COVID-19 and other world events
If you have talked with anyone else in the industry, you know that everyone is very busy. Properties are selling quickly, sometimes over asking price. Lenders and title companies are doing whatever they can to stay on top of the influx of orders, maintain turn time, and deliver excellent customer service. It is during these busiest times that having multiple branches and employees that can assist with searching, examining, processing and closing transactions allows CSS to stand out from the competition. And, on more than on occasion over these past months of the pandemic, CSS has come through for customers by helping deals to close on time, due to its expertise with Remote Online Notary (RON) closings. Just another way CSS is putting its technology and resources to work for you!
Mortgage rates fall to all-time low
Mortgage rates fell to a new all-time low the week of September 8th, averaging just 2.86% for a 30-year fixed rate mortgage, according to Freddie Mac. The reason? Most economists believe that the combination of the coronavirus pandemic and the economic downturn is causing the low. And, the Mortgage Bankers Association (MBA) predicts that rates will not climb past the mid-3% range over the next two years. This is good news for home buyers who are finding competitive bidding markets for existing home sales.
Sell and Stay
We are currently seeing a seller’s market, where sellers are getting at or above their asking price and even seeing bidding wars on a regular basis. While this is beneficial for a seller from a profit scenario, sellers are often challenged with having to acquire another property to replace the one that was sold. There may be a solution for those sellers that need time to find something, want to wait until the market shifts to more of a buyer’s market, or just want to get out of the burdens of home ownership, while remaining in the home they love: Sell and Stay. The premise is that a company will buy your house and lease it back to you for as long as you like. There are real estate technology companies operating in all 50 states that specialize in sale-leaseback programs. There are different programs available which offer different opportunities for sellers, some offering the opportunity to re-purchase one’s home and some which offer greater flexibility for those who want to sell but are waiting for the right time to move.
As with any transaction, a consumer should do his/her due diligence to ensure that the company is a reputable company and speak with his/her legal advisor.
We have certainly seen it in Northern Michigan, as well as other areas: real estate acquisition is booming. The coronavirus pandemic (and specifically NPR’s Planet Money.) has created the new term “zoom town” to describe a housing market that is suddenly booming as working remotely becomes the norm. The workforce is on a quest for a new place to call home or for a second home and leaving crowded urban areas for more space. Many are making their permanent residences in spots that were previously only vacation destinations.
“Remote workers are craving more space, privacy and tranquility as well as convenient opportunities to spend time outdoors and get closer to nature,” Forbes.com writer Irene S. Levine notes in a recent article. “Although interest in zoom towns has been primarily fueled by millennials, the desire to move is also being felt acutely by families living in close quarters whose children are now learning remotely at home.”
As remote work grows in the pandemic, some Americans are realizing they can take their jobs with them to new places. This could potentially reshape some of these smaller towns, depending on various factors, including topography and community resistance.
While it is possible that this trend is temporary, it will “….become clearer in the next year or two,” writes Conor Sen for Bloomberg. Temporary or permanent, the influx of these “zoomers” is certainly helping to keep realtors, lenders and title companies in our area extremely busy.
1031 federal disaster extensions. The IRS has issued an extension for storms for Section 1031 deadlines falling on or after April 12, 2020 in the following counties. The Disaster Date is in bold. Listed counties are the “Covered Disaster Area”. Note: the extension date in the Notice is October 15, 2020, so that might be longer than 120 days in some cases.
South Carolina: The IRS has issued an extension for Aiken, Barnwell, Berkeley, Colleton, Hampton, Marlboro, Oconee, Orangeburg and Pickens counties beginning April 12, 2020.
Tennessee: Bradley and Hamilton.
Mississippi: Clarke, Covington, Grenada, Jasper, Jefferson Davis, Jones, Lawrence, Panola and Walthall
In order to get the extension, both of the following must be met:
(1) The taxpayer is located in the Covered Disaster Area or is otherwise an affected taxpayer as defined in the Notice, regardless of where the relinquished property or replacement property is located, or otherwise has difficulty meeting the exchange deadlines under the conditions in Revenue Procedure 2018-58, section 17; AND
(2) The relinquished property was transferred (or the parked property was acquired by the EAT in a reverse exchange under Revenue Procedure 2018-58) on or before the Disaster Date listed in the Notice. Note that some disasters occur on a single date; others, such as flooding, occur over a period of days and the Disaster Date above is preceded by beginning.
IF the taxpayer meets these criteria, THEN any 45-day or 180-day deadline that falls on or after the disaster date is extended to THE LONGER OF: (1) 120 days from such deadline; OR (2) the extension date listed in the Notice (October 15, 2020). Note: the date may not be extended beyond one year or the due date (including extensions) of the tax return for the year of the disposition of the relinquished property.
Please see Revenue Procedure 2018-58, Section 17, and the Notices shown on https://www.irs.gov/newsroom/tax-relief-in-disaster-situations.