Valuable Real Estate Insights

Ken Grodner

Given what we read and see about inflation and recession, both in the US and globally, a number of our clients have expressed concern over a possible market correction and have asked if it is prudent to wait to buy after a correction.
 
Vikki and I just came back from Anaheim, CA for Keller Williams’ annual real estate event and we are excited to share thoughts from some of the top thought-leaders in real estate. This includes the work of an economist who spends every day looking and analyzing trends from a global and industry perspective.

They would suggest not to wait to buy real estate and here is why:


Real Estate continues to serve as a solid investment, even during a recession. Values appreciated in 4 out of the last 6 recessions.

Home Prices have risen every year for the past decade.  We are expecting only a slight decrease in home prices in 2023, certainly not a correction.

Prices continue to remain stable in large measure because there are so few homes for sale (supply and demand).  Six months of supply represents a balanced market and we have less than 3.

Our economists believe inflation has peaked and will continue to trend downward over the next two years toward the targeted 2%.

Mortgage rates, while significantly higher than the last two years, are still well below historical averages.

After just 3 years, clients are better off buying versus renting. After 7 years they have doubled their investment and continue to build wealth every year.

April 24, 2025
As real estate continues to be one of the most effective tools for building and preserving wealth, many families are strategically using homeownership to transfer financial security to the next generation. By leveraging real estate investments, parents can provide both immediate support and long-term financial stability for their children. With home prices on the rise and tax laws evolving, proactive wealth transfer strategies can maximize benefits while minimizing tax burdens. Rather than waiting to pass on assets through inheritance, many parents are choosing to transfer wealth now by helping their children acquire property and enjoy it additional years of the benefit. Here’s how they’re making it happen. 1. Gifting a Home with a Structured Loan Forgiveness Plan A married couple can loan their single child $500,000 (or any other amount) to purchase a home, following the guidelines established by the IRS. This method allows parents to maintain financial control while gradually transferring wealth. Here’s how it works: The parents forgive an amount equal to the maximum annual gift tax exemption per parent ($19,000 in 2025) on the loan, totaling $38,000 per year. This process can be repeated annually until the full loan amount is forgiven. If the child is married, their spouse can also receive the same gift amount, effectively doubling the annual forgiveness to $76,000 per year. Over time, this strategy allows parents to gift a home while minimizing tax implications. 2. Buying a Home in Cash and Gifting It For parents who have the financial means, purchasing a home outright and gifting it to their child can be a tax-efficient way to transfer wealth. Here’s how it works: A married couple buys their child a $500,000 home in cash and gifts it to them. They file the required gift tax return, which falls under the lifetime gift and estate tax exclusion of $27.98 million per married couple (for 2025). This strategy allows for the immediate transfer of homeownership without requiring the child to take on a mortgage. Important Note: The lifetime gift and estate tax exclusion is set to drop significantly in 2026, from $13.99 million per individual ($27.98M per couple) to approximately $5 million per individual. This means high-net-worth families should consider making large gifts before the exemption decreases. Why Real Estate Is a Smart Wealth Transfer Strategy 1. Tax Advantages By structuring gifts properly, families can leverage the annual gift tax exclusion and lifetime gift tax exemption to pass on real estate with minimal tax consequences. Additionally, if the child holds onto the property, they may benefit from step-up in basis rules if the home is inherited later. 2. Long-Term Wealth Growth Real estate historically appreciates in value (on average 5% per year over the last 30 years), making it an excellent asset for wealth accumulation. By helping children buy a home now, families position them for financial growth through home equity. 3. Immediate Use & Stability Unlike other investments, real estate provides immediate utility—offering a stable place to live while also serving as a valuable financial asset. Start Building Generational Wealth with Real Estate Today As wealth transfer strategies evolve, real estate continues to be a cornerstone of financial planning for families. Whether through structured loans, gift exemptions, or outright purchases, helping your adult children acquire property now can be a powerful way to secure their financial future. If you're considering using real estate as a generational wealth transfer tool, contact The Hospitality Network Group at Keller Williams today. Our team specializes in guiding families through smart real estate investments that maximize long-term wealth potential. Hospitality Network Group at Keller Williams – Client focused . Performance driven The Hospitality Network Group at Keller Williams is honored to be part of a company that fosters a culture of excellence, empowering its agents to deliver unmatched service and expertise. This commitment to excellence is why Keller Williams agents consistently achieve results that set the standard in the industry. Whether you're buying, selling, or investing, our team is here to ensure your goals are not only met but exceeded. Trust the Hospitality Network Group at Keller Williams to guide you through every step of your real estate journey. Contact us today to learn how we can help you achieve your real estate dreams. Disclaimer: The information provided in this blog does not, and is not intended to, constitute legal or financial advice; instead, all information, content, and materials available in this blog is for general informational purposes only. You should consult your own legal, financial, or tax advisor and verify all information to your satisfaction prior to taking any action.
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