Sales of existing homes surge to a 14-year high

August sales rose to a seasonally adjusted annual rate of 6 million

Sales of existing homes rose to a 14-year high of 6 million at an annualized pace in August, the National Association of Realtors said in a report on Tuesday.

Combined sales of single-family houses, townhomes, condominiums and cooperatively owned apartments rose 2.4% from July, according to the report. Compared to a year ago, prior to the COVID-19 pandemic, last month’s sales were 11% higher, NAR said.

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” said Lawrence Yun, NAR’s chief economist. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”

The median existing-home price last month was $310,600, up 11.4%, and prices rose in every region, NAR said.

The number of properties on the market at the end of August totaled 1.49 million, down 18.6% from the year-ago month, the report said. Unsold inventory measured as a “months supply” number that gauges how long it would take to sell all the homes if nothing else came on the market, was 3 months, NAR said. That’s down from 3.1 months in July and compared with 4 months a year ago.

The cheapest home financing costs on record are driving demand for homes, Yun said. Mortgage rates have reached new lows nine times since the Federal Reserve began buying mortgage bonds in March to expand access to credit, according to a weekly survey by Freddie Mac.

The average U.S. rate for a 30-year fixed mortgage increased one basis point to 2.87% last week, the second-lowest on record, rising from the prior week’s all-time low, Freddie Mac said on Thursday. The less-popular 15-year rate fell to a record low of 2.35% last week, the mortgage giant said.

If you are wondering how current national and global situations might be impacting your property’s value, your neighborhood, or the Real Estate market in general, we are happy to provide more specific information.

If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Are You On the Vintage Rug Hunt?

"All art, especially rugs, comes down to communication and connection"

Rugs make the space, but buying them can be a consuming and confusing process as there are so many options. Rug weaving has a long history with stories woven into each piece. We talked to the experts at The Loom House to learn more about the process of rug weaving, what to think about when buying rugs and their favorite Instagram retailers. 

What To Consider

Mystical pieces of art made of hand-spun sheep and lamb wool dipped and soaked in indigo, madder root, saffron, and other natural vegetables, flowers, teas, spices, and minerals, then hung and scattered under the sun to dry, to finally be tied one small knot at a time to create an ancient and timeless nomadic masterpiece woven from the fingers of mainly women that have an unparalleled amount of patience, imagination, and soul; this is the first thing to know before you search for your perfect antique or vintage rug. The older the rug, the truer it holds to the process we’ve laid out for you above. Regardless of age, materials, design, and colors – if it was woven by hand, it wasn’t easy. When you’re on the hunt for a rug, be mindful of the way it makes you feel; what does it say? What was the weaver trying to communicate? Is it love at first sight, or is it’s mesmerizing charm growing on you each time you notice something new? Then you can worry about the colors and size, as of course, it needs to work in your space.

5 Factors for Buyers

1. Quality of the wool and dyes (is the wool soft and are the dyes natural and unaltered)

2. Workmanship/Quality of the rug weave (was it difficult and timely to weave – the smaller the knots the more time it took)

3. Does the design of the rug appeal to you? (is it interesting, attractive, well-composed, artistic, expressive, etc.)

4. What makes it different? (where are the birthmarks of the rug, where are the irregularities, where is the human element, where are the imperfections, etc.)

5. Does it speak to you? (Can you see the soul in it? Does it move you?)

These weavers create these mystical pieces of art to communicate something personal to the world, our interpretation of their messages either connect with us or it doesn’t. Equally, which rug you buy also communicates something personal about you to the world, and how others interpret that either connects with them or it doesn’t. And remember, it isn’t always about you finding the perfect rug, but also the perfect rug finding you – because imagine the infinite number of coincidences that have to occur for a 100 year old rug woven in a remote village or town thousands of miles away from you somehow magically finding you at the right time and at the right place – there’s something incredible about that.

Instagram Retailers

Shopping for rugs is easier than ever when it's on your feed. Follow these curators for high quality rugs + new finds.

Blue Parakeet Rugs
shopblueparakeetrugs.com
@blueparakeetrugs

Upstate Rug Supply
upstaterugs.com
@upstaterugs

Frances Loom
francesloom.com
@francesloom

THE LOOM HOUSE
theloomhouse.com
@loomhouse

Jean Palmer
jeanpalmerhome.com
@jeanpalmerhome

Old New House
firstpickrugs.com
@oldnewhouse

Rug Symbolism

These symbols and motifs all have different meanings woven into your rug. You'll find many of these in old tribal rugs. 

Boteh/Seed/Paisley Design: Birth, Growth, Fertility, Evolution

Tree of Life: Prosperity, Growth, Life, New beginnings

Tulip Flower: Prosperity

Pomegranate: Abundance, Good Luck

Willow Tree: Wisdom + Knowledge

Cypress Tree: Eternity, Connection between Heaven + Earth

Fence Design (Border): Protection from negativity

Herati/Water Garden/Fish: Love, Perseverance, Optimism

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• Back to School is Influencing Homebuying Decisions

Back to School is Influencing Homebuying Decisions

Research finds that back to school uncertainly is influencing parents’ homebuying decisions.

This infographic from Real Trends breaks down how child education is affecting parents’ decision making in regards to online schooling and housing.

Here’s a breakdown of some of the stats:

• 84% of parents are considering home education models for their children this year

• The top 3 most important amenities to buyers with school-age children learning at home are

  • 35% space for multiple home offices

  • 31% an area within a home that can be used for child homeschooling

  • 18% homes that allow for faster internet speed

• Top motivating factors to move include

  • 55% the need for more space

  • 49% the low mortgage rates

Need help deciding what is on your must-have home checklist or thinking about making a move? Contact us, we would love to help in any way that we can!

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• 5 Tips For a Smooth 1031 Exchange

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5 Tips For a Smooth 1031 Exchange

Many real estate investors know that when they do an exchange, they can’t touch the money, they have to identify what they are going to buy within 45 days, and close on any replacement properties within 180 days of the closing date of the property that is sold. 

While these facts are true, there are some other things to understand ahead of time that will make it easier to have a smooth and successful 1031 exchange. Here are five points to consider. 

1.     Sign Exchange Documents Before You Close

The 1031 exchange rules allow you to sell your “relinquished” property to someone, and acquire your “replacement” property on a later date from a different person. By signing exchange documents and following the other rules, you can take what would otherwise be a sale followed by a purchase and turn it into an exchange. It’s essential to sign exchange documents on or before the date that you close on the sale of your relinquished property. Exchange documents include an exchange agreement entered into between the real estate investor and the intermediary, an assignment of your rights under the contract to sell the relinquished property and a notice to the buyer of the assignment. On or before the date you close on the purchase, you will also need to sign an assignment of your rights under that contract and you will need to give the seller notice of that assignment. The intermediary assists with this documentation.

2.     Think About Who Will Acquire Replacement Property

The same taxpayer who sells the relinquished property must buy the replacement property. What if your lender requires you to acquire the replacement property in a single asset entity? This is workable because a single member limited liability company is disregarded for tax purposes. So, for example, an investor can sell his relinquished property that has been held by him individually and can acquire the replacement property in an LLC as long as he is the only member/owner of the LLC. 

3.     Buy Enough Replacement Property to Defer All of the Gain

In order to completely defer all of the tax you would otherwise have to pay on the gain, you must do two things. First, you must acquire replacement property that is equal to or greater in value than the relinquished property. So if you sell something for $1 million, you must acquire replacement property worth at least $1 million or the transaction may be partially taxable. Second, you must invest all of your net equity from the sale into the purchase. If you sell something for $1 million that has a $300,000 loan on it, you must invest the full $700,000 you net out of the sale into the replacement property in order to completely defer the taxes. (This example ignores expenses to keep it simple.) To summarize, in this example, you would need to acquire replacement property for at least $1 million, invest $700,000 of cash into it, and then either borrow $300,000 or invest your own funds in that amount. 

4.     Think About Expenses

There are some expenses that can be paid with the exchange proceeds that will not cause the deal to be partially taxable. For example, brokerage commissions, escrow fees, exchange fees and transfer taxes are generally considered to be this type of expense. On the other hand, when you are selling the relinquished property, if you give the buyer a credit for security deposits or pre-paid rents, you are using exchange proceeds for non-exchange expenses and it could result in your exchange being partially taxable. For that reason, it’s best to come in with your own funds to pay these if you don’t want to pay any tax. 

5.     Think About Experience and Safety

Your intermediary will provide vital guidance through the 1031 exchange process. You may need special expertise when dealing with seller financing, reverse and build to suit exchanges, dissolving partnerships, and other unique issues that take careful planning and guidance.

Additionally, when you do an exchange, your funds are held by the intermediary until you use them to acquire replacement property. It’s important to find out how those funds are held – are they in a separate account identified by the name and tax ID number of the investor? Are they held in an FDIC-insured bank account or invested in securities? Is the intermediary financially strong and reputable? 

For more info and resources, go to First American Exchange Company.

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How Building Bans and Affordable Housing Have Curtailed Construction

While the coronavirus pandemic has severely curtailed many industries and left millions unemployed, there is still plenty of construction going on in America's largest cities.

Some even say there’s too much construction happening, particularly in lower-income neighborhoods that are drawing new attention, thanks to massive public projects and renewed interest from young professionals.

Seeking to curtail gentrification and displacement, Atlanta and Chicago put construction and demolition moratoriums in place early this year. In Atlanta, construction permits were banned until Dec. 4 to slow investor activity near the western portions of the Beltline, a trail system under construction that is laid over old railroad tracks and driving up the value of real estate everywhere it winds.

Chicago made a similar move, prohibiting until February 2021 demolition of old two- and four-flats, which were being torn down in favor of large single-family houses, in the western portions of the 606 trail. Similar to Atlanta’s Beltline, the 606 is laid out over old rail tracks, in this case elevated ones, providing an urban greenway through several northwest Chicago neighborhoods. In both cases, public investment in the popular trails led to a jump in the value of privately owned real estate.

LaTonya Gates-Johnston is an Atlanta resident and founder of PAWKids, a nonprofit providing food and enrichment for kids on the city’s west side. (Lynsey Weatherspoon/for The Washington Post)

For that reason, Atlanta City Council Member Andre Dickens said his city is obligated to protect its long-term residents who may not be able to afford higher rent or taxes.

“When you invest major public dollars in an area, plus infrastructure, inevitably you get a lot of redevelopment,” Dickens said. “The challenge comes when that public investment leads to people who have lived there for a generation or more not being able to benefit from it. We don’t want vultures to come in and buy up the limited amount of owner-occupied properties in the area.”

Similar proposals are under discussion in New York, where a major expansion of Harlem’s Lenox Terrace housing complex has led to moratorium calls, and Gainesville, Fla., where student housing at the University of Florida may threaten historically Black neighborhoods.

The long-term goal of these proposals is to hit the pause button on development to find permanent solutions. And aiding the effort since March are construction moratoriums put in place since the pandemic spread. While these are aimed at protecting workers rather than homeowners or tenants, affordable housing projects are often exempted, helping to put more houses and apartments within reach of people with modest incomes.

For more information and the full article, visit The Washington Post.

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