Investing 101

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You may have been thinking of buying a home because mortgage interest rates are the lowest, they have ever been-hovering @3% per year. This really is terrific for the real estate market for what is one of the largest economic pieces to a healthy national financial recovery. But what if you’re NOT in the real estate market and just trying to make a good investment on your savings? What interest are you getting on your savings account right now? The Annual Percentage Rate quoted from First America Credit Union is 0.10%. If you want to invest in a money market by depositing $0-$4,999.99 the APY is 0.15% and for $5,000-$9,999 it’s 0.30%.  For example, if you deposit $5000 into a savings account and then contribute $100 per month at 0.15%, you’ll earn a whopping $8.32 at the end of a year on your investment.  Hell, you could hold a virtual yard sale or sell some clothes at Uptown Cheapskate that will net you more than that savings account ever will!  The Federal Reserve (aka ’the Fed’) is the central bank of the United. It’s been called the bank for all the banks in the country and one of its biggest jobs is to help economic growth and keep inflation in check by controlling interest rates.  Basically, when banks need to borrow money, they go to the Fed. Depending on what the Fed charges, the bank wanting money will then filter down to what that bank charges its customers for home loans, car loans and credit cards.  For a simple ‘Econ 101’ class we learned that when the Fed lowers interest rates when the economy isn’t doing well to help jump start a sluggish economy. Visa versa, when the economy is growing too fast, the Fed will raise its lending rates to banks.  Right now, the Fed may be moving to charge BELOW ZERO interest rates, which would be a negative interest rate. That would be like if our Fed changed its lending rate from 0.1% to –0.1%. In 2016 Japan adopted this negative interest rate policy to generate economic growth but that has proven to be a dismal failure for what had been the world’s second largest economy. This doesn’t forebode well for our country as the corona virus is causing severe economic distress with insane unemployment figures and predictions for massive business bankruptcies and permanent business closings. How do you make money then if the world is in crisis and our economy sucks? Buying stocks, bonds or annuities are risky for the uneducated investor, especially during a recession. Look hard at buying a primary residence or an investment property. Sure, I’m a REALTOR and thus suspect in my intentions, but when property values are going up at say 10% a year, that’s something to analyze and investigate deeply. A $350,000 home in two years could be worth @$424,000 given inflation. That’s a gain of $74,000. Maybe you should be in the real estate market?

Land, Lots of Land

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Mark Twain once said, “Buy land, they’re not making it anymore.”  Around the Wasatch front raw land to build on is about as rare as a victory for common sense!  I always have a steady number of calls from old and young hippies who want to “find a lot in the city so we can build a tiny house, have chickens and farm.”  Again, buildable residentially-zoned land in the tri-city area is virtually unheard up and generally is swooped up by full time investors and builders who can squeeze in high density townhomes (where allowed). Two BIG landholders here are the Church of Jesus Christ of Latter Day Saints and Rio Tinto. I recall when I was a Planning and Zoning Commissioner for Salt Lake City when Rio Tinto came to meet with us and discuss their vision for the far west side of the Salt Lake Valley. Basically, the multi-national company owns from the smelter smokestack on the north end of the Oquirrh mountains to past daybreak. As the mine ore taps out the Rio Tinto plans to build communities. Most important, they own the water rights to support those communities (like Daybreak) and one employee pointed out “By the time we’re done building we’ll need 90 schools to support the families that will live there!”  Rio Tinto is NOT building the 900 acre ‘Olympia’ project just west of Herriman, but their land virtually abuts that project. Just south of Daybreak and Olympia is Camp Williams, a training site for Active and Reservist National Guard as well all sorts of covert and overt military specialists.  The military with cooperation of private and public landowners is planning to put an open space plan around certain parts of the 23,000 base, which is smart because again, vacant land is being bought up to build housing projects. If you drew a circle with Camp Williams in the middle of it, the ‘Sentinel Landscape’ project would have Lehi and Draper on the north, Herriman on the east, Eagle Mountain and Saratoga Springs on the west and Utah lake to the south. As a homeowner you don’t want errant bullets and shells ending up in your new bedroom and so it’s good to have a buffer zone that will also help protect wildlife and our unique ecosystem. If you flew north west over the Oquirrh range the Church is building a new Temple in Tooele. Their real estate arm (Suburban Land Reserve) who built the City Creek project has announced that they will now build a massive housing project of homes to surround that edifice. Why not add green space, rec areas and walking paths and housing that looks good with the Temple as a focus. As I’ve also told clients over the years “If the Church announces they are going to build a Temple, buy any land you can around it because the value is going to skyrocket! If not land, a home. It’s logical that a Temple is going to add value to the neighborhood.”

Asshats

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As a native New Yorker, I think I know pizza.  For years I never ate it in Utah because I couldn’t find a thin and crisp slice served on a cheap paper plate. The piece of pie had to be foldable in half and the grease drip down my arm like it did when you eat a slice from Joe’s or Ray’s in Manhattan or Brooklyn. When I moved to Utah in the 1970’s there were very few choices for pizza other than a few lame national chains who made doughy nasty fast food. You’d be hard pressed today to review my spending to find that I’ve ordered more than two or three pies delivered to our home in any given year, and then only because of a last minute party.  Yet much to my surprise, my Visa card just reported that I bought pizza in Texas and Ohio about a dozen times in one week. FRAUD ALERT!  I’d been hacked. Hackers and fraudsters come in many forms these days. These jerks are selling fake surgical masks, sanitizer that wouldn’t kill a single germ, forging/stealing the $1200 stimulus checks, etc. In real estate there are two common frauds: 1) rental properties too good to be true and 2) fake emails that direct buyers or sellers to change where wired funds should be sent. I often get calls reporting that photos of one of my listings is showing up on a Craigslist-type website for a rental property: “This 5 bedroom luxury home in the Avenues with a pool and four car garage is leasing for only $800 a month!”. The scam is that the non-owner (criminal) will run a fake ad with someone else’s house photos, get calls from eager renters and meet them at the property. The crook has already scoped out the home, sometimes even figured out how to get in (if it’s vacant) and will tell the prospect that they can have the rental if they throw down a cash deposit right then and there! The ‘landlord’ promises a key and to meet up the next day only to never be seen again. The second fraud has surfaced in the past two years with computer hackers following a real estate transaction and at the last minute sending out a fake email to a buyer that looks like it’s from their own real estate agent, escrow officer or lender changing the wiring instructions at the last minute for the funds to close. The unsuspecting victim eager to finalize the purchase changes the wire and BAM, all the funds disappear to some mystery country and asshat fraudster.Salt County now has a new service to help stop fraud via the Recorder’s office. ‘Property Watch’ is free and it notifies you if someone puts a lien /mortgage on your property without your permission. It’s like the services some banks and credit card companies offer now to alert you if someone is falsely using your account. Just sign up at SLCO.org or call 385-468-8176 to register to keep fraudsters away from what is yours.

MICROTRANSIT

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My industry has been protected in Utah since Covid-19 struck and I’ve been able to leave our home and to work-going to the office for paperwork, close escrows for buyers and sellers, and show homes (virtually, usually). There haven’t been that many folks out on the roads and it’s interesting to get on I-15 and see how many people are speeding. I find myself in the fast lane going 90 mph and realizing soon after that I am the one speeding, too because I’m not paying attention and just going with the flow. Slow the F down! I’ve noticed that there are less cars attached to the TRAX trains yet UTA is still getting people where they need to go. Bus and train drivers are part of the huge group of unsung pandemic hero’s working to keep our transportation system going. Sure, the schedules may be different with less options, but you will eventually get to your destination. Uber and Lyft are working and as are cab and limo drivers. My go-to taxi company (Ute) told me that so many of their drivers have little kids at home or are older and can’t drive, and that many haven’t been able to get unemployment benefits. You just don’t see these kinds of companies on the road because YOU’RE not on the road with our suggested stay at home orders these past several weeks, but as regulations loosen, you’ll be calling them again for rides. One alternative to moving people that hasn’t stopped is a new program offered by UTA that was at first an experiment and is now may be a permanent fit for public transportation if UTA votes it in during their November planning meeting. “Microtransit’ is the minivan option that offers shared rides along the southern section of the Wasatch front for the same price as a bus ticket. Ridership for all service providers-public and private-have dropped as much as freeway traffic. Given that fact it’s a good time to be working out the potential bugs of getting people too and fro for UTA. Basically, you use your smart phone and app (UTA ON DEMAND) to request a ride or you call from a landline. They’ve partnered with demand rider sharer ‘Via’ to connect multiple riders heading in the same direction into a Mercedes Benz van to save riders money and provide more transportation options.  You book the ride and the app or person at the end of the land line will let you know where the van will meet you. The real point is to get riders to TRAX or Frontrunner stations from areas where bus service is limited.  It’s a pilot program that other large cities are also trying and so far, people seem to like the option. Just like Uber and Lyft you can rate your ride from 0-5 while the program is being tested. For more information, go to rideutah.com/services/UTA-on-Demand-by-Via or call 385-217-8191. Yes, their drivers are masked, and they are not cramming six people into a van at this time due to social distancing recommendations.