on both business revenue and the personal income of wealthier households, and many would change the treatments of investment income that reduces net returns. But real estate firms could also benefit from the retention or expansion of some tax policies like Opportunity Zones and the New Markets Tax Credit program, as well as renewable energy policies. The details of the new administration’s plans are obviously not set in stone but from what we have heard from them so far, there will be some sweeping changes in the tax code. All of this might be a moot point though if the administration is not able to stem the tide on the pandemic and help the economy recover from what will be almost a year of on-and-off lockdowns.

Thank you Propmodo.com for this article. For the whole article, Click Here.

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The 8 Biggest Stories That Impacted Real Estate Investors In 2020

The hottest topics for real estate investors this year ran the gamut — Airbnb’s IPO, WeWork’s new CEO, the vacation rental market’s comeback, eviction bans, and more.

The quick turn of events early on in 2020 threw the real estate community — and the rest of the world — for a loop. Many of the year’s biggest real estate stories that affected investors most were in relation to ongoing changes due to the coronavirus pandemic. Still, standalone developments from Airbnb, WeWork, and Vacasa also made an impact this year.

From a glance in the rearview window, here’s a look at the hottest topics in Property Portfolio from 2020.

The Vacation Rental Market’s Comeback

Early spring was a tenuous time at best for the vacation rental market. Amid the uncertainty of a rapidly spreading pandemic and statewide stay-at-home orders, travelers were canceling reservations and hunkering down at home. As a result, companies like Airbnb and Vacasa initiated cost-saving measures like severely reducing executive salaries and furloughing employees. But, by the time late spring rolled around and people started craving more time outside of the house, the vacation rental market made an incredible comeback.

During the weekend of June 5 to June 7, 2020, Airbnb experienced year-over-year growth in its gross booking value for the first time since February. But, travelers started seeking out new kinds of rentals than previously — ones relatively close to home, in smaller towns and cities, and that would offer the flexibility of a longer stay and the ability to bring pets along.

Likewise, vacation rental company Vrbo told Inman in June that 95 percent of the company’s booking demand at the time was for non-urban areas, and that there had been a 15 percent increase in demand for bookings within 500 miles of the traveler’s home.

In-flux Evictions Moratoria

Landlord groups in New York City and California were among the first to call for a halt to evictions in 2020 as the seriousness of the pandemic became more apparent to the public. The federal government also enacted a ban on evictions early on, which was allowed to expire at the end of July when renters were once again thrown into the lurch for a month until a new federal ban was put into place at the beginning of September, one now set to expire at the end of 2020.

Individuals states also established and continue to adjust their own eviction bans on a regular basis. In general, the enforcement of such bans has been a bit of a mess at worst and not uniform at best, with outcomes largely dependent on what judge oversees the proceedings.

In recent weeks, landlords, lobbyists and Realtor associations have fought back against bans with legal challenges, arguing that the situation is simply untenable for landlords, and may even be positioning the market for a housing crisis.

At the end of November, the Alabama Association of Realtors and the Georgia Association of Realtors filed a lawsuit against the Trump Administration for the national eviction ban, arguing it merely shifts billions of dollars in rent debt from renters to landlords.

Airbnb’s Downs, Ups and an IPO

At the end of March, Airbnb CEO Brian Chesky announced dramatic cost-saving measures for the short-term rental company amid coronavirus-induced stay-at-home orders and reductions in bookings, including executive-level salary cuts and eliminating the company’s marketing.

Many wondered how well the company could weather the storm as hosts who depend on income from bookings lost money on Airbnb’s more lenient cancellation policies enacted as a result of the pandemic.

Still, Airbnb pulled through and secured $1 billion in debt and equity funding from Silver Lake and Sixth Street Partners in April. Although some in the industry were skeptical that the company would be able to put forth an IPO this year given its financial turmoil at the start of the pandemic, Airbnb succeeded in filing paperwork for an IPO in November.

But, the company isn’t quite out of hot water yet, as it now faces a class-action lawsuit led by one of its hosts over how the company issued refunds to guests in the spring.

Property Managers and Building Owners Respond to COVID

The pandemic caused a great shift in American professional and personal life from public and social to private and sequestered, as result of the need for preventing spread of the virus. In response, apartment and office building owners have had to rethink daily operations in order to be able to operate safely and reassure tenants in this new world.

Real estate industry intelligence firm Propmodo recently released guidelines for how property managers can prepare for smooth operations this winter with the virus, including maintaining and updating HVAC systems, adopting staffing policies that allow for remote working and cross-training staff in case of long-term absences, and managing access to buildings, among other measures.

Predictive cleaning, whereby sensor technology determines areas in a building that are used more frequently, and therefore, need to be cleaned more frequently, was also identified during the past year as an essential resource for property managers and owners in order to conduct more effective cleaning.

Likewise, air purifiers with the capacity to deactivate viruses in the air started flying off the shelves in 2020, and will likely become a staple for places of business in years to come.

WeWork Gets a new CEO

One month into 2020 — and nearly five months after founder and CEO Adam Neumann resigned — co-working startup WeWork announced its new CEO, Sandeep Mathrani. Mathrani came from Brookfield Properties’ retail group, and had a weighty load going in to his new position. In 2019, WeWork had filed paperwork with the U.S. Securities and Exchange Commission announcing its intention to go public, but had to put a pause on those plans once the filing revealed the company’s significant losses.

Although Neumann stepped into the shadows for some time after his resignation, recent movement from the former CEO shows he hasn’t completely called it quits on real estate. In October, Neumann’s family office, 166 2nd LLC, led a $42 million funding round for residential management software startup Alfred, an end-to-end platform that boasts in-home support and local services for residents.

How Landlords Dealt with Dropping Rent Prices, Non-paying Tenants

Economic uncertainty and unemployment have hit the rental market hard during 2020. As a result, many landlords have had to get creative in order to make ends meet by doing things like creating payment plans with tenants, restructuring bed and breakfast-type room rentals to a single-family vacation rental, and helping tenants apply for federal aid.

The number of rental concessions landlords offered to tenants also nearly doubled between February and July, according to Zillow. And, in pricey West Coast markets, landlords have resorted to lowering rents and offering discounts as people who can now work remotely have started relocating to more affordable areas, resulting in trending rent declines in these more expensive markets.

While some larger property management companies and real estate investment trusts received millions of dollars in aid from the federal government through the CARES Act, many smaller management companies and landlords were excluded.

The California Apartment Association told Inman that they believed many small landlords didn’t even try applying for aid because it would be difficult for them to maneuver the restrictions for how aid packages were allowed to be used, and were worried it might end up causing them legal trouble down the line.

Vacasa’s Leadership Shakeups

Vacation rental giant Vacasa saw some significant leadership changes early on in the year. As then-chief technology officer Tim Goodwin left the company to work for a healthcare communication firm, Jeff Flitton, who was serving as vice president of engineering, was promoted to take Goodwin’s place. Mike Dodson, who had formerly served as chief revenue officer at OpenTable and briefly as CEO of restaurant marketing company Fishbowl, joined Vacasa in March as chief revenue officer.

But, the biggest change at Vacasa in 2020 was the stepping down of founder and then-CEO Eric Breon. After 10 years at the helm, Breon said that “the time was right for me to step away from day-to-day operations” and instead focus on the company’s strategy by continuing to serve on the board of directors.

Matt Roberts, who had been a Vacasa board member and served as CEO of OpenTable for four years, stepped in as Vacasa’s new CEO. Since then, former Zillow and Angie’s List executives have joined the company’s board of directors as well.

Smart Investments in a Turbulent Year

Many investors learned the hard way this year that putting one’s eggs all in the same basket isn’t a great idea. Investors with properties concentrated in urban areas faced a reckoning as many city dwellers made the shift to the suburbs and small towns in an effort to avoid the virus.

Those who maintained a diverse portfolio of investment properties were more likely to remain on solid footing as Americans fundamentally reassessed how and where they wanted to live through the pandemic.

Investors looking for new opportunities also learned that mobile-home parks, generally considered a recession-proof investment, continue to be a sound investment during this pandemic.

As people have also striven to social distance for all daily activities, investors also learned that their parking lots could be given new life by being repurposed as outdoor markets, extra spaces for rental car companies with an excess of inventory, or even as a portable storage location with the addition of shipping containers.

Thank you Inman for this article. For the whole article, Click Here.

Creating Harmony at Home

As 2020 has been an unprecedented year on so many fronts, and the stress and anxiety level for so many has increased.   It is important to find ways that we can reflect and find calmness in our home environments especially since we are spending much more time there.

Interior Designer Tish Mills has put together some suggestions on how you can create harmony in your home.

What makes a space tranquil?

There are multiple ways to make a space feel tranquil.  Tranquility is all about balance.  There needs to be balanced in everything from, room arrangement, to finishes, to use of color. Tish starts by really thinking about the objective and key use of a space.  Then she looks at the form of a space and takes cues from any significant architectural elements.  From there it is planning and most importantly, restraint. It is about the contrast and pushes/pull to create balance.  She always tells Clients, not everything in a room can be the star. She always decides what the star moments in a room will be and then the remaining pieces and fabrics are the support to the star.  That immediately creates a balance which, in turn, creates a tranquil feeling.  Even in a bold space.

How do you create the energy to ensure that a space feels pleasant?

Balance and restraint.  Think of when you are getting dressed to go out.  You determine where you are going and how you want to look and feel.  You start with the base and then add the appropriate layers.  And finally, the perfect accessories.  Then, follow the fashion rule of removing one.  That way everything works together is in balance and harmony with the surroundings.

What is important in the floorplan? 

The floorplan and architecture are the bones and are the jumping-off point.

How important is the color palette? Are some colors more soothing than others? If so, which ones do you use and where?

Color is an interesting question.  You can approach the color palette by using color theory and stay with colors that ground and calm you.  A second approach is washing with one color.  This is effective as long as it isn’t jarring, it can also promote a soothing outcome and feeling.  Or, there are times that the use a lot of bold, saturated color actually comes off as a soothing neutral space.  It is really about balance and the compliment of color combinations.

In living rooms, what is the balance that is needed to make the room sing?

How and when does furniture play into the conversation?  What is a consideration in fabric selection?   

For Living Rooms again, I first start with: How will the room be used?  Will the Client entertain in there? Is it a space to sneak away and meditate and read since it is one of the least used rooms typically?  Or is it a place to unwind and have a glass of wine with your spouse?  Once I get that established, I look at traffic patterns through the space so that nothing is in conflict with that function.  From there, I channel the Client’s personality so that it is a true reflection of them.  As for furniture, often comfort isn’t taken into account as much in Living Room furniture.  I don’t do that. Other than potentially a single sculptural piece such as a chair, I believe that everything should be comfortable and usable.

Fabric consideration depends on the project.  Once a color story is created for a home, I love to allow different colors from that story, to come forward in the different rooms to help with making each space have its own personality. Like a puzzle, each piece fits together to create a beautiful picture that overall provides balance and tranquility in the home.

How do you mix patterns and textures effectively to create balance?

I love to mix textures and patterns within a home.  I often do that by keeping the same color in the main fabrics and change textures to create interest.  I suggest using only one main pattern and then let any additional patterns create more of a supporting role as to not fight with the star fabric of the room.

Let’s talk about Lighting.   How do you use it to create different moods?

When planning a space, I always look at the mix of general, task, and ambient lighting to create the perfect balance.  And let’s not forget about the power of leaving some areas a bit darker or shadowy to help create mood and ambiance.

When it comes to floors how should rugs be utilized vs natural flooring and tile?

I do love layering. Use rugs wherever possible regardless of if the surface is hardwoods or tile.  They anchor a space, promoting balance, while also helping with comfort, warmth, and sound absorption.  Many designers start with the rug, which speaks to how important they are to a space.  I don’t tend to do that. I treat them more like the exclamation point at the end.

In the bathroom, what is needed for a space to have harmony?  Is there a focal point?

Types of materials.  Tubs vs Showers.

Bathrooms are one of my favorite areas to design.  The options are limitless, and the materials can be used in numerous combinations.  In bathrooms, just like living spaces, I first decide what will be the star of the space.  Will the tub sit as the eye line when you walk into the room?  Will the shower be tucked away or front and center?  Single vanity or dual spaces?  Once the base layout is decided using these points, I tend to take my cues from outside for Master Bathrooms as so many have many windows these days.  Or for bathrooms without large windows, I take my inspiration from the adjoining bedroom.   Regardless of whether a bathroom design is organic or super glamorous, if the space is balanced, it will be peaceful and soothing.

As for materials, I’m always a big fan of natural stone.  But these days, there are so many options for porcelains that are rich and textural, that I’m finding that I’m using more even in primary spaces.

What types of technology is out there to help create different moods as well as create wellness?

Especially in this time that we are all home much more, I’m finding that Clients are taking more time to create more spa-like bathrooms.  Finishes have become very important as to have the actual selections.  More clients are really looking at what type of air tubs to install, such as light therapy or heated backrest.  Some have started to install infrared saunas in their homes.  I’m a big fan of the benefits here.  On a more of the technology side, vanity drawers that light when opened so that looking for things are easy on the eyes.  And, of course, motorized shades for privacy.

How important are plants and greenery to a room?

I do love including something living in a space.  There is a reason that so much of the magazine photography includes fresh flowers or plants.  I tend to pull that off “only for photography” and into day-to-day life.  Fresh flowers or a plant will always lift the spirit while also helping to feel more grounded and alive in a space.

Tish Mills Kirk of Tish Mills Interiors, a preferred vendor of The Meridian Real Estate Group, is an award-winning interior designer who has been working with clients in their homes for more than two decades. She believes that it is essential to put together a cohesive plan for your home renovation before you get started that can be carried out by the team of experts you assemble. www.harmoniousliving.net

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Six Things to Consider When Buying Rural Land

1. Location & Use

Location is always an important factor for any piece of real estate purchase and land is no different. Of course, when considering location it is important to know what you are going to use the land for. Recreational hunting land would obviously have much different requirements than a farm or a homestead. Access to basic utilities like water and electricity is vitally important when considering the location of a property you are looking to purchase. If you are going to live on the property you will need to ensure that land will support a septic system by ordering a perc test to study the drainage capability of the soil, as most rural land will not have access to a public sewer system.

2. Find an Land Agent

Real estate is a local business. Finding a local expert who knows all the in and outs of the local land market is a must. As well as knowing the basic features and prices of land in the area a knowledge of the local governments and legal practices is critical to making a good purchasing decision and getting the transaction closed.

3. Get a Survey

You will often find rural land that has never been surveyed. Without a proper land survey you can never actually be certain of the acreage and boundaries of the property. Surveys can be expensive but the knowledge gained is usually well worth it, and if you are financing the purchase then most lenders will require it anyway. If you decide to forgo a survey you will at least want to roughly confirm the acreage and boundaries by walking the land to inspect the boundaries, reviewing the legal description on the title, and examining the county GPS topographical maps.

4. Understand the Zoning and Easements

Most rural land will be governed by county zoning departments. Zoning codes different greatly from county to county or town to town if you are within a city’s limits. Make sure you have a clear understanding of the current zoning for the land and how that may affect what you are legally allowed to do with the property.

You will need to have a clear understanding of what easements currently exist on the land and how they may affect what can and cannot be done with the property. It is also important to anticipate what easements you made need to request from neighboring property owners for access or utilities.

5. Price

Of course you will need to understand at what price land is generally going for per acre in the area that you are looking in and what factors may greatly affect that per acre price. Many land sellers will have an over-inflated value of what they think their land is worth. Even if you are willing to pay a little extra for your dream property you should at least know what the average prices are in the area and then make your judgments on what to offer accordingly.

6. Terrain and Water

Again the topographical GPS maps that most counties provide online are a huge asset to researching the topography and hydrology of any land you are considering to purchase. Topography is something that you want to start by researching on a map but then you will want to walk the property as well. There are many aspects of understanding the lay of the land that are hard to visualize unless you are actually looking at the land in person.

Water in the form of creeks, streams, ponds, flood plains, and wells have a huge impact on what you can feasibly build on the land. You will always want to understand where water is present on the property both on the maps available and by inspecting the land in person.

We Can Help

Whether you’re looking to lease, buy, or sell commercial property, now is still the time to do it in Atlanta. The Meridian Real Estate Group has been assisting commercial clients for well over a decade and would love the privilege of earning your business. Our goal is not just to help our clients with a transaction, but to support the building of financial legacies through real estate. Call us today at 678-631-1723 or visit us online at www.themeridianway.com. We look forward to serving you.

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MORTGAGE RATES REMAIN LOW – FOR HOW LONG

Long term mortgage rates, on average, have remained below 3.0% for seventeen consecutive weeks, per a recent Black Knight report. The same report states that 19.4 million homeowners could still benefit from a home loan refinance.

Black Knight’s report views prime candidates as 30-year mortgage-holders who have at least 20% equity in their homes, credit scores of 720 or higher, are current on their payments and who stand to cut their first lien rates at least 0.75% by refinancing. – housingwire.com

How long will mortgage rates stay at near historic lows? The market is desperate for positive economic news. The announcement of multiple viable COVID-19 vaccines sent rates higher for a hot minute, but soaring COVID-19 cases and a contested election is causing market strain, keeping rates mostly flat. Once Trump concedes, and the vaccine enters wide distribution, long term interest rates are anticipated to climb.

2021 CONFORMING LOAN LIMIT INCREASE

The conforming loan limit will increase to $548,250 from $510,400. Conforming loans generally have less restrictive guidelines than homes with non-conforming loans amounts( JUMBO)

2021 FHA LOAN LIMIT INCREASE

The Federal Housing Agency (FHA) has just raised its loan limit by 7.4% to a maximum amount of $356,362 in most areas. In certain high cost areas, it’s $822,375. Limits will take effect in 2021.

DOW HITS 30,000

 On November 24, 2020, the Dow Jones hit 30,000 for the first time in U.S. history. A remarkable milestone to hit during a global pandemic, a recession, as well as during a contested presidency.

The market extended its Tuesday morning gains after President Trump stated that aids would begin to work with the incoming Biden administration, easing uncertainty with the markets.

SOARING HOME PRICES

The recent S&P Case-Shiller report shows home prices rose 7% in September over the same period last year. The biggest year over year gain in six years.

“Home prices are normally sticky, meaning that they often take a while to respond to market shifts,” said Matthew Speakman, economist at Zillow. “These elevated levels of market competition have been placing upward pressure on prices for months, but home prices have just recently begun to take off in earnest. Some measures show home prices now growing at a faster pace than they ever have.” – housingwire.com

Phoenix, Arizona lead the rise in home prices posting an 11.4% gain. Seattle, Washington came in at second place with a 10.1% gain.

Home prices show no sign of slowing, despite a global pandemic, they are being fueled by historic low interest rates, diminishing inventory.

HOME SALES STAY STRONG

New home sales were down a slight 0.3% in October over September, but up a colossal 41.5% higher than the same time last year. – Department of Housing and Urban Development. The surge in home sales has left a bleak 3.3-month supply of home inventory. The average home price $386,200.

By Lisa Bell – Loan Officer

Geneva Financial, LLC

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Top 3 Reasons Your Realtor Recommends You Talk to a Lender Before Touring Property

I’ve held a real estate license for over 20 years and on occasion have seen a particular look or heard a particular tone from a new buyer when I ask if they’ve already talked to a lender. A look and/or tone that suggests I am somehow questioning their financial integrity or being too pushy and trying to close a sale before we’ve even started. Neither of these are true. There are 3 primary reasons your Realtor will encourage and sometimes even insist you get pre-approved before scheduling a tour of a home.

1)     More. This is always a great discovery, that you may actually qualify for more home than you realized. You may also qualify for a lower interest rate than you thought possible which will impact your monthly payments favorably. A price increase of even $20,000 can make a difference in the quality of the homes you are looking at. The only way to determine what your personal qualifications are is to get the process rolling with a lender. They will pull your credit and be able to see what your score is as well as determine your debt-to-income ratio. We recommend you shop around for lenders as some will have different programs with different interest rates. Your agent should have some solid referrals and banks and credit unions may have some good options too.

2)     Less. Maybe this doesn’t sound like as great of a discovery but it is still quite valuable as it will save you time and heartache in the long run. There is nothing worse than falling in love with a house only to discover you qualify for less. I have had to learn this lesson the hard way as early on in my career, I was less apt to ask my clients to get pre-approved before putting them in my car and touring them around town. Because I was afraid of appearing too pushy, we wasted countless hours, gas and emotions by the time we realized we were looking in the wrong price range, or worse, they needed to take some steps before actually qualifying for a loan. A good lender will be able to inform you of some credit issues you may be unaware of and help you with an action plan to improve your score in a timely manner. The higher your credit score, the lower your interest rate and monthly obligation will be. Definite win-win!

3)     Competitive Edge. In today’s highly competitive seller’s market, you may find yourself in a multiple bid scenario where the listing agent immediately asks for all interested parties highest and best offer as soon as the home hits the market. You may have only a couple of days from the time it goes live to the time all offers are due by. And your offer likely won’t even be considered if you don’t have a pre-approval letter from a qualified lender to submit with the offer. Also, in the higher price points, sellers may actually require you submit a pre-approval letter before they will even allow you to see the home.

As an agent who has experienced every one of these scenarios throughout the years, multiple times, I have become much more assertive in my request that a buyer talks to a lender before we physically tour anything. I know I’m advocating for their best interest and that in the long run, it will make for a much smoother and satisfying experience for all parties involved.

If you’re thinking of buying a home and need a lender referral, check out our website, www.themeridianway.com. We have several creative and aggressive loan officers we have worked with for years that serve our clients with excellence and integrity.

By Holly A. Morris, Realtor

The Meridian Real Estate Group

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October Contract Signings Surge Way Beyond Last Year’s Levels: NAR

The Pending Home Sales Index, an indicator of future sales based on contract signings, rose 20.2% from October 2019, according to the National Association of Realtors.

The number of pending home sales is far outpacing last year’s totals, according to data released Monday by the National Association of Realtors.

October’s Pending Home Sales Index (PHSI), a forward-looking indicator of future sales based on contract signings, was up 20.2 percent from October 2019, but down 1.1 percent from September.

“Pending home transactions saw a small drop off from the prior month but still easily outperformed last year’s numbers for October,” NAR Chief Economist Lawrence Yun said in a statement. “The housing market is still hot, but we may be starting to see rising home prices hurting affordability.”

Each region tracked by the National Association of Realtors experienced year-over-year gains in contract activity, but only the South posted a monthly gain. In October, the PHSI hit 128.9, with a score of 100 being equal to the level of contract activity in 2001, when the metric was first tracked by NAR.
The numbers are still outperforming last year’s totals, but record-low inventory is putting a crunch on affordability, even as mortgage rates set historic lows.
“The combination of these factors – scarce housing and low rates — plus very strong demand has pushed home prices to levels that are making it difficult to save for a down payment, particularly among first-time buyers, who don’t have the luxury of using housing equity from a sale to use as a down payment,” Yun said. “Work-from-home flexibility has also increased the demand for both primary and secondary homes.”

Thank you Inman for this article. For the whole article, Click Here.

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How DIY TV Shows Changed Homebuying Trends

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Bright Spots: Land, Apartments, Industrial

The coronavirus pandemic deepened its impact on sales and leasing transactions in the second quarter of 2020. Retail, hotel, and office properties were hit the hardest, while residential, industrial, and land assets were being only mildly impacted. These are some of the findings of
the latest Commercial Real Estate Market Trends and Outlook, a quarterly survey from the National Association of REALTORS®.

SALES, LEASING DECLINE ACROSS ALL SECTORS

Nearly 500 REALTORS® provided information about their sales volume, with respondents reporting a 5% yearover-year average decline in sales transactions in the second quarter, mostly transactions of less than $2.5 million. Among transactions valued at $2.5 million or more, sales plunged by 68% year over year, according to a report from Real Capital Analytics.

REALTORS® reported the largest declines in sales of office, retail, and hotels, with sales down by 6% to 7% year over year. Sales of apartment properties and industrial properties dropped 4% year over year, while land sales declined 3%.

Among sales of properties valued at less than $2.5 million, commercial prices declined 3% year over year in Q2 2020. Among transactions of at least $2.5 million, commercial prices were still up nearly 4%, but this increase is lower than in the precoronavirus period (6% year over year in January 2020).

Meanwhile, commercial properties held by REITs declined in value 9% year over year, according to the Green Street Commercial Property Price Index.

THE IMPACT OF STAY-AT-HOME ORDERS
In the small commercial market, according to the NAR research, prices were down across all commercial property types, with the largest decline in hotel (–7%), retail (–6%), and office (–5%). Apartment prices fell by 2% year over year. Industrial commercial real estate prices fell the least, by about 1% year over year.

With sheltering-in-place guidelines shuttering offices and businesses in April and May—and with social distancing guidelines reducing foot traffic in stores, restaurants, bars, and hotels—the vacancy rate across all commercial sectors averaged 25%, up from 7% in the first quarter of the year. With travel at a standstill, hotel vacancies spiked to 73%, up from 10% in Q1, and retail vacancies rose to 20%, up from 9% in Q1. REALTORS® reported smaller increases in industrial and multifamily vacancies.

COLLECTION OF RENT DUE VARIES
NAR also recently surveyed members engaged primarily in leasing and property management. The Leasing Conditions Report revealed that across single-family rentals, apartment buildings, offices, and industrial buildings, at least 90% of rent due in the second quarter was collected. However, only 70% of rent due was collected from tenants at strip malls and freestanding stores, and the fraction of rent collected fell to just half among mall tenants.

The federal CARES Act’s $600 weekly pandemic unemployment assistance (PUA), which ended July 31, enabled tenants to keep up rent payments. States had until Sept. 10 to apply for funding under the Lost Wages Assistance Program, which promises federal relief through a partnership between the Federal Emergency Management Association and the Department of Labor. However, the benefit will be less generous, increasing the risk that a higher fraction of rent due in the coming months won’t be collected.

Sixty-four percent of respondents reported landlords offered rent payment options to residential tenants. The most common form of assistance was allowing the tenant to pay the missed rent over several months. Rent payment options offered included:
• Rent abatement or rent reduction
• Frequent, smaller rent payments
• “Other payment options” such as “no late fees or charges,” “use of the security deposit,” and “not increasing the rent when the lease is renewed.”

Sixty-nine percent of respondents said landlords of nonresidential buildings offered rent payment options. Assistance mostly took the form of allowing the tenant to pay the missed rent over several months and rent abatement or reduction. Respondents cited other options, including:
• Extending the lease term for deferred rent
• Extended term on rent abatement
• Using deposit for rent

INVESTORS SEEK HIGHER RETURNS
Amid lingering uncertainty over the direction of the economic recovery—caused by the resurgence of coronavirus cases, extension of working from home, and effects of increased online shopping—investors are asking for higher returns on long-term demand for commercial real estate. One measure of the increased risk aversion is the difference between operation income (cap rates) and the risk-free 10-year Treasury bond. A larger spread means investors are seeking higher returns to compensate for the increased riskiness of investing in the asset. The risk spread (cap rate less 10-year T bond rate) increased to about 6% in the second quarter of 2020 from just 4% in the first quarter of 2019 in both the large commercial real estate market (transactions of $2.5 million and more) and the small commercial market (less than $2.5 million).

OUTLOOK: NEXT THREE MONTHS
REALTORS® anticipated a continuing tough environment in at least the third quarter. They expected sales transactions to decline across all property types and vacancy rates to remain elevated. Multifamily remains the strongest leg of the business, as turbulent times generally boost the demand for apartments and e-commerce continues to make deeper inroads into retail.

Thank you National Association of Realtors for this article. For the whole article, Click Here.

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The Pandemic’s Effect on Land Development and Real Estate Investment

The coronavirus pandemic has had a deep impact on the world’s health and economic systems during the last several months. As a part of the economic reaction to this crisis, new trends are emerging for land development in both investment and process.     

COVID-19 has slowed the land development process for many local governments with staff adjusting to working from home and/or social distancing in the office. This slowdown in government response times and permitting has disrupted the flow of equipment, materials, and labor along the supply chain that keeps the land development process in motion. Developers are continuing to adapt to new expectations for extended timelines and quickly shifting demands.

Retail has been the real estate sector most affected by the pandemic, and paying tenants of retail properties continue to struggle with weak demand and social distancing concerns. Industrial property has fared the best among commercial real estate since the pandemic hit. 

Another major trend that is expected to continue possibly even after an effective vaccine is distributed is the erosion of the overall appeal of big cities as a place to live and work. Within the next three to five years it is expected that people will continue to prefer suburbs due to concerns with urban living. 

Residential real estate has done better in general than commercial real estate in being resistant to the effects of the health crisis. The spread of the virus has done little to slow the need for housing and the trend towards working from home will further boost the demand for housing.

The pandemic has set up up an interesting opportunity for real estate investors who have been sitting on the sidelines between recessions. Both the commercial and residential sectors will soon see an onslaught of motivated sellers as they cope with disappearing incomes and unpaid expenses. 

One previously hot investment for those developing land in urban areas was the mixed-use development, but since the pandemic hit the feasibility of these projects has been greatly affected due to their reliance on restaurant and retail commitments to get the projects initiated.

In rural areas a new trend is emerging with a rise in individuals looking to buy land parcels that are twenty acres or less. A number of historically urban and suburban dwellers are becoming interested in escaping densely populated areas due to the pandemic and civil unrest. Mini-farms and self-sufficient living on small amounts of acreage appears to be a trend that will continue for the foreseeable future.

It remains to be seen if the pandemic will have longer term effects on land development or overall trends in real estate investment. Certainly retail will not make any miraculous comeback until a vaccine has slowed the spread of the virus. Predicting how long the trend of people flowing out of densely populated urban areas into suburban and rural surroundings will last after a vaccine has been distributed will be a key question for those deciding where to put their real estate investment dollar in the near future. 

We Can Help

Whether you’re looking to lease, buy, or sell commercial property, now is still the time to do it in Atlanta. The Meridian Real Estate Group has been assisting commercial clients for well over a decade and would love the privilege of earning your business. Our goal is not just to help our clients with a transaction, but to support the building of financial legacies through real estate. Call us today at 678-631-1723 or visit us online at www.themeridianway.com. We look forward to serving you.

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