More REOs on the Way! See The Charts

While there are sign of a real estate market recovery, there are some causes for concern on the horizon.

Mortgage defaults continue to be high.

While we have seen fewer distressed properties for sale in the MLS, another wave of short sales and bank owned foreclosures is in our future.

Check out these Calculated Risk has some very nice charts that show defaults by loan type.

 

Buy 26% More For The Same Payment

How much impact will an interest rate change have on your next Tampa Bay home?  You can borrow 26% more for the same monthly payment if the mortgage rate is 4% rather than 6%.

Many potential Tampa Bay home buyers are still sitting on  the fence, just waiting for the right time to buy real estate.  Let’s look at how much house you can buy for a $1,000 per month mortgage payment at various mortgage rates:

Rate  Amount
3%     $236,967
4%     $209,644
5%     $186,220
6%     $166,667

How long can these low mortgage rates last? Is now the time to make your move? Contact Annette, Doug or Dale Bohannon today at 813-377-4455 to discuss the options.

 

Lacrosse in Hillsborough High Schools

High School lacrosse in as a sanctioned varsity sport Tampa set to begin in January 2014.

Lacrosse clubs and local boosters have been meeting with school board members for months to come up with a plan.  The Hillsborough County School Board has finally approved a pilot program to add lacrosse as a sport at select Tampa area public high schools.

Participating high schools may include:  Alonso, Durant, Freedom, Newsome, Plant, Robinson, Steinbrenner and Wharton, Jefferson and Tampa Bay Tech.  See the Tampa Tribune article for details.

 

Mortgage Debt Forgiveness Tax Law To Expire

Is a short sale or foreclosure in your future?

Taking a hit on your credit is bad enough, but did you know that you might pay income tax on the bank’s loss?

The Mortgage Forgiveness Debt Relief Act (HR3648) is set to expire at the end of 2012. For short sellers of their primary residences, this act provides tax relief if they close in 2012.

If you undertake a short sale, deed-in-lieu or foreclosure, then you may be taxed on the lender’s loss. If the lender must write off $100,000 for example, then you will receive a Form 1099-C at the start of the year showing that the bank forgave $100,000 of debt – which counts as income to you (see my blog post: Short Sales – Report the income & exemption).

Prior to the Mortgage Forgiveness Debt Relief Act (HR3648) in 2008, homeowners of primary residences were subject to a “Phantom Tax” whereby the amount forgiven would count as income. Since the passage of HR3648, eligible homeowners still report the canceled debt as income, but they also are granted exclusion to write off the income. The write off only applies to forgiven debt on primary residences and canceled debt up to $2,000,000. If you acquired a home equity line of credit (HELOC) after closing that was not used to improve the property, then forgiveness of that loan may be subject to tax.

Bottom line: Tampa Bay homeowners considering a short sale should act now. A short sale may take 3-10 months to complete, and you must close prior to the end of 2012. There is no guarantee that the Mortgage Forgiveness Debt Relief Act (HR3648) will be extended. Please consult a qualified tax professional for details. Below is information from the IRS web site which addresses some of the questions on this law:

 

IRS Tax Tip 2011-44, March 3, 2011

If you are a homeowner whose mortgage debt is partly or entirely forgiven during tax years 2007 through 2012, you may be able to claim special tax relief and exclude the debt forgiven from your income.

Here are 10 facts the IRS wants you to know about Mortgage Debt Forgiveness.

1. Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.

2. The limit is $1 million for a married person filing a separate return.

3. You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.

4. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.

5. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.

6. Proceeds of refinanced debt used for other purposes – for example, to pay off credit card debt – do not qualify for the exclusion.

7. If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.

8. Debt forgiven on second homes, rental property, business property, credit cards or car loans do not qualify for the tax relief provision. In some cases, however, other tax relief provisions – such as insolvency – may be applicable. IRS Form 982 provides more details about these provisions.

9. If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.

10. Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.

For more information about the Mortgage Forgiveness Debt Relief Act of 2007, visit http://www.irs.gov. A good resource is IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments.

You can also use the Interactive Tax Assistant available on the IRS website to determine if the cancellation of debt is taxable. The ITA tool is a tax law resource that takes you through a series of questions and provides you with responses to tax law questions

Taxpayers may obtain copies of IRS publications and forms either by downloading them from http://www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

Links:  IRS Form 982, IRS Form 1099-C, Publication 4681

 

10 Highest Priced Sales in New Tampa

Curious about the Luxury Home Market in New Tampa?

According to MLS sales data for 2011, the top 10 home sales in the 33647 sold for between $679,000 and $1,400,000. Of these 10 homes, 9 were traditional (equity) sales, one was a short sale, and none were bank owned. Top neighborhoods included Tampa Palms, Cory Lake Isles and Hunter’s Green.

The median home had 5 bedrooms, 4 baths, 5660 square feet and an asking price of $1,037,200. The median sale price was $889,200, or about a 12% discount off of the final asking price. The median sales price per square foot was $153. The median home was on the market for 238 days prior to going under contract. Follow these links for 33647 Home Sale Details and a 33647 Sales Comparison of these New Tampa homes.

Thinking of buying? Here is a link to the Top 20 For Sale. For a confidential consultation, contact Annette, Doug or Dale Bohannon today at 813-377-4455.

Size of U.S Housing Market

(click for report)

How big of a deal is the U.S. Housing market? Even after a historic devaluation, U.S. residential real estate ranks among the world’s largest asset classes. How does residential real estate compare against other asset classes?

This comparison by Radar Logic shows the footprint of U.S Housing and asks: “Given its relevance to the overall economy, should it be among your allocations?”

As an REO listing agent for Bank of America and other lenders in the Tampa Bay area, we see a surge in both first-time investors and institutional investors buying residential real estate. I know Tampa Realtors who spend all of their time helping hedge funds buy units in bulk. We are also seeing many international investors, including a surge from China. Rather than focusing on immediate appreciation, we see a premium placed on cash flow. Is it time for you to think about investing in real estate?

As a Certified Investor Agent Specialist (CIAS), I have the training and tools to help you success in today’s Tampa Bay real estate market. To learn more about real estate investor metrics and investment properties, contact Dale Bohannon at 813-377-4455.

 

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