Saturday, January 18, 2014

Paradise in Demand: 2013 Solid Year for Real Estate


NAPLES, FL - All signs point to stabilization for the local housing market as evidenced in the 2013 Annual Market Report released by the Naples Area Board of REALTORS® (NABOR®), which tracks home listings and sales within Collier County (excluding Marco Island). Overall pending and closed sales for homes over $300,000 increased by double digits in 2013.

"The first sign of stabilization can be seen in the increase of traditional closed sales for 2013," said Pat Pitocchi, NABOR® President and Corporate Trainer at Downing-Frye Realty. "At the beginning of the year, 74 percent of sales were traditional, while 26 percent were non-traditional [short sale and foreclosed properties]; but by December, traditional sales rose to 83 percent of all sales leaving 17 percent as non-traditional."

"This report indicates a tremendous market shift from home sales in the under $300,000 category to home sales in the over $300,000 categories," said Bill Coffey, Broker Manager of Amerivest Realty Naples. "Sales over $300,000 now drive the market. Closed sales of homes in the over $300,000 price categories increased by 22.5 percent in 2013."

According to the report, the overall housing market inched ahead of activity reported in 2012, which was considered a recovery year by market expert Cindy Carroll, SRA, with the real estate appraisal and consultancy firm Carroll & Carroll, Inc. Overall median prices for properties between $300,000 - $2 million leveled off in 2013 with little or no change. However, median prices in the lower-end (under $300,000) and higher-end ($2 million+) increased 16 and 5 percent, respectively.

"The report shows a clear and steady demand for housing in Naples," said Glenn Ginsburg, Broker/Owner of A Delta Realty of Naples, Inc. "The condo market was especially hot in 2013 with the most impressive activity in the $2 million and above category, which realized a 62 percent increase in closed sales from 60 units sold in 2012 to 97 units sold in 2013."

The NABOR® 2013 Annual Report provides comparisons of single-family home and condominium sales (via the Southwest Florida MLS), price ranges, and geographic segmentation and includes an overall market summary. The NABOR® Annual 2013 sales statistics are presented in chart format, including these overall (single-family and condominium) findings:
  • Overall closed sales in both the $300,000 - $500,000 and $2 million and above segments increased 27 percent from 1,366 in 2012 to 1,730 in 2013 and 234 in 2012 to 298 in 2013, respectively.
  • Median prices for single family homes in the $300,000 and below category increased by 17 percent from $150,000 in 2012 to $175,000 in 2013.
  • Overall inventory decreased by 18 percent from 6,557 properties in 2012 to 5,403 properties in 2013.
  • Inventory in the condo market decreased by 23 percent.
  • Closed sales in the single-family market rose 1 percent, while closed sales in the multi-family or condo market rose 8 percent.

"The report indicates the housing market is behaving in a normal manner," said Mike Hughes, Vice President and General Manager of Downing-Frye Realty. "The solid incremental growth we experienced in 2013, especially in the middle priced markets, is a good sign our housing market has recovered. Homeowners that want to sell but are sitting on the fence need to understand that the lax lending environment, which created the last spike in prices, no longer exists. Demand for existing homes has increased in all price segments and in all neighborhoods. This may change when new home construction catches up, so now is a good time to call a REALTOR®.".

Wednesday, January 8, 2014

Mortgage tax break expires despite lawmaker support


WASHINGTON – Jan. 6, 2014 – To the dismay of housing advocates, industry groups, and U.S. legislators, a tax break for distressed homeowners who mortgages were written down expired on Dec. 31.

The 2007 measure exempted borrowers from federal taxes they normally would owe on assistance received from banks, primarily in the form of a seller’s forgiven home loan debt in a short sale.

If a lender approves a short sale that’s $10,000 less than the seller owes on the home, for example, the lender absorbs the $10,000 loss. However, the IRS considers that $10,000 money that the seller made on the deal since he no longer owes as much to the bank. As a result, the IRS expects the seller to report that $10,000 as income – even if he never saw the money – unless Congress extends the tax break.

Although the residential property market is in recovery, housing advocates contend that the market still needs this tax break that was put in place after the crash. More than 6 million homeowners in this country still owe more on their mortgages than the underlying properties are worth, they say, and failure to renew the tax break would only increase their financial burden. A report by the Congressional Research Service calculates that a middle-income homeowner who is granted a $20,000 reduction in mortgage debt could expect to owe $5,600 in federal taxes under the new reality.

“It makes absolutely no sense,” says Sen. Debbie Stabenow (D-Mich.). “This is not just about fairness for homeowners. This is about keeping the housing recovery alive.”

Many of her colleagues agree, given the broad bipartisan support for an extension of the law. While Congress went on holiday break without taking action, it could revisit the issue as soon as next week, possibly passing a retroactive extension.

However, an extension is not guaranteed. Owners considering a short sale currently should seek advice from a professional tax consultant or attorney.