Real Estate News – Extended Mortgage Debt Relief Act, PMI Tax Relief and Capital Gains Tax Rates

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Now that we are well into 2013, there will be some changes to our real estate outlook with some familiar programs back in action. With all the talk about the impending Fiscal Cliff, it is no wonder that homeowners everywhere are wondering how the outcome will impact them individually. Here are three recent changes and/or updates to the programs available out there that will have a significant impact on our marketplace this year and moving forward.

Mortgage Debt Forgiveness Act Extended Through 2013

On the minds of many homeowners that have mortgages falling short of the current value of their homes, the Mortgage Debt Forgiveness Relief Act was set to expire on December 31, 2012. Among the many issues discussed within Congress during the last few hours of 2012 was the extension period of this important tax relief for distressed homeowners. Primarily as a means to help consumers faced with hardships overcome their financial difficulties when they incur forgiven debt – the Act serves to waive tax implications on what otherwise would be considered taxable income.

Private Mortgage Insurance Tax Relief Now Applies to Fiscal Years 2012 and 2013

Each year millions of homeowners look forward to the tax relief that comes with being able to write off their private mortgage insurance premiums. By the end of 2012, no one was sure the American Taxpayer Relief Act of 2012 would be extended to include the coming year. Once again, at the final hours of negotiations the Act was extended through fiscal year 2013 to allow homeowners paying private mortgage insurance to deduct that amount when filing their income taxes.

Capital Gains Tax Rates Increased from 15% to 20%

A topic of confusion for many, the capital gains tax increase set for higher income levels is more lenient than most people realize. Though the theory is that this increase in tax impacts individuals and households with higher income levels, the truth is the income and gains cap is relatively high. The capital gains tax increase will only apply to individuals earning an Adjusted Gross Income of $400,000 or more. Furthermore, people in these income brackets will incur the capital gains tax only on income earned above and beyond the cap which is $250,000 or more for individuals and $500,000 or higher for households.

 

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If you would like to discuss these or any other issues in the real estate marketplace or if you are considering buying or selling a home – contact us today! We would love to help make your real estate dreams become a reality!

Happy 2012 Holidays and Warm Season’s Greetings!

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To all our cherished friends, neighbors, family and clients – we are so proud to have been able to work with you and be a part of your lives! As we end this year and turn to the exciting time and events that 2013 holds, we just wanted to take a moment to thank you for all that you bring to our lives.

We have some really great plans in the coming year to bring more success to all your real estate endeavors. And with each transaction that makes it to the closing table in the coming months and years ahead – we know that there will continue to be new and exciting things to follow for all of us.

On behalf of the entire group – Happy Holidays, Season’s Greetings, Peace and Joy!

Real Estate Trends On Both Sides of the Fence; Here’s What’s Happening

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We are definitely seeing a plethora of lengthy reports about the real estate market these days, whether on a national level or honed in on a particular local area.  But the fact remains that the market is in an unstable state and keeping track of indexes, watching over home sales and how they fluctuate from month to month or year over year, is giving us a glimpse into what to expect.  It is these very measures that allow us to foresee the greater trends that exist so we can act accordingly.  Here, according to which side of the transaction you are on, are some happenings in the industry and what they mean to you as a home buyer or home seller.

Buyers Don’t Beware
Buyers Trend #1
Foreclosures have slowed down. 

For the most part, whatever foreclosures that had flooded the market have either slid into transition stage, where the banks are reviewing documents and going through the sometimes lengthy review process that comes before accepting applications to purchase a foreclosed home – or there are fewer properties available.  There was indeed a flood of distress sales in the market that occurred in the recent past but banks have now shifted away from foreclosures and they are favoring short sales instead. Short sales are a far better option for many reasons, but the two main benefits remain 1. Homeowners are either able to retain some of their credit while buying back their home at less than its current value and 2. Banks are spared the added expense and risk that goes along with foreclosures.


Buyers Trend #2
Prices remain historically low.

One thing that has not changed for the duration of our current recession, even as we have headed into a double-dip economic downturn, is that as a result home prices continue to be at their lowest level in years.  In the S&P Case-Shiller Home Price Index, it is indicated that housing prices these days rival a 30-year low and they seem to be hanging there in place as the market remains unsettled. Even though prices are as low as they are, the fact remains that these transactions that are taking place are happening with regular homeowners and simple sales deals, rather than banks for foreclosure sales.


Buyers Trend #3
Rates are still at an all-time low.

Interest rates, depending on the day, are still as low as a little under 5% for the average 30-year fixed rate mortgage loan.  For potential homeowners and those who want to move up or seize the opportunity to move into a luxury residence, this could not be a more perfect time to invest in that property.  For those people willing to remain in the mix for the long haul, the current market trends will predominantly not affect them in terms of return on investment.  The market will indeed bounce back, whether 6, 7 or even more years later.  And when it does, you will end up having much more house (in terms of value), while still paying that very low interest rate.
It’s a Small (Selling) World After All


Sellers Trend #1
There are lots of buyers looking to buy. 

When you are selling your property, the more the potential buyers the merrier.  With the number of buyers who are looking for a great deal your chances of selling are a lot better these days and if you have a home that has unique or upgraded amenities you can further avail the opportunities that will come with having that edge over other sellers.

Sellers Trend #2
Inventory is down. 

With the number of pending sales in limbo on a day-to-day basis, inventory figures are relatively low.  This is great news for people looking to sell their properties, because that translates to more buyers for the taking and the ones that do come looking at your property are far more impressionable.
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To sum things up, right now is a great time to be a buyer – especially with all the incentives out there ranging from super low interest rates to housing prices that are closer to those from 7 or 8 years ago.  If you can afford it now, buy now.

As a seller, the main advantage you have these days is that there is less inventory for those buyers out there looking for a deal now – which means you have the edge and better chances of selling that property.
The trends keep fluctuating a bit here and there but the major things remain:  low rates, low housing prices, low inventory.  And now is the time to seize the opportunities that lie within these trends.

Debunking the Myth of Selling in the Winter Months

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Many sellers are unsure whether or not to wait until next spring before listing their home. The confusion comes with a combination of age-old schools of thought that predict the spring season as being almost the only season for homes to sell successfully. Not true.

A lot of homeowners are under the impression that homes are not selling at all, whereas in our own experience, time and again we continue to see complete opposite results. So much so, that we are defying the myths of never ending days on market statistics with many properties going under contract in approximately two weeks. Here’s why.

There are so many buyers in the marketplace right now that are eager to lock in the phenomenal interest rates and market conditions that continue to allow a very significant amount of buying power. The interesting thing is that while it is a strong buyers’ market in that sense, sellers are still enjoying an edge with the lower inventory that comes with it being this time of year.

Regardless of which side of the fence you are on, either way you look at it the market is strong. People are out there buying. If there are fewer homes available on the market, then that only means that there is less selling competition. This of course translates to top dollar and incredibly quick, hassle-free transactions in which everyone comes out a smiling winner.

So to answer one of the most frequently asked questions I am getting these days, it IS a great time to sell your home. Sure, you could wait till spring. But keep in mind that so will countless other sellers and by the time springtime blooms are back out, so will equally as many more “for sale” signs, competing with you.

By listing your home now, you can harness the power of the buyers that are striving to find that perfect property before the holidays kick in.

Contact us today if you’d like a custom, home valuation report detailing exactly what we expect your home will sell for in today’s marketplace. Our team looks forward to hearing from you and helping your real estate goals come to fruition.