Monthly Archives: February 2015

U.S Foreclosure Activity Increases 5 Percent in January

Source: RISMedia

Foreclosure filings — default notices, scheduled auctions and bank
repossessions — were reported on 119,888 U.S. properties in January,
an increase of 5 percent from the previous month but still down 4 percent
from a year ago, according to RealtyTrac®’s recently released
U.S. Foreclosure Market Report™ for January 2015.

The 5 percent monthly increase was primarily by a 55 percent monthly jump
in bank repossessions, to a 15 month high. A total of 37,292 properties
were reposessed by lenders in January, up 23 percent from a year ago to
the highest monthly total since October 2013

“The year-over-year increase in REOs in January was the first annual increase
nationwide, following 25 consecutive months of declines getting the foreclosure
spring cleaning we anticipated in our last foreclosure report off to a quick
start in 2015.” says Daren Blomquist, vice president at RealtyTrac.
“Meanwhile, the number of future foreclosure auctions scheduled in January
continued to increase in many states, foreshadowing more foreclosure spring
cleaning to come in the next several months in those states.”

The Most Valuable Tax “Loophole” Available Today

By Brett Eversole, analyst, True Wealth Systems
Friday, February 13, 2015

The government seems to spend its time finding ways to increase taxes…

In 2013, income taxes for America’s top earners increased. And in last month’s State of the Union address, President Obama proposed capital gains tax increases among other changes.

The only things certain in life are death and taxes, as the saying goes. But if you haven’t already, you can still take advantage of one of the most powerful tax loopholes available… your home.

For most individuals, buying a home is a powerful tax shelter. In fact, I can’t think of an asset that has more government incentives than the home you live in.

Let me show you what I mean…

First, you can deduct the interest on your mortgage off your taxes. You can also deduct certain other expenses, like insurance and property taxes. Depending on your income tax bracket, this could lead to tax savings of a few hundred dollars a month.

But that’s the small stuff. The major tax advantage comes when you sell your home…

This is probably the best tax loophole available today… The government allows you to keep up to $500,000 in capital gains, tax-free. (Depending on your filing status.)

That’s not a typo. If you’re married, you can keep up to half a million dollars in profit on your home sale without having to pay any capital gains taxes. And that benefit could have a massive positive effect on your net worth.

For example, say John buys a $250,000 home and Jill buys $250,000 in stocks and bonds. After 20 years, both have increased in value to $750,000 – a $500,000 increase.

When John sells his home, he pays no taxes. He walks away with the full $750,000. Jill, on the other hand, has to pay capital gains taxes on the $500,000 she gained. Today, that would leave her owing 20% to the government – or $100,000.

Jill would walk away with just $650,000… 13% less than John.

This is truly the most valuable tax loophole available today. And all you need to do to take advantage of it is own a home.

Importantly, buying a home is still a good investment decision today. Housing is still incredibly affordable… and that means higher prices are likely from here.

We’ve written about housing affordability many times in DailyWealth. It’s a simple idea…

Housing affordability compares three things… income, home prices, and mortgage rates. These three factors tell us if typical incomes can pay for typical mortgage payments.

Today, affordability sits well above its historical average. Home prices would need to rise around 30% for affordability to move back to normal.

This tells us that there is still upside in U.S. housing. And that the most valuable tax loophole available is still a prime opportunity.

If you don’t already own a home, it’s a tax loophole you should consider today.

Good investing,

Brett Eversole

Area Brokers Release January Sales Data

Source: NWMLS

KIRKLAND, Washington (Feb. 5, 2015) – Home sales this super bowl season outpaced a year ago as sidelined buyers emerged to compete for limited inventory, according to brokers who commented on January activity.

New figures from Northwest Multiple Listing Service show year-over-year increases in pending sales, closed sales, and prices, while inventory fell by double digits.

“The current inventory of homes available for sale has never been lower in my 22 years as a real estate broker,” lamented MLS director George Moorhead, designated broker and owner at Bentley Properties.

The number of active listings of single family homes and condominiums fell from the year-ago figure of 19,195 to 17,082 at the end of January, a decline of 11 percent. Twelve of the 23 counties in the MLS system reported double-digit drops. For the four-county Puget Sound region, the selection was down 12 percent.

When measured by months of supply (the ratio of sales to listings), Northwest MLS figures show it has dipped below four months. In King County, there is only about two months of supply. In general, brokers say four to six months is considered to be healthy balance between supply and demand.

Blame brisk sales, as the number of pending sales, at 7,658, surpassed the number of new listings, which totaled 6,989. A comparison of figures for the four-county region for the past 15 years indicate January’s pending sales exceeded any of the prior years.

“We saw sales at a higher pace this super bowl season than last year,” remarked J. Lennox Scott, chairman and CEO of John L. Scott Real Estate.

Closed sales increased more than 3.7 percent compared to a year ago, rising from 4,306 completed transactions area-wide to last month’s total of 4,467.

Scott said multiple offers of most new listings are common. “We are entering February with a severe shortage of homes for sale in the neighborhoods close to the job centers, and we expect that shortage to continue throughout the spring market,” he stated. Buyers need to be “buyer ready” so they can react quickly.

Brokers recommend getting preapproved for a mortgage, which can give potential buyers an edge in a fast-moving market.

Home prices for single family homes and condos are also tracking ahead of the year-ago pace. The median price on last month’s closed sales was $279,000 system-wide, up about 9.4 percent from the year-ago price of $255,055. King County reported the highest median price at $390,000, up 6.9 percent from twelve months ago.

Despite tight inventory, Northwest MLS brokers complete more than 77,000 sales valued at nearly $28 billing during 2014

Source: NWMLS

KIRKLAND, Wash. (Jan. 22, 2015) – Members of Northwest Multiple Listing Service reported 77,276 closed sales during 2014 to outgain the prior year’s volume by 1,759 transactions for a 2.3 percent increase.

Measured by dollars, last year’s sales of single family homes and condominiums were valued at nearly $28 billion. Compared to 2013, that dollar volume represents a 9.4 percent gain.

The sales activity reflects the work of more than 22,000 brokers across 21 counties in the member-owned Northwest MLS.

Last year’s completed sales included 66,716 single family homes (about 86 percent of the total) and 10,560 condominiums. The total units and dollar volume are the best since 2007 when members registered 82,197 sales valued at $32.3 billion.

The area-wide median price for last year’s sales of single family homes and condominiums was $285,000, improving on the previous year’s figure of $270,000 (up nearly 5.6 percent). A comparison by county shows median sales prices ranged from $119,900 in Pacific County to $399,750 in King County.

Prices for single family homes (excluding condominiums) rose about 5 percent from 2013, increasing from $281,000 to $295,000. Condo prices jumped 11.4 percent, rising from the 2013 figure of $202,000 to last year’s median selling price of $225,000.

Home buyers who shopped during 2014 often had lots of company – and competition. Brokers notched more than 102,000 pending sales (mutually accepted offers) during 2014, while adding 107,722 new listings to inventory. Brokers said depleted inventory led to bidding wars for homes in the most desirable areas, and led to disappointment for indecisive or unprepared bidders.

During 2014, the average area-wide supply, as measured by months of inventory, fell below 3.5 months. King County had the lowest level, averaging only 1.9 months of supply. Industry insiders tend to use a 4-to-6 month range as an indicator of a balanced market, favoring neither buyers nor sellers.

Further evidence of a housing recovery is reflected in high-end sales. Northwest MLS members reported 2,069 sales of single family homes priced at $1 million or more, up nearly 28 percent from the 2013 total of 1,621 “luxury” sales. Condos priced at $1 million and up accounted for another 152 sales. A total of 878 condos commanded sales prices of $500,000 or more, up 20 percent from the figure for 2013.

The highest-priced single family home that sold during 2014 by a member of Northwest MLS was a property in the Town of Hunts Point that commanded $9.1 million. Topping the chart of high-priced condominiums was one in a downtown Seattle high-rise that sold for $6.1 million.