MarketWatch: Weekly Real Estate Update for Riverdale, Bronx – 1/15/2023 – 1/22/2023

Did You Know?

* 2023 was a BUMPER year for hedge funds:  the industry produced combined gains worth $218 billion after fees. Hedge fund is a fancy name for an investment partnership with freer rein to invest aggressively in a wider variety of financial products than most mutual funds. Its purpose is to pool funds, maximize investor returns, and eliminate risk with hedging strategies. They are generally structured as pass-through entities, allowing them to pass their entire tax obligation along to their investors or limited partners. One major tax planning strategy for hedge funds is to use carried interest from a hedge fund to the general partners for performance fees paid to hedge fund managers. A newer tax strategy many funds are using is to enter the reinsurance business with a company based in Bermuda. These two methods allow hedge funds to reduce their tax liabilities substantially.

* While spending was strong in December and triggered a notch-up in inflation, lots of that was fueled by buy-now-pay-later consumers….and the time is approaching to pay….. or pay huge interest rate financing credit card for debt. The average credit card interest rate is over 20%!

* Miami-Dade County saw 24,154 single-family home and condo sales in 2023, down 26% from 32,627 sales in 2022. Broward saw 27,070 transactions last year, down 17% from 32,573 transactions in 2022. In 2021, Miami-Dade had 39,394 sales and Broward had 40,423. Inventory has improved slightly and prices are way, way up between 8-15%! (Miami Assoc. of Realtors)

* A tax deal proposed by Washington, D.C., lawmakers could lead to the creation of more than 200,000 new homes for low-income families by boosting the low-income housing tax credit that incentivizes developers to build new affordable-housing units, part of the broader Tax Relief for American Families and Workers Act of 2024, introduced by Sen. Ron Wyden, an Oregon Democrat and the Senate Finance Committee chairman, and Rep. Jason Smith, a Missouri Republican and the House Ways and Means Committee chairman. (BARRONS)

* A new report by the progressive Groundwater Collective think tank claims that corporate greed is a primary driver of recent inflation, arguing that although inflation has cooled significantly since the pandemic, consumers continue to pay high prices set by corporations to pad earnings. While consumer prices have risen by 3.4% over the past year, input costs for producers have risen by just 1 percent. They argue that Corporate profits drove more than 53% of inflation in the 2nd and 3rd quarters of 2023, whilst driving 11% of price growth in the 40 years prior to the pandemic.

Courtesy of Stephen Lascher, Wells Fargo