In Case of Emergency: Buy?
Ernie Neve, CPA
July 16, 2020
One of the things I’ve learned to do as an accounting professional is to look for and identify trends. My clients count on me to be “in the know” on far more than tax law, so I feel comfortable discussing a wide variety of things with them.
Car leasing versus purchasing
Corporate entity structures
The “contractor” or “employee” conversation
And of course…
The best “way” to buy a home…
Honestly, when the pandemic and subsequent economic crisis hit, I felt the overall housing market – both for single-family and rentals – was going to tank. With production of building materials not considered “essential” and many subcontractors out of work, I believed existing new home inventory would dry up.
More importantly, I thought people would be worried about moving in this environment.
Well, it appears that some of my beliefs were wrong, as the most recent information I’ve been seeing is that the housing market in the United States has already returned to nearly “normal” levels. In fact, home mortgage applications are up nearly 20% from last year, and that is especially rare in an election year. (Another reason I thought the market would stay “soft” at least until early Spring of 2021)
There are a lot of ways this benefits both the buyer and the seller, but no matter what side of the equation you’re on, if now is the time to sell (or buy), then you’re really in a great spot.
There really isn’t as much going on in new home starts, so newer homes that still represent what buyers look for in new construction are a solid market, while older homes that have been extensively updated also represent prime examples. On the “fix and flip” side, too, we’re seeing a lot of rental owners decide to divest certain properties – perhaps they were financially overextended, perhaps the current unrest has them second-guessing certain areas they’d hoped would gentrify in larger cities.
Nevertheless, there are some great deals out there, and more importantly, banks are lending money for them.
If you’re on either side of the table – buying or selling – then I’d encourage you to get moving on it now, and if you need some advice on the best way to mitigate taxes on a purchase or a sale, reach out to me and the team.
Make it a great day-