States Focus on Helping First-Time Buyers

With rising home prices, more state lawmakers are proposing legislation to help home shoppers tackle the down payment obstacle. More states this year have considered or are considering passing laws to allow for tax-saving down payment accounts to aid first-time buyers.
Three states authorized such accounts this year: Iowa, Minnesota, and Mississippi. Colorado, Montana, and Virginia already have such accounts in place.
The established down payment accounts vary by state. In general, they allow first-time home buyers to save for a down payment or related expenses, like closing costs, in dedicated savings accounts. These accounts typically feature tax breaks for contributions, such as being able to deduct the amount saved that year from state income tax returns. In Minnesota, however, the contribution is not deductible, but savers can subtract the interest earned on the savings from their taxable income. Mississippi, on the other hand, offers a tax benefit in both contributions and gains.
States usually cap the amount that can be saved in these accounts per year. For example, in Mississippi, buyers can set aside up to $5,000 each year as couples, and $2,500 as individuals.
Down payment accounts can be helpful to first-time buyers, particularly with rising home prices, Adriann Murawski, state and local government affairs representative with the National Association of REALTORS®, told The New York Times. NAR has supported legislation to create these accounts within states. Murawski told The New York Times that she hopes other states will decide to follow suit in 2018, such as Alabama, Louisiana, Michigan, Missouri, and Pennsylvania.
Source: “How Some States Are Helping First-Time Home Buyers,”

The New York Times (Dec. 8, 2017)

Daily Real Estate News | Tuesday, December 12, 2017

Range of Voices  concert Friday December 15th at 7 p.m. at Grace Lutheran Church Hibbing.

4 Reasons December Is Favorable for Buyers

Many home shoppers don’t think about purchasing a house during the holiday months—many even put their home search on hold. But Desare Kohn-Laski, broker-owner of Skye Louis Realty in Coconut Creek, Fla., offers some points to pass on to your clients, letting them know this is one of the best times of the year to shop for a house.

Less Competition, Better Prices.
Let your clients know that the holiday months work in their favor. “Instead of competing with hungry buyers, eager to move in before the school year begins, the dip in demand actually drives prices down, and can create a mini buyers’ market,” Kohn-Laski says. In her experience, buyers often fare better in the negotiation process during the winter months.

More Time to (Home) Shop.
Time off around the holidays gives many buyers the opportunity to do some careful house hunting. Instead of giving up an entire weekend to open houses and showings, buyers can more leisurely tour homes during the week, Kohn-Laski suggests.

Tax Benefits.
We still don’t know how the House and Senate tax reform bills will shake out in conference committee; however, if your clients purchase in 2017, they can still deduct property taxes, mortgage interest, and other costs. Learn more about how you can influence tax reform.

Move-In Ready Weather.
For a large part of the country, winter is a favorable season to move. The heavy lifting of furniture and home improvement projects are easier to perform without the heat of the summer months, Kohn-Laski says.

“There are numerous benefits and added perks to buying a house during the holiday season that make December arguably the best time to buy,” Kohn-Laski says. Happy house hunting…

—Erica Christoffer, REALTOR® Magazine

Daily Real Estate News | Friday, December 08, 2017

The Yuletide Festival is Thursday December 7th. scheduled for 6 to 7:30 at the Hibbing Public Library.

5 Most Common Reasons for Closing Delays

Seventy-three percent of home sales closed on time in October, but 25 percent of REALTORS® report a delay in getting to the settlement table, according to the latest REALTORS® Confidence Index, a survey based on responses from more than 3,500 real estate professionals. Only 2 percent say a contract was terminated completely.
What are the main problems encountered with delayed settlements? Real estate pros report the following:

1. Issues related to obtaining financing: 32%
2. Appraisal issues: 20%
3. Home inspection/environmental issues: 16%
4. Titling/deed issues: 11 percent
5. Contingencies stated in the contract: 6%

So when a delay happens to arise in your deal don’t get upset just talk to your realtor because usually these issues can be worked out.

Daily Real Estate News | Monday, December 04, 2017

2017 Annual Yuletide Festival this Thursday December 7, 2017 at 6:00-7:30

1 Month Left to Sell Before Possible Tax Hike

Some home sellers would need a sale contract inked before the end of 2017 in order to avoid a big tax bill that would be imposed if the GOP tax reform proposals become law. Both the House and Senate bills would require sellers to have lived in their residence for a longer period of time before qualifying for the capital gains tax exclusion on the sale of a primary home. They would have to live in their house at least five years out of the last eight; right now, the requirement is two years out of the last five.

The Senate version, however, includes an exception for transactions in which a contract is written before Jan. 1, even if the closing occurs in 2018. The bill passed by the House includes no such exception. Therefore, homeowners who are currently thinking about selling have only one month left to complete a deal before proposed tax changes would take effect. Should tax reform be enacted, some homeowners who sell in 2018 may no longer qualify for the capital gains exclusion, which covers up to $250,000 for an individual and $500,000 for a married couple. As a result, the difference between your client’s tax bill pre- and post-tax reform could be huge.
It won’t be known whether the House or Senate version of tax reform is adopted until the bill is finalized, which could happen in a few weeks. But sellers who haven’t lived in their house for more than five of the last eight years will want to act quickly regardless of the version that is approved.

Capital gains exemption
Under current tax framework, a typical owner, who has lived in their house for at least 2 years out of the last 5 years, will pay nothing in capital gains taxes if he sells his house. Under the proposed tax frameworks, owners need to live in their house for at least 5 years out of the 8 years in order to claim the exemption. Otherwise, they need to pay $3,480. In capital gains taxes.
In 2016, 14.1% of the owners in Minnesota lived in their homes for 2-4 years. These owners will not be able anymore to take the exemption based on the proposed tax frameworks.

Impact on housing prices
If both mortgage interest and real estate taxes deductions will be eliminated, home prices expect to fall from 7% to 10%. A decline in value as projected could mean a loss in home value of $10,370 – $15,550. for a typical homeowner.

DAILY REAL ESTATE NEWS | THURSDAY, NOVEMBER 30, 2017
SOURCES: INTERNAL REVENUE SERVICES 2015, AMERICAN COMMUNITY SURVEY 2016, NATIONAL ASSOCIATION OF REALTORS 2016, 2011; ALL CALCULATIONS ARE BY NAR RESEARCH GROUP.

5 Housing Trends to Watch for 2018

Home shoppers may have it easier in 2018. Inventory constraints of for-sale homes and rising home prices may finally start to ease next year, according to realtor.com®’s 2018 National Housing Forecast.
“Next year will set the stage for a significant inflection point in the housing shortage,” says Javier Vivas, director of economic research for realtor.com®. “Inventory increases will be felt in higher priced segments after spring home buying season, which we expect to take hold and begin to provide relief for buyers and drive sales growth in 2019 and beyond.”
But the big wild card for 2018 will be any impact from the proposed tax reform legislation, which is currently being debated by Congress, realtor.com® adds.

Here’s a closer look at realtor.com®’s five housing prediction trends for 2018:

1. Inventory to start increasing: Realtor.com® projects positive year-over-year inventory growth by the fall of 2018—which will be the first time since 2015. “Inventory declines are expected to decelerate slowly throughout the year, reaching a 4 percent year-over-year decline in March before increasing in early fall, after the peak home-buying months,” realtor.com® notes in its report. The cities expected to see inventory levels recover first are Boston; Detroit; Kansas City, Mo.; Nashville; and Philadelphia. The majority of this growth will be in the mid- to upper-tier price points (which includes homes priced above $350,000). On the other hand, recovery in the starter home market likely will linger since levels are “significantly depleted by first time buyers,” realtor.com® notes.

2. Price appreciation to slow: Home buyers likely will see home prices moderate in the new year. Realtor.com® forecasts home prices to slow to a 3.2 percent growth year over year nationwide. For comparison, home prices in 2017 posted a 5.5 percent increase. The majority of the slowing price appreciation will be centered in the higher-priced ranges as more inventory becomes available. Entry-level homes, on the other hand, likely will continue to see price gains due to a larger potential buyer pool as well as a more limited number of homes available for sale in this price range.

3. Millennials to gain market share: Finally, the long-held predictions may hold true. Millennials may reach 43 percent of home buyers taking out a mortgage by the end of 2018, up from an estimated 40 percent in 2017, realtor.com® projects. The largest cohort of millennials are expected to turn 30 in 2020. “Millennials are a driving force in today’s housing market,” Vivas says. “They already dominate lower price home mortgage and are getting close to overtaking older generations for mid- and upper-tier mortgages. While financially secure in general, their debt to income ratios have started to increase as they compete for higher priced homes.”

4. The South to lead in sales growth: Realtor.com® forecasts that Southern cities will top national averages in home sales growth in 2018. Markets like Tulsa, Okla.; Little Rock, Ark.; Dallas; and Charlotte, N.C., are expected to be the highest performers.  Sales in these markets are predicted to increase by 6 percent or more. Nationally, sales growths are predicted to grow by 2.5 percent. “The majority of this growth can be attributed to healthy building levels combating the housing shortage,” realtor.com® notes in its report. “With inventory growth just around the corner, these areas are primed for sales gains in years to come.”

5. Tax reform wild card: Tax reform could dampen 2018 sales and price forecasts, realtor.com® reports. The U.S. House has passed a tax bill, and the Senate likely will vote on one soon. “While the ultimate impact of tax reform will depend on the details of the plan that is finally adopted, both versions include provisions that are likely to decrease incentives for mobility and reduce ownership tax benefits,” realtor.com® reports. “On the flip side, some taxpayers, including renters, are likely to see tax cuts. While more disposable income for buyers is positive for housing, the loss of tax benefits for owners could lead to fewer sales and impact prices negatively over time with the largest impact on markets with higher prices and incomes.” Read more: Tax Reform Proposals Threaten Homeowners and REALTORS® Square Up After House Passes Tax Bill

Daily Real Estate News | Wednesday, November 29, 2017
Source: realtor.com®

6 Outdated Features in Your Clients’ Homes

Home buyers say they want the latest design trends in their next property—but 70 percent admit to having outdated features in their current house, according to a new consumer survey by home builder Taylor Morrison. The most common of these outdated features are:

1. Linoleum floors (40 percent)
2. Popcorn ceilings (29 percent)
3. Wood paneling (28 percent)
4. Ceramic tile countertops (28 percent)
5. Shag carpeting (19 percent)
6. Avocado green appliances (8 percent)

“This is why real and virtual house hunting is so popular,” says Taylor Morrison Chair and CEO Sheryl Palmer. “We all love to daydream and envision ourselves in a beautiful new environment. But keeping up with ever-evolving preferences for paint colors, home features, new technologies, and how we expect to use our homes over the years is difficult. We also know that home interior preferences vary by generation, by home style, by region, and even by city.”
Taylor Morrison found that the features home buyers say they most desire are:

1. Better energy efficiency (62 percent)
2. Personalized floor plans (58 percent)
3. Easier maintenance (56 percent).

Also, the interior features home shoppers called most essential are:

1. Wood flooring (65 percent)
2. USB and Ethernet ports (44 percent)
3. Whirlpool tub (36 percent)
4. Sun room (34 percent).

Daily Real Estate News | Monday, November 20, 2017
Source: “Home Is Where the Shag Carpet Is?” BUILDER (Nov. 16, 2017)

This is just something to think about when you do decide to put your home up for sale. I hope you have a happy Wednesday folks.

4 Renovations That Grab Buyers’ Attention

Among the home improvement projects buyers are most likely to value are those that increase storage space and preserve vintage features. Southern Living magazine recently rounded up some of the renovations that get sellers the most attention for their properties, including:

Temperature-controlled square footage: “From the appraiser’s point of view—and really from everyone’s—heated and cooled square footage is the biggest winner” in terms of payoff, says Dewey Golub, a real estate pro with Keller Williams Realty in Charleston, S.C. That’s important to keep in mind for buyers who are weighing a garage, attic, or screened-in porch conversion.

Cosmetic kitchen tweaks: Southern Living says more buyers are turning away from busy backsplashes and jarring palettes in the kitchen, opting for a simpler subway tile backsplash and subdued paint colors for cabinetry. Los Angeles agent Ben Lee also suggests using stainless steel appliances to help modernize a dated kitchen. “They don’t have to be that expensive,” he says.

Vintage preservation: If the property has historical value, stay true to its character with projects such as restoring original window casements and hardware. “You want to respect the authenticity and the integrity of the home,” says Steven Jones of Better Shelter, a Los Angeles-based residential real estate development and design firm.

Plenty of storage: Organizational accents, such as built-in bookshelves and window seats with storage underneath, are not only practical but also offer “old-school charm,” Southern Living notes. When closet space is tight, consider adding storage solutions such as extra shelves, hooks, and rods. “If there is limited closet space, I always install an extra closet rod so people can increase their hanging capacity,” Jones says.

Source: “8 Home Upgrades That Always Pay Off, According to the Pros,” Southern Living (November 2017)

Daily Real Estate News | Monday, November 27, 2017

These are just a few ideas for you sellers to help grab a buyers eye when trying to sell your home.