Real Estate Gift Programs
Trends In Real Estate
Real Estate Donations: A Growing Source of Charitable Revenue
Real estate is a large component of the overall U.S. economy — with more than $20 trillion of real estate expected to change hands in the next 20 years due to the aging of the baby boomers. According to the National Association of Realtors:
- In 2005, 1 out of 25 people owned three or more properties; 1 in 10 owned two properties.
- In 2005, 27.7% of all homes were purchased for investment purposes, setting a record with 2.32 million investment homes purchased, up 15.7% from 2004. The median price was $183,500 in 2005, up 24% from 2004.
- In 2005, another 12.2% of all home sales were vacation homes – 3.34 million in all, up 16% from 2004. The median price of a vacation home was $204,100, up 7.4% from 2004.
- In 2005, privately held property in the U.S. was estimated to be worth more than $24 trillion.
Households have created significant value in personal real estate assets, and the potential to utilize these assets to fund charitable donations is great. Further, with more people investing in real estate, the potential for donations of property, already large, continues to grow.
Real Estate Gifts: A Significant New Revenue Stream
- Many potential donors have the majority of their assets in real estate, and a single gift of real estate is usually worth over $200,000. Yet the average person donates far less in cash: $3,700 annually.
- With 50% of donors’ assets likely to be invested in their primary residence and in other property holdings, a growing number of organizations are asking for real estate gifts.
- In 2005, $5 billion in real estate was donated — and such donations are growing as more donors become aware of the benefits of gifting real estate.
Donors and organizations both benefit when real estate is an integral part of a development program. Organizations gain from a significant new source of funds; donors, depending on the nature of the gift, can potentially reduce income taxes, receive an annual income or avoid capital gains taxes, among other benefits.
