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You are here: Home » 2013 » October

Should We take Our Home Off The Market For The Holidays?

Every year about this time I hear this question. There is a myth out there that home selling activity completely shuts down right before Thanksgiving and picks up again in January. The truth is that homes sell all year round. I’ve had some of my best months in December.

If you aren’t that motivated to sell, you don’t have a deadline to meet, and showing your home during the Holidays is too much of a hassle, go ahead and take your home off the market. However, if you do have to sell your home, and you do have a deadline to meet, then leave it on the market. It certainly isn’t going to sell if you take it off the market!

There are some reasons why the Holidays can be a GOOD time to be on the market. Some people are off of work, so they have time to look. The “lookey-loo” buyers go home, so while you’ll have fewer buyers looking, they’ll be the serious buyers. And your home will look great all decorated, right?

However, given all that, if you aren’t on the market yet, and you have a choice of when to go on, I wouldn’t recommend going on the week before Thanksgiving, or the week prior to Christmas or New Year’s. The buyer activity slows down quite a bit around those times. But keep in mind that there is usually a big spike in inventory right after New Year’s, so you will have more competition if you wait until January.

If you absolutely, positively do not want to move until after the Holidays, that is still not a reason to avoid being on the market now. If you get an offer asking you to move out December 20, you can counter-offer a new date or just refuse the offer altogether.

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). To search the MLS for free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty

Pease Out ( Or In? )

No, that’s not a typo. Just my way to try to be funny on the slang goodbye of “Peace out!” Anyways, if you are a “high-income” earner (individuals earning more than $250,000 or joint filers above $300,000), then you need to know about the return of the “Pease Limitations.” Most people are focused on the increase in tax rates and on the Obamacare surcharges, but there is another, more sneaky way that your tax bill may go up.

Remember the whole “fiscal cliff” debacle back in January of this year? Well, one way that they closed the financial gap was to re-introduce “Pease Limitations.” These reduce the value of itemized deductions for high income taxpayers. They were introduced back in 1990 but were scaled back a while ago. Well, they are back now, and you probably didn’t read about that in the paper. There is a formula for the reductions, but I don’t have enough space to explain it here. At least there is a cap on the reduction so that your itemized deductions won’t be reduced more than 20%.

So why am I mentioning this in a real estate article? It’s because that mortgage interest and property taxes are two of the bigger itemized deductions that people take. So if you were calculating the “after-tax” cost for your mortgage, you may need to recalculate that because you may be losing up to 20% of that benefit. On the bright side, at least we still have 80%+ of those deductions! There were discussions about eliminating the mortgage interest tax deduction entirely!

And the other good news is that the capital gains rates on the sale of a principal residence were  not changed, which means a single tax payer may still exclude up to $250,000 and married couples may still exclude up to $500,000 in gain.

I AM NOT A TAX EXPERT. PLEASE CONSULT YOUR TAX ADVISOR. If you have questions on any other real estate topic, call me at (925) 240-MOVE (6683). #1 in Brentwood listings sold since 2000. To search the MLS for free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty.

Inventory Is Up

Home inventory started this year with only 42 homes on the market in Brentwood, so when the inventory rose to 100 homes on the market around June, that was a big percentage increase. However, 100 homes is still VERY low by historic rankings. Where are we at now? As I write this we have 140 homes on the market in Brentwood. So that’s higher than it was in June, and much higher than it was in January, but again, this is still historically very low.

What’s a bit concerning is what is happening in regards to the number of homes selling. From June to August of this year, the number of homes going pending and the number of solds increased at almost the same rate as the number of homes for sale was going up. So that seemed to suggest that we had plenty of buyers to suck up the new listings. But then in September, the number of homes for sale continued to increase, but the number of pendings and solds actually DECREASED to about where it was in June.

The rise in prices year over year is what is driving many sellers into the market. On top of that, we are seeing a marked decline in the number of investors buying homes. They are still there in spades for anything under $200K, but there are few investors looking to buy homes over $300-400K. They just can’t rent them for enough to have it make much sense. Back when the market was “bottoming” and appreciating rapidly, investors were willing to buy almost anything to ride the wave back up. But now that prices seem to have flattened out a bit, the investors want the properties to cash-flow. That means many of our buyers now are owner-occupants.

So inventory is up and there are fewer buyers. We are seeing fewer multiple offers, although the nice homes that are priced well are still often attracting more than one offer. We’ll have to keep an eye on the inventory versus the number of homes selling. If the inventory keeps rising while the number of homes selling stays the same, or falls, that could mean that price appreciation may be flattening out.

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). #1 in Brentwood listings sold since 2000. To search the MLS for free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty.

Ca Forgiven Debt Tax Update

I’ve written extensively in the past about the forgiven debt tax that you may or may not have to pay when you have debt forgiven in a foreclosure, loan mod with principal reduction or short sale. It is an extremely complicated issue, especially since we are dealing with Federal and State tax law. Up until the end of 2012, Federal and State laws were basically the same. So far this year, they are different. California has been considering a bill to make California law match up to IRS rules, but it hasn’t passed yet. The California legislature has adjourned for this year. However, all hope is not lost because if they reconsider it when they come back in session again and pass it by April 14, 2014, it will be retroactive for 2013 tax returns. So there is still hope!

I don’t have room to get into all the details, but let me address a few myths. First, this has NOTHING to do with your lender “coming after you” for the deficiency on your loan balance after the fact. The topic of the forgiven debt tax is only about the TAX that you may owe on the forgiven debt. Second, this situation is NOT unique to short sales. It drives me crazy to see so many articles and blog postings about how this tax could KILL short sales. What they don’t seem to realize is that if you let it foreclose, you very well may still owe the tax. So if you are thinking to yourself, “Hey, I may owe that tax, so I won’t do a short sale, I’ll just let it foreclose…” that may not be wise thinking. In fact, depending on the legal classification of your loan (purchase money or recourse) and the method of how your lender forecloses, it’s possible that a short sale WOULD protect you from the forgiven debt tax when a foreclosure wouldn’t! Third, there are still other exemptions available, so even if both of the Federal and State governing bodies let this laws lapse, it’s not a given that you will owe on the forgiven debt tax.

I AM NOT A TAX OR LEGAL EXPERT. PLEASE CONSULT ONE FOR YOUR SITUATION. If you have questions on any other real estate topic, call me at (925) 240-MOVE (6683). #1 in Brentwood listings sold since 2000. To search the MLS for free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty.

How The Market Has Changed

Boy, how our market has changed since last year! It’s darned near unrecognizable! Last year at this time I was still dealing almost exclusively with short sale listings. It was rare to have a “regular” seller who had equity in their home. However, around the beginning of 2013 I started seeing more and more regular sellers. Within a short period of time I was back to the majority of my sellers having at least some equity again! I’m still seeing a few short sales, but they are the definite minority now. There are still a few bank-owned properties that pop up now and then, but they are getting to be somewhat rare. This time last year more than half of all closings in our area where distressed sales of some kind, and the vast majority of those were short sales. But now it’s dropped to about 25% or less of all sales are short sales, and the numbers keep dropping! The main reason for this is the rise in home prices. The median home price is up nearly 30% over last year! So in some cases that’s almost a $100,000 increase in price. So someone that was $75K upside-down a year or two ago now has some equity!

The other reason we are seeing fewer distressed sales is that we are now 6-7 years removed from the “mortgage meltdown.” The lenders just aren’t making those crazy loans anymore, and it’s just taken us this long to work through all those bad loans either through a loan mod, foreclosure or short sale. Imagine a factory where we kept pushing product out (short sales or foreclosures) but stopping bring the raw materials in (bad loans), so eventually the numbers had to drop on the output side. We are seeing people now that are selling because they bought their home after the bubble burst, but need to move for one of the more established reasons: job relocation, need bigger/smaller house, divorce, etc. And if they bought after 2007, they likely have some equity now.

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). #1 in Brentwood listings sold since 2000. To search the MLS for free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty.

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