Something Exciting is Happening in Chicago’s Real Estate Market

Chicago’s luxury housing market seems to be doing quite well for itself these days. Riding off the longest bull market in U.S. history, a multi-million dollar property is being sold once every five days in the Chicago metro area.

Not all tiers of Chicago’s housing markets are experiencing the same boom that the top tier of the market is. But this has not had an effect on the luxury market. In the month of August alone over 51 houses and condos in the windy city sold for at least $4 Million. More than were sold the previous two years. 6 sales for homes over $10 million have taken place this year alone.

Luxury Housing Market Stays Strong as Trump Tariffs Hit Home Builders

Aluminum, steel, and lumber are all key ingredients to constructing a house. And these ingredients are seeing a soaring price increase. The price of housing materials shot through the roof this summer after tariffs imposed by the White House took effect. Experts are preparing for the long road ahead as the tariffs are likely to worsen.

While luxury housing is not above the fray, construction material is a smaller percentage of the overall cost of a luxury property. Luxury home buyers are also willing to shell out a little more cash to acquire the home they want. Demand for luxury homes has remained strong amid the chaos of rising prices.

Are U.S. Home Prices Cooling Down?

Home prices are still growing, but it looks as though the pace is starting to slow. The price growth rate for July dropped to its lowest point in over two years. A flow of new inventory has accompanied the moderating growth of July. This will be welcome news for first-time home buyers who have been struggling with low inventory and little negotiating power in an unforgiving market. The hope is that the market is heading towards a more even position after years of shrinking inventory and out-of-control price growth.

Luxury Home Sales in Miami Surge While Starter Homes Remain in Short Supply

2018 has been a great year for luxury home sales in South Florida. According to a new report by the Miami Association of Realtors, luxury real estate sales of properties over $1 Million have increased 21.5% and posted year-over-year increases in the last 6 of 7 months. Luxury condos are continuing to take the lead with sale increasing as much as 28%.

Homes valued under $600,000 are still facing severe supply shortages. Prices on single-family homes in Miami have continued to rise as lack of inventory and high demand plague lower tier markets.

To learn more about how you can utilize the power of a 1031 Exchange visit The 1031 Investor.

What is the Luxury Housing Market Doing Now?

Despite rising prices, the luxury housing market is seeing an increase in home sales. While many buyers are struggling to find a starter home to call their own, luxury houses are changing hands quickly in 2018. According to Realtor.com, 91 counties in the U.S. have seen an entry price level increase of 4.6%. Leaving the entry point for luxury housing at no less than $1 million. With the stock market on an upward climb and high-paying jobs growing, buyers have been more than willing to put up with the costs associated with buying and owning a luxury home.

To learn more about how you can utilize the power of a 1031 Exchange visit The 1031 Investor.

canstockphoto

3 Surprising Things That States Count as Real Estate

While all parts of the US generally agree on what is considered real property, every state has its own unique laws and definitions. Reading through each state’s legal definition for real property brings up some interesting tid bits here and there.

1.   Riverboats

Starting in the mid 90’s casino riverboats began appearing in Indiana. At the time, the state did not allow any gambling establishments to operate on land. However, once the states began to realize what a golden goose they had, the laws were loosened and changed. Riverboat casinos in Indiana are now legally defined as real property and given the right to remain permanently moored.

2.   Shellfish Land

Some fun facts from ct.gov, the state of Connecticut’s official website.

·     Connecticut shell fishing generates $30 Million plus in farm-gate sales annually.

·     The Connecticut shellfish industry provides over 300 jobs statewide.

·     Annually, Connecticut shellfish harvests exceed 450,000 bushels of hard clams and 200,000 of bushels of oysters.

·     More than 70,000 acres of shellfish farms are now under cultivation in Connecticut’s coastal waters.

Aquaculture is big business in Connecticut. It is easy to see why the state defines underwater shellfish lands as real estate.

3.   Fossils

While legal definitions may not be very exciting, dinosaur bones are. Fossils found on real property function in a way similar to oil, gas, and minerals. While the fossils are in the ground on your property, they are treated like real estate. Idaho, Minnesota, and New York are all states that explicitly define fossils as part of an individual’s real property.

While all of these items could potential be exchanged using a 1031 exchange, as Gideon Tucker once said, “No man’s life, liberty, or property are safe while the legislature is in session.” Always consult with a local expert in your area to see what your state defines as real property.

To learn more about how you can utilize the power of a 1031 Exchange visit The 1031 Investor

Miami’s Luxury Market Heating Up in 2018

The Sunshine State’s most popular city has been enjoying a great beginning to the new year. According to the Miami Association of Realtors, luxury home sales and existing condominium sales increased in February. The boost in sales is credited to Florida’s favorable tax treatment. With no state income tax and a pro-business tax structure, many northern buyers from expensive high-income tax states have begun flocking to Florida. Luxury homes are still lingering on the market longer than they were last year. But as the market picks up and more Northerners flee the frozen north, luxury homes might not be sitting empty for very long.

First-Time Home Buyers Struggling Amidst an Unforgiving Market

First-time homebuyers don’t have it easy in today’s housing market. According to a report by Trulia, over the past six years starter homes have been getting pricier, smaller, and poorer in quality. With some of the lowest inventory on record, starter homes have been far more affected by these problems than any other category of housing that Trulia tracked. As supply shrinks, first-time homebuyers will be expected to spend far more of their income on buying their first home than new homebuyers in the past. Trulia doesn’t have an optimistic view of the 2018 buying season for young homebuyers plagued by a “perfect storm.” Millennials looking to settle down and start families of their own will have to hold tight for the near future.

 

South Florida Real Estate Holding Strong After Irma

After hurricane Irma left Florida smarting from billions of dollars in damage, many worried about the future of the sunshine state’s real estate market. But after a month-long slump, South Florida’s real estate market remained strong. Both Palm Beach and Miami Beach logged an increase in high-end home sales in 2017, according to a report from ONE Sotheby’s International Realty and Integra Realty Resources. And according to the report, luxury home sales are still expected to increase by a modest amount in 2018.

The weakening dollar is expected to draw in international buyers, while the favorable zero state income tax is expected to attract tax refugees from heavily taxed states in the Northeast. Irma might have shaken the state up a bit, but Florida’s real estate market still seems resiliently poised for a bright future.

How the New Tax Plan Affects 1031 Exchanges

A 1031 exchange is the go-to process for anyone looking to maximize their real estate investing and defer capital gains taxes. But how will president Trump’s new “Tax Cuts and Jobs Act of 2017” impact 1031 exchanges?

In the past, a 1031 exchange could be used to defer capital gains taxes on both real estate and personal property. If you had a house with a bunch of furniture inside you could exchange both the house and the furniture without encountering any capital gains taxes. Under this new bill, personal property can no longer be exchanged using the 1031 method. However, if you were already in the process of exchanging personal property and had closed on a sale or acquired replacement property before December 31, 2017, then you are free to finish the exchange in 2018.

While these changes will have a big effect on art collectors, real estate investors will come out on top. Those looking to utilize the power of a 1031 exchange on their real estate are still free to do so.

If you want to see what else is covered in the “Tax Cuts and Jobs Act of 2017” follow this link to read the full tax plan.