I hope everyone enjoyed a happy Easter. My family and I were blessed to celebrate my Grandma's 97th Birthday. May we all live so well and so long.

Finance real estate now at historically low interest rates. The Federal Reserve dropped rates another one half point this week. Now that the stock market begins to stabilize after a long series of earnings warnings, one could consider diversifying their portfolio with some real estate The April 1, 2001 edition at www.realtormag.com indicates real estate, both residential and commercial, was the best thing going for investors looking for a safe haven from sinking stocks.

Santa Fe sales continue at a brisk clip in a demand-driven market. From this broker's point of view, local and out-of-state demand for Santa Fe property remains steady due to fair market pricing relative to other destination resort communities. Email tony@santafeone for free listing research.

For those of you looking for new construction, consider the following builders:

Los Santeros at Las Campanas $650,000 - $935,000
Bob DiJanni Custom Homes $300, 000 - $500,000
Rancho Viejo $129,000 - $282,000
Whispering Ridge $120,000 - $200,000
Presley Homes $94,000 - $164,000

FINANCE 4/19/01

by Carla M. Hiley, President
New Directions Financial, Inc.
cmhiley@qwest.net

The Feds surprised Wall Street and consumers by reducing the Federal Funds Rate by .50 basis points. Stocks rallied; however, the long bond which affects the 30-Year Fixed rate, has not reacted yet. Various economists around the nation are predicting further rate cuts by the Feds over the next several months. Mortgage specialists who track the bond market are advising buyers and current homeowners to move forward with their purchases or refinances at current rates.

Other factors to consider while waiting for the Federal Reserve to move on rates:
1. If you are purchasing: will the housing market have adequate inventory to select from and/or will there be further price increases which will negate any savings that might be realized by waiting for a fraction of an interest rate change?

2. If you are refinancing: what are the goals of that refinance? Debt consolidation is never that rate sensitive if monthly revolving debts are at rates of 18% or higher per annum. If you can save 1% or more on your current interest rate, it is certainly worth considering current rates. Rates have not been this low since the fourth quarter of 1998 and first quarter of 1999.

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New Directions Financial, Inc. can offer buyers and current homeowners a variety of loan programs to fit your needs. There is a loan for everyone. Call Carla Hiley at (888) 884-4240 to discuss your individual goals or email cmhiley@qwest.net. Carla specialize in Non-Conforming Borrowers and Non-Conforming Properties.

GOVERNMENT & TAXES

Tax Tips for Prospective Buyers of Real Estate in the Santa Fe area.
By Samoa J. R. Wallach, CPA
TEL: (505) 690-7653

Financial advisors have always said that Real Estate is the best investment! As a CPA and a homeowner, I can say that for tax purposes, purchasing a first or second home can produce significant income tax deductions. According to the Internal Revenue Code, Real Estate Taxes, Mortgage Points and Mortgage Interest are all deductible on Schedule A of the Form 1040 with some limitations.

Real Estate Taxes paid on all real property owned is deductible on Schedule A. This can include the real estate taxes on a primary residence, secondary or vacation residence and land held for investment purposes. When a home is first acquired, the settlement statement has the new owner's portion of real estate taxes from the day of acquisition until the end of the tax period. Remember to give your CPA a copy of the settlement statement; for that is the only place where the real estate taxes paid on acquisition is located.

If you pay your real estate taxes separately from your mortgage, give your CPA a copy of the property tax statement and your canceled check. If your real estate taxes are paid with your mortgage payments, the information will be on Form 1098 sent to you by the lender.

Points paid to a mortgage company for a principal residence, which are itemized on the settlement statement and paid by the taxpayer are fully deductible in the year paid. Unfortunately, points for a secondary or vacation residence are not deductible. Points on refinancing a mortgage for a principal residence are deductible only over the life of the loan. (Ex: a 30-year loan, $2,500 in points. $83.33 deductible per year for 30 years.) Points can be reported by the lender on Form 1098 in the year of the loan initiation or may only be on the settlement statement. Give a copy of the settlement statement to your CPA.

Mortgage Interest or as the IRS calls it Qualified Residence Interest paid during the year, is deductible on a primary residence and a secondary or vacation residence with some limitations. The limitation on the interest deduction is based on the aggregate amount of acquisition indebtedness. The interest deduction is limited to indebtedness below $1 million. Interest on indebtedness over $1 million is not deductible on Schedule A. But if you have two homes with a combined acquisition indebtedness of only $999,999, all the interest on the two loans is deductible on Schedule A. Mortgage Interest paid during the year is reported to homeowners by lenders on Form 1098.

If you are thinking of purchasing a primary home or a secondary home in the Santa Fe area, you can look forward to additional tax deductions that make the Land of Enchantment more enchanting!

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Samoa J.R. Wallach has an MBA and is a licensed CPA in New Mexico and California. Her practice includes tax return preparation, individual and small business bookkeeping, and financial records organization. Samoa is a QuickBooks® Pro Advisor: setting-up, training and maintaining QuickBooks Pro for her clients. She is Santa Fe's mobile CPA. Samoa goes where the information is located, to her client's homes and businesses.
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When you move to Santa Fe, give her a call at (505) 690-7653 or e-mail SAMOAZ@worldnet.att.net

Call the experts !
New Mexico Tax and Revenue 505-827-0700
City of Santa Fe 505-984-6500
Santa Fe County 505-986-6200

STATISTICS

Santa Fe Association of Realtors property statistics

2001 first quarter Santa Fe Area

Existing and new, single family detached homes sales:

Total City of Santa Fe:

1st Qtr 2001 165 sold, median price $214,500

1st Qtr 2000 185 sold, median price $205,000

Total Santa Fe County

1st Qtr 2001 136 sold, median price $236,916

1st Qtr 2000 108 sold, median price $235,000

Condo/Townhome sales:

Total City & County

1st Qtr 2001 60 sold, median price $169,250

1st Qtr 2000 57 sold, median price $214,900

Note: This representation is based in whole or in part on data supplied by the Santa Fe Association of Realtors or its Multiple Listing Service. Neither the Association nor its MLS guarantees or is any way responsible for its accuracy. Data maintained by the Association or its MLS may not reflect all real estate activity in the market.

Rising from 6500 to 7500 ft, most of central New Mexico is in the transition zone. Ponderosa pines, oak, juniper, spruce, aspen and Douglas fir grow here.

FYI - Santa Fe, see our resources page.