Tag Archives: South Salem NY Homes

Do You Understand Income Tax Considerations of Rental Properties? | South Salem Real Estate

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A rental property can generate “taxable losses” that can be used to reduce your normal salary income, hence the federal income taxes you pay. It’s difficult for most people to understand how taxes work, and even more confusing once we get into the realm of rental properties and taxes. Note that understanding how taxes impact personal residences are a completely different topic, as those are governed by totally separate tax codes and go elsewhere on your 1040 form.

Below are some of the basics to understanding rental properties and federal income taxes.

Often I hear people saying that they want to buy some real estate to save money on income taxes. However, depending on your tax situation, owning real estate might not save you a dime on taxes. It wholly depends on your specific tax picture and the IRS rules about Passive Activity Loss Limitations.

First and foremost you should never make real estate investment decisions based solely on tax considerations. The first order of business is do your due diligence and determine if an investment makes sense based on cash flows, cash on cash returns, renovation costs, rental income, financing, and the risk of any particular property. Once you believe it makes sense in every other sense, then you can contemplate the tax effects.

Important note: Always have a CPA, attorney or licensed tax professional guide you through your individual tax picture — this article is an illustration of one scenario but your scenario can be very different based on your financial picture.

To better understand, let’s first quickly discuss the IRS 1040 form.

The 1040 form you fill out each year does two things:

 

http://homes.yahoo.com/news/understand-income-tax-considerations-rental-properties-184514095.html

Zillow signs NY State MLS as latest member of partnership program | South Salem NY Homes

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Zillow is set to acquire listings directly from NY State MLS, a multiple listing service (MLS) with more than 10,000 members that covers all 62 counties of New York state.

The deal adds the MLS to a roster of others that have joined the Zillow Partnership Program while further tightening Zillow’s strong grip on New York.

In exchange for providing listings, Zillow will offer brokers and agents who belong to the NY State MLS enhanced branding and other perks, as it does for all MLSs that join the Zillow Partnership Program.

Zillow dangles such incentives because access to MLS feeds allows it to improve the freshness of its inventory. Listing feeds from some sources don’t allow for frequent updating, but direct feeds from MLSs let Zillow refresh listings as often as every 15 minutes.

“We understand our members’ desire to display the most up-to-date listing data while maintaining maximum exposure,” said Dawn Pfaff, president of NY State MLS, in a statement. “This partnership ensures listings sent to Zillow are updated multiple times per day and kept current for prospective homebuyers.”

Listings fed to the Zillow program appear on the Zillow Real Estate Network, which includes Yahoo Homes, Google Now, HotPads, HGTV’s FrontDoor.com and AOL Real Estate.

– See more at: http://www.inman.com/2014/03/03/zillow-signs-ny-state-mls-as-latest-member-of-partnership-program/?utm_source=20140303&utm_medium=email&utm_campaign=dailyheadlinespm#sthash.JCO3rqep.dpuf

Bankrate: Mortgage Rates Show Little Movement | South Salem Homes

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Mortgage rates saw very little change this week, with the benchmark 30-year fixed mortgage rate inching lower to 4.48 percent, according to Bankrate.com’s weekly national survey. The average 30-year fixed mortgage has an average of 0.31 discount and origination points.

To see mortgage rates in your area, go to http://www.bankrate.com/funnel/mortgages/.

The average 15-year fixed mortgage stepped back to 3.50 percent, while the larger jumbo 30-year fixed mortgage climbed to 4.51 percent. Adjustable rate mortgages were slightly up this week, with the average 1-year ARM moving up to 3.29 percent and the 5-year ARM rising to 3.30 percent.

Mortgage rates have been in a docile state over the past few weeks, as uncertainty regarding global markets has receded. While the pace of the U.S. economic recovery is still an open question, things have transitioned to a wait-and-see mode that translates into tame movements in mortgage rates. The surge of monthly economic releases over the next ten days may answer some of those economic questions, and be a catalyst for renewed volatility in the bond market, and ultimately, mortgage rates. Mortgage rates are closely related to yields on long-term government bonds.

On May 1, 2013, the average 30-year fixed mortgage rate was 3.52 percent. At that time, a $200,000 loan would have carried a monthly payment of $900.32. With the average rate currently at 4.48 percent, the monthly payment for the same size loan would be $1,011.00, a difference of $111 per month for anyone that waited too long.

 

 

http://finance.yahoo.com/news/bankrate-mortgage-rates-show-little-123000542.html

4 signs the real estate market is in trouble | South Salem NY Real Estate

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wish I’d said this (and in a few weeks I will have, I’m sure) but Ramsey Su at Acting Man Blog did it first and in a way I’ve been searching for the words to explain.

Every week or so we get another indicator that’s supposed to tell us how the housing market is doing.

And every part of the industry trumpets whichever metric best serves its own purpose. Thus you have the Mortgage Bankers Association touting this “good news” about interest rates, while the National Association of Realtors touts how rising home prices are a great sign, and on and on.

But none of these measures – home sales, home starts, home prices, interest rates – tell the real tale.

Then along comes this boy named Su, who gets right to the heart of the matter:

The strength of the real estate market should not be measured by price appreciation, or the number of new and existing home sales. It should be measured by the support of underlying fundamentals and whether they can help to withstand economic cycles without policy makers having to go hog wild just to avoid a total collapse.

How healthy is the real estate market today?

He looks at some troubling measures we’ve noted at HousingWire – the decline of income growth, the bulk of Americans having subprime credit, and the fact that there’s nothing left in the Fed for another bailout if (when) things go pear-shaped again.

1. The Subprime Majority

Recently, I came across a report by the Corporation for Enterprise Development (CFED) titled Assets and Opportunity Scorecard. Some of their findings are quite interesting. According to the CFED Scorecard, 56% of all consumers have sub-prime credit. Sub-prime is “earned”. A consumer has to miss a few payments, or default on a loan or two to earn that status. These 56% cannot, or should not, be taking on more debt, especially a large debt like a mortgage.  They may also be struggling with a mortgage that they should not have taken out in the first place.

And with so few companies willing to loosen credit standards, even the worthy subprime don’t have many options.

2. Liquid Asset Poor

CFED found that 44% of households in America are Liquid Asset Poor, defined as having saved less than three months of expenses. As one would expect, 78% of the lowest income households are asset poor, but 25% of middle class ($56k to $91k) households also have less than three months of expenses saved.

How much of a down payment can you expect them to have on hand?

 

 

http://www.housingwire.com/blogs/1-rewired/post/28994-signs-the-real-estate-market-is-in-trouble

Could You Afford a Median-Priced Home in These US Cities? | South Salem NY Homes

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According to a new report by HSH.com, an online mortgage and consumer loan information site, it depends. The cost of owning the roof over your head fluctuates considerably from city to city.

A hefty $115,500 annual salary will get you an average house in the San Francisco metropolitan area, where the median home price is $682,410, leaving you with a $2,700 monthly mortgage payment.

If that seems too expensive, simply head east to Cleveland, the cheapest city for housing on HSH’s list, where $19,000 a year in pay will buy you an average home with a $453 house payment. Median-priced homes in Cleveland go for $112,800.

In Seattle, a base salary of $59,130 is enough to purchase a median-priced home of $344,400. On the East Coast, Atlanta homes average $142,400, requiring a $24,391 paycheck to cover the $569 mortgage payment.

Do these numbers seem reasonable to you? Actually there’s a huge caveat with these figures.

Using its mortgage rate data and fourth-quarter median home prices from the National Association of Realtors, HSH.com calculated how much a homebuyer would need to earn to afford the principal and interest payments on a median-priced home. The figures do not include property taxes, insurance and other expenses.

 

http://finance.yahoo.com/news/could-afford-median-priced-home-225740361.html

Washington housing market uneven in fourth quarter | South Salem NY Real Estate

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Washington state’s housing market softened in the fourth quarter of 2013 compared to the quarter before, but remained stronger than a year ago, according to the Runstad Center for Real Estate Studies at the University of Washington.

Sales of existing homes declined 8.6 percent in the September-December quarter of 2013, but still were 9.2 percent higher than the same time in 2012.

The seasonally adjusted sales rate was 91,340 homes, meaning that if the quarter’s pace continued unchanged for a year, that number of homes would be sold.

“Washington’s housing market is finding its balance,” said Glenn Crellin, associate director of the Runstad center. “Sales throughout 2013 totaled 93,730 units, well above any of the last five years, but still well below the pre-recession frenzy.”

An inadequate supply of listings available for sale continues to be a problem and contributes to increases in home prices, Crellin said.

The statewide median home sales price during the fourth quarter was 6 percent above a year ago at $256,300. Price increases were especially strong in the metropolitan Seattle area.

Median prices were lower than a year earlier in 16 counties, but most declines were less than 2 percent. Median prices ranged from $70,000 in Lincoln County to $421,000 in King County.

 

http://south-everett.villagesoup.com/p/washington-housing-market-uneven-in-fourth-quarter/1117564

 

First Person: Why Generation X Needs to Be Mortgage Free | South Salem NY Homes

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According to some headlines, Generation X has the most financial stress compared to any other generation. Many of us bought homes during the housing bubble. We are sending our children to college at a time when private college tuition costs as much as a house (not a house payment). In order to feel less stressed financially, I have made paying off my mortgage my No. 1 goal. So many experts scoff at the idea of putting extra money toward a mortgage when interest rates are so low. I have a mortgage rate of 2.75 percent. Because my interest rate is so low, I don’t usually have enough mortgage interest to make it worth my while to itemize my deductions. Therefore, I don’t deduct my mortgage interest. According to a recent article by The Street, people who are 35 to 44 have the most financial worries. A Pew study shows Generation X lost an average of $33,000 per person after the Great Recession. Although I’m dealing with stagnant wages, layoffs in my family and high college costs, I know owning my home outright will provide economic security for the rest of our lives.

Owning instead of renting

If I could come out ahead even though I bought a home during the top of the housing bubble, I am confident my Gen-X peers will come out ahead by buying a home at this time. Even though real estate prices are not at the bottom, it’s still more affordable to buy now than it was during the housing bubble. We pay just $900 a month to own our home, but renting a similar home would cost $1,300. When we retire, we will just have to pay property taxes as well as optional home owner’s insurance.

 

http://finance.yahoo.com/news/first-person-why-generation-x-needs-mortgage-free-184800194–finance.html

Puget Sound area home prices up as much as 17% in January | South Salem NY Real Estate

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With more houses on the market and sales prices rising, the housing market is “definitely in full recovery mode” in the Puget Sound area, a Realtor said Wednesday.

The median price of King County houses and condos that sold in January was nearly $364,900, or 17 percent higher than in January 2013, according to the latest report from the Northwest Multiple Listing Service. Median sale prices in Pierce and Snohomish counties rose 12 percent and 14 percent, respectively.

“We are finally going to be looking at the ‘housing crisis’ in the rear view mirror,” said Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate. “In 2014 we are definitely in full recovery mode.”

The inventory of residences on the market, while improving, continues to be a source of worry, he said.

“Lots of buyers and not enough of the right inventory to satisfy our buyers’ wants and needs,” was how Gain described current conditions. “Following the worst year for inventory I have seen in my 35 years of practicing real estate locally, we are expecting the number of homes for sale to increase in 2014.”

 

http://www.bizjournals.com/seattle/news/2014/02/05/puget-sound-home-prices-up-as-much-as.html

Flipping Moves on Up as Profits Rise 19 Percent | South Salem Real Estate

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Higher prices and fewer foreclosures have not put a dent in the flipping business.  In fact, last year saw 156,862 single family home flips — where a home is purchased and subsequently sold again within six months — in 2013, up 16 percent from 2012 and up 114 percent from 2011, according to RealtyTrac’s Year-End and Q4 2013 Home Flipping Report.

Homes flipped in 2013 accounted for 4.6 percent of all U.S. single family home sales during the year, up from 4.2 percent in 2012 and up from 2.6 percent in 2011. Flips accounted for 3.8 percent of all sales in the fourth quarter, down slightly from 3.9 percent of all sales in the third quarter and down from 7.1 percent of all sales in the fourth quarter of 2012 — the highest percentage of sales represented by flips in a single quarter since RealtyTrac began tracking flipping data in the first quarter of 2011.

The average gross profit for a home flip — the difference between the flipped price and the price the flipper purchased the property for — was $58,081 for all U.S. homes flipped in 2013, up from an average gross profit of $45,759 in 2012. The average gross profit for homes flipped in the fourth quarter was $62,761, up from 52,746 in the fourth quarter of 2012, a 19 percent increase.

 

http://www.realestateeconomywatch.com/2014/01/flipping-moves-on-up-as-profits-rise-19-percent/

 

Home Prices Rise Nationwide; Connecticut and New Jersey Lag | South Salem NY Homes

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According to recent data released from the Federal Housing Finance Agency [1], seasonally adjusted home prices have surged 8.4% from November 2012 to November 2013, bringing national home prices to 2005 levels. This represents the fastest quarterly pace of price appreciation since 2006. Furthermore, the November 2013 foreclosure report from CoreLogic shows that national foreclosure inventory has fallen 34% over the past 12 months, and the rate of seriously delinquent mortgages is at a five-year low. In aggregate, the data presents a favorable sign that the housing market is continuing to rebound from the financial downturn. Housing market trends not only reflect the overall health of the economy, they also tie directly to the revenue capacity of local governments, which often rely on property tax revenue.

 

Home prices appreciated year over year in all 50 states and the District of Columbia. Leading the nation in year-over-year gains were Nevada, California, Arizona, Florida, and Washington. However, these five states also lag the furthest behind third-quarter 2007 levels. The problem is especially acute in Nevada, where home prices remain over 40% below the prerecession peak. We are also concerned about the housing recovery in Connecticut, Delaware, Illinois, New Jersey, and New Mexico; prices in these states lag third-quarter 2007 levels by 13%-16% but have grown at the slowest pace in the nation at between 2%-3% over the past 12 months.

 

Source: Federal Housing Finance Agency

 

Thirty-eight states still lag third-quarter 2007 levels, though 34 of the 38 lag by only 10% or less. Home prices in resource-rich states North Dakota, South Dakota, and Texas are now at all-time highs and exceed prices from 2007 by more than 10%; North Dakota is the leader of the pack, with a 28.9% price increase since third-quarter 2007.

 

http://news.morningstar.com/articlenet/article.aspx?id=632034&SR=Yahoo