It’s “Cruiseship Limbo Contest” winning low. It’s Barry White “Can’t Get Enough of Your Love” low. It’s “Bring out the charts and graphs!” kinda low. When you look at the housing market, it’s all relative. “Fewer people buying houses with a lot more people having to sell them”, that’s the kind of market we got used to after the shock of the bubble burst wore off. Then there was a stasis where the flood of foreclosures had receded and there was a nice level of inventory, but buyers wary of further market drop stayed on the fence: 2011 in a nutshell. Last January the shift began and like a flash flood, buyers filled the streets. Now we have lots of buyers and where are the sellers? Denver housing market inventory is at a 23 year low. What does that mean for you? Buyers should buy now, sellers should list while they have no competition, and you should call me with any questions you have about either.
One of my favorite things about being in real estate is looking at houses. I’m mad about architecture, color, design, shape and style. I love staging that brings out the best features in the home while keeping it homey. Watching home improvement shows, HGTV, and all that real estate porn… I must admit, excites me. And when January rolls around and the color wizards announce the nominees, I feel as dizzy as an ingenue on Oscar morning.
On any given power-shopping Saturday, I can take buyers to look at five to fifteen properties. After house number 10, you’re beginning to feel a sense of overwhelm and the ‘buyer’s blur’, as each house starts to blend into the next. As the day progresses, the copious notes you started out taking become chicken scratches or a simple “NO!” until you get to my favorite place… walk in, walk out.
At the beginning of a house hunt, we feel the need to take the time to visualize ourselves in the home, our colors on the wall and grandma’s hutch in the dining room. Once you get the “Blur” it’s like triage, you identify what’s wrong quickly and assess if you can fix it or if you have to move on.
So sellers, what is it that buyers are responding to? First off I’d say CLEAN. And I mean clean to the point that a team of pros came in and scrubbed every corner with a toothbrush! Even an old house will look new when it’s sparkling clean. It inspires trust, helps us believe you’ve taken good care of your home. And by all means DECLUTTER. I know you’ve heard this before, from me and a thousand other HGTV Realtors, because we’re right. We’re the ones in the house when you’ve left for the showing and we hear EVERYTHING. When I say declutter, I don’t mean get rid of those things you’ve been planning to take to the Goodwill, I mean take all that to the Goodwill and then come home and pack up half of what you own!
Now comes the good part; UPDATE! The new 2013 colors are out and they are sensational. Spend some time browsing around to see if there’s something that speaks to you. If you’re prepping to sell (and right now you should be), look at the new neutrals, look at the latest accent colors and see if there’s something you can do to make your home feel au currant. You’re going to have to break out the paint brush, may as well add some pop! A word of caution though, if you’re not comfortable taking the lead on this bring in a color consultant or a stager for a professional eye. It can make a big difference in how much your home sells for and how quickly it sells.
The Denver market has changed. Home prices are up a stout 7% but that doesn’t mean you can just plant a sign in the yard and ask top dollar. If you want the most for your home, put the most into it. I guarantee you, that’s what your neighbor’s doing.
So… I guess it’s time to start moving on moving.
How would it affect you if you could no longer write off the interest you pay on your mortgage?
According to panelists at Friday’s housing forum hosted by Zillow and the University of Southern California’s Lusk Center for Real Estate:
The burgeoning federal debt makes it unlikely that the mortgage interest tax deduction will survive in its present form. Of course, any proposed changes to the tax break for homeowners will spark a fierce debate over the fundamentals of the U.S. housing market, the value of home ownership, and consumer behavior.
“Fierce debate” he says? I’d call it a jobs-killer! But then again, I’m in real estate. Change is never easy, but when it hits our pocketbooks and the government, it really hits home. I advise my clients to educate themselves, talk to their tax professional and view the tax benefits icing on the cake. Knowing the long-term financial upside leaves them feeling good and more secure as they move forward with their biggest single purchase.
“I think it’s entirely likely that something big is going to happen (with the MID) starting next year with either administration,” said Jason Gold, director and senior fellow at the Washington, D.C.-based Progressive Policy Institute, an independent think tank.
A Congressional contingent advocates for the elimination of the mortgage interest deduction to help address the nation’s debt and budget deficit. Obviously things must be done to right the problem, but sticking it to a Middle Class whose beginning to feel the effects of a post-crisis housing market recovery seems a bit harsh. At the end of this year, a series of tax increases and spending cuts are scheduled to go into effect automatically unless Congress acts to prevent or alter them. Revamping the mortgage interest deduction is on the table as a way to head off that “fiscal cliff” scenario. (I wonder how many of those guys have a mortgage.)
Two years ago, a bipartisan deficit reduction commission recommended scaling back the mortgage interest deduction, which is currently capped at mortgages worth up to $1 million for both principal and second homes and home equity debt up to $100,000 and the deduction is only for taxpayers who itemize.
The Simpson-Bowles commission proposed turning the deduction into a 12 percent non-refundable tax credit available to all taxpayers, capping eligibility to mortgages worth up to $500,000, and eliminating the deduction on interest from second homes and home equity debt.
Though that seems more reasonable to me than the first idea, the National Association of Realtors has consistently defended the mortgage interest deduction in its current form.
Highly critical of the recommendation and claiming any changes to the MID could depreciate home prices by up to 15 percent, they are promising to “remain vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest.”
So… we’re back to whose going to pay down the debt? And how.
The MID is a “tax expenditure,” meaning its cost must either be made up through higher taxes elsewhere or by adding to the debt, and it costs the government about $90 billion a year. Richard Green, the director of the USC Lusk Center for Real Estate, told forum attendees that reforming the MID is necessary for fiscal sustainability. “We need to get revenue,” Green said. “You need to make a judgment about what’s better or worse for the economy. In my opinion, it’s better to do it with tax expenditures, rather than rates, though you may have to do both to get to where we need to be.”
Because mortgage interest rates are currently so low, he added, “This may be an opportunity to do less damage by reforming the mortgage interest deduction than at other times.”
(I wonder what cuts would make this guy feel the pinch.)
The mortgage interest deduction is particularly polarizing because of the disconnect between how people use it and how it is perceived. Green gave the example of Texas where most people do not itemize their taxes (only about 30% of taxpayers do) so they cannot take advantage of the MID. This line of thought perplexes me. So… if more Texans itemized their taxes it would make things fairer? or does he mean that if they actually knew they could they would, adding to the deficit? And haven’t Texans done enough of that? 😉
No matter how the chad falls in the next three weeks, watch for ongoing and loud debates over the Mortgage Interest Deduction. *covers ears*
Source: Inman News, Andrea V. Brambila, Monday October 15, 2012
It’s late October in a very tight presidential race. Pols shift twice in the same day and the election is coming down to swing states and undecided voters, though I’m not sure exactly who these people are. The issue is not that the Democrats and Republicans have successfully laid out their vision for the next 4 (or 8) years, because neither of them has been too clear on that, or that I don’t think it’s really important and has a profound impact on my future, because it does. I know. It does. The issue is… I can’t decide. Really?
I consider myself decisive and spontaneous in general, but I am slow and deliberate when it comes to making the big decisions, gathering all available information and trying on perspective outcomes in the dressing room of my mind. When weighing out the cost/benefit ratio of a situation, what is it that makes one finally take a stand, or take action?
The word ‘SALE’ has some power over me, at least it gets my interest. Once piqued I am swirling through the— Do I need it? Do I want it? Does it solve a problem? Is it cheap enough?— cycle until either I buy or walk away. Even when that “One Day Only!” sale fills me with a sense of urgency, I know I can always come back…like to next month’s “One Day Only!” sale.
So what about the big things? Deciding on a president or buying a house? (You knew I’d go there)
I have binders full of buyers, debating over whether or not its time to get off the fence. Right now Denver Colorado is in the top five cities leading the housing market recovery. Home prices are rising steadily, foreclosures are in decline, inventory is low, the home affordability index is high and the money’s on sale. What questions do you need to ask yourself before you take the leap?
Beyond the “One Day Only!” hype, buyers who’ve waited for the market to hit bottom (so two years ago) have a sense of urgency to make a good investment before the window of opportunity closes. With the release of pent up demand (sounds very “Fifty Shades of Grey”, doesn’t it?) sellers who’ve waited out the storm have built back some lost equity and are feeling more confident their home will fetch a fair and decent price. There are more bidding wars and high-demand neighborhoods than I’ve seen in five or six years and that feels good. The crush of summer housing sales gives way to autumn when the market slows a bit, leaving the serious buyers and sellers. Its a very efficient time for me as a real estate agent, often producing my best quarter.
I know home ownership is not for everyone, nor is real estate investing, but when you’re in an historical sweet spot to buy and hold real estate, it may be time to make a decision before you turn into a pumpkin. As for that voting thing… oh, I’m not goin’ there.
And don’t we all need a little good news? Working in the real estate trenches I’ve been watching the steady turn around, especially evident in 2012 as the Denver real estate market took a sharp turn for the better. Today’s Denver Business Journal announced the data to back up my experience.
Colorado’s housing market stands out as the fifth-strongest in the country, according to the website 24/7 Wall Street.
Home prices across the state have increased by an average of 7.3 percent over the past year, putting Colorado between North Dakota (7.1 percent) South Dakota (8.3 percent). The ranking was based on a review of data from various sources, including the CoreLogic Home Price Index and foreclosure reports from RealtyTrac. 24/7 Wall Street forecasts Colorado home prices will increase by 3.7 percent between the first quarter of the year and the first quarter of next year.
Good news for the Dakotas, but we get to live in Colorado! If you’d like more information about your neighborhood or how you can make this market work for you, call, text, email or comment here and we’ll talk.
UPDATE: This house went under contract in 8 days. Buyers are happy, sellers are happy… agent is very happy.
Just listed a wonderful 3 bed/3 bath home in the Willow Trace subdivision of Aurora South. I really like the floor plan as it lives large. The master bedroom is huge, closets are bigger than my house ; ) and the second/third bedrooms are nice and roomy. Great loft space upstairs to keep the little ones close or use for study/gaming area. Over-sized two car garage with secure storage. Partial basement is insulated, plumbed and egressed; ready for your finish if you need more space and Cherry Creek Schools! This house is totally move in ready! Check out the virtual tour.