Tuesday, February 20, 2018

When Loan Rates Rise, Do Greenwich Home Sales Slump?



34 Midwood Rd in Prestigious Deer Park, Greenwich  $7.495 Million 
Many Greenwich homeowners will be planning to list their properties this spring because it’s when future home sales would be expected to peak. Historically, spring is when the highest crush of prospects arrive on the scene. But this year, the upward drift in mortgage interest rates might have would-be sellers worried. After all, it’s common sense that any rise in home loan rates would put a damper on buyers’ enthusiasm.

Sometimes common sense and reality don’t go hand in hand. When we try to estimate the strength of Greenwich’s future home sales, it could be a case in point.  That’s one way to look at the conclusions drawn by a pair of studies released last week. Both were focused on examining how rising interest rates are likely to affect future home sales. 

 John Burns Real Estate Consulting examined the “common sense” idea about the dampening effect of rising mortgage interest rates—and found historical evidence that put the kibosh on it. They looked at ten separate periods since 1975 during which rates rose by 1% or more, and found little or no impact on sales if the underlying economy was strong. Apparently, the public optimism that accompanies a roaring economy offsets the effect of higher monthly mortgage payments.

 Another study by market research journalist Greg McCarriston summarized a late-2017 Redfin-commissioned survey. More than 4,000 people were polled in late 2017 about their own homebuying plans. Surprisingly, only 6% of those quizzed said they would cancel their own homebuying plans if mortgage rates passed 5%. A surprising 46% said that would either have no effect on their plans—or that it would actually increase their urgency to buy since rates might rise further.

Common sense or not, if both studies prove out, the strength of recent economic news could energize this spring’s Greenwich future home sales activity—despite a creeping rise in interest rates. That will be good news for homeowners who decide to sell, and for buyers.  The selection of properties in Greenwich is excellent and none more special than the one featured in today's blog and available for purchase.

Robin Kencel, Associate Broker
The Robin Kencel Group
Top 10 Greenwich Real Estate Agent, 2017
Top Agent, Douglas Elliman Greenwich 

Monday, February 12, 2018

Greenwich SDIRA Investment Avoids Wall Street Gyrations

For many typical Greenwich breadwinners, last week’s stock market gyrations undoubtedly revived feelings that had been largely absent for quite a while: retirement jitters. Nearly a quarter of working Americans own Individual Retirement Accounts—but since most IRAs’ values fluctuate considerably with the ups and downs of Wall Street, when major indexes officially enter correction territory (as the New York Times reported last Thursday), savers’ anxiety levels head toward redline territory. 

That’s too bad because one of the principal purposes of saving for retirement is to create a secure feeling about the future. Even if the financial pundits seem undismayed by all the correction territory chitchat, those feelings can begin to evaporate.

All of this may seem unavoidable, but there is an alternative strategy that Greenwich retirement savers might want to check into. It’s a sort of do-it-yourself option that’s called a Self-Directed IRA (SDIRA). It is structured to allow withdrawals at a specified age—but differs from other IRAs in that it allows investments in a wide variety of diversified investment choices, including Greenwich real estate as well as private market securities and more. The tax advantages are like those enjoyed by traditional and Roth IRA accounts.
Since I am not a financial planner, I’ll refrain from providing much more than a few brief observations about SDIRAs:

They aren’t for everyone. Since they’re subject to more stringent and complex IRS rules than regular IRAs—and since they are actively directed by the beneficiary—they require a good deal more initiative and due diligence.
Although the beneficiary makes the investment decisions, SDIRA accounts are opened, held, and administered by a recognized SDIRA specialist firm which acts as a trustee or “custodian.” 
Custodian firms may allow only some kinds of investment assets, so it’s important to be sure they match the investor’s preferred mix of assets. This is a list of custodian firms.
IRA rules do not allow SDIRA investments to be used for personal use until the targeted withdrawal date—so, for instance, any Greenwich rental property held in an SDIRA could not be used for the investor or family members until then.
I
f this little-publicized alternative sounds intriguing, you should do your own research—and probably an in-depth consultation with a trusted financial adviser. I will be standing by to introduce you to the wide assortment of Greenwich properties that might just become key elements in a more diversified—and more stable—retirement picture.

Thursday, February 1, 2018

Super Bowl and Real Estate Misconceptions

Readers who check in here regularly know that every once in a while I’m moved to relate Greenwich real estate matters to various hot issues that are claiming the popular imagination. Such topics used to be called “water cooler talk” (but that was before we all started carrying water bottles around all day). So despite the fact that we may not gather around water coolers anymore, this the odds are that the leading topic of conversation won’t be the State of the Union or the Binney Park dredging project (good news-- it's done and water is back in the pond).  

So, it’s all but inevitable—here are the Top 7 Things that Greenwich real estate and the Super Bowl have in common:
1. Both are Sunday-centric. Greenwich real estate and the Super Bowl make Sunday a major activity day (at least when the weather is nice).
2. Both do better when their ads are top-notch. The best Super Bowl ads will be replayed on Monday night news shows, but although our best Greenwich real estate ads won’t get that kind of attention, eye-catching ads sell.
3. Both rely on heads-up plays by top notch teams (had to say it!).
4. Both rely on marketing to draw a crowd.
5. Both have a definite banking connection (Sunday’s venue is U.S. Bank Stadium).
6. Both are (mostly) free to enjoy. Open houses and showings are free to the public—only in Minneapolis will admission be charged (and what a charge!).
7. Both are judged to be first rate when fumbles don’t happen.

Now you may be thinking that my Top 7 Things list is offered for no other reason than to try to get Super Bowl fans thinking about Greenwich real estate instead of the game itself. There may be an element of truth in that but I know, this Sunday, it's a useless try.  However, come Monday, it's Spring Season and time to think about the real estate market.