U.S. Dollar Value Against Other Currencies Spiking

BLOOMBERG -- The U.S. dollar is headed toward its largest gain since 2009.

"The greenback has risen more than 7 percent in November amid speculation U.S. President-elect Donald Trump will pursue reflationary policies, as futures signal growing bets that the Federal Reserve will follow an interest-rate increase in December with additional hikes next year."

Read the full story here.

Monday Funny

October Sales of Naples Area Homes Fell 7 Percent In October

October home sales in the Naples area were down 7 percent from last year, and the number of homes listed for sale last month was 39 percent higher.

 

The Naples Area Board of Realtors also reported that the median sale price of single-family homes and condos rose to $315,000 in October, up 9 percent from the same month last year. October sales of houses and condos in the Naples area dropped to 556 from 601 last year. Sales of condos in October fell more steeply than sales of houses.

 

For the full story, click here.

Why The Super Wealthy Are Getting Mortgages

One of my lender colleagues here in SWFL, Gerry Teeven of New Penn Financial, has penned an interesting piece on the trend of how the ultra wealthy using mortgages as a tax tool. Not a new approach, as we have seen it before.

BUT, it seems to be gaining in popularity.

Check out his piece by clicking here. 

BUCKS WIN

A real nail-biter yesterday as Ohio State narrowly defeated Michigan, in a battle of #2 against #3, respectively.

An instant classic. This game could have gone either way, but it was hard to watch the Wolverines dominate my Bucks for the first three quarters.

Channeling Woody and Bo

Watching the Ohio State-Michigan rivalry game, referred to as "The Game" by fans of both schools.

My Buckeyes trailing by 3 in the fourth quarter, but this has been a back-and-forth, defensive grind so far. Harkens back to my childhood watching these teams slog it out in Ohio Stadium every two years.

Both coaches -- Urban Meyer and Jim Harbaugh -- have turned their teams into juggernauts this season. But somehow I think Woody Hayes and Bo Schembecler are smiling down from their perches on high. THIS is how football is supposed to be played by two college superpowers.

Why Did I Join John R. Wood Properties?

Recently, I've had a couple of telephone calls and emails from friends and colleagues, wondering why I joined a family owned, independent real estate brokerage in Florida, rather than one of the more well-known national "flag" brands.

The answer is simple. John R. Wood Properties IS the big dog brand in the Paradise Coast corridor.

Besides making a difference for our customers, John R. Wood Properties turns heads when it comes to statistics regarding its weight in this market, the state of Florida, and nationally.

Consider the information below, and it will make sense

-- #1 In Per Agent Productivity/Sales In Florida
-- #18 In the USA In Agent Productivity/Sales
-- Ranked 65 out of 500 U.S. brokerages in total closed sales volume at $2.365 billion

Those are just a few items to consider, to start. I couldn't ask for a better strategic partner in John R. Wood Properties with which to serve my customers in Naples, in Florida, and across the nation.

AP: Some Buyers Starting To Panic

As I wrote in an earlier post, interest rates are very likely to creep up in the near future. According to the Associated Press, that has some home buyers in a panic

Says the AP:  "With mortgage rates surging following the election win of Donald Trump, homebuyers may feel compelled to snap up loans before rates rocket even higher. But housing experts say consumers shouldn't get carried away by the post-election wave. The advance of the past week or so, stoked by a surprise victory that turned economic expectations on their head, could soon settle.

Says Erin Lantz, vice president of mortgages at Zillow, "Consumers considering buying or refinancing now should stay patient, as we'll likely see rates stabilize once markets find a new equilibrium."

The AP continues: "In the week ended Thursday, the average rate on the 30-year fixed-rate loan jumped to 3.94 percent from 3.57 percent the previous week, mortgage company Freddie Mac reported. That put the benchmark rate close to its year-ago level of 3.97 percent. The average for a 15-year mortgage, a popular choice for people who are refinancing, climbed to 3.14 percent from 2.88 percent.

"The rate rise was powered by a sustained decline in U.S. government bond prices in the days after Trump's victory became known early last Wednesday. Bond investors looked toward tax cuts and beefed-up spending to upgrade roads, bridges and airports under a Trump administration, which could fuel inflation. That would depress prices of long-term Treasury bonds because inflation would erode their value over time."

My opinion is not to be fearful, just aware of what is coming and make decisions accordingly. As always, there is more to come on this story . . .

Its Game Day For Buckeyes

Remember I said I am a big Ohio State Buckeye fan?

We are in Denver for the Thanksgiving holiday. My significant other and her daughters and their kids are baking cookies. It snowed a couple of days ago. Temp is hovering around 20 degrees F.

And I have the Ohio State-Michigan State game on my laptop. OSU needs to win this game, as well as against the highly ranked Michigan Wolverines next Saturday in Columbus.

Still in the hunt for the National Championship . . .

Folo On Likely Gradual Interest Rate Hikes

Catching up on my reading, I noticed a piece in USA Today stating that Federal Reserve Vice Chairman Stanley Fischer said Friday that the case for raising interest rates gradually "is quite strong."

More fuel to bolster my opinion that the rate hikes are coming.

In the first remarks by a Fed policymaker since the election, Fischer didn't specifically address the vote or whether the Fed will lift its key rate at a mid-December meeting. But in a speech he delivered at an event in Chile, he didn't give any indication the Fed's roadmap has been altered."

"In my view, the Fed appears reasonabl close to achieving both inflation and employment components of its mandate," Fischer said. "Accordingly, the case for (raising interest rates) gradually is quite strong, keeping in mind that the future is uncertain and that monetary policy is not a preset course."

Again, if you are a buyer, LOCK IN YOUR RATES. If you are thinking about buying, get in touch with your lender NOW to get the ball rolling.

Lock In Your Rates! And Other Thoughts . . .

As I have shared with my readers in my Cash On Cash blog over the past few years, if the stock market rises steadily, then interest rates normally follow suit.  

Over the past several days, the stock market has risen dramatically. As money pours out of bonds, Treasuries and mortgages-backed securities into the stock market, those markets are raising interest rate yields -- at an almost hourly rate -- trying to keep investors.  Buyers and sellers of residential real estate need to pay attention. If you're not paying attention, or you're with a lender or agent who doesn't alert their customers, you may not only be in for a shock but your loan approval could be in jeopardy if you are tight on debt-to-income ratios.

If you are a buyer in contract, make sure your interest rates are locked.  If they are not, I strongly advise you to read the news and seriously consider doing so.  The majority of the media has failed to prepare the public for this, so be pro-active.  

Further, President-Elect Trump has indicated he will likely retain Janet Yellin as head of the Federal Reserve. She and her colleagues have already hinted that interest rate hikes are likely coming. My guess is we will see a full percentage point increase by this time in 2017.

Now the good news!! This run up on the stock market is a sign of renewed confidence in our economy and, with the new administration already sending signals that they are going to encourage U.S. companies to bring the trillions of dollars now banked overseas back to the U.S. (under a one-time tax forgiveness program), we could see a huge investment by business and their infrastructure.

More jobs + higher wages + confident consumers = MORE HOME BUYERS!

Which is VERY good news for sellers!

I Am Joining John R. Wood Properties -- The Market Leader

I am proud to announce I have joined the market leader in luxury home sales in Southwest Florida -- John R. Wood Properties.

This is a great company, with deep roots in Naples and surrounding communities. The other firms can say they sell more properties or dollar volume in Florida, but John R. Wood leads in both when it comes to the Paradise Coast, which encompasses Marco Island to the south, Naples, Bonita Springs, Estero, and Captiva/Sanibel Island to the north.

This company is solid. Its reputation is sterling. Of the top 500 real estate companies across the United States, JRW ranked Number 13 in the entire nation and Number 1 in Florida in Per Agent Sales. Not too shabby for an independent real estate brokerage on the coast of SWFL.  

I didn't come by this decision lightly. A respected agent with whom I knew well, trusted and spent eight or so years exchanging referrals, suggested that I come aboard. The details of the partnership took some time, and then I had to take a leave of absence in order to take care of an ailing family member.

2017 is going to be a great year for my customers in Florida, and my many client and broker relationships in Ohio and the Midwest, with whom I still work. The market in the Naples area is stable-ish, and as we had into "season," inventory is growing. Naples continually ranks among the most livable cities in America. Plus, you just can't beat the white sugar sand beaches -- or golf -- depending on your interests.

Rest assured, I bring you readers, buyers and sellers, the kind of expertise, ethics and professionalism you want in a real estate adviser.

My job isn't to sell you anything. I'm here to make the process simpler.

SWFL: Not Enough Housing, New Building To Keep Up With Demand

THIS is a great market, for buyers and sellers!

"After analyzing employment and permits, the National Association of Realtors concluded that there’s a shortfall of 13,609 new single-family homes in Cape Coral-Fort Myers, and a shortfall of 3,020 homes in the Naples-Immokalee-Marco Island metro areas."

THIS is why I love working and living here!

CLICK HERE for the full story . . . . 

In Case You Missed It

Here is a news recap from last week that impacts the U.S. residential housing industry.

The major headline? First-time buyers represent 35 percent of home-buyers overall, according to a recent survey from the National Association of Realtors.

-- The Federal Reserve voted not to raise policy rates at last week's meeting, but did signal that they may raise rates at December's meeting if economic improvement continues.

-- Jobless claims were up slightly, but layoffs were at a five-month low. A strong non-farm payroll report could fuel speculation that the Fed will raise rates in December.

-- Consumer spending is up and factory orders rose for the third straight month. As the economy slowly heats up, inflation could become an issue and bring higher rates. It also might not. We have been in an inflationary period for some time with the non-stop printing of money (evidenced by spikes in food prices at stores, etc.), though the way the government "officially recognizes" inflation, we official have had none. With rates held artificially low for so many years, in my opinion we are due for an increase soon.

-- Although construction spending was down slightly in September, most of the drop was non-residential. Spending on residential construction was up 0.5 percent for the month.

-- Mortgage purchase applications were down slightly from the previous week, but were up nine percent compared to the same week in 2015.

Its Election Day!

VOTE!!!

In Port St. Lucie, Florida's Foreclosure Capital, Voters Are Mixed

An interesting read from CNBC, on how voters on this east Florida coast city are mixed on the election.

More than anyone else across the United States, homeowners are voting either for Donald Trump or Hillary Clinton because of their pocketbooks. Some eligible voters are even sitting out the election this year, having no idea which candidate they prefer.

Check it out here.

U.S. Presidential Observations

Isn't it interesting.

For all the blather, bloviating, etc. from both presidential candidates, isn't it interesting that neither candidate has elevated housing or mortgage lending to a central issue.

From a business view, this is a bit startling. Trump has talked about easing regulations on lenders. Clinton has forwarded an idea of providing down-payment match for households earning less than the median income.

Overall, however, both candidates have been remarkably vague in the few cases where housing or lending was the subject.

Tax Straddling: The Surprise Advantage of a Year-End 1031 Exchange

Halloween may be over, but a treat might exist for those taxpayers who initiate a 1031 tax-deferred exchange on their second home residential property investment (or rental investment, or commercial/investment property) toward the end of 2016, only to find that their exchange fails in 2017 or they receive any amount of cash boot in 2017.

The good news is the IRS provides the treat in that there might be a back-up benefit in store – 1031 tax straddling – which provides added incentive to most taxpayers selling investment property at the end of the year who face the above mentioned circumstances.

Here is how it works. In a tax deferred exchange, taxpayers typically have 45 days from the sale of the old property to identify potential replacement property and 180 days to complete the purchase of the identified property. Once a 1031 Exchange is initiated, if replacement property is not purchased to complete the exchange, the earliest the Qualified Intermediary can return the taxpayer’s funds is on the 46th day (the day after the identification time period has ended) or, in some cases, the 181st day (the day when the 1031 Exchange time period is complete).

Taxpayers who enter into a 1031 Exchange during the fourth quarter of 2016 and receive their funds back from the Qualified Intermediary in 2017, have the option of deferring payment of taxes on the profits from their sale until 2018 – the due date of their 2017 tax return. Combining §1031 with §453 permits the cash received from the Qualified Intermediary at end of the exchange to be treated as a payment in the year of actual receipt, rather than in the year the property was sold.

The best part? The IRS does not penalize investors for attempting to complete a 1031 Exchange. Tax straddling merely provides added incentive to taxpayers selling investment property at the end of the year. So why not attempt to complete a 1031 Exchange when a one year deferral is available as the back-up plan?

PLEASE KEEP IN MIND THIS IS NOT ACCOUNTING NOR LEGAL ADVICE and I AM NOT AN ACCOUNTANT.

Consult with your tax advisor since tax straddling does not apply to all sales, and any gain attributed to debt relief will still have to be recognized in the year of sale.