January's Real Estate Market (2015)
Year over year median sales prices are up 14.47% and average sales are up 11.22%. Year-to-date, a total of 53,719 homes closed, the average price was $325,634. Condos had a huge increase in sales volume year over year with an increase in sales volume of 56%.
Residential (Single Family plus Condo)
Active Inventory: 4,355 -19.65% prior month
Sold Homes: 3,869 +2.9% prior month
Average Price: $340,448 +3.41% prior month
Median Sold Price: $287,000 +2.50% prior month
Average Days on Market: 46 +17.95% prior month
Looking at February,
2015 should be a great for new construction, and the real estate market in general. Although, we see a decrease in sold homes mostly due to low inventory and time of year, there is also an increase in buyer demand. This combined with extremely low inventory results in a strong seller’s market. For the foreseeable future, the low inventory will continue to drive prices up. There are over 20,000 less properties on the market today than in 2008.
Active Inventory: 4,171 -4.23% prior month
Sold Homes: 2,328 -42.74% prior month
Average Price: $332,767 -1.96% prior month
Median Sold Price: $285,000 -0.35% prior month
Average Days on Market: 43, -6.52% prior month
Keep in mind we had almost 28,000 homes on the market in 2006 and we are back to 2006 prices.
Denver’s Rental Market 2015
Investors are looking for more protection and more privacy, holding real estate through an LLC or Limited Liability Company could be the answer. However there are important issues to consider when holding real estate through a limited liability Company.
Negatives to owning real estate through an LLC:
- “Due-on-Sale or Transfer” Clauses Deeds of trusts, the instruments that secure notes, commonly contain provisions known as “due-on-sale” or “due-on-transfer”. These restrictions allow the lender to call the loan due if the title to the property has changed without the lender’s consent. If this is the case with your deed and if you purchased the property in your name and had it transferred to an LLC, the lender can recall the loan. You must check with your lender before making this decision.
- Capital Gain Exclusion If you transfer your primary residence into a multiple-member LLC, you may lose the ability to benefit from the IRS’ capital gain tax exclusion. If you have a gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income. You may qualify to exclude up to $500,000 of that gain if you file a joint return with your spouse, so long as you’ve lived in and owned your home for at least two of five years. However, if you transfer your primary residence into a single-member LLC you may still take advantage of the capital gain exclusion because the LLC is treated as a “disregarded entity” for federal tax purposes.
- Mortgage Interest Deductions If you transfer your primary residence to a multiple-member LLC, you may no longer qualify for mortgage interest income tax deductions because you no longer own the property by yourself (which means you cannot take a personal deduction). However, in a single-member LLC, the owners are generally entitled to mortgage interest deductions.
Benefits to owning real estate through an LLC:
- Privacy Many people like to have their privacy. A limited liability company can do that.
- Personal Liability Owning a property through a limited liability company may provide legal protection from liability for the owner because law suits will be directed towards the LLC, rather than the individual that owns the LLC. In most cases they cannot sue you personally so the liability would go no further than what assets were held through the LLC. However, owners that manage a property may find themselves party to a lawsuit (especially went negligent) as an LLC may not protect you from all claims against you relating to your property.
Some owners find the combination of privacy and liability protection make it well worth it, especially with investment properties. However, everyone should consult with a tax attorney and/or accountant before making any decisions.