Cheri, my lovely wife and manager of RE/MAX Impact shared market stats at our monthly meeting today.  Here’s the scoop.  Number of sales in Columbus MLS compared to last year is down 9.4%.  However, RE/MAX Impact is up 30%!  Number of homes on the market is down 12.2%.  Home prices fell a little in 2009…2.3%.  Home inventory declined from 9.8 to a 6.9 month’s supply.  Our agents have averaged selling $2,400,000 in real estate YTD.  RE/MAX Impact remains the #1 RE/MAX office in our local area and #5 in closed sales out of the 82 offices in the Central and Northern Ohio region! 

Some agents say this is a difficult market…but looks like RE/MAX Impact agents have it figured out!

Had several clients ask this same question this week. 

QUESTION:

 How will the new extended and expanded stimulus affect real estate?

ANSWER:

First, let me reiterate that the $8000 tax credit for first time buyers and the new $6500 tax credit (if you have owned for 5 years) has been approved through April 30, 2010.  It will definitely help as evidenced by the strong number of sales this year.  It will also give an incentive to those who currently own a home, which will help sell homes priced higher than $250,000.  Philosophically, I don’t agree with giving tax money to people to get them to buy things.  It isn’t fair to people who purchased before the incentive program and to those who purchase after it.  However, I’m not raising too much fuss because I benefit greatly by it.  Long story short If you have been wanting to upsize, downsize or move to Florida…you have a 6 month window that will help you get that done.  Will they extend the program beyond April?  Dunno.  I’m not sure they will have the money.  In fact, I’m not sure where they’re getting the money now!

The time to do anything is when you can.  Don’t wait till March or April and hope the government extends the program again.  They can’t continue to do it forever.  Most of the “stars” are aligned now…free money, low interest rates, low home prices, lots of inventory.  As the Buick commercial says, “The only thing missing is You”.  Selling will still take excellent marketing and presentation.  Call me to help with that.  

When you mow for the last time this year be sure to winterize the mower.  Add some StaBil to the gas and run the motor long enough to get it in the carburetor before shutting it off.  I like my mower deck’s underside to be scraped, wire brushed and painted with Rustoleum to prevent rust from eating on the deck all winter.  Take the battery out and keep in a safe warm place.  You can slip the battery in to your wife’s closet and set it on a block of wood while she scraping the mower deck.  I’ve found if you cover the battery up with some summer clothes, she shouldn’t even find out about it…unless of course, the acid eats a hole in her new blouse.           

The 2 cycle motors on weed whips, blowers, edgers, etc. should be okay without StaBil as the oil in the gas slows its evaporation.  It’s also a good time to have the blades sharpened for next year.  I prefer to wait until spring to change the oil and filters so any condensation from the winter will also be drained out.   

Don’t forget to drain the water out of your boat motors.  Used washing machines and dishwashers stored in the garage should be drained also, or you’ll be finding them a new home in the landfill next spring.   

If you could control interest rates, unemployment, layoffs, factory closings, terrorist attacks, tax laws, etc etc. then you could wait and take the chance. Problem is, there are so many variables that affect the cost that you can’t take the chance.   Here’s something to think about.  A $300,000 house purchased today with a 5.5% loan will actually cost less than a $270,000 house purchased with a 6.5% loan.  The chances are greater that interest will go up 1% than the values fall 10%.   

There is an old saying, which I live by, “The best time to go fishing is… when you can.”   

I say, “The best time to buy a house … is when you can.”  If your budget and circumstances allow you to buy now, then don’t wait.  

Reminds me of a story I heard…. well, I better save that for another day!

QUESTION:  (Brett)  On a short sale, (where a bank is not fully paid) is the forgiven debt taxable income?

ANSWER:  (John)  Technically yes, but most people get an exception and do not have to pay tax on the forgiven debt.   I forwarded this question to my accountant for a more complete and accurate answer.  

John,

 Generally, if a taxpayer owes a debt that is canceled or forgiven, the canceled amount is taxable income.  There are exceptions:

Bankruptcy – Canceled debt is not included in gross income if the debt is canceled in a bankruptcy case under the U.S. Bankruptcy Code.  The debtor must be under the jurisdiction of the court, and the cancelation of debt must be granted by the court or occur as a result of a plan approved by the court.

Insolvency – Canceled debt is excluded from gross income up to the amount by which the taxpayer’s liabilities exceed the fair market value of assets.  This determination is made immediately before the cancelation of debt.

A foreclosure or a short sale results in canceled or forgiven debt.  These are treated as a sale or exchange of property.  If this is a primary residence, then the normal rules for exempting the income from taxation come into play.

The bankruptcy and insolvency exceptions apply to income resulting from foreclosure or sale of property.

Have any of your clients contact me regarding their personal situation. I’d be happy to help.

Gary

Here is a secret that not everyone knows…when I worked for other real estate agents I referred my friends & my husband’s co-workers to John.  I think that says a lot in regards to my confidence in his abilities, his integrity, his morals and his vast experience in Real Estate.  What a blessing when it finally worked out that I could be a part of this team.

Recently, John was talking to someone needing a rental.  Turns out that he is filing bankruptcy because of the present economy.  John asked what he was doing with the house he owned.  He was going to give it back to the bank…that is a foreclosure.  John told him that he could do a short sale and though his credit would still be dinged with the bankruptcy he could rebuild his credit in about 2 years.  A foreclosure follows you for 10 years.  John is now helping him avoid foreclosure by doing a short sale.

What is the tip in this you say?  If you need to buy, sell, renegotiate your loan, want advice on short sales or pre foreclosures don’t hesitate one minute to call John.  He will work for YOU!

Here is a secret that not everyone knows…when I worked for other real estate agents I referred my friends & my husband’s co-workers to John.  I think that says a lot in regards to my confidence in his abilities, his integrity, his morals and his vast experience in Real Estate.  What a blessing when it finally worked out that I could be a part of this team.

Recently, John was talking to someone needing a rental.  Turns out that he is filing bankruptcy because of the present economy.  John asked what he was doing with the house he owned.  He was going to give it back to the bank…that is a foreclosure.  John told him that he could do a short sale and though his credit would still be dinged with the bankruptcy he could rebuild his credit in about 2 years.  A foreclosure follows you for 10 years.  John is now helping him avoid foreclosure by doing a short sale.

What is the tip in this you say?  If you need to buy, sell, renegotiate your loan, want advice on short sales or pre foreclosures don’t hesitate one minute to call John.  He will work for YOU!

The real estate market is HOT!  But only for properties under $250,000.  The $8000 tax credit given to first time buyers has really helped this price segment.  Homes up to $350,000 are still doing pretty well, but over that the market slows to a crawl. The higher the price the slower it gets.  A lot of areas have up to a 4 or 5 year supply of homes available at current absorption rates.  

The $8000 tax credit goes away on Dec 1st.  That means a buyer will need to be “in contract” by Nov 1st and if things get stacked up like I think…it may take 6 weeks to get a loan closed.  So, to be safe a buyer will need to be “in contract” by Oct 15th in order to close by the Nov 30 deadline.

If you want to buy or sell, you should do it when this stimulus money is available. Give me a call.

Japanese Beetles won’t kill your trees and plants but will eat all the leaves and cost you the normal growth for the year.  They are partial to River Birch and a few other landscape trees…and they love raspberry and blackberry leaves.  There are several sprays available that work marvelously, however I don’t use sprays on my fruits and vegetables. I remove them by hand or give them a little love squeeze with pliers.  When heavily infested I spray them off with water.  Washing your plants with water and dish soap disposes of the scent they give off which attracts more of their friends.  The soap also repels them.  I know my little brothers sure didn’t like it when I had to wash their mouths out with soap.  That was mom’s trick when they picked up a bad word…I found it handy to get them to do my chores.  

Ron Wilson (Sat 10-12 Gardening show on WTVN) says, “If you have to buy the bags that attract and capture Japanese Beetles…buy them and give them to your neighbor”.

Go to your county auditor’s website.  Check your valuation and see if you agree. If you think it’s too high then you can contest the valuation. On the auditor’s site you will also find a document titled something like “Real estate valuation complaint form”.  Fill it out and hold until the appropriate time.  Read the instructions, but most counties have a window… say Jan 1 through Mar 31.  Do not submit before the prescribed time.  Some counties have smaller windows.  What you are trying to do is get the auditor to lower his valuation of your home.  Say you get a $50,000 decrease in market value (assessed value is 35% of market value), that will save you approximately $1000 per year depending on your local tax rates.     

Documentation.:  You can have a professional appraisal done at a cost of approximately $350 or do it yourself with a little help from your friend (me).  I will do a competitive market analysis for you (clients & friends) showing listing and sales info on comparable homes in your area.  You will need to review the info and choose 3 comparable sales and 3 comparable listings to present when you get the appointment with the review board.    

You may be able to get your valuation decreased substantially…saving hundreds if not thousands of dollars a year.  Of course, if everyone does this, then the taxing authorities will have to raise taxes to cover the shortfall…however not everyone is as well informed as you and me.  So, as I so profoundly say…let the other guy pay.  It’s not fair to give our politicians too much money and make them work so hard to get rid of it.  Let’s give ‘em a break.  Let ‘em go home early.  We’re working those poor fellows too hard.  Lighten up.  It’s the least we can do for our country. 

If you successfully challenge your valuation, calculate the savings and let me know.  I would like to know if you saved money.  If you’re the one in a thousand who believes in paying your fair share, then go ahead and get your valuation lowered and apply the difference to my tax bill.  Call me for my parcel number.      

Do yourself a favor and show her some love.  Get a backpack for her for Father’s Day.

10 year ownership even in Detroit shows an average of $10,000 equity still remains for the typical homeowner.  15 and 20 year ownership scores $60,000 and $78,000.  In Indianapolis the 10, 15 and 20 year gains are $19,000, $47,000 and $68,000 respectively.  Honolulu homeowners have enjoyed a run up of $485,000 in the last 20 years, but then who would want to endure Hawaii weather for 20 years just for a little money?  (...not in the article...it's John's editorial comment)

John's Take on This

The Columbus market is similar to Indianapolis.  Some areas have bottomed out and have been appreciating for the last 6 months to a year.  Appreciation should be in the 5-6% range in a couple of years.  It will follow the inflation rate and be a point or two less than the interest rates, both which are bound to increase.  After all, appreciation is the politician's "feel good" word for inflation.  Don't moan and groan about the coming inflation. Make it work for you.  Don't moan and groan about the coming tax increases.  Make it work for you.  Position yourself to gain equity and save taxes.  It's not rocket surgery.  You have to own your home and then you need to invest in rental property. 

Go forth boldly and capitalize on the low real estate prices and low interest rates (5% or less)!

I didn’t realize how dirty siding can get.  I thought God sent rain to wash houses.  But, you know, the dabburn EPA has cleaned up the air so much that rain doesn’t even have enough acid to clean your house anymore.  

It took about 4 hours but the house looks like brand new.  Cheri at first was a little intimidated with the height when she was atop the fully extended ladder trying to scrub the peaks of the gables, but I was able to talk her through it.  It wasn’t easy, but as long as I remained calm and kept my voice steady she didn’t know how close to death she really was.  I don’t want to appear immodest, but I did a pretty good job talking her up the last 15’ or so, even if I have to say so myself! 

Move up market doing well.   It seems like homes that are beyond the typical first time buyer ($200k-$400k) are still selling pretty well.  In central Ohio, FHA loan limit is $341,250 and VA limit is $417,000, which helps this price segment.     

The executive home market ($400k-$600k) is still slow.  In all but a few areas there is a 3 to 5 year supply of homes at the current rate of sales…that is if no more homes were to come on the market! 

The luxury home market ($600k & up) is tough.  Sellers, builders and banks are selling at bargain prices.  If you can afford a home in this price range, you will probably never see home prices & interest rates this low again.  

Let me sum it up.  Of course, your house can sell in this market.  Proper pricing, great presentation and excellent marketing will get your home sold.   

By the way, interest rates are phenomenal.  If you want to buy or even just refinance…call me.  If you know someone who qualifies as a first time buyer…call me,
614-523-1000.  It’s likely they will never have an opportunity like this again. 

1.  Are downspouts connected to the drain tiles?

2.  Are the drains handling the water or are the drains backing up and overflowing?

3.  Is the water (and hail stones) rolling away from the basement walls or do you find a couple places that may need some fill dirt (topsoil can be purchased in bags that are easy for a woman to handle)… or if you want a truck load of soil, Mother’s Day is fast approaching and what woman wouldn’t want a new wheel barrow?

4.  While she’s out there have her check that no vegetation is touching the house…or planted closer than 18 inches from the foundation.

5.  Just to show her you are fair minded, check over her checklist and explain how you want any issues fixed. 

6.  I personally inspect the sump pump to see it is operating correctly.  Some things you just can’t delegate!

Once she has these things taken care of you should sleep well knowing you won’t be having water problems in the basement.  If your lady thinks this is a little too much to expect of her, simply remind her scrubbing mold off the basement walls will not be much fun either!

Always trying to help,

John