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 |5 Things to consider when making an offer on a Yardley area house.
The real estate market in the Yardley area in Bucks County, is showing very encouraging signs of life this spring. I have had 7 or 8 Yardley area houses, in the past couple of weeks, that have gone on the market and sold in just days. In a couple of cases, we received more than one offer!
Yesterday, a prospective buyer, who found my profile on-line, sent me a very interesting questionaire. He was basically conducting an interview, to see if we would be compatible. I am happy to say, that I am meeting he and his wife on Saturday, so I passed the first step in the interview process.
One of the interesting questions he posed, though, was how I would help them with making an offer on a house, once we found the right house? That question got me thinking about the steps to take in preparing an offer on a Yardley area house. There is no doubt in my mind, that the more information you have, the better off you will be in making an appropriate offer.
There is so much information available online, and your realtor should provide a tremendous amount of additional information.
1. In evaluating a sellers asking price, the first thing that I look at, is how long the house has been on the market, and whether there has been price adjustments. Markets find their proper balance, and if a house has been on the market a long time, it generally means that the asking price is too high. I realize that sellers may dispute this, but in my opinion, if the asking price is correct, for market conditions, then the house will not sit on the market for weeks and weeks.
2. Evaluate activity in the neighborhood. This can sometimes be difficult, depending on how large the neighborhood is, assuming the house is in a neighborhood, and also whether there has been a lot of recent activity in the neighborhood. The strongest comparison, which we would refer to as a comparable, would be a similar house in exactly the same neighborhood. If there have been recent sales, you would have a very solid frame of reference for structuring an offer.
3. Next, I would suggest looking beyond the exact neighborhood, for houses that are similar to the one you are looking to make an offer on. If you can find houses that are close to the same size, with similar amenities and upgrades, again, you are armed with useful information for an offer. This is very similar to the process that an appraiser would go through. When looking for similar houses, it would be important to stay within the same township and school district. Yardley housing is different from Newtown, for example, so homes in Yardley and Newtown, would not be priced the same, even if they had similar amenities.
4. Pay close attention to condition of comparable homes. Remember, a low priced home that needs lots of upgrading, may not be such a great deal, if the cost to do the upgrades makes the price higher than homes in a similar neighborhood that have been upgraded. Other vital elements to consider include location within the neighborhood. If a particular house backs to a busy road, clearly there will be a significant impact in the price.
5. Finally, armed with all of the above information, plan your negotiating strategy. I help buyers all the time, with this process. Depending on how the house is priced, the art of drafting an offer, from the buyer perspective, is to be as aggressive as possible, without being insulting to the seller, assuming the house is priced realistically in the first place. If you start the process with an offer that is perceived to be unrealistically low, you run the risk of not getting a counter offer back from the seller. Obviously if the house is significantly overpriced, then I would not be too concerned about that.
I work very hard to make sure that buyers have as much information as possible, so that we can make realistic offers, that buyers are comfortable with. I would be happy to discuss this further, and can be reached at 215-519-1399 or 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 |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 |Why Would You Buy Real Estate Low and Sell Real Estate High in Yardley?
Welcome to 2012! For many, there was no great heartache in saying goodbye to 2011. Here is an interesting perspective on real estate in Yardley, Newtown and Bucks County.
I think everyone would agree that the worst investing advice in the world would be to buy high, sell low! To me, that is the very definition of losing money on an investment. Not too smart, if you can help it, right?
So, my question for those considering buying real estate in Yardley, or Newtown, or anywhere in Bucks County, is why would you wait for the housing market to improve, before buying a house? Seriously, I understand that there is a lot of uncertainty out there right now. Job security is still questionable, unemployment is too high, and there is general fear about getting approved for a mortgage. it can be scary. But, here’s the thing. In my opinion, letting fear dictate your financial stragegy for the future is a guaranteed way to pay too much for a house in years to come.
Put fear aside for just a moment, and consider:
- Interest rates are at or close to all time historic lows.
- Prices for homes have plunged to the lowest levels we have seen in a generation.
- There are distressed property sales.
- Rents are rising, and in most cases, rental inventories are shrinking, which limits rental options
Shouldn’t you, rather than a landlord, be the one who benefits from owning a home? In my opinion, right now is the “buy low/sell high cycle! I love helping renters and first time home buyers explore their purchasing power. People are often surprised at just how qualified they are for home ownership.
If you are curious, simply email me at Marty@MartinMillner.com or call me at 215-519-1399, and I would be happy to discuss your home buying options with you.
Continue Reading > Add a Comment |Five Reasons Why Your House in Yardley, or Newtown, Is NOT Being Shown
“Help! My home is not being shown!” is a very common complaint that I get when I speak with sellers whose homes did not sell with their original listing agent. The most common answers given by (pretty much) all realtors are as follows:
- Price
- Staging
- Location
- Condition
I am not here to suggest that those answers are not important, or that they are not, in fact, the most important issues with most homes that are not being shown. I would, however, like to share with you several issues that I often see with homes that don’t get shown.
1. Photography
This is a sore subject for me. I hire professional photographers who understand lighting, angles and architectural photography. It amazes me how often I see dark and inferior pictures on listings. This is often true on expensive homes. I have seen 700,000 homes with pictures that look like they were taken with a $100 point and shoot camera. With lots of homes to pick from, the pictures can often make the difference between a home being on the “must see” list for a buyer, or on the “let’s pass this one” list.
2. Multiple Listing language
When writing descriptive language, I think it is important to try and create an image, a mood. If the house has four bedrooms, agents and buyers can see that from the MLS detail. I try and point out thing, in my narrative, that make the house special. I can often get that sort of information by asking the seller what they love about their house. I try and make the language within the description stand out. I also try and fill the entire field of allocated characters. Again, I have seen very expensive homes with just three sentences as a description. If the listing agent isn’t excited about the house, why would a buyer be excited?
3. Video
Video has become more and more important in promoting listings. Again, I use a professional videographer, so that I know my video will be a high quality production. I want exposure on YouTube – and everywhere else - with my video. There are thousands and thousands of searches for real estate on Youtube.
Get your video up there to create added exposure for your home. Along with the use of video, I try and use the maximum number of photos that our system within the MLS allows, which is now 25 pictures.
4. Access
This is another of my pet peeves. I can’t tell you how often, even in this market, sellers make their house difficult to show. I try to explain to my sellers the obvious. You cannot sell your house unless buyers can see it. Make it as easy as possible for agents to get their buyers into the house. It is so frustrating, as an agent with a buyer, not to be able to show a house when it fits your schedule with the buyer. If you are a seller, you need to understand that the agent with the buyer may be showing that buyer eight houses that all have to fit within a schedule.
5. Buyer agent commission
As a seller, be sure to discuss this with your realtor. Commissions are completely negotiable but as a seller, you want to be sure that the commission you are offering to the agent who represents the buyer is appropriate, so that the buyers agent is encouraged to show buyers your house. There is competition, and some sellers are actually offering selling bonuses to an agent with a buyer who makes an acceptable offer.
I hope this list is helpful to you. I would love to hear your thoughts; please leave your comments! I can be reached at Marty@MartinMillner.com.
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