Tuesday, February 20, 2018

Impact of Tax Reform on WI Real Estate

Here are 10 ways the Wisconsin Real Estate Market will be impacted by the 2017 Federal Tax Reform:

1. Mortgage Interest Deduction
The new law reduces the mortgage interest deduction from $1 million to $750,000 and maintains the deduction for second homes for mortgages issued prior to December 15.

2. Doubling of the Standard Deduction
The new tax law doubles the standard deduction to $24,000 for married couples who file jointly and $12,000 for single filers.

3. Home Sale Capital Gains Exemption
On the of the items to go unchanged thankfully the capital gains exclusions for the sale of a primary residence remains at $500,000 for a married couple at $250,000 for an individual as long as you lived in the property 2 of the last 5 years.  Earlier versions of the proposed legislation changes pushed for a person to live in a property 5 of the last 8 years before they could claim this exemption.

4. State and Local Taxes (SALT)
The new tax law places a cap on the deduction for state and local taxes, allowing taxpayers to deduct up to $10,000 of state and local taxes, including property taxes and the choice of income or sales taxes.

5. Pass-Through Business Income
The tax rate for pass-through entries like solo proprietorships, LLCs and partnerships is reduced from 39.6% to 20%.

6. Home Equity Line of Credit (HELCO)
The deduction for interest on home equity loans/lines of credit is eliminated beginning in 2018 with no grandfathering of existing loans.  There is possibly an exception being discussed if a home owner can prove the loan was used directly for improvements to the home.

7. Like-Kind Exchanges
Also known as 1031 Exchanges, like-kind exchanges are maintained under the new law and allow a property owner to defer the payment on taxes on profits from the commercial property sales if the owners reinvest those profits into similar commercial property.

8. Depreciation
The depreciable life of both residential and commercial real estate property is reduced from 39 years to 25 years.

10 Moving Expenses
The new law eliminates the deduction for moving expenses/costs.  Under the prior law, a homeowners could claim a deduction for reasonable moving expenses if the new workplace was at least 50 miles from the home.

Monday, February 12, 2018

Buyers Should be Looking NOW!

2017 was the third straight year of record-setting sales in the state. Despite a decline in December sales of 3.3 percent over 2016, the strong economy pushed 2017 annual sales up 1.4 percent past the previous year with more than 83,000 units sold with an average price of $174,000, up 5.5 percent from 2016. 

These outstanding numbers seem almost impossible considering the continuing low inventory of properties for sale. The state’s low unemployment and mortgage rates coupled with steady job growth has fueled the housing demand. As we’ve stated before, there are no shortage of buyers ready to purchase. Just imagine how many units could have sold in 2017 if there was a substantial inventory to select from! 

Of course, the robust economy paired with the low inventory of homes for sale means there is a very high demand for homes… and homes are selling at an extremely brisk pace. In December, most homes were on the market for 80 days. To put it in perspective, that’s down from 99 days a year prior. This has pushed the average home price up 5.5 percent from 2016.

Regarding supply, rising prices may incentivize current owners to sell their homes, especially Baby Boomers entering into their 70s. Eventually, their increased need to make health-driven decisions about where they reside may increase the supply of homes. These factors could lead to minor supply improvements in 2018.

The good news is, those looking to buy should be ever diligent now as it's a great time to purchase.  While the inventory remains low, there are fewer buyers out looking  - who wants to move in the winter, right? - but it also means less competition in a very competitive market.

If you need help, contact me.  I'm happy to help!

Wednesday, January 31, 2018

Souper Bowl XXII

This is not your typical "Super Bowl", but it is one of the most unique!  This event also involves good food, and it's the largest fundraiser for the Habitat for Humanity UW-Madison Chapter.  

It all takes place from noon-5 p.m. on Saturday February 3rd at Madison West High School where attendees choose a locally-made ceramic bowl (many made by Madison West Students).  The bowl is filled with soup and the meal also includes salad, bread and desserts.  The cost is $15 for a bowl - including all the fixins' - for a great meal.  For a family of four, the cost is $35 and includes two bowls and four meals.  

This community events has been a mainstay since 1995 and also includes entertainment, music and celebrity soup-servers.  

Local artists will also have artistic bowls available during a silent auction.  This "Souper Bowl" is sure to be a wonderful warm-up to the football Super Bowl on Sunday!

Friday, January 26, 2018

Westmorland Winter Play Day

In recent years, the Westmorland Neighborhood Association has held an annual winter festival.  This year is no exception!  The Annual Westmorland Winter Playdate is scheduled for Saturday January 27th from 2:00-5:00 p.m. at Westmorland Park located at 4114 Tokay Blvd.

This is a great opportunity to enjoy the outdoors with family, friends and neighbors.  In an "normal" year, you could enjoy ice skating and sledding!  No matter the weather, attendees are still sure to enjoy eating and visiting with others in the park. The committee is also hoping to have tunes from the neighborhood DJ! 

This is a wonderful family event in a vibrant west Madison neighborhood.  Swing by the park and join us for some winter fun!

Thursday, January 18, 2018

November 2017 Home Sales

As is typical in the 4th quarter of the year, the Real Estate market slowed a bit, but only in terms of inventory.  Buyer's continued to swarm to new listings is hopes of finding the home of their dreams.  2018 is shaping up to be the same kind of market.

Here's what's sold on the near west side in early November.

Saturday, January 13, 2018

Monroe Street Shopping

Monroe Street has traditionally been a wonderful place to shop locally.  Two new stores on the street are adding to old favorites like Katy's American Indian Arts and Orange Tree Imports.

ReFind Style offers vintage and modern clothing and accessories.  The boutique opened a few months ago at 1639 Monroe St. in the spot formerly occupied by Walter Swim and Sun near the Monroe St. Public Library.  Looking to Upcycle?  Check out the unique offerings at ReFind Style.

hive of Madison offers outdoor lifestyle apparel
and accessories for men and women.  Located at 1904 Monroe St., the shop offers selections from Patagonia, Toad&Co, and Lole, to name a few.

These stores are sure to add to the already eclectic shopping experience that is Monroe St.  Be sure to check them out the next time you are on Monroe!

Tuesday, January 9, 2018

Resolutions Should be Small Tweak

Well, here we are, almost two weeks into the new year.  How are those New Year’s resolutions coming along?  According to Consumer Reports, only 68% of people who make New Year’s resolutions keep them beyond two weeks.  And only nine percent achieve their resolution by the end of the year.  So what’s the deal?

I once heard a coach and speaker say that “success is not a result of a major change or shift, but a result of small, consist tweaks”.  I’m actually paraphrasing, but you get the idea.  Rather than trying to lose 30 pounds, how about starting with one pound?  Instead of cutting out all sugar, maybe start by slowly cutting back?  Rather than trying to run 5 miles on your first day in the gym, perhaps try walking for two?

The same can be said for those looking to buy a house in 2018.  Rather than only looking at houses with two bathrooms, how about looking at a few with a bath and a half?  Or if a fenced yard is a “must have”, maybe a fence could be added. 

For those looking to sell their house, the same rules could apply.  If you really want to close on your house in June, could a May closing work with the right offer?    Is it more important to have fewer buyer contingencies rather than a higher price? 

2018 is shaping up to be another very busy year for Real Estate.  Small modifications and flexibility will be key components for the successful.

As for your New Year’s resolution, maybe try a small tweak instead of a major overhaul.  For me, I plan to do one good deed a day.  So far so good!