Location, Location, Location-and a Little T&E Navigation

• Published in: Wealth Management
• Main Author: Myers, Peter S
• Format: Trade Publication Article
• Language: English
• Published: New York Informa 20.06.2017
• Subjects: Baby boomers; C corporations; Census of Population; Commercial real estate; Construction spending; Credit scoring; Economic crisis; Economic indicators; Employment; Home loans; Housing prices; Housing starts; Insurance policies; Interest rates; Mortgage companies; Planning; Real estate financing; Rent control; Small business loans; Taxation; Trends; Valuation
• ISSN: 2469-6269; 2469-6277

Trends in real estate-inventory, housing starts, financing and market dynamics-affect the estate-planning practitioner in a number of ways: (1) net worth changes as a result of overall appreciation and depreciation in valuations; (2) housing starts can impact constructions costs, supply and demand and client mobility; (3) liability arising out of defect litigation can impact asset protection strategies; (4) the availability of conventional or "hard money" financing can affect liquidity; (5) liquidity affects diversification and the ability to pay estate and gift taxes on death; (6) rent control, zoning and land use issues in general can affect the family's appetite to continue the business of property management; and (7) approaches to income taxation of real estate affect clients' investment decisions regarding their holdings. Homes near urban centers, public transportation and workplaces are valued as desirable.3 The planner has to anticipate client mobility in these markets, placing greater importance on maintenance of the trust funding as clients move, refinance or acquire new properties (including rental properties and vacation homes). Trends in Financing and Liquidity In December 2016, the Federal Reserve indicated that it sees U.S. mid-term growth as stable, increasing the federal funds rate higher by 0.25 percent.4 Because inflation, as of this writing, is modest if not low in the United States and in some emerging markets (deflation is reported in some sectors and countries), there's little motivation (even with unemployment at historic near-term lows) for increasing these rates. [...]assuming bank lending standards don't significantly tighten, lending rates (especially the now...