Emails, Texts, Calls, Complaints and Profound Thoughts from the Readers

Real questions but the names have been changed to protect the longtime readers and first-time writers in. Here we go….

1. Will the new tax bill help with real estate? – George

Jeff:

Really good question and one worth looking at. We had one client purchase recently trying to get ahead of this because of potential tax savings. They are using their home purchase for corporate housing and there could be some major tax depreciation incentives. Same on short term rental properties and commercial. *Check with your CPA on any of this regarding tax deductions. Opportunity zones should get more multifamily homes started again.

Obviously having more money from taxes in your pocket means more money to spend. That should give a boost to the economy. Conversely, possible cuts in subsidies and other government programs will go the other way. People at the lower and middle end of the economic spectrum or on fixed income typically spend everything that comes in. Some of the spending coupled with tariffs could raise inflation as well. As for the deficit, that’s a whole different discussion altogether.

2. Can I limit who I sell or lease to? – Paul

Jeff:

I once rented a guy’s home out – 12 or 13 years ago where I encountered discrimination. He wanted to see everyone’s drivers license before they came in. I said “that’s going to be difficult. May I ask why?” He didn’t want to rent to a Black person. I promptly said, “Mr. Archie Bunker, we are cancelling the listing”. For you youngsters, you’ll have to google Archie Bunker. I’ve seen other issues like not leasing to a homeowner on a full price contract because the landlord wanted a family and wouldn’t accept 2 roommates even though it was written up as one contract. The Fair housing law is very clear on race, religion and family status. In 25 years of seeing tens of thousands of contracts, I’ve only seen housing discrimination rear its ugly head on three occasions.

3. Is now a good time to buy? – John

Jeff:

My opinion is a strong YES with some * asterisks. This offseason might be the best opportunity to purchase in years. However, that doesn’t mean that every house is a good buy. There are a few rules to keep in mind. Cherry homes with the best layouts, views, and those that are remodeled are still in high demand and often have multiple offers. But they are available at reasonable prices whereas the supply was zilch in the pandemic. The bigger buildup is homes that are 85% of what you are looking for and fixer uppers. The reason the summer and fall is such a good time to purchase is because the “must seller” who doesn’t want the carry cost + the lost opportunity of investment with the return on proceeds of sale, is willing to cut a deal. Last, sellers are not pegging moving prices up with inflation. I think this will become a bigger story as the tariff prices and other inflationary factors take hold. Thus, homesteads are losing some value at the moment. I wrote about this earlier in the year, in Inflation Boomerang. As we get closer to next season, “HOPE” comes into play and Sellers typically then are less likely to lower or move off their prices. It’s impossible to time a market but you know you are way off from the top. My guess is the best buys will happen between now and the end of 2025. Remember, the prime areas are out of land in South Florida and population over the long haul will only grow.

I had one Buyer call me up this week to engage us in a purchase. The primary reason was our experience, and they understood that this is an easy market for a Buyer to make a major mistake in not understanding the proper price.

4. I’m an investor and want to buy a single-family home at the bottom. I’ve studied housing markets. Every 18 years, markets crash. It’s been this way since the late 1800’s. I last bought a single-family home in 2004 for $60,000. – Pete

Jeff:

Employment is at full capacity and most sellers are great on paper with 3-4% loans. There will not be a short sale or foreclosure problem so curb your enthusiasm as Larry David would say. The great depression happened in 1929. I never read about the follow-up great housing crash of 1947. Good luck with the 60k purchase. Perhaps you might find a nice spot (not a single-family home) under a viaduct in Topeka.

5. What are you recommending young people do to purchase a home. – Ringo

Jeff:

Get a plan and save up. Our son Sam is living with us (part of the plan) and has a plan to purchase a home in 2027. He has created buckets to put money away and is being very disciplined about it. He understands that money snowballs and living at home with modest rent lets him save. He does have a bucket to go out on dates and have fun with friends but the forced bucket amounts are keeping him disciplined so he hits his goal. One idea is for him to team up on a purchase with a long-time friend. Both are very compatible. Draw up a plan with an exit strategy if one wants to move on. We are also seeing more families with parents and grandparents help out some of these younger adults. Older generations didn’t have the college and health care costs that have risen so much more than inflation over time. Funny, I’m going to your concert this weekend at the Hard Rock. As you say, “we all get by with a little help from our friends”.