Mortgage Interest Deduction – Will Homeowners Still Benefit?
Homeownership is supposed to be the American Dream, and the government has long supported offering tax advantages to homeowners. The question is: Will this tax benefit continue? With the government looking for more revenue, and mortgage interest being one of the highest dollar tax deductions, a change to the laws may be in our future.
As it Stands
Currently, homeowners are able to deduct interest on loans up to $1.1 million for first and second homes. The opinion is that this deduction is no longer necessary, and benefits mostly the wealthy, who are more likely to have multiple homes and large dollar mortgage loans.
Recent Proposals
In 2009, there were talks about allowing deductions for first homes only, and only for loans up to $500,000. In 2011, other ideas included eliminating the deduction all together and replacing it with a straight tax credit. Still more talks revolved around a mortgage interest deduction based as a percentage of adjusted gross income. President Obama’s 2013 federal budget proposes limiting the tax deduction for families with incomes over $250,000.
What it Means to You as a Bucks County Homeowner
During this election year, we can probably not expect to see too many strong opinions about changing or limiting the mortgage interest deduction. Most voters are homeowners, and politicians don’t want to ruffle feathers at this time. However, this issue will certainly be revisited as long as there is a continuing need for increased federal revenue. The effect on home values is yet to be determined.
I’ll continue to keep you updated on issues that affect you as a home buyer or home seller in Yardley, Newtown or anywhere in Bucks County, PA. Please contact me for more information about Bucks County real estate.
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Yardley, PA real estate market update
So what is happening in real estate in Bucks County, and Yardley?
First quarter real estate market results are in, so lets take a look at what is happening.
First, looking at Bucks County real estate, what is really striking, is that the number of houses for sale, was more than 7% lower at the end of March this year, than last year at the same time.
I have blogged a couple of times recently, about the changing dynamics in the market. It seems as though more houses are selling faster than they were last year, and based on the decrease in inventory levels, that makes sense.
The other extremely striking statistic, in the Bucks County real estate market, is in pending sales. Pending sales represent homes where the seller has accepted an offer, but the house is waiting for closing. Pending sales in Bucks County were up by an incredible 26% at the end of March, compared with last year.
I am not quite sure what to make of that number, yet. I sense that buyers are more motivated, and more buyers are coming to the realization that 4% interest rates will not be around forever.
Check the chart, for Bucks County real estate details.
Bucks County real estate market in a shapshot
Yardley Real Estate
In the Yardley, Lower Makefield Township real estate market, the number of homes on the market is actually about 2% higher at the end of March than it was last year at the same time.
Inventory was up by almost 12% from the end of February, which is to be expected, as we entered the spring market.
I think that there are still an abundance of houses in Yardley that have been on the market for a long time, because they are overpriced, given current market conditions. Even though inventory levels are higher, there is definitely more activity in the real estate market right now.
It is also interesting to note that the average price of a house on the market in Lower Makefield Township was $476,000 thie year, compared with $481,000 last year.
In addition to that, it may surprise people to know that the average price of a home sold in 2011, increased slightly in 2011, and is up by 5% this year, so far.
In Lower Makefield Township, there still is about an 8 month inventory supply, which indicates that factors are still favorable for buyers. We consider the real estate market to be balanced, when there is about a 6 month supply of homes on the market.
Yardley real estate appreciation chart
In summary, the real estate market in Bucks County, and especially in the Yardley-Newtown areas, is showing the most encouraging signs that I have seen in about 4 years. There are still homes that have been on the market for months and months, because they are overpriced. However, homes that come on the market that are priced realistically, based on current market conditions, are selling much fast than they have at any point in the past 4 years. If you are getting ready to put your house on the market, please ask me for a copy of my ebook, 450 ideas to help get your home sold quickly. Send me your email, and I will email it to you. My email is: Marty@MartinMillner.com.
Continue Reading > Add a Comment |Yardley Home Buyers and Sellers Update
I just received the National Association of Realtors (NAR) 2011 profile of home buyers and sellers. As we move further into the spring real estate market in Bucks County, I always enjoy reviewing the NAR survey, which comes out around this time every year.
Contrary to what the press would have us all believe, people actually bought and sold houses in 2011! NAR interviews literally thousands of home buyers and sellers every year, and generates a very comprehensive review of the prior year in real estate. What did we see in 2011?
Buyers
- 37% of recent home buyers were first time home buyers. This represented a drop from 50% in 2010. No doubt the high number of first time home buyers in 2010 was a result of the first time home buyer tax credit. To me, even 37% is a very high percentage. I know that personally, I worked with a number of first time home buyers in Yardley and Newtown in 2011.
- The typical buyer was 45 years old, which was a jump from 39 years old, in 2010
- The 2010 median household income of buyers was $80,900. Median income was $62,400 for first time home buyers, and $96,600 for repeat buyers.
- 64% of recent home buyers were married couples, which was the highest percentage since 2001. 18% of recent home buyers were single females, which was the lowest share since 2004. Not exactly sure why that was the case.
- For 27% of recent home buyers, the primary reason that they bought, was simply a desire to own a home!
Sellers
- The typical seller lived in their home for 9 years. The median tenure has increased in recent years. As recently as 2007, it was six years.
- 87% of sellers used a realtor when selling. (I love that statistic!)
- Recent sellers sold for 95%of the listing price, and 61% reported that they reduced the price at least once.
- 41% of sellers offered incentives to attract buyers, most often offering home warranties and help with closing costs.
The entire buyer and seller report is almost 200 pages, and includes interesting charts and graphs. I can email the report, if anyone is interested in seeing it.
I like to look at the report and see how the national experiences of buyers and sellers, compares with what I find in my real estate business in Yardley, Newtown and Bucks County. I will talk about the report in future posts, but it is always important for me to emphasize that, especially in our area, real estate is moving. I have had recent listings that have sold within a very short period of time, and the market is active.
If you would like to see the home buyer and seller report, please email me at Marty@MartinMillner.com.
Continue Reading > Add a Comment |Buying a Home in Yardley or Newtown, Bucks County? 10 Important Questions for Your Home Inspector
Maybe because the weather has been so warm and snow-free, it seems as though the so-called “spring” real estate market in Yardley, Newtown and all over Bucks County has started early. I have written a few recent posts on changes in the Yardley, Newtown area real estate market.
When working with buyers, I always stress how important it is to have a thorough and complete home inspection. For any buyer of real estate in Bucks County, it is critically important to know that any offer you make on a house, can be made contingent on the results of a home inspection. Over the years, I have worked with many area home inspectors. I thought it would be interesting to review what I think are 10 great questions to ask your home inspector.
There are a number of highly qualified, experienced home inspectors in the Yardley, Newtown area, and there is nothing wrong with interviewing more than one. Here are the questions:
1. What does your inspection cover?
At the time of the inspection, most home inspectors will give you a document to sign, that explains, among other things, the limits to what they will be inspecting. The inspector should ensure that their inspection and report meets all applicable requirements for Pennsylvania. They should also ensure that the report will comply with the local standards of practice and code of ethics. If you have specific concerns about something in the house, or an area in the house that you are concerned about, make the inspector aware and be sure that those things are covered in the inspection.
2. How long have you been practicing in the home inspection professions and how many inspections have you done?
This should not be a problem for the inspector to answer. You should be able to review their history in the profession, and perhaps get referrals.
3. Are you specifically experienced in residential inspection?
If the inspection is for a commercial property, you should ask the same question. The inspector may have a construction or engineering back round. but there is no substitute for training and experience in the unique discipline of doing home inspections.
4. Do you offer repairs or improvements based on the inspection?
In some states, this is specifically outlawed. Years ago, in Bucks County, inspectors often did work on repairs, and I never liked that idea since there was an obvious conflict of interest. For the most part, this is no longer an issue with home inspectors in the Yardley and Newtown area.
5. How long with the inspection take?
I have found that the average inspection in our area takes between tw0 and three hours. For the purposes of budgeting your time, you should have a general understanding of how long the inspection should take.
6. How much will it cost?
Costs can vary from inspector to inspector, and it is one of the questions that you should ask, so that you are not surprised the day of the inspection. There are also some variables in terms of what inspections are needed, that will impact the cost. If you need a septic and/or water and well inspections, the cost will be somewhat higher than if those inspections are not needed. When I meet with buyers, I include an approximate cost for the home inspection in my closing cost estimate.
7. What type of inspection report do you provide and how long will it take to receive the report?
I think it is a good idea to ask for samples of the inspectors report, so that you are comfortable with the format, and that you can understand the report language and style. You also need to be sure that the time parameters meet your needs. In our Pennsylvania agreement of sale, there is a time limit to the inspection contingency. It is critically important that the report be available to you in enough time that you can evaluate it and respond to the seller appropriately.
8. Will I be able to attend the inspection?
I always encourage buyers to attend the home inspection, and I would be highly suspicious of any inspector who did not encourage that. I have never actually encountered a problem with an inspector suggesting that a buyer not attend the inspection, but you should ask the question, just to be sure. The inspector will share maintenance information, as well as explaining any defects, and attending the inspection gives you a great chance to learn about the house.
9. Do you maintain membership in a professional home inspector association?
There are actually tw0 national home inspection associations, and in Pennsylvania, the inspector needs to be a member of one of them in order for their report to be used as a basis to negotiate with the seller as a result of an inspection report. There should be no problem asking the inspector whether they are a member of one of the organizations.
10. Do you participate in continuing education?
I think this is a good measure of the inspectors professionalism and service. The more knowledge an inspector has, the better they should be in evaluating any unusual or unique condition in a house.
I hope that these suggestions are helpful if you are considering a home inspector for a house in Yardley, Newtown or anywhere in Bucks County. I would love to hear your thoughts. I can be reached at 215-519-1399, or Marty@MartinMillner.com. If you are considering buying a Yardley or Newtown home, please let me know if I can help you.
Continue Reading > Add a Comment |Home Buying 101 in Yardley, Bucks County
I saw an interesting article this morning from MSNBC entitled, “What you should know before buying a home”.
The author of the article described the journey from moving 9 times in 9 years, from college dorms to various apartments, before deciding to look for something a bit more permanent in the form of a house. In 2009, the author purchased a home, and based on that experience, has suggested five important pieces of advice.
This story resonated with me, because I have three kids who, I suspect, are within a couple of years or so of the author.
Each of my three kids has already purchased a home, or is currently in the process of purchasing a home. I have learned first hand, from their experiences, how daunting and potentially confusing the home buyer process can be, especially for fist time home buyers.
Yardley, Newtown and the entire Bucks County area offers great opportunities for owning real estate. Especially now, with prices lower than they have been in years, and with interest rates at historic lows, it is a great time to buy real estate. However, if you have not been through the process before, it is scary!
I appreciated the advice given in the MSNBC article, and thought that these are five great suggestions.
1. Have a good realtor. I know that I am biased, because this is what I do. But personally, I love working with first time home buyers. I feel that it is my responsibility to be sure that first time home buyers are comfortable with the process, and at each step in the home buying process clearly understand their options and what is happening. I enjoy guiding and educating first time home buyers through the experience, and I know that as we move through the experience, they will understand the process completely.
2. Educate yourself. Again, I think this is great advice. There is a tremendous amount of information that you can find on-line. I actually have a book called, “Before You Buy”, that I can send to people who are interested while my supply lasts. It is a great book on buying a home. The National Association of Realtors also has a buyers guide. It is important to learn as much as you can.
3. Talk to neighbors. I think that this is a great suggestion, and it isn’t done often enough. Before finalizing an offer on a house, it is a great idea to speak with neighbors. Ask them what they like about living in the neighborhood, and ask whether there is anything they don’t like. You may be surprised by what you learn.
4. It is OK not to do everything in the house in the first month you own it. I have worked with buyers who become a bit overwhelmed by thought that they have to furnish, decorate and update an entire house. Remember, there is nothing wrong with taking on projects in stages. Start with rooms and spaces that are most important, and do not feel that it is necessary to everything at once. It will all come together, eventually, and that is fine.
5. Be aware of, and prepared for, hidden costs. When you are a home owner, unexpected costs will occur. Try and be prepared. Could be plumbing issue. Maybe the heater needs a repair. When working on a budget, try and allocate a reserve for these, sudden, and unexpected costs that will come up.
Finally, in searching for your first home, you should love it. It is exciting, it is a lot of money, but in the end, should all be worth it.
If you want a copy of the book, “Before You Buy”, send me your contact information, and I will get a copy out to you. I have about five or six copies left.
Continue Reading > Add a Comment |The Real Estate Market in Yardley, Newtown and Bucks County is Changing. Find Out How…
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Continue Reading > Add a Comment |Is It Spring in Real Estate in Yardley?
I realize that the weather so far this winter has been very pleasantly warm for Bucks County. But the calendar says that spring is still weeks away!
That is not the case in real estate in Yardley.
From a real estate perspective, we in the industry feel as though what we refer to as the “spring market” begins just after the Superbowl.
Happily for us Eagle fans, the Superbowl is over. On a different note, that was one of the most painful games to watch for those of us who are diehard Eagle fans. From a purely football perspective, I am happy that the game is over!
So what are we talking about when we say that the spring market starts after the Superbowl? What that means, in general, is that as we get closer to real spring, people begin to take steps to effect moves in June, July and August, which are the busiest moving times of the year. Many people, especially if they have kids in school, prefer if possible to move while their kids are out of school.
So, for those who want to either buy or sell beginning at the end of June, they often start the process in February or March, which is why in the real estate industry we say that the spring market starts now.
One of the very common questions that I get from sellers is whether it is best to sell in the spring. The reality is that real estate in Yardley, Newtown or anywhere for that matter, is essentially a function of supply and demand. The answer to the question about whether the spring is the best time to sell really is that it depends.
It depends on supply and demand factors. If the next month or so brings a flood of new sellers to the market in the Yardley area, without a corresponding increase in buyers, there will be further downward pressure on prices. If, on the other hand, there are lots of buyers but fewer sellers, the opposite will happen.
From several personal recent real estate experiences, I can tell you that right now, in the Yardley and Newtown area, inventory of houses is lower than it has been in quite a while, and there does seem to be an increase in the number of buyers.
I have had listings in Newtown and Yardley that have recently received multiple offers. I hear the same thing from other agents. I am also having a really difficult time finding quality houses to show buyers that I am working with in the Yardley area.
I have encouraged several sellers that I am working with to take advantage of the current dynamic, by getting their house on the market as soon as possible. I am not suggesting that suddenly we are in a sellers market, but I am suggesting that for those sellers who are realistic about their price, the real estate market in Yardley and Newtown is more favorable than it has been in quite some time.
Spring is in the air in real estate in Yardley!
Continue Reading > Add a Comment |People ARE Buying Homes, Here in Bucks County and All Over the Country!
Many folks believe that very few houses are selling, and that almost no one can get a mortgage. Along with Keeping Current Matters, I want to let everyone know that neither of these assumptions is true.
A few weeks ago, the National Association of Realtors (NAR) released their Existing Homes Sales Report. According to the report there are, on average, 12,109 homes selling in the United States EACH and EVERY DAY! That means that approximately 12,000 houses sold yesterday, approximately 12,000 will sell today and approximately 12,000 will sell tomorrow. So the thinking that homes aren’t selling just isn’t true.
Another interesting fact in the report was that 72% of these transactions were accompanied by a mortgage. That means that approximately 8,719 people qualify for a mortgage on a daily basis in this country.
There are over 12,000 homes sold and over 8,000 mortgages granted every day. The real estate market is doing better than many believe.
If you’d like more facts and figures, or information about buying or selling a home in Yardley, give me a call – I’d love to talk with you!
Continue Reading > Add a Comment |Moving To or From Yardley, What Are the Top 6 Forgotten Items During a Move?
Moving day can definitely be a hectic day!
For people moving in and out of the Yardley area, because of how hectic moving day can be, people often leave behind very important things, that will be sorely missed at their new home. In order to help prevent that, I put together this list of what I see as the six top forgotten items during a move.
1. Jewelry, watches and small valuables. These small, sometimes expensive and often irreplaceable items should be kept in a safe deposit box, or kept with trustworthy friends or relatives on moving day.
2. Garage door opener. Be sure to leave your old garage door openers behind, and be sure to get the garage door openers to your new house. Most new cars have a button that you can program, that replaces the old fashioned garage door opener. The problem is that in most of those cars, you need the garage door opener to program the button!
3. Spare keys. Make sure you leave behind all spare keys. And like the garage openers above, make sure you receive keys to your new house. I know that it sounds impossible, but I have heard stories of buyers closing on a house and then rushing to meet movers, only to realize that they never received keys to the new house. Don’t let that happen to you.
4. Old address books. I realize that most of us use smart phones, Ipads etc., as our address books. However, I know that there are still lots of people who use old fashioned address books. Often, if a home owner has been in their house for a long time, the reliable old address book may be stashed in a drawer somewhere. Be sure to bring it with you.
5. Unfinished errands. Again, this would seem to be fairly obvious, but I have heard stories. Do you have clothes at the dry cleaner? Books due at the local library? For those who still rent things like videos or games, have they been returned? It can be a mess to deal with those things, once you have moved, especially if you are moving any distance.
6. Medical records. Although there is a lot of medical information that is digital these days, you should be sure that you don’t misplace copies of medical records, including dental information and prescriptions. It is very easy to lose those things when they are stashed at the bottom of a hastily thrown away box.
I try really hard to make sure that my clients’ experience as both buyers and/or sellers is as smooth as possible. That includes the actual move. If you are interested in a hassle-free home selling or buying experience, please get in touch today. You can reach me at 215-519-1399 or Marty@MartinMillner.com
Any important items that I have overlooked?
Continue Reading > Add a Comment |Bucks County Home Prices Stabilizing (or not?)
There was a really interesting article in the Wall Street Journal a couple of days ago, questioning whether home values are still falling. If you are curious about what is happening in the real estate market, check out this article at the following link, “Why Home Prices Are (and Aren’t) Stabilizing”
From a Bucks County perspective, why is this article so interesting?
There are always articles written that talk about how bad the real estate market is. I have written pretty extensively about the real estate market in and around Yardley and Newtown, and all over Bucks County. I have pointed out on numerous occasions, that our market is nowhere near as dire, as in other parts of the country, like Arizona, Florida, etc.
This Journal article is the first article that I have seen that makes a distinction between distressed sales, and non-distressed sales. I think this could be a critically important distinction, because, as the article points out, according to CoreLogic, an important emerging trend is that home prices are actually stabilizing after excluding distressed sales. If you are not familiar with the term, “distressed sale”, it essentially refers to bank owned properties, and/or short sales, etc.
It is clear, according to the statistics, that prices of non-distressed properties are actually stabilizing, even as the prices of distressed properties are still falling.
The reason this becomes so important to the real estate market in Bucks County, is because for Bucks County real estate, the percentage of distressed property sales, is very significantly lower than the national average. In fact, for all of Bucks County, the percentage of distressed property sales is about 13% or so, while the national percentage is 28 to 30%. I would actually suggest that in the Yardley, Newtown, Washington Crossing real estate market, that percentage is even lower.
In fact, many people are really surprised to learn that for the entire real estate market in Bucks County, following the height of the market, which was in 2007, prices fell by 6.7% in 2008, they dropped by 6.8% in 2009 and believe it or not, they actually went up by 4.3% in 2010. Those statistics are based on the change in the average sold price, each year.
So, if you live in or are interested in real estate in Bucks County, spread the word!
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