Real Estate Information

Delaware County has been ranked the #1 healthiest county in Ohio in which to live, according to Robt Wood Foundation & University of Wisconsin.  Franklin Co. ranked  64.  Fairfield 15, Licking 29, Union 30, Knox 38.  Criteria used was morbidity, mortality, tobacco use, diet, exercise and other factors (probably quality of fishing).  How many of our tax dollars do you suppose was spent on this useless survey? 

Anyway, if I sold you a house anywhere except Delaware Co I want to apologize and let you know I'm ready to get it on the market right away and sell you a lovely home in Delaware Co.  I'm really concerned about your health!  SO CALL TODAY!

$6500 & $8000 TAX CREDIT UPDATE

New IRS policy states first time buyers and move up buyers who purchase before April 30 need to file IRS Form 5405 (available at www.irs.gov) and the HUD closing statement.  To qualify for the $8000 or $6500 you have to purchase before April 30 and close by June 30.

There is still time. Seriously, call me right away! 

Here’s a little good news today.  Columbus is ranked #2 in the nation as best place to buy real estate.  What Ohio cities are #1 and #3?  Click the link below to find out.  Aren’t you glad you’re a Buckeye? 

Central Ohio real estate experienced a good rebound last year.  2010 looks to match it…at least until the tax credit stimulus money expires in April.  First time buyers still get $8000 and can also qualify for the Ohio Bond program!  Most move-up buyers qualify for $6500 tax credit.  Call me for details.

Thanks to Jeff Lichtenstein of Market Mortgage (614-848-5626) for telling me about this website.  

http://www.housingpredictor.com/predictions.html

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!

Interest rates just keep getting better.  About 6 months ago I had forecast 7% rates by Christmas.  I’m pleased to say…I was wrong.  I may have missed the timing, but I’m still forecasting rates climbing in the not too distant future.  If you are planning on buying, selling or refinancing now is the time.  Call if you need a good lender.  I endorse Market Mortgage and Colony Mortgage.  This week a 30 year loan was 4.75% and a 15 year loan was 4.25%.   Time to lock in these rates!

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.  

QUESTION: Does granite countertops and ceramic & wood floors add value to your home?

ANSWER: These upgrades will enhance your home’s appeal and will help it sell more quickly, but adds little value if your home is valued under $300,000.  The market definitely penalizes you for the lack of these upgrades if your home is valued over $300,000.  Homes in the $400,000 and up price range HAVE to have these features.  

A client of mine who flips houses in the $100,000-$125,000 range has found that upgrading his houses with these luxury amenities added a little more cost to what he was going to replace any way and even though it didn’t increase the sale price, his houses presented better than the competition and helped his properties sell.  However, he did not tear out and replace an item that did not already need to be replaced.  

I just sold a property that had these features and even though our buyer appreciated the granite, wood and ceramic, the appraiser did not.  The appraisal came in at the exact price of an identical property which has Formica tops, carpet and vinyl.  Again, these items WILL help your house sell but rarely will you recoup much of your investment.  

There has been $400,000,000,000 (billion) in real estate foreclosed or sold short (loan not paid in full) since the market turned down.  Another wave of foreclosures will be hitting early next year.  It is estimated there are $300+ billion in mortgage loans still in trouble.  

SO WHAT?

That’s actually good news.  We are more than half way through this melt down!  The real estate market has stabilized and some areas are experiencing appreciation.  Yet, there is still opportunity to buy a home at the discounted price…and 5% interest!

FORECAST:

Real estate prices will continue to increase from the low reached last winter.
Affordability will decrease as interest rates start to rebound to normal levels (7-8%).
It will be extremely important to buy with an eye on reselling.   

Check all radiators for proper antifreeze protection soon.  You should change antifreeze every 2 or 3 years so as to keep its rust protection.

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.   

Someone asked me this week, “Should I buy now, or wait till spring and hope home prices drop another 10%?  Here’s my answer.

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