In the nick of time

I’m scrambling as I write this. 
 
Somehow this year, amid the clutter of life in general and of business in particular, I missed the fact that April only has 30 days, and that today is the last of those 30. My monthly message usually goes out on the last, or nearly the last, day of each month. But as a rule, I put it together the day before, and set it up to go out at 5:30 the following morning. Today, I’m doing the whole thing – writing, designing, and sending – on the same day. 
 
In the nick of time, as they say. Which gets me thinking about time, and timing, and of course, real estate. 
 
Time – or clock time, as Eckhart Tolle describes in The Power of Now – governs almost everything we do in real estate. And yet, clock time is really just an artificial construct that helps us navigate life and get through each day. In a more universal sense, clock time doesn’t exist. “Time” is now. The present moment is all we have. The past is gone and the future hasn’t arrived yet. 

Time in both senses – clock time, and “now” time – are present and affect our real estate dealings. Clock time helps us plan, do business in cooperation with others, mark progress toward a goal, and a host of other useful things. But our lives often unfold and make sense within a different concept of time.

All of our official real estate activities are governed by clock time. Our agreements – listing and buyer rep agreements, purchase and sale agreements, inspection periods, closing dates – are time-limited. They have start dates and expiration dates. 
 
This business couldn’t function without dates and deadlines. Would an inspection ever get done without an inspection deadline? Could we ever close a sale if there weren’t a closing date specified in the contract? The inspection deadline or the closing date might change during the process, but the original date specified in the contract puts down a marker to work toward. It keeps both sides on track and focused on getting things done. 
 
However, the less concrete, more universal sense of “now” time, plays a big role, as well. We live in the now. Moment by moment. Planning for the future and remembering the past are vital to our sanity, but the present moment is really all we have. 
 
So, we look at how we are living now. Am I happy with my house? Does it meet my needs now? It might have met your needs years ago, or even days ago, but it does no longer. It might, or might not, meet my needs at some point in the future, but now it works. Or doesn’t work.
 
The understanding that the past is gone – and what’s gone includes how much you paid for the property – enables a clearer look at the present. Likewise, understanding that the future isn’t here yet – and may never get here, at least not in the form we imagine it – allows a more clear-eyed look at the present.
 
And we come back to the often-asked questions: “Is this a good time to buy a house? Is this a good time to sell?” The answer always must start with “now” and then look to the past and the present for context and nuance. 

Tax Time

It’s that time of year.  Many of us are playing beat the clock – sorting through stacks, totaling-up mileage, rounding-up receipts, collecting 1099s and W-2s – in order to file. Or at least get it to the accountant. Moaning all the while about the expense and the indignity of it all.
 
But I’ll take a different angle …
 
About 50 years ago, I had a conversation with an older member of my extended family. Recently widowed, she had had to pay a tax on the estate of her very successful late husband. She was so furious that her voice quavered, her lips were white, her face flushed. She mentioned an amount that in today’s money would be close to $200,000. 
 
That’s a lot of money, I’ll admit. But at the time, my thought was that I wished I had an estate large enough to be taxed by such a whopping amount. I never said this to my relative (too timid back then – how times change!) and she retired to a plush beachfront condo on Longboat Key and lived another 30 years, still furious, no doubt, at the IRS.
 
I have replayed this scene in my mind countless times since – especially at tax time. I try to focus on the fact that the more I pay, the more I’ve made – and I like to make money! In my years in real estate, I’ve paid as much at $100,000 in income tax, and as little as $15,000. I consider it a privilege, no matter the amount.

With that in mind, let’s review a few ways home ownership and taxes interact. It’s not all bad!
 
Mortgage interest deduction
If you are paying a mortgage, there’s a substantial deduction available to you. Mortgage interest is the single biggest deduction most people who itemize can take. And it can reduce the taxes you owe – significantly! 
 
Property tax deduction
Right behind mortgage interest is property tax. And another good way to reduce your liability.
 
Lesson: If you feel your tax burden is too high, buy a house!  

Capital Gains
Here’s one that many people moan about. And sometimes it amazes me. I know at least two people right now who are staying put in properties that are less than ideal because they don’t want to pay capital gains tax on their increased equity. And given real estate price inflation over the past six years, that increase could be quite substantial. 
 
I’d advise you to look at it from my angle. The more you pay, the more money you made – while having a roof over your head and shelter from the storm. If you have a large capital gains tax bill, it’s a given that you had a whopping increase in equity. Why moan about the tax when you could open a bottle of good champagne and celebrate the money you made?
 
Lesson: Focus on the upside and enjoy your life!

Perspective …

I’ve been traveling a good bit lately – around town, across state lines, and internationally. And thinking about things. Real estate among them – anyone surprised by that?
 
All this has me thinking that perspective is key to understanding anything. Depending on where one is standing, things can look a certain way. Shift your position, your perspective shifts, and things look different. 
 
True about life in general, of course, but in the context of this message, true for the business of buying and selling a house.
 
Over the past 30 days, I’ve spent a week at an all-inclusive in Punta Cana, Dominican Republic, 4 days visiting friends in Palm Beach, FL, and 24 hours at a retreat on the mountain in Sewanee, TN. 
 
So, what are the perspectives that emerge …

Location, location, location
I’ve watched the residential market in Palm Beach for a decade, and there is an almost direct correlation to the market here. Simply add a zero to the end of a Nashville price, and you get the Palm Beach price. Same property, different neighborhood, and worth 10 times more. Closer to home, I have a cute house currently listed in Antioch – great for a first-time buyer or a small family. The price of the house is $340,000. In 12 South the land underneath this perfectly livable house would be worth twice that much. It’s all in where you are standing when you look.
 
Disaster
I was in Punta Cana when the ice storm hit. I talked about this, and about hurricane devastation, with my driver when I was heading back to the airport from the beach. The ice storm, was certainly a disaster for many Nashvillians. But it would have been a mere inconvenience for many Domincans, for whom a mid-range hurricane can mean losing one’s entire existence – one’s house, one’s friends, one’s whole town. Defining disaster depends on who and where you are.

Noise Level
Last weekend I was at an overnight meeting at the retreat center run by St. Mary’s Episcopal Convent in Sewanee. It’s a beautiful place way out in the middle of nowhere, perched on a bluff looking out to a long valley below. Every time I stepped out of my room onto the walkway, I was struck by the absolute absence of noise. We who live in town are so used to the background hum, that we do not hear it until it is gone. The silence on the bluff was almost a presence in and of itself. Defining a “quiet” neighborhood depends on the neighborhood. 
 
All of this brings me back to the fact that residential real estate is a very personal business.

What’s perfect for one person, would be totally out of line for another. A happily-ever-after house for one family, would be hell on Earth for another. 
 
A good realtor’s job is to understand your perspective, and guide you toward the house that will look “exactly right” to you.

Palm Trees and Ice Storms …

I spent the week of January 19-26 at an all-inclusive resort in Punta Cana, Dominican Republic, and returned to Nashville on January 27.
 
A week at a luxe resort: warm breezes, gorgeous views, immaculate landscaping, excellent service, lots of food, lots of cocktails, lots of lounging. Like being on another planet. 
 
Returning to: freezing cold, power outages, downed trees, impassable roads, and many of my fellow citizens living in cold and darkness. Not to mention a couple of clients seriously worried about the condition of their property which, because of the ice, is inaccessible at the moment. 
 
Whiplash! Disorienting, to say the least!

This reminds me, however, that certain things remain constant. On average, Americans are richer than Dominicans, but we all want the same things – food, shelter, community, recreation, a sense of purpose. We have disasters – they have hurricanes and earthquakes; we have tornados and ice storms. We all recover.

It’s life. In the Caribbean. In Middle Tennessee. Which brings me to real estate.
 
As I’ve said a number of times in this space, a house (or condo, or whatever) is a place to “do” your life. It’s a big investment for sure, but it’s so much more than that – a canvas on which to paint your personal story. Everyone everywhere wants and deserves a good place to live.
 
So, how does that play out on this freezing, ice-bound mid-winter day in Tennessee? May be hard to believe it, but this is the perfect time to buy.

At plus/minus 6%, interest rates are a whole 1% lower than they were a year ago. While they may drift somewhat lower in the year ahead, they aren’t going back to the record lows of a few years ago, and if you look at history, 6% is a pretty solid deal. Inventory was up by 13% in December – so, you have plenty of properties to look at. 
 
Shop now. Don’t wait until spring. The conventional thinking is that there will be more inventory in the spring because sellers often wait to list until spring. And sellers do that because they assume there will be more buyers in the spring. It’s a circular argument. 

Right now, there are fewer buyers to compete with, and inventory is more than adequate. Aside from slogging through sidewalk slush and soggy yards, this is the perfect time to gear up for the search and beat the rush. 

Gifts Received, Gifts Wished For

In this festive season of sipping and chatting, shopping and wrapping, giving and getting, I am always well-advised to slow it down a bit and look at all the good things life has brought me. Life itself is a gift, and when I stop and look, life is full of other gifts. 
 
That said, there’s always something more to wish for.

Gifts received …
 
My Peeps The relationships in your life are the substance that makes the rest of it make sense. I love my family and friends who support me, feed me, buy me drinks, and make me laugh. I love my clients – so many of whom appreciate my services, say please and thank you, become my friends, and earn me a good living in the process. And I love my crew at Onward Real Estate. I simply could not have landed in a better spot – great friendships, great professional support, and laughs a plenty.
 
An Arrival On March 21st, Cordell Harding Paine arrived here on the planet – son of William and Kristin, my son and daughter-in-law, and baby brother to Ruthie. Happy parents, grandparents, great aunts, and a host of cousins and friends. Joy all round!
 
Boom Town I’ve said it before, and I will say it again, we live in exciting times here in Nashville! I came here 49 years ago, to a sleepy, backward, medium-sized city without much going for it. But in recent years, we have stepped into the spotlight as a city of consequence (bachelorettes aside) and I love it! Growth and opportunity abound all around us! Another gift! 

Interest Rate Relief While 7%+ is, historically speaking, a decent mortgage rate, there has been a lot of angst among buyers (and sellers) who long for the never-to-return days of 3%. Angst also, among those priced out of the market by real estate price inflation. Down to the low 6% range, and perhaps to dip into the high 5s, mortgage rates these days are friendlier, and that’s a gift for everybody.

A few gifts I’m still waiting for …
 
A little sanity in Washington I’ll go ahead and say it: we need a break from the looney tunes stuff! Tariffs, no tariffs, maybe tariffs. Conspiracy theory of the week. Masked men in unmarked cars yanking people off the streets. Giving the finger to our closest allies. Epstein all day, every day. Enough! Let’s give ourselves a break!
 
Less hate, more love! Seriously! We, as a nation and as individuals, need to simmer down! The current level of angry rhetoric and divisiveness in this country is unsustainable. People abusing waiters and flight attendants. Politicians demonizing and name-calling anyone they disagree with. Book banning and burning. It’s at a level I’ve never seen before. We must embrace our common humanity and work together despite disagreements. Or we will lose everything. The effort begins with me. And you. So, I ask you to give it a try. I’m with you on this.