mortgage debt forgivenes

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As the fiscal cliff debate raged, the NATIONALAsso-

CIATIONOFREALTORS@was intent on not adding to

the confusion by speculating on what might happen

given one scenario or another. Yet, I can't overstate

how much work was happening behind the scenes

to minimize any potential impact on real estate.

The result was that on Jan. 2, the same day the

House passed the bill to avert the fiscal cliff, we were

providing information to all of our state and local associations-

and to you via REALTOR.org-about

specific provisions of the bill that affected real estate.

While the debate was underway, we felt it was a

good time to reaffirm our support for the mortgage

interest deduction. Although discussions to limit

the MID never progressed to an actual proposal,

we wanted to remind lawmakers that the MID

benefits primarily middle-income families, and 'any

change to it could harm housing and the economy

as a whole. The Dec. 3 Call for Action generated

record levels of response's from REALTORS@Y.ou let

Congress know loud and clear that we'd be vigilant

in opposing any plan that modifies or excludes the

deductibility of mortgage interest.

While the legislation that was signed into law

in January did not affect the MID, its passage represents

a step in a continuing effort by NAR to protect

the ability of American families to own a horne,

The legislation also extended several tax measures

r ".' l' ~ __ .•... L ~__ ~~~ •.•

• Mortgage cancellation relief is extended

for another year. Households that have mort-

, gage debt forgiven by a lender in 2013as a result of

a modification, short sale, or foreclosure will not

have to pay tax on the amount forgiven.

• Mortgage insurance premiums remain

deductible. Tax filers making less than $no,ooo

who pay for mortgage insurance' can deduct the

cost of their premiums on their 2012 and 2013tax

returns.

• IS-year straight-line cost recovery on

leasehold improvements is extended. For

qualified leasehold improvements on commercial

properties, 15-year depreciation is extended

through 2013and made retroactive to cover 2012.

• Energy efficiency tax credit remains in

force. The IO percent tax credit, up to $500,

for home owners who make energy efficiency

improvements to an existing home is extended

through 2013and made retroactive to cover 2012.

Debate will continue in the coming months on longterm

solutions to the issues left unresolved by the fiscal

cliff bill. As Congress addresses those issues and

broader tax reform, you can bet that we'll continue

our vigilance on behalf of REALTORS"

 

 

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Housing may loosen up

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Housing may loosen up

NEW YORK – Dec. 21, 2012 – Shrinking inventories of homes for sale, which have helped drive prices higher this year, may reverse course next year, economists say.

Rising prices are likely to persuade more people to sell and builders to add more homes, which would expand supplies.

In recent years, with prices nationally down more than 30 percent from their 2006 peaks, the only people selling were people who had to sell, says economist Paul Diggle at Capital Economics. But prices have been rising, up 6.3 percent in October compared with a year earlier, CoreLogic says. More increases are likely next year.

Supplies of homes for sale are “close to a low point now,” Diggle says and will “probably turn around over the next year.”

That will help keep a check on prices. Still, Capital Economics predicts prices will rise 5 percent next year. Economists surveyed by market watcher Zillow foresee a 3.1 percent jump.

The housing market continued to show signs of strengthening in November, with existing home sales climbing to its highest level in three years, the National Association of Realtors reported Thursday.

Total sales of existing homes rose 5.9 percent in November to a seasonally adjusted annual rate of 5.04 million, up 14.5 percent from a year ago, NAR said.

Yet, the most important number in the monthly report dealt with the supply of homes for sale, says economist Patrick Newport of IHS Global Insight. Supplies have fallen to the lowest in more than seven years, based on the current pace of sales. NAR reported the supply fell to 4.8 months in November, down 38 percent from January 2011. Realtors consider a six-month supply to be a balanced market between buyers and sellers.

More people will likely step up to sell next year, assuming prices continue to rise, Newport says. “A lot of people have just been waiting.”

Phoenix, which leads the nation with a 25 percent rise in October prices year-over-year, saw its supply of active listings hit a low in June, then expand until December. That’s a normal seasonal pattern for Phoenix, but more ordinary sellers are also likely tapping into rising prices, says Mike Orr, real estate expert at Arizona State University.

A recent survey also points to more sellers. Fannie Mae’s November National Housing Survey showed the share of consumers who say now is a good time to sell a home jumped 5 percentage points in November to 23 percent. That’s the highest level since the survey began in June 2010.

Real estate website Trulia, with Harris Interactive, also recently surveyed homeowners and found that 22 percent of current homeowners said they’re at least somewhat likely to sell their homes next year.

Those most likely to sell are people who bought after 2009 and have seen prices rise, the survey showed. They will likely include “flippers” who buy distressed homes, fix them, then resell, says Trulia economist Jed Kolko.

Supplies of homes for sale have been tightening, given stronger sales and a reluctance among people to sell while prices were weak. Also, fewer distressed properties have been coming to market as the foreclosure crisis slowly abates.

© Copyright 2012 USA TODAY, a division of Gannett Co. Inc., Julie Schmit

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The long-awaited opening of the Veterans Affairs clinic in Cape Coral

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The long-awaited opening of the Veterans Affairs clinic in Cape Coral today means easier access to health care for many area veterans, but also — city officials hope — a dose of good medicine for the city’s economy. Dana Brunett, the city’s director of economic development, said more than 500,000 people could visit the clinic each year. “You got people traveling pretty fair distances,” he said. “They’re gonna have to get something to eat, buy gas, stuff like that. We want to make sure that happens in our community.” The city has pushed hard for development on more than 400 acres of untapped land within a mile of the site, what it calls the Veterans Investment Zone. On its wish list is everything from medical offices and pharmacies to movie theaters and bars. Nothing much is stirring yet, Brunett said, but that should change. “People like to see it happen,” he said. “They don’t want to be pioneers, but I think once you see the bodies showing up at that place and the amount of traffic they’re going to have, I think it’s really going to pick up.” Cape Coral real estate agent Hal Leopard said it’s pretty clear what’ll happen first. “Primarily, you’re gonna see hotels first, then there’ll be food vendors, restaurants, and then you’re gonna have the last (wave): retail,” Leopard said. And since many of the veterans will be disabled, that means they’ll be traveling with families, he said. “It’s gonna be a serious impact in that area,” he said. “Because once you close the Fort Myers location of the existing clinic, the only other two places vets can go is Tampa or Miami.” With more than 200,000 veterans in Southwest Florida and others coming from six counties, Cape Coral Councilman Kevin McGrail said the next step is securing a straight shot from Interstate 75, a federal project that will likely cost tens of millions.

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Homebuyers reveal preferences

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Old vs. new? Homebuyers reveal preferences

NEW YORK – Dec. 6, 2012 – What do home shopper prefer about new homes versus older homes? A study commissioned by BHI Inc. examined consumer preferences in new homes versus existing homes among 984 prospective buyers who plan to purchase a home within the next 12 months.

The survey found that consumers generally prefer existing homes over new homes, but many will still consider a new home offered by a builder. Seventy-five percent of the buyers say they’re considering an existing home compared to 20 percent who want a new home. Five percent say they have no preference whether the home is old or new, according to the survey.

For home shoppers who prefer existing homes, their preferences tend to be driven by the mature landscaping, larger lot sizes and sense of community that they say existing homes tend to offer. Some said established neighborhoods tend to have a “warmer inviting feel,” “better construction,” and “better privacy – homes are not on top of each other and cookie cutter.”

Homebuyers who prefer new homes tend to cite energy efficiency, the ability to customize the home to their needs, and lower maintenance costs as top drivers. Also, they say that new homes tend to offer more living space, but that may come at the expense of smaller yard and lot sizes.

Source: “Don’t Let Buyers Shop New Homes Without You,” Inman News (Nov. 14, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

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Oct. 2012 pending home sales highest in over five years

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Oct. pending home sales highest in over five years

WASHINGTON – Nov. 29, 2012 – Pending home sales rose strongly in October with mixed regional results, according to the National Association of Realtors® (NAR).

The Pending Home Sales Index (PHSI) based on contract signings increased 5.2 percent to 104.8 in October from an upwardly revised 99.6 in September. The PHSI is 13.2 percent above October 2011 when it was 92.6. The data reflect contracts but not closings.

“We’ve had very good housing affordability conditions for quite some time, but we’re seeing more impact now from steady job creation, and rising consumer confidence about homebuying now that home prices have clearly turned positive,” says Lawrence Yun, NAR chief economist.

Outside of a few spikes during the tax credit period, pending home sales are at the highest level since March 2007 when the index also reached 104.8. On a year-over-year basis, pending home sales have risen for 18 consecutive months.

Yun says there are clear regional patterns: “Contract activity surged in the Midwest and is showing very healthy gains in the South, but was down slightly in both the Northeast and West.”

“The Northeast saw some impact from Hurricane Sandy, but limited inventory in the West is keeping a lid on the market. All regions are up from a year ago, with double-digit gains in every region but the West,” says Yun.

The PHSI in the Northeast slipped 0.1 percent to 79.2 in October, but it’s 13.3 percent above a year ago. In the Midwest, the index jumped 15.6 percent to 104.4 in October, and it’s 20.0 percent above October 2011.

Pending home sales in the South rose 5.5 percent to an index of 117.3 in October, and it’s 17.4 percent higher than a year ago. In the West, the index declined 1.1 percent in October to 105.7, but it’s 0.9 percent above October 2011.

© 2012 Florida Realtors®

 

 

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Investors see shrinking 2-year window to buy up REOs

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Investors see shrinking 2-year window to buy up REOs

NEW YORK – Nov. 16, 2012 – The big discounts in the housing market are fading, and investors are taking notice that time is ticking. Blackstone Group LP, one of the world’s largest private-equity firms, says that investors likely have less than two years to buy up foreclosed U.S. homes as prices rise and supplies shrink.

“Prices are starting to move faster,” Jonathan Gray, global head of real estate for Blackstone, told Bloomberg. “That’s one of the risks that emerge as more people like us get into the space and as individual homeowner confidence grows. Frankly, buying a home today is pretty compelling.”

Blackstone has spent about $1.5 billion on 10,000 foreclosed homes this year alone. It is the biggest buyer of single-family homes in the nation. According to Blackstone, the investment firm purchases $100 million in these kinds of properties per week. The strategy is to purchase foreclosed single-family homes at steep discounts and turn them into rentals.

“The recovery in house prices could surprise people,” Gray told Bloomberg. “They have just gotten beaten down so much and we’re not building enough to keep up with the population growth. Affordability is there. I think as homeowners get a little bit of confidence, we will steadily have more people lean toward buying homes, faster home-price appreciation, which will be good for this investment strategy and good for the economy at large.”

Source: “Blackstone Sees 2-Year Window to Buy Distressed Homes: Mortgages,” Bloomberg (Nov. 14, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

 

 

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Fla.'s housing market continues positive trends in Oct. 2012

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Fla.’s housing market continues positive trends in Oct. 2012

ORLANDO, Fla. – Nov. 19, 2012 – Pending sales, closed sales and median prices rose, while the inventory of homes and condos for sale dropped in Florida’s housing market in October, according to the latest housing data released by Florida Realtors®.

“With Thanksgiving just around the corner, we have a lot to be thankful for here in Florida,” said 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “The state’s latest unemployment rate fell to 8.5 percent, the lowest in nearly four years – and combined with the momentum of the housing market, it clearly shows that Florida is on a positive path and has been for months. Pending sales, closed sales and prices are trending up.”

Statewide closed sales of existing single-family homes totaled 17,779 in October, up 25.3 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts that are signed by not yet completed or closed – of existing single-family homes last month rose 56.7 percent over the previous October. The statewide median sales price for single-family existing homes in October was $145,000, up 9 percent from a year ago.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in September 2012 was $184,300, up 11.4 percent from the previous year. In California, the statewide median sales price for single-family existing homes in September was $345,000; in Massachusetts, it was $294,900; in Maryland, it was $244,357; and in New York, it was $225,000.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Looking at Florida’s year-to-year comparison for sales of townhomes-condos, a total of 8,252 units sold statewide last month, up 16.4 percent compared to October 2011. Meanwhile, pending sales for townhome-condos in October increased 47.1 percent compared to the year-ago figure. The statewide median for townhome-condo properties was $107,000, up 20.2 percent over the previous year. NAR reported that the national median existing condo price in September 2012 was $181,000.

The inventory for single-family homes stood at a 5.2-months’ supply in October; inventory for townhome-condo properties was also at a 5.2-months’ supply, according to Florida Realtors. Industry analysts note that a 5.5-months’ supply symbolically represents a market balanced between buyers and sellers.

“Once again, everything that should be going up in the market is going up, and everything that should be going down is going down,” said Florida Realtors Chief Economist Dr. John Tuccillo. “As impressive as the year-over-year gains for October are, far more impressive are year-to-date gains of 2012 over 2011. They indicate the depth and resilience of this recovery.”

The interest rate for a 30-year fixed-rate mortgage averaged 3.38 percent in October 2012, down from the 4.07 percent averaged during the same month a year earlier, according to Freddie Mac.

To see the full statewide housing activity report, go to Florida Realtors website and click on the Research page; then look under Latest Housing Data, Statewide Residential Activity and get the October report. Or go to Florida Realtors Media Center and download the October 2012 data report PDF under Market Data.

© 2012 Florida Realtors®

 

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