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US Homebuilders Are Optimistic About Spring Sales.

U.S. homebuilders are feeling more optimistic about their business prospects, reflecting a recent surge in sales of newly built homes and a lingering shortage of previously occupied homes on the market.

The National Association of Home Builders/Wells Fargo builder sentiment index released Monday rose to 70 this month. That’s up two points from 68 in April.

Readings above 50 indicate more builders view sales conditions as good rather than poor. The index has been above 60 since September. It hit 71 in March, the highest level since June 2005 during the height of the last housing boom.

The May index exceeded analyst predictions, which called for the reading to hold steady from last month, according to FactSet.

Readings gauging builders’ view of sales now and over the next six months also rose from last month, while a measure of traffic by prospective buyers edged lower.

More Americans are seeking homes as job security has improved with low unemployment. But even with construction running ahead of last year’s pace, the supply of new and existing homes across much of the country remains tight.

That’s been good news for homebuilders this year.

U.S. sales of new homes shot up in March to a seasonally adjusted annual rate of 621,000, the fastest pace in 8 months. Sales were running 12 percent higher during the first three months of this year than during the same period in 2016. April sales data are due out next week.

Especially as existing home inventory remains tight, we can expect increased demand for new construction moving forward,” said Robert Dietz, the NAHB’s chief economist.

Still, builders continue to grapple with a shortage of skilled construction workers and land parcels cleared for home construction.

Sales of new homes have risen this year despite, or perhaps because, a modest rise in mortgage interest rates.

The average interest rate on 30-year fixed-rate home loans inched up to 4.05 percent last week from 4.02 percent previously, according to mortgage buyer Freddie Mac.

The average stood at 3.57 percent a year ago and averaged 3.65 percent in 2016, the lowest level in records dating to 1971.

This month’s builder index was based on 250 respondents.

A measure of current sales conditions for single-family homes rose two points to 76, while an outlook for sales over the next six months gained four points to 79. Builders’ view of traffic by prospective buyers declined one point to 51.

Albuquerque Can Attract Venture Capital For Tech Startups

Excerpted from an Article by Steve Case the chairman and CEO of Revolution, a Washington, D.C.-based venture capital firm; co-founder of AOL; and the bestselling author of “The Third Wave: An Entrepreneur’s Vision of the Future.”

“This month, more than 100 startup leaders from Albuquerque and other rising cities will join us in Washington, D.C., for our inaugural “Rise of the Rest Summit”, to exchange ideas and information to accelerate the Rise of the Rest. This gathering will include the winner of our Rise of the Rest pitch competition in Albuquerque,”

Albuquerque Startup Invited to “Rise of the Rest Summit”

“Raghu Kopalle, founder of a company called Innobright. Innobright is disrupting the way rendering is done in computer-generated imagery (CGI) by developing a system that renders fantastic quality in less time and at a fraction of the cost….”

“Since the early ’90s, venture capital has been heavily concentrated in a few geographic regions. Last year, 78 percent of venture dollars went to three states: California, Massachusetts and New York. And more than 50 percent went to California alone….”

Albuquerque One of 26 Cities Targeted For Venture Capital

“Over the past three years, I have traveled 6,000 miles to visit 26 U.S. cities, including Albuquerque, and meet with people who are helping startups thrive outside of the coastal tech hubs. In the process, I have also learned a lot about the challenges these innovators face. And while some of the challenges each city breeds are different, there are also quite a few similarities….”

“At the Summit, we will discuss what governments are doing to create strong startup ecosystems. City and state leaders across the country are learning from Silicon Valley while capitalizing on what makes each of their cities unique. They are implementing plans to attract capital by offering angel tax credits or creating incentives to help get local investors off the sidelines. They are creating incubators and accelerators to support entrepreneurs at every stage in their company’s development….” See full Article in  March 23, 2017, Albuquerque Business Journal.

Residential Rentals and Sales Effected by Unemployment Rate

New Mexico unemployment rate highest in the nation for second month in a row

Residential rental  and sales markets in the metro area may be affected if the regional  unemployment rate remains this high.   The unemployment rate is an economic indicator about the strength of the job market and the status of household finances. Rising unemployment can lead to reduced levels of consumer spending and higher instances of delinquency, default, and bankruptcy. Low unemployment indicates a tight labor market, where employers have a tougher time finding people to fill jobs and often must pay more to attract them.

Bernillo County’s rate is better than the state overall

The U.S. Department of Labor released a new report Monday showing New Mexico with a 6.7 percent unemployment rate for January, surpassing Alaska and Alabama. This is the second month in a row that New Mexico has posted the highest unemployment rate in the country.  New Mexico’s unemployment rate remained unchanged from December. Alaska’s unemployment rate dropped to 6.5 percent, making New Mexico’s unemployment rate the highest.   The New Mexico private-sector job market has been struggling for several years. New Mexico’s unemployment rate in January 2016 was 6.5 percent. New Hampshire had the lowest January 2016 unemployment rate at 2.7 percent, followed by Hawaii at 2.8 percent.  The current unemployment rate for Bernillo County is 5.9% according to the area specific unemployment profile published by the  New Mexico workforce Connection.  This is better than the state and  below the national average.

Residential Rentals in Albuquerque and Rio Rancho remain stable

Residential Rentals in Albuquerque and Rio Rancho are still strong.  This is driven by a lack of new apartment communities coming on line in the past couple of years.  Currently, there are several apartment communities under construction.  So far, residential sales have remained steady from last year.   Albuquerque and Rio Rancho have not been hit as hard as the rest of the state.  We are hopeful, the area  unemployment rate will start to come down as we see increased construction in the better weather.

This is the first time New Mexico has had the highest rate

According to the Albuquerque Journal, this is the first time that New Mexico has had the nation’s highest unemployment rate, however, stubbornly high unemployment has dogged the state since 2006,  Albuquerque private sector jobs have declined by almost 15,000 between September 2006 when there were 318,200 private-sector jobs and September 2016 when there were only 3o3,300 private sector jobs.

The national unemployment rate is 4.8 percent. Employers added 238,000 jobs, higher than what was expected.Employers boosted hiring in 13 U.S. states in January, while employment changed little in 36 states. , New Mexico’s unemployment insurance trust fund balance was $378 million as of October.

Single-Family Rentals 2017 Tax Strategies

Real estate investors in single-family rentals should update their tax strategies annually.  Most investors in single-family rentals include their rental income (loss) on their personal tax return (IRS 1040). The IRS recently released its personal income tax changes for 2017. Changes to personal income tax rules are important to investors in single-family rentals as they need to look at the whole individual tax return  as they develop their single-family rental tax plan for 2017.  I timed this article for the first part of March, as many single-family real estate investors put off assessing their tax strategy for the current year until they are preparing their taxes for the year just passed   Remember these changes will not affect your 2016 taxes, which are usually filed in the next 30 days.

 These changes pertain to your  2017 taxes which most of you will file in the first three months of 2018.  I have chosen only a few of the updates for 2017 that I believe may be most helpful for single-family real estate investors. Be sure to check with your tax adviser if these or any other changes effective in 2017 need to be considered in conjunction with your tax strategy for your  single-family real estate investment portfolio.  There are other changes to personal income tax as well you may need to know. For a more detailed  look at these changes and other changes check out this tax change portion of the  IRS website.

The standard deduction for married filing jointly rises to $12,700

For tax year 2017, the standard deduction is up $100 from the prior year. For single taxpayers and married individuals filing separately, the standard deduction rises to $6,350 in 2017, up from $6,300 in 2016, and for heads of households, the standard deduction will be $9,350 for tax year 2017, up from $9,300 for tax year 2016.Tax brackets adjusted for inflation.

The individual income tax brackets have been adjusted for inflation

The good news is that inflation has been nominal, meaning there wasn’t a large shift upwards in the tax schedule. For tax year 2017, the 39.6 percent tax rate affects single taxpayers whose income exceeds $418,400 ($470,700 for married taxpayers filing jointly), up from $415,050 and $466,950, respectively.

Limit on itemized deduction rises

The limitation for itemized deductions to be claimed on tax year 2017 returns of individuals begins with incomes of $287,650 or more ($313,800 for married couples filing jointly).

Exclusion for Estate Taxes rises

Estates of decedents who die during 2017 have a basic exclusion amount of $5,490,000, up from a total of $5,450,000 for estates of decedents who died in 2016.

Changes to the AMT

The Alternative Minimum Tax exemption amount for tax year 2017 is $54,300 and begins to phase out at $120,700 ($84,500, for married couples filing jointly for whom the exemption begins to phase out at $160,900). The 2016 exemption amount was $53,900 ($83,800 for married couples filing jointly).  For tax year 2017, the 28 percent tax rate applies to taxpayers with taxable incomes above $187,800 ($93,900 for married individuals filing separately).

Tradition and Roth IRA phase-out adjusted higher

Among the various retirement tools at your disposal, the traditional IRA is among the most popular. Traditional IRAs are tax-deferred accounts, meaning you’ll pay tax once you begin making withdrawals during retirement. But, they can also provide an ancillary benefit of lowering your current-year tax liability. In 2017, the phase-out range for taking this deduction increases $1,000 to $62,000 to $72,000 for single taxpayers, and $99,000 to $119,000 for married couples filing jointly.For those of you investing with a Roth IRA — a retirement account with no upfront tax deduction, but which has the ability to grow tax-free for life — the individual phase-out to be able to contribute rose $1,000 for single filers to a range of $118,000 to $133,000, while it jumped $2,000 for married couples filing jointly to a range of $186,000 to $196,000. In other words, a few extra people should be able to contribute to a traditional or Roth IRA in 2017 because of these modest increases.

 

 

 

Rio Rancho Resource Guide

AMMRE is the premier property management company for Albuquerque and Rio Rancho. Rio Rancho properties make up a large percentage of our portfolio. We take pride in knowing the community and the market. If you are interested in renting a house or renting out your house in Rio Rancho we would love to here from you.

 

Rio Rancho

Please take advantage of this handy guide of Rio Ranch resources

Important Numbers

Non-Emergency Police/Fire # ………….. 505-891-7226
Utilities (Water & Sewer) ………………….
(After Hours) ……………………………….
505-891-5020
505-975-1581
Traffic Signals …………………………………..
(After Hours) ……………………………….
505-891-5016
505-896-7300
Municipal Court ……………………………….. 505-891-5999
Animal Control ………………………………… 505-891-5075
Code Enforcement ………………………….. 505-891-5862
Roads ………………………………………………. 505-891-7224

Rio Rancho Facts

Rio Rancho Census Quick Facts

Rio Rancho City Info

Important Websites

City of Rio Rancho Website

City of Rio Rancho Event Calendar

Rio Rancho 360

Rio Rancho Chamber of Commerce

Rio Rancho Convention and Visitors Bureau 

RRCVB Event Calendar

Santa Ana Star Center

Rio Rancho Public Schools

Utilities

MVD

Animal Control

Graffiti Removal 

Fair Housing

Sandoval Economic Alliance

Yelp Rio Rancho

Trip Advisor Rio Rancho

Taste of Rio Rancho

Pork and Brew

Albuquerque Gets New Urban Rentals

Albuquerque has embraced the current trend for more residential urban rentals in the downtown area.  The latest addition to the Albuquerque Downtown Entertainment Design is One Central, a residential and entertainment center to be build in an empty lot at First Street SE and Central Ave.  The project is scheduled to break ground in January 2017.   One Central will include 60 apartments  above about 40,000 square feet of commercial space that developers hope to fill with a bowling alley, a brewery, restaurants and more. The parking garage will have 423 spaces, and the city will take over immediate management and operation duties, with an option to eventually buy it.t into One Central, a five-story residential/commercial building with an attached parking structure.One of the many urban rental options

Albuquerque businessmen Jerry Mosher, Dale Armstrong and Tony Pisto will develop the site under One Central Operating Associates LLC. But the city of Albuquerque will play a major role in the undertaking too, ultimately contributing about half the total cost in a collaboration both parties say is essential to the project’s viability.

One Central will cost an estimated $40 million to develop. The city will chip in $17.55 million – most of it coming from lodgers’ tax collections – plus land valued at $1.4 million, accounting for just under $19 million. Bernalillo County has also approved an industrial revenue bond package that includes property and gross receipts tax breaks.

For Full Article Click Here

Homeowner Foreclosure Assistance Program Expiring

Photo credit: ABQ Business First

Photo Credit: ABQ Business First

 

New Mexico’s Attorney General,  Hector Balderas, said  that there is help available for Albuquerque and Rio Rancho homeowners who may soon be behind on their home loan payments.  They can apply to the Home Affordable Modification Program to avoid foreclosure. This government program for struggling homeowners expires at the end of this year.

In touting this program the AG explained that the foreclosure rate for Albuquerque and Rio Rancho is higher than the national average and urges homeowners struggling this year with paying their mortgages to apply.   The government Home Affordable Modification Program is designed to help homeowners obtain loan modifications with affordable payments. Interest rates can drop as low as 2 percent, and the program limits the monthly housing payment at 31 percent of a family’s gross monthly income, according to the state Attorney General’s office.

Albuquerque’s foreclosure rate has been steadily declining since 2012, however New Mexico’s rate is higher than the national average foreclosure rate.  “In August 2016, the latest data available, the metro’s foreclosure rate hit 1.68 percent, the lowest seen since April of 2009, according to data from CoreLogic.  Still, that was higher than the national foreclosure rate, which was 0.90 percent in August. Albuquerque’s highest foreclosure inventory rate hit 4.20 percent in April of 2012.”  Excerpt from Albuquerque Business First, December 7, 2015 by Stephanie Guzman-Barrera

Single Family Investment Purchases

Digested from an article written by Phil Hall in the October 20, 2016 National Mortgage Professional Magazine.

Single Family Investment Property Returns

According to data on single family investment returns compiled by ATTOM Data Solutions, the average annualsingle family investment data gross rental yield—monthly rent, annualized, divided by median home price—was 8.7 percent for single family properties purchased in the first seven months of this year are down from an average of 8.8 percent for the same time period in 2015. This year’s numbers were the lowest level recorded since 2007, when the average gross rental yield was 7.3 percent across the 473 cities analyzed for this survey.

ATTOM Data Solutions also found that 2.7 percent of all single-family homes that sold in the first seven months of 2016 were purchased by institutional investors, up from a 2.1 percent share during the same period last year. However, 68 percent of the counties analyzed for this study reported year-over-year increases in the share of institutional investor purchases.

“While average rental returns on properties purchased so far in 2016 are at a nine-year low, these returns are still attractive compared to alternative investing opportunities,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “After a drop-off in single family purchases by both individual and institutional investors over the past two years, we’re starting to see investor acquisition activity pick up again. Given shifting attitudes toward homeownership that are showing up in stubbornly low homeownership rates and our data showing more than 18 million non-owner occupied single family homes—one in every four single family homes—these single family rental investors will be an important and likely growing force in the real estate market for years to come.”

Beware The Expert Liar

Ammre notices the expert liarDo not fall for the story of a glib liar trying to fool you into renting your rental property. Although, by far most people are honest and trustworthy, the world is full of expert liars. Most landlords do not have an opportunity to really know someone when they apply to rent their investment home. Decisions need to be made very quickly. People want to move-in, and the landlord wants to begin receiving rent. This is a great combination for an experienced liar trying to get away with something when applying for a rental.

The Rule of Thumb to Catch an Expert Liar

The rule of thumb is to question the veracity of every story or explanation a stranger tells you when they are trying to rent your property. Here are some tips to protect yourself and your property from renting to the expert liar. Be objective about what is on the application and what you are told. This advice is much easier for a professional property manager to follow than an individual landlord. Professional Managers are bound by Fair Housing and other Federal, State and local laws against any appearance of discrimination. The individual normally is not. To abide by these regulations and laws the professional manager must document in their paperwork that they used objective rental criteria before a rental shopper is approved for a rental home. Everything needs to be verified and documented. There is no room for gut feelings.

As an individual renting their own property they are exempt from most anti-discrimination laws and regulations. This leaves room for the owner/landlord to rely heavily on their gut feelings. Many Owner/Landlord’s run credit checks on potential residents as well as standard background reports the same as the professionals. When the individual owner asks the potential rental about something they noticed that put up a red flag they may not verify the answer. This is especially true when the owner/landlord formed a favorable impression of the potential renter. It is human nature to want to believe someone you like. People tend to like expert liars on first impression. They get away with their lies because they are likeable. An expert liar will be very convincing, charming, quick to self-disclose, and can even produce tears for effect. These liars can fool anyone, no matter how honed your liar radar skills.

Always verify what is said. Ask questions and ask for details. If it is not obvious how to verify what they are telling you ask them how you can verify the explanation. In my experience, honest people will accept your need for accountability and take responsibility for helping you verify the information. The person who immediately shifts their attitude from charming to defensive or does not provide the kinds of details needed to verify the explanation is potentially a professional liar. If this happens heavily weigh the red flags, ignore gut feelings, run the issue by an objective person, etc. Be prepared to walk away from this potential renter. Expert liars are not responsible people and in general make poor residents. Further, You may have to deal with the expert liar over maintenance, late rents, etc. for a year or more.