“2020 will be known for a lot of things, and a record-breaking year for real estate will certainly be one of its more unexpected legacies,” prominent economist Daryl Fairweather said. And he’s right: most of us would have expected the housing market to suffer from circumstances like a once-in-a-hundred-years pandemic and historic inventory shortages.
For years now, virtual home tours have helped real estate buyers far and wide find the perfect home. From long-distance military personnel being relocated, to investors expanding their portfolio, to homeowners looking for a vacation getaway, this technology makes finding a house that’s a bit out of driving distance much easier. And for real estate agents, virtual tours have been a useful way to help buyers with their home search and to assist sellers in creatively marketing their listings.
The pandemic has changed the way many of us live, work, and attend school—and those changes have impacted our priorities when it comes to choosing a home.
According to a recent survey by The Harris Poll, 75% of respondents who have begun working remotely would like to continue doing so—and 66% would consider moving if they no longer had to commute as often. Some of the top reasons were to gain a dedicated office space (31%), a larger home (30%), and more rooms overall (29%).
Are you considering a home renovation as a way to increase the value of your propety? There are two ways that you can build value with any real estate investment. The first is through natural appreciation where the value of the property grows over time due to increased demand. Historically real estate has appreciated at a much faster pace than the rate of inflation. In California, real estate has appreciated at nearly 5% annually since the year 2000 which exceeds the inflation rate of about 2.2% over the same period.
The Bay Area real estate market continues to confound experts with high property prices which counters commonly held economic theory. Mortgage interest rates are at historic lows, buyer demand remains robust even in the face of widespread job losses, and prices for homes are at record high levels. So what gives? The basic supply and demand curve from microeconomic theory explains that as demand increases while supply remains constant (or declines), prices will go up.
Many clients ask me about the sale of their home capital gains taxes they may owe. Capital gains are the difference between how much you pay for a capital asset how much you sell it for. These gains can have important tax considerations when you sell your home. Home sale capital gains tax rates vary depending on how long you have owned your home, and whether or not it is a primary residence. While this article is not advice on how you file your taxes, it is intended to help you understand how home sale income is treated from a tax perspective.
Traditionally, spring is one of the busiest times of the year for real estate. However, the coronavirus outbreak – and subsequent stay-at-home orders – has led many people to reconsider whether to buy or sell real estate right now. In April, new listings fell nearly 45%, and sales volume fell 15% compared to last year.
Fortunately, as restrictions have eased, we’ve seen an uptick in market activity. Economists expect a rebound in July, August, and September, as fears about the pandemic subside, and buyers return to the market with pent-up demand from a lost spring season.
Purchasing in a housing market with limited inventory and many competing buyers can be daunting and discouraging. This environment is known as a seller’s market where the seller has pricing power due to a large amount of demand from prospective buyers. Even as the real estate industry undergoes a shift to more virtual practices due to the global pandemic, in markets like the Bay Area, sellers continue to retain the ability to command high prices for their properties.