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IRS: May 15 tax deadline extended to Oct. 16 for disaster area taxpayers in California, Alabama and Georgia
Did You Know?
- * Baby boomers rose from 29% of buyers to 39% in 2022, unseating millennials for the greatest share of buyers for the first time since 2014. Many of the moves were related to retirement and semi-retirement planning. 10,000 Baby boomers are retiring EVERY DAY and their real estate needs are changing, often competing with first-time home buyers that further exacerbates the housing shortage for entry level homes. (NAR)
- * New York, Hawaii, Maine, Vermont and Connecticut are the states with the highest overall state tax burden. Alaska, Delaware, New Hampshire, Tennessee and Florida have the lowest. While Florida’s tax burden is half that of New York’s – 6.33% versus 12.47% – it’s not tax free as many believe. No US state has an OVERALL state tax burden below 5.03% (Alaska). The state’s most appealing to the wealthy are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming as they do not levy state income taxes on capital gains….in California, New Jersey, Washington DC and New York the rate is over 10%! (Wallethub)
- * Mortgage rates dropped for the fourth straight week, relieving homebuyers a bit more. But bigger declines may be needed to offset other challenges buyers face this spring season. The average rate on the 30-year fixed mortgage dipped to 6.28% from 6.32% the week before, according to Freddie Mac. Rates have slid nearly a half-point in the last month, reflecting the decline in the 10 yr Treasury yield since early March — which was first kicked off by the banking crisis and then sustained by signs that inflation may be cooling. While the drop takes some pressure off of buyers, the persistent lack of for-sale inventory hampers their ability to snag a home. Normally at this time we expect close to 1.2M homes for sale and currently we have 536K homes for sale. Rates haven’t fallen enough either to convince many owners to list their homes, maintaining a housing gridlock that keeps prices elevated. “Affordability and availability of homes are the biggest hurdles for buyers in today’s market, though both are driven by mortgage rates,” Jeff Tucker, a Zillow senior economist, told Yahoo Finance. “Many homeowners just are not willing to give up their current house and low monthly payments to jump into a tight, expensive market.” (Yahoo News 04/06/2023)
- * When rates drop, the real estate flood gates will open and many buyers will be priced out. Buyers can buy now and refinance when rates drop. Some can still buy using a variety of creative techniques:
- Income derived from 12 months of deposits into your bank account
- Early IRA withdrawal to supplement your income
- Amortize assets to supplement your income
- 10% down to $2M
- Rates for multi units = same as 1 unit
- Interest only loans amortized over 40 yrs
- Cross collateral – use the equity of your existing home to buy your new home
- Use market rents to offset your current carrying costs of your home
- Lenders with low reserve requirements and ability to accept high debt to income ratios
Tools
- Capital Gains Tax Rates For 2022 And 2023
- Capital Gains Tax Calculator
Trends & Forecasts
- Housing Market Predictions For 2023: Are Home Prices Finally Becoming Affordable?
- Sonoma County Market April Flipbook
- California Housing Market Report
Market Update
year was 45% higher at $1,200,000 than in March of 2022 at $862,500. As we’ve mentioned before, the small number of transactions and even a single closing can often have a much greater impact on the statistics and that is certainly true in this instance. On further investigation, we found that one major influence on that figure was the closing of a $7.4 million dollar sale. With only 19 closings in March – down from 32 in March 0f 2022, it’s easy to see how that can happen.
Sonoma Valley experienced a 21% drop in listing inventory in the month of March. This percentage was in line with other regions – specifically all of Sonoma County and Napa County as well. The drop in the number of homes to sell is having a strong influence on keeping prices – both median list and median sales prices – up. Besides the above mentioned median sales price, we noted that the March, ’23 median list price was a mere 5% below that in 2022 from $1,795,000 to $1,700,000. This median list price is the highest among all areas in Sonoma County.
Looking forward, as the weather improves, flowers begin to bloom and buyers come out of their winter hibernation, the Spring selling season is anticipated to be very strong. Of course, the uncertainty of the Fed’s policies will continue to impact the economy, but it is always amazing to us what a sunny day does for our market.
Please note, all information is for single family residences in the Sonoma Valley as reported to BAREIS, the local multiple listing service through Broker Metrics.
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