Reasons to Buy a House Now

Renting a 2 bedroom apartment in Bay Area is average ranging from $1800 – $2500 per month.  For some prime area, it could be even higher.  Should you rent or buy a house now?

There are many reasons that you should consider buying a house now:

1. Interest rate are still low – it could go higher soon as economy improving.  Now a 30-year-fixed-rate loan averages 4% – 4.25%, still very low.

2. More inventory now compares to last year.

3. Price still going up – a lot of area still lower than the peak in 2008.

4. Rents are too high – it makes sense to pay your own mortgage on your house than to pay your landlord’s mortgage on renting.  With rent so high, low interest rate has a great advantage in buying.

5. Employment is improving – better economy and steady employment create a healthy housing market on demand in buying.


Singles: Why We’re Buying Now

Someone ask me this question recently, why single should buy a house, instead of renting.

I found this article on RealtorMag and it is interesting to read.

1031 Exchange Requirements

Make sure you work with your CPA, title officer, 1031 exchange specialist, and real estate agent to meet your 1031 exchange requirements.


Below is a summary of some of the main exchange requirements and disclosures which will be helpful in the successful completion of your client’s exchange:


  1. The property being sold must have been held for investment purposes for a period of time (this is generally considered at least 2 years).  A property that is acquired strictly for the purpose of re-sale does not qualify for an exchange.
  2. Your intention when acquiring the replacement property through the exchange must be to own and hold it for investment purposes for a period of time (this again is generally considered at least 2 years)
  3. In order to fully defer your capital gains tax, you need to acquire a property of equal or greater net value to the property being sold (net value is the sales price less the normal costs of sale)
  4. In addition to acquiring a property of equal or greater net value, you need to replace the equity and debt you have on the property being sold.  This just means that when acquiring a replacement property, in order to fully defer the capital gains tax, you need to use all of the exchange proceeds to acquire the replacement property(ies) and you need to replace any debt you have on the property being sold by either obtaining a new loan on the property being acquired or bringing in cash to replace the loan.
  5. Any exchange funds that are used at closing to pay for non-exchange related expenses are potentially taxable.  Attached you will find our e-Report regarding Exchange Expenses.
  6. From the date you close escrow on the property you are selling you will have 45 days to identify in writing the property or properties that you would like to acquire.  We will provide you with the Identification Notice that you may complete when you are ready to identify and this would be submitted to OREXCO within the 45 day identification period.  Although you are not required to be in contract on a property that you would like to acquire in order to identify it; it is a good idea to be in contract and with inspections completed so that you are fairly certain you will be able to acquire this specific property because once you go past the 45th day, you are unable to substitute properties for any reason.
  7. From the date you close escrow on the property you are selling you will have 180 days to close on one or more of the properties you have identified in the first 45 days.
  8. There are three identification rules you may choose from when identifying your replacement properties.  I have attached a copy of the Adopted Treasury Regulations that will explain these rules fully.
  9. The way you hold title to the property you are selling is the way you need to hold title to the property you are acquiring. 
  10. At close of the property you are selling the exchange proceeds will be held by us in trust for your exchange.  The IRS has restrictions with regard to when we are able to release the exchange funds.  We are always able to release the funds for you to use to acquire a replacement property you have identified however there are limitations at other times in the exchange.  This will be more fully described in the attachment entitled G-6 Limitation Disclosure.
* Information provided by Orexco 1031 Exchange

Section 1031 Gain Deferred in a Like-Kind Exchange

Whenever you sell business or investment property and you have a gain, you generally have to pay tax on the gain at the time of sale. IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange. Gain deferred in a like-kind exchange under IRC Section 1031 is tax-deferred, but it is not tax-free.

Please refer to the update information on IRS site or consult with your CPA.



Housing Investory Snapshot as of July 28, 2014

We hope you will find the following snapshot of local Real Estate inventory interesting. The table represents aggregated values based on MLS data for the specified date.

Housing Inventory Snapshot July 28, 2014
Average List Price for active listings Median List Price for active listings Average DOM: for active listings/ for sold listings
Alameda County, CA
Single Family under $1M $588,933 $589,000 37
Single Family over $1M $1,905,615 $1,528,000 63
Condo/Townhome under $600K $402,375 $399,950 38
Condo/Townhome over $600K $752,122 $716,755 38
Contra Costa County, CA
Single Family under $1M $514,619 $475,000 47
Single Family over $1M $2,034,369 $1,649,000 82
Condo/Townhome under $600K $328,955 $314,000 44
Condo/Townhome over $600K $707,003 $689,000 25
Monterey County, CA
Single Family under $1M $570,174 $549,000 73  / 55
Single Family over $1M $3,601,891 $2,200,000 192  / 58
Condo/Townhome under $600K $332,072 $315,000 86  / N/A**
Condo/Townhome over $600K $896,650 $799,000 131  / 65
San Benito County, CA
Single Family under $1M $580,429 $565,900 100  / 44
San Mateo County, CA
Single Family under $1M $716,565 $699,000 46  / 19
Single Family over $1M $3,920,414 $2,149,000 80  / 21
Condo/Townhome under $600K $440,424 $448,000 28  / 35
Condo/Townhome over $600K $922,826 $794,350 46  / 12
Santa Clara County, CA
Single Family under $1M $708,611 $699,900 41  / 14
Single Family over $1M $2,490,453 $1,799,000 77  / 22
Condo/Townhome under $600K $440,189 $439,000 34  / 17
Condo/Townhome over $600K $813,661 $750,000 23  / 21
Santa Cruz County, CA
Single Family under $1M $668,365 $695,000 59  / 16
Single Family over $1M $2,195,813 $1,499,000 133  / 1
Condo/Townhome under $600K $432,332 $419,000 77  / N/A**
Condo/Townhome over $600K $820,958 $749,000 175  / N/A**

Should You Pay Off Your Mortgage Before You Retire?

Paying off your mortgage will bring peace of mind in your retirement, but it will tide up your money in the short-term.

  1. * Message from your Real Estate and Mortgage Broker, Andy, 408-218-2513