How’s the market?

Everywhere I go, people ask me, “How’s the market?” I’m happy to say, April was fantastic! Our team sold 121 homes in the month of April. That’s great news, not just for us as a team, but also for you, our clients! We are starting to see an increase in activity. Homes that are priced well, and in good condition, are selling quickly. We are seeing homes sell in under a week and in a few cases, multiple offers. 119 of our listings have sold in under 30 days since the beginning of the year. 43 of those listings have sold in 10 days!

The condition of the home is certainly dictating how quickly it’s selling. That’s why we focus so much on staging your home properly. We are proud to announce we have two new Home Marketing Consultants on our team, Debra White and Dervon Hampton. They bring an incredible amount of experience and savvy design know-how to the table, and are already receiving rave reviews from our sellers. According to stagedhomes.com, 94.6% of staged homes sell on average in 33 days or less!

We are all pleased to see signs of recovery in this region and we are hopeful this trend continues during the summer selling season.

Interested in a no-obligation market analysis?

Governor O’Malley Signs New Real Estate Legislation

On May 20th, Governor Martin O’Malley signed hundreds of bills into law.  Summaries of several real estate bills he signed are listed below, including three MAR priorities: legislation prohibiting the taxation of forgiven debt in short sales; legislation giving small businesses the ability to pay property taxes semiannually; and legislation regulating real estate teams.

No “Sales Tax” on Home Sales in Recently Enacted Health Reform Bill

Contrary to reports and newspaper articles circulating widely on the Internet, there is not a “sales tax” or “transfer tax” on the sale of a home included in the recently signed health care reform bill. The analysis underlying these reports is incorrect.

Beginning in 2013, the health bill imposes a new 3.8% Medicare tax on “net investment income” earned by taxpayers with Adjusted Gross Income of more than $200,000 for individuals or more than $250,000 for married couples. Since capital gains are included in the definition of net investment income, a tax obligation might result from the sale of real property. In the case of the sale of a principal residence, the existing $250,000/$500,000 exclusion from capital gains on the sale of a principal residence remains unchanged. Therefore, even when the AGI limits are met, the new tax would apply only to the gain realized on a home sale in excess of the $250K/$500K existing primary home exclusion that pushes the filer’s AGI over the $200K/$250K adjusted gross income limit.

Here is the language from the bill:

Housing Affordability Near Record High

You have no doubt seen or heard the press mention that the ‘Affordability’ index is at or near record levels. The NAR’s Housing Affordability Index (HAI) rose to the range of 160-170 this year, setting record high levels.

Housing Affordability – Whichever Index You Look at, The Value Story is Great for Buyers

• First, there are actually several indexes out there from various sources. For example, the NAHB (National Association of Home Builders) has one they call the Housing Opportunity Index or HOI and the NAR (National Association of Realtors) publishes the Housing Affordability Index or HAI.
• While both indicate we are at or near record levels, I want to focus on the NAR index as the topic of today’s note.

The NAR Housing Affordability Index – What is It?

• Essentially, the index is a measure of the financial ability of U.S. families to buy a house.
• In the simplest terms, an index value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home.
• An index above 100 signifies that a family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.

The NAR Housing Affordability Index – Trending Higher

• The current index at the end of 2009 stood at 171.6 – 56 points above where it was at the end of 2007!
• What this shows is that the relationship between home prices, mortgage interest rates and family income is very favorable right now.
• The NAR has said that it is the most favorable since tracking began in 1970!

Going to sell the house? Don’t wait for ‘spring’ in February

The busiest season for home sales traditionally begins the day after the Super Bowl. But putting off getting the word out about your property would probably be a mistake, some experts say.

By Mary Umberger
January 10, 2010

Reporting from Chicago – It’s nearly spring — at least that’s the case in the parallel, slightly weird universe of real estate.

Traditionally, the “spring” home buying season, theoretically the busiest time in the marketplace, begins the day after the Super Bowl. Why this is so has never been clear, but it probably has something to do with finally being able to pry spouses off the couch to tour houses.

This year, “spring” arrives later than usual: The big game is Feb. 7.

But if you’re thinking of selling, waiting to list until the bowl festivities have passed probably is a mistake in the current market, according to some experts.

If you’re new to the selling game or haven’t sold a house in years, here are a few thoughts:

* Think about planting that “for sale” sign in the yard before your neighbor gets around to doing the same thing.

“We’re going to see a lot of property coming on the market,” said James Kinney, vice president of luxury home sales for Chicago-based Baird & Warner Real Estate. “We’re going to see everything that people took off the market in the fall, knowing they were going to be back in the spring.”

Plus there will be genuinely new listings in addition to the continuing cascade of foreclosures and short sales, he said.

* Don’t be surprised if, in determining an asking price, listing agents emphasize how much the competition is asking, rather than relying solely on data for recently sold homes.

Agents have always at least considered what else is on the market in setting an asking price, said Jim Merrion, regional director of Re/Max Northern Illinois.

“Now there’s more weight being placed on the current inventory, because in many cases it’s pushing prices to lower levels,” Merrion said. “I don’t know if it’s the effect of HGTV shows or what, but now we’re seeing agents taking sellers right into active listings” to get a true comparison of what they’re up against. “That never used to happen.”

Still, there’s a danger in relying too much on what the guy down the street is asking.

“An awful lot of listings are wrongly priced,” Kinney said. “If people use those as a guidepost, they could get into trouble. Do a combination of historical data and looking at who you’re competing against, once you’ve determined whether they’re valid prices.”

* And then there’s the thorniest issue: Most people have inflated notions of their home’s value in this boom-gone-bust market.

Experimenting with trying to net a price that’s rooted in the past can taint a house as an “old” listing, Kinney said.

“If you’re asking a price commensurate with or higher than prices achieved in 2006 and 2007, you’re incorrectly priced,” he said.

(Source: BaltimoreSun.com, Mary Umberger, January 10,2010)

Frequently Asked Questions About the Home Buyer Tax Credit for Members of the Military

Congress has acknowledged the unique circumstances affecting members of the military, the foreign service and the intelligence community by making the following exceptions that apply to both the $8,000 tax credit for first-time home buyers and the $6,500 tax credit for repeat home buyers.

Frequently Asked Questions About the Extended First-Time Home Buyer Tax Credit

The Worker, Homeownership, and Business Assistance Act of 2009 has extended the tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence. The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.

For sales occurring after November 6, 2009, the Act establishes income limits of $125,000 for single taxpayers and $225,000 for married couples filing joint returns.

The income limits for sales occurring on or after January 1, 2009 and on or before November 6, 2009, are $75,000 for single taxpayers and $150,000 for married taxpayers filing joint returns.

The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.

Senate and House Approve Tax Credit Extension and Expansion!

*UPDATE: President Obama has signed the bill into law*

First Time Home Buyers now have until April 30, 2010 to purchase a new home to be eligible for the $8,000 credit.

Great news from Capitol Hill today as Congress has just passed legislation to extend the $8,000 First Time Home Buyer Tax Credit until April 30, 2010! The bill also provides new legislation for a $6,500 tax credit for Move-up or Trade-down buyers that have currently owned a home for at least five years. The legislation was added to an extension of unemployment benefits and was passed by the Senate on Wednesday night. President Obama is expected to sign the legislation into law Friday morning.

View a brief summary of the tax credit extension and expansion legislation.

Start your home search now!

Legislation Pending to Extend Tax Credit

Legislation is currently pending to extend the First Time Home Buyer $8000 Tax Credit, as well as provide a new tax credit for Move Up Buyers (those that currently own a home and are looking to move up to a new home).

See below for a brief overview of the new legislation:

First Time Buyers: You have less than 35 days

ATTENTION FIRST TIME BUYERS:

Time is running out to take advantage of the $8,000 First Time Home Buyers tax credit, which expires on December 1, 2009. While there has been talk of the government extending or broadening the current program, at this time no such legislation has been passed. What does this mean to you?

Remember, the home buying process takes time. This means that in the next 35 days you must:

1. Listen to our step-by-step guide for First Time Home Buyers
2. Find a REALTOR to help you in the home buying process
3. Get pre-approved for a mortgage with a reputable lender
4. Find a home
5. Write, negotiate and ratify an offer on the home
6. Conduct inspections on the property – Appraisal, Termite, Home Inspection, Radon, Well/Septic, etc
7. Settle on or before November 30, 2009

For more information, visit our First Time Home Buyer Resource Center, or contact us now for more last minute tips to make sure you meet the deadline!