Is There Really a Selling Season?

In this area there definitely is.  Usually it’s our first sign of spring when For Sale signs start popping up like dandelions in the lawn and our multiple listings change daily with new homes and land on the market.  Historic data at the National Association of REALTORS® indicate that April through July sales outpace the rest of the year in sales.  Buying stays steady through the summer and early fall.  It usually drops off right after Labor Day for a couple of weeks and then picks up again in October through early November.  Two of the more obvious factors for this “seasonal” market include the fact that school has ended and families prefer to move before the next school year starts as well as the weather is much nicer in the spring-summer to be out looking at properties.  This is not to say that properties will not sell any other time of year.  It just means that in this area there may be less buyers out there looking.  With proper pricing and enhancing your home for maximum effect, a house will sell regardless of the month.  Give me a call to get the Coldwell Banker advantage any time of year.  Donna Forest, Broker Associate, 603-526-4116; www.donnaforest.com

Will You Miss Out?!

I recently attended an event where one of the guest speakers was Lawrence Yun, the Chief Economist for the National Assoc. of Realtors.  Below are some of the highlights.

  • Home sales are the best they’ve been in 5 yrs.  Nationwide sales are up 8%.  As of September 2012, NH sales are up 19%.
  • One reason for a slower recovery, aside from the credit bubble hangover, is that people are not moving as much right now.  (Mobility rate fell from 18% to 12%).
  • Investors are back in the market and they are buying.
  • The housing forecast is that we may see a 5% increase in NH home prices next year.
  • Housing market will be a multi-year recovery.  Shrinking inventory will push prices higher.
  • Nationwide, the median price of a home is up 11.4% from a year ago.  In NH, the median price, as of September was down 2.4%.

High affordability, job creation, and rising rents will be pushing the housing market forward.  There has NEVER been a better time to buy!  Give me a call if you don’t want to miss out on your buying opportunity.  Donna Forest, Broker Associate 603-526-4116; donna@donnaforest.com.

Home Sales on the Increase

A Picture is Worth What?

The old saying “a picture is worth a thousand words” definitely holds true in real estate marketing.  With 90% of buyers starting their search online, it is imperative to have good photos and plenty of them in as many websites as possible.  Listings with 3 or 4 photos, bad lighting or cluttered rooms will be skipped over by buyers.  Sellers should be preparing their house before the agent arrives.  This means extensive de-cluttering – removing items from countertops & on top of cabinets, clearing knick-knacks, removing everything from the refrigerator, getting rid of furniture if necessary, and neutralizing eye-popping colors.   And of course, curb appeal is everything.  Essentially the home should be staged for maximum effect.  A competent agent will use a wide angle lens, ensure there is adequate lighting and take lots of pictures.   Sellers should go online and view how their listing compares to other properties for sale. There should be 24 good photos in the Multiple Listing Service.  If there aren’t, it may be time for a re-shoot!  If you're interested in selling your home, give me a call at 603-526-4116 or email donna@donnaforest.com.

Is there REALLY a 3.8% Tax on Home Sales?

Yes and no. There are a lot of misleading emails that make you think every seller will have to pay an additional tax when they sell their house. Yes, there is a new federal 3.8% sales tax on real estate to pay for the Affordable Care Act. It was passed by Congress in 2010 with the intent of generating an estimated $210 billion to help fund health care and Medicare overhaul plans. The reality is, only a small percent will end up paying, starting in 2013. It applies to those with incomes over $200,000 ($250,000 if married, filing jointly). Even then, the tax doesn’t apply to the first $250,000 (or $500,000 if married, filing jointly) on PROFITS from the sale of a personal residence. This exclusion doesn’t work for vacation homes or rental properties. It’s possible that investment income could be generated by the sale of real estate. But it’s quite a stretch to call it a real estate tax.

Contact me and I’ll be glad to email you a PDF document from the National Association of REALTORS® explaining this tax. Please check with your accountant for the most accurate and up-to-date information.

Donna Forest, Broker Associate, 603-526-4116

www.donnaforest.com

Who Gets The Money?

In every real estate transaction, deposits are required to show the sincerity and strength of the buyer’s intent to purchase the property as well as to provide liquidated damages to the seller in case of default by the buyer. Sellers will sometimes eye these funds as potential money in their pockets and assume that the deposit will just be handed over to them if the buyer defaults. The reality of it is, that for the deposit to be turned over, the release has to be signed by both seller AND buyer. This release allows the real estate company to withdraw the money from the escrow account and distribute it appropriately. However, the chances of the buyer just signing over thousands of dollars without an argument are very slight. If both parties won’t agree to signing, most likely the process will end up in mediation or court. To avoid this situation, it is always best to find compromises that will help resolve any contractual disputes as amicably as possible. An experienced REALTOR® can be invaluable in helping the sale continue to move forward and avoid time-consuming and costly litigation. Give me a call if you're interested in buying or selling a home, 603-526-4116. I'd be happy to share my expertise. www.donnaforest.com

Where Have We Been and Where are We Going?

So far, it’s been a bumpy 6 years, as home prices correct themselves from the peak of 2005 (values saw  double digit increases from 2000 to 2005).   The median price declines we are now experiencing seem more painful because of this boom. -1.9% in 2006,   -1.6% in 2007,   -9.9% in 2008,   -9.8% in 2009,   +1.4% in 2010,   -6.2% in 2011 The S&P/Case-Shiller Home Price Indices show that as of March 2012, average home prices across the U.S. are back to 2002/2003 levels. Where are we going?  According to a March 2012 survey of economists, real estate experts and investment and market strategists conducted by Pulsenomics, home values are predicted to slowly rise starting 2013. -0.72% in 2012,   +1.39% in 2013,   +2.55% in 2014,   +3.18% in 2015,   +3.32% in 2016 What does all this mean?   For sellers, realistic pricing is of utmost importance if you wish to sell.  Price for today’s market; not what it was in 2005.  For buyers, there may never be a better time to buy than this year.  Call me if you want to work with a REALTOR® in the know!  603-526-4116

Donna Forest, Broker Associate

First Quarter NH Home Sales Ahead by 17 Percent

Excellent conditions, both in terms of weather and purchasing leverage, lifted first quarter residential home sales to its highest level since 2007, according to data released by the New Hampshire Association of Realtors.  Low snowfall totals, combined with low prices, low interest rates and relatively high inventory, opened the door for 2,223 homes to be sold in the first three months of 2012, a 17 percent increase over the 1,903 sold through March 31 in 2011. Median price on those sales, meanwhile, dropped nearly five percent, from $197,500 in the first quarter of 2011 to $188,000 in the same period 2012.  “This is about supply and demand, and it’s about home prices continuing to adjust to a market that has been favoring buyers for several years now,” said NHAR President John Rice, a 40‐year veteran of the real estate industry and an agent with Tate & Foss Sotheby’s International Realty in Rye. New Hampshire residential sales for March‐only were also ahead of last year’s pace by 17 percent, from 769 in 2011 to 896 in 2012. Median price in March 2011 compared to March 2012 declined 3 percent, from $195,000 to $188,750. In terms of local markets, each of the state’s 10 counties saw unit sales increases in the first quarter compared to the same period a year ago, including a 65 percent gain in Sullivan County, 42 percent in Coos County, 31 percent in Cheshire County, and 18 percent in the state’s largest, Hillsborough County. Only Merrimack and Coos counties showed first quarter median price increases. March 2012 data residentialMarch 2012 data condo-1 Rice said he believes the surge in sales is likely to mean the beginning of the end of dropping prices. “That’s just fundamental, free market principles,” he said. “More sales equals less inventory, which eventually equals higher prices.  “In future years we’ll look back and be able to pinpoint when prices stabilized. We can’t know that point while we’re going through it, but if this pace keeps up, I can’t imagine we’re too far from it right now.” Source:  Press Release, New Hampshire Association of REALTORS®, Dave Cummings, Director of Communications

Has Spring Already Sprung?

Historically, our spring is heralded by the arrival of buyers, starting to look for their new home so they can be settled in before school starts again or if a vacation home buyer, be able to enjoy the summer season.  This spring is different.  Why?  Due to the mild winter, buyers have already been out buying for months.  And the homes that are selling are the ones that have a compelling price to attract buyers.   Smart investors are snapping up the bargains.  Overpriced inventory doesn’t stand a chance.   Indicators are that home sales will increase in 2012.  This does not mean that home prices will increase as well.  Supply still exceeds demand.   The Home Price Expectation Survey asked 104 leading industry experts where they thought prices would be at the end of 2012. These experts believe prices will depreciate by about 1%.  Bottom line, if you are a buyer or a seller, it won’t pay to wait.  If you are looking for an expert to guide you thru the buying or selling process, then give me a call!  603-526-4116; donna@donnaforest.com; www.donnaforest.com

7 Mortgage Interest Deduction Myths

Think losing the mortgage interest deduction would be no big deal? We bust seven myths to show why the cost is bigger than you think.

Proposals floating on Capitol Hill to curb the mortgage interest deduction gloss over all the ways home owners, and even renters, would be hurt by the change. Let’s set the record straight.
Myth #1: The mortgage deduction is just for rich people.
  • The mortgage interest deduction helps mostly middle- and lower-income families.
  • 65% of families who use it earn less than $100,000 per year.
  • 91% earn less than $200,000 per year (that’s where most economists draw the line between rich and middle-class).
  • Only 9% earn more than $200,000 per year.
This myth may have arisen because of a related fact: If you buy a house, you’re much more likely to accumulate wealth by the end of your life. Home owners have an average net worth of $200,000, while the average renter’s net worth is $5,000, according to the Federal Reserve’s Survey of Consumer Finances.
Myth #2: I'm not affected by the mortgage deduction because I don't own a home.

If the mortgage interest deduction goes away, home values would fall by 15%, the NATIONAL ASSOCIATION OF REALTORS® estimates. When home values fall, tax revenues follow suit, giving your local government two choices:
  • Raise property taxes. Not only will home owners pay more in taxes, renters won’t escape unscathed either as landlords raise rents to cover their costs.
  • Cut services that everyone—renters and owners—enjoys.
Myth #3: Switching to a 12% mortgage interest credit would be a wash for most.

One proposal floating around Congress is to replace the mortgage interest deduction with a 12% nonrefundable mortgage interest tax credit. (Deductions reduce your taxable income; credits reduce your tax liability.) This plan would increase taxes for many home owners.
Example: If you paid $10,000 in mortgage interest, and you’re in the 25% bracket, you’d pay $1,300 in extra taxes.
  • The $10,000 deduction you have now saves you $2,500 on your taxes (25% x 10,000).
  • The 12% credit would save you only $1,200 (12% x 10,000) on your taxes.
  • In this scenario, if the mortgage interest deduction is changed to a 12% credit, you’d lose $1,300 (the current $2,500 savings minus the $1,200 you’ll save under the 12% plan).
Myth #4: Not that many people take the mortgage interest deduction.

There are 75 million American home owners, and 38.5 million of them take the mortgage interest deduction. The average mortgage interest tax deduction is $12,200, and a typical benefit for home owners is $3,050 a year.
The mortgage deduction is a key benefit to first-time home owners and trade-up buyers because you pay the most mortgage interest when you first take out a mortgage. (You won’t pay equal amounts of principal and interest until year 13 or later, depending on your interest rate.) People with large families also get a lot of bang from mortgage interest deductibility—they buy relatively big houses for their big families.
Myth #5: Getting rid of the deduction won't affect me or my housing market.

It will mean lower property values for all American home owners, including the one-third who own their homes outright and the 12 million who take the standard deduction.
Even if you don’t have a mortgage, getting rid of the MID will affect how much home you can afford to buy—and how much a buyer will pay for your home.
Myth #6: People will still buy my house without the mortgage interest deduction.

Yes, people will still value home ownership, but it will be harder for them to buy your house. The mortgage interest deduction makes it cheaper to buy a home because it saves real money at tax time.
If you bought a home last year with a $200,000, 30-year, 5% fixed-rate mortgage and you’re in a 25% tax bracket, you’d save about $2,500 from the mortgage interest deduction alonein the first year you own your home. That’s money you can use to pay down other debts, save for your children’s college education, or put away to buy a move-up house.
Myth #7: Solving the U.S. budget problems requires everyone to sacrifice.

Home owners already pay 80% to 90% of the federal income tax collected. If mortgage interest deductibility disappears, you and your fellow home owners could foot 95% of federal income tax.
If you’re at the beginning of your mortgage, losing the mortgage deduction will cost you a bundle:
  • $26,685—a 15% drop in value for the median home valued at $177,900.
  • A proportionally smaller gain in overall home equity over your lifetime, because your home now starts from a lower value.
Dona DeZube Dona DeZube has been writing about real estate for more than two decades. She lives in a suburban Baltimore 1970s rancher on a 3-acre lot shared with possums, raccoons, foxes, a herd of deer, and her blue-tick hound.
Visit Houselogic.com for more articles like this.  Reprinted from Houselogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.