To cash in your real estate investment and forgo the tax bill in some cases, some people trade into another property.  Though 1031 Exchanges isn’t new, with a slowing market it is  enjoying a renewed popularity and all you need to do is sell one property, buy another with certain restrictions and time limits.

A section of the tax code known as 1031 allows investors to make a "like kind" exchange of investment properties and defer, and even in some cases avoid, capital-gains taxes.  You can exchange into new properties of equal or greater value, while deferring the tax hit.

Here is a quick example; an individual purchased a duplex 10 years ago for $150,000 now worth $500,000. Selling the property would get him $52,500 in capital-gains taxes.  However in a 1031 exchange, the $500,000 could be used as a down payment for another more expensive property.  The most common way is known as a deferred or delayed exchange must be identified within 45 days of the sale closing, and a deal must be completed within 180 days.

As usual, use a good Realtor who is well versed in 1031 Exchanges.  They will guide you through the stringent yet lucrative ways of this system.

You can read more on this subject here.

So how is a historic neighborhood defined?  Who says one is and what happens next?

In Long Beach, historic neighborhoods are defined as areas where 67 percent or more of the homes and buildings are at least 50 years old.  They also need to be somewhat in original shape, design and materials.    In order to be granted the sought after "historic" designation by a city ordinance, certain design guidelines exist to protect vintage houses and control design alterations and development.

Homeowners seeking to make changes to the exteriors of historic houses are required to obtain approval from the city.   As well as owners of old buildings have a choice of keeping it as is or join the more astringent preservation society.

There is a pattern in sales, states with the biggest drops in home sales had the steepest appreciations. Another obvious trend is states with the largest losses of residents are those with the highest home prices, California amongst them.

Not much revelations here but it was nice to see Business Week talking about it.  Trends like these have to be kept under close watch as they will give us a clue as to the health of our state in the coming years.

Click here for the original story.

Sales in the Bay Area are at their lowest in ten years with price increases at their slowest since spring 2003.

New, resale houses and condos were down 19.1 percent in June, and down 30.8 percent since July last year, according to DataQuick Information Systems.  July was the slowest month  since 1996.    The median price was down 2.6 percent in June but up 3.5 percent from July a year ago. Last month’s year-over- year increase was the lowest since May 2003 when the $427,000 median was up 3.4 percent.

These are interesting prices as it indicates a market that appreciating at a more reasonable pace then a year ago.

You can read a more in-depth story at Calculated Risk.

As I mentioned yesterday, DSL users were finally going to see our bills go down without the infamous Universal Service Fund imposed by Verizon.  And now Verizon announced it will impose new fees which strangely negates any savings we would have had.

The FCC deregulated DSL as an information service.

Verizon told AP the added fees were because of "new costs that we’ve developed over the past year as we’ve been developing and delivering this standalone DSL service. That service doesn’t have the benefit of the revenue that was coming in from voice."  However the email Verizon sent me words it differently: "This surcharge is not a government imposed fee or a tax; however, it is intended to help offset costs we incur from our network supplier in providing Verizon Online DSL service."

Of course they defend themselves they were simply redirecting the USF fees into its  pockets. Verizon was one of the main proponents of DSL regulation and its removal from the Universal Service Fund.  And this is the company that wants to regulate the Internet and prioritize traffic and swears they will never abuse of it.  Yes, right!

Click here for the original article on BetaNews.

The MBA reported the mortgage loan application volume increased by 1.4 percent from a week earlier.  On an unadjusted basis, the Index increased 0.4 percent compared with the previous week but was down 25.6 percent compared with the same week one year earlier.

The four week moving average for the seasonally-adjusted Market Index was up 0.9 percent.  The four week moving average is down 0.8 percent for the Purchase Index, while this average is up 3.7 percent for the Refinance Index.

The refinance share of mortgage activity increased to 39.6 percent from  previous week. The adjustable-rate mortgage share of activity decreased to 27.2 percent of total applications from 27.6 percent the previous week. The ARM share is at its lowest since February 2004.

Eventhough those numbers are pretty low in difference, it shows many people are moving to renegotiate their mortgages hoping to find a better rate of locking themsleves in a better deal.  We will see more and more lenders and banks find exotic products to make sure they do not get caught up in a wave of foreclosures.   it is in a bak’s best interest to have its clients bringing in money and not have it’s assets locked in auctions.

Here is the Mortgage Bankers release.