Happy Holidays! Real estate news is good – prices are rising and homes are selling. Several of the factors that have led to an increase in home sales so far this year include the following:
• Affordability conditions
• Rent increases
• Lower levels of inventory
• Some job creation
The National Association of Realtors reported that existing home sales increased by 2.1% in November over the previous month. Homes over $500,000 are showing the most in price gains. One-third of all homes coming on the market are in escrow within 30 days and the average days on market is just 71 days.
According to the Federal Reserve, this year’s housing equity has risen by a cumulative $760 billion. By year-end, it is anticipated that the rising equity will reach 5% or $1 trillion.
There are tax advantages available through the end of 2012. If you want to talk, know that I am here for you. Meanwhile, may December be a time of joy and reunion for you.
Q: Will new taxes affect the sale of our home in 2013?
A: Yes. Starting in 2013, the Health Care and Education Reconciliation Act will add a new 3.8% Medicare tax on all your investment income. These are sources of income the IRS defines as “unearned income.” This includes interest from the bank, royalties, dividends, capital gains and rental income.
The new rate on long-term capital gains earned from selling a home will also be raised from 15% to 20%. The 20% rate plus the added 3.8% for the new healthcare tax combines for a total of 23.8% tax.
You can search the web for “tax changes for 2013” to learn more. Better still, I recommend that you talk to your accountant about the tax changes coming in 2013.
For the first six months of this year, Fannie Mae completed 38,717 short sales. That compares to 70,025 for all of 2011. On November 1, new guidelines went into effect for short sales. These are expected to simplify and speed the process by streamlining documentation. This should also help borrowers who have not defaulted on loans. Some of the new guidlines require lenders to
• Respond to short sales within 30 days of an offer
• Provide weekly updates to the borrow
• Communicate a final decision to the borrower within 60 day of receipt of the offer
Get more information by visiting www.fhfa.gov, or downloading the new guidelines here. This sounds like good news for buyers and seller and should facilitate a smoother transaction for everyone.
Bay Area Job Growth, Healthy Housing Markets May Outshine Washington’s Fiscal Cliff
Dire warnings of the approaching “fiscal cliff” in Washington obscure solid economic fundamentals in the Bay Area that point to continued economic recovery in 2013 and equally strong forecasts for our housing markets. Get the full story on this critical topic: http://bit.ly/WWdYmW.
I am truly honored by the trust you place in me with your referrals of family, friends and business associates.