20 Years of home price changes in every city in the U.S.
Two Decades of Housing Prices
The interactive visual below ? created by Alison Young Global, using data from?Zillow?? is a comprehensive look at U.S. home price data over the past two decades.
At the turn of the century, the average U.S. home value was?$126,000. Today, that figure is at a record high?$259,000?? a 106% increase in just two decades.
Of course, the path from A to B was anything but linear with a financial crisis,?housing bubbles?in major cities, and now COVID-19, which is drastically altering market dynamics.
How has the housing market evolved, on a city-by-city basis?
Opportunity Zones & Funds: Aligning Public and Private Real Estate Capital
Opportunity zone funds (OZFs) can help the neighborhoods that need it most, while also providing significant tax benefits for investors.
An Opportunity Zone is a designation created by the Tax Cuts and Jobs Act of 2017 allowing for certain investments in lower income areas to have tax advantages. The purpose of this program is to put capital to work that would otherwise be locked up due to the asset holder's unwillingness to trigger a capital gains tax.
An opportunity zone fund (OZF) is an investment vehicle that provides tax benefits for private capital to help revitalize economically distressed communities. Both operating businesses and real estate are eligible for investment.
A Qualified Opportunity Zone Fund is any investment vehicle which is organized as a corporation or a partnership for the purpose of investing in qualified opportunity zone property (other than another qualified opportunity fund) that holds at least 90 percent of its assets in qualified opportunity zone property.
Many investor types may take advantage of opportunity zone funds:
- Corporations? Also includes partnerships
- Accredited investors? Defined as high net worth individuals, brokers, and trusts
- Nonresident foreign investors? Only on capital gains earned in the U.S.
- Retail investors? Through funds that have lower minimums, though options are more limited
In addition to their wide eligibility, OZFs have a number of potential benefits.
The Home Seller?s To-Do List for 2020
As the new year takes its first steps, the real estate business is closely analyzing 2019 to see what 2020 will bring. There were some pretty exciting developments last year, and they?ll definitely play a major role in the future. In fact, some trends, like those that SpendMeNot?s real estate market research noted, will be pivotal for anyone looking to sell this year.
So what will it take to turn the real estate market in your advantage as a property seller in 2020? Here?s a useful and to-the-point guide to tell you exactly that.
Prepare for Slow Growth of Home Prices
In line with the growth we?ve seen thus far, house prices should be increasing somewhat in the current year. This growth probably won?t be all that radical, measured at 2.8% by some estimations, but it will nevertheless impact the way you go about your job.
One consequence that you can look forward to is the fact that you?ll probably be making more of a profit. Though not an amazing rate, a bit shy of 3% is nothing to scoff at.
That said, you won?t be overjoyed when you hear that you probably won?t see as many offers as you could have in 2019. An increased price will unavoidably narrow down the amount of people that can afford to make an offer you?ll be satisfied with.
Overall, it?s a bit of a give-and-take situation where you need to take advantage of both the good and the bad. The best way to do that, in this case, would be to make your house stand out as much as you can. In the highly discriminating market we?re looking at right now, a property with more to offer will get a lot more attention from buyers.
Facts About?Housing Data
- 50% of buyers?found their home on the internet
- 5.34 million existing homes were sold in 2019
- The US housing market was worth?$33.3 trillion?in 2018
- Sales of existing homes will fall?1.8% from 2019
- The cost of renting has gone up by?66%
- 6% of younger millennials were first-time homebuyers
Cater to Today?s Main Buyers: MIllennials
Millennials (people born roughly between the 1980s and 2000s) currently represent the majority of home buyers. How large a majority? As many as 67% of all buyers come from this generation.
What does this mean for you? Well, it means that, if you want results, you will need to adjust the way you sell. Here are a few pointers to help you do that.
Highlight certain features that they?re on the lookout for. Garage storage, patio, laundry room, and hardwood front exteriors are among the popular home features for millennials, but there are plenty more, so don?t worry if your property doesn?t have those. Highlight the ones that it does have, though, and you?ll quickly see more interested parties.
Make sure that your online listings are high-quality. Practically everyone (especially millennials) relies on the internet to find whatever they need, and homes for sale are no exception. Therefore, anything you have about your property online should be updated and looking sharp - high-quality photos and a video recording of the place will get you a long way.
Emphasize qualities other than square footage. Nine times out of ten, given a choice between a large house and one that?s near good schools or has a good commute, millennials will choose the latter. As long as you make these perks a priority to emphasize, you?ll do great.
Expect Low Mortgage Interest Rates, but Don?t Count on Them
Last year, mortgage interest rates fell under 4% for common kinds of loans. For 2020, the trend will likely remain the same, and this rate shouldn?t go anywhere above 3.7%. That said, interest rates can fluctuate depending on economy shifts, so it isn?t a prophecy set in stone.
For you, a low interest rate will translate into more interest from people. It?s only logical, after all, since they will have to pay less overall in these conditions. But there?s little guarantee that the rate will stay as is, so be prepared for the opposite.
Should the interest rate rise, you?ll see plenty of prospects beginning to hesitate, so you?ll likely be in a bit of a bind if you?re pressed for time to sell that house of yours. It could theoretically swing either way, but the chances are that the rates will stick to their current estimates.
What the Heck is Mortgage ?Note? Investing? The Start of a Journey
Have you ever heard of people talking about note investing? Probably not! It is not a topic that you are discussing over coffee or at a social event.? Would you be surprised to know that note investing has been around since the 1950?s.? When I first heard about note investing 4 years ago I had no clue what it was and I was skeptical just like you are.? Since note investing is not part of the mainstream investing conversation, people do not believe or understand how they can invest in notes passively.? What is a note? Instead of giving you some crazy definition from Investopedia I wanted to share my definition with you: Notes are financial instruments that are used to secure loans against real property.? These instruments can be used on just about any type of real estate.? Additionally, notes play a critical role in the housing market in the form of land contracts, owner financing, trust deeds.? These forms of mortgages ?notes?, are utilized for homeowners that do not qualify for financing from traditional brick and mortar banks.
Now we got the boring stuff out of the way let?s start talking turkey!? We all remember the last recession and how bad the housing market was hit.? Housing prices in some markets dropped 30% in value, and foreclosure rates were in the double-digits.? The American Economy was a disaster and there was no relief in sight.? Just like you, I do not want to go through another time like that again without being prepared. ?This is where note investing comes into play for all of us. In 2016, banks/lenders sold $116B worth of non-performing notes (1st trust of deeds on Single Family Residences).? This number does not include purchases by hedge funds like Black Stone, Fortress, and GCM Grosvenor to name a few. These hedge funds are buying directly from Freddie and Fannie, and are paying between 20%-40% of the Current Market Value of each property.? When I first learned about all this I could not believe it!? I did my homework on the offerings, and I wanted to find out how I could buy directly from banks/lenders.? This is where I will leave you on this posting and on my next posting we will talk more about the journey and how banks/lenders operate in this space. Let?s work together to bring Wall Street to Main Street!